Case Name: Michael James Crabtree, et al., Respondents, v. The Department of Retirement Systems, et al., Appellants
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1984-05-17
Citations: 101 Wash. 2d 552
Docket Number: No. 49195-0
Parties: Michael James Crabtree, et al, Respondents, v. The Department of Retirement Systems, et al, Appellants.
Judges: 
Reporter: Washington Reports
Volume: 101
Pages: 552–565

Head Matter:
[No. 49195-0.
En Banc.
May 17, 1984.]
Michael James Crabtree, et al, Respondents, v. The Department of Retirement Systems, et al, Appellants.
Kenneth O. Eikenberry, Attorney General, and Donald F. Cofer, Assistant, for appellants.
Bryan P. Harnetiaux, Judith Lonnquist, and Burning, Webster & Lonnquist, for respondents.

Opinion:
Rosellini, J.
This case presents an issue of first impression concerning the interpretation of 1977 amendments to the Teachers' Retirement System (TRS). Laws of 1977, 1st Ex. Sess., ch. 293. Respondents, teachers in the Spokane school system, claim entitlement to the more favorable provisions of the preamendment retirement scheme. The trial court held in favor of the respondents. We affirm.
Appellants, Department of Retirement Systems and its director, administer nine public retirement systems, including the TRS. That system, created in 1947, is governed by the terms of RCW 41.32. In 1977, the Legislature substantially amended RCW 41.32. The new program was designed to reduce the system's future liabilities, thereby improving its actuarial soundness.
The original program, hereinafter designated as Plan 1, had significant advantages over the subsequent program, Plan 2. For instance, Plan 1 allowed a teacher to retire with full salary after 30 years' service. Under the terms of Plan 2, on the other hand, a teacher may still retire after 30 years' service but will not receive benefits until he reaches the age of 65.
The facts as to the two respondents are undisputed. Michael James Crabtree first worked for the Spokane school system during the 1976-77 fiscal year as a substitute teacher. During that year Crabtree worked 124.7 days on a daily, noncontract basis. Crabtree signed his contract to teach full time in the school system on August 8, 1977. Respondent Beuhler signed her contract with School District 81 on September 19, 1977.
Both respondents were thus initially employed by the school district before October 1, 1977. Similarly, both respondents had employee contributions for the retirement system deducted as of their first day of employment.
As Mr. Crabtree was generally aware of the different retirement programs available, he contacted school district officials and asked whether he belonged to Plan 1 or Plan 2. He was informed that he was enrolled in Plan 1. Respondent Beuhler apparently did not inquire as to her plan membership.
In the spring of 1980, respondents received a small refund check and a notice which stated that they had been assigned to Plan 2.
Respondents brought the present action to challenge their assignment to Plan 2. Judge Gerry Alexander found that the respondents were entitled to benefits under Plan 1 and ordered their reassignment to that plan. The Department appealed to Division Two of the Court of Appeals. We granted respondents' motion to transfer the appeal. We affirm.
We start, as did the trial judge, with the provisions of RCW 41.32. RCW 41.32.240 provides that all teachers, employed full time in the public schools, shall be members of the TRS. The statute also requires that a minimum of 90 days or its equivalent "shall be required to establish membership." RCW 41.32.240.
Prior to 1977, the 90-day membership provision appar ently had little significance unless the employee became disabled or died within that time. If that occurred the employee's contributions were refunded.
Following the passage of the 1977 amendments, however, the Department placed additional significance on the 90-day period. The Department relied on the 90-day membership period to exclude those individuals, employed prior to October 1, 1977, who had not achieved membership status as of that date. Respondents were among those affected by the Department's interpretation of the amendments.
Respondents argue first that the plain language of the statute requires their assignment to Plan 1. Their argument begins with the provisions of RCW 41.32.755. That section states that Plan 2 benefits, as described in RCW 41.32,760-.825, apply "only to those persons who are initially employed by an employer on or after October 1, 1977." RCW 41.32.755. Respondents then turn to the language of RCW 41.32.750. That section indicates that those members, first employed on or before September 30, 1977, "shall not suffer any diminishment or loss of benefits or rights, whether current or prospective, as a result of the enactment of this 1977 amendatory act." Respondents conclude that these sections mandate that the teacher's first day of full-time employment is determinative of whether the teacher will be subject to the amendatory provisions. The date of employment would thus determine also whether the teacher's pension benefits will be calculated under Plan 1 or Plan 2.
Appellants acknowledge that these sections suggest such a result. They urge, however, that several of the definitions contained in RCW 41.32.010, when combined with the legislative history of the amendatory act, require membership in the TRS prior to October 1 in order for an employee to obtain Plan 1 benefits. Appellants observe that the Department has always interpreted the 90-day employment requirement of RCW 41.32.240 as a threshold that must be met before membership is established in the TRS. See WAC 415-112-100. Appellants thus conclude that the Leg islature intended that a teacher establish membership prior to October 1, 1977, in order to qualify for Plan 1.
The trial judge rejected the legislative intent argument. He reasoned that if he adopted appellants' argument, he would have to ignore the specific statements contained in RCW 41.32.750 and .755.
The trial judge recognized, nonetheless, that the definitions cited by appellants seemed to contradict the plain terms of RCW 41.32.755. In an attempt to reconcile the apparent internal conflict contained in these statutes, Judge Alexander characterized the 90-day membership provision as a condition subsequent. Under his analysis, if a teacher, employed prior to October 1, 1977, successfully completed the 90-day period, the "state of membership would then relate back to the date of employment." Stipulation and Oral Decision, at 7. We find Judge Alexander's reasoning persuasive.
In addition, we find this result to be most consistent with general principles of pension law and the specific legislative provisions here at issue.
The importance of pension rights is beyond dispute. Concerned by the need to protect employee rights in pensions, Congress passed the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001-1381 (Supp. 4, 1974). That act contains specific safeguards designed to protect these important benefits.
Furthermore, decades before the federal government acted in this area, our courts recognized the importance of pension benefits and applied our own safeguards. In Bakenhus v. Seattle, 48 Wn.2d 695, 698, 296 P.2d 536 (1956), we stated that "a pension granted to a public employee is not a gratuity but is deferred compensation for services rendered." In addition, Bakenhus quoted from a New York opinion that noted that pensions were in effect pay '". . . withheld to induce long-continued and faithful service.'" Bakenhus, at 700 (quoting Giannettino v. McGoldrick, 295 N.Y. 208, 66 N.E.2d 57 (1946)). We expanded on this notion in Tembruell v. Seattle, 64 Wn.2d 503, 506, 392 P.2d 453 (1964) and observed that "the rights in and to it [the pension] commence to vest with the first day of employment or service, and continue to vest with each day's service thereafter."
Appellants dismiss Tembruell and the above language with the observation that it is dicta. Dicta or not, however, Tembruell recognized an important fact of retirement benefits. That is, pension benefits have traditionally been determined from the date of employment. The interpretation the trial judge gave these sections reflects that fact. The interpretation urged by the appellants does not.
Furthermore, as noted by the trial judge, this interpretation is necessary to give effect to RCW 41.32.750 and .755. If Plan 1 benefits were to apply to only those individuals who were members of the TRS on October 1, 1977, the Legislature would not have referred instead to the date of employment.
Finally, we are unpersuaded by appellants' reliance on the legislative history. Appellants admit "[t]he legislative history . . . offers no conclusive insight into the legislature's intent" on this matter. Brief of Appellants, at 17. Given the uncertainties involved in relying upon even clear legislative history, we are unwilling to rely upon legislative history which merely "suggests" an answer. Reason and justice here require the opposite result.
In conclusion, we hold that respondents are entitled to benefits under Plan 1.
The decision of the trial court is affirmed.
Williams, C.J., and Stafford, Brachtenbach, and Pearson, JJ., concur.