Chun v. Employees' Retirement System, 6185

• Decision Date: 05 March 1980
• Docket Number: No. 6185,6185
• Citation: 607 P.2d 415,61 Haw. 596
• Parties: Leilani L. CHUN, Plaintiff-Appellant, v. EMPLOYEES' RETIREMENT SYSTEM of the State of Hawaii, Defendant-Appellee.
• Court: Hawaii Supreme Court

Page 415

607 P.2d 415

61 Haw. 596

Leilani L. CHUN, Plaintiff-Appellant, v. EMPLOYEES' RETIREMENT SYSTEM of the State of Hawaii Defendant-Appellee.

No. 6185.

Supreme Court of Hawai'i.

March 5, 1980.

Syllabus by the Court

1. Supreme court is bound by the plain, clear, and unambiguous language of a statute. However, court may sometimes construe statutory language contrary to its literal meaning when the literal meaning would be clearly inconsistent with the purpose of the statute and lead to an absurd and unjust result.

2. Employees' pension and retirement statute prescribes procedures applicant must take in making application for service retirement; applicant must execute and file an application with the board of trustees and must specify on what date, not less than thirty days nor more than ninety days subsequent thereto, applicant desires to be retired. HRS § 88-73(1).

3. Under provisions of employees' pension and retirement statute, an applicant for service retirement does not retire merely upon the execution and filing of an application for service retirement. HRS § 88-73(1).

4. Although not controlling, the uniform practical construction of a statute by those charged with carrying out the statute is entitled to much weight.

5. Legislative committee reports on amendment, which eliminated requirement that applicant for service retirement survive for thirty days after effective date of retirement in order to receive benefits, recognize that under the statutory scheme the earliest date upon which retirement can become effective is thirty days after filing of an application for service retirement. Legislature meant to continue the initial thirty-day requirement while eliminating only the requirement of survival for thirty days after retirement.

6. Constitutional provision stating that accrued benefits in retirement system shall not be diminished or impaired was meant to protect members of employees' retirement system from reduction in accrued benefits. However, extent of such benefits as well as the conditions under which benefits are received are governed by applicable statutory provisions, including provision that applicant, at time of filing application for service retirement, designate date, not less than thirty days nor more than ninety days subsequent thereto, on what he desires to be retired. Art. XVI, § 2 of Hawaii Constitution; HRS § 88-73(1).

7. The "not less than thirty days nor more than ninety days" provision of HRS § 88-73(1) does not act as a forfeiture where applicant had not retired prior to his death and statute made in-service death benefits or other benefits available to applicant's beneficiary. HRS § 88-73(1); HRS § 88-84.

George W. Brandt, Honolulu, for plaintiff-appellant.

Nobuki Kamida, Deputy Atty. Gen., Dept. of the Atty. Gen., Honolulu, for defendant-appellee.

Before RICHARDSON, C. J., and OGATA and MENOR, JJ. ^*

RICHARDSON, Chief Justice.

Plaintiff-appellant, Leilani L. Chun, filed suit in the circuit court of the first circuit claiming certain retirement benefits were due her as the beneficiary of her deceased husband, Clarence C. K. Chun. The trial court, sitting without a jury, heard the case on stipulated facts and rendered a decision for defendant-appellee, Employees' Retirement System of the State of Hawaii. This appeal followed. ¹

We affirm.

On March 7, 1974, Clarence Chun executed and filed an application for service retirement with the Employees' Retirement System. He was then employed in the Fire Department of the City and County of Honolulu, was over fifty-five years of age, and had about 32 years of credited service in the retirement system. In his application, Mr. Chun selected option 1 of the available retirement options ² and designated appellant as his beneficiary. The application explained general provisions covering the retirement system and read in part, "(a)ll applications for retirement must be in the office of the Employees' Retirement System not less than thirty (30) days and not more than ninety (90) days prior to the effective retirement date." One section of the application stated "I request that my retirement allowance become effective on ......" Mr. Chun filled in the blank with the date "April 6, 1974." On March 12, 1974, appellee notified Mr. Chun that under the option 1 benefits he had selected, he was entitled to a retirement reserve totalling approximately $152,848.00.

Clarence Chun died on March 16, 1974. After his death, appellee notified Mrs. Chun that her husband's application for service retirement was not effective because he had not survived until April 6, 1974. Instead of option 1 benefits, appellant was offered a lump sum settlement of $44,110.00 or option 3 "in service" death benefits ³ of an annuity of $442.00 per month. Mrs. Chun elected to receive the allowance under option 3, without prejudice to her right to claim benefits under option 1.

Appellant claims error in the lower court's finding of fact No. 10 that "Clarence C. K. Chun, the Decedent, died while in service and prior to his retirement." Appellant also alleges error in all of the lower court's conclusions of law, the most relevant of which are the following:

1. A member of the Retirement System eligible for service retirement does not retire upon the filing and execution of the application for service retirement.

2. The retirement of an eligible applicant for service retirement takes effect and he becomes a retirant on the date specified in his application, provided that such date is not less than 30 days nor more than 90 days after the execution and filing of the application.

Thus, the sole issue presented by this appeal is whether Clarence C. K. Chun retired prior to his death. For the reasons stated below, we conclude that he did not.

I

Hawaii Revised Statutes, chapter 88, sets forth controlling provisions of the pension and retirement system for public officers and employees. HRS § 88-21 defines "service retirement" as retirement for age or length of service. The manner in which various classes of members effectuate service retirement is set forth in HRS § 88-73 which states in pertinent part:

§ 88-73 Service Retirement. Retirement of a member on a service retirement allowance shall be made by the board of trustees as follows:

(1) Any member who has at least five years of credited service and who has attained age fifty-five or any member who has at least twenty-five years of credited service or any member who has at least ten years of credited service, including service as a judge, an elective officer, or the chief clerk and the sergeant at arms of both houses of the legislature, may retire upon his written application to the board specifying on what date, not less than thirty days nor more than ninety days subsequent to the execution and filing thereof, he desires to be retired. (Emphasis added.)

Appellant's basic contention is that, for purposes of the vesting of benefits, retirement occurs upon the execution and filing of an application for service retirement. Appellant argues that the "not less than thirty days nor more than ninety days" language of HRS § 88-73(1) is meant to provide a time period for administrative processing of retirement payments. Under appellant's interpretation of the statute, Clarence Chun retired on March 7, 1974 and his beneficiary is entitled to option 1 benefits.

Appellee maintains that the date specified by an applicant in the application for service retirement as the date on which the retirement allowance becomes effective is the date of retirement. Under the statute, such date must be "not less than thirty days nor more than ninety days subsequent to the execution and filing" of an application for service retirement. Appellee reasons that since Clarence Chun did not survive until April 6, 1974, the date he designated in his application, he had not retired and was still "in service" when he died.

This court is bound by the plain, clear, and unambiguous language of a statute. In re the Estate of Spencer, 60 Haw. 497, 591 P.2d 611 (1979); In re Grayco Land Escrow, Ltd., 57 Haw. 436, 559 P.3d 264, cert. den. 433 U.S. 910, 97 S.Ct. 2976, 53 L.Ed.2d 1094 (1977); In re Palk, 56 Haw. 492, 542 P.2d 361 (1975); State v. Park, 55 Haw. 610, 525 P.2d 586 (1974). While we have sometimes construed statutory language contrary to its literal meaning when the literal meaning would have been clearly inconsistent with the purpose of the statute and would have an absurd and unjust result, see e. g., State v. Ogata, 58 Haw. 514, 572 P.2d 1222 (1977); Save Hawaii Loa Ridge Association v. Land Use Commission, 57 Haw. 84, 549 P.2d 737 (1976); Tangen v. State Ethics Commission, 57 Haw. 87, 550 P.2d 1275 (1976), this is not such a case. HRS § 88-73(1) must be given effect according to its plain and obvious meaning.

It is clear on the face of the statute that retirement does not become effective merely upon the execution and filing of an application for service retirement. The statute prescribes certain steps which an applicant must take. An applicant must execute and file an application with the board of trustees and in that application must specify upon what date, not less than thirty nor more than ninety days subsequent thereto, the applicant "desires to be retired." Appellant places much emphasis on the phrase "may retire upon his written application" and argues that this should be interpreted to mean that retirement becomes effective upon written application to the board of trustees. However, this interpretation completely ignores the obvious meaning of the section. We hold that under the provisions of HRS § 88-73(1) an applicant for service retirement does not retire merely upon the execution and filing of an application for service retirement.

Our reading of the statute is also consistent with past administrative practice of the Employees' Retirement System. The application itself indicates that applications for...