DISTRICTS ‑- SCHOOLS ‑- NONCERTIFICATED EMPLOYEES ‑- STATE RETIREMENT SYSTEM ‑- RETROACTIVE EMPLOYERS' CONTRIBUTIONS FOR PRIOR SERVICE.
School districts coming into the state employees' retirement system under the provisions of § 1, chapter 84, Laws of 1965 (RCW 41.40.410), will be required to make an employers' contribution to the retirement system fund for past services rendered by their eligible noncertificated employees since April 1, 1949. However, this financial obligation may be spread over a fifteen-year period from the date of the employers' admission to the retirement system.
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June 7, 1965
Honorable Charles O. Carroll
King County Courthouse
Seattle, Washington 98104
Cite as: AGO 65-66 No. 21
By letter previously acknowledged you have requested an opinion of this office on a question which we paraphrase as follows:
Is it legally proper for the Washington state employees' retirement board, in implementing § 1, chapter 84, Laws of 1965 (Senate Bill No. 272), to require that affected school districts make retroactive employers' contributions to the retirement fund?
We answer your question in the affirmative for the reasons set forth in our analysis.
By § 1, chapter 84, Laws of 1965 (Senate Bill No. 272), the legislature amended RCW 41.40.410 (relating to participation by political subdivisions in the Washington state employees' retirement system) to read as follows:
"The employees and appointive and elective officials of any political subdivision of the [[Orig. Op. Page 2]] state may become members of the retirement system by the approval of the local legislative authority: PROVIDED, That on and after September 1, 1965, every school district of the state of Washington shall be an employer under this chapter and every employee of the school district who is eligible for membership under RCW 41.40.120 shall be a member of the retirement system and participate on the same basis as a person who first becomes a member through the admission of any employer into the retirement system on and after April 1, 1949. Each such political subdivision becoming an employer under the meaning of this chapter shall make contributions to the funds of the retirement system as provided in RCW 41.40.080, 41.40.361 and 41.40.370 and its employees shall contribute to the employees' savings fund at the rate established under the provisions of RCW 41.40.330. For the purpose of administering and interpreting this chapter the board may substitute the names of political subdivisions of the state for the 'state' and employees of the subdivisions for 'state employees' wherever such terms appear in this chapter. The board may also alter any dates mentioned in this chapter for the purpose of making the provisions of the chapter applicable to the entry of any political subdivisions into the system. Any member transferring employment to another employer which is covered by the retirement system may continue as a member without loss of previously earned pension and annuity benefits. The board shall keep such accounts as are necessary to show the contributions of each political subdivision to the benefit account fund and shall have the power to debit and credit the various accounts in accordance with the transfer of the members from one employer to another." (Emphasis supplied.)
We have underscored the amendatory language. It is to be seen from this amendatory provision that the purpose of the legislation is to require every school district of the state to participate, as an employer, in the state employees' retirement system on and after September 1, 1965, for the benefit of every school district employee who is eligible for [[Orig. Op. Page 3]] membership. Since certificated teachers are not eligible for membership in the state employees' retirement system, as a general matter, because they are covered by the state teachers' retirement system (see, RCW 41.40.120 (4)), it is evident that for all practical purposes this new legislation will only apply to noncertificated school district employees.
The amendatory provision further states that the subject school district employees shall participate in the state employees' retirement system ". . . on the same basis as a person who first becomes a member through the admission of any employer into the retirement system on and after April 1, 1949." The statute then provides that:
". . . Each such political subdivision becoming an employer under the meaning of this chapter shall make contributions to the funds of the retirement system as provided in RCW 41.40.080, 41.40.361 and 41.40.370 . . ."
The matter of employers' contributions to the state employees' retirement fund is covered by RCW 41.40.361. This statute provides as follows:
"(1) For the purpose of this section, the 'fundable employer liability' at any date shall be the present value of
"(a) all future pension benefits payable in respect of all members in the retirement system at that date, and
"(b) all future benefits in respect of beneficiaries then receiving retirement allowances or pensions.
"(2) The contributions by the employer for benefits under the retirement system shall consist of the sum of a percentage of the compensation of members to be known as the 'normal contribution', a percentage of such compensation to be known as the 'unfunded liability contribution' and in the case of employers admitted to the retirement system after April 1, 1949, a percentage of such compensation to be known as the 'additional contribution'. The rates of such contributions shall be determined by the retirement board on [[Orig. Op. Page 4]] the basis of assets and liabilities as shown by actuarial valuation: Provided, That as to state employers the total combined contributions of the normal contribution and unfunded liability contribution shall not exceed a total combined percentage rate of six percent for each employer unless authorized by the legislature.
". . .
"(5)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 would have been required to contribute between April 1, 1949, and the date of such employer's admission to the retirement system: Provided, 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." (Emphasis supplied.)
On the basis of the underscored language relating to "additional contributions" by employers admitted to the retirement system after April 1, 1949, it is to be seen that the impact of Senate Bill 272 is to require all school districts becoming employers under the provisions of this 1965 amendment to make an ". . . additional contribution: equal to the amount of contributions which the school district, as an employer, would have been required to contribute between April 1, 1949, and the date of such employer's admission to the retirement system . . ." (i.e., September 1, 1965) in regard to its eligible employees at the time of admission.
However, because of the proviso contained in RCW 41.40.361 (5),supra, it will be seen that the financial burden of complying with this requirement can be spread over a considerable period of time; i.e., fifteen years from the date of the employer's admission.
In summary, therefore, we answer your question, as paraphrased, in the affirmative. School districts coming into the state employees' retirement system under the provisions of § 1, chapter 84, Laws of 1965, supra, will be required to make employers' contributions for past services rendered by their [[Orig. Op. Page 5]] eligible employees since April 1, 1949.
To the extent that your question raises an issue as to the constitutionality of this statutory requirement, we, of course, presume the constitutionality of duly enacted legislation. See, AGOs 1891-92:93; 1893-94:38; 1907-08:110; 1927-28:867; 1945-46:260; and AGO 59-60 No. 18 [[1891-92 OAG 93; 1893-94 OAG 38; 1907-08 OAG 110 to Prosecuting Attorney, Mason County on May 4, 1907; 1927-28 OAG 867 to Highway Patrol on July 31, 1928; 1945-46 OAG 260; and AGO 59-60 No. 18 to Dale M. Nordquist, State Senator on February 27, 1959]]. 260; and AGO 59-60 No. 18.1/
We trust the foregoing will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
PHILIP H. AUSTIN
Assistant Attorney General
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1/See, also, Labor and Industries v. Cook, 44 Wn.2d 671, 269 P.2d 962 (1954); as well as Williams v. Baltimore, 289 U.S. 36, 77 L.Ed. 1015, 53 S.Ct. 431 (1933), cited and discussed therein and holding that a municipal corporation may not invoke the equal protection clause of the 14th Amendment of the United States Constitution in opposition to the will of its creator.