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June 3, 1970
Honorable Carlton A. Gladder
State Representative, 7th District
501 Fidelity Building
Spokane, Washington 99201
Cite as: AGLO 1970 No. 86
This is written in response to your recent letter requesting our opinion on three questions pertaining to the computation of pension benefits under the provisions of chapter 37, Laws of 1970 (Senate Bill No. 145).
This act contains three amendatory sections ‑ pertaining, respectively, to the provisions of §§ 33, 34 and 38 of chapter 209, Laws of 1969, Ex. Sess. These three sections of the 1969 act, in turn, provided for two percent per annum increases in certain pension benefits payable under the 1955 paid firemen's pension system (chapter 41.18 RCW); the first class city police pension system (chapter 41.20 RCW); and the 1947 paid firemen's pension system (chapter 41.16 RCW).
In essence, each of these three amendatory sections is the same ‑ and can be illustrated by referring to the first of them ‑ § 1 (amending § 33 of the 1969 act) alone. This section reads as follows (with new language underscored and deleted language lined out):
"The amount of all benefits payable under the provisions of RCW 41.18.040, 41.18.080 and 41.18.100 as now or hereafter amended, shall be increased annually as hereafter in this section provided. The present benefits payable under RCW 41.18.040, 41.18.080 and 41.18.100 on July 1, 1969 shall be increased two percent each year using as a basis for such two percent increase, the amount of the present benefit payable and not the amount of the future benefit payable which will hereafter be increased by the provisions of this section.
"((Said increases shall become effective July 1, 1969 or one year after the date when the said benefits are payable, whichever is later.)) As to each person receiving such [[Orig. Op. Page 2]] benefits on or after July 1, 1969, said increases shall take effect as of July 1st, of the first year when such benefits have heretofore or shall hereafter become payable. Each year effective with the July payment all benefits specified herein, shall be increased two percent as authorized by this section. This benefit increase shall be paid monthly as part of the regular pension payment and shall be cumulative but shall not be compounded. The increased benefits authorized by this section shall not affect any benefit payable under the provisions of chapter 41.18 RCW in which the benefit payment is attached to a current salary of the rank held at time of retirement."
Your questions with respect to this section ‑ and the counterpart provisions of §§ 2 and 3 of the 1970 act ‑ are as follows:
"1. In the case of a widow, does she receive 2% for each year that she has been a widow or would she receive 2% for each year since the retirement date of her late husband?
"2. Is the 2% additional pension based only upon completed years of service or do we consider months as a partially completed year and compute this also?
"3. Is the 2% additional pension based upon the pension received July 1, 1969, or is it based upon the pension originally received at the time of retirement?"
Of course, all three of your questions are based upon an assumption that the purpose and effect of the amendatory language contained in the second paragraph of each of the subject statutes was to make the two percent per annum pension increases which were provided for by the original 1969 act retroactive to July 1, of the first year that the benefits subject to the increase had become payable. As we indicated in our recent letter to State Representative R. Ted Bottiger (dated March 25, 1970), copy enclosed, we have no doubt, from an unofficial standpoint, that this assumption is correct. In that letter we said:
[[Orig. Op. Page 3]]
"This provision was drafted in this office, at the request of the public pension commission, for the avowed purpose of making the annual two percent pension increases which had been provided for by the provisions of the 1969 act retroactive to the first year that the benefits to which the two percent increases were to be added had become payable. Accordingly, we may unofficially state it to be our opinion that this is what was intended and accomplished by the 1970 legislature through its enactment of the act in question."
However, for reasons of policy based upon a factor which was further explained in the foregoing letter ‑ namely, the likelihood of litigation on the basic question of retroactivity because of the position which has been taken on that issue by the Tacoma city attorney's office ‑ we declined to issue an official opinion on that question until the matter has been settled by the court.
Nevertheless, without contravening this policy not to issue an official opinion on a question where litigation is either pending or imminent, we can provide you with our general thinking on the questions which you have raised, as set forth above. In advising you on these questions, we may first properly determine the pension benefits which are to be increased by virtue of the legislation in question. They are, in the words of § 1, supra (amending § 33 of the 1969 act):
". . . The present benefits payable under RCW 41.18.040, 41.18.080 and RCW 41.18.100 on July 1, 1969 . . ."
Accord, § 3, chapter 37, Laws of 1970, amending § 38 of the 1969 act, which provides for the increasing of
". . . The present benefits payable under RCW 41.16.080, 41.16.120, 41.16.130 and 41.16.140 on July 1, 1969 . . ."
In the case of § 2, chapter 37, Laws of 1970, amending § 34 of the 1969 act and providing for the increasing of certain benefits payable under the laws governing the first class city police pension system, the benefits to be increased are identified and described in the first paragraph [[Orig. Op. Page 4]] thereof as follows:
"All benefits presently payable pursuant to the provisions of RCW 41.20.050, 41.20.060 and 41.20.080 as such RCW sections existed prior to the effective date of the amendment of such RCW sections by sections 1, 2, 3, chapter 191, Laws of 1961 to persons who retired prior to the effective date of the said 1961 amendatory act, shall be increased annually as hereafter in this section provided. On July 1, 1969 such presently payable benefits shall be increased two percent each year using as a basis for such two percent increase, the amount of the present benefit payable and not the amount of the future benefit payable which will hereafter be increased by the provisions of this section."
The date of July 1, 1969, which is referred to in each of these sections was, of course, the effective date of the 1969 act. See, § 45 thereof. Thus, in accordance with the reasoning of AGO 1969 No. 22 [[to R. Ted Bottiger, State Representative on November 25, 1969]], copy enclosed,1/ it follows that the pension benefits which are to be increased by virtue of these sections are those "present" benefits which the recipients thereof were in receipt of on that effective date of the 1969 act ‑ and not such lesser pension benefits as may, in some instances, have been provided for under the laws in effect at the time of the recipient's retirement or other commencement of receipt of the benefits.2/
[[Orig. Op. Page 5]]
Secondly, assuming without officially deciding that the 1970 amendments had as their purpose the insertion of a retroactivity factor into the benefit increase formula described by the original 1969 version of the act in question, we may properly point out the time factor which is expressly spelled out in the 1970 amendments ‑ as to when these increases are to take effect. Under the terms of these 1970 amendments, the increases are to take effect ". . . as of July 1st, of the first year when such benefits have heretofore or shall hereafter become payable. . . ." (Emphasis supplied.)
From these two propositions it follows ‑ to the extent that we are correct in our presently "unofficial" expression of opinion that chapter 37, Laws of 1970 (Senate Bill No. 145) was intended to have retroactive effect ‑ that your three questions are answerable in the following manner:
(1) In the case of a widow of a deceased fireman or police officer who was in receipt of benefits on July 1, 1969, to which the two percent per annum pension increase is applicable under the subject statutes, the increase would be effective as of July 1st of the year in which she became a widow rather than the year of her late husband's retirement.
(2) The first increase of two percent would be effective as of July 1st of the first year that the individual in question became a widow, and each additional two percent increment would be added as of July 1st of each ensuing year that the individual in question was in receipt of the subject widow's benefit.
(3) The two percent pension increases which are provided for by the subject legislation are to be based upon the benefits which the eligible recipients were receiving on July 1, 1969 ‑ without regard to the original amounts of these benefits.
It is hoped that the foregoing will be of assistance to you at this time.
Very truly yours,
PHILIP H. AUSTIN
Assistant Attorney General
*** FOOTNOTES ***
1/In which we identified the persons to whom the annual two percent increases provided for by the 1969 act were to be paid as those persons who were presently in receipt of the benefits to be increased as of July 1, 1969, when chapter 209, Laws of 1969, Ex. Sess., became effective.
2/Accord, if there be any uncertainty or ambiguity in the statutes on this point, the well-established principle that all pension statutes should be liberally construed in favor of their beneficiaries. See, e.g., Benedict v. Board of Police Etc. Comm., 35 Wn.2d 465, 214 P.2d 171 (1950).