Opinion
19-P-615
04-23-2020
Nancy O'LOUGHLIN v. MBTA POLICE ASSOCIATION RETIREMENT BOARD, trustee, & others.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff filed suit challenging the MBTA Police Association Retirement Board's (board) calculation of her pension. A Superior Court judge granted summary judgment for the defendants, and the plaintiff appeals. We affirm.
Background. We summarize the undisputed facts from the summary judgment record. In December 2012 the plaintiff retired from the Massachusetts Bay Transportation Authority (MBTA) police department and submitted an application to the board for retirement benefits. The board acts as trustee of the MBTA Police Association Retirement Plan (plan), a trust that serves as a private pension plan for MBTA police officers and their beneficiaries. The plan is governed by a trust agreement and a pension agreement. These documents vest the board with power to administer the plan.
Under the pension agreement, the board calculates retirement benefits based on the applicant's "highest three ... years of compensation prior to retirement." The plaintiff's application identified her highest compensation years as 2006, 2011, and 2012. After noting that the plaintiff's 2006 compensation was unusually high, however, the board learned that that figure included back pay that an arbitrator had ordered as a remedy for wrongful demotion. The arbitrator's award reimbursed the plaintiff for lost wages and overtime pay from 2004 to 2006. The award was paid to the plaintiff in 2006.
After a meeting the board unanimously voted to attribute the back pay award to the years in which the money was earned and should have been paid, rather than the year in which the award was actually paid. This decision had the effect of reducing the plaintiff's 2006 compensation, which, in turn, negatively affected her pension entitlement. The board denied the plaintiff's request for review.
The plaintiff then brought this action for breach of contract and breach of fiduciary duty. Concluding that the board did not abuse its discretion in calculating the plaintiff's pension, the judge allowed the defendants' motion for summary judgment. This appeal followed.
Discussion. Our review of a grant of summary judgment is de novo. See Halstrom v. Dube, 481 Mass. 480, 483 (2019). Our review of the board's underlying decision, the parties agree, is for abuse of discretion. This is a highly deferential standard, which requires the plaintiff to show that the board's decision "lacks any rational explanation that reasonable persons might support." Board of Health of Northbridge v. Couture, 95 Mass. App. Ct. 296, 302 n.7 (2019), quoting Frawley v. Police Comm'r of Cambridge, 473 Mass. 716, 729 (2016).
The plaintiff argues that the definition of "compensation" in the pension agreement is unambiguous and required the board to include the back pay award as part of her 2006 compensation. We conclude to the contrary that the language of the agreement does not resolve the issue. The agreement defines "compensation" generally as "the following parts of actual compensation received in any month: (i) base pay, (ii) longevity, (iii) education allowance, (iv) night shift differential, ... (v) holiday pay [and] (vi) firing range stipend." Implicit in the language "actual compensation received in any month" is the assumption that employees will be paid in a timely manner. The definition does not unambiguously answer the question of how to treat the back pay award, which was intended to make the plaintiff whole for monies that were wrongfully withheld in prior years.
It was therefore within the discretion of the board, which is charged by the plan documents with deciding disputed questions, to determine the appropriate treatment of the back pay award. And we discern no abuse of discretion in the board's decision to attribute the award to the years in which the money should have been paid. The board determined that "compensation" as defined in the pension agreement "should not include compensation that, [because of] inappropriate disciplinary action by the employer, was delayed to a subsequent year" because the money "was rightfully due to [the plaintiff] in 2004 and 2005 and should have been paid in those years." As the board reasoned, treating a back pay award as lump sum compensation in a later year "could artificially inflate the pension of that particular applicant, to the detriment of the other participants." This reasoning is rational and consistent with the board's decision to include -- at the plaintiff's urging -- her 2012 vacation pay as part of her 2012 compensation, even though it was not actually paid until 2013.
We disagree with the plaintiff that the board abused its discretion by treating the back pay award differently from how it treats retroactive pay increases resulting from implementation of new collective bargaining agreements. Although the board's practice is to include retroactive payments as compensation in the years in which the payments are actually made, the board considered the back pay award to be different because that money was owed to the plaintiff "at the time the hours [were] worked," whereas retroactive pay is not owed "until the agreement providing for the increases is implemented." This is a rational distinction, and we cannot substitute our own judgment for that of the board. See Thomas v. Civil Serv. Comm'n, 48 Mass. App. Ct. 446, 451-452 (2000).
We note also that the retroactive pay increases apply across the board to all MBTA police officers; thus, the board's practice does not present the risk of one officer's pension being artificially inflated at the expense of another.
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Finally, the plaintiff suggests that the board abused its discretion by coming to a decision that conflicted with the initial recommendations of the plan's then executive director. This is unpersuasive because the executive director was not a board member, and there is nothing in the record to suggest that his recommendations were binding.
Judgment affirmed.