STATE COLLEGES OF EDUCATION -- BOARD OF TRUSTEES -- FACULTY RETIREMENT BENEFITS

STATE COLLEGES OF EDUCATION -- BOARD OF TRUSTEES -- FACULTY RETIREMENT BENEFITS.

State Colleges of Education, duties of Board of Trustees, providing retirement and income plans, faculty transfers between plans.

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                                                                 August 20, 1957

Honorable Don S. Patterson
President
Eastern Washington College of Education
Cheney, Washington                                                                                                              Cite as:  AGO 57-58 No. 112

Dear Sir:

            You have requested an opinion of this office on a question which we paraphrase as follows:

            Do the provisions of chapter 76, Laws of 1957, permit the board of trustees of a state college of education to establish a pension plan or plans for retirement of its faculty, while at the same time permitting members of its faculty presently under the teachers' retirement act to elect whether they shall come under the new plan?

            We answer your question in the affirmative.

                                                                     ANALYSIS

            Section 1, chapter 76, Laws of 1957, provides in part:

            "The board of trustees of each of the state colleges of education are authorized and empowered:

            "(1) To assist the faculties of their respective institutions in the purchase of old age annuities or retirement  [[Orig. Op. Page 2]] income plans under such rules and regulations as the trustees of said institutions may prescribe.

            "(2) To provide, under such rules and regulations as any such board may prescribe for the institution under its supervision, for the retirement of any such faculty member on account of length of service, age, or condition of health:  Provided, That retirement on account of age shall not be earlier than the sixty-fifth birthday."

            The purpose of chapter 76, Laws of 1957, was to authorize the board of trustees of each state college of education to make provisions for old age annuities or retirement of its faculty.  These provisions are somewhat similar to those presently available to the faculties of the University of Washington and Washington State College under RCW 28.76.240 through 28.76.280.  However, the faculties of those two institutions were not under any retirement or annuity plan at the time of the enactment of RCW 28.76.240 through 28.76.280.  Members of the faculties of the colleges of education are presently covered by participation in the Washington state teachers' retirement system (RCW 41.32.010 (16), (23) and (30)) supplemented by federal OASI.

            The general procedure applicable to these retirement systems in the State of Washington is to allow the governing authority to make available a particular retirement or annuity plan for its employees.  Upon providing such a plan, all employees of the eligible coverage group are then mandatorily covered under the program.  This was the procedure followed in the plan adopted by their boards of regents for the faculties of the University of Washington and the State College of Washington.  There was no individual option accorded members of the faculty with respect to the coverage.  But, as pointed out, there was no previous plan affording coverage.

            On the other hand, in the cases of the colleges of education, we have a plan presently according the faculties coverage under the state teachers' retirement system.  This presents the question of the extent to which any new plan adopted by their boards of trustees may apply to their faculties and to what extent it can affect those under an existing system.

            InBakenhus v. Seattle, 48 Wn. (2d) 695, our supreme court stated (p. 698):

            "In this state, a pension granted to a public employee is not a gratuity but is deferred compensation for services rendered. . . ."

             [[Orig. Op. Page 3]]

            and quoted with approval from a California case (Bowen v. Los Angeles, 257 P. (2d) 672) the statement that (p. 699):

            "'Pension rights . . . are contractual in nature and they become vested at the time the employee enters the public service.'"

            and from a Pennsylvania case (Baker v. Retirement Board of Allegheny County, 374 Pa. 165, 97 A. (2d) 231):

            "'As of the time he joined the fund, his right to continued membership therein, under the same rules and regulations existing at the time of his employment, was complete and vested.  The legislature could not thereafter constitutionally alter the provisions of his already existing contract of membership.  His rights in the fund could only be changed by mutual consent . . .'"

            Under the rules announced in the above case, it is apparent that members of the faculties of colleges of education belonging to the teachers' retirement system have an already existing contract of membership therein which can only be changed by mutual consent.  In this connection, it is to be noted that under any new plan permitted under chapter 76, retirement cannot be earlier than age sixty-five, while under the teachers' retirement system, retirement may be after thirty years of creditable service.  Therefore, the members presently in the teachers' retirement system are entitled to be continued therein, and they can only be excluded from it and included in any new plan with their consent.  (Cf.King County Employees' Assn. v. State Employees' Retirement Board, 150 Wash. Dec. 602 [[50 Wn. 2d 869]].)  Any plan adopted should give due consideration to this fact in order to prevent the impairment of contractual rights.

            Based on the foregoing analysis and in answer to the question under consideration, we conclude that under chapter 76, Laws of 1957, the board of trustees of each college of education is authorized to make provisions for old age annuities or retirement of its faculty; that in so doing it should be cognizant of, and make provisions for those members of its faculty presently under the teachers' system; and that in this situation the following factors must be considered:

            (1) That any plan or plans which it adopts should include all members of its faculty.

             [[Orig. Op. Page 4]]

            (2) That at present the terms and provisions of the state teachers' retirement system apply to those members of its faculty coming under its provisions;

            (3) That anynew plan which is adopted will be prospective in its application ‑ that is, apply only to new members of its faculty or members of its faculty under the teachers' system who elect to come under the new plan;

            (4) That the present members of the state teachers' retirement system have a right to be continued under such system unless they elect to come under the new plan;

            (5) That contributions of members of the present teachers' system who elect to come under any new plan will remain in that fund as provided by RCW 41.32.500 and as modified by § 4, chapter 76, Laws of 1957; and

            (6) That the board of trustees is empowered to adopt rules and regulations which will give effect to the foregoing provisions but not in derogation of any pension rights presently enjoyed, except as herein outlined.

            We trust that the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

MITCHELL DOUMIT
Assistant Attorney General