Opinion
No. CV04 0524998 S
December 29, 2004
MEMORANDUM OF DECISION
This is an appeal from a declaratory ruling of the respondent Connecticut State Employees Retirement Commission ("commission"). The plaintiffs are two former Assistant Attorneys General who elected retirement pursuant to an Early Retirement Incentive Program in June 2003. They seek an application of the State Employees Retirement Act, §§ 5-152 et seq. of the General Statutes, such that payments for accrued but unused vacation time and for pro-rated longevity payments would be included in the last year's salary, thus significantly raising the average salary used to compute retirement benefits. The respondent urges that the Connecticut State Employees Retirement Commission correctly computed the amounts of the pensions and that the declaratory ruling issued by the commission properly explained the reasoning. The respondent computed the pensions, analytically, by considering the amounts of the payments, but also applying statutory language defining state service in such a way that the payments for accrued vacation time and longevity necessarily imply a time element, such that the average yearly salary used to compute benefits is not dramatically increased by the addition of the payments. After careful consideration, I agree with the commission and dismiss the appeal.
The parties agree that the court has jurisdiction to consider the appeal. The declaratory ruling was issued pursuant to § 5-155-1 of the Regulations of State Agencies and § 4-176 of the General Statutes. The appeal has been brought pursuant to § 4-183 of the General Statutes. Because the commission issued a ruling adverse to their direct personal interests, the plaintiffs are aggrieved.
The commission's finding of facts is not contested. For present purposes, it is sufficient to state that each of the plaintiffs were credited with more than thirty-three years of state service. The early retirement incentive added three years to state service. Each of the respondents also were credited with significant amount of vacation time that had accrued but had not been used as vacation. Longley had accumulated 120 days, which the commission "converted" to five months and twenty-two days of "calendar time" for the purpose of computing retirement credit. Greenberg had accumulated 96.92 days of vacation time, which the commission convened to four months and 19 days of calendar time. Additionally, each plaintiff received significant additional amounts of "longevity payments" pursuant to § 5-213 of the General Statutes.
The statutory scheme for computing retirement benefits appears in §§ 5-152 et seq. of the General Statutes, the "State Employees Retirement Act." The general idea is that the average base salary for the employee's three highest-earning years of state service is then multiplied by a percentage determined by the number of years of state service. Longley's average salary, which the commission determined on a basis including payment for accrued vacation time, was $123,928.74. Greenberg's was $123,829.25. If the time frame were not extended by the additional payments, the pensions would be approximately $99,700 per year. If the time frame is extended, the pension would be approximately $90,600 per year.
The analysis depends primarily of the words of the pertinent statutes. If the language is clear and unequivocal as applied to the facts presented, of course, then no further aids to construction ought to be utilized.
"We are obligated to interpret the legislative meaning inherent in the statutory enactment . . . Where the language used in a statutory enactment is clear and unambiguous, we assume that the words themselves express the legislature's intent and there is no need to look further for interpretative guidance . . . We are bound to interpret legislative intent by referring to what the legislative text contains, not by what it might have contained . . . We will not read into clearly expressed legislation provisions which do not find expression in its words." (Internal quotation marks omitted.) Tower v. Miller Johnson, Inc., 67 Conn.App. 71, 78, 787 A.2d 26 (2001). "[I]t is axiomatic that the process of statutory interpretation involves a reasoned search for the intention of the legislature. In seeking to discern that intent, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter." (Internal quotation marks omitted.) State v. Russo, supra, 447-48.
State v. Wegman, 70 Conn.App. 171, 184 (2002).
In determining the meaning of a statute, however, we look not only at the provision at issue, but also to the broader statutory scheme to ensure the coherency of our construction. See Schroeder v. Triangulum Associates, 259 Conn. 325, 339, 789 A.2d 459 (2002) ("[w]e have previously recognized that our construction of the [act] should make every part operative and harmonious with every other part insofar as is possible"); Sweetman v. State Elections Enforcement Commission, supra, 249 Conn. 307 ("[w]e consider the statute as a whole with a view toward reconciling its parts in order to obtain a sensible and rational overall interpretation").
Schiano v. Bliss Exterminating Co., 260 Conn. 21, 42 (2002).
I am to look, then, at the plain meaning of the relevant statutes, with an eye toward reading statutes in the context of a harmonious legislative whole and avoiding bizarre results. I begin with § 5-162(a) of the General Statutes, which provides that "[t]he retirement income for which a member is eligible shall be determined from his retirement date, years of state service and base salary . . ." "Base salary" is defined as "the average covered earnings received by a member for his three highest-paid years of state service . . ." Section 5-162(b)(2) of the General Statutes. "Covered earnings," in turn, means "the annual salary, as defined in subsection (h) of section 5-154, received by a member in a year, limited by one hundred thirty per cent of the average of the two previous years' covered earnings." Id.
"Salary" means "any payment, including longevity payments and payments for accrued vacation time under section 5-252, for state service . . ." § 5-154(h); "state service" means "service with the state . . . for which salary is paid" and "includes a period equivalent to accrued vacation time for which payment is made under section 5-252 . . ." § 5-154(m)(6); and "year of state service" means "any period of twelve consecutive months of state service . . ." Section 5-154(n) of the General Statutes.
Several other statutory provisions play into the mix. Section 5-252 provides that any employee leaving state service shall receive a lump sum payment of accrued vacation time, and § 5-213(b) provides that "semiannual longevity payments shall be made (in April and October) . . . except that a retired employee shall receive, in the month immediately following retirement, a prorated payment based on the proportion of the six-month period served prior to the effective date of his retirement."
The conceptual dispute is simple: the plaintiffs urge that the extra payments for accrued vacation time and longevity payments should be added to the regular salary payments for the final consecutive twelve-month period of actual work for the state, such that the salary for the final year is significantly increased, and, hence, the three-year average on which the pension is based. The commission agrees that the payments should be considered, but because "state service" includes a "period equivalent to accrued vacation time for which payment is made under section 5-252," the payment for accrued vacation time has the effect of extending the time period of state service on which the salary is computed.
The dispute is perhaps best illustrated by an entirely hypothetical example. Suppose an employee's salary was $50,000 in Year 1, $51,000 in Year 2 and $52,000 in Year 3. Suppose that Years 1, 2 and 3 are the three highest-paid years of state service (before any period attributable to accrued vacation time is added in). Before the additional payments are considered, the average would be $51,000 and the pension would be computed accordingly.
Now, leaving aside for the moment the issue of longevity payments, suppose that a payment of $13,000 is made in the month following retirement for accrued vacation time, and that, based on the daily rate of pay at the time of retirement, that amount corresponds to three months of salary. The plaintiffs would add the $13,000 to the final year's salary, such that the recomputed amount for Year 3 would be $65,000. (Because $65,000 is less than 130% of the average of Years 1 and 2, it does not have to be adjusted downward). The recomputed average salary would be $56,000. If the pension were paid at a 70% rate, then the yearly pension would be $39,200 yearly.
The commission would account for the payment for accrued vacation time differently. It would adjust the years forward, taking into account the statutory language which includes in "state service" periods equivalent to the accrued vacation time. Because the $13,000 in our example corresponded to three months of employment, Year 3 is extended by three months for computation purposes. Because the accrued vacation time is computed according to the last salary rate, the payment for Year 3 is still $52,000. Payment for Year 2 is adjusted somewhat upward: nine months is at the rate of $51,000, but three months is at the $52,000 rate, which is included in Year 2 because of the forward shift. Recomputed salary for Year 2, then, is $51,250. The amount attributed to Year 1 is computed similarly: nine months at the rate of $50,000 per year is $37,500, and three months at the rate of $51,000 is $12,750. The recomputed rate for Year 1 is, therefore, $50,250. The average for the three highest-paid years becomes $51,166.67. The pension, again at 70%, would be $35,816.67.
This example replicates fairly accurately the plaintiffs' financial situation, except that the figures in the plaintiffs' cases are greater than the example by a factor of almost three.
The differences as to longevity payments are similar. The commission's method includes in the three highest years of salary the amount of longevity payments included in that period. The statutory system contemplates semiannual payments in April and October, plus one lesser amount prorated for the last increment of time worked after the last April or October. That is, an employee receives payment for longevity for the last period of time worked, whereas, if the payments were limited to April and October, there would be no payment for the last increment in most cases. The plaintiffs, consistently, would add the prorated payment to the last year's salary, not subtract any consideration for the first year, and end up with more than a year's worth of longevity payments packed into the last year of service, for the purpose of computing the average salary. The commission would prorate the last payment, but deduct payment for the same amount of time from the first year considered in the computation of average salary, so that some benefit is given to the employee but the payments correspond to actual time periods.
The commission's ruling appears in the record and it is persuasive. It seems to me that the commission's construction is compelled by the plain language of the statutory provisions, so no further rules of statutory construction are required. Should it appear, however, that there is an ambiguity, I agree with the commission's analysis for three additional reasons. First, the commission's interpretation takes into consideration all of the statutory provisions involved in the rather complex statutory scheme. The interpretation urged by the plaintiffs ignores the full logical implications of § 5-154(m), which provides that state service includes a period equivalent to accrued vacation time. The plaintiffs agree that such time should be added for the purpose of determining the percentage to be applied to average of the three highest years of salary in order to do the final computation for the pension, which indeed has been done by the commission. They do not agree, however, that the period should have anything to do with the computation of the three highest years of service. Section 5-154(m) clearly, however, contemplates a period of time correlative to the accrued vacation time, and there is no reason to ignore the provision when computing "years of state service" when the statute states that the period of time is to be so considered. By according the highest value to the accrued time, almost all employees will receive some benefit from the inclusion of accrued vacation time in the computation of the pension.
Second, some consideration ought to be accorded the apparently unanimous opinion of the commission which is designated by the legislature to compute pensions. Although such deference is not of great weight in the circumstances, in that the question is largely one of law and the issue has not been decided by the courts or, so far as I can tell, by published agency decision, the interpretation is apparently long-standing and consistently applied. Perhaps more persuasively, the commission has by legislative mandate the responsibility to compute the pensions of very many state employees. There ought to be some reluctance to interfere judicially with process consistently used across the board.
Finally, and consistently, an interpretation which avoids bizarre results should be adopted. Although it is not my province to second-guess legislative policies, I do not think that it likely that the legislature intended to reward, to the tune of $10,000 a year in the instant examples, a practice of not taking vacation days. Vacation presumably benefits both the employee and the employer, and it seems odd to me that a unilateral choice might result in quite such a windfall. The construction of the commission gives some benefit to the employee without the allowance of what might appear to be a remarkable windfall. Stated conversely, a long-term employee who took his vacation would be sorely penalized for doing so, and I doubt that this is the policy intended by the legislature.
I find that none of the reasons for reversal of an agency's decision, which appear in § 4-183(j) of the General Statutes, are satisfied, and the appeal is dismissed.
Beach, J.