Opinion
No. 74-024
Decided November 12, 1974. Rehearing denied December 3, 1974. Certiorari granted January 20, 1975.
Retired state employee brought action in nature of mandamus seeking upward adjustment of her pension benefits. From summary judgment for retired employee, retirement association appealed.
Reversed
1. STATUTES — Prospective Application — Presumed — Doubt Resolved Against — — Retrospective Application. There is a presumption that statutes shall be construed prospectively unless a contrary intention is manifest, and any doubt regarding legislative intent is to be resolved against retrospective application.
2. PENSIONS — Retired Public Employee — No Claim — Statutory Amendment — Reduce Pension — No Impairment — Vested Rights. Since in action relative to change in pension benefits there is no claim by retired public employee that amendment to pension statute would in any way reduce the amount of the pension she is presently receiving, there are no vested rights of hers which are being impaired.
3. Retired Public Employee — Sought — Increased Pension Benefits — Statutory Amendment — Not Affect — Judgment for Retiree — Reversed. Where retired public employee sought to obtain increased pension benefits by utilization of pension statute amendment passed after her retirement, that amendment was not intended to affect those who had retired prior to its effective date, and the pension rights of the retired employee are to be determined as of the latest enactments in effect prior to her actual retirement; accordingly, judgment awarding retired employee increased benefits under the amendment must be reversed.
Appeal from the District Court of the City and County of Denver, Honorable Merle R. Knous, Judge.
Robert C. Floyd, for plaintiff-appellee.
John P. Moore, Attorney General, John E. Bush, Deputy Attorney General, Andrew A. Markus, Assistant Attorney General, for defendant-appellant.
This is an appeal from a final judgment denying defendant-appellant's (PERA) motion for summary judgment and granting judgment in favor of plaintiff-appellee (Taylor). We reverse.
Taylor is a retired state employee, having retired in July 1972. In June 1973, 1969 Perm. Supp., C.R.S. 1963, 111-1-10(1), was amended by Colo. Sess. Laws 1973, ch. 321, 111-1-10(1), and thereafter Taylor filed a petition in the nature of mandamus under C.R.C.P. 106(a)(2) for an order directing PERA to readjust her pension benefits.
The admitted facts are as follows: Taylor had been employed by the State of Colorado from 1934 to 1942, and had made the required payments to PERA. In 1942 she terminated employment with the state and withdrew all of the money she had paid into the retirement fund. In May of 1960 she again entered state employment and remained until August of 1972, at which time she retired and was awarded a monthly pension based only on the last twelve years of her state employment. After the 1973 amendment of the pension statute, she offered to make a tender of the funds previously withdrawn by her from the PERA retirement fund, plus interest, and demanded that her retirement benefit be adjusted to reflect twenty years of service rather than twelve years of service. The Board of Managers of PERA refused to comply with her demand and she began this suit.
The matter at issue involves only the construction of the 1973 amendment, which is here set forth in full, with capital letters indicating new material and dashes through words indicating deletions from the section amended:
"111-1-10. Members may be reinstated. (1) Whenever any member of the public employees' retirement association who ceases covered employmentshall re-enter REENTERS the employment of any affiliated employer within five years of said cessation of employment, AND REMAINS IN SAID EMPLOYMENT FOR A PERIOD OF AT LEAST ONE YEAR, the service credit forfeited OR DEFERRED by such member at the time of such separation, whether by withdrawal of funds or otherwise, shall be restored upon repayment by such employee to the retirement fund of the full amount of all moneys withdrawn, if any,and, in addition thereto, in any event, an amount equal to such monthly salary deductions as he would have paid during the period of non-employment with interest at four SIX percent, compounded semiannually, on the full amount of such payments to the retirement fund; thereupon, such employee shall resume his obligation as a member with full rights and benefits, as of the date he first became a member of the retirement association, but no service credit shall be allowable for retirement purposes for any period of nonemployment."
We start with the premise that the retirement benefits payable to Taylor are a "vested right of which [she] . . . cannot be deprived," Police Pension Relief Board v. McPhail, 139 Colo. 330, 338 P.2d 694; and that, in the presence of ambiguity, pension statutes should be liberally interpreted in favor of the employee. Endsley v. Public Employees' Retirement Ass'n., 33 Colo. App. 416, 520 P.2d 1063.
[1] Under long-established principles, there is a presumption that statutes "shall be construed prospectively unless a contrary intention is clearly manifest." Curtis v. McCall, 79 Colo. 122, 244 P. 70. In 1973, the Legislature adopted this rule of common law construction by declaring that "a statute is presumed to be prospective in its operation." Colo. Sess. Laws 1973, ch. 406, 135-1-202. Any doubt regarding legislative intent is to "be resolved against retrospective application." Department of Employment Security v. General Cleaners Dyers, 128 Colo. 298, 263 P.2d 574.
[2] Since Taylor did not reenter state service within five years from the time she had originally left such service, the provisions of the pension statute as it existed in May of 1960 would prevent her from recovering the service credit she forfeited when she left in 1942. See C.R.S. 1963, 111-1-10. The amendment was not intended to affect those who had retired prior to its effective date, June 21, 1973. We note that during the legislative session which adopted the 1973 amendment, the Legislature, when it wished to extend additional benefits to those who had previously ceased employment, did so in clear unmistakable terms. See Colo. Sess. Laws 1972, ch. 320, 111-1-9. Had the Legislature intended the 1973 amendment to apply to persons previously retired, it could have said so in the same clear terms.
Taylor cites a number of Colorado cases which she contends are authority for her position: Police Pension Relief Board v. Bills, 148 Colo. 383, 366 P.2d 581; Police Pension Relief Board v. McPhail, supra; McNichols v. Walton, 120 Colo. 269, 208 P.2d 1156; Bedford v. White, 106 Colo. 439, 106 P.2d 469; and People ex rel. Albright v. Board of Trustees, 103 Colo. 1, 82 P.2d 765. Except for McPhail and Bills, supra, all of these cases were decided upon the theory that government employee pensions are a gift or gratuity with no right to a continuance thereof and are thus subject to whatever changes the Legislature decides to make. However, in McPhail, supra, this theory was discarded, and the court adopted the "contract principle" whereby one entering service, where a retirement plan is in effect, acquires a limited vesting of pension rights while still in active employment, which becomes totally vested upon retirement. Accordingly, the court thereafter held that employees' pension rights are "not subject to a unilateral change of any type whatsoever." Bills, supra. The cases decided prior to McPhail are not applicable to the factual situation under consideration here.
It is conceded that changes can be made in a pension so long as vested rights are not impaired. McPhail, supra. However, McPhail does not stand for the proposition that a change in a pension statute must cover both active and retired personnel or that they must be treated equally. There is no claim by Taylor that the pension amendment will in any way reduce the amount of the pension she is presently receiving, and there are, therefore, no vested rights of hers which are being impaired.
To accept Taylor's position we would have to read the 1973 amendment as follows: "(1) Whenever any member of the Public Employees' Retirement Association who has ceased or hereafter ceases covered employment has reentered or hereafter reenters the employment of any affiliated employer, and has remained or hereafter remains in said employment for a period of at least one year . . . . " We have added the emphasized words to the 1973 amendment to show the extent we would have to go in order to accept Taylor's position. This we will not do. Our refusal to so interpret the statute is in accord with the holding in Kettering v. Public Employees' Retirement Board, 151 Colo. 474, 378 P.2d 837, where the court said:
"We find no ambiguities or conflicts in the section relied upon. We do not find it to be out of harmony with any other provisions of the Public Employees' Retirement Act. It needs no construction or interpretation, and to construe the Act as contended for would simply be to rewrite it and that is not the privilege or prerogative of the courts."
[3] The rights of Taylor to her pension are to be determined as of the latest enactments in effect prior to her actual retirement. Atchison v. Retirement Board of Police Retirement System, 343 S.W.2d 25 (Mo.); Leonard v. City of Seattle, 81 Wash. 2d 479, 503 P.2d 741.
Judgment reversed and the cause is remanded with directions to grant PERA's motion for summary judgment against Taylor.
JUDGE PIERCE concurs.
JUDGE STERNBERG dissents.