Opinion
No. 38653
Decided March 24, 1965.
Police relief and pension fund — "Pensions" and "monthly disability benefits" distinguished — Section 741.49, Revised Code — Vested right not granted to beneficiary of disability benefits — Section 741.46, Revised Code — Monthly disability benefit amounts — Authority of board of trustees to fix — To increase or decrease.
1. The provisions of Section 741.49, Revised Code, make a clear distinction between "pensions" and "monthly disability benefits."
2. Section 741.46, Revised Code, does not grant a vested right to the beneficiary of "monthly disability benefits" received pursuant to paragraph (C) of Section 741.49, Revised Code.
3. Under the provisions of paragraph (C) of Section 741.49, Revised Code, the board of trustees of a police relief and pension fund has the authority to fix the amount of "monthly disability benefits" to be paid to a qualified beneficiary and the authority, within the limits of the statute and within the proper exercise of its discretion, to increase or decrease such "monthly disability benefits."
APPEAL from the Court of Appeals for Hamilton County.
This is an action in mandamus instituted in the Common Pleas Court of Hamilton County by a former member of the Cincinnati Police Division against the Trustees of the Police Relief and Pension Fund of the city of Cincinnati.
The facts are stipulated.
Relator was employed as a patrolman by the city of Cincinnati Police Division in December 1945 and was retired with less than twenty-five years of active service on January 30, 1956, pursuant to Section 741.49 (C), Revised Code, on a partial disability incurred in the line of duty. Relator's salary during his last year of service was $4,712.88. The defendants awarded relator a monthly disability benefit of $196.37, amounting annually to $2,356.44 and representing one-half of his salary.
On November 21, 1961, defendants adopted the following resolution:
"It will be the general policy of this board that in any disability benefits granted by this board under Section 741.49, paragraphs C and D, Revised Code of Ohio, for members with less than 25 years of service, that the amount of benefits, when added to any sums of money recipient of the benefits makes, shall not exceed the current salary of the rank at which recipient retired, with the proviso that a minimum of $5 per month benefits be paid and that disabled benefits recipients be interrogated each year by proper questionnaire as to the amount of their earnings."
And on March 27, 1962, the defendants adopted the following resolution:
"Item 1. It will be the general policy of this board, in considering adjustments of disability allowances, that when a disability beneficiary's compensation for personal services during the preceding year plus his disability retirement allowance exceeded the compensation he would have received from the police division during said period if he had been employed by the police division in the same classification he held at the time of said disability retirement, the board shall reduce said beneficiary's disability retirement allowance during the following year, or, if necessary, years, by the amount his compensation for personal services plus his disability allowance exceeded the compensation he would have received from the police division if he had been employed by the police division in the same employment classification he held at the time of his retirement. However, no disability retirement allowance shall be reduced so that a beneficiary is awarded less than five ($5) dollars a month.
"* * *
"Item 5. Except as provided in items 3 and 4, all members retired under Sec. 741.49, paragraphs C and D, on and after Sept. 25, 1947, with less than twenty-five (25) years of service, shall be required to file with the board of trustees on forms to be furnished by the board, annual reports of compensation for personal services received the preceding year and authorizations for inspection of federal income tax returns. Failure to file such annual reports and authorizations will result in suspension of the beneficiaries' disability allowances until such time that said reports and authorizations are properly filed and processed.
"Item 6. If a disability beneficiary makes any false statement concerning the compensation he has received for his personal services in reports required to be filed under item 5, the board may institute such action as it deems proper within the law and the rules of the board."
According to his federal income tax returns, relator's compensation for personal services was, in 1960, $10,052.53 and, in 1961, $8,973.51. Pursuant to defendants' rules set forth above, the relator's disability benefits for the period from December 1, 1961, through October 31, 1962, were reduced by the defendants to $5 per month. During this period, the salary of a Cincinnati patrolman was less than the amount of income which the relator received as compensation for personal services. During this period, relator's injury, which prevented him from performing his official duties as a patrolman, was substantially the same as at the time he was first granted disability benefits. Relator's petition prays for a writ of mandamus ordering the defendants to pay relator the sum of $191.37 for the months of December 1961 through April 1962 and the sum of $196.37 per month thereafter.
The Common Pleas Court allowed the writ and ordered payment of the amounts prayed for in the petition.
Upon appeal, the Court of Appeals affirmed the judgment of the Common Pleas Court.
The cause is before this court upon the allowance of a motion to certify the record.
Mr. Morris G. Sullivan, for appellee.
Mr. Wm. A. McClain, city solicitor, for appellants.
The questions which this court must decide are:
1. Does the relator have a vested right to the amount of disability benefits which were originally granted to him by the defendants?
2. If the relator does not have such a vested right, did the defendants abuse their discretionary power to decrease disability benefits (provided for under Section 741.49(C), Revised Code) when they reduced relator's benefits?
Relator contends that he had a vested right to monthly disability benefits of $196.37 once such benefits were granted by the defendants. Relator relies for his position upon Section 741.46, Revised Code. The provisions of this section read as follows:
"The granting of a pension to any person pursuant to the rules adopted by the board of trustees of the police relief and pension fund vests a right in such person, so long as he remains the beneficiary of such fund, to receive such pension at the rate fixed at the time of granting the pension."
Section 741.49, Revised Code, effective on October 2, 1953, and, therefore, in effect at the time relator's disability benefits were granted by defendants, makes a clear distinction between "benefits" and "pensions."
Paragraph (C) of Section 741.49, Revised Code, under which the relator's disability benefits were granted, provides:
"A member of the fund who is partially disabled as a result of the performance of his official duties as a member of the department and such disability prevents him from performing those duties and impairs his earning capacity, shall be paid monthly disability benefits in an amount to be fixed by the board. The board may increase or decrease such monthly benefits whenever the impairment in the member's earning capacity warrants an increase or decrease, but in no event shall a monthly benefit paid to such member exceed fifty per cent of his average monthly salary for the last year he was in the active service of the department. * * *" (Emphasis added.)
Section 741.49, supra, was amended by the Legislature in 1953 but no change was made in Section 741.46. Section 741.46, supra, applies to retirement pensions but not to monthly disability benefits, and the relator does not have a vested right, under the statute, to the monthly disability benefits which were granted by the defendants under authority of Section 741.49. The defendants, under the latter statute, had the discretion to fix the monthly disability benefits to be paid to the relator and the authority, within the proper exercise of their discretion, to increase or decrease such monthly benefits.
The defendants, by their resolution of March 27, 1962, supra, established the criteria by which adjustments are to be made in relator's disability allowances, and the defendants followed the provisions of their resolution in reducing relator's monthly disability benefits.
The remaining question is: Did the defendants abuse their discretion when they reduced relator's monthly benefits in accordance with the provisions of their resolution adopted pursuant to the statute, Section 741.49(C), supra?
Relator asserts that the defendants' action was an abuse of discretion under the provisions of Section 741.49, supra. The pertinent language in Section 741.49 is as follows:
"* * * The board may increase or decrease such monthly benefits whenever the impairment in the member's earning capacity warrants an increase or decrease * * *."
Relator's position is that the words, "earning capacity," relate solely to his earning capacity as a patrolman on active duty and that the amounts which he actually earned subsequent to his retirement from the police force have no bearing upon such determination. Relator grounds his position upon the case of A.P. Waite Taxi Livery Co. v. McGrew (1922), 16 Ohio App. 219, which states the general rule in tort as to the meaning of earning capacity. In that context, impairment of earning capacity does not mean loss of earnings but rather projected loss of the ability to earn, finally computed at the time of the rendering of a verdict as an element of damages.
The same rule is applied in workmen's compensation cases. Industrial Commission v. Royer (1930), 122 Ohio St. 271, 273; State, ex rel. Waller, v. Industrial Commission (1943), 38 Ohio Law Abs. 515.
These cases do not involve relief or pension plans. They involve damages or awards granted in lieu thereof under statutes enacted pursuant to Section 35, Article II of the Constitution of Ohio. See, also, Industrial Commission v. Weigandt (1921), 102 Ohio St. 1, fourth paragraph of the syllabus.
An examination of the legislative history of the police relief and pension fund statutes is necessary to properly determine the meaning and intent of the provisions of Section 741.49, supra.
The section creating a police relief fund was originally enacted in 1898 (93 Ohio Laws 76, 78) and amended to apply to all municipalities in 1902 (95 Ohio Laws 223, 226). This section gave the municipality the power to create the board of trustees to administer the fund. The act provided that moneys from the fund could be used at the discretion of the trustees for pensions for members, or could be used for relief of members sick or disabled from performing their duties, for funeral expenses, for relief of deceased members' families or for pensions of those honorably retired from the force. Thus, in the original enactment, a distinction was made between pensions upon retirement and relief for sick or disabled members. The term used was "relief fund," and the words, "pension" and "relief," were used to designate different purposes.
The board of trustees retained this discretionary power to enact rules and regulations in substantially the same form as it was granted in the original enactment of the police-relief-fund statute until 1947, when Section 4628, General Code, was amended to provide specific statutory standards for the exercise of its discretion in making awards (122 Ohio Laws 614, 624).
From the original enactment of the statute to the present act, the discretion of the board of trustees to establish and to increase and decrease the amount of disability payments has been retained. 95 Ohio Laws (1902) 223, 226, 229; 97 Ohio Laws (1904) 241, 245, 248; 113 Ohio Laws (1929) 64, 66; 122 Ohio Laws (1947) 614, 624; 123 Ohio Laws (1949) 815; 125 Ohio Laws (1953) 61, 62; 127 Ohio Laws (1957) 515; 128 Ohio Laws (1953) 635, 638; 129 Ohio Laws (1961) 582, 647; 129 Ohio Laws (1961) 1342, 1346.
A study of this legislative history leads to the conclusion that the original and continuing concept upon which the granting of disability benefits was based has been one of need, to be determined in the discretion of the board of trustees.
In the light of this legislative history and the language of the statute, the defendants did not abuse their discretion when they adopted their resolution of March 27, 1962, and applied the provisions of that resolution to the relator to decrease his monthly disability benefits in accordance therewith.
The judgment of the Court of Appeals is, therefore, reversed, and the cause is remanded to the Common Pleas Court with instructions to dismiss the petition
Judgment reversed.
TAFT, C.J., ZIMMERMAN, MATTHIAS, HERBERT, SCHNEIDER and BROWN, JJ., concur.