Court Opinion

ID: 9619460
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:28:13.15743+00
Date Added: 2024-06-11T18:04:40.990617
License: Public Domain

Dore, J.
(concurring in part, dissenting in part) — I would have held that the 1977 law providing state pension for teachers who became employed on or after October 1, 1977, required a teacher to complete 90 days of service in the system before a teacher's membership could be established. Accordingly, I would reverse the trial court's decision to *558assign teacher Beuhler to Plan 1 and reassign her to Plan 2. As to teacher Crabtree, I would affirm his assignment to Plan 1 on the basis he already had accumulated 90 days of service prior to October 1, 1977 by acquiring 124.7 days of service as a substitute teacher prior to October 1, 1977.
Both Crabtree and Beuhler became teachers and members of the Teachers' Retirement System at a time which would place them in pension Plan 2 which, generally, provided for benefits at a substantially reduced level than Plan 1.
The issue here is whether a teacher hired less than 90 days prior to October 1, 1977 can teach for 90 days, and relate such work experience retroactively back to his or her hiring date, in order to qualify for membership in the Washington retirement system as of the earlier date for purposes of becoming eligible for Plan 1.
90-Day Service Requirement
RCW 41.32.240 requires a teacher to complete 90 days of service before membership is established in the retirement system.1 However, RCW 41.32.755 provides:
RCW 41.32.760 through 41.32.825 [Plan 2] shall apply only to those persons who are initially employed by an employer on or after October 1, 1977.
(Italics mine.) A literal reading of these two statutory provisions would result in a teacher, initially employed less than 90 days prior to October 1, 1977, being assigned to neither retirement plan.
The trial judge resolved this dilemma by characterizing the 90-day service requirement as a condition subsequent. Under his analysis, once a teacher completes 90 days of *559service, the "state of membership would then relate back to the date of employment." Oral Decision, at 7. However, in reaching his conclusion, the trial judge admitted his uncertainty with the issue, noting with candor: "I think I've got frankly about a 50 percent chance of being reversed in this case, whichever way I went." Oral Decision, at 10.
The majority summarily affirms this "condition subsequent" analysis, and holds a teacher's initial employment date to be determinative of his assignment to Plan 1 or Plan 2. Today's holding revokes the clear intent of the Legislature and invades the province of the administrative agency responsible for administering the pension fund.
Condition Subsequent
The majority applies its "condition subsequent" analysis for the sole purpose of giving effect to the language of RCW 41.32.755. However, the court must look to the statute as a whole, considering the relationship of all provisions to each other, in order to harmonize each provision and give effect to the legislative purpose. Newschwander v. Board of Trustees, 94 Wn.2d 701, 620 P.2d 88 (1980). The definitional section of the statute, RCW 41.32.010, consistently distinguishes the terms of Plan 1 from those of Plan 2 by reference to the date the individual teacher established membership in the system. For example, RCW 41.32.010(1) provides:
(a) "Accumulated contributions" for persons who establish membership in the retirement system on or before September 30, 1977, means the sum of all regular annuity contributions with regular interest thereon.
(b) "Accumulated contributions" for persons who establish membership in the retirement system on or after October 1, 1977, means the sum of all contributions standing to the credit of a member in the member's individual account together with the regular interest thereon.
(Italics mine.)
The majority's decision gives effect to one statutory provision and nullifies both the 90-day service requirement of RCW 41.32.240, and the Legislature's pervasive reference to *560membership in the system as the determinative criterion for a teacher's assignment to a particular retirement plan.
The legislative history of the 1977 amendments confirms that the date of membership was intended to determine a teacher's assignment to Plan 1 or Plan 2. The amendments were initially introduced in the House of Representatives on February 17, 1977 as House Bill 866 which was entitled:
An Act Relating to public employment; revising the teachers' retirement system with respect to persons entering as members on or after July 1, 1977; adding a new chapter to Title 41 RCW to be designated as chapter 41.32A RCW; adding a new section to chapter 41.32 RCW; defining crimes; providing penalties; and prescribing an effective date.
(Italics mine.) House Journal, 45th Legislature (1977), at 328. The bill was later modified, and Substitute House Bill 866 initially passed the House of Representatives on April 21, 1977. House Journal, at 980. On May 31, 1977, the Senate adopted substantial amendments to the House version. Senate Journal, 45th Legislature (1977), at 2134-44. Final passage of the bill was delayed until June 17, 1977. House Journal, at 2094; Senate Journal, at 2763-77. Throughout the entire amendatory process, the definitional section, codified at RCW 41.32.010, consistently distinguished between Plan 1 and Plan 2 by reference to the date a teacher established membership in the system. At no time in the entire legislative process did anyone refer to a teacher's date of employment as determinative of assignment to Plan 1 or Plan 2.
Establishing Membership in Retirement System
The Department of Retirement Systems, charged with the responsibility of administering the Teachers' Retirement System, has traditionally determined a teacher's assignment to a retirement plan by the date the teacher established membership in the system under the 90-day rule.2 The Department policy was effectuated after consul*561tation with the Attorney General. AGO 8 (1980) provides at page 3:
The Washington Teachers' Retirement System is, of course, one of those "other" public retirement systems. We further should note that... it now encompasses two separate pension plans. Plan I covers all "teachers" employed full time in the "public schools" (as those two terms are defined in RCW 41.32.010(30) and (23), respectively) whose membership was initially established prior to October 1, 1977, on the basis of employment on or before July 1, 1977. Accord, RCW 41.32.240. Plan II, in turn, covers all"teachers" employed by an "employer" (as defined in RCW 41.32.010(12)) who initially established membership on or after October 1, 1977,1
(Italics mine.) Footnote 1 to the opinion provides:
throughout this opinion we will use this criteria of when membership was established to distinguish between Plan I and Plan II members of TRS. We are aware that RCW 41.32.755 and .780 actually speak of employment on or after October 1, 1977, as the basis for Plan II membership. At the same time, RCW 41.32.005 states that the earlier, Plan I, sections of chapter 41.32 RCW "... shall apply only to those persons who establish membership in the retirement system on or before June 30, 1977." And, under RCW 41.32.240, supra, one must have been employed as a teacher for at least ninety days in order to become a member of the system. Accordingly, if the literal wording of the statutes were to be followed, those persons first employed as teachers after April 1, 1977 (less than ninety days before June 30, 1977) but before October 1, 1977 would be covered by neither TRS plan. Cf., AGLO 1977 No. 37. We have, therefore, informally counselled you in the past to avoid that obviously unintended result by applying Plan I to all those who, on the basis of employment on or before July *5621, 1977, established TRS membership prior to October 1, 1977.
(First italics mine.)
This construction effectuates the purpose of the 1977 amendments by reducing the future liabilities of the Teachers' Retirement System and enhancing its actuarial soundness. The interpretation given to a statute by the agency responsible for its administration is entitled to great weight. Newschwander v. Board of Trustees. Unfortunately, the majority opinion ignores the policy of the Department and overrules the legislative purpose by misplacing some 1,680 teachers under Plan 1 (Report of Proceedings, at 93), and unjustly increasing by millions of dollars the future liabilities of the teachers' pension fund, jeopardizing the actuarial soundness of the fund.
History
Legislative amendments to the Teachers' Retirement System passed since 1977 provide even more compelling reasons for this court to adopt the interpretation given by the Department. The definitional section of the statute was amended by Laws of 1979, 1st Ex. Sess., ch. 249, § 5(28)(b), p. 2009 to read in part:
Notwithstanding RCW 41.32.240, teachers covered by RCW 41.32.755 through 41.32.825 [Plan 2], who render service need not serve for ninety days to obtain membership so long as the required contribution is submitted for such ninety-day period. Where a member did not receive service credit under RCW 41.32.775 through 41.32.825 due to the ninety-day period in RCW 41.32.240 the member may receive service credit for that period so long as the required contribution is submitted for the period. Anyone entering membership on or after October 1, 1977, and prior to July 1, 1979, shall have until June 30, 1980, to make the required contribution in one lump sum.
(Italics mine.)
Dr. Hollister, Director of the Department of Retirement Systems, stated that he was actively involved in the passing of this 1979 amendatory legislation, and that the legislators *563were well aware of the criterion the Department used to assign teachers to a particular retirement plan. He testified as follows:
"A. We proposed a bill to the legislative leadership with which we customarily worked, which would be the House Subcommittee on Pensions of the Appropriations Committee, chaired through '78 by Representative Bauer and in the '79 session jointly by Representatives Taller and Douthwaite. I worked extensively with those gentlemen and in the Senate with Senator Mardesich prior to the '79 session and subsequently, at that time and later, with Senators Jones, Scott and Marsh.
"These people were all informed of the problems that we had encountered with the bill as they passed it. They were fully informed as to the Plan I/Plan II decision that had been made and how we were implementing it. They were fully informed as to the effect of the no service credit for the 90 days, and based on the reaction that I perceived from them, we introduced a bill only proposing to change the part relating to the 90-day service credit.
"Q. So it was your impression that at least those members of the community were well aware that these teachers had been assigned to Plan II?
"A. They were well aware of it, both from me and from constituent letters they had received."
Report of Proceedings, at 36-37.
In 1982, the Legislature passed additional amendments to the definitional section of RCW 41.32. Again, Plan 1 and Plan 2 were distinguished by reference to the date a teacher established membership in the system. Laws of 1982, 1st Ex. Sess., ch. 54, § 3(2). Where the Legislature has subsequently amended a statute and failed to repudiate an administrative interpretation thereof, the agency's position merits even greater weight. Green River Comm'ty College v. Higher Educ. Personnel Bd., 95 Wn.2d 108, 622 P.2d 826 (1980), modified, 95 Wn.2d 962, 633 P.2d 1324 (1981); Newschwander v. Board of Trustees.
Moreover, an amendment to the 90-day service requirement of RCW 41.32.240 was introduced in the 1980 legisla*564tive session. House Journal, 46th Legislature (1980), at 98. House Bill 1726 would have given specific statutory authority for the interpretation adopted by the trial court and the majority. The bill provided in part:
A minimum of ninety days or the equivalent of ninety days of employment during a fiscal year shall be required to establish membership: Provided, That a teacher who has commenced a period of employment after June 30, 1977, but before October 1, 1977, and who became a member of the system during the period of employment shall be deemed to have established membership on the date the period of employment commenced.
The bill died in committee. Dr. Hollister's testimony makes it clear that the Legislature was fully aware of the Department's policy of enforcing the 90-day service requirement by assigning those teachers initially employed between July 1 and October 1, 1977 to Plan 2. The Legislature's rejection of House Bill 1726 is strong evidence that it did not want teachers who had not served 90 days prior to October 1, 1977 to have the benefits of Plan 1. Human Rights Comm'n v. Cheney Sch. Dist. 30, 97 Wn.2d 118, 123, 641 P.2d 163 (1982).
Bakenhus Does Not Apply
The majority insists its decision is compelled by the vested rights doctrine set forth in Bakenhus v. Seattle, 48 Wn.2d 695, 296 P.2d 536 (1956) and Tembruell v. Seattle, 64 Wn.2d 503, 392 P.2d 453 (1964). We are not concerned, in this case, with the problem of a teacher being denied his vested rights to pension benefits. Rather, we are called on to determine when the teacher's pension rights vested. The Legislature plainly instructs us that a teacher must serve 90 days before he becomes a member of the retirement system and his pension rights vest. ROW 41.32.240. The majority's holding effectively renders this legislatively mandated 90-day service requirement null and void. Bakenhus is not relevant to this issue.
*565Conclusion
I would uphold the policy of the Department of Retirement Systems which enforces the 90-day service requirement for teachers who were initially employed between July 1 and October 1, 1977 to establish membership in the retirement system. This harmonizes with the legislative intent manifested in the language and history of RCW 41.32. Moreover, this policy and amendatory pension law for teachers substantially contributes to the actuarial soundness of the Teachers' Retirement System.
I would affirm the trial court's decision assigning plaintiff Crabtree to Plan 1. The record reflects that Crabtree had completed 124.7 days of service as a substitute teacher prior to October 1, 1977. He, therefore, qualified for membership in the Teachers' Retirement System under Plan 1. Beuhler was initially hired as a teacher in September 1977. She had not completed 90 days of service prior to October 1, 1977. I would reverse the trial court's decision regarding Beuhler and reinstate the Department's order assigning her to Plan 2.
The Legislature, through the passage of House Bill 866, as illustrated in the Senate Journal, never intended that the 90-day service requirement for teachers to establish membership in the retirement system, should be waived for those teachers who were employed between July 1 and October 1, 1977. This waiver completely defeats the legislative intent of a cutoff date of October 1, 1977 for teachers who had qualified by working 90 days in service as of that date. As a result, an estimated 1,680 teachers will receive benefits under Plan 1 rather than Plan 2, at an expense of millions of dollars to the fund. The majority gives a windfall to some 1,680 new teachers but, simultaneously, jeopardizes and weakens the actuarial soundness of the teachers' retirement fund for the other 40,000 teachers in our state. The majority decision defeats House Bill 866's purpose.
Utter, Dolliver, and Dimmick, JJ., concur with Dore, J.

RCW 41.32.240 provides in part:
"All teachers employed full time in the public schools shall be members of the system except those who have previously exempted themselves from membership and alien teachers who have been granted a temporary permit to teach as exchange teachers.
"A minimum of ninety days or the equivalent of ninety days of employment during a fiscal year shall be required to establish membership."

WAC 415-112-100 provides:
*561"Ninety calendar days of employment within a fiscal year as a full-time teacher, or the equivalent of ninety days of service within a fiscal year as a teacher employed on a part-time, occasional, hourly, or daily basis, shall be required, together with necessary contributions, before membership in the teachers' retirement system is established and before the director may approve an application for cancellation of exemption, for the granting of additional credit for previous service, or for the payment of any benefit."