Court Opinion

ID: 9749631
Source: CourtListenerOpinion
Date Created: 2023-08-27 16:54:28.79914+00
Date Added: 2024-06-11T15:06:56.814679
License: Public Domain

OPINION
ZAPPALA, Justice.
The issue in this appeal is whether Section 402(g) of the Municipal Pension Plan Funding Standard and Recovery Act, Act 1984-205, 53 P.S. § 895.402(g), requires municipalities with more than one pension plan to distribute state aid based upon the unit allocation formula of Section 402(e) of that act, 53 P.S. § 895.402(e).
*267The appellants, the Pennsylvania State Lodge of the Fraternal Order of Police and two of its members, Thomas Megless, an Upper Merion Township police officer, and William Evens, a Pottstown police officer, initiated this action in the Commonwealth Court by filing a Petition for Review against Donald Bailey, the Auditor General of Pennsylvania,1 and against the Office of the Auditor General. In the Petition, the FOP asserted that the Auditor General had advised the various municipalities that receive general municipal pension system State aid that each such municipality may allocate its State aid among its pension plans as it deems appropriate. The FOP complained that in giving such advice and in approving audits of municipal pension funds where State aid had been distributed in reliance on that advice, the Auditor General was acting contrary to the requirements of Act 205. According to the FOP, Act 205 requires that State aid be distributed among the municipal pension programs according to the unit allocation formula set out in Section 402(e).
The Auditor General admitted to giving the aforementioned advice, but denied that it was contrary to the Act. According to the Auditor General, Section 402(g) vests the governing bodies of the municipalities with discretion to determine the appropriate distribution of State aid among their pension plans. Agreeing that there were no genuine issues of material fact, the parties filed cross-motions for summary judgment. Commonwealth Court granted summary judgment in favor of the Auditor General, and this appeal followed.
Section 402(g) of Act 205 provides as follows:
Authorized expenditures of general municipal pension system state aid.—
Any general municipal pension system State aid received by a municipality shall only be used to defray the cost of the pension plan or pension plans maintained by the municipality. If only one pension plan is maintained *268by the municipality, then the total amount of the general municipal pension system State aid received by the municipality shall, within 30 days of receipt by the treasurer of the municipality, be deposited in the pension fund or the alternate funding mechanism applicable to the pension plan. If more than one pension plan is maintained by the municipality, then the governing body of the municipality shall annually determine the proportion of the total amount of the general municipal system State aid received by the municipality which shall be credited to each pension plan and the total amount of the general municipal pension system State aid received by the municipality shall, within 30 days of receipt by the treasurer of the municipality, be deposited in the pension funds or alternate funding mechanisms applicable to the respective pension plans in accordance with that determination.
The FOP argues that this section must be read together with Section 402(e), which provides, in relevant part, as follows:
Allocation of general municipal pension system State aid.— ,
(1) General municipal pension system State aid shall be distributed annually to each eligible recipient municipality no later than the first business day occurring in the month of October____
(2) ... The applicable number of units attributable to each eligible recipient city, borough, incorporated town and township shall be as follows:
(i) Police officer — two units
(ii) Firefighter — two units
(iii) Employee other than police officer or firefighter— one unit.
(3) The amount of general municipal pension system State aid per unit shall be initially determined by dividing the total amount of the general municipal pension system State aid available by the total number of units certified by all eligible municipalities. If the maximum specified in subsection (f)(1) is applicable, the amount of general *269municipal pension system State aid per unit applicable to all municipalities other than the municipality or municipalities subject to the maximum aid amount specified in subsection (f)(1) shall be adjusted. The adjusted amount of general municipal pension system State aid per unit attributable to municipalities unaffected by the aid maximum specified in subsection (f)(1) shall be determined by dividing the total amount of general municipal pension system State aid available, after excluding 25% of the total for each municipality to which the maximum aid amount is applicable, by the total number of units certified by all eligible municipalities unaffected by the aid maximum specified in subsection (f)(1).
The FOP first argues the words of the statute clearly require that the unit allocation formula of Section 402(e) be read into the distribution provision of Section 402(g) so as to give effect to all the statute’s provisions. This argument is unfounded. Although the statute must be read as a whole, there is no authority for removing language from the context of the section in which it appears and adding it to a section where the legislature chose not to put it.
Indeed, acceptance of this argument would cause the language of Section 402(g) in question to be mere surplus-age. The unit allocation formula of Section 402(e) by its terms is limited to determining the total amount of aid each municipality shall receive from the general municipal pension system State aid fund. If municipalities must follow that same formula in distributing the aid among their various pension plans, there is no proportion to be determined by the governing bodies; the proportion has been determined by the legislature.
Assuming arguendo that the language of the statute does not clearly demonstrate the meaning they attribute to it, the FOP makes a second argument, from the Statutory Construction Act, that this was the legislative intent. The refutation of this argument is twofold. First, although we find that the statutory language is clear, precluding use of the rules of construction to ascertain legislative intent, we *270find that it clearly accords with the Auditor General’s actions. “[T]he governing body of the municipality shall annually determine the proportion of the total amount of the general municipal pension system state aid which shall be credited to each pension plan____” (Emphasis added.) Second, application of the rules of construction would lead us to the same conclusion.
Our examination of the occasion and necessity for the statute, the circumstances under which it was enacted, the mischief to be remedied, the object to be obtained, the former law upon the same subject, the consequences of the various interpretations, and the contemporaneous legislative history, 1 Pa.C.S. § 1921(c)(l)-(7), leads us to the following conclusions.
Prior to the enactment of Act 205, the law required that the entire amount of state aid received from the tax on foreign casualty insurance premiums be allocated solely for the benefit of police pension funds. Firefighters pensions were funded by a tax on foreign fire insurance premiums. None of these monies could be allocated for or distributed to any non-uniformed employee pension funds. Further, the formula used to allocate funds was not based on actual cost or need. One of the effects of that formula was that some pension plans were overfunded and others were severely underfunded. The Public Employee Retirement Study Commission, which was established to examine this issue, estimated that “unfunded accrued liabilities of municipal funds in Pennsylvania [had] been increasing by more than $150 million annually and ... [exceeded] $2.5 billion.” Report to the General Assembly and the Governor of Pennsylvania, January 1983, page i. To rectify this situation, the Commission recommended that aid be allocated to municipal pension plans based upon actual employee participation. The Commission also recommended that the aid no longer be dedicated to particular plans, but be in the form of non-restricted allocations that the municipalities could distribute at their discretion to adjust for particular local needs.
*271Were we to follow the FOP’s approach, we would defeat one of the principal purposes of Act 205, rectifying the disparity under the previous system whereby some pension plans were overfunded and others underfunded. Under the Auditor General’s interpretation of Section 402(g), municipalities have the capacity to distribute the state aid as necessary to correct the imbalance and thereafter ensure the fiscal integrity and actuarial soundness of all their pension programs. Under the FOP’s reasoning, municipalities have no discretion as to distribution, and the state aid cannot be used in any meaningful way in the recovery program for municipal pension systems.
The underlying reason for the FOP’s challenge, put forward as an “unreasonable result” which the legislature could not have intended, is the possibility that in some municipalities where police pension funds were once entirely funded by state aid, requiring no employee contributions, the governing body might distribute the aid in such a way that employee contributions might become necessary. Whatever the truth of this speculative assertion, it neglects the fact that the question of employee pension contributions is generally a subject for collective bargaining, and that through that process it might be agreed that municipalities, not employees, should make any necessary contributions. Nor do we agree that requiring employee contributions, if this result occurred, would be unreasonable. It would be wholly inappropriate to turn the statute against itself for the fiscal benefit of one group at the expense of others and to the detriment of the public at large. See 1 Pa.C.S. § 1922(5).
The order of the Commonwealth Court is affirmed.
LARSEN, J., files a dissenting opinion in which PAPADAKOS and CAPPY, JJ., join.

. Pursuant to Pa.R.A.P. 502(c), Bailey’s successor has been substituted as a party.