Haverhill Retirement System v. Contributory Retirement Appeal Board
Haverhill Retirement System v. Contributory Retirement Appeal Board
Opinion of the Court
This is an appeal arising from the erroneous enrollment of a municipal employee in the Haverhill Retirement System (HRS) rather than the Massachusetts Teachers’ Retirement System (MTRS). The issue before us is whether the HRS may be required to make a statutorily defined reimbursement to MTRS for the period of time it received mistaken contributions once the employee, and his creditable service, were transferred
Background. The administrative record reveals the following undisputed facts. The city of Haverhill (city) employed Albert Rosso as a school adjustment counsellor between 1995 and 1997. During those years Rosso was enrolled as a member of the HRS. Both his “regular deductions,” G. L. c. 32, § 1, inserted by St. 1945, c. 658, § 1, also known as employee contributions, see G. L. c. 32, §§ 1, 22(1 ){b), and the city’s employer contributions were paid to HRS.
MTRS wrote to HRS and requested that HRS transfer the accumulated total deductions that fund the annuity portion of the benefit to MTRS pursuant to G. L. c. 32, § 3(8)(o). In response, HRS forwarded to MTRS Rosso’s accumulated total deductions in HRS. Chapter 32 does not, however, provide for the transfer of the employer contributions and related earnings for the pension portion of the benefit. Instead, G. L. c. 32, § 3(8)(c), as
MTRS requested a determination from the Public Employee Retirement Administration Commission, which found that HRS was responsible for the liability. HRS appealed. A division of administrative law appeals (DALA) magistrate determined that HRS was obligated to assume liability for the relevant period. CRAB affirmed, and the Superior Court judge upheld the CRAB determination.
Standard of review. “Appellate review under G. L. c. 30A, § 14, is limited to determining whether the agency’s decision was unsupported by substantial evidence, arbitrary and capricious, or otherwise based on an error of law.” Arlington Contributory Retirement Bd. v. Contributory Retirement Appeal Bd., 75 Mass. App. Ct. 437, 441 (2009) (Arlington). Here we are presented with a pure question of law. Although questions of law are subject to de nova review, Rosing v. Teachers’ Retirement Sys., 458 Mass. 283, 290 (2010), “[w]e typically defer to GRAB’S expertise and accord ‘ “great weight” to [its] interpretation and application of the statutory provisions it is charged with administering.’ ” MacKay v. Contributory Retirement Appeal Bd., 56 Mass. App. Ct. 924, 925 (2002), quoting from Lisbon v. Contributory Retirement Appeal Bd., 41 Mass. App. Ct. 246, 257 n.10 (1996).
Discussion. CRAB held that G. L. c. 32, § 3(8)(c), clearly
Because the statute does not explicitly address the question of erroneous enrollment in a retirement system, we treat the statute as ambiguous and decide the case accordingly. See Adams v. Boston, 461 Mass. 602, 611 (2012). Compare Boston Hous. Authy. v. National Conference of Firemen & Oilers, Local 3, 458 Mass. 155 (2010) (G. L. c. 150E, § 7, subsequently amended by St. 2011, c. 198). CRAB’s case-specific determination is entitled to “substantial deference.” Provencal v. Commonwealth Health Ins. Connector Authy., 456 Mass. 506, 514 (2010). “[A] [S]tote administrative agency in Massachusetts has considerable leeway in interpreting a statute it is charged with enforcing, unless a statute unambiguously bars the agency’s approach.” Zoning Bd. of Appeals of Amesbury v. Housing Appeals Comm., 457 Mass. 748, 760 (2010), quoting from Goldberg v. Board of Health of Granby, 444 Mass. 627, 633 (2005) (determining authority of State housing appeal committee). As CRAB noted in its decision, “[statutory silence, like statutory ambiguity, often requires that an agency give clarity to an issue necessarily implicated by the statute but either not addressed by the Legislature or delegated to the superior expertise of agency administrators.” Goldberg v. Board of Health of Granby, supra at 634 (upholding agency regulations).
“We interpret a statute to give effect to the Legislature’s intent.” Boston Retirement Bd. v. Contributory Retirement Appeal Bd., 441 Mass. 78, 83 (2004). See Adams v. Boston, 461 Mass. at 611; Arlington, 75 Mass. App. Ct. at 442. The purpose of G. L. c. 32, § 3(8)(a) and (c), with certain exceptions not applicable here, is to ensure that a member of multiple contributory retirement systems will receive a pension based on all the member’s years of creditable service to the full extent permitted by those retirement systems. Towards that end, § 3(8)(a)
Most critical to the analysis here, G. L. c. 32, § 3(8)(c), provides that the method of computation for calculating the pension liability of the transferring fund shall be based on an actuarial computation which includes, among other things, all years of service in the transferring fund. The Legislature’s choice of, and reliance on, the actuarial calculation of the cost of the pension benefit, rather than a simple reimbursement of employer contributions (with or without earnings due), reflects a legislative commitment to calculating the liability of the transferring fund in such a way that the receiving fund is fully compensated for the true actuarial cost of the pension benefit. As with the Veteran’s Retirement Act, G. L. c. 32, § 59A, which contains analogous reimbursement provisions, the “Legislature has enabled governmental units that approve and pay pensions based on creditable service to units other than the paying unit to spread some of the cost of the pension to those other units.” Lexington v. Bedford, 378 Mass. 562, 572 (1979).
It is against this backdrop that the CRAB decision must be reviewed. HRS argues that CRAB erred as a matter of law because Rosso was erroneously enrolled and, therefore, his service did not truly “pertain” to HRS in its capacity as the retirement system of the second governmental unit
Judgment affirmed.
A public employee’s pension is made up of two components. The first component is “regular deductions,” G. L. c. 32, § 1, also known as “employee contributions,” G. L. c. 32, § 22(1)(¿>), inserted by St. 1945, c. 658, § 1, which are deducted from employee pay. The “regular interest” on those deductions, G. L. c. 32, § 1, see G. L. c. 32, § 22(6)(a), (6), and the regular deductions comprise the employee’s “accumulated total deductions.” G. L. c. 32, § 1. The accumulated total deductions are then invested in an investment account. The second component is made up of the “employer contributions,” see G. L. c. 32, § 22(3), which are also invested. At retirement, the employee receives a “retirement allowance” consisting of an “annuity,” funded by the accumulated total deductions, and a “pension,” funded by employer contributions and earnings. G. L. c. 32, § 1.
This section provides in pertinent part, “Whenever any retired member . . . receives a pension . . . from a system pertaining to one governmental unit in a case where a portion of such pension ... is attributable to service in a second governmental unit to which another system pertains, the first governmental unit shall be reimbursed in full, in accordance with the provisions of this paragraph, by the second governmental unit for such portion of the pension as shall be computed by the actuary.”
HRS argues that it should not be penalized because it returned the ac
To the extent that HRS argues, in the alternative, that § 3(8)(c) requires
Case-law data current through December 31, 2025. Source: CourtListener bulk data.