PENSIONS ‑- RETIREMENT ‑- ACQUISITION OF SERVICE CREDIT FOR PREVIOUS PERIODS OF EMPLOYMENT
Necessity for completion of all contributions to the public employees' retirement fund as a condition precedent to acquisition of service credit for previous periods of employment under RCW 41.40.120(3), RCW 41.40.150(2), RCW 41.40.170(3) and RCW 41.40.361(5).
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April 24, 1975
Honorable S. E. "Sid" Flanagan
State Representative, 13th District
Olympia, Washington 98504 Cite as: AGLO 1975 No. 45
By letter, previously acknowledged, you have asked for the opinion of this office on several questions which we paraphrase as follows:
(1) Under RCW 41.40.120(3), where a member of the public employees' retirement system seeks to obtain additional service credit for a previous period of service as an elected official or as a gubernatorial appointee, must both the employer's and employee's contribution to the retirement fund covering the period of service for which credit is claimed be completed before such credit can be allowed?
(2) Under RCW 41.40.150(2), where a member of the public employees' retirement system who has withdrawn his employee's contributions upon a separation from service later returns to service in an eligible position, must he make a full restoration of all of his previously withdrawn employee's contributions, with interest, before being returned to the status which he held at the time of his earlier separation?
(3) Under RCW 41.40.170(3), must a member of the public employees' retirement system seeking to obtain military service credit who has previously withdrawn some or all of his employee's contributions upon an earlier separation from service restore all such withdrawn contributions before being credited with the military service which he is seeking?
(4) Under RCW 41.40.361(5), when a political subdivision is admitted into the public employees' retirement system after April 1, 1949, must all employers' and employees' contributions which would have been made by or on behalf of a given employee had the political subdivision been an employer between that date and the date of its admission to the retirement system be completed before any service credit can be allowed to such employee for that period of employment?
[[Orig. Op. Page 2]] (5) Does the 15-year time limit specified in RCW 41.40.361(5) apply both to employers' contributions and employees' contributions which are required to be made under that statute in the event of entry into the public employees' retirement system of a political subdivision after April 1, 1949?
We answer questions (1), (2), (3), and (5) in the affirmative and question (4) in the negative.
Your first question involves a situation where a member of the public employees' retirement system seeks to obtain past service credit for previous service rendered as an elected official or as a gubernatorial appointee. The governing statutory provision is RCW 41.40.120(3) which provides in pertinent part as follows:
". . .And provided further, That any persons holding elective offices or persons appointed by the governor who are members in the retirement system and who have, prior to becoming such members, previously held an elective office, and did not at the start of such initial or successive terms of office exercise their option to become members, may apply for membership and be accepted by action of the retirement board, to be effective during such term or terms of office, and shall be allowed to recover or regain the service credit applicable to such term or terms of office upon payment of the employee contributions therefor by the employee and employer contributions therefor by the employer or employee: And provided further, That any person who was an elected official eligible to apply for membership pursuant to this subsection, who failed to exercise that option while holding such elected office and who is now a member of the retirement system, shall have the option to recover service credit for such elected service upon payment to the retirement system of the employee and employer contributions which would have been made had the person been a member during the period of such elective service;"
As you can see, this statute contemplates two classes of individuals in terms of recovering past service credit. The first class is composed of thosepresently holding elective offices or offices to which they have been appointed by the governor who are members of the retirement system and [[Orig. Op. Page 3]] wish to recover past elective service. These individuals may do so upon application and "upon payment of the employee contributions therefor by the employee and employer contributions therefor by the employer or the employee."
The second class of persons covered by this statute consists of those who are presently members of the public employees' retirement system in any capacity and who wish to recover elective service. They may do so by application and upon their payment of both the employee and employer contributions which would have been made during the period of time in question had they been a member of the retirement system during that period.
In both instances, however, a completion of all of the required payments is clearly a condition precedent to an allowance of any of the past service credit claimed.
Your second question involves a situation where a person was once a member of the public employees' retirement system but then separated and withdrew his employee's contributions. Later, he returned to service in an eligible position.
The recovery of service credit in such cases is governed by RCW 41.40.150(2), which provides as follows:
"An employee not previously retired who reenters service shall upon completion of six months of continuous service and upon the restoration of all withdrawn contributions with interest as computed by the retirement board, which restoration must be completed within a total period of five years of membership service following his first resumption of employment, be returned to the status, either as an original member or new member which he held at time of separation: Provided, That any member who reentered service outside the ten-year period formerly provided by this subsection, and by reason of the former language of this section was not allowed to restore withdrawn contributions, shall have two years from April 25, 1973 to restore said contributions: And provided further, That any member who reentered service within the ten-year period formerly provided by this section, and who failed to restore withdrawn contributions within the three or five years previously allowed, shall now have two years from April 25, 1973 to restore said contributions, with interest as determined by the retirement board." (Emphasis supplied.)
[[Orig. Op. Page 4]] Again, a full restoration of all withdrawn contributions (with interest) is a condition precedent to obtaining that which is here being sought; i.e., return to the membership status held at the time of the member's prior separation and withdrawal of contributions. In addition, the returning member must serve for at least six continuous months before he can obtain such prior status.
All withdrawn contributions must be restored within five years of the member's return to service. However, an exception to this time limitation exists in one instance. Until 1973, the statute provided that persons who did not reenter service within ten years could not restore their withdrawn contributions at all. However, when this was changed by § 6, chapter 190, Laws of 1973, Ex. Sess., members of the retirement system who were then precluded from restoring withdrawn contributions by the former language of the law were given until April 25, 1975, to restore such contributions. Additionally, persons who reentered service within the ten-year period but did not restore withdrawn contributions within the period previously allowed by this statute were also given until April 25 of this year to restore such contributionswith interest.
Your next question involves the granting of military service to persons who have served in the armed forces. The governing statute in this case is RCW 41.40.170, which provides as follows:
"(1) A member who has served or shall serve on active federal service in the military or naval forces of the United States and who left or shall leave an employer to enter such service shall be deemed to be on military leave of absence if he has resumed or shall resume employment as an employee within one year from termination thereof.
"(2) If he has applied or shall apply for reinstatement of employment, within one year from termination of the military service, and is refused employment for reasons beyond his control, he shall, upon resumption of service within ten years have such service credited to him.
"(3) In any event, after completing twenty-five years of creditable service, any member may have his service in the armed forces credited to him as a member whether or not he left the employ of an employer to enter [[Orig. Op. Page 5]] such armed service: Provided, That in no instance, described in subsections (1), (2), and (3) of this section, shall military service in excess of five years be credited: And provided further, That in each instance the member must restore all withdrawn accumulated contributions, which restoration must be completed within five years of membership service following his first resumption of employment: And provided further, That this section will not apply to any individual, not a veteran within the meaning of RCW 41.04.005, as now or hereafter amended: And provided further, That in no instance, described in subsections (1), (2) and (3) of this section, shall military service be credited to any member who is receiving full military retirement benefits pursuant to Title 10 United States Code."
As you can see, as in the case of RCW 41.40.120(3), supra, there are also two basic classes of individuals affected by this statute. The first includes those whose public employment was interrupted by military service and who either resumed employment within one year after the termination of their military service or, having applied for employment within such period and having been refused for reasons beyond their control, resumed employment within ten years. The second class is comprised of others, including some whose public employment was interrupted by military service but who did not resume employment within one year, etc., and still others whose service in the military did not interrupt their public employment at all.
Members of the first class may receive credit for their military service to a total of five yearsupon the restoration of all withdrawn contributions if this restoration is completed within five years of membership service following their first resumption of employment. The members of the second class must also restore any withdrawn contributions within five years if they have resumed employment, but they are only eligible for military service credit after having served a total of 25 years. At such time, they may be granted credit for military service in the same fashion as members of the first class.
As with the statutes involved in your first two questions, however, a full restoration is again clearly a condition precedent to a receipt of the credit being sought.
[[Orig. Op. Page 6]]Question (4):
Your fourth question involves the granting of service credit to employees of a political subdivision admitted into the public employees' retirement system after April 1, 1949.1/ The question is specifically directed at the process for receiving service credit for service rendered to the political subdivision prior to its admittance into the retirement system, and not to the accumulation of service credit after the political subdivision has been thus admitted. The governing statute in this case is RCW 41.40.361(5), which provides as follows:
"Any employer admitted to the retirement system after April 1, 1949, shall make an additional contribution until such time as the sum of such additional contributions equals the amount of contributions which such employer and employee would have been required to contribute between April 1, 1949, and the date of such employer's admission to the retirement system: Provided, That either the employee or employer may make the contributions the employee would have made during the same period of time: Provided further, That all additional contributions hereunder and under the provisions of RCW 41.40.160(2) must be completed within fifteen years from the date of the employer's admission. Employee contributions for these periods must be made before the member will receive credit for those periods of service, pursuant to such regulations as the retirement board may adopt."
As you will see from the last sentence of this subsection, an employee may receive service credit for such periods of service only after employee contributions have been made by him or on his behalf. The statute does not, however, require that both employer and employee contributions be made before the member may be granted such past service credit. For this reason, your fourth question, as set forth above, is answered in the negative.
[[Orig. Op. Page 7]]Question (5):
Your final question is whether a political subdivision described in question (4) has 15 years in which to make both the employer and employee contributions which are required under that statute. The answer to this question is quite clearly provided by the final proviso which describes the 15-year period as applying to "all" additional contributions. For this reason, the employer may choose to make both employee and employer contributions over the 15-year period. However, since no service credit is to be allowed for the time covered by such contributions (accord, our answer to question (4)) until all of theemployee's contributions have been made, the statute permits the employees involved to make these contributions themselves if they desire, in order to expedite the process.
We trust we have been of assistance.
Very truly yours,
WAYNE L. WILLIAMS
Assistant Attorney General
*** FOOTNOTES ***
1/See, RCW 41.40.410 which sets forth the procedures to be followed by a political subdivision in order to be thus admitted into the retirement system.