Opinion ID: 1866763
Heading Depth: 1
Heading Rank: 5

Heading: calculation of disability benefit

Text: In its first assignment of error, the board of trustees contends that the district court erred in finding that its calculation of the amount of Campbell's disability pension benefit was improper. This assignment requires us to examine the evidence offered before the board of trustees and the applicable sections of the Omaha Municipal Code. The record includes medical records and copies of relevant portions of the Omaha Municipal Code which Campbell submitted to the board of trustees in support of his application for a service-connected disability pension. Chapter 22, article III, of the Omaha Municipal Code is entitled Police and Fire Retirement System. The award of disability pensions is governed by Omaha Mun.Code, ch. 22, art. III, § 22-78 (1996), which provides in relevant part: Any member of the system who, while in the line of duty, has sustained or shall sustain injuries or sickness, arising out of the immediate or direct performance or discharge of his/her duty, which immediately or after a lapse of time permanently unfit such annuitant for active duty in his/her department, shall receive a monthly accidental disability pension as long as such annuitant remains unfit for active duty in such member's department, equal to 50 percent of such member's average final monthly compensation. In addition thereto, such annuitant shall be paid medically necessary covered services which may be incurred as a result of such sickness or injury. (Emphasis supplied.) Omaha Mun.Code, ch. 22, art. III, § 22-63 (1995) defines [a]verage final monthly compensation as used in article III as [t]he member's highest average monthly compensation during any consecutive 26 pay periods, during the member's last five years of service as a member of the system for which service credit has been earned. The dispute in this case is whether the board of trustees erred in ignoring Campbell's settlement agreement with the city and the resulting increase in his monthly pay when determining his average final monthly compensation. We addressed a similar issue in Brunken, supra, and both parties rely on Brunken to support their arguments. In that case, Donald E. Brunken, an Omaha firefighter, applied for general retirement benefits under Omaha Mun.Code, ch. 22, art. III, § 22-76 (1996). Section 22-76 is the provision for age-related retirement, and its provisions are very similar to § 22-78. Most notably, § 22-76 provides in relevant part that participants in the city's fire and police systems `shall be entitled, upon ... retirement, to a monthly service retirement pension payable each month for the remainder of [his or her] natural life after retirement equal to [a certain percentage] of the member's highest average monthly compensation' during any year of the member's last 5 years of service. (Emphasis supplied.) Brunken, 261 Neb. at 627, 624 N.W.2d at 631. Brunken argued that the board of trustees erred in calculating his retirement pension because it refused to consider a one-time, lump-sum payment he received in 1995 of $7,117.38, representing retroactive wages from 1994, in his overall total income for the year 1995. The retroactive wage payment was a result of contract negotiations between the firefighters and the city. In analyzing Brunken's claim, we determined that although the backpay was part of his total compensation for the year 1995, it was not monthly compensation as contemplated by § 22-76 because it was a one-time payment, not regular compensation received every month. Brunken v. Board of Trustees, 261 Neb. 626, 632, 624 N.W.2d 629, 634 (2001). We thus determined that the `happenstance' receipt of the backpay in 1995 did not alter Brunken's regular monthly compensation in that year and that thus, the board of trustees did not err in calculating Brunken's retirement benefit without reference to the lump-sum backpay. Id. In this action, the board of trustees argues that Campbell's receipt of the moneys outlined in his settlement agreement with the city is similarly only happenstance. In addition, the board of trustees contends that it should not be bound by the settlement agreement, to which it was not a party, when calculating Campbell's disability pension benefits. As an initial matter, we note that the clear language of § 22-78 does not give the board of trustees discretion in calculating pension benefits. The board of trustees' sole duty under § 22-78 is to award a disability pension based upon a member's average final monthly compensation. Thus, if Campbell's agreement with the city results in a higher average monthly compensation than he would otherwise receive, the board of trustees is bound to award him a disability pension based upon that amount regardless of whether it was privy to the settlement agreement. The issue is not whether the board of trustees is bound by Campbell's settlement with the city, but, rather, whether certain funds which Campbell actually received pursuant to the settlement were part of his monthly compensation as that term is defined under the applicable ordinance. In this respect, the instant case is distinguishable from Brunken, which involved a single lump-sum payment for backpay. The settlement agreement at issue in this case specifically and clearly provides that the front pay awarded to Campbell was to be disbursed through the regular city payroll in regular monthly installments. Moreover, it is equally clear from the terms of the settlement agreement that its purpose was to put Campbell in the position he would have been in had the city lawfully promoted him to the rank of sergeant, and thus the fact that the additional payments were regularly awarded on a continuing monthly basis for 13 months was hardly happenstance. Because Campbell was thus receiving regular monthly compensation in an amount greater than that considered by the board of trustees in calculating his pension benefit, its calculation was not based upon sufficient relevant evidence and the district court correctly concluded that the board of trustees erred in making its calculations.