PENSION AND RETIREMENT SYSTEMS OF THE STATE AND ITS POLITICAL SUBDIVISIONS ‑- CREDIT FOR PARTIAL SERVICE RETAINED OR RESTORED

PENSION AND RETIREMENT SYSTEMS OF THE STATE AND ITS POLITICAL SUBDIVISIONS ‑- CREDIT FOR PARTIAL SERVICE RETAINED OR RESTORED.

Chapter 98, Laws of 1951, authorized boards of governing bodies of the various public retirement systems in this state to preserve service credits earned by members of one system:

(1) Who may become employed by some other public agency in this state covered by an existing retirement system, notwithstanding any provisions or ordinances controlling the retention of such credits.

(2) Chapter 98 also authorizes a board of a public retirement system to pay benefits on the basis of service credit preserved under the arrangement outlined in (1) above when a member is eligible for retirement subject to the restriction contained in section 4 of chapter 98, to the effect that the total payments payable under one or more retirement systems shall not exceed the maximum payment for full service in the system last participated in.

(3) Chapter 98 does not authorize the board of a public retirement system to consider the credits established under another system as applicable to meeting the minimum years of service required for retirement under its retirement system and thus to establish the member's eligibility for retirement benefits.

(4) Agreements between existing public retirement systems are not required generally but are required as provided in sections 2, 4 and 5 of chapter 98.

(5) A board of a public retirement system cannot assure a member who leaves active service under its system and becomes a member of another retirement system that he has a vested right in a retirement allowance to be paid when he reaches retirement status.

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                                                   May 22, 1951 [[Orig. Op. Page 2]]

Honorable L. D. Burrus
Secretary-Manager
Teachers' Retirement System
Old Capitol Building
Olympia, Washington                                                                                             Cite as:  AGO 51-53 No. 43

Dear Sir:

            We have received your letter of May 3, 1951, in which you ask the following questions, all relative to chapter 98, Laws of 1951 (71.04.070-110, RCW [[RCW 71.04.070-71.04.110]]):

            "(1) Does this Act authorize boards of governing bodies of the various public retirement systems in the State of Washington to preserve service credits earned by members of one system who may become employed by some other public agency in the state covered by an existing retirement system, contrary to and notwithstanding any provisions or ordinances controlling the retention of such credits?

            "(2) Does the Act authorize a board of a public retirement system in the state to pay benefits, on the basis of service credit preserved under the arrangement outlined in question (1), when a member is eligible for retirement?

            "(3) Does the Act authorize the board of a public retirement system in the state to consider the credits established under another system as applicable to meeting the minimum number of years of service required for retirement under its system, and thus establish the member's eligibility for retirement benefits?

            "(4) Are agreements between existing public retirement systems in the state required to carry out the purposes of chapter 98?

            "(5) Can a board of a public retirement system in the State of Washington assure a member who leaves active service under its system and becomes a member of another public retirement system in the state that he has a vested right in a retirement allowance, to be paid when he reaches retirement status?"

             [[Orig. Op. Page 3]]

            The conclusions reached may be summarized as follows:

            (1) Yes.

            (2) Yes, subject to the provisions contained in section 4 of chapter 98.

            (3) No.

            (4) No, except in such cases as the employment or office is changed as the result of an amalgamation of any public service agency as provided in section 2 or, in the case of actual retirement, in relation to the minimum payment for full service as provided in section 4, or, in the case of a joint operation of a public service as provided in section 5.

            (5) No.

                                                                     ANALYSIS

            The questions you propound involve the construction and legislative intent of chapter 98, Laws of 1951.  We have a right to consider the title of the law, which reads:

            "AN ACT relating to pension and retirement systems of the state and political subdivisions thereof; conditionally permitting the retention of accrued service credit by members of such systems when undertaking other public employment, or upon the amalgamation of any one such public service with another."

            Section 1 states the intention of the act, and reads:

            "It is the intent of this act to allow the preservation, accumulation and retention of service credits towards eventual retirement by officers and employees who by reason of employment by more than one public agency in the state may participate in one or more retirement or pension systems.  It is also intended that sovereignty of the various retirement and pension systems operating in the state shall not be intruded upon and the eventual granting of pensions and/or  [[Orig. Op. Page 4]] annuities to such officers and employees shall remain under the control of and be controlled by act of the governing bodies of such retirement or pension systems except as specifically set forth herein."

            It would seem, therefore, that the intention of chapter 98 was (1) to allow the retention of credit for service in employment in any pension or retirement system operated by the state or by any political subdivision where the recipient enters another publicly operated system; (2) to allow such privilege to any officer or employee whose employment or office is changed as the result of an amalgamation of any public service agency in this state with another; (3) to allow persons to recover or regain credit lost or lapsed by reason of previous lack of authority to proceed as intended in the act and such recovery to be allowed under rules separately established by the governing bodies of the various pension or retirement systems; (4) that the receipt of any pension or annuity earned as a member of any system under the circumstances provided for shall not preclude the receipt of another pension earned as a member of any other system, but that the total of one or more system payments due at the time of retirement shall not exceed the maximum payment for full service in the system last participated in, and (5) where there exists a joint operation of a public service, the authorities in charge may make provision for membership of all new employees in one designated retirement system.

            There is nothing in chapter 98 which would specifically authorize the accumulation of credits earned in the various pension systems so as to make applicable the minimum number of years of service required for the retirement in a particular system, nor can the provisions of chapter 98 be stretched so as to allow the same.

            Agreements between the various public service systems are not required save and except as to such cases where employment is changed due to amalgamation of one agency with another, as to the maximum payment for full service in the system last participated in and in the instance of joint operation of a public service.  While such agreements between public service systems might be desirable in all cases, the law does not require the same except as to the three instances last above mentioned.

            Chapter 98 also contemplates that each system shall be supreme within itself as to its own statutes, rules and regulations, except as specifically provided in the chapter.

             [[Orig. Op. Page 5]]

            The case ofLuellen v. Aberdeen, 20 Wn. (2d) 594, 148 P. (2d) 849, would appear to be decisive of the question asked in your fifth inquiry.  In such case a police officer of Aberdeen who had apparently served a sufficient time to entitle him to retirement rights under the law and ordinances of the city of Aberdeen was illegally removed from office.  He brought an action against the city and various public officials and the court held that he was illegally removed from office and met all requirements of the law and ordinances so as to be eligible to apply for retirement and for a pension.  It held in such case that he had an established right which the law would protect, saying:

            "A police officer who has met all the statutory requirements so as to make him eligible to apply for reinstatement and a pension, has established a right which the law will protect, subject to certain limitations not material in this case. (cases) There are many similar cases which might be cited, but we think these are sufficient to show the trend of judicial thought on the subject involved.  They base their views that a vested right exists upon the theory that, when the police officer has met all the requirements of the statute, he has something that has ripened into a contractual obligation or something so nearly like it as to be governed by the same principles."

            It would therefore seem to follow that when a member leaves one system and becomes a member of another system, he does not have a "vested right" in the retirement allowance to be paid when he reaches retirement status since he has not at that time reached retirement status.  Something still remains to give him the status of a vested right, namely:  additional years of service.  To illustrate:  Say a person thirty years old works five years in one retirement system and then changes to a second retirement system.  His credits are preserved in the first retirement system but he does not have a true"vested right" in the retirement at that time, as the term"vested  [[Orig. Op. Page 6]] right" is used in the law.  When he has completed the full time necessary for retirement under the second system or has reached the retirement age under the second system, then it might be said that he has a"vested right" in whatever accumulated time he had in the first system.

Very truly yours,

SMITH TROY
Attorney General

GEORGE DOWNER
Assistant Attorney General