Opinion
No. 73-028
Decided March 26, 1974.
Widow of college professor brought declaratory judgment action to review retirement board's denial of annuity to her. Trial court determined professor had sufficient "credited service" at time of his death to make widow eligible for annuity, and board appealed.
Affirmed
1. PENSIONS — Ambiguities — Statute — Construed Favorably — Towards Employee. Where ambiguities appear in statutes regulating pension and retirement funds, they are construed favorably toward the employee.
2. "Credited Service" — Calculation — Accrued Sick Leave — Can Be Tacked — Period of Actual Performance. In calculating college professor's "credited service" under pension statute, the sick leave accrued by the deceased can be tacked onto the period of actual performance of duties under the employment contract.
3. Determination by College — Professor Fulfilled Contract — Not Bind — — Retirement Association — Relevant — Determine — Credited Service. Although the determination by the college that the deceased college professor had fulfilled the requirements of his contract does not bind the retirement association as regards his widow's eligibility for an annuity, such a determination is certainly relevant to the determination of the deceased's period of credited service.
4. "Credited Service" — Public Employee — Not Cease — Until — Payments in His Name — Terminate — Deductions — Following Death — Maintain — "Active" Membership — Retirement Association. As regards a widow's eligibility to receive an annuity pursuant to the terms of public employees' pension statute, the period of "credited service" by a public employee does not cease until payments into the fund in the name of the employee are terminated, and thus deductions paid into the retirement fund for the months following the death of deceased college professor were sufficient to maintain his "active" membership in the retirement association.
Appeal from the District Court of Mesa County, Honorable James J. Carter, Judge
Graham, Webster Wise, Hugh D. Wise, George Graham, for plaintiff-appellee.
John P. Moore, Attorney General, John E. Bush, Deputy Attorney General, Bernard S. Kamine, Assistant Attorney General, for defendants-appellants.
By stipulation entered in a petition for rehearing since the issuance of our opinion on January 15, 1974, in this case, the attorney general has waived all objections which he previously had to the venue of this action being placed in Mesa County, and the parties have requested that we consider the other allegations of error raised on appeal. Pursuant to this request, we hereby withdraw our opinion of January 15, 1974, and issue this opinion in its stead.
Plaintiff filed a complaint requesting declaratory relief to require the board of managers of the Public Employees' Retirement Association (PERA) to pay the plaintiff a widow's annuity according to the provisions of C.R.S. 1963, 111-8-4. That statute provides that widows of deceased persons who had fifteen years of "credited service" are eligible to receive an annuity upon reaching the age of fifty. Widows of those who had less than fifteen years of credited service are not eligible until they have reached sixty-two years of age. Defendant Board denied liability for payment of the annuity at this time on the grounds that plaintiff's husband had not accumulated the required fifteen years of credited service. The trial court ruled that the deceased had met the statutory requirement and ordered that the plaintiff receive the annuity from the date of her fiftieth birthday. We affirm.
The facts in this case are uncontested. Plaintiff's husband was a professor at Mesa Junior College from September 1, 1952, to the date of his death, May 8, 1967. His employment contract with the college called for his services over a nine-month period from September through May, according to the regular academic year. However, he was to receive salary payments in twelve installments over the entire calendar year from September through August. Upon his death, officials of the college determined that his contract should be deemed to be completed in full for the calendar year. The basis of their decision was, in part, that even though illness had prevented deceased from teaching any classes after March 8, 1967, he had accumulated sufficient sick leave time to carry him through the end of the academic year and into the summer months during which he would have had no employment duties to perform under the contract. The college then paid the salary payments into the deceased's estate and deducted the normal PERA contribution from each salary payment. PERA was aware of the death of the decedent, continued to receive the retirement deductions paid into it by the college, and has retained these payments.
[1] The principle issue before us is the meaning of the words "credited service." As noted by the trial court, "the statute speaks best in ambiguous silence as to the definition of credited service." Where ambiguities appear in statutes regulating pension and retirement funds, they are construed favorably toward the employee. Application of Smith, 57 N.J. 368, 273 A.2d 24; Driggs v. Utah State Teachers Retirement Board, 105 Utah 417, 142 P.2d 657. See Martin v. Public Employees' Retirement Board, 150 Colo. 127, 371 P.2d 266. With this principle in mind, the trial court correctly concluded that the deceased had completed the full fifteen years of "credited service."
[2] PERA argues that sick leave accrued by the deceased cannot be tacked onto the period of actual performance of duties under the contract in calculating his credited service. It cites for that proposition, McNichols v. Police Protective Association, 121 Colo. 45, 215 P.2d 303. However, that case dealt only with the question of whether or not payments in lieu of accumulated sick leave could be paid to survivors following the death of the deceased. Nothing in that case would prevent the inclusion of accumulated sick leave in calculating the "credited service" given by the deceased.
[3] PERA also argued that the determination by the college that the deceased had fulfilled the requirements of the contract does not bind PERA. While it is correct that such a determination by an employer is not conclusive, see McNichols v. Police Protective Association, supra, it is certainly relevant to the determination of the deceased's period of credited service. The decision of the college officials establishes that, as far as they were concerned, the deceased had performed the requirements of his teaching contract for the year sufficiently to justify payment of the balance of the salary payments under the contract. this evidence leads to the conclusion that the deceased had earned his full salary for the year and thereby became entitled to credit for the final year's service.
Finally, PERA argues that the months following the death of the deceased cannot be included in the period of "credited service" because, in its view, death terminates membership in PERA and a termination of membership must constitute a termination of "credited service." This argument assumes that credited service requires the continual physical performance of duties of employment for the period sought to be included in the credited service calculation. However, it fails to recognize that employment contracts for teachers normally cover a calendar year but require performance of employment duties for only a nine-month period from September to June. Yet, PERA deductions are taken from each of the twelve salary installment payments over the calendar year.
Finally, PERA attacks the trial court's conclusion that monetary contributions are sufficient to maintain an employee's "active" membership in the association — a prerequisite to the payment of survivor's benefits. PERA argues that payments made into the fund following the termination of the employee, whether by death or otherwise, cannot maintain the employee's membership in the association for purposes of the survivor's benefits section. Citing Martin v. Public Employees' Retirement Board, supra, the argument is made that a "retained" member, that is, one who has left public service but continues to pay the employee contribution into the fund, does not qualify as an active member and that payments after death are analogous to those made by a "retained" member.
[4] The Martin case, however, supports a position contrary to that argued by PERA. There, the court stated:
"Prior to June 6, 1957, Martin was an 'active member' of the retirement association, making periodic contributions to the retirement fund and as of that date had nearly fifteen years of 'credited service.' On that date, though not eligible for superannuation benefits, he was retired because of physical disability and thereafter ceased being an 'active member' of the association and became a 'disability retiree.' As such he was entitled to a disability annuity, which he received for about one year and from which no deductions for the retirement fund were made. As of June 6, 1957, he ceased making any financial contribution to the retirement fund, and accordingly his period of 'credited service' also came to an end." (emphasis added)
Thus, the period of "credited service" does not cease until payments into the fund in the name of the employee are terminated. We conclude that the deductions paid into the fund for the months following the death of the deceased were sufficient to maintain his "active" membership in the association. See Kettering v. Public Employees Retirement Board, 151 Colo. 474, 378 P.2d 837.
Judgment affirmed.
JUDGE COYTE and JUDGE ENOCH concur.