TEACHERS ‑- RETIREMENT ‑- CREDIT FOR OUT-OF-STATE SERVICE UNDER RCW 41.32.300 ‑- 1961 AMENDMENT
A teacher who entered public school employment during the 1960-61 school year has until June 30, 1962, to establish credit for out-of-state service under the provisions of RCW 41.32.300 as it read prior to its 1961 amendment.
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June 6, 1961
Honorable E. B. Rogel
Teachers' Retirement System
P.O. Box 778
Cite as: AGO 61-62 No. 35
By letter previously acknowledged you requested an opinion of this office on the following question:
"Will members of the Washington State Teachers' Retirement System, whose first public school employment in Washington since June 8, 1955 was during the school year 1960-61, have until June 30, 1962 to establish credit for out-of-state service under the provisions of RCW 41.32.300, in effect when they became members of the Retirement System, or will they be subject to the 1961 amendment to RCW 41.32.300 if they should seek to establish or re‑establish [[reestablish]]credit for out-of-state service after July 1, 1961 and before June 30, 1962?"
We answer this question in the manner set forth in our analysis.
When a teacher entered public school employment in this state for the school year 1960-61, and became a member of the teachers' retirement system, the following pertinent statutes were in effect:
RCW 41.32.300 reads as follows:
[[Orig. Op. Page 2]]
"A total of not more than ten years of service outside of the state is to be credited to a member who has entered public school employment in this state subsequent to April 1, 1938, and not more than fifteen years of service to a member who entered public school employment in this state prior to that date. Foreign school teaching service, if paid for by public funds of the United States of America, shall be creditable as out-of-state service. No member who establishes out-of-state service credit after July 1, 1947, shall at retirement for pension payment purposes be allowed credit for out-of-state service in excess of the number of years credit which he shall have earned in the public schools of the state of Washington."
Thus, under this statute a member who first entered public school employment during the school year 1960-61, could, if eligible, establish a maximum of ten (10) years of credit for out-of-state service, upon compliance with RCW 41.32.310, which reads as follows:
"Any member desiring to establish credit for services previously rendered, must present proof and make the necessary payments before June 30, 1957; or, if not employed on the effective date of this act, before June 30th of the second school year after entry into public school employment in this state. Payments covering all types of membership service credit may be made in a lump sum when due, or in annual installments, with three percent interest. The first annual installment of at least twenty percent of the amount due must be paid before the date specified above, and the final payment before June 30th of the fourth school year following that in which the first payment was made." (Emphasis supplied.)
In other words, under the express language of RCW 41.32.300 and RCW 41.32.310,supra, a teacher who entered public school employment during the school year 1960-61, would have (1) the right to establish up to ten (10) years credit for out-of-state service; (2) until June 30th of the second year after entry into such employment (June 30, 1962) to establish credit for prior service for which credit may be granted.
The problem which you have requested that we resolve requires that we determine what, if any, effect the action of the 1961 legislature had upon these rights of such teacher.
[[Orig. Op. Page 3]]
During its recent session, the legislature enacted chapter 132, Laws of 1961, which amends several sections of the law governing the teachers' retirement system. Specifically, § 7 amends RCW 41.32.300, supra, to read as follows:
"Henceforth a total ofnot more than four years of service outside of the state shall be credited to a member who establishes or reestablishes credit for out-of-state public school employment in this state subsequent to July 1, 1961. Foreign school teaching service, if paid for by public funds of the United States of America, shall be creditable as out-of-state service. No member who establishes out-of-state service credit after July 1, 1947, shall at retirement for pension payment purposes be allowed credit for out-of-state service in excess of the number of years credit which he shall have earned in the public schools of the state of Washington." (Emphasis supplied.)
It is an oft-quoted rule of statutory construction that where a statute is plain, clear and unambiguous, there is no room for construction. Martin v. Tollefson, 24 Wn. (2d) 211, 163 P. (2d) 594 (1945); Soundview Pulp Co. v. Taylor, 21 Wn. (2d) 261, 150 P. (2d) 839 (1944). While this rule was stated in the Taylor case,supra, the court recognized and applied the following rule:
"There are statutes, however, in which their wording may be plain, but it may appear from such wordingthat a given statute may be applied in different ways, or some of the words may be susceptible of different meanings, and if applied, or the words are used in a certain way, the statute would be unconstitutional, or a grave doubt as to its validity would be raised. In such cases the rule is that, where a statute is open to two constructions, one of which will render it constitutional and the other unconstitutional or open to grave doubt in this respect, the former construction and not the latter is to be adopted. [Citing cases.]" (Emphasis supplied.) (p. 268)
See, also,Yelle v. Bishop, 55 Wn. (2d) 286, 347 P. (2d) 1081 (1960);Hammack v. Monroe St. Lbr. Co., 54 Wn. (2d) 224, 339 P. (2d) 684 (1959);Gruen v. State Tax Commission, 35 Wn. (2d) 1, 211 P. (2d) 651 (1949); AGO 51-53 No. 500 [[to A. B. Langlie, Governor on March 23, 1953]]; AGO 59-60 No. 120 [[to Prosecuting Attorney, Kitsap County on May 31, 1960]].
[[Orig. Op. Page 4]]
While we feel it is established beyond question that the legislature can make changes in retirement systems to operate prospectively and which will affect persons who are not members of the system when the changes are made, there is at least grave doubt as to the constitutionality of § 7, chapter 132, Laws of 1961, if we were to conclude that it was intended to limit or restrict the rights guaranteed by statute to present members of the retirement system. The basis for this reasoning stems from the case of Bakenhus v. Seattle, 48 Wn. (2d) 695, 296 P. (2d) 536 (1956), in which the court held that pension rights are contractual in nature and they become vested at the time the employee enters public service. In that case the court said:
"'As of the time he joined the fund, his right to continued membership therein, under the same rules and regulations existing at the time of his employment, was complete and vested. The legislature could not thereafter constitutionally alter the provisions of his already existing contract of membership. His rights in the fund could only be changed by mutual consent: Marshall v. Pilots Assn., 206 Pa. 182, 55 A. 916 [[55 Atl. 916]].'" (p. 699.)
"'An employee's vested contractual pension rights may be modified prior to retirement for the purpose of keeping a pension system flexible to permit adjustments in accord with changing conditions and at the same time maintain the integrity of the system. [Citing cases]. Such modifications must be reasonable, and it is for the courts to determine upon the facts of each case what constitutes a permissible change. To be sustained as reasonable, alterations of employees' pension rights must bear some material relation to the theory of a pension system and its successful operation, and changes in a pension plan which result in disadvantage to employees should be accompanied by comparable new advantages. [Citing cases.]'" (p. 701.)
Under the factual situation presented by your question, if § 7, chapter 132, Laws of 1961,supra, is controlling, a member of the teachers' retirement system who entered public school employment for the school year 1960-61, would be deprived of any right he might have to establish more than four years out-of-state credit unless the same were re‑established prior to July 1, 1961. However, under existing law when he became a member of the system, and his contractual rights became vested, he had the right to establish such credit prior to June 30, 1962.
[[Orig. Op. Page 5]]
We have been unable to find any corresponding benefit for the loss of the right noted. Furthermore, we have not been advised by you nor by any other source that the amendment limiting the time within which credit for out-of-state service could be established was necessary for "flexibility" in the program.
Accordingly, it is our opinion that under the rule of the Bakenhus case, supra, a teacher who entered public school employment during the 1960-61 school year has until the 30th of June of the second year following his entry into service and that the number of years credit for out-of-state service is to be determined by the law in effect at the time the member of the system entered public employment, i.e., RCW 41.32.300, prior to the 1961 amendment.
We trust the foregoing will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
ROBERT J. DORAN
Assistant Attorney General