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October 4, 1971
Honorable Lloyd G. Baker, Director
Law Enforcement Officers' and Fire
Fighters' Retirement System
201 General Administration Building
Post Office Box 2008
Olympia, Washington 98501
Cite as: AGLO 1971 No. 115 (not official)
By recent letter you have requested an opinion of this office on three questions relating to the law enforcement officers' and fire fighters' retirement law, which we paraphrase as follows:
(1) Are the employer and employee contributions required by RCW 41.26.080, to be remitted for a member who is on disability leave pursuant to RCW 41.26.120?
(2) Are disability leave allowance payments to be considered in establishing an employer's proportional share of the expense of the administration of the retirement system pursuant to chapter 216, Laws of 1971, 1st Ex. Sess.?
(3) Where a member of the law enforcement officers' and fire fighters' retirement system, being eligible therefor under RCW 41.26.040, has applied for and been granted both a disability retirement allowance under RCW 41.26.120 and a similar benefit for his prior service; and where, thereafter, this person's LEFF disability allowance is reduced pursuant to RCW 41.26.130 (5) because of income from gainful employment, is he then entitled to receive from his prior system any amounts by which his benefit thereunder exceeds his LEFF disability retirement allowance as thus reduced?
We answer questions (1) and (2) in the negative and question (3) in the affirmative for the reasons set forth below.
The processing of applications for disability retirement on the part of local governmental law enforcement officers [[Orig. Op. Page 2]] or fire fighters who are members of the LEFF is provided for in RCW 41.26.120, as follows:
"Any member, regardless of his age or years of service may be retired by the disability board, subject to approval by the retirement board as hereinafter provided, for any disability which has been continuous since his discontinuance of active service and which renders him unable to continue his service, whether incurred in the line of duty or not. No disability retirement allowance shall be paid until the expiration of a period of six months after the disability is incurred during which period the member, if found to be physically or mentally unfit for duty by the disability board following receipt of his application for disability retirement, shall be granted a disability leave by the disability board and shall receive an allowance equal to his full monthly salary from his employer for such period. . . ." (Emphasis supplied.)
RCW 41.26.030 (19) defines the term "disability leave" as used in the foregoing statute as meaning ". . . the period of six months or any portion thereof during which a member is on leave at an allowance equal to his full salary prior to the commencement of disability retirement."
The critical point which is made by these two statutes is that a "disability leave allowance" is a benefit which is paid to a disabled law enforcement officer of fire fighter in lieu of his regular salary; in other words, disability leave connotes a separation from an employer's payroll because of disability‑-followed by payment to the separated member of a disability leave allowance equal to the full salary which was payable to the member at the time of the incurrence of his disability. See, opinion dated September 9, 1971, to the Benton County Prosecuting Attorney, copy enclosed.
On the other hand, RCW 41.26.080, which requires employer and employee contributions to the system, reads as follows:
". . .
"(1) Every member shall have deducted from each payroll a sum equal to six percent of his basic salary for each pay period.
"(2) Every employer shall contribute monthly a sum equal to six percent of the basic salary of [[Orig. Op. Page 3]] each employee who is a member of this retirement system. The employer shall transmit the employee and employer contributions with a copy of the payroll to the retirement system monthly.
". . ." (Emphasis supplied.)
The references in this statute to payroll and salary obviously indicate that it is directed to the basic payments made to an employee for services rendered. As we have noted above, a member must separate from the payroll to be in receipt of a disability leave allowance. Therefore, as he is no longer on the payroll during his period of disability leave, the employer and the employee are not required to make contributions based upon disability leave allowance payments.
The same considerations noted above, relative to the payment of disability leave allowance, would apply to the payment made by the employer to defray the administrative expense of the LEFF retirement system. Section 2 (5) and (6), chapter 216, Laws of 1971, 1st Ex. Sess., provides as follows:
". . .
"(5) In order to reimburse the retirement system expense fund on an equitable basis the retirement board shall ascertain and report to each employer the sum necessary to defray its proportional share of the entire expense of the administration of this chapter during the ensuing biennium or fiscal year whichever may be required. Such sum is to be computed in an amount directly proportional to the estimated entire expense of the said administration as the ratio of monthly salaries of the employer's members bears to the total salaries of all members in the entire system. It shall then be the duty of all such employers to include in their budgets or otherwise provide the amounts so required.
"(6) The retirement board shall compute and bill each employer at the end of each month for the amount due that month to the retirement system expense fund and the same shall be paid as are its other obligations. Such computation as to each such employer shall be made on a percentage rate of salary established by the board: [[Orig. Op. Page 4]] PROVIDED, That the retirement board may at its discretion establish a system of billing based upon calendar year quarters in which event the said billing shall be at the end of each such quarter.
". . ." (Emphasis supplied.)
The directive of these statutes is to compute each employer's proportional share of the system's administrative expenses on the basis of salaries. As indicated above, the payments made in the form of "disability leave allowance" cannot be considered salaries. Therefore, we conclude that such payments are not to be included in determining an employer's proportional share of the administrative expense of the system.
Your final question envisions a law enforcement officer or fire fighter who was formerly a member of one of the prior pension systems and was required to transfer to the law enforcement officers' and fire fighters' retirement system by RCW 41.26.040, which provides, in part, as follows:
". . .
"(1) All fire fighters and law enforcement officers employed as such on or after March 1, 1970, on a full time fully compensated basis in this state shall be members of the retirement system established by this chapter with respect to all periods of service as such, to the exclusion of any pension system existing under any prior act except as provided in subsection (2) of this section.
"(2) Any employee serving as a law enforcement officer or fire fighter on March 1, 1970, who is then making retirement contributions under any prior act shall have his membership transferred to the system established by this chapter as of such date. Upon retirement for service or for disability, or death, of any such employee, his retirement benefits earned under this chapter shall be computed and paid. In addition, his benefits under the prior retirement act to which he was making contributions at the time of this transfer shall be computed as if he had not transferred. For the purpose of such computations, the employee's creditability of service and [[Orig. Op. Page 5]] eligibility for service or disability retirement and survivor and all other benefits shall continue to be as provided in such prior retirement act, as if transfer of membership had not occurred. The excess, if any, of the benefits so computed, giving full value to survivor benefits, over the benefits payable under this chapter shall be paid. . . ." (Emphasis supplied.)
Your question notes that such a member retains his rights under the prior retirement act which was applicable to him, "as if he had not transferred." For this reason, he is entitled to "the excess, if any" of the benefits he is entitled to under the prior act, over those payable from LEFF.
Of course, since his rights are calculated "as if he had not transferred", he must comply with the provisions of the prior act as they relate to application and qualification for benefits under that act,1/ as your question also stipulates.
Having qualified under both the LEFF act and the prior act, and while in receipt of a nonduty disability retirement allowance from the LEFF system, such a person is subject to RCW 41.26.140 (5), provides as follows:
". . .
"(5) Should a disability beneficiary whose disability was not incurred in line of duty, prior to attaining age fifty engage in a gainful occupation, the disability board shall reduce the amount of his retirement allowance to an amount which when added to the compensation earned by him in such occupation shall not exceed the basic salary currently being paid for the rank the retired member held at the time he was disabled. . . ." (Emphasis supplied.)
A person whose LEFF disability retirement allowance2/ is reduced pursuant to this section3/ , is obviously entitled to the excess of any allowance he would have received under his [[Orig. Op. Page 6]] prior act over the reduced allowance then available from LEFF. See, RCW 41.26.040 (2), supra.
To make the situation more concrete, we shall envision the instance of a fireman who is receiving a nonduty disability retirement allowance in the amount of $500. We imagine that the compensation presently attached to the rank he held at the time he was disabled is $1,000 per month. We additionally imagine that the amount of nonduty disability retirement allowance he is entitled to under his former act is also $500 a month, and that he is engaged in a gainful occupation which pays him $550 per month. The following computation would then be made:
Amount received from occupation $ 550.00
LEFF disability retirement allowance 500.00
Minus compensation currently attached
to his rank ‑ 1,000.00
DIFFERENCE $ 50.00
LEFF disability retirement
allowance $ 500.00
Difference above - 50.00
Reduced LEFF allowance$ 450.00
Pension payable under former act $ 500.00
Reduced LEFF allowance - 450.00
Amount of excess which must be paid
by prior system $ 50.00
In this instance, the prior system would be required, by the express terms of RCW 41.26.040, supra, to make a monthly [[Orig. Op. Page 7]] payment of $504/ to the member, because that figure represents "the excess of the benefits" under the old act over the reduced benefits payable under the LEFF act, and "the excess, if any, of the benefits so computed . . . over the bnenfits payable under this chapter (41.26 RCW) shall be paid."
We trust the foregoing information will be of assistance.
Very truly yours,
FOR THE ATTORNEY GENERAL
WAYNE L. WILLIAMS
Assistant Attorney General
*** FOOTNOTES ***
1/A person alloying for benefits under the LEFF act would, therefore, normally be well advised to simultaneously apply and qualify for benefits under his old act. Compare RCW 41.18.080, which requires that a request for nonduty disability benefits be filed within 60 days of the disability with RCW 41.20.060, which contains no such time limitation.
2/There is no such reduction provided for disability leave allowance payments.
3/(Cont.) We emphasize that the disability retirement allowance is reduced only if three conditions exist: (1) the member is under 50 years of age; (2) the member is in receipt of a nonduty disability retirement allowance; and (3) the total retirement allowance and compensation from his new occupation total more than the current salary attached to his rank.
4/If the prior act does not similarly require a reduction of pension payments where the retired member is gainfully employed. Compare chapter 41.18 RCW with chapter 41.40 RCW.