Bittenbender v. State Employees' Retirement Bd.

• Decision Date: 16 March 1993
• Citation: 622 A.2d 403,154 Pa.Cmwlth. 11
• Parties: Robert J. BITTENBENDER, Petitioner, v. STATE EMPLOYEES' RETIREMENT BOARD, Respondent.
• Court: Pennsylvania Commonwealth Court

Page 403

622 A.2d 403

154 Pa.Cmwlth. 11

Robert J. BITTENBENDER, Petitioner, v. STATE EMPLOYEES' RETIREMENT BOARD, Respondent.

Commonwealth Court of Pennsylvania.

Argued April 10, 1992.

Decided May 14, 1992.

Publication Ordered March 16, 1993.

Edward R. Eidelman and Mary J.B. Eidelman, for petitioner.

Kathleen E. Boyle, for respondent.

Before DOYLE and FRIEDMAN, JJ., and LORD, Senior Judge.

LORD, Senior Judge.

This Petition for Review is brought by Robert J. Bittenbender (Bittenbender) from an order of the State Employees' Retirement Board (Board) order denying his request for greater Option 3 payments, as those payments were indicated in an erroneous retirement estimate by an employee of the State Employees' Retirement System (SERS).

Bittenbender, a 62-year old Superintendent of District 5 of the Turnpike Commission, who had been employed by the Commission in excess of fourteen years, considered retirement. He consulted with an SERS retirement counselor assigned to the Turnpike Commission to ascertain whether the "numbers" were suitable for retirement, since he had concluded he needed an income of $18,000 a year to retire (which included his Social Security and his retirement benefits). He obtained a retirement estimate under Option 3 which would pay one-half of such retirement benefit to his widow and which met his needs. He then retired. About three months later, he was advised the estimate he reviewed was in error and that instead of receiving $1017.67 a month, he would be receiving $778.94 or $238.73 per month less. ¹

Bittenbender contends that, even admitting that the estimate was a mistake, he entered into a contract with SERS when he retired for the $1017.67 monthly amount and that therefore SERS is obliged to pay him that amount.

Bittenbender makes two contentions in support of his argument for reversal.

(1) SERB was in error as a matter of law when it denied his request because the estimate was part of his contract.

(2) SERB denied Bittenbender his constitutional right of due process.

In his first argument, Bittenbender relies upon general contract law. He contends that, under the doctrine of unilateral mistake, the retirement system is bound by the principle that if a mistake is unilateral and not due to the fault of the party mistaken, but to the negligence of the one who acted under the mistake, it affords no basis for relief from the contract, unless the party not mistaken has good reason to know of the unilateral mistake. This is an accepted principle of contract law and has been applied by this Court under other circumstances. Department of Education v. Miller, 78 Pa.Commonwealth Ct. 1, 466 A.2d 791 (1983).

However, in making his argument, Bittenbender ignores several important statutes which govern the system and one which specifically governs this situation.

The State Employees Retirement System is a creation of legislature. 71 Pa.C.S. § 5102. It provides for various contributions to a fund and various choices (options) that a prospective pensioner has upon retirement. 71 Pa.C.S. § 5705. Bittenbender is the only person who can make the choice of which option he elects, and SERS acts only ministerially and is obligated by statute to provide counseling. 71 Pa.C.S. § 5906(4). Thus, an employee has only those rights created by statute and none beyond it. Indeed, even though the contract which the employee has with the Commonwealth must be liberally construed, the employee rights are so personal that even his widow is not allowed to complete his payment into the fund to increase her benefits. Bowers v. State Employees Retirement Board 29 Pa.Commonwealth Ct. 561, 371 A.2d 1040 (1977).

The specific section of the subject act which governs the situation here is Section 5954, 71 Pa.C.S. § 5954, which states:

§ 5954. Fraud and adjustment of errors.

. . . . .

(b) Adjustments of errors.--Should any change or mistake in records result in any member, beneficiary or survivor annuitant receiving from the system more or less than he would have been entitled to receive had the records been correct, then regardless of the intentional or unintentional nature of the error and upon the discovery of such error, the board shall correct the error and so far as practicable shall adjust the payments which may be made for and to such person in such a manner that the actuarial equivalent of the benefit to which he was correctly entitled shall be paid.

Thus, even if the beneficiary is receiving mistaken benefits, the board is duty bound to correct the mistake. ² See also Kellams v. Public School Employes' Retirement Board, 486 Pa. 95, 403 A.2d 1315 (1979), where the Supreme Court unanimously upheld this Court's determination that a system-wide mistake which overpaid the annuitants must be corrected prospectively.

One other matter raised by Bittenbender needs to be mentioned--that is, the doctrine of equitable estoppel. In Finnegan v. Public School Employment...