City of Littleton v. Fire and Police Pension Ass'n

• Decision Date: 27 July 1989
• Docket Number: No. 88CA0026,88CA0026
• Citation: 786 P.2d 458
• Parties: CITY OF LITTLETON, Town of Avon, City of Cortez, City of Cherry Hills Village, Eagle Vail Fire Protection District and City of Grand Junction, Plaintiffs-Appellees, v. FIRE AND POLICE PENSION ASSOCIATION, Defendant-Appellant. . III
• Court: Colorado Court of Appeals

Page 458

786 P.2d 458

CITY OF LITTLETON, Town of Avon, City of Cortez, City of Cherry Hills Village, Eagle Vail Fire Protection District and City of Grand Junction Plaintiffs-Appellees, v. FIRE AND POLICE PENSION ASSOCIATION, Defendant-Appellant.

No. 88CA0026.

Colorado Court of Appeals Div. III.

July 27, 1989.

Rehearing Denied Sept. 14, 1989.

Certiorari Denied Jan. 29, 1990.

S. Morris Lubow, Denver, for plaintiffs-appellees.

C. Thomas Bastien, Denver, and William Morris, Englewood, for defendant-appellant.

Opinion by Judge CRISWELL.

The Fire and Police Pension Association (the association), a governmental agency, appeals from a declaratory decree of the district court. That decree determined that, when a local government withdraws from the state fire and police pension plan, the association must refund to that local government from funds under its control all contributions previously made by it on behalf of all employees who had ceased their employment before the local government withdrew. The trial court's judgment required the association to pay over to the plaintiffs, who consist of several municipalities and fire districts which withdrew from the association after January 2, 1985, contributions made by them on behalf of their former employees. We agree with the trial court that the governing statute is unambiguous; thus, we affirm its judgment.

In 1979, the Colorado General Assembly, faced with the fact that the then-existing pension plans for local fire and police department employees were not actuarially sound, adopted an act, § 31-30-1001, et seq., C.R.S. (1986 Repl.Vol. 12B), which established a statewide pension system for all local fire and police employees hired after April 8, 1978. See Colorado Springs v. State, 626 P.2d 1122 (Colo.1980). The association was created to administer the provisions of this statute. Section 31-30-1004, C.R.S. (1986 Repl.Vol. 12B).

The statute provides for retirement, disability, death and survivor benefits, §§ 31-30-1006, 31-30-1007, and 31-30-1008, C.R.S. (1986 Repl.Vol. 12B), which are funded by contributions made to the association by the local governmental employers and the covered employees, as well as by certain funds made available for this purpose from the state. See §§ 31-30-1012, 31-30-1013, and 31-30-1014, C.R.S. (1986 Repl.Vol. 12B).

Every "employer," defined as "any municipality or special district offering fire protection service ...," § 31-30-1002(4), C.R.S. (1986 Repl.Vol. 12B) is required to provide to its "members" the benefits provided by this statute. Section 31-30-1003(1), C.R.S. (1986 Repl.Vol. 12B). For this purpose, a "member" is "an active employee who is a full-time salaried employee of [the] municipality or fire protection district" and who was hired after April 8, 1978. Section 31-30-1002(5), C.R.S. (1986 Repl.Vol. 12B).

From the date of its initial adoption, this statute has contained provisions authorizing an employer to "withdraw" from the association and to provide retirement benefits to members covered by the act through a local pension plan. See § 31-30-1003(2)(b), C.R.S. (1986 Repl.Vol. 12B). However, such withdrawals must have become effective by January 1, 1988. Section 31-30-1003(2)(b)(I), C.R.S. (1986 Repl.Vol. 12B).

Initially, the statute did not describe what was to happen to the employer and member contributions to the association when a previously covered employer elected to withdraw. In 1981, however, the General Assembly added § 31-30-1003(2)(b)(V), C.R.S. (1986 Repl.Vol. 12B). See Colo.Sess.Laws 1981, ch. 378 at 1525. That subsection reads, in pertinent part, as follows:

"(A) Within six months from the effective date of withdrawal, the association shall refund to the employer all employer and member contributions in its custody....

(B) The refunded moneys shall be used only as contributions to the alternative pension plan.

(C) Upon the effective date of withdrawal, the employer is liable for the payment of all benefits then vested under the provisions of section 31-30-1006 [relating to retirement benefits based upon years of service]." (emphasis supplied)

From the effective date of this amendment until January 2, 1985, a period of some three and one-half years, whenever an employer withdrew from the association, the association refunded to such employer all of the contributions which it had previously made to the association, whether those contributions were made on behalf of employees who were still employed by the employer on the date of its withdrawal or were made on behalf of individuals who were no longer employed by it. Effective January 2, 1985, however, the association adopted its Rule 401.22, which established its formal policy upon the nature of the refunds required by § 31-30-1003(2)(b)(V). That rule stated that a withdrawing employer would be refunded:

"Employer and member contributions remitted to [the association] on behalf of all [employees] who are employed by the employer on the effective date of the withdrawal." (emphasis supplied)

When plaintiffs withdrew from the association, each to administer its own local pension plan, the association applied this rule to them. Thus, while each employer was refunded the contributions made by the employees who were then employed by it, as well as the contributions made by it on behalf of such employees, no refund was made either of the contributions made by its former employees or of those made by the employer on behalf of those former employees.

The parties agree that the association properly retained the contributions made by the former employees themselves. The refund statute compels the refund of "member " contributions, and the definition of this term excludes any former employees, except in certain circumstances not involved here. Section 31-30-1002(5), C.R.S. (1986 Repl.Vol. 12B). Further, the former employee is himself entitled to a refund of the contributions made by him when his employment terminates, § 31-30-1011(1)(a), C.R.S. (1986 Repl.Vol. 12B), or, in certain instances, to vested retirement benefits from the association. Section 31-30-1011(2)(a), C.R.S. (1988 Cum.Supp.).

Plaintiffs argue, however, that the refund statute's reference to "all employer ... contributions" is clear and unambiguous and that the association's rule limiting the type of employer contributions that will be refunded is inconsistent with this statutory provision. The trial court agreed, and so do we.

The association makes two principal arguments in support of its assertion that the term "all employer ... contributions" should be construed to mean something less than all employer contributions.

It relies, first, upon the well-accepted principle that a statutory provision must be not construed in isolation, but must be considered within the context of the entire act of...