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June 22, 1971
Honorable Lloyd G. Baker
Director, Public Employees Retirement System
General Administration Building
Olympia, Washington 98501 Cite as: AGLO 1971 No. 84 (not official)
By letter previously acknowledged you have requested an opinion of this office on several questions relating to certain amendments to the laws governing the public employees' retirement system which are contained in chapter 271, Laws of 1971, Ex. Sess. (Senate Bill No. 522) [[S.B. 522]]. For the purpose of presenting your questions, and our responses, in a logical order related to the sequence in which the subject amendatory sections appear in the act, we have rearranged them from the order in which they appear in your letter. Moreover, due to the number of questions posed, we have further determined it to be more appropriate, for the purposes of this opinion, to set them forth within the body rather listing them all at the outset.
By way of general background, chapter 271, Laws of 1971, Ex. Sess., because it contains an emergency clause in § 17, became effective on May 21, 1971, when it was signed by the governor. Although this act contains a number of provisions relating to several different public employees' retirement systems, your immediate concern is basically with three sections only, §§ 5, 10 and 11, which involve chapter 41.40 RCW ‑ the "Washington Public Employees' Retirement Law."
As reorganized for purposes of clarity, our discussion under this heading will deal with that portion of your request which pertains to new subsection (5) of RCW 41.40.190. This code section deals, basically, with the computation of service reitrement allowances for members of the public retirement system who become eligible, by reason of qualifying periods of service, for retirement based upon service rather than upon disability. The first four subsections describe the basic components of a service retirement allowance in terms of an "annuity," funded by employee [[Orig. Op. Page 2]] contributions, and a pension (consisting of one or more of the following subparts: a "basic service pension," a "membership service pension," and a "prior service pension") which is funded by employer contributions. By its enactment of new subsection (5), the legislature has added the following:
"(5) Notwithstanding the provisions of subsections (1) through (4) of this section, the retirement allowance payable for service where a member was elected or appointed pursuant to Articles II or III of the Constitution of the state of Washington or RCW 48.02.010 and the implementing statutes shall be a combined pension and annuity. Said retirement allowance shall be equal to three percent of the average final compensation for each year of such service. Any member covered by this subsection who upon retirement has served ten or more years shall receive a retirement allowance of at least one thousand two hundred dollars per annum; such member who has served fifteen or more years shall receive a retirement allowance of at least one thousand eight hundred dollars per annum; and such member who has served twenty or more years shall receive a retirement allowance of at least two thousand four hundred dollars per annum: PROVIDED, That the initial retirement allowance of a member retiring only under the provisions of this subsection shall not exceed the average final compensation upon which the retirement allowance is based. The minimum benefits provided in this subsection shall apply to all retired members or to the surviving spouse of deceased members who were elected under the provisions of Article II of the Washington State Constitution."
Your specific question involving this provision contains the following five subparts:
"(a) Is the 'service' referred to in this section, only service as an elected or appointed official, or does it include other types of service creditable under Chapter 41.40 RCW?
"(b) Does the limitation of certain retirement allowances, to a figure less than the Average Final Compensation upon which it is based, apply to presently retired members who were elected under the provisions of Art. II of our State Constitution?
[[Orig. Op. Page 3]]
"(c) Does the limitation referred to in question (b) apply only to those members who have no other service creditable under Chapter 41.40 RCW, except that which meets the criteria of RCW 41.40.190 (5)?
"(d) Does the retroactive portion of this section have application only to the spouse of deceased members who named their spouse as beneficiary of one of the options set forth in RCW 41.40.190 (6) which allows such designation?
"(e) Will an employee who meets the criteria of this section be required to elect a retirement allowance option under RCW 41.40.190 (6)?"
Our answer to these questions are as follows:
(a) We believe that the term "service" as used in RCW 41.40.190 (5), supra, should be taken to mean only such periods of service by a member of the retirement system as are rendered in one of the elective or appointive capacities to which this subsection refers.
Broadly speaking, the term "service," for the purposes of the retirement act, is defined by RCW 41.40.010 (9) as follows:
"(9) 'Service' means periods of employment rendered to any employer for which compensation is paid, and includes time spent in office as an elected or appointed official of an employer. . . ."
However, within the context of new subsection (5), we believe that the term must be given a more limited meaning. This subsection provides that the "retirement allowance shall be equal to three percent of the average final compensation for each year of such service. . . ." (Emphasis supplied.) Obviously, the phrase "such service" relates back to the antecedent requirement that a member have served in an elective or appointive office under Articles II and III of the constitution (or RCW 48.02.010, which refers to the statutory office of state insurance commissioner) in order to qualify for the special retirement allowance computation which is provided for by the amendment. As stated by our court in Smith v. Dept. of Labor & Industries, 8 Wn.2d 587, 591, 113 P.2d 57 (1941),
[[Orig. Op. Page 4]]
"It is a well-established rule of grammar, which has been recognized and adopted by all the courts, that a qualifying and limiting phrase relates only to the last antecedent; . . ."
Therefore, it follows that the "service" referred to in this subsection refers only to those periods of service rendered "where a member was elected or appointed pursuant to Article II or III of the Constitution of the state of Washington or RCW 48.02.010."
(b) The limitation of certain retirement allowances to a figure less than the average final compensation upon which they are based, which is set forth in the proviso to RCW 41.40.190 (5), supra, is not, in our opinion, applicable to presently retired members who at one time served as elected officers under the provisions of Article II of our state constitution.
For ease of reference we shall quote again, by itself, the language of this proviso:
". . . PROVIDED, That the initial retirement allowance of a member retiring only under the provisions of this subsection shall not exceed the average final compensation upon which the retirement allowance is based. The minimum benefits provided in this subsection shall apply to all retired members or to the surviving spouse of deceased members who were elected under the provisions of Article II of the Washington State Constitution." (Emphasis supplied.)
It seems clear from the tense of this sentence that it looks only toward the future. A member already retired is not in receipt of his "initial retirement allowance" on the basis of the provisions of this amendatory subsection. Instead, such a member ‑ having retired before the effective date of the amendment ‑ is receiving his "initial retirement allowance" under the preexisting first four subsections of RCW 41.40.190. Moreover, grammatically, such a member would be more properly described as a member "retired" as opposed to one "retiring." Therefore, consistent with the well-established general rule that a public employee's retirement allowance, in the absence of a clear and unambiguous manifestation of legislative intent to the contrary, is governed [[Orig. Op. Page 5]] by the laws in effect at the time of retirement and not by subsequent enactments (see, AGO 1969 No. 12 [[to Pat Wanamaker, State Representative on July 15, 1969]], copy enclosed), we conclude that this limitation does not apply to presently retired members who are merely granted new minimum benefits by the preceding sentence of RCW 41.40.190 (5), rather than being granted their "initial retirement allowance" thereunder.
(c) Likewise, it is our opinion that the limitation set forth in the foregoing proviso should also be regarded as being applicable, even in so far as future retirees are concerned, only to those members who, at the time of retirement, are entitled to benefits computed under new subsection (5) alone, without any consideration of the other subsections of this statute. In other words, this proviso applies solely to future retirees whose only periods of creditable service, at the time of retirement, are periods in elective or appointive offices under Articles II and III of the constitution (or RCW 48.02.010).
In accordance with our answer to subquestion (a), supra, it will be seen that if a member, at the time of retirement, has some periods of service which are creditable for purposes of new subsection (5), and other periods of service which give rise to eligibility for a retirement allowance under the preexisting provisions of (1) ‑ (4), he will receive one retirement allowance computed under subsection (5) and another computed under these preexisting subsections. By this token, such a member will not be retiring "only" under the provisions of subsection (5).
(d) and (e) We believe both questions (d) and (e) to be answerable in the affirmative. Subsection (6) of RCW 41.40.190 (to which reference is made in both of these subparts to your second question) deals with the optional forms of service retirement allowance which a member must choose between at the time of retirement. Under this subsection a surviving spouse of a retired member is to receive a monthly benefit for the remainder of his or her life only if the member, at the time of retirement, selected either "Option II" or "Option III" as provided for in this preexisting subsection.
The critical language of subsection (5), supra, states that:
". . . The minimum benefits provided in this subsection shall apply to all retired members or to the surviving spouse of deceased members [[Orig. Op. Page 6]] who were elected under the provisions of Article II of the Washington State Constitution."
Clearly, in so far as subquestion (d) is concerned, the express language of this sentence meets the test required for retroactive effect under AGO 1969 No. 12, supra. Therefore, it must be regarded as being applicable to the surviving spouse of an already deceased member whose periods of creditable service included the period of elective service under Article II of the constitution. However, because the only spouse who will be receiving a monthly retirement allowance to which the language of this sentence could apply is one whose deceased spouse selected either "Option II" or "Option III" under RCW 41.40.190 (6), supra, it follows that only such a spouse will be entitled to the benefits of the new minimum retirement allowance which the legislature has provided.
In so far as subquestion (e) is concerned, the general right of every member retiring for service to select any one of the several optional forms of service retirement allowance which are provided for in RCW 41.40.190 (6), is unquestionably applicable to those members who retire under subsection (5) ‑ for there is simply nothing stated in this amendment which would exclude such members from the rights granted under preexisting subsection (6). Moreover, the legislature, in enacting new subsection (5), must be presumed to have been fully aware of all of these preexisting provisions. Accord, Sandahl v. Dept. Labor & Industries, 170 Wash. 380, 16 P.2d 623 (1932): Bradley v. Dept. Labor & Industries, 52 Wn.2d 783, 329 P.2d 196 (1958).
This question deals with RCW 41.40.330, as amended by § 10 of the 1971 amendatory act. By this section, which is obviously related to new subsection (5) of RCW 41.40.190, the legislature added a new subsection (3) to this preexisting statute dealing with employee contributions to the retirement fund. The ordinary employee's contribution which is provided for under RCW 41.40.330, presently amounts to five percent of the member's monthly "compensation earnable." However, presumably for the purpose of assisting in the funding of the increased benefits for members elected or appointed under Articles II and III of the constitution (and RCW 48.02.010) by virtue of § 5 of the act, the legislature in this section added the following:
[[Orig. Op. Page 7]]
"(3) The officer responsible for making up the payroll shall deduct from the compensation of each member covered by the provisions of RCW 41.40.190 (5) on each and every payroll of such member for each and every payroll period subsequent to the date on which he thereafter becomes a member of the retirement system, an amount equal to seven and one‑half percent of such member's compensation earnable."
Your question dealing with this provision is as follows:
"Does the requirement for a 7 1/2% employee contribution, for certain employees, contained in RCW 41.40.330 (3), only apply prospectively?"
It could, conceivably, be argued that for those persons who were members of the retirement system prior to the effective date of the 1971 amandatory act, the language of this new subsection relates back to that date upon which they first became members, and now requires an additional employee's contribution (the difference between the then existing contribution rate and the new rate of 7 1/2% for certain periods of service) for each payroll period subsequent to that date. However, two firm rules of statutory construction mitigate against this approach.
The first of these rules is that a statute is not made retroactive merely by the fact that it draws upon facts antecedent to its enactment for its operation. Earle v. Froedtert Grain & Malting Co., 197 Wash. 341, 85 P.2d 264 (1938). Moreover, consistent therewith, it is well established that statutes will not be given a retroactive construction unless they are required to be given such a construction by a clear expression of legislative intent. Moran v. Seattle, 179 Wash. 555, 38 P.2d 391 (1934); Bodine v. Dept. of Labor & Ind., 29 Wn.2d 879, 190 P.2d 89 (1948).
Secondly, to give the provisions of new subsection (3) of RCW 41.40.330, supra, a retroactive affect would be to lead to an absurdity, in violation of the rule of construction stated in such cases as Lenci v. Seattle, 63 Wn.2d 664, 388 P.2d 926 (1964), and Alderwood Water Dist. v. Pope & Talbot, 62 Wn.2d 319, 382 P.2d 639 (1963). If this provision were construed to operate retroactively, it would require payroll officers now to make additional deductions [[Orig. Op. Page 8]] from the compensation already paid.
Therefore, it is our opinion that this provision applies prospectively only.
Questions (3) and (4):
These two questions involve amendments contained in § 11 of chapter 271, Laws of 1971, Ex. Sess. The first of these amendments adds the following new language to RCW 41.40.361 (3), relating to the computation of employers contributions to the retirement fund:
". . . In addition the board shall determine the additional employer contribution rate necessary to fund the benefits granted officials holding office pursuant to Articles II and III of the Constitution of the state of Washington and RCW 48.02.010. Said additional employer contribution rate shall be paid in the same manner as the normal contribution and the unfunded liability contribution. . . ."
The other amendatory provision of § 11 to be noted constitutes a new subsection (6), reading as follows:
"(6) For the biennium beginning July 1, 1971, and ending June 30, 1973, only, and notwithstanding any other provision of the chapter, the rate determined by the board for state employer contributions shall be only the percentage of compensation for members equal to the 'normal contribution' computed to be four and thirty-six one‑hundredths percent of compensation. (Emphasis supplied.)
Your first question dealing with these amendments reads as follows:
"Will the new employer contribution rate, which the Retirement Board is required to calculate pursuant to RCW 41.40.361 (3), be subject to the limitation contained in RCW 41.40.361 (6)?"
[[Orig. Op. Page 9]]
This question, in our opinion, must be answered in the affirmative. By the new language which the legislature has added to RCW 41.40.361 (3), supra, an additional, employer financed, funding source for the increased retirement allowances provided for certain elected and appointive officials under § 5, supra, has been established. However, the temporary limitation upon "state employer contributions" for the 1971-73 biennium which is provided for in new subsection (6) of RCW 41.40.361, supra, is expressly stated to be effective "notwithstanding any other provision of the chapter." Therefore, to the extent that this limitation is inconsistent with the amended version of subsection (3), supra, subsection (6) must prevail. From this it follows that this limitation is applicable to all employer contributions by state agencies, including those made for and on behalf of elective or appointive officials, during the specified 1971-73 fiscal biennium period.
Lastly, again referring to new subsection (6) of RCW 41.40.361, supra, you have asked:
"Are the school districts and other political subdivisions receiving state funds, 'state employers' for the purpose of paying an employer contribution rate of 4.36%, as outlined in RCW 41.40.361 (6)?"
This final question, in our opinion, is clearly answerable in the negative.
In construing an amended statute, it should be viewed as if it had read from the beginning as it does in amended form. McClure v. United States, 95 F.2d 744 (9th Cir. 1938); In re Eichler's Estate, 102 Wash. 497, 173 Pac. 435 (1918). It is further the rule that words used in an amendment, where they also appear in the original act, will be presumed to be used in the same sense in the amendment as in the original act. Groves v. Meyers, 35 Wn.2d 403, 213 P.2d 483 (1950).
In this instance, the word "employer" is, and has in the past, been defined in RCW 41.40.010 (in material part) as follows:
"(4) 'Employer' means every branch, department, agency, commission, board, and office of the state and any political subdivision of the state admitted into the retirement system; . . ." (Emphasis supplied.)
[[Orig. Op. Page 10]]
The entry of school districts and other political subdivisions into the retirement system is provided for under RCW 41.40.410 which, since 1965, has been mandatory in the case of school districts but remains optional in the case of all other political subdivisions. Thus, these governmental units do not participate in the retirement system on the basis of being a ". . . branch, department, agency, commission, board, and office of the state . . . "; rather, participation by these units is on the basis of their characterization as "political subdivisions" of the state which have been admitted into the retirement system under RCW 41.40.410, supra.
New subsection (6) of RCW 41.40.361, supra, refers only to the rate of the employer contribution determined by the board for "state employer contributions." (Emphasis supplied.) However, to read this provision as applying, as well, to political subdivisions would be to read the modifying word "state" totally out of the amendatory provision. This, of course, would be contrary to the well-established rule that a statute is to be so construed as to give every word or clause its true significance, if at all possible. See, e.g., State ex rel. George v. Seattle, 184 Wash. 560, 52 P.2d 360 (1935). Therefore, such a construction is to be rejected in this case, and the provisions of new subsection (6) of RCW 41.40.361, supra, are to be read as applicable only to those employer contributions to the retirement fund which are made by state agencies.
We trust that the foregoing, which covers all but one of the questions set forth in your request, will be of assistance to you at this time. Your remaining question, dealing with the applicability of RCW 41.40.190 (5), supra, to certain "elected" officers of the state senate and house of representatives, remains under consideration and will be answered by a separate opinion as soon as our conclusion thereon has been reached.
Very truly yours,
FOR THE ATTORNEY GENERAL
WAYNE L. WILLIAMS
Assistant Attorney General