Opinion
C.A. No. 99A-12-003.
Submitted: May 26, 2000.
Decided: August 2, 2000.
Upon Appeal From a Decision of the Board of Pension Trustees. Affirmed.
Leonard W. Williams, Esquire, 1214 King Street, Wilmington, Delaware 19801, Attorney for Appellant.
Calvin I. Scott, Jr., Esquire, Deputy Attorney General, Department of Justice, 820 N. French Street, Wilmington, Delaware 19801, Attorney for Appellee.
Dear Counsel:
Pending before this Court is the appeal of Appellant Ernest W. Calhoun, Jr. (Appellant) of an October 29, 1999 decision of the Board of Pension Trustees (Board) denying Appellant's appeal of a ruling made by the State Pension Office that required him to make a buy-in pursuant to 29 Del. C. § 5501 (e) in an amount of $5,053.85 plus interest at rate of 6% per annum to receive his maximum pension. For the reasons set forth below, the Board's decision is AFFIRMED.
FACTUAL AND PROCEDURAL HISTORY
Appellant has been employed for more than thirty two years as a teacher in the State of Delaware. He was hired in 1967 to work in the Wilmington School District, which he did until it was dismantled in 1978, when he then commenced employment with the Brandywine School District. Appellant was notified by the State Pension Office by letter dated February 26, 1999 that in order to remove the maximum pension calculation limitation for service prior to January 1, 1977, he was required to make a buy-in pursuant to 29 Del. C. § 5501 (e). Appellant was informed that the cost of the buy-in would be $5,053.85. This figure represents the addition of the required pension contribution of $1,384.97 and interest at a rate of 6% per annum beginning in 1975, when Appellant's salary exceeded $24,000 per year.
Under Delaware Pension law before 1976, employees ceased contributing toward their pension after they reached $24,000 per year. On June 24, 1976, the law was amended to require contributions regardless of income. Under 29 Del. C. § 5501 (e), an employee making more than $24,000 per year before 1976 could buy-in to the increased pension by paying contributions which would have been deducted had the $24,000 limit not been in place. The employee's contributions would have been added to the State's contributions, plus interest.
Upon learning of the "buy-in" amount, Appellant appealed to the Board and at the Board hearing on June 9, 1999 Appellant contended that he was never notified by the State Pension Office or his employer of the change in the law allowing him to "buy-in" in 1978 which would have resulted in paying less interest. At the hearing, the State Pension Office had conceded that it did not directly communicate with state employees regarding the change in the law but that it did inform school districts of the change, with the expectation that the individual districts would relay the information to their employees.
On October 29, 1999, the Board held that
[w]e sympathize with [Appellant]. However, the [Board] is bound by the provisions of 29 Del. C. §§ 55. Twenty-Nine Del. C. § 5501(e) and 5527(a), read together, compel the Board to deny [Appellant's] contention that the pension calculation is in error. This statute simply does not provide the Board with the discretion to rule otherwise . . . [Appellant's] request [is] DENIED.
Bd. Dec. at 5.
It is from this decision of the Board that forms the basis of Appellant's current appeal.
Robert W. Willard, Esquire, Deputy Attorney General submitted the Answering Brief on behalf of the Board of Pension Trustees.
STANDARD OF REVIEW
The Supreme Court and this Court repeatedly have emphasized the limited appellate review of factual findings of an administrative agency. The function of the reviewing Court is to determine whether substantial evidence supports the agency's decision. Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. This Court, on appeal, does not weigh the evidence, determine questions of credibility, or make its own factual findings. If the Board has not committed an error of law, or made findings of fact unsupported by substantial evidence, or acted arbitrarily, or with an abuse of discretion, the Court must affirm the Board's decision. An abuse of discretion results when the Board exercises such discretion in a fraudulent, arbitrary, or incomplete manner.DISCUSSION
One question presented before this Court is whether the Board's decision requiring Appellant to buy-in under 29 Del. C. § 5501 (e) at an amount of $5,053.84 plus 6% per annum is supported by substantial evidence in the record. A second related question is whether the Board has discretion to waive the accrued interest when calculating the buy-in amount.Appellant contends that (1) the State Pension Office has admitted that it did not notify Appellant of the buy-in requirement and that therefore the interest must be waived, and the failure to do so was an error or law, (2) that the action of the Board was "an abuse of discretion and there was a lack of substantial evidence to support its finding," and (3) the Board "erroneously concluded that it lacked [the] authority" to waive the accrued interest.
Appellant's Opening Brief at 6.
Id. at 10.
Id. at 12.
The State Pension Office contends that it "has no discretion to waive the interest payment and the Board decision is supported by substantial evidence."
Appellee's Answering Brief at 5.
In its decision, the Board read the two applicable statutes together and determined that the pension calculation was not m error. Twenty-nine Del. C. § 5527(a) provides that
(a) The amount of the monthly service of disability pension payable to an employee or former employee shall be 1/60th of his/her final average compensation multiplied by the number of years, taken to the nearest twelfth of the year, in his/her period of credited service. The amount payable to a participant who does not make the additional contribution provided in section TITLE Del. C. § 5501(e) of this title for years of credited service before 1977 shall be 1/60th of his/her final average compensation multiplied by the number of years, taken to the nearest twelfth of the year, in his/her period of credited services after 1976, plus 1/60th of his/her prior final average compensation multiplied by the number of years, taken to the nearest twelfth of a year, in his/her period of credited services before 1977, provided that the maximum amount based on the service before 1977 is $1,000.
Twenty-nine Del. C. § 5501(e) provides, in pertinent part that
(e) . . . that for an employee who, prior to the issuance of his/her pension check pays to the Fund contributions determined in accordance with the rules and regulations approved by the Board equal to the sum of (1) the additional employee contributions which would have been made to the Fund if the maximum amount of $24,000 per annum for computing employee contributions had not been applied, (2) an amount determined by applying the rate of state appropriations to the Fund in affect on December 31, 1976, to his/her earnings from January 1, 1966, to December 31, 1976, in excess of $24,000 per annum, and (3) interest compounded at the rate of six percent annum on the sums of(1) and (2) from the date of the calendar year accrued to the date paid, "prior final average compensation" shall mean "final average compensation" as defined in subsection (d) of this section.
This Court finds the Board's decision that §§ 5527(a) and 5501(e) do not require notification to employees of this change in the law is supported by substantial evidence in the record. The laws of the State are of public record and employees are charged with knowledge of the law. As such, Appellant's contentions that the State Pension Office had a duty to notify Appellant of a change in the law is without merit.
See Derby v. Derby, Del. Fam. Ct., No. G-747, Parrish, J. (July 26, 1990) (Mem. Op.); Vosters v. Delaware Racing Commission, Del. Super., C.A. No. 86A-JL-14, Martin, J. (Apr. 1, 1987) (ORDER).
Appellant contends that the Board has the authority to waive the accrued interest. In support, Appellant cites to Thompson v. Board of Pension Trustees, a case where the Board had discretion pursuant to 29 Del. C. § 8308 (b)(2) to pay owed accrued interest to a state police officer. The Thompson Court found that the authority granted to the Board "should be construed so as to permit the fullest accomplishment of legislative intent or policy" and that the "legislature necessarily intended that the Board be permitted to award a pensioner all sums to which he is lawfully entitled." The Thompson case is factually inapposite to the issue presented here. Moreover, when a "governing statute specifies a method for calculation, a pension administrator does not have the discretion to modify its provisions." Twenty nine Del. C. § 5527(a) and 5501(e) provide a method for calculation to fix and determine pensions, and this Court does not interpret the Thompson holding, allowing the Board to pay interest, as giving the Board authority to waive owed accrued interest. As such, Appellant's contention is without merit.
Del. Supr., 552 A.2d 850 (1988).
Id. at 852 ( citing Atlantis I Condominium Assoc. v. Bryson, Del. Supr., 403 A.2d 711 (1979)).
Id.
60A A.M. Jur 2d Pensions and Retirement Funds § 1963 (1988); see Patry v. Board of Trustees, Conn. Supr., 461 A.2d 443 (1983).
This Court finds that the decision of the Board finding that the calculation of $5,053.84 as the buy-in amount for Appellant to receive his maximum pension is based on substantial evidence in the record. The Board, through a strict literal reading of the statute, determined that the above statutes did not require a notice to the employee of a change in the law, and that the Board lacked the authority to waive the accrued interest. Although this Court also sympathizes with Appellant, the decision of the Board must be affirmed.
CONCLUSION
The Board's decision is supported by substantial evidence and contained no error of law. For the reasons stated, the decision of the Board is AFFIRMED.
IT IS SO ORDERED.