Com. ex rel. Zimmerman v. Officers and Employees Retirement Bd.

• Court: Pennsylvania Supreme Court
• Writing for the Court: Author: Per Curiam
• Citation: Com. ex rel. Zimmerman v. Officers and Employees Retirement Bd., 469 A.2d 141, 503 Pa. 219 (Pa. 1983)
• Decision Date: 29 December 1983
• Parties: COMMONWEALTH of Pennsylvania, ex rel. Leroy S. ZIMMERMAN, Attorney General of the Commonwealth of Pennsylvania and John A. Reilly, District Attorney of Delaware County, Pennsylvania, Appellants, v. OFFICERS AND EMPLOYEES RETIREMENT BOARD.

Page 141

469 A.2d 141

503 Pa. 219

COMMONWEALTH of Pennsylvania, ex rel. Leroy S. ZIMMERMAN Attorney General of the Commonwealth of Pennsylvania and John A. Reilly District Attorney of Delaware County Pennsylvania Appellants, v. OFFICERS AND EMPLOYEES RETIREMENT BOARD.

Supreme Court of Pennsylvania.

Reargued Oct. 18, 1983.

Decided Dec. 29, 1983.

Robert A. Graci, Rex R. Gary, Asst. Dist. Attys., Susan J. Forney, Deputy Atty. Gen., for appellants.

Christopher F. Gorbey, Chester, for appellee.

Before ROBERTS, C.J., and NIX, LARSEN, FLAHERTY, McDERMOTT and ZAPPALA, JJ.

OPINION

PER CURIAM:

This appeal relates to a denial by the Court of Common Pleas of Delaware County to issue a writ of mandamus compelling the Officers and Employees Retirement Board (appellee) to discontinue the payment of retirement benefits to a pensioner under the alleged authority of the Public Employee Pension Forfeiture Act (Forfeiture Act), Act of July 8, 1978 P.L. 752, No. 140 § 1 et seq., 43 P.S. § 1311 et seq. (Supp.1983-84). On May 28, 1980 the common pleas court filed an opinion and order granting the instant appellee's motion for summary judgment and dismissed the complaint relying upon the Commonwealth Court's decision in Burello v. Commonwealth of Pennsylvania, State Employees' Retirement System, 49 Pa. Commonwealth Ct. 364, 411 A.2d 852 (1980). ¹ This appeal came directly to this Court pursuant to section 722(7) of the Judicial Code, 42 Pa.C.S. § 722(7).

While this appeal was pending and prior to the date scheduled for oral argument this Court decided Bellomini v. State Employees' Retirement Board, 498 Pa. 204, 445 A.2d 737 (1982). Because of the similarities of the issues in Bellomini with those presented here appellants requested and they were granted a continuance of oral argument and given leave to file a supplemental brief by order of this Court dated October 7, 1982. In due course the supplemental brief and a responsive brief by appellee were filed and oral argument heard on December 8, 1982. A decision affirming the trial court's dismissal of the complaint in mandamus was filed March 31, 1983. Commonwealth ex rel. Zimmerman v. Officers and Employees' Retirement Board, 501 Pa. 293, 461 A.2d 593 (1983). A request for reargument was granted and oral argument was again heard on October 18, 1983. We now reaffirm the initial decision entered by this Court.

The complaint in mandamus called upon the court of common pleas to order appellees to discontinue payments of pension benefits to a pensioner based upon the retroactive provision of section 7 which purported to extend the terms of the Forfeiture Act to December 1, 1972 although the effective date of the Forfeiture Act was July 8, 1978. ² It is that attempt to divest previously vested rights of a public employee or official by subsequent legislative judgment that we find to be a constitutionally impermissible retroactive divestment of vested rights.

In Pennsylvania we have rejected the view that pension benefits are mere gratuities or expectancies subject to the whim of the munificent governmental employer. To the contrary, it is the well settled law of this jurisdiction that the nature of retirement provisions for public employees is that of deferred compensation for services actually rendered in the past. Commonwealth ex rel. Zimmerman v. Officers and Employees' Retirement Board, supra at ---, 461 A.2d at 595; Bellomini v. State Employees' Retirement Board, supra 498 Pa. at 209, 445 A.2d at 739. Accord, McKenna v. State Employees' Retirement Board, 495 Pa. 324, 433 A.2d 871 (1981); Harvey v. Allegheny County Retirement Board, 392 Pa. 421, 141 A.2d 197 (1958); Wright v. Retirement Board of Allegheny County, 390 Pa. 75, 134 A.2d 231 (1957); Baker v. Retirement Board of Allegheny County, 374 Pa. 165, 97 A.2d 231 (1953); McBride v. Allegheny County Retirement Board, 330 Pa. 402, 199 A. 130 (1938); Retirement Board of Allegheny County v. McGovern, 316 Pa. 161, 174 A. 400 (1934). Moreover, in Bellomini v. State Employees' Retirement Board, supra, we rejected the argument that there was an implied condition of faithful service which was a condition precedent to the receipt of retirement funds. Id. 498 Pa. at 211-212, 445 A.2d at 740-741.

Thus, the only basis to support appellant's request for a writ of mandamus terminating the payment of benefits to the instant pensioner is based upon the retroactive provision provided for in section 7 of the Forfeiture Act. In Bellomini a majority of the members of this Court held that the Forfeiture Act could not prevent the payment of benefits to employees whose pension rights were vested in enjoyment prior to the passage of that act. Here the question is whether the retroactive provision may apply when the conduct of an employee or official occurred prior to the passage of the Forfeiture Act at a time when his right in the terms of entitlement, although not enjoyment, had vested.

The emotional appeal of the argument that such a result rewards an employee for unfaithful service and unwarrantly undermines government service attempts to obfuscate the basis for our decision. We again reiterate that pension benefits represent deferred payment for past services. From the date of the enactment of the Forfeiture Act government employees are placed on notice that unfaithful service could jeopardize their pension rights and thus it serves as a deterrent to future misbehavior. However, the application to conduct prior to the enactment of the Forfeiture Act has no deterrent impact upon an employee who committed improper acts relating to the employment prior to that enactment, as was the case here.

Of equal significance, the unfaithful service would provide a basis for the termination of the employment of the governmental employee or the removal from office of the public official. In such case, even though the official or employee may have enjoyed a vested right in the terms of eligibility for pension benefits, those benefits could properly be denied if the official or employee failed to meet the original term of eligibility for receipt of those benefits, e.g., as the required length of service. ³ In such case the forfeiture is not retroactively applied but rather the conduct of the official or employee serves as the basis for the termination of the service and the loss of benefits results directly from the failure of the employee to complete the term of eligibility.

Appellant's argument that this decision frustrates the application of the Forfeiture Act to employees or officials who commenced service prior to the enactment of that Act is totally incorrect. The gravamen of the objection is the retroactive application for conduct occurring prior to the passage of the Forfeiture Act.

Accordingly, the order of the Court below granting the motion for summary judgment and dismissing the complaint in mandamus is affirmed.

ZAPPALA, J., files a concurring opinion.

ROBERTS, C.J., files a dissenting opinion in which LARSEN, J., joins.

HUTCHINSON, J., did not participate in the consideration or decision of this case.

ZAPPALA, Justice, concurring.

While I concur with the result reached by the majority today, I feel the need to write separately to emphasize the fact that no law, regardless of how noble its purpose, may retroactively affect existing contract obligations. U.S. Const. art. 1, § 10, cl. 1.

In the instant case, Appellants' purported argument is totally contrary to all principles of contract law. It is unquestioned that the Appellee herein entered into a pension agreement wherein certain requirements were to be met in order to insure the payment of the pension itself. The pension, therefore, vests upon compliance of all the terms and conditions at the time in which the parties had agreed. Once a contractual obligation vests, no matter how innocuous it may appear, the same cannot be altered, amended or changed by unilateral action. There is no question that the Appellee in this case had certain vested interests in the plan itself. To at this time permit the requirements of Act 140 to be interposed retroactively would destroy all the principles heretofore established under contract law. This clearly is impermissible.

DISSENTING OPINION

ROBERTS, Chief Justice.

Once again I must dissent from yet another miscarriage of justice caused by some members of this Court who insist on mandating the payment of a full pension at public expense to an ex-public official convicted of political corruption and dishonesty in office, the fourth such mandate compelling my dissent in the past three years. See Commonwealth ex rel. Zimmerman v. Officers and Employees Retirement Board (Matter of Nacrelli Pension), 501 Pa. 293, 303, 461 A.2d 593, 598-600 (1983) (Roberts, C.J., joined by Larsen, J., dissenting); Bellomini & Cianfrani v. State Employees' Retirement Board, 498 Pa. 204, 213-18, 445 A.2d 737, 741-44 (1982) (Roberts, J., joined by Larsen, J., dissenting); Miller & Fineman v. State Employees' Retirement Board, 498 Pa. 103, 108-112, 445 A.2d 88, 90-92 (1981) (Roberts, J., joined by Larsen & Kauffman, JJ., in support of reversal).

Today's reward for dishonesty in public office goes to John Nacrelli, the former mayor of the City of Chester, who was convicted in federal court of obstructing law enforcement, 18 U.S.C. § 1511, and related charges of corruption. Nacrelli was sentenced to a term of...