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AGO 1992 No. 24 - October 19, 1992
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Ken Eikenberry | 1981-1992 | Attorney General of Washington

PENSIONS--POLICE--RETIREMENT--CITIES AND TOWNS--LAW ENFORCEMENT OFFICERS--Change in Pension of Retired Member

RCW 41.20.050 and .060 provide that a retired police officer will receive a pension equal to 50 percent of the amount of salary at any time attached to the position held at the date of retirement.  If a city creates a new step in its civil service classification and advances all officers at the next lower step to the new step, an officer who retired at that next lower step will receive a pension equal to 50 percent of the salary attached to the new step.

                                                                 * * * * * * * * * *

                                                                October 19, 1992

Honorable Art Wang
State Representative, District 27
203 John L. O'Brien Building
Mail Stop:  0654
Olympia, Washington  98504-0654

                                                                                                                 Cite as:  AGO 1992 No. 24

Dear Representative Wang:

            By letter previously acknowledged, you have requested our opinion on a question we paraphrase as follows:

            If a city creates a new step in its civil service classification of police officers and advances all officers at the next lower step to that new step, are officers who retired at the next lower step entitled to have their pensions under chapter 41.20 RCW based on the salary attached to the new step?

For the reasons set forth in the following analysis, we answer your question in the affirmative.

                                                                    ANALYSIS

            Our understanding is that civil service employees such as police officers are classified and compensated in accordance with a grid representing "ranges" and "steps".  Ranges rank positions so that those requiring similar duties, training, experience, and skill also offer the same salary.  Steps are increases in compensation to which an employee in a given range becomes entitled after holding that position for a certain length of time.  They are, in other words, raises for longevity.  After reaching the highest step in a range, the employee receives no further salary increases unless moved into a position in a new range, or given a cost of living salary increase.

            Your letter describes a situation in which a number of persons who had begun serving as police officers in a first class city prior to March 1, 1970, retired at "E" step, then the highest step in their range.  After their retirement, the union representing currently employed police officers negotiated with the city to create a new, higher step known as "F" step.  The compensation paid to officers at "F" step is higher than that paid to officers at "E" step.  Under the terms of the negotiated agreement, all officers at "E" step on the effective date of the agreement automatically advanced to "F" step.  Other officers could advance to "F" step after being at "E" step for one year.

            The question is whether the retirees' pensions should be based on the salary currently paid to officers at "E" step, or on that currently paid to officers at "F" step.

            We begin by reviewing the provisions of state law governing retirement benefits for city police officers.  Officers who began service on or after March 1, 1970, are members of the Washington Law Enforcement Officers' and Fire Fighters' Retirement System, also known as LEOFF.  RCW 41.26.040(1).  Their retirement benefits are determined solely by the provisions of chapter 41.26 RCW.

            Officers who began service before March 1, 1970, also are members of LEOFF.  RCW 41.26.040(2).  Because they had previously been members of other retirement systems, however,[1]these officers are entitled to the retirement benefits provided by LEOFF and to any additional benefits provided by the system of which they originally were members.  RCW 41.26.040(2) states as follows:

                        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 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 whether or not the employee has made application under the prior act.  If the employee's prior retirement system was the Washington public employees' retirement system, payment of such excess shall be made by that system; if the employee's prior retirement system was the state-wide city employees' retirement system, payment of such excess shall be made by the employer which was the member's employer when his transfer of membership occurred: PROVIDED, That any death in line of duty lump sum benefit payment shall continue to be the obligation of that system as provided in RCW 41.44.210; in the case of all other prior retirement systems, payment of such excess shall be made by the employer which was the member's employer when his transfer of membership occurred.

(Emphasis added.)  Your question asks about the benefits available to retired police officers under one of these prior retirement systems, a city's police relief and pension fund retirement system established pursuant to chapter 41.20 RCW.

            Former members of a city police relief and pension fund established under chapter 41.20 RCW may retire after completing a specified number of years service, or after becoming disabled.  Separate statutes describe in nearly identical terms the pension benefits payable to officers retiring for service or for disability.  The statute pertaining to retirement for service provides in part as follows:

                        Whenever a person has been duly appointed, and has served honorably for a period of twenty-five years, as a member, in any capacity, of the regularly constituted police department of a city subject to the provisions of this chapter, the board, after hearing, if one is requested in writing, may order and direct that such person be retired, and the board shall retire any member so entitled, upon his written request therefor.  The member so retired hereafter shall be paid from the fund during his lifetime a pension equal to fifty percent of the amount of salary at any time hereafter attached to the position held by the retired member for the year preceding the date of his retirement: Provided, That, except as to a position higher than that of captain held for at least three calendar years prior to date of retirement, no such pension shall exceed an amount equivalent to fifty percent of the salary of the captain, and all existing pensions shall be increased to not less than three hundred dollars per month as of April 25, 1973[.]

RCW 41.20.050 (emphasis added).

            The statute pertaining to retirement for disability provides in part as follows:

                        Whenever any person, while serving as a policeman in any such city becomes physically disabled by reason of any bodily injury received in the immediate or direct performance or discharge of his duties as a policeman, or becomes incapacitated for service, such incapacity not having been caused or brought on by dissipation or abuse, of which the board shall be judge, the board may, upon his written request filed with the secretary, or without such written request, if it deems it to be for the benefit of the public, retire such person from the department, and order and direct that he be paid from the fund during his lifetime, a pension equal to fifty percent of the amount of salary at any time hereafter attached to the position which he held in the department at the date of his retirement, but not to exceed an amount equivalent to fifty percent of the salary of captain except as to a position higher than that of captain held for at least three calendar years prior to the date of retirement in which case as to such position the provisions of RCW 41.20.050 shall apply, and all existing pensions shall be increased to not less than three hundred dollars per month as of April 25, 1973[.]

RCW 41.20.060 (emphasis added).  Both statutes provide that the pension is based on a percentage of the "salary at any time hereafter attached to the position" held by the retiree.  The answer to your question lies in the meaning of this phrase.

            Our goal in construing this phrase is, of course, to discern the Legislature's intent.  Rozner v. Bellevue, 116 Wn.2d 342, 347, 804 P.2d 24 (1991).  If possible, that intent is to be found in the language of the statute itself.  Id.  We are mindful in this case of the rule that statutes involving pension rights are, if ambiguous, to be construed in favor of the retiree.  Bowen v. Statewide City Employees Retirement Sys., 72 Wn.2d 397, 402, 433 P.2d 150 (1967).

            We turn now to the definitions section of chapter 41.20 RCW.  It defines "position" as "the particular employment held at any particular time, which may or may not be the same as civil service rank."[2]  RCW 41.20.005(2).   "Salary" is the "basic monthly rate of salary or wages, including longevity pay but not including overtime earnings or special salary or wages."  RCW 41.20.005(4) (emphasis added).  When the Legislature set pensions at a percentage of the salary, including longevity pay, attached to the position held at retirement, it clearly meant for the position to be described in terms that reflect longevity.  Under a salary schedule that rewards longevity through step raises, the salary attached to the retiree's position is the salary attached to the range and step attained at the time of retirement.  At the time of their retirement, the officers about whom you inquire held the positions defined by their range and "E" step.

            Because a new step was created, however, all active officers formerly at "E" step have moved to "F" step.  In essence, the positions occupied by the retired officers have been redesignated.  The real question, then, is whether the salary now attached to each retiree's position for purposes of RCW 41.20.050 and .060, is the salary attached to the range and step that retiree held at the time of retirement, or whether it is the salary attached to the range and step at which the retiree would be classified if still working.  In our opinion, it is the latter.

            RCW 41.20.050 and .060 provide for retirees a fluctuating pension -- that is, a pension tied to the salary of a currently employed police officer holding the same position held by the retiree at the time of retirement.  By providing a fluctuating rather than a fixed pension, the Legislature apparently intended to maintain for the retiree a constant standard of living.  SeeAbbott v. Los Angeles, 178 Cal. App. 2d 204, 215-16, 3 Cal. Rptr. 127, 134 (1960).  A fluctuating pension also establishes parity between the retiree and an actively employed counterpart.  Dunham v. Berkeley, 7 Cal. App. 3d 508, 516, 86 Cal. Rptr. 569, 573 (1970); see alsoBanish v. Hamtramck, 9 Mich. App. 381, 389, 157 N.W.2d 445, 448 (1968).

            We believe that these legislative goals are served only if the pensions reflect structural changes in the employer's salary schedule from which the retiree would benefit if still active on the police force.  Cases from outside this state, although based on statutory language somewhat different from that in RCW 41.20.050 and .060, support this conclusion.

            In Dunham v. Berkeley, supra, retired police officers claimed that their pensions should reflect salary increases paid to active officers participating in two programs established after the plaintiffs' retirement.[3]   These programs, known as the Senior Patrolman and Career Incentive programs, rewarded officers who received additional training with higher salaries.  The court found that the retirees had, while working, undergone the same training for which active officers were then receiving additional compensation.  Therefore, the court held the retirees had performed the services that entitled current officers to higher pay, and thus had earned the right to base their pensions on that higher salary.

            Plaintiffs in Long Beach v. Allen, 143 Cal. App. 2d 35, 300 P.2d 356 (1956) were retired police officers who sought to have their pensions increased in accordance with salary increases given to active officers.[4]   While the retirees were working, there had been only two rates of pay for the positions they held.  The lower rate applied when the officer first held the position.  After six months, the officer automatically moved to the higher rate.

            Following plaintiffs' retirement, the city passed an ordinance establishing three new rates of pay, for a total of five.  Officers rose through the first three rates based solely on longevity.  The last two, however, were merit raises payable only on the recommendation of management.  When the city established the new rates, it specified that the new salaries of active officers would be the same as, or higher than, the officers' old salaries.  Active officers were assigned to the pay rate that would ensure this result.

            The retired officers, all of whom had reached the highest rate of pay available at the time of retirement, claimed that they were entitled to base their pensions on the highest rate of pay established under the new ordinance.  The court agreed.  It held that the retirees had a right to a fluctuating pension based on the salary of the employee who held the same position they had held prior to retirement.  Since the officers had retired at the highest rate of pay then available, their current counterparts were the officers receiving the highest rate of pay presently available.

            Although the court in Baldwin v. San Diego, 195 Cal. App. 2d 236, 15 Cal. Rptr. 576 (1961) reached a result different from that reached in Dunham and Allen, it used the same rationale relied upon by the courts in those two cases.  One of the plaintiff retirees was found not to be entitled to base her pension on the increased salary earned by current police officers and firefighters.[5]   After the plaintiff retired, the city offered current employees additional compensation for working at times considered "unusual for the class of position" held by the employees.  Plaintiff offered evidence that she had worked different shifts, including night shifts, and argued that her pension should reflect the additional compensation paid for working at unusual times.  In the court's view, the plaintiff did not demonstrate that she had actually worked at unusual times, and therefore did not earn the extra compensation she claimed.

            The principle that emerges from these cases is that retirees' fluctuating pensions should reflect structural changes made in the salary schedule after retirement if the retirees would have benefitted from the change had they continued working.  In other words, if the retirees' conduct while working establishes that they would have qualified for the new step, higher rate of pay, or additional compensation associated with the structural schedule change if still employed, then their pensions should be based on the higher compensation.  We believe that this principle is consistent with the Legislature's intent in creating a fluctuating pension system for retired police officers of first class cities.

            Applying this principle to the situation you have described, we conclude that the retired police officers' pensions should be based on the salary currently paid to officers at "F" step.  It appears that, were they still working today, the retirees would be classified at "F" step; the requirement that all officers move from "E" step to "F" step on the effective date of the ordinance guarantees this result.  Entitlement to the higher salary was not conditioned on the officer's performance of additional duties or on working unpopular shifts, as in Baldwin.  Consequently, the retirees should not be deemed ineligible for the new step.[6]

            We believe that denying the retirees the benefits of any structural salary schedule changes to which they would be entitled if still employed would thwart the purpose of the fluctuating pension, to maintain parity between the retiree and an active counterpart.  That parity would soon be lost if, instead of periodically raising the salary attached to each step, the city simply moved all officers to higher steps with higher pay.  Each creation of a new step would leave the retirees further behind their current counterparts.

            Since the retired police officers apparently would have moved to "F" step had they still been working when the new ordinance was adopted, we conclude that it is the position on which their pensions under chapter 41.20 RCW should be calculated.

            We trust this will be helpful to you.

                                    Very truly yours,

                                    KENNETH O. EIKENBERRY
                                    Attorney General

                                    TANYA BARNETT
                                    Assistant Attorney General

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    [1]       LEOFF was established by chapter 209, Laws of 1969, 1st Extraordinary Session, and came into existence in 1970.

    [2]       Before the Legislature added this definition to the statute in question here, the State Supreme Court held that the term "rank" as used in the Firemen's Relief and Pension Fund Act included not just civil service employment, but appointive positions such as fire chief.  Eisenbacher v. Tacoma, 53 Wn.2d 280, 286, 333 P.2d 642 (1958); see alsoMartin v. Spokane, 55 Wn.2d 52, 55, 345 P.2d 1113 (1959) (unclassified civil service position of chief of police is "rank" for purposes of Policemen's Pension Fund Act).

    [3]       The relevant ordinance provided that a retiree's pension benefits were based on "the average salary attached to the respective rank or ranks held during the three years immediately preceding the date of retirement".  Dunham. at 574.

    [4]       The relevant section of the city charter entitled the retirees to a pension based on a certain percentage of the salary currently provided for "the rank or position held by him one year prior to the date of retirement."  Long Beach, at 36-37.

    [5]       The pension benefit language applicable to the plaintiff provided for a fluctuating pension based on a percentage of the rate of pay for the position she held during her service, adjusted to the rate of pay for such position at the time the pension payments accrued.  Baldwin, at 239.

    [6]       Our conclusion is based on the information supplied with your opinion request, which indicated that the only prerequisite for advancing to "F" step was having reached "E" step.  If the city set other prerequisites for advancement, then we would have to consider whether the retirees had, while working, satisfied those prerequisites before we could decide whether their pensions should be based on the salary attached to "F" step.

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