OFFICES AND OFFICERS - CITY - POLICE OFFICERS - PENSIONS - WIDOWS - COMPUTATION.
(1) The amendment contained in § 26, chapter 209, Laws of 1969, Ex. Sess., deleting the proviso in § 1, chapter 140, Laws of 1961 (RCW 41.20.085) under which certain police widows' pensions were to be reduced by the amount being received "under social security or any other pension grant," is applicable so as to prospectively eliminate this offset factor in the case of those widows who began receiving such pensions prior to the effective date of the 1969 amendment.
(2) The two percent per year post-retirement pension increase which is provided for by § 35, chapter 209, Laws of 1969, Ex. Sess., is to be computed on the basis of the pension benefit payable on the effective date of the 1969 amendment rather than that which was payable at the time chapter 209, Laws of 1969, Ex. Sess., was passed by the legislature.
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July 15, 1969
Honorable F. Pat Wanamaker
State Representative, 10th District
Route 1, Box 193 A
Coupeville, Washington 98239
Cite as: AGO 1969 No. 12
This is written in response to your recent request for the opinion of this office on two questions relating to the payment of pensions to certain widows of deceased police officers under RCW 41.20.085, as amended by chapter 209, Laws of 1969, Ex. Sess. We paraphrase your questions as follows:
(1) Does the amendment contained in § 26, chapter 209, Laws of 1969, Ex. Sess., deleting the proviso in § 1, chapter 140, Laws of 1961 (RCW 41.20.085) under which certain police widows' pensions were to be reduced by the amount being received "under social security or any other pension grant," apply so as to eliminate, prospectively, this offset factor in the case of those widows who began receiving such pensions prior to the effective date of the 1969 amendment?
[[Orig. Op. Page 2]]
(2) Is the two percent per year post-retirement pension increase which is provided for by § 35, chapter 209, Laws of 1969, Ex. Sess., with respect to "all benefits presently payable pursuant to the provisions of RCW 41.20.085 which are not related to the amount of current salary attached to the position held by the deceased member" to be computed on the basis of the pension benefit payable on the effective date of the 1969 amendment rather than that which was payable at the time chapter 209, Laws of 1969, Ex. Sess., was passed by the legislature?
We answer both of the foregoing questions in the affirmative for the reasons set forth in the following analysis.
A brief summary of the legislative history of RCW 41.20.085 would appear to be helpful as a background for our consideration of your specific questions.
This section was originally enacted in 1959, when the legislature for the first time provided for monthly payments to the surviving spouse of any member of a first-class city police department upon his death, either while still in service or after retirement, without regard to the cause of death. See, § 2, chapter 78, Laws of 1959.1/ However, this law did not provide for a pension for the surviving spouse of a police officer who had died or retired prior to the effective date of the act. Accordingly, the 1961 legislature passed an amendment to make such provision. The amended version of the statute, as enacted by § 1, chapter 140, Laws of 1961, read as follows:
"Whenever any member of the police department of any such cityshall die, or shall have heretofore died, or whenever any such member who has been heretofore retired or who is hereafter retired for length of service or a disability, shall have died, or shall die, leaving a surviving spouse or child or children under [[Orig. Op. Page 3]] the age of eighteen years, upon satisfactory proof of such facts made to it, the board shall order and direct that a pension equal to one third of the amount of salary at any time hereafter attached to the position held by such member in the police department at the time of his death or retirement, not to exceed one third of the salary of captain, shall be paid to the surviving spouse duringthe surviving spouse's life, and in addition, to the child or children, until they are eighteen years of age, as follows: For one child, one eighth of the salary on which such pension is based; for two children, a total of one seventh of said salary; and for three or more children, a total of one sixth of said salary: Provided, If such spouse or child or children marry, the person so marrying shall receive no further pension from the fund. In case there is no surviving spouse, or if the surviving spouse shall die, the child or children shall be entitled to the spouse's share in addition to the share specified herein until they reach eighteen years of age. No spouse shall be entitled to any payments on the death of a retired officer unless [s]he has been married to such officer for a period of at least five years prior to the date of his retirement.
"As of July 1, 1961, a surviving spouse not otherwise covered by the provisions of section 2, chapter 78, Laws of 1959, shall be entitled to a pension of one hundred fifty dollars per month: Provided, That such pension shall be reduced by the amount of any pension such surviving spouse may be receiving under social security or any other pension grant.
"'Surviving spouse' as used in this section means surviving female spouse." (1961 amendatory language underscored.)
Shortly thereafter, the Washington supreme court, in two cases which we will discuss later on in this opinion, declared the act [[Orig. Op. Page 4]] to be unconstitutional as to those police widows whose husbands had both retired and died before the effective date of the amendment,2/ but valid as to widows whose husbands, although retired, were still living at that time.3/ Then, several years later in 1968, a question arose as to the application to be given to the proviso contained in the second paragraph of the amended statute. This office was asked for an opinion on the matter and, in AGO 1968 No. 15, copy enclosed, we answered as follows:
"(1) The proviso contained in the second paragraph of § 1, chapter 140, Laws of 1961 (RCW 41.20.085), which requires certain police widows' pensions to be reduced by the amount being received by the recipient 'under social security or any other pension grant' applies only against the special pension of $150 per month for those surviving spouses not otherwise qualified for a pension under § 2, chapter 78, Laws of 1959, and does not require offsetting social security or any other pension grant against the general pension provided for by the 1959 act, as amended.
"(2) In the case of a surviving spouse who is in receipt of a pension to which the 'offset' proviso is applicable, all social security and all other pension benefits that the surviving spouse is receiving, whether in her own right or as a survivor, must be offset against the amount of the pension."
Against this background, the 1969 legislature, as a part of its omnibus pension bill for fire fighters and law enforcement officers (Senate Bill No. 74), enacted the further amendment to which your first question refers. By § 26 of the bill (see, § 26, chapter 209, Laws of 1969, Ex. Sess.) it deleted the offset proviso which had been the subject of our 1968 opinion.
Your initial question asks whether this amendment applies so as to eliminate this offset factor in the case of those widows who began receiving their pensions of $150 per month (less social [[Orig. Op. Page 5]] security, etc.), under the second paragraph of § 1, chapter 140, Laws of 1961, supra, prior to the effective date of the amendment.4/ Because an affirmative answer to this question would result in a net increase in the existing pensions of at least some of those police widows to whom you have referred,5/ it is necessary that we precede our consideration of the particular legislation with a general discussion of the legal aspects of post-retirement pension increases for any public employees or their survivors.
We begin with a reference to the situation which existed in this state prior to voter approval of Amendment 35 to the state constitution in November, 1958. In Sonnabend v. Spokane, 53 Wn.2d 362, 333 P.2d 918 (1958), a case arising before the adoption of this amendment, our supreme court had held that the granting of a post-retirement pension increase to any public employee in this state was unconstitutional as being in violation of Article II, § 25 of the constitution. This section of the constitution then read as follows:
"The legislature shall never grant any extra compensation to any public officer, agent, servant, or contractor, after the services shall have been rendered, or the contract entered into, nor shall the compensation of any public officer be increased or diminished during his term of office."
The 1958 constitutional amendment added the following sentence to this section:
". . . Nothing in this section shall be deemed to prevent increases in pensions after such pensions shall have been granted."
Following the adoption of this amendment the court, in Luders v. Spokane, 57 Wn.2d 162, 356 P.2d 331 (1960), responded by upholding a 1959 statute providing for post-retirement pension increases to retired police officers.6/ In this ruling, the court said:
[[Orig. Op. Page 6]] "The 1958 amendment to Art. II, § 25, removed the constitutional barrier precluding increasing police pensions after grant thereof. The legislative power in this respect is now unlimited. . . ."
Next, in point of time, came the two cases (footnoted above) dealing with the constitutionality of § 1, chapter 140, Laws of 1961, supra, by which provision had been made for a pension for the surviving spouse of a member of a police department who had either died or retired prior to the effective date of the act. In the first of these cases,State ex rel. Bolen v. Seattle, supra, the court held this statute to be unconstitutional as to the widow of a police officer who had both retired and died before its effective date. With reference to the 1958 constitutional amendment,supra, the court said:
"While the constitution as amended authorizes legislation increasing existing pensions, it does not authorize the legislature to grant a widow a pension when there was no right thereto at the time of the death of the husband. The respondents were widows when the statute was enacted, at which time they had no pension rights. A subsequent act granting a pension to such a class is not an increase of an existing one."
However, a year later, inState ex rel. Albright v. Spokane, supra, the court upheld the constitutionality of the same statute as applied to the surviving spouse of a police officer who had retired before its effective date but who did not die until sometime later. Answering the contention that the widow's pension was not merely an increase in her husband's retirement allowance but was, instead, a new and separate pension payable to her and thus, an unconstitutional gift of public funds in violation of Article VIII, § 7 of the constitution the court held as follows:
"We think it is clear that the legislature, in making pension benefits payable to a widow of a police officer, did not create a new pension but simply increased the pension of the officer by making its benefits payable to his widow after his death. This is within the area of legislative action permitted by the 35th amendment."
[[Orig. Op. Page 7]]
Thus, in summary with regard to widows' pensions, the court has held that the legislature still may not grant a pension to the surviving spouse of a public employee after such employee has both retired and died; however, it is now free to increase a previously granted public employee's pension following his retirement but prior to his death, by means, inter alia, of providing for a benefit to be paid to his widow after his death. It is but a short, and constitutionally permissible (in our opinion) step from this to say that the legislature may also increase a public employee's widow's pension which it had previously provided for during her spouse's lifetime.
However, the fact that the legislature's authority to grant post-retirement pension increases to public employees or their survivors is no longer constitutionally restricted does not mean that every legislative amendment to an existing pension statute increasing the amount of benefits payable thereunder is to be taken as applicable to persons already retired or otherwise in receipt of benefits under the statute. At this point, analytically, the question becomes one of legislative intent. Query: Is the legislature, when it amends a particular statute relating to the pension benefits payable to the public employee members of a retirement system upon their retirement, to be taken as intending that the increased benefits should be payable to persons already retired or simply that the increased benefit formula should be applicable to future retirees?
For the most part, our research of cases from other jurisdictions in which it is constitutionally permissible to grant post-retirement pension increases to public employees (or their survivors) has disclosed a judicial disinclination to hold an amendment increasing benefits applicable to persons already retired, unless some manifestation of legislative intent to grant a post-retirement pension increase to existing retirees or other beneficiaries appears clearly evident from the language and scope of the amendment. See, e.g.,Miner v. Stafford, 326 Ill. 204, 157 N.E. 164 (1927);Cross v. Graham, 224 Ark. 277, 272 S.W.2d 682 (1954); Sommers v. Patton, 399 Ill. 540, 78 N.E.2d 313 (1948);Young v. O'Keefe, 248 Iowa 751, 82 N.W.2d 111 (1957);Board of Trustees, Etc. v. Naughton, 197 Okla. 592, 173 P.2d 425 (1946);Board of Trustees, Etc. v. McCommas, 198 Okla. 49, 175 P.2d 75 (1946);Rupert v. Policemen's Relief and Pension Fund, 387 Pa. 627, 129 A.2d [[Orig. Op. Page 8]] 487 (1957).7/
51Although our own court has not yet had occasion to consider the point, its general approach to public employees' pension laws in the past would seem to provide reason for its adoption of this same view. The leading case in this state with regard to the nature of public employees' pensions is, of course,Bakenhus v. Seattle, 48 Wn.2d 695, 296 P.2d 536 (1956), in which the Washington court characterized the payment of pensions to public employees in this state as being contractual in nature, saying:
"In this state, a pension granted to a public employee is not a gratuity but is deferred compensation for services rendered. The contractual nature of the obligation to pay a pension when the employee has fulfilled all of the prescribed conditions was recognized in Luellen v. Aberdeen, 20 Wn.2d 594, 148 P.2d 849 (1944), inBenedict v. Board of Police Pension Fund Com'rs, 35 Wn.2d 465, 214 P.2d 171, 27 A.L.R.2d 992 (1950), and in Ayers v. Tacoma, 6 Wn.2d 545, 108 P.2d 348 (1940). Had we held in those cases, or were we to hold now, that the pension statutes provide for the payment of gratuities, we would be bound to hold further that such statutes are contrary to the provisions of Art. II, § 25, and Art. VIII, § 7, of the Washington constitution and are therefore void."
The contractual relationship visualized by the court in Bakenhus is one which is formed at the commencement of an individual's period of public employment subject, however, to modification during his period of active service ". . . for the purpose of keeping the pension system flexible and maintaining its integrity. . . ." Thus, by this case the rule was established that a public employee's pension rights are governed by the law in effect at the time of commencement of employment, together with any beneficial amendments which are enacted during his period [[Orig. Op. Page 9]] of serviceat or prior to the time of his retirement.
Admittedly, this case was decided before post-retirement pension increases became constitutionally permissible in this state. However, remembering that the facilitating constitutional amendment was precipitated by a court decision that a post-retirement pension increase for a public employee would be anoncontractual payment of excess compensation8/ - and therefore, in violation of Article II, § 25,supra it seems accurate to paraphrase the amendment to this section as saying, in essence, that a post-retirement pension increase might constitutionally be granted to a retired public employee even though not contracted for. Accord,Luders v. Spokane, supra.
Thus, theBakenhus rule continues to apply as to thecontractual pensions of all public employees meaning that the computation of such pensions continues to be governed by laws enacted no later than at the time of the employee's retirement. Post-retirement pension increases, being noncontractual in nature, should be viewed as exceptions to this rule, and for this reason (consistent with the position taken by the courts in most other states) should not be regarded as having been provided for by the legislature unless that law-making body, in enacting a statute increasing pension benefits, manifests a clear intent to make the enactment applicable to persons already retired as is now permitted by the constitution.
In terms of the 1969 amendment to RCW 41.20.085, supra, which we are here considering, the foregoing discussion of general principles means, first, that even though its application to those widows who began receiving the $150 per month (less offset) pension prior to its effective date will result in a net increase in some of their pensions, this increase is constitutionally permissible. Accord,State ex rel. Albright v. Spokane, supra. Secondly, however, it means that this result is only to be reached if clearly intended by the legislature.
In our judgment, this requisite legislative intent may be found. The proviso which was deleted by the amendment in question stated that:
[[Orig. Op. Page 10]]
". . .such pension shall be reduced by the amount of any pension such surviving spouse may be receiving under social security or any other pension grant." (Emphasis supplied.)
What pension? In AGO 1968 No. 15, we said that "such pension" to which the proviso referred meant the special, one hundred fifty dollar per month, pension payable after July 1, 1961, to those surviving spouses not otherwise qualified for a pension under § 2, chapter 78, Laws of 1959. Thus, for the most part, the class of police widows involved is already in existence and has been since July 1, 1961. It is a class which is distinct from that group of police widows which is covered by the first paragraph of RCW 41.20.085, as amended by § 1, chapter 140, Laws of 1961, in that the husbands of these widows must have retired prior to the enactment of § 2, chapter 78, Laws of 1959.
In 1961, when the legislature decided to make provision for payment of a pension to these widows, it initially contemplated lumping them together with the widows of police officers who had not retired before the effective date of the 1959 act with aminimum pension of one hundred fifty dollars per month to be paid to all. See, AGO 1968 No. 15, at p. 7. However, as we described in some detail on pp. 8-10 of this opinion, the form of the bill was altered before final passage so as to establish, instead, a separate pension of a flat one hundred fifty dollars per month reduced by any social security or other pension benefits for the special class of widows who were not qualified for the 1959 version of the police widows' pension. Now, by deleting the offset proviso, the legislature has said that "no longer shall 'such pension' be so reduced" meaning this special one hundred fifty dollar per month pension being paid to the limited class of widows in question.
At least, this is the way we see it in view of the history of this provision. Therefore, based upon what we believe to be a sufficiently clear indication of legislative intent, we answer your first question (as paraphrased) in the affirmative and advise you that, after July 1, 1969, no pension paid to a surviving spouse of a first class city police officer under RCW 41.20.085, supra, is to be reduced by reason of her receipt of social security or other pension benefits from some other source.
This question involves the effect to be given to § 35, chapter 209, Laws of 1969, Ex. Sess. By this section, the legislature [[Orig. Op. Page 11]] amended chapter 41.20 RCW by adding the following new section thereto:
"All benefitspresently payable pursuant to the provisions of RCW 41.20.085 which are not related to the amount of current salary attached to the position held by the deceased member, shall be increased annually as hereafter in this section provided. At the effective date of this 1969 amendatory act such presently payable benefits shall be increased two percent each year using as a basis for such two percent increase, the amount of thepresent 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. 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." (Emphasis supplied.)
The issue raised by this question is whether the word "presently" as used in this section refers to the effective date of the act rather than to the date the amendatory act was passed by the legislature.9/
51InThompson v. Board of Com'rs, 127 Kan. 863, 275 Pac. 205 (1929), the supreme court of Kansas was presented with a similar issue. The 1927 session of the Kansas legislature had enacted a statute limiting the uses which a benefit road district could make of certain state road funds. As set forth in the court's decision, § 9 of the act provided for
"'. . . the payment of the installments of [[Orig. Op. Page 12]] the benefit district tax assessed on the property in such benefit districts as the same become due, and to the reimbursement to the taxpayers of all assessments made and collected on such lands' . . ."
out of the county and state road fund. This general requirement was followed in the same section with a proviso reading as follows:
"'Provided, however, that such payments and reimbursements shall be optional with the county board in any county where any proceedings arenow under way for the construction of a state road in accordance with some federal aid specification until the construction of such road shall have been completed.'" (Emphasis supplied.)
The act was approved by the legislature on March 15, 1927, but, in accordance with its terms, did not take effect until May 1. After noting the time sequence factor, the court said:
"The first point urged is that the word 'now,' in the option or proviso, means literally the present time, the very moment the Legislature is speaking, namely, the day the act was approved. There are authorities sustaining that view, but the weight of authority and the tendency of the Kansas decisions is to consider the whole act as the voice of the Legislature on the specific day they have designated for it to become a law, to be operative and in effect, unless a different construction is plainly and purposely intended.
"'Now. An adverb implying present time. * * * The intent with which the term is used as gathered from the contents determines its meaning. It does not necessarily mean at the present time. The word is sometimes used, not with reference to the moment of speaking, but to a time contemporaneous with something done. It may mean at the time spoken of or referred to as well as at the time of speaking.' 46 C.J. 632.
"When the act itself designates a particular [[Orig. Op. Page 13]] date in the near future for it to take effect, such designation should control, rather than a retrospective or even a present date, upon the theory that a definite date signifies a legislative purpose, and a prospective effect is preferable to a retrospective, or even a present, effect."
We believe this approach is sound, and in accordance with the great weight of authority. The notion that a statute which is to take effect in the future speaks of its effective date is in full accord with decisions of our own court. See,Skidmore v. Clausen, 116 Wash. 403, 199 Pac. 727 (1921), in which the court expressed itself as follows:
"InState ex rel. Atkinson v. Northern Pacific R. Co., 53 Wash. 673, 102 Pac. 876, 17 Ann. Cas. 1013, we held that:
"'The general rule is that a statute speaks from the time it goes into effect, whether that time be the day of its enactment or some future day to which the power enacting the statute has postponed the time of its taking effect.'
"We quoted with approval 26 Am. & Eng. Ency. Law (2d ed.), p. 565, reading:
"'A statute passed to take effect at a future day must be understood as speaking from the time it goes into operation and not from the time of passage. Thus the words "heretofore," "hereafter" and the like, have reference to the time the statute becomes effective as a law, and not to the time of passage. Before that time no rights may be acquired under it, and no one is bound to regulate his conduct according to its terms; . . .'"
Therefore, we also answer your second question affirmatively and, accordingly, advise you that the two percent per year post-retirement pension increase provided for by § 35, chapter 209, Laws of 1969, Ex. Sess.,supra, is to be computed on the [[Orig. Op. Page 14]] basis of the pension benefit payable on the effective date of the 1969 amendment10/ rather than that which was payable at the time chapter 209, Laws of 1969, Ex. Sess., was passed by the legislature.
We trust the foregoing will be of assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Assistant Attorney General
*** FOOTNOTES ***
1/Previously, the only pension payable to the surviving spouse of such a police officer was one based upon loss of life "while actually engaged in the performance of duty, or as the proximate result thereof." See, RCW 41.20.080
2/State ex rel. Bolen v. Seattle, 61 Wn.2d 196, 37 P.2d 454 (1963).
3/State ex rel. Albright v. Spokane, 64 Wn.2d 767, 394 P.2d 231 (1964).
4/The effective date of this amendment was July 1, 1969, in accordance with § 45 of the 1969 act.
5/I.e., those presently receiving income from "social security or any other pension grant."
6/See, chapter 6, Laws of 1969, which was substantially identical to the 1957 law (chapter 84, Laws of 1957) which has been turned down by the court in the Sonnabend case.
7/These cases appear to represent the great weight of authority. The only contrary decisions we have found are two cases from Colorado: People ex rel. Albright v. Board of Trustees, 103 Colo. 1, 82 P.2d 765 (1938), andMcNichols v. Walton, 120 Colo. 269, 208 P.2d 1156 (1949).
8/Sonnabend v. Spokane, supra.
9/We have already noted that the efective date of the act (by virtue of § 45 thereof) is July 1, 1969. It was passed by the extraordinary session of the 1969 legislature, and was signed by the governor on May 9, 1969.
10/I.e., a pension of one hundred fifty dollars per month, without reduction for social security, etc., in accordance with our answer to your first question.