AGO 1970 No. 17 - Jun 30 1970
PENSIONS - POLICE OFFICER - WASHINGTON LAW ENFORCEMENT OFFICERS' AND FIREFIGHTERS' RETIREMENT SYSTEM - ELIGIBILITY
A police officer who was employed by a first class city on March 1, 1970, and who was making contributions to a retirement system as provided in chapter 41.20 RCW, is entitled to have his eligibility for retirement benefits under that chapter determined by the provisions thereof notwithstanding the fact that, on March 1, 1970, his membership was transferred, by operation of law, from the former retirement system to the law enforcement officers' and firefighters' retirement system, chapter 41.26 RCW.
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June 30, 1970
Honorable Walter B. Williams
State Senator, 43rd District
3871 45th Avenue NE
Seattle, Washington 98105
Cite as: AGO 1970 No. 17
By letter previously acknowledged you have requested an opinion of this office on a question pertaining to the eligibility of a police officer for retirement benefits, as follows:
"In the case of a Police Officer who was employed by a first class city on March 1st, 1970, and who became a member of the Washington Law Enforcement Officers and Firefighters Retirement System on that date in accordance with RCW 41.26.040, is this individual's eligibility for retirement benefits under the provisions of Chapter 41.20 RCW to be governed by the Statutes contained in that Chapter, or is it instead to be governed by the provisions of RCW 41.26.090?"
It is our opinion, for the reasons set forth in the following [[Orig. Op. Page 2]] analysis, that the governing statutes with respect to a police officer's eligibility for retirement benefits under chapter 41.20 RCW are those contained in that RCW chapter.
It is well established in this state that a pension granted to a public employee is not a gratuity but it is deferred compensation for services rendered pursuant to contractual principles. Bakenhus v. Seattle, 48 Wn.2d 695, 296 P.2d 536 (1956), and cases cited therein. Accordingly, under our state constitution,1/ the rule in this state (as expressed by the supreme court in theBakenhus case) is that:
". . . the employee who accepts a job to which a pension plan is applicable contracts for a substantial pension and is entitled to receive the same when he has fulfilled the prescribed conditions. His pension rights may be modified prior to retirement, but only for the purpose of keeping the pension system flexible and maintaining its integrity. . . ."2/ (Emphasis supplied.)
Bearing this fundamental principle in mind, we now turn to the legislation which has given rise to your question. By its enactment of chapter 209, Laws of 1969, Ex. Sess., as amended by chapter 6, Laws of 1970 (codified as chapter 41.26 RCW) the legislature created a comprehensive new state wide retirement system for all full time, regularly compensated county and municipal law enforcement officers and firefighters. This system became operative on March 1, 1970, in accordance with provisions contained in the original 1969 act and carried over [[Orig. Op. Page 3]] into the 1970 amendments thereto.3/
The coverage of this new retirement system is spelled out in RCW 41.26.040 (1), as follows:
"(1) All fire fighters and law enforcement officers employed as such on or after March 1, 1970, on a full time fully compensated basis in this state shall be members of the retirement system established by this chapter with respect to all periods of service as such, to the exclusion of any pension system existing under any prior act except as provided in subsection (2) of this section."4/
Thus, the system is designed to cover law enforcement officers and firefighters who were already employed in such capacities as of March 1, 1970, as well as persons newly employed therein after that date. And, of course, many of these already employed personnel were, by virtue of their employments, already participating in one of the several preexisting public employees' pension systems which had been established by previous legislatures; e.g., the Washington public employees' retirement system (chapter 41.40 RCW); the state wide city employees' retirement system (chapter 41.44 RCW); the pension system for volunteer firemen (chapter 41.24);5/ the several municipally operated pension systems for paid firemen (chapters 41.16 and 41.18 RCW); and, lastly, the pension systems for first class city police officers as provided for in chapter 41.20 RCW, to which your question refers. Therefore, consistent with the "contract of employment" theory of public employees' pensions enunciated in the Bakenhus case,supra, it was necessary for the legislature, in transferring these individuals to [[Orig. Op. Page 4]] the new retirement system, to make provision for preservation of the "vested rights" which these persons who were covered by prior pension systems had already acquired on the basis of their services rendered under the coverage of such systems. The legislature's solution to this problem appears in subsection (2) of RCW 41.26.040,supra, and reads 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 act 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 1970 amendatory act shall be paid. If the employee's prior retirement system was the Washington public employee's retirement system, payment of such excess shall be made by that system; if the employee's prior retirement system was the state wide [[statewide]]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 [[Orig. Op. Page 5]] shall be made by the employer which was the member's employer when his transfer of membership occurred." (Emphasis supplied.)
We have underscored the portion of this statute which appears to be determinative of your question. With respect to the receipt of benefits under the laws governing the prior retirement system in which a law enforcement officer or firefighter was participating at the time of his transfer to the new pension system, such an individual'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. . . ."
By way of illustration of the application of this provision, let us take the case described in your question and add to it certain assumed or hypothetical facts regarding the subject individual's age and length of service at the time of his separation from service and application for retirement benefits. Specifically, let us assume that at that time this individual was 48 years of age and had completed 25 full years of service with his first class city's police department, all of which was creditable under the provisions of both chapter 41.20 RCW (governing the prior retirement system) and chapter 41.26 RCW (governing the new system).
Based upon these facts, the subject individual would not be immediately eligible for a service retirement allowance paid out of the state law enforcement officers' and firefighters' retirement fund pursuant to RCW 41.26.090 (1) because, under that statute, a member of the new retirement system must have completed five or more years of service and have attained the age of 50 years in order to be eligible for such allowance. Instead, this individual's eligibility to commence receiving a service retirement allowance from the new state fund would be deferred until his attainment of age 50, in accordance with subsection (2) of this section and in the meantime, his status under the laws governing the new system would [[Orig. Op. Page 6]] be that of an optionally vested member.6/
However, under the provisions of RCW 41.20.050, this same individual would be immediately eligible for a retirement allowance paid by his city's police pension fund under the provisions of the law governing his prior retirement system, because the terms of that statute authorize retirement after twenty-five or more years of serviceat any age. Accordingly, giving effect to the provisions of RCW 41.26.040 (2),supra, this individual, upon applying for a retirement allowance under RCW 41.20.050, should immediately begin receiving it on the basis of the criteria set forth therein. He should receive it in full until his attainment of age fifty, when he begins receiving his state allowance under RCW 41.26.090 (2), and thereafter, he should continue to receive from the city any overage in payments which may exist after subtracting the amount of the state payments from the amount of retirement allowance payable by the city.
[[Orig. Op. Page 7]]
This construction of RCW 41.26.040 (2), supra, is correct, in our opinion, for several distinct reasons. First, of course, it is a construction which, under the Bakenhus rule, serves to preserve the constitutionality of the statute rather than to open it to grave doubt as to its validity. See,Soundview Pulp Co. v. Taylor, 21 Wn.2d 261, 150 P.2d 839 (1944), and cases cited therein. Secondly, this construction is in accordance with the rule that statutes providing for pensions for public employees are to be liberally construed in their form, in the event of doubt or ambiguity. See, e.g.,Benedict v. Board Police, Etc. Comm., 35 Wn.2d 465, 214 P.2d 171 (1950). And finally, this construction of RCW 41.26.040 (2), supra, gives full effect to the phrase "and eligibility for service or disability retirement and survivor and all other benefits" as contained in the underscored excerpt from this subsection which we have quoted earlier in this opinion in accordance with the well-established rule of statutory construction that effect must be given, if possible, to every word, clause and sentence contained in a legislative enactment. Chelan County v. Fellers, 65 Wn.2d 943, 400 P.2d 609 (1965).
We trust that the foregoing will be of assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Assistant Attorney General
*** FOOTNOTES ***
1/Washington Constitution Article I, § 23, which provides that:
"No bill of attainder, ex post facto law, or law impairing the obligations of contracts shall ever be passed."
2/48 Wn.2d at 701.
3/See, § 4, chapter 209, Laws of 1969, Ex. Sess., and § 2, chapter 6, Laws of 1970.
4/See, RCW 41.26.030 (3) and (4) for definitions of "law enforcement officer" and "firefighter [[fire fighter]]."
5/For an explanation as to the basis for covering paid firemen in the volunteer firemen's pension system, see, AGO 65-66 No. 104 [[to Richard Taylor, State Representative on September 22, 1966]].
6/The pertinent provisions of RCW 41.26.090 (1) and (2) read as follows:
"(1) Any member having five or more years of service and having attained the age of fifty years shall be eligible for a service retirement allowance and shall be retired upon his written request effective the first day following the date upon which the member is separated from service.
"(2) Any member having five or more years of service, who terminates his employment with any employer, may leave his contributions in the fund. Any employee who so elects, upon attaining age fifty, shall be eligible to apply for and receive a service retirement allowance based on his years of service, commencing on the first day following his attainment of age fifty. Any member selecting this optional vesting shall not be covered by the provisions of RCW 41.26.150 or 41.26.160 until the attainment of the age of fifty years: . . ."