Opinion ID: 2360503
Heading Depth: 3
Heading Rank: 1

Heading: Considering Purposes of Disability Benefits

Text: In the first of these three rationales, the district court discounted the plain language of subsection (d)(3) of Wichita Code Section 2.28.150 and instead focused on the first half of the self-described purpose of the retirement plan, as laid out in Wichita Code Section 2.28.010, which states: The purpose of the Wichita employees' retirement plan, hereinafter referred to as the `retirement plan,' is to establish an orderly means whereby noncommissioned personnel employed by the city who have attained retirement age or who have become disabled as set forth in this chapter may be retired from active service without prejudice and without inflicting a hardship on the employees retired, and to enable employees to accumulate reserves for themselves and their dependents to provide for old age, disability, death and termination of employment, and for the purpose of effecting economy and efficiency in the administration of governmental affairs. Citing this provision, the district court specifically found that [t]he reduction by the Board of the disability retirement benefits by the amount of attorney fees retained by petitioner's counsel in her workers compensation case creates a hardship on the petitioner and will not be permitted because that action thwarts the very purpose of the disability retirement plan. In support of this finding, the court detailed Robinson's difficult financial situation. The district court did not explain, however, why Robinson's personal financial statusa case-specific factrequires the interpretation of any amount received under the Wichita Code to be the equivalent of net receipts, i.e., the award after deduction of attorney fees. Nowhere does Wichita Code Section 2.28.150(d)(3) require that the claimant's personal financial status be considered. In addition, Robinson cites no authority for the notion that an individual's disability income must meet a certain level of adequacy. Finally, as the Retirement Board argues, by emphasizing the purpose provision of the Wichita Code, the district court essentially found that the general purpose provision, Section 2.28.010, controls over the specific deduction provision of Wichita Code Section 2.28.150(d)(3). Yet, well-established rules of construction hold that specific statutes control over general ones. Ft. Hays St. Univ. v. Fort Hays State University Ch., Am. Ass'n of Univ. Profs., 290 Kan. 446, 228 P.3d 403 (2010). Also, in focusing on the general purpose provision, the district court changed the universal applicability of the deduction provision because performing a prejudice and hardship analysis requires a case-by-case consideration. This could lead to inconsistent results, bypassing systematic calculations in order to consider the facts of each case. The Retirement Board argues that this case-by-case approach would jeopardize compliance with a different portion of Wichita Code Section 2.28.010, specifically that portion which states: It is the intent that the Wichita employees' retirement plan be established as a qualified governmental pension plan under Section 401(a) and 414(d) of the Internal Revenue code. Section 401(a) of the Internal Revenue Code requires that actuarial assumptions be specified in a pension plan in order for the plan to qualify for tax exempt status. See 26 U.S.C. § 401(a)(25) (2006). Additionally, 26 C.F.R. § 1.401-1(b)(1)(i), which was issued under section 401(a) of the Internal Revenue Code, requires pension plans to provide definitely determinable benefits in order to meet the requirements for special tax treatment. Eaton v. Onan Corp., 117 F.Supp.2d 812, 847 (S.D.Ind.2000). The Retirement Board contends that this objective would be defeated, and the tax status of the retirement plan imperiled, if the Board or the courts were to apply the general purpose provision of the Wichita Code to use discretion in calculating benefits for individuals based on hardship. The Retirement Board makes a valid point. The district court did not consider the possibility that it is the City's act of providing determinable disability retirement benefits to all eligible retirees which fulfills the purpose of the City's retirement plan. Focusing on the terms prejudice and hardship in the purpose provision of the Wichita Code, the district court essentially ignored the plain language in Section 2.28.150(d)(3).