Title: Joan Solie v. Employee Trust Funds Board
Citation: 2005 WI 42
Docket Number: 2003AP001850
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: April 19, 2005

2005 WI 42 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2003AP1850 
COMPLETE TITLE: 
 
 
Joan Solie and Ann Baxter,  
          Plaintiffs-Respondents, 
     v. 
Employee Trust Funds Board and The  
Department of Employee Trust Funds,  
          Defendants-Appellants. 
 
 
 
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
OPINION FILED: 
April 19, 2005   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 5, 2004   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Dane   
 
JUDGE: 
Paul B. Higginbotham   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
WILCOX, J., dissents (opinion filed). 
PROSSER, J., joins the dissent.   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the defendants-appellants the cause was argued by L. 
Jane Hamblen, assistant attorney general, with whom on the 
briefs (in the court of appeals) was Peggy A. Lautenschlager, 
attorney general. 
 
For the plaintiffs-respondents there was a brief (in the 
court of appeals) by Joanne L. Huston and Wisconsin Education 
Association Council, Madison, and oral argument by Joanne L. 
Huston. 
 
 
2005 WI 42 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2003AP1850  
(L.C. No. 
02 CV 000021) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Joan Solie and Ann Baxter,  
 
          Plaintiffs-Respondents, 
 
     v. 
 
Employee Trust Funds Board and The  
Department of Employee Trust Funds,  
 
          Defendants-Appellants. 
 
FILED 
 
APR 19, 2005 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
APPEAL from an order of the Circuit Court for Dane County, 
Paul B. Higginbotham, Judge.    Affirmed in part and reversed in 
part, and remanded for proceedings consistent with this opinion.  
 
¶1 
LOUIS B. BUTLER, JR., J.   The Employee Trust Funds 
Board (Board) appeals from the circuit court's order that 
reversed the Board's order and reinstated Joan Solie's and Ann 
Baxter's years of creditable service earned while in the 
combined group plan.  The court of appeals certified the appeal 
to us to determine whether our decision in Schmidt v. Wisconsin 
Employe Trust Funds Board, 153 Wis. 2d 35, 449 N.W.2d 268 
(1990), should be construed to provide continued State Teacher's 
No. 
2003AP1850   
 
2 
 
Retirement System (STRS) combined group membership to teachers 
who withdrew their deposits in the retirement deposit fund and 
then returned to teaching after creation of the formula group.   
¶2 
We answer the question in the affirmative.  We 
conclude that Solie and Baxter retained their STRS membership 
rights when they returned to teaching after they departed from 
teaching service and took separation benefits prior to the 
formula group's creation.  As such, Solie and Baxter were 
improperly placed in the formula group retirement plan without 
their having elected to do so.  We further conclude, however, 
that Solie and Baxter are not entitled to costs and reasonable 
attorney 
fees 
pursuant 
to 
Wis. Stat. § 814.245 
(2001-02).  
Therefore, we affirm in part and reverse in part the circuit 
court's order. 
I 
¶3  From the late 1950s to the 1980s, STRS experienced 
several alterations that culminated in its assimilation into the 
Wisconsin Retirement System (WRS).  This case centers on a 
single change to STRS that occurred in 1965, the legislature's 
creation of the "formula group" retirement plan, and this 
court's decision in Schmidt.  To better provide context, the 
following background discussion weaves the relevant alterations 
in STRS with the historical facts involved in Solie's and 
Baxter's cases.   
¶4 
Solie began teaching at a Wisconsin public school in 
1957.  She taught during the 1957-58 and 1958-59 school years.  
After teaching part of the 1959-60 school year, she left.  She 
No. 
2003AP1850   
 
3 
 
returned to teach for the 1963-64 school year and then left 
again on June 12, 1964.  Baxter taught for both the 1962-63 and 
the 1963-64 school years.  She left on June 12, 1964, but then 
returned to teach for .48 of a year during the 1964-65 school 
year.  Baxter again left in June 1965. 
¶5 
Up until their departures, it is undisputed that both 
Solie and Baxter were members of the STRS "combined group" 
retirement plan.1  The combined group was an annuity plan whereby 
a teacher's retirement benefit depended upon the amount of 
deposits and earnings in the teacher's retirement deposit 
account.  See Wis. Stat. §§ 42.242-42.243 (1965).2  Both the 
teacher and the state were required to make deposits into the 
account.  See Wis. Stat. § 42.40(2) and Wis. Stat. § 42.45. 
¶6 
After a teacher left the system, the teacher could 
take 
a 
"separation 
benefit." 
 
Wis. Stat. § 42.242(5).3  
                                                 
1 The "separate group" existed prior to the combined group 
plan.  The separate group is not at issue in this case. 
2 All references to the Wisconsin Statutes are to the 1965 
version, unless otherwise noted. 
3 Wisconsin Stat. § 42.242(5) read:  
Any member who has ceased to be employed as a 
teacher in the public schools, state colleges or 
university in this state, and is not on leave of 
absence from a teaching position in the public 
schools, state colleges or university in this state, 
may be paid the accumulation from the member's 
deposits made while a member of the combined group 
based on teaching service performed after June 30, 
1957, on filing with the board before the 50th 
birthday anniversary of such a member a written 
request therefore and a full and complete discharge 
and release of all right, interest or claim on the 
No. 
2003AP1850   
 
4 
 
Generally, a separation benefit allowed the teacher to withdraw 
his or her accumulated deposits, with interest, in his or her 
STRS retirement deposit account, subject to certain conditions.  
Id.  To obtain the separation benefit, § 42.242(5) required the 
teacher to sign a narrow waiver, which constituted a "full and 
complete discharge and release of all right, interest or claim 
 . . . to state deposit accumulations."   
¶7 
Each time Solie and Baxter left teaching (Solie at the 
end of the 1959-60 and 1963-64 school years, and Baxter at the 
end of the 1963-64 and 1964-65 school years),4 they signed a 
combined group wavier and took their separation benefits.  As a 
result, they had no money remaining in STRS.5 
                                                                                                                                                             
part of such member to state deposit accumulations 
based on teaching service performed after June 30, 
1957.  Withdrawal of accumulations from member's 
deposits made before said member became a member of 
the combined group shall be governed by s. 42.49.  
4 Specifically, Solie's first separation benefit application 
was signed and dated April 12, 1960.  Her second separation 
benefit application was signed and dated June 26, 1964. 
Baxter's first separation benefit was signed and dated 
"Sept. 14," and file stamped received on September 23, 1964.  
Her second separation benefit application was signed and dated 
October 31, 1965.  Baxter R. 194.     
5 The Board argues that Solie and Baxter are similarly 
situated in that prior to September 11, 1965, they both left 
teaching, took separation benefits, and signed a combined group 
waiver of rights.  Solie and Baxter do not contest this 
assertion, so we treat them as being similarly situated.  We do 
note, however, that Baxter did not apply for her second 
separation benefit until October 31, 1965.  Baxter R. 194.  As 
such, it appears that Baxter still had deposits in the 
retirement deposit fund on September 11, 1965. 
No. 
2003AP1850   
 
5 
 
¶8 
Following 
Solie's 
and 
Baxter's 
departures, 
the 
legislature created another retirement annuity plan, the formula 
group, which became effective on September 11, 1965.  See 
Wis. Stat. §§ 42.244 and 42.245.  Under this group, a teacher's 
retirement benefit was calculated by a statutory formula that 
used, in addition to other factors, the teacher's "creditable 
service."  See Wis. Stat. § 42.245(1)-(2).  Creditable service 
included all years taught as a formula group member as well as 
certain amounts for years taught while under the combined group 
or the predecessor separate group.  § 42.245(1).6   
                                                 
6 Wisconsin Stat. § 42.245(1), provided as follows:   
 
(a) Creditable service shall be expressed in 
years 
and 
such 
fractions 
thereof 
as 
the 
board 
determines.  The creditable service of each member any 
time prior to July 1, 1966, shall be the number of 
years of service as a teacher in Wisconsin teaching 
(including prior service) theretofore creditable to 
him pursuant to the applicable statutes and rules, 
provided 
that 
military 
service 
meeting 
the 
requirements of s. 42.45(2) or (3) shall be included 
for any such period for which the member makes 
deposits as provided by s. 42.45(4).  The creditable 
service of a member with respect to teaching after 
June 30, 1966, shall be the number of years of 
subsequent service as a teacher in Wisconsin teaching 
until such service as a teacher is terminated, but not 
including any period subsequent to the June 30 
following or coincident with his 70th birthday.  The 
board shall fix and determine by proper rules and 
regulations 
how 
much 
teaching 
in 
any 
years 
is 
equivalent 
to 
one 
year 
of 
creditable 
service.  
Military service after June 30, 1966, shall be 
creditable on the same basis as military service prior 
thereto.   
 
(b) A member shall be considered a new member 
with respect to each separate period of service as a 
teacher in Wisconsin teaching as determined pursuant 
No. 
2003AP1850   
 
6 
 
¶9 
Like the combined group, a formula group member could 
withdraw any deposits made into the STRS retirement deposit 
fund.  See Wis. Stat. § 42.245(4).7  Unlike the combined group, 
however, a formula group member was required to sign a much 
broader waiver, which provided "a full and complete discharge 
and release of all right, interest or claim on the part of the 
member to state deposit accumulations and to any benefit arising 
under any provisions of ss. 42.20 to 42.54."  Id. 
                                                                                                                                                             
to s. 42.20(17)(a) which begins after June 30, 1966.  
The commencement of a separate period of teaching 
service shall not cause the loss of any benefit to 
which a member is entitled by virtue of any preceding 
service.   
 
(c) Creditable service for Wisconsin teaching 
prior to September 11, 1965 shall be reduced by one-
half of any period included therein with respect to 
which the required deposits of a member have been 
withdrawn, unless repayment of any such withdrawal has 
been made prior to July 1, 1966, pursuant to any 
applicable law.  Nothing in this paragraph shall be 
construed to reinstate any rights waived in connection 
with the payment of a withdrawal or separation 
benefit.   
7 Wisconsin Stat. § 42.245(4) provided as follows:   
Any formula group member who has ceased to be 
employed as a teacher in Wisconsin teaching and who is 
not on authorized leave of absence from a teaching 
position in Wisconsin teaching, shall be paid the 
accumulation from the member's required and additional 
deposits upon filing with the board, before the 50th 
birthday of the member, a written request therefore 
and a full and complete discharge and release of all 
right, interest or claim on the part of the member to 
state deposit accumulations and to any benefit arising 
under any provision of ss. 42.20 to 42.54.   
No. 
2003AP1850   
 
7 
 
¶10 Participation in the formula group began on July 1, 
1966, see Wis. Stat. § 42.244(3), but not all teachers were 
automatically 
enrolled 
in 
the 
new 
plan.  
Wisconsin Stat. § 42.244(1)(a)-(d) governed which teachers could 
elect to participate and which were required to join the formula 
group.8  Subsections (1)(a)-(c) allowed STRS "members" to elect 
                                                 
8 Wisconsin Stat. § 42.244(1)(a)-(d) provided as follows:   
There is created as of September 11, 1965, as a part 
of the system a formula group, to be composed of:  (a) Any 
combined group or separate group member, except any member 
who on September 11, 1965, is a member receiving an annuity 
or a member whose annuity is being withheld pursuant to s. 
42.242(6) or 42.49(13), who at any time on and after 
September 11, 1965, but prior to December 1, 1965, is 
employed as a teacher in Wisconsin teaching and makes a 
required deposit pursuant to s. 42.40, and who elects in 
accordance with this section to become a member of the 
formula group; (b) any combined group or separate group 
member who on September 11, 1965, is on authorized leave of 
absence, and who elects in accordance with this section to 
become a member of the formula group, but no such election 
shall be effective unless and until such member resumes 
employment as a teacher in Wisconsin teaching concurrently 
with the termination of such leave of absence; (c) any 
member who is a member of the system on September 11, 1965, 
but who is not eligible for an election under (a) or (b) 
herein, who within 90 days from the last day of the month 
in which he is first employed as a teacher in Wisconsin 
teaching after September 11, 1965, elects in accordance 
with this section to become a member of the formula group, 
but his participation as a member of the formula group 
shall not include or relate to any benefit, compensation or 
employment for any period prior to September 11, 1965; and 
(d) any person who becomes a member of the system after 
November 30, 1965.  For purposes of s. 66.99 each member of 
the formula group shall also be classified as a member of 
the combined group or of the separate group, as determined 
pursuant to s. 42.241; such classification shall also be 
applicable with respect to any benefit, compensation or 
employment which is not includable for formula group 
purposes.   
No. 
2003AP1850   
 
8 
 
to join.9  Subsection (1)(a) applied to combined and separate 
group members, subject to limitations, who were teaching and 
making required deposits.  Subsection (1)(b) concerned any 
combined and separate group member who was on authorized leave.  
And subsection (1)(c) was the catchall provision that pertained 
to all STRS members who did not fall under subsections (1)(a) or 
(1)(b), subject to certain provisions.  The last provision, 
subsection (1)(d), applied to all non-STRS members.  It did not 
contain an election provision but rather required "any person 
who becomes a member of the system after November 30, 1965," to 
be joined in the formula group.  § 42.244(1)(d). 
¶11 Solie and Baxter returned to teaching following the 
formula group's creation; Solie came back for the 1967-68 and 
1968-69 school years, while Baxter taught for the 1966-6710 
school year and for 11 days during the 1969-70 school year.  
Each time they returned, the Department of Employee Trust Funds 
(Department) automatically enrolled them in the formula group, 
                                                 
9 The members' right of election was a "one-time option to 
make a change in retirement plans."  Schmidt v. Wis. Employe 
Trust Funds Bd., 153 Wis. 2d 35, 48, 449 N.W.2d 268 (1990).  To 
enable the members to make an informed election, the legislature 
required 
these 
members 
to 
be 
provided 
with 
"comparative 
information concerning the required deposits, benefits and other 
features applicable to members of the formula group and to 
members of the group to which such member then belongs."  
Wis. Stat. § 42.244(2).     
10 Baxter also took a separation benefit after the 1966-67 
school year, with the application signed and dated June 21, 
1967.  Although Baxter was placed in the formula group, this 
separation benefit application was a combined group member 
application. 
No. 
2003AP1850   
 
9 
 
pursuant to Wis. Stat. § 42.244(1)(d), because it concluded they 
were not "members" of STRS.  Wisconsin Stat. § 42.20(6r)(a) 
defined "member" as "a person who, as the result of having been 
engaged in Wisconsin teaching, has a credit in the retirement 
deposit fund or a reserve in the annuity reserve fund, or who is 
or may be entitled to a present or future benefit under the 
teachers' insurance and retirement law as provided by s. 
42.51."11  The Department equated "credit in the retirement 
deposit fund or a reserve in the annuity reserve fund" with 
having money in either of the funds.  Because Solie and Baxter 
previously withdrew all money when they took their separation 
benefits, the Department concluded they did not have any 
"credit" in the system.  Thus, the Department no longer deemed 
them STRS members.  Therefore, the Department reasoned that 
Solie and Baxter did not fall under the member election 
provisions in § 42.244(1)(a)-(c), but rather under the automatic 
enrollment provision in § 42.244(1)(d). 
¶12 In 
1971, 
following 
their 
last 
withdrawal 
from 
teaching, Solie and Baxter took separation benefits.12  As 
                                                 
11  It is agreed that Solie and Baxter do not fall under the 
second half of this definition that refers to the teachers' 
insurance and retirement fund under Wis. Stat. § 42.51.  That 
retirement system related to retirement benefits under the plan 
that predated STRS.  
12 According to the Board's findings of fact, Baxter also 
took a separation benefit in 1967.  Although she was a member of 
the formula group during that time, she signed a combined group 
waiver.  This mistake is not material, though, because Baxter 
later signed the broader formula group waiver in 1971.   
No. 
2003AP1850   
 
10 
 
before, they signed waivers of rights.  But because they were in 
the formula group, they signed the broader waiver that resulted 
in "a full and complete discharge and release of all right, 
interest 
or 
claim" 
in 
any 
STRS 
benefits.13 
 
See 
Wis. Stat. § 42.245(4). 
¶13 Solie again returned for the 1973-74 school year and 
Baxter returned the following school year.  The Department again 
placed them in the formula group; this time not because the 
Department concluded they were not members of STRS, but because 
the legislature mandated that all previous groups be joined into 
the formula group.  See Wis. Stat. § 42.244(4)(a) (1973).14  
Solie and Baxter continued to teach each year from then on.   
¶14 STRS was merged into the current retirement system, 
WRS, in 1982.  See Wis. Stat. §§ 40.20-.22 (1981-82).  Solie 
retired from Wisconsin teaching on June 27, 1993, as did Baxter 
on June 6, 1998. 
¶15 To determine Solie's and Baxter's retirement benefit, 
WRS, like the STRS formula group, utilizes creditable service as 
a factor.  See Wis. Stat. § 40.02(17) (2003-04).15  After Solie 
                                                 
13 The record does not reveal whether Solie and Baxter read 
the waiver, much less understood it. 
14 Wisconsin Stat. § 42.244(4)(a) (1973) read in relevant 
part: 
Beginning on May 11, 1973 the formula group shall 
include every member who on or after such date is 
employed as a teacher in Wisconsin teaching and who 
makes a required deposit pursuant to s. 42.40. 
15 Wisconsin Stat. § 40.02(17) 
(2003-04) 
reads 
as 
is 
pertinent here: 
No. 
2003AP1850   
 
11 
 
and Baxter retired, the Department determined that they were 
only entitled to creditable service dating back to when they 
returned to teaching in 1973 and 1974, respectively, since they 
signed a formula group waiver when they took their separation 
benefits in 1971.  The Department noted that their 1971 formula 
group waiver surrendered "all right, interest or claim on the 
part of the member to state deposit accumulations and to any 
benefit arising under any provisions of ss. 42.20 to 42.54."  
See Wis. Stat. § 42.245(4).  According to the Department, the 
waiver meant that Solie's and Baxter's creditable service prior 
to 1971 was extinguished.  This resulted in an otherwise reduced 
WRS retirement benefit.   
¶16 Solie and Baxter appealed the Department's denial of 
creditable service earned before 1971 to the Board.  They 
contended 
that 
the 
Department 
acted 
erroneously 
when 
it 
automatically placed them into the formula group upon their 
return to teaching in 1966 and 1967.  Although Solie and Baxter 
returned to teaching after the formula group was created in 
1965, they argued that they were still STRS members when they 
returned because, pursuant to Schmidt, they retained their 
creditable service.  Thus, they argued that they could have been 
joined in the formula group only if they had elected to do so.  
See Wis. Stat. § 42.244(1)(c).  Given that they did not make 
                                                                                                                                                             
[T]he amount of creditable service for periods 
prior to January 1, 1982, shall be the amount for 
which 
the 
participant 
was 
eligible 
under 
the 
applicable laws and rules in effect prior to January 
1, 1982. 
No. 
2003AP1850   
 
12 
 
that election, they asserted that they should have remained in 
the combined group, which, in turn, meant that they should have 
only signed the combined group waiver when they left teaching in 
1971.  And because the combined group waiver relinquished only 
their right to the state's deposits in the system, and not their 
creditable service, Solie and Baxter claimed they were entitled 
to all of their creditable service, not just that earned from 
1973.  The Board disagreed. 
¶17 In concluding that Solie and Baxter were no longer 
STRS members, the Board, like the Department, associated 
"credit" 
with 
deposits 
of 
money. 
 
Solie's 
and 
Baxter's 
creditable service did not suffice.  Since they chose to 
withdraw all their money from their retirement accounts when 
they left teaching prior to the formula group's creation, the 
Board concluded that they no longer were STRS members.  As such, 
the Board determined that the Department properly enrolled Solie 
and Baxter into the formula group pursuant to the automatic 
enrollment provision in Wis. Stat. § 42.244(1)(d).  Having been 
members of the formula group, the Board agreed with the 
Department that Solie and Baxter were not entitled to creditable 
service for their years of teaching prior to 1971 because of the 
formula group waivers they signed upon taking their separation 
benefits in 1971. 
¶18 Solie and Baxter sought certiorari review in the 
circuit court for Dane County pursuant to Wis. Stat. § 40.08(12) 
No. 
2003AP1850   
 
13 
 
(2001-02).16  Reviewing the Board's determination de novo, the 
circuit court, Honorable Paul B. Higginbotham, reversed.  The 
circuit court concluded that Solie and Baxter were indeed STRS 
members when they each returned to teaching.  The circuit court 
agreed with Solie and Baxter that they remained combined group 
members when they returned because under Schmidt they retained 
their right to creditable service credits.  The court reasoned 
that this satisfied the requirement in the definition of 
"member" that a teacher have a "credit in the retirement deposit 
fund."   
¶19 The circuit court rejected the Board's contention that 
"credit" referred to a deposit of money for two reasons.  First, 
the court observed that the plain meaning of credit included 
much more than just deposits.  Second, the court observed that 
the legislature used both "credit" and "deposit" in varying 
places.  Applying the statutory interpretation presumption that 
the legislature uses different words to connote separate 
                                                 
16 Wisconsin Stat. § 40.08(12) (2001-02) states: 
Notwithstanding s. 227.52, any action, decision 
or 
determination 
of 
the 
board, 
the 
Wisconsin 
retirement board, the teachers retirement board, the 
group insurance board, or the deferred compensation 
board 
in 
an 
administrative 
proceeding 
shall 
be 
reviewable only by an action for certiorari in the 
circuit court for Dane County that is commenced by any 
party to the administrative proceeding, including the 
department, within 30 days after the date on which 
notice of the action, decision or determination is 
mailed to that party, and any party to the certiorari 
proceedings may appeal the decision of that court.  
No. 
2003AP1850   
 
14 
 
meanings, the court concluded that a credit need not be a 
deposit of money.  
¶20 Given the circuit court's conclusion that Solie and 
Baxter were STRS combined group members, the court noted they 
had the statutory right to elect to become formula group 
members.  Since they did not make that election, the circuit 
court concluded they continued to be combined group members.  As 
a consequence, they should have only signed a combined group 
waiver when they took their separation benefits in 1971, which 
would have waived their entitlement only to the state's deposits 
in their accounts.  The court concluded that the Department owed 
Solie and Baxter the entirety of their creditable service.  
¶21 Without explanation, the circuit court also awarded 
Solie and Baxter costs and reasonable attorney fees pursuant to 
Wis. Stat. § 814.245 (2001-02). 
¶22 The Board appealed, and the court of appeals certified 
the case to this court.  We accepted the certification to 
determine whether Schmidt should be construed to provide 
continued membership in the combined group to teachers who 
withdrew their deposits in STRS and then returned to teaching 
after creation of the formula group.  
II 
¶23 On certiorari review, we review the decision of the 
agency, not the circuit court.  See Beecher v. LIRC, 2004 WI 88, 
¶22, 273 Wis. 2d 136, 682 N.W.2d 29.  Our review is limited to 
(1) whether the Board kept within its jurisdiction; (2) whether 
the Board acted according to law; (3) whether the Board acted 
No. 
2003AP1850   
 
15 
 
arbitrarily, oppressively, or unreasonably; and (4) whether the 
evidence permitted the Board to reasonably make the order or 
determination in question.  See State ex rel. Tate v. Schwarz, 
2002 WI 127, ¶15, 257 Wis. 2d 40, 654 N.W.2d 438.   
¶24 The fundamental question in this case is whether Solie 
and Baxter were STRS "members" as that term is used in 
Wis. Stat. § 42.20(6r)(a) 
when 
they 
returned 
to 
teaching 
following the formula group's creation.  This presents a 
question of law.  See Petrowsky v. Krause, 223 Wis. 2d 32, 35-
36, 588 N.W.2d 318 (Ct. App. 1998). 
¶25 We employ any of three levels of deference to an 
agency's conclusion of law:  great weight deference, due weight 
deference, or no deference.  We will grant an agency's 
interpretation of a statute great weight deference when: 
(1) the agency is charged with administration of the 
particular statute at issue; (2) its interpretation is 
one of long standing; (3) it employed its expertise or 
specialized 
knowledge 
in 
arriving 
at 
its 
interpretation; 
and 
(4) 
its 
interpretation 
will 
provide uniformity and consistency in the application 
of the statute. 
Beecher, 273 Wis. 2d 136, ¶23.  Due weight deference is 
appropriate when an "agency has some experience in the area but 
has not developed the expertise that necessarily places it in a 
better position than a court to interpret and apply a statute."  
Id. (citation omitted).  No deference is owed to an agency 
interpretation "where the issue is one of first impression, 
where the agency has no special expertise, or where the agency's 
No. 
2003AP1850   
 
16 
 
position has been so inconsistent that it provides no real 
guidance."  Id. (citation omitted).   
¶26 The Board is charged with administering WRS.  See 
Wis. Stat. § 40.03(1) (2001-02).  In concluding that Solie and 
Baxter were not STRS members when the Department automatically 
enrolled them into the formula group, the Board not only 
interpreted § 42.20(6r)(a), it also examined and rejected the 
import of this court's decision in Schmidt.  The Board asserts 
that its interpretation of the statutes at issue should be given 
great weight deference because its interpretation is long-
standing and provides uniform and consistent application of the 
statutes.  However, no decisions are set forth or are available 
to this court to support the Board's interpretation in the 
present case.  See Wis. Admin. Code § ETF 11.13(2) (Jan., 2004).  
Because the issue in this case amounts to whether Schmidt should 
be construed or extended to provide teachers with continued 
membership in the combined group, "we need not defer to agency 
interpretations of our own decisions" because this court 
"retains the power to explain, modify, or overrule its own 
precedents."  See Beecher, 273 Wis. 2d 136, ¶26.   
III 
¶27 The heart of this case is the meaning of "member."  As 
noted above and as relevant here, "member" is defined as "a 
person who, as the result of having been engaged in Wisconsin 
teaching, has a credit in the retirement deposit fund or a 
reserve 
in 
the 
annuity 
reserve 
fund."  
Wis. Stat. § 42.20(6r)(a). 
 
Following 
the 
formula 
group's 
No. 
2003AP1850   
 
17 
 
creation, if Solie and Baxter were still STRS members when they 
returned to teaching for the 1967-68 and the 1966-67 teaching 
years, respectively, then they should have been given the right 
to 
elect 
to 
join 
the 
formula 
group 
pursuant 
to 
Wis. Stat. § 42.244(1)(a)-(d).  If they were not STRS members 
when they returned, then they were properly placed in the 
formula group automatically.  
A 
¶28 The 
Board 
argues 
that 
Solie 
and 
Baxter 
were 
appropriately 
automatically 
enrolled 
in 
the 
formula 
group 
because they were not members of STRS upon their return. 
Focusing on the term "credit," the Board concedes that credit, 
when viewed in isolation, "can include an acknowledgment or 
recognition 
of 
both 
monetary 
and 
non-monetary 
things."  
Creditable service, they agree, is an example of a "non-
monetary" credit.  Viewing "credit" in context, however, the 
Board contends that creditable service is insufficient to 
sustain membership because the credit must be "in the retirement 
deposit fund or a reserve in the annuity reserve fund." See 
Wis. Stat. § 42.20(6r)(a). 
 
The 
Board 
submits 
that 
the 
retirement deposit fund contained only money, given that 
Wis. Stat. § 42.33(1)(a) and (b) provides:  
The state teachers retirement board shall at all times 
maintain assets: 
(a) In the "Annuity Reserve Fund" at least equal 
to the net present value of the prospective benefit 
payments according to the basic assumptions for the 
rates on which benefits have been granted; 
No. 
2003AP1850   
 
18 
 
(b) In the "Retirement Deposit Fund" equal to the 
liabilities for member deposits and for state deposits 
for members of the separate group and the combined 
group and interest accretions. 
Creditable service credit, the Board argues, simply does not fit 
the requirement to maintain assets in these funds.   
¶29 The Board also observes that other statutes within 
chapter 42 indicated that the retirement deposit fund was 
comprised 
of 
deposits 
and 
earnings. 
 
See 
Wis. Stat. § 42.243(5)(c) ("Earnings will be credited to the 
individual accounts in the retirement deposit fund . . ."); 
§ 42.243(6)(c) ("Capital gains and losses will be credited to 
the individual accounts in the retirement deposit fund . . ."); 
Wis. Stat. § 42.45(1)(d) ("All state deposits shall be credited 
as of June 30 . . .").  Again, the Board contends that 
creditable service credit is not something that fits here.   
¶30 In response to the court of appeals' certified 
question regarding Schmidt, the Board reads Schmidt as providing 
no guidance on what constitutes membership or how a person 
became a formula group member.  The Board notes that Schmidt 
involved a teacher who elected to become part of the formula 
group.  Schmidt, 153 Wis. 2d at 39.  But more to the point, the 
Board notes that nothing in Schmidt indicated that a teacher's 
creditable service was credited to the retirement deposit fund, 
as the definition of member requires.  The Board maintains that 
all Schmidt held was that, notwithstanding a combined group 
waiver, a teacher's "years of service remained on his [or her] 
record" which subsequently could be used to receive creditable 
No. 
2003AP1850   
 
19 
 
service if and when he or she became a formula group member.  
See Id. at 46.  Therefore, the Board reasons, Schmidt does not 
undermine its statutory analysis regarding membership.   
¶31 Solie and Baxter, on the other hand, claim that they 
were incorrectly automatically enrolled in the formula groups 
because they were still STRS members, combined group members in 
particular.  They contend the Board has given the definition of 
member 
an 
overly 
narrow 
interpretation, 
noting 
Wis. Stat. § 42.20(6r)(b)'s definitions for active and inactive 
members.17   
¶32 Solie and Baxter predominantly rely on this court's 
decision in Schmidt, going so far as to say that Schmidt clearly 
controls this case.  They claim that because Schmidt determined 
that combined group members who signed a separation benefit 
waived any interest in money only, "[l]ogic dictates that one 
has to remain a member of a system in which one has a credit and 
retains rights."  Thus, by signing the combined group waiver, 
                                                 
17 We note that even the definitions for active and inactive 
member 
include 
the 
term 
"member." 
 
See 
Wis. Stat. § 42.20(6r)(b)1 
(defining 
"active 
member" 
as 
"a 
member who is not receiving an annuity  . . . and who has made a 
required deposit in the retirement deposit fund based on 
earnings after June 30, 1956, or is deemed an active member 
under s. 42.241(7), or is on a leave of absence from a Wisconsin 
teaching 
position."); 
§ 42.20(6r)(b)2 
(defining 
"inactive 
member" as "a member who is not receiving an annuity  . . . , 
who has not made a required deposit in the retirement deposit 
fund based on earnings after June 30, 1956, and is not on leave 
of absence from a Wisconsin teaching position.").  Thus, Solie's 
and Baxter's reliance on these definitions to broaden the 
definition of member is circular and we therefore do not address 
this argument further. 
No. 
2003AP1850   
 
20 
 
they argue, they did not divest themselves of membership in 
STRS. 
¶33 Although the Board advances a plausible basis for 
automatically placing Solie and Baxter in the formula group, the 
argument does underestimate this court's decision in Schmidt.  
In Schmidt, this court considered the interplay between the 
combined group——which did not contain the concept of "creditable 
service"——and the formula group.  At issue was "the rights 
retained" under STRS after a combined group member withdrew his 
deposits and signed a combined group waiver.  Schmidt, 153 
Wis. 2d at 37.  In that case, Schmidt taught from 1957 until 
1963, at which time he withdrew his member deposits and signed a 
combined group waiver.  Id. at 37-38.  He returned to teaching 
the following year, and the formula group was created the year 
after that, in 1965.  Id.  Schmidt elected to join it.  Id. 
¶34 Several years later, the Department completed an audit 
of the system that determined what years of creditable service 
teachers were owed.  Id. at 39.  Schmidt objected to his tally 
as being six years too short.  The Department denied Schmidt any 
creditable service for his years of teaching prior to 1963 
because of the combined group waiver he signed.  Id.  
¶35 This court framed the question before it as asking 
what were the "rights retained" under STRS when a teacher signs 
a combined group waiver only to later return to the system.  Id. 
at 38.  This court examined how a teacher's combined group 
waiver 
impacted 
that 
teacher's 
creditable 
service 
after 
returning to the system as a formula group member.  This court 
No. 
2003AP1850   
 
21 
 
observed that the combined group waiver provided "a full and 
complete discharge and release of all right, interest or claim 
on 
the 
part 
of 
such 
member 
to 
state 
deposit 
accumulations . . . ."  Id. at 44.  Contrary to the Board's 
reading, in view of the waiver's language, this court in Schmidt 
did more than simply say that a teacher who signed this waiver 
retained years of creditable service on his or her record.  See 
id. at 46.  Schmidt determined that a teacher who stopped 
teaching and signed a combined group waiver "only waived his [or 
her] right to money which accumulated in his [or her] retirement 
fund through state deposits, nothing else."  Id. at 46.  The 
court reasoned that the Board erred in equating the plain 
meaning of "state deposit accumulations" with the terms "years 
of teaching service" and "creditable service."  Id. at 45.  In 
other words, this court recognized that there were other rights 
that were not affected by a separation benefit and combined 
group waiver.  We agree with Solie and Baxter that when they 
returned 
to 
teaching 
service, 
their 
STRS 
combined 
group 
membership constituted one of these rights. 
¶36 Our interpretation of Schmidt does not conflict with 
the statutory definition of member.  Again, to be a member 
requires a teacher to have a "credit" in the retirement deposit 
fund or in the retirement annuity fund.  Although the Board 
highlights several statutes that indicate what types of credit 
go into the fund——see, e.g., Wis. Stat. §  42.33(1)(a) and (b) 
No. 
2003AP1850   
 
22 
 
(assets equal 
to 
liabilities),18 § 42.243(5)(c) 
(earnings), 
§ 42.243(6)(c) (capital gains and losses), § 42.45(1)(d) (state 
deposits)——we 
disagree 
that 
this 
list 
is 
exhaustive, 
particularly given that the legislature specifically granted 
teachers credit for their creditable service.  Without any 
mention in the statutes regarding where a teacher's creditable 
service remains, we conclude that it is reasonable to construe 
the retirement deposit fund as encompassing more than simply a 
lockbox for money.  Accordingly, because Solie's and Baxter's 
creditable service constituted a credit in the retirement 
deposit fund sufficient to sustain STRS membership, our reading 
of Schmidt is not at odds with the statutory definition of 
member. 
B 
 
¶37 As STRS combined group members, Solie and Baxter could 
not have been automatically enrolled in the formula group.  The 
only teachers who were automatically enrolled in the formula 
group were persons who became members of STRS after November 30, 
1965.  Wis. Stat. § 42.244(1)(d).  Teachers who were STRS 
members before November 30, 1965, could only have joined the 
formula group if they elected to do so.  § 42.244(1)(a)-(c).  
Subsection (1)(a) applied to combined and separate group 
members, subject to limitations, who were teaching and making 
required deposits.  Subsection (1)(b) concerned any combined and 
                                                 
18 We note that these sections do not define membership, but 
deal with the responsibilities of the Board. 
No. 
2003AP1850   
 
23 
 
separate group member who was on authorized leave.  And 
subsection (1)(c) was the catchall provision that pertained to 
all STRS members who did not fall under subsections (1)(a) or 
(1)(b), subject to certain provisions.   
¶38 In Solie's and Baxter's case, they could not have been 
automatically 
enrolled 
in 
the 
formula 
group 
under 
Wis. Stat. § 42.244(1)(d) because we have already determined 
that they were STRS combined group members prior to November 30, 
1965.  Their right of election was provided in the catchall 
provision in subsection (1)(c), as they were neither teaching 
and making required deposits nor on an authorized leave of 
absence.  Because they did not elect to join the formula group, 
they were improperly placed in it.  They should have remained 
combined group members, which means that when they took 
separation benefits in 1971 they should have signed only the 
combined group waiver.  And because the combined group waiver 
forfeited only their interest in state deposits, they retained 
their years of creditable service.  See Schmidt, 153 Wis. 2d at 
46.  Those years are now due consistent with this court's 
decision in Schmidt. 
IV 
 
¶39 The State also argues the circuit court erred by 
awarding Solie and Baxter costs and reasonable attorney fees 
pursuant to Wis. Stat. § 814.245 (2001-02).  Section 814.245 
states: 
Except as provided in s. 814.25, if an individual, a 
small nonprofit corporation or a small business is the 
No. 
2003AP1850   
 
24 
 
prevailing party in any action by a state agency or in 
any proceeding for judicial review under s. 227.485(6) 
and submits a motion for costs under this section, the 
court shall award costs to the prevailing party, 
unless the court finds that the state agency was 
substantially justified in taking its position or that 
special circumstances exist that would make the award 
unjust. 
¶40 The State points out that this proceeding was not an 
action brought by a state agency, as the Board did not initiate 
review, nor was it a proceeding for judicial review under 
Wis. Stat. § 227.485(6) (2001-02), as Board determinations are 
not reviewed by Wis. Stat. ch. 227 (2001-02), but rather are 
governed 
solely 
by 
certiorari 
review 
under 
Wis. Stat. § 40.08(12) (2001-02).  
In 
addition, 
the 
Board 
argues, the necessary information was not presented to the 
circuit court.  According to the Board, § 814.245(8) (2001-02) 
provides that "[a]n individual is not eligible to recover costs 
under this section if the person's properly reported federal 
adjusted gross income was $150,000 or more in each of the 3 
calendar years or corresponding fiscal years immediately prior 
to the commencement of the action."19  There is no indication in 
the record that Solie and Baxter provided the circuit court with 
this information.   
¶41 The circuit court failed to state reasons as to why it 
was awarding statutory costs and reasonable attorney fees in its 
written 
decision 
and 
order, 
other 
than 
to 
cite 
                                                 
19 Wisconsin Stat. § 814.245(8) (2001-02) goes on to state, 
"This subsection applies whether the person files the tax return 
individually or in combination with a spouse." 
No. 
2003AP1850   
 
25 
 
Wis. Stat. § 815.245 (2001-02).  Solie and Baxter have not 
responded to the State's argument that the trial court erred by 
awarding costs under this statute.  We will not develop their 
argument for them.  See State v. Gulrud, 140 Wis. 2d 721, 730, 
412 N.W.2d 139 (Ct. App. 1987).  Therefore, we reverse the trial 
court’s order awarding costs without addressing this argument 
further. 
V 
¶42 In sum, we construe Schmidt to provide continued STRS 
membership to teachers who were members of the combined group, 
withdrew their deposits in STRS, and then returned to teaching 
after creation of the formula group.  As STRS members, Solie and 
Baxter could have been placed in the formula group only if they 
had elected to do so.  Because they did not, they remained in 
the combined group and consequently should have signed a 
combined group waiver only in 1971.  Therefore, Solie and Baxter 
are entitled to all of their creditable service consistent with 
this court's decision in Schmidt.  They are not, however, 
entitled to costs and attorney fees under Wis. Stat. § 814.245 
(2001-02). 
  
By the Court.—The order of the circuit court is affirmed in 
part and reversed in part, and remanded for proceedings 
consistent with this opinion. 
 
 
 
 
No.  2003AP1850.jpw 
 
1 
 
 
¶43 JON P. WILCOX, J.   (dissenting).  I respectfully 
dissent from the majority opinion.  The dispositive issue in 
this case is whether the plaintiffs possessed "a credit" in the 
"retirement deposit fund" after they left teaching prior to the 
creation of the formula group, took separation benefits, and 
withdrew all of the money from their state retirement deposit 
fund accounts, such that they continued to be "members" of the 
State Teachers Retirement System (STRS) when the formula group 
was created in 1965.  While the majority correctly sets forth 
the material facts and the history of the various teacher 
retirement 
programs, 
its 
analysis 
is 
nonetheless 
flawed.  
Specifically, I disagree with the majority's interpretation of 
our decision in Schmidt v. Wisconsin Employe Trust Funds Board, 
153 Wis. 2d 35, 449 N.W.2d 268 (1990), and its definition of the 
words "fund" and "credit" in Wis. Stat. § 42.20(6r)(a)(1965).20 
¶44 The facts relevant to this dispute are as follows:  1) 
Both plaintiffs were teachers and members of the combined group 
who took separation benefits prior to November 30, 1965; 2) Both 
teachers emptied their STRS accounts and signed combined group 
waivers upon departing from teaching; 3) Following the creation 
of the formula group in 1965, both teachers returned to teaching 
and were automatically enrolled in the STRS as formula group 
members; 4) Both teachers again took separation benefits in 
1971, executing formula group waivers; and 5) Both teachers 
                                                 
20 All references to the Wisconsin Statutes are to the 1965 
version unless otherwise indicated.   
No.  2003AP1850.jpw 
 
2 
 
returned to teaching after 1973 as formula group members and 
thereafter retired.  See majority op., ¶¶3-14.   
¶45 The broad issue in this case is whether the teachers 
are entitled to "creditable service" under the Wisconsin 
Retirement System, Wis. Stat. § 40.02(17)(1981), for the time 
they taught prior to 1971.  The answer to this question is 
dependent upon whether the teachers were correctly enrolled in 
the formula group plan upon their return to teaching after 1965.   
¶46 If the plaintiffs were correctly enrolled as formula 
group members, then the waivers they signed in 1971 waived their 
right to any prior creditable service21 because formula group 
waivers constituted a "full and complete discharge and release 
of all right, interest or claim on the part of the member to 
state deposit accumulations and to any benefit arising under any 
provision 
of 
ss. 
42.20 
to 
42.54." 
 
Wis. Stat.  
§ 42.245(4)(emphasis added).  In contrast, if the plaintiffs 
were not correctly enrolled in the formula group, then they 
continued as part of the combined group and signed combined 
group waivers in 1971.  Combined group waivers did not waive 
prior creditable service22 because such waivers constituted 
merely "a full and complete discharge and release of all right, 
interest or claim on the part of such member to state deposit 
                                                 
21 See Schmidt v. Wis. Employe Trust Funds Bd., 153 
Wis. 2d 35, 45-46, 449 N.W.2d 268 (1990)(concluding that the 
separate group waiver, which contained language similar to the 
formula group waiver, resulted in loss of years of service). 
22 See Schmidt, 153 Wis. 2d at 46 (concluding that the 
language contained in the narrow combined group waiver did not 
waive a member's right to prior creditable service).   
No.  2003AP1850.jpw 
 
3 
 
accumulations based on teaching service performed after June 30, 
1957."  Wis. Stat. § 42.242(5).   
¶47 Whether the teachers were properly part of the formula 
group or combined group when they returned to teaching after 
1965 is dependent upon the interaction of several statutes.  
Wisconsin Stat. § 42.244, governing the creation of the formula 
group, provided, in pertinent part: 
(1) There is created as of September 11, 1965, as a 
part of the system a formula group, to be composed of:  
 . . . . (c) any member who is a member of the system 
on September 11, 1965, but who is not eligible for an 
election under (a) or (b) herein, who within 90 days 
from the last day of the month in which he is first 
employed as a teacher in Wisconsin teaching after 
September 11, 1965, elects in accordance with this 
section 
to 
become 
a 
member 
of 
the 
formula 
group . . . . (d) any person who becomes a member of 
the system, after November 30, 1965. . . .  
As such, this case turns on whether the plaintiffs were 
"members" of the retirement system on November 30, 1965.  If the 
plaintiffs were members of the STRS prior to their return, then 
they would have continued as combined group members unless they 
elected to join the formula group.  In contrast, if the 
plaintiffs' memberships terminated after their departure, they 
became members of the STRS when they returned to teaching after 
November 30, 1965, and were correctly enrolled in the formula 
group under § 42.244(1)(d).  
¶48 Section 42.20(6r)(a) defined "member" as "a person 
who, as the result of having been engaged in Wisconsin teaching, 
has a credit in the retirement deposit fund . . . ."  Therefore, 
this case boils down to the question of whether the plaintiffs 
possessed "a credit" in the retirement deposit fund on November 
No.  2003AP1850.jpw 
 
4 
 
30, 1965, given that prior to that date, they left teaching, 
took separation benefits, depleted their retirement deposit fund 
accounts, and had not returned to teaching.   
¶49 I would conclude that the plaintiffs ceased to be 
"members" of the STRS when they left teaching prior to November 
30, 1965, took separation benefits, and withdrew all of the 
money in their retirement deposit fund accounts.  The plaintiffs 
ceased to be "members" of the STRS at that time because they did 
not possess "a credit" in their retirement deposit fund 
accounts, as they withdrew all the money in said accounts.    
¶50 Rather than focusing on the statutory definition of 
"member" and the meaning of "credit," the majority, relying 
principally on this court's decision in Schmidt, concludes that 
the plaintiffs were members of STRS because the combined group 
waivers they signed prior to November 30, 1965, did not 
terminate 
their 
STRS 
combined 
group 
membership 
"rights."  
Majority op., ¶¶33-36.  This reasoning is flawed in several 
respects. 
¶51 First, the plain language of § 42.20(6r)(a) defined 
"member" as "a person who, as the result of having been engaged 
in Wisconsin teaching, has a credit in the retirement deposit 
fund . . . ."  (Emphasis added.)  Thus, in order to be a 
"member" of the STRS, under the plain language of the statute, a 
teacher must have possessed "a credit" in the retirement deposit 
fund.  The statute did not equate membership with retained 
"rights."  "Words that are defined in the statute are given the 
definition that the legislature has provided."  Wis. Citizens 
No.  2003AP1850.jpw 
 
5 
 
Concerned for Cranes and Doves v. DNR, 2004 WI 40, ¶6, 270 
Wis. 2d 318, 677 N.W.2d 612 (citing Beard v. Lee Enters., 225 
Wis. 2d 1, 23, 591 N.W.2d 156 (1999)).23  Therefore, even 
assuming that the majority is correct that the plaintiffs 
retained "rights" in the retirement system after signing 
combined group waivers, majority op., ¶35, that fact is not 
germane to the question of whether they continued to be 
"members" of the system, as membership is defined solely in 
relation to the existence of "a credit" in the retirement 
deposit fund.    
¶52 Second, the majority opinion misconstrues our decision 
in Schmidt.  In Schmidt, the plaintiff left teaching in 1963, 
executed a combined group waiver, and returned to teaching in 
1964.  Schmidt, 153 Wis. 2d at 38.  When the formula group was 
created in 1965, Schmidt elected to become a member of the 
formula group.  Id. at 39.  Thus, in Schmidt, there was no 
question as to which benefit group the teacher properly belonged 
or which type of waiver he executed.  The sole issue in Schmidt 
was whether the plaintiff's prior years of teaching while in the 
combined 
group constituted 
"creditable 
service" 
under the 
formula group, given that he had previously taken a separation 
benefit and signed a combined group waiver.  Id. at 43-44.  As 
such, the Schmidt decision involved the interpretation of the 
language 
utilized 
in 
the 
combined 
group 
waiver 
under 
                                                 
23 See also Bosco v. LIRC, 2004 WI 77, ¶23, 272 Wis. 2d 586, 
681 N.W.2d 157 (accord); State ex rel. Kalal v. Cir. Ct. for 
Dane County, 2004 WI 58, ¶44, 271 Wis. 2d 633, 681 N.W.2d 110 
(accord).   
No.  2003AP1850.jpw 
 
6 
 
§ 42.242(5), which required a teacher to waive "all right, 
interest or claim on the part of such member to state deposit 
accumulations . . . ."  Id. at 44-45.   
¶53 Thus, the Schmidt decision concerned the effect of 
this language and whether a teacher retained any rights after 
signing such a waiver.  Unlike the present case, there was no 
question that the plaintiff in Schmidt was properly a member of 
the formula group.  Because the plaintiff in Schmidt voluntarily 
elected to join the formula group after its creation, it did not 
matter whether he was a "member" of the STRS when the formula 
group was created.  Schmidt simply did not address the 
definition of "member" or what it meant to have "a credit" in 
the retirement deposit fund.   
¶54 However, when analyzing the effect of the combined 
group waiver, Schmidt explicitly stated that "years of teaching 
service" and "creditable service" were not synonymous with 
"state deposit accumulations": 
Here, the terms "years of teaching service," and 
"creditable service" become synonymous as applied to 
ex-combined group members and are concerned only with 
time. 
 
In 
contrast, 
the 
term 
"state 
deposit 
accumulations," defined as "the deposit made by the 
state in the retirement deposit fund on behalf of any 
member," is clearly concerned only with money.  
Id. at 46 (emphasis added).  The court found it significant that 
a combined group waiver resulted merely in a loss of a member's 
right to "state deposit accumulations."  Id.  Therefore, the 
court concluded:  "under the clear, plain language of sec. 
42.242(5), Stats., we hold that Schmidt only waived his right to 
money which accumulated in his retirement fund through state 
No.  2003AP1850.jpw 
 
7 
 
deposits, nothing else.  His years of [teaching] service 
remained on his record . . . ."  Id.  (emphasis added).   
¶55 Therefore, under Schmidt, the plaintiffs in this case 
clearly retained their years of teaching service on their 
records after they signed combined group waivers.  However, that 
fact does not resolve the present dispute.  Schmidt simply did 
not address the dispositive issue in this case:  whether years 
of teaching service on a teacher's record constitute "a credit" 
in the retirement deposit fund, such that a teacher continues to 
be a "member" after withdrawing all monies from said fund.  
Thus, the fact that the plaintiffs in this case signed combined 
group waivers prior to the creation of the formula group is 
simply not relevant to the resolution of this case.  What is at 
issue is whether the plaintiffs here possessed "a credit" in the 
retirement deposit fund after they took separation benefits and 
withdrew all the money in their retirement deposit fund 
accounts.   
¶56 While Schmidt did not directly address this issue, its 
rationale nonetheless undercuts the majority's conclusion that 
years of teaching experience on a teacher's record constitute "a 
credit" in the retirement deposit fund.  See majority op., ¶36.  
Schmidt clearly drew a sharp distinction between "money which 
accumulated in [the plaintiff's] retirement fund," and "years of 
service [that] remained on his record."  Schmidt, 153 Wis. 2d at 
46.  If "years of teaching service" or "creditable service" is 
part of the retirement fund, as the majority asserts, then the 
No.  2003AP1850.jpw 
 
8 
 
distinction Schmidt drew is meaningless and the rationale of 
Schmidt comes unraveled.   
¶57 While Schmidt stated that when a combined group member 
made required deposits, "a year of teaching experience would be 
credited to that teacher within the retirement system," id. at 
42 (emphasis added), it did not hold that years of teaching 
experience were "a credit" within the retirement deposit fund.  
Indeed, it specifically ruled that deposits in the fund were 
"clearly concerned only with money."  Id. at 46.  See also 
Wis. Stat. § 42.20(2)(a)-(d)(defining "deposits" in the fund 
solely in relation to monetary contributions).   
¶58 The majority erroneously concludes that because "the 
legislature specifically granted teachers credit for their 
creditable service[]" that "creditable service constitute[s] a 
credit in the retirement deposit fund . . . ."  Majority op., 
¶36.  The majority reasons that the retirement deposit fund is 
not comprised solely of money and includes "creditable service," 
even though it cannot point to any statute "regarding where a 
teacher's creditable service remains[.]"  Majority op., ¶36.  
The majority's reasoning in this regard is in contravention of 
both common sense and the definition of the words "fund" and 
"credit."   
¶59 The pertinent statutes do not define the terms "fund" 
or "credit."  However, if these terms are accorded their common, 
ordinary meaning when read in the context in which they appear 
in chapter 42, it is clear that the retirement deposit "fund" is 
comprised solely of money and that a "credit" refers to a 
No.  2003AP1850.jpw 
 
9 
 
positive balance in a teacher's retirement deposit fund account.  
See 
Wis. 
Citizens 
Concerned 
for 
Cranes 
and 
Doves, 
270 
Wis. 2d 318, ¶6 (unless specifically defined, nontechnical words 
in a statute are accorded their common everyday meaning and are 
read in the context of the statute in which they appear)(citing 
Wis. Stat. § 990.01(1)(1999-2000)).   
¶60 The ordinary definition of "fund" is "[a] sum of money 
or other resources set aside for a specific purpose: a pension 
fund."  The American Heritage Dictionary of the English Language 
735 (3d. ed. 1992)(emphasis in original).  See also Black's Law 
Dictionary 682 (7th ed. 1999)(defining "fund" as "[a] sum of 
money or other liquid assets established for a specific 
purpose").  This definition of "fund" comports with the context 
in which the term is utilized in chapter 42.  The retirement 
deposit fund is a sum of money set aside for teachers' 
retirement.   
¶61 Chapter 42 indicates that the term "fund" is utilized 
in a financial context.  Wisconsin Stat. § 42.33(1) provides, in 
pertinent part:  "The state teachers retirement board shall at 
all times maintain assets: . . .  (b) In the 'Retirement Deposit 
Fund' equal to the liabilities for member deposits and for state 
deposits for members of the separate group and the combined 
group and interest accretions[.]"  See also Wis.  Stat.  
§ 42.243(5)(c); 
Wis. Stat. § 42.243(6)(c); 
Wis. Stat. 
 § 42.45(1)(d); Wis. Stat. § 42.46(1); Wis. Stat. § 42.475 (all 
describing a member's account in the state retirement fund being 
credited with member contributions, state deposits, and interest 
No.  2003AP1850.jpw 
 
10 
 
and discussing the withdrawal, payment, and maintenance of such 
monies).   
¶62 In addition, Schmidt, 153 Wis. 2d at 46, explicitly 
stated that a teacher who signed a combined group waiver "only 
waived his right to money which accumulated in his retirement 
fund through state deposits."  (Emphasis added.)  Likewise, Wis. 
Admin. Code § TR 4.01 (Sept., 1964) specifically distinguishes 
between "years of teaching experience" being "counted as within 
the system" and "required deposits" being "paid into the fund," 
by stating that years of teaching experience are not to be 
counted within the system until any required deposits plus 
interest are paid into the fund.   
¶63 In short, the "retirement deposit fund" is a fund 
comprised of monetary deposits established for the purpose of 
teacher retirement. 
¶64 Given that § 42.33(1) specifically states that the 
retirement deposit fund's assets are teacher deposits, state 
deposits, and accrued interest, the majority's conclusion that 
"it is reasonable to construe the retirement deposit fund as 
encompassing more than simply a lockbox for money[]" is entirely 
unfounded and anything but reasonable.  Majority op., ¶36.  The 
majority's conclusion that a repository of money earmarked for a 
particular purpose (a fund) can be comprised of something other 
than money is inexplicable in light of the statutory language.  
Notably, the majority cites to no statute, administrative rule, 
or case for the proposition that the "retirement deposit fund" 
may contain something other than money.  It simply declares it 
No.  2003AP1850.jpw 
 
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to be so.  Simply put, nowhere does chapter 42 speak of the 
retirement deposit fund being credited with, consisting of, or 
containing anything other than money.   
¶65 Next, the majority compounds this error by concluding 
that creditable service constitutes "a credit" in the retirement 
deposit fund.  Majority op., ¶36.  The majority reasons that 
creditable service must be a "'credit' in the retirement deposit 
fund" because "the legislature specifically granted teachers 
credit for creditable service."  Id.  This reasoning conflates 
the use of the word "credit" in its colloquial sense and its use 
in the statute in the accounting context.  When used as a verb 
in its colloquial sense, "credit" means "[t]o ascribe to a 
person; attribute."  The American Heritage Dictionary of the 
English Language 439 (3d. ed. 1992).  This is the usage of 
"credit" in Schmidt, which stated:  "If the teacher made the 
required deposit when due for each year of service as a teacher, 
then . . . a year of teaching experience would be credited to 
that teacher within the retirement system."  Schmidt, 153 
Wis. 2d at 42 (emphasis added).   
¶66 In contrast, the word "credit," when used as a noun in 
§ 42.20(6r)(a) in relation to a sum of money, clearly means a 
"positive balance or amount remaining in a person's account."  
The American Heritage Dictionary of the English Language, 439 
(3d. ed. 1992).  See also Black's Law Dictionary 374 (7th ed. 
1999) (defining "credit" as "[t]he availability of funds either 
from a financial institution or under a letter of credit" and 
No.  2003AP1850.jpw 
 
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"credit balance" as "[t]he status of an account when the sum of 
the credit entries exceeds the sum of the debit entries.").24   
¶67 Given that the retirement deposit fund is a sum of 
money established for a particular purpose——teacher retirement——
and possesses assets consisting of state deposits, member 
contributions, and accrued interest, a "credit" in the fund is 
plainly a positive account balance.  Other provisions of chapter 
42 clearly utilize the word "credit" or "credited" in its 
financial sense when discussing the retirement deposit fund.  
When used as a verb in the accounting or financial context, 
"credit" means "[t]o enter as a credit[,]" "[t]o make a credit 
entry in" an account, The American Heritage Dictionary of the 
English Language 439 (3d. ed. 1992), or "[t]o enter (as an 
amount) on the credit side of an account."  Black's Law 
Dictionary 374 (7th ed. 1999).   
¶68 For example, § 42.243(6)(c) states that "[c]apital 
gains and losses will be credited to the individual accounts in 
the retirement deposit fund only on amounts that have been on 
deposit for the full year . . . ."  (Emphasis added.)  Likewise, 
§ 42.243(5)(c) states that "[e]arnings will be credited to the 
individual accounts in the retirement deposit fund only on 
amounts which have been on deposit for the full year . . . ."  
                                                 
24 The following example illustrates this difference in 
usage.  A college student may receive credit for completed 
coursework or be credited with completing his major, but that 
does not mean he possesses a credit in his account at the 
bursar's office.  The majority's holding is the equivalent of 
saying the student has a credit in his account at the bursar's 
office because he received credit for all the classes he took 
last semester.  Neither makes any sense.   
No.  2003AP1850.jpw 
 
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(Emphasis added.)  Finally, § 42.45(1)(d) states that "[a]ll 
state deposits shall be credited as of June 30."   
¶69 No statute speaks of years of teaching experience or 
creditable service being placed in individual accounts in the 
retirement deposit fund.  Further, Schmidt itself stated that 
years 
of 
teaching 
experience 
"remained 
on 
[a 
teacher's] 
record[;]" it did not say that years of teaching service or 
creditable service are placed in the fund.  Schmidt, 153 
Wis. 2d at 46 (emphasis added).  See also id. at 42 (noting that 
years of teaching service are credited "within the retirement 
system[,]" not the fund)(emphasis added).  Thus, while years of 
teaching service remain on a teacher's record and are credited 
or attributed to a teacher under the retirement system, Schmidt, 
153 Wis. 2d at 42, 46, years of teaching experience do not 
themselves constitute "a credit in the retirement deposit 
fund . . . ."  Wis. Stat. § 42.20(6r)(a)(emphasis added). 
¶70 The majority cannot cite a single provision of chapter 
42 that speaks of years of teaching experience or creditable 
service being placed in the retirement deposit fund or as 
constituting a credit within the retirement deposit fund.  The 
majority essentially admits that no such statute exists.  
Majority op., ¶36.  There is simply no authority to support the 
majority's contention that a teacher's years of teaching service 
are placed in the fund.  Again, the majority, by judicial fiat, 
simply declares it to be so.  However, it is clear that a 
teacher's "years of service remain[] on his record . . . ."  
Schmidt, 153 Wis. 2d at 46 (emphasis added).   
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¶71 As noted by the majority, creditable service is a 
variable utilized in the statutory formula for determining the 
retirement benefit of a teacher in the formula group.  Majority 
op., ¶¶8, 15.  In other words, the retirement benefit is a 
function 
of 
creditable 
service 
and 
other 
factors. 
 
Id.  
Creditable service is simply a means of calculating the ultimate 
retirement benefit.  A year of teaching service under the 
combined group was "creditable" if the teacher made the required 
deposits into his retirement deposit account.  Schmidt, 153 
Wis. 2d at 42.   
¶72 Thus, 
"creditable 
service" 
is 
a 
concept 
for 
determining which years of teaching experience "count" or are 
attributable 
to 
a 
teacher 
for 
purposes 
of 
the 
formula 
calculating the formula group retirement benefit.  See id. at 39 
(noting that creditable service is a "factor in computing the 
size of the retirement benefit"); id. at 44 (noting that not all 
years of teaching service are creditable for purposes of 
determining a retirement benefit).  Creditable service is not 
itself a type of capital resource that can earn interest or be 
transferred, deposited, or withdrawn.   
¶73 Given the nature of what creditable service is, if one 
accepts the proposition that creditable service truly is placed 
"in" the fund as a "credit," it necessarily follows that 
"creditable service" is never used up; it is never withdrawn 
from 
the 
account.25  This 
logical 
corollary 
has serious 
                                                 
25 Indeed, the majority's holding that creditable service 
remains in the fund even if a teacher has withdrawn all of his 
money compels such a conclusion.  Majority op., ¶¶35-36. 
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consequences 
and 
renders 
incomprehensible 
several 
of 
the 
statutory subcategories of "members." 
¶74 An "active member" is defined as "a member who is not 
receiving an annuity . . . and who has made a required deposit 
in 
the 
retirement 
deposit 
fund . . . ." 
 
Wis. Stat. 
 § 42.20(6r)(b)1.(emphasis added).  Notably, the definition of 
active member incorporates the definition of "member," which 
requires "a credit" in the fund.  Under a correct reading of the 
terms "fund" and "credit," an active member is a teacher who 
made required state deposits in the fund, see Schmidt, 153 
Wis. 2d at 42, and has a "credit" or positive balance in the 
fund.   
¶75 Similarly, an "inactive member" is "a member who is 
not receiving an annuity . . . who has not made a required 
deposit 
in 
the 
retirement 
deposit 
fund . . . ."  
Wis. Stat. § 42.20(6r)(b)2.  Thus, an inactive member is someone 
who has a positive balance in his retirement deposit fund 
account (from past contributions, state contributions and/or 
interest) but who is not currently making required deposits.  
Finally, a "retired member" is "a member who is receiving an 
annuity . . . ."  Wis. Stat. § 42.20(6r)(b)3.  Thus, a retired 
member is a teacher who is receiving an annuity and possesses a 
positive balance in his retirement deposit fund account.   
¶76 Because 
all 
three 
of 
the 
above 
classifications 
incorporate the definition of "member," the majority's reasoning 
results in the conclusion an active member, inactive member, or 
retired member need not have any money in their retirement 
No.  2003AP1850.jpw 
 
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deposit fund account.  According to the majority, simply 
possessing a creditable service "credit" "in" the fund renders 
one a member of STRS.   
¶77 Thus, under the majority's interpretation, a teacher 
would qualify as an "inactive member" if he had not made 
required contributions and had depleted all of the funds in his 
account, as long as he had earned "creditable service" at some 
point.  He would qualify as "a member who is not receiving an 
annuity . . . who has not made a required deposit in the 
retirement 
deposit 
fund . . . ." 
 
Wis. Stat.  
§ 42.20(6r)(b)2.(emphasis added).   
¶78 Likewise, a teacher who signed a combined group waiver 
in 1965, took a separation benefit, depleted all of the funds in 
his account, and never returned to teaching would still be a 
"member" in 2005 because he would be entitled to his creditable 
service for his years of teaching as a combined group member and 
that creditable service, according to the majority, remains "in" 
the retirement deposit fund as "a credit."  Thus, under the 
majority's interpretation, there is no difference between an 
"inactive member" and a teacher who has altogether left 
teaching.   
¶79 Further, under the majority's interpretation, a member 
who retires, takes an annuity, and subsequently depletes all of 
the funds in his retirement deposit fund account would still be 
a "member" 30 years later and would meet the definition of 
"inactive member."  Even though he is no longer receiving an 
annuity and has no money in his account (and thus not a "retired 
No.  2003AP1850.jpw 
 
17 
 
member"), and is not making required deposits (because he is no 
longer teaching), he would still have creditable service "in" 
his account, according to the majority's logic.  Thus, under the 
majority's reasoning, anyone who was ever a Wisconsin teacher 
becomes a perpetual "inactive member" of STRS because his 
creditable service would always remain as a "credit" "in" his 
account.   
¶80 Teachers across the state and the Department of 
Employee Trust Funds will certainly be surprised to learn that a 
teacher can never dissociate himself with the STRS so long as he 
earned creditable service at some point.  The conclusion that 
any Wisconsin teacher who earned creditable service will become 
a perpetual "inactive member" is not simply a slippery slope 
argument 
or 
hyperbole; 
rather, 
it 
is 
a 
direct 
logical 
consequence given the statutory definitions and the majority's 
conclusion that creditable service constitutes "a credit" in the 
retirement deposit fund and remains in the fund after a teacher 
has withdrawn all monetary deposits from the fund.   
¶81 Ultimately, the majority's conclusion in this case 
rests on flawed, circular reasoning.  The majority reasons as 
follows:  the plaintiffs are entitled to creditable service for 
their years of teaching prior to 1971 because the waivers they 
signed in 1971 were really combined group waivers (not waiving 
creditable service), as the plaintiffs were placed in the wrong 
retirement group when they returned to teaching after 1965; the 
plaintiffs should have continued as combined group members when 
they returned to teaching after 1965 because they were still 
No.  2003AP1850.jpw 
 
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"members" of STRS when the formula group was created; the 
plaintiffs were still "members" because they had a "credit" in 
the retirement deposit fund, despite the fact that they had no 
money in their accounts; the plaintiffs had a "credit" in the 
fund because they were entitled to creditable service.  Thus, 
according to the majority, the plaintiffs are entitled to 
creditable service because they are entitled to creditable 
service.   
¶82 In 
accordance 
with 
the 
plain 
language 
of 
the 
applicable statutes, the overall statutory scheme, and common 
sense, I would conclude that when the plaintiffs left teaching 
prior to the creation of the formula group, took separation 
benefits, and withdrew all of the money in their retirement 
deposit fund accounts, they ceased to be "members" of the STRS, 
as that term is defined in § 42.20(6r)(a).  The plaintiffs were 
no longer "members" because they withdrew all of their money in 
their retirement accounts and therefore no longer possessed "a 
credit" in the retirement deposit "fund," which is comprised 
solely of money.  Because they were no longer "members" after 
they depleted the funds in their accounts, they were correctly 
enrolled as formula group members when they returned to teaching 
after November 30, 1965, pursuant to § 42.244(1)(d).  As they 
were correctly enrolled as formula group members when they 
returned to teaching, the waivers they signed in 1971 were 
formula group waivers, which constituted a "full and complete 
discharge and release of all right, interest or claim on the 
part of the member to state deposit accumulations and to any 
No.  2003AP1850.jpw 
 
19 
 
benefit arising under any provision of ss. 42.20 to 42.54."  
Wis. Stat. § 42.245(4)(emphasis added).  Because the plaintiffs 
signed this broad formula group waiver, they waived the right to 
any creditable service that remained on their record for years 
of teaching prior to 1971.   As such, the plaintiffs are not 
entitled to "creditable service" under the Wisconsin Retirement 
System, § 40.02(17)(1981), for the time they taught prior to 
1971.   
¶83 This conclusion is more than "plausible," majority 
op., ¶33; it is the only conclusion that is consistent with the 
pertinent statutory language, Schmidt, and common sense.  While 
the result of the majority opinion grants the plaintiffs some 
extra retirement money, it simply cannot be justified based on 
the 
pertinent 
statutes. 
 
No 
amount 
of 
construction 
or 
interpretation can contort "a credit" in a "fund" into anything 
other than money.   
¶84 For the foregoing reasons, I respectfully dissent.   
¶85 I am authorized to state that Justice DAVID T. PROSSER 
JR. joins this dissent.   
 
 
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