Opinion ID: 2345108
Heading Depth: 2
Heading Rank: 3

Heading: Authority to Assess Back Contributions from the District

Text: [¶ 18] Because we are satisfied that the System's assessments are not barred by law or equity, we turn to the substantive issue of the System's authority to assess back contributions from the District. In its decision, the Board relied upon 5 M.R.S. § 17203 (2008) and 5 M.R.S. § 17154(9) (2008) to determine that the System had authority to collect back contributions from the District. Section 17203(1) requires a district's chief administrative officer to cause to be deducted from the compensation of each member on each payroll of the department, school or participating local district for each payroll period, the appropriate percentage of earnable compensation to be contributed 5 M.R.S. § 17203(1). It also provides that delinquent payments may be subject to late fees or legal actions in courts, or deducted from any other money payable to that school administrative unit. [8] Section 17154(9) states that actuarial and administrative costs resulting from improper application of retirement systems statutes must be charged to and paid by the employer that . . . improperly applied the statutes or rules. It further provides, The employer is liable for amounts not recovered from the retiree and for costs incurred in resolving problems caused by the employer's actions. [9] The Board concluded that these statutes authorized the System to collect back contributions from the District. [¶ 19] The District argues that: (1) sections 17203 and 17154(9) are not applicable, because section 17203 requires employees, not employers, to correct contribution errors, and section 17154(9) applies only to actuarial costs, which it construes literally to mean costs based on the services of an actuary; and (2) because the statutes were not enacted until after 1989, they may not be applied retroactively against the District for payments due prior to its enactment.
[¶ 20] The District asserts that responsibility regarding amounts deducted under section 17203 rests with the employees rather than the District and that the System does not have the authority to shift that burden to the District. We disagree. [¶ 21] The plain language of the statute does not limit the District's responsibility to merely collecting and withholding contributions. Viewing section 17203 as a whole, the statute imposes an unequivocal duty on the District to deduct certain amounts from employee salaries and to forward that deduction to the System. Subsection 17203(1) states that the chief administrative officer shall cause [the relevant compensation] to be deducted, (emphasis added) while subsection 17203(1)(B) states that [a]mounts deducted. . . must be paid to the State Employee and Teacher Retirement Program by the chief administrative officer of each school administrative unit  (emphasis added). Further, the relevant language under subsection 17203(1)(B) generally refers to [d]elinquent payments due under this paragraph. This logically refers to any instances where the District does not fulfill its obligation to deduct and submit funds to the System, including instances where the District deducted payments and erroneously directed them elsewhere. [¶ 22] Section 17203 grants the System the authority to assess employers for back contributions to the System. Because section 17203 grants this authority, we need not determine whether the back contributions assessed also constitute additional actuarial and administrative costs pursuant to section 17154(9).
[¶ 23] The District argues that application of sections 17203 and 17154(9) would be improperly retroactive. In support of its argument, it notes that it erroneously classified employees from July 1973 to March 1989, and that it corrected the erroneous classifications before either section was enacted. See P.L. 1989, ch. 95, § 3 (effective Sept. 30, 1989); P.L. 1991, ch. 857, § 1 (effective June 30, 1992). The District further argues that the System had no preexisting authority to collect monies owed, and that the System has never been able to collect back contributions directly from the District. The pivotal question, the District thus notes, is whether it is appropriate or lawful to imply an agency right to shift employee/member contribution obligations to an employer, in the face of an express statutory scheme requiring that those amounts to be paid by the member/employee. [¶ 24] The District's analysis fails to recognize that at all relevant times, it was required by statute to deduct employee contributions and submit them to the System. See 5 M.R.S.A. §§ 1062(2)(A), 1091(5) (1964). The District not only failed to make the required employee contributions; it actually deducted Social Security contributions from the employees' pay. The System did not require the District to fund employee contributions to it; it assessed the District for its failure to deduct and then forward the employee contributions, as required by statute. [¶ 25] The System's general authority to collect monies owed predates the enactment of sections 17203 and 17154(9). See 5 M.R.S.A. § 1062(2)(A) (1964). When a statute d[oes] not alter existing rights or obligations, [but] merely clarifie[s] what those existing rights and obligations ha[ve] always been, the statute is not retroactive in its operation. See Levy v. Sterling Holding Co., 544 F.3d 493, 506 (3rd Cir.2008). As we have previously observed, An authorizing statute grants [a public body] such powers as may be fairly implied from its language . . . [and] [t]he public body may employ means appropriate for the purpose of carrying out the authority directly conferred upon it. State v. Fin & Feather Club, 316 A.2d 351, 355 (Me.1974) (quoting Lynch v. Commissioner of Ed., 317 Mass. 73, 56 N.E.2d 896 (1944)). The District's articulation of the question presented as whether the System may shift responsibility for funding contributions to the District is inapposite. Instead, the appropriate questions are: (1) whether the System had implied authority to enforce, through administrative action, the District's preexisting duty to deduct and submit the employee contributions to the System; and (2) whether the System had the additional implied authority to assess the District for late fees such as interest. If the System had this implied authority, sections 17203 and 17154(9) are properly regarded as clarifying the System's preexisting authority. [¶ 26] Overall, the Board has long been charged with [t]he general administration and responsibility for the proper operation of the retirement system and for making this chapter [governing the retirement system] effective  5 M.R.S.A. § 1031(1) (Supp. 1972) (emphasis added); 5 M.R.S. § 17103(1) (2008). This fairly implies that the Board has authority to enforce the payment of delinquent submissions. A statute is of little effect if it cannot be enforced. Further, given the overall administrative regulatory scheme of Chapter 5, it is reasonable to infer that a power to enforce is implicit within the overall regulatory scheme. Therefore, the System had implied authority to enforce, through administrative action, the payment of delinquent submissions. [¶ 27] The Legislature also gave broad authority and discretion to the Board in managing the System: [I]t is expressly provided that the board of trustees shall in all cases make the final and determining decision in all matters affecting the rights, credits and privileges of all members of the system . . . [and] shall make the final and determining decision on all matters pertaining to administration, actuarial recommendations, the reserves and the investments of the system. 5 M.R.S.A. § 1032 (Supp.1972); see also 5 M.R.S. § 17103(6), (7) (2008). The assessment of late fees for delinquent payments, especially assessment for interest, affects the rights of the employee members. This language reasonably suggests that the Board had the ability to assess the District both for deductions currently owed and for interest or additional fees on those deductions. [¶ 28] Thus, review of preexisting law establishes that the System had implied authority to assess the District for delinquent payments, including assessment of additional fees such as interest, prior to the enactment of sections 17203 and 17154(9). The application of these sections is not improperly retroactive because they merely clarify the System's preexisting authority. We are not persuaded by and do not address the District's remaining arguments. The entry is: Judgment affirmed.