Bennetts v. State Emp. Retirement Systems Bd., Docket No. 45422

• Decision Date: 21 February 1980
• Docket Number: Docket No. 45422
• Citation: 95 Mich.App. 616,291 N.W.2d 147
• Parties: In the Matter of Walter E. BENNETTS, Plaintiff-Appellant, v. STATE EMPLOYEES' RETIREMENT SYSTEMS BOARD, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 147

291 N.W.2d 147

95 Mich.App. 616

In the Matter of Walter E. BENNETTS, Plaintiff-Appellant, v. STATE EMPLOYEES' RETIREMENT SYSTEMS BOARD, Defendant-Appellee.

Docket No. 45422.

Court of Appeals of Michigan.

Feb. 21, 1980.

Released for Publication April 30, 1980.

David E. S. Marvin, Lansing, for plaintiff-appellant.

Frank J. Kelley, Atty. Gen., Richard P. Gartner, Asst. Atty. Gen., for defendant-appellee.

Before ALLEN, P. J., and V.J. BRENNAN and MacKENZIE, JJ.

PER CURIAM.

In this appeal we are asked to interpret 1976 P.A. 227 ¹ relating to retirement options for those county welfare department employees who became state employees when the county welfare system was merged into the state system. ² The precise question raised is whether such an employee is entitled to receive credit for retirement purposes for all his service with the county, or whether only his service in the county welfare office may be credited. In the case before us, plaintiff was employed by the Gogebic County Road Commission for 21 years, 9 months and 21 days. Four years later he was reemployed by Gogebic County as director of the county welfare department where he served eight years, eight months and 21 days until the department was merged into the State Department of Social Services. Thereafter, plaintiff served 11 years, three months and 19 days as an employee of the State Department of Social Services until his retirement July 10, 1976. ³

Upon retirement, plaintiff was granted a retirement allowance from the State Employees' Retirement System for only his 11 years, three months and 19 days served with the State Department of Social Services. Plaintiff was granted a hearing under the Administrative Procedures Act at the conclusion of which the administrative law judge ruled plaintiff was not entitled to any credit for service with the county road commission or the county department of social welfare. Appeal was taken to the Ingham County Circuit Court which, after receiving briefs from both parties and hearing oral argument, issued an opinion April 20, 1976, modifying the Board's order by giving credit for plaintiff's service with the county welfare department. Credit for plaintiff's prior service with the county road commission was denied on grounds that the statute was not ambiguous.

"The petitioner urges the court to find the language of 1976 P.A. 227 ambiguous and to then construe the statute in a manner to allow a retiree who was merged with the state system by virtue of the Social Welfare Act, 1965 P.A. 401, M.C.L.A. 400.1 et seq.; M.S.A. 16.401 et seq., to claim service credit for previous years of county employment in departments other than the county department of social services.

"However, the statute which states that members who have been merged with the state system 'shall receive retirement system service credit for the period of service under the county department of social services', cannot be ignored. The fact that the statute requires a member to make an election to 'withdraw all rights in and to any pension benefit he may be eligible to receive under a county pension plan' does not necessarily give rise to the conclusion that the wording of the statute was an oversight and not reflective of the legislature's true intent."

As a result of the trial court's opinion, plaintiff is now receiving $194.51 per month retirement benefits from the state and $182.75 per month retirement benefits from Gogebic County, a combined monthly benefit of $377.26. But if all of his county service could be credited, plaintiff would be entitled to $957.04 per month retirement benefits. Or to state the problem another way if plaintiff's service with Gogebic County had not been interrupted by merger pursuant to 1965 P.A. 401 plaintiff would be drawing retirement benefits from Gogebic County of some $850-$900 per month. ⁴ From an order entered May 16, 1979, formalizing the trial court's opinion, plaintiff appeals of right.

1976 P.A. 227, immediately effective August 4, 1976, reads:

"Sec. 17c. Any member retired on or after January 1, 1975 who is an employee of a county department of social services who was merged and placed under the employment of the state department of social services pursuant to Act No. 280 of the Public Acts of 1939, as amended, being sections 400.1 to 400.122 of the Michigan Compiled Laws, shall receive retirement system service credit for the period of service under the county department of social services if the employee withdraws all rights in and to any pension benefit he may be eligible to receive under a county pension plan, and pays into the state employees' retirement system a contribution of $600.00 for each year of service claimed."

This Court is struck by the inconsistency between the language underscored in solid lines and the language underscored in broken lines above. The two provisions are incompatible. If one is to receive credit only for service while employed with the county social services department, why should one give up not only credits while so employed but in addition surrender credits while employed in other county departments. The statute, literally read, requires plaintiff to surrender all rights to 301/2 years of earned pension credit in order to gain 83/4 years pension credit. Given the background in which the bill was drafted, is that what the Legislature really intended? We think not. The incompatibility of the two provisions is sufficiently great to raise questions as to what the Legislature really intended. Thus, the statute is ambiguous and is distinguishable from the situation in Curtis v. Michigan Public School Employees Retirement System, 10 Mich.App. 508, 159 N.W.2d 889 (1968), a case upon which defendant strongly relies. ⁵

Where the language of a statute is plain and unambiguous, judicial construction thereof is precluded. Lansing v. Lansing Twp., 356 Mich. 641, 648-649, 97 N.W.2d 804 (1959). But where, as here, the statute is found subject to two or more interpretations, legislative intent may be found by looking to the purpose and objectives sought to be accomplished. Davis v. Board of Education of School District for the City of River Rouge, 73 Mich.App. 358, 363, 251 N.W.2d 585 (1977). Legislative intent may be determined by looking to extrinsic aids showing the object sought to be achieved and the problem to which the bill addresses itself. Consumers Power Co. v. Big Prairie Twp., 81 Mich.App. 120, 156-157, 265 N.W.2d 182 (1978). In the instant case, two extrinsic aids are supportive of the interpretation urged by plaintiff. A memorandum from Richard Ross, State Personnel Director, to Governor Milliken, ⁶ dated December 30, 1975, describes the bill's purpose as follows:

"1. What is the purpose of the bill?

"This bill amends the State Retirement Act to allow former county employees who were mandated into state service in the Department of Social Services the opportunity to purchase years of service credit for each year of county service. The employee must forfeit all rights to any pension benefit they may be eligible to receive under a county pension plan." (Emphasis supplied.)

The second extrinsic aid indicative of the Legislature's intent are two bill analyses prepared for legislative guidance while the bill was being considered by the Legislature. ⁷

"The Apparent Problem to Which the Bill Addresses Itself:

"Under a 1965 amendment to the Social Welfare Act (Public Act 401 of 1965) which provided for the merger of county social service departments with the state Department of Social Services, many county employees were made state employees. However, no provision was made for the transference of retirement credit to the State Employees' Retirement System (where an ex-county employee was covered by a county plan), nor was provision made for the purchase of retirement credit by those ex-county employees who were not covered by a county plan prior to the merger. Many persons believe that legislation providing service credit for these employees is still needed and that it would be unfair to continue denying them credit for the public service rendered to counties prior to the merger." (Emphasis supplied.)

"Argument For:

"The persons who would be affected by the bill are former county employees who were made state employees by law. In many cases, this transfer disrupted an employee's participation in a county pension plan, forcing him or her to become a member of the State Employees' Retirement System. It seems only fair to allow such a person to place all of his/her contributions with 1 system and to receive his/her benefits from 1 source. Other former county employees who were transferred to state employment by law were not covered by any plan prior to transfer. The bill would allow them to receive credit for public service." (Emphasis supplied.)

It is readily transparent from the language emphasized above that the Legislature intended that any employee involved in the 1965 merger would receive credit for all of his or her service rendered to the county. The fact that all contributions were to be put in one system and credits earned from one source is contra to the interpretation placed on the statute by defendant. Defendant's interpretation results in two systems.

Having rejected what Justice Frankfurter described as "the tyranny of literalness", this Court looks to "the persuasive gloss of legislative history" to ascertain legislative intent. United States v. Witkovich, 353 U.S. 194, 199, 77 S.Ct. 779, 782, 1 L.Ed.2d 765, 769 (1957). 1976 P.A. 227 was the legislative response to demands by the Michigan County Social Services Association for legislation correcting the inequity caused by the forced merger of the county welfare system into the state system. The inequity was the reduction in pension benefits which...