Independent School Dist. of Cedar Rapids v. Iowa Employment Sec. Commission
| Decision Date | 17 December 1946 |
| Docket Number | 46915. |
| Citation | 25 N.W.2d 491,237 Iowa 1301 |
| Parties | INDEPENDENT SCHOOL DIST. OF CEDAR RAPIDS et al. v. IOWA EMPLOYMENT SECURITY COMMISSION et al. (BOARD OF WATER WORKS TRUSTEES OF CITY OF DES MOINES et al., Interveners). |
| Court | Iowa Supreme Court |
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John M. Rankin, Atty. Gen., R. G. Yoder, First Asst. Atty. Gen and Oscar Straus, Asst. Atty. Gen., for John Grimes Treasurer of State of Iowa, and Fred Porter, Comptroller of State of Iowa, appellants.
Evans, Riley, English & Jones, of Des Moines, for Fred E. Moore, intervenor-appellant.
Herrick, Sloan & Langdon, of Des Moines, for Independent School Dist. of Cedar Rapids, Linn County; Independent School Dist. of Sioux City, Woodbury County; Independent School Dist. of Lyons, Clinton County; Independent School Dist. of Des Moines, Polk County; Independent School Dist. of Clinton, Clinton County; Independent School Dist. of Dubuque, Dubuque County; and Kenneth F. Stratton, appellees.
F. D. Riley, of Des Moines, for Iowa Employment Security Commission, appellees.
A. A. McLaughlin and Gibson, Stewart & Garrett, all of Des Moines, for Board of Water Works Trustees of City of Des Moines, and Edna L. Harnagel, intervenors-appellees.
Chapter 91, Acts 51st G.A., now chapter 97, Code 1946, which became law July 4, 1945, established an Old-Age and Survivors' Insurance System for the public employees of the state, its political subdivisions and instrumentalities, including school districts. The law is patterned after Title II of the federal Social Security Act (42 U.S.C.A. § 401 et seq.). It provides for a fund created in the first instance by a tax upon each employer and employee equal to 1 per cent of wages paid through 1948 and 2 per cent of such wages thereafter. Code, § 97.8. The tax upon employees is collected by deductions from wages (section 97.9) which are matched by the employer (section 97.12). The political subdivision is directed to levy a tax sufficient to meet its obligations under the act (section 97.6).
The system is administered by the Iowa employment security commission, herein called the commission (section 97.3). The treasurer of state is the custodian and trustee of the fund, administers it as directed by the commission, and makes disbursements upon warrants drawn by the comptroller as ordered by the commission (section 97.5).
Chapter 387, Acts 37th G.A., enacted in 1917, authorized any independent school district having a population of 75,000 or more to establish a pension and annuity retirement system for its teachers. This act was later amended. In its present form as found in sections 294.8-294.10, Code 1946, it provides that any independent school district located in whole or in part within a city having a population of 25,100 or more may establish a pension and annuity retirement system for its teachers provided such system, in cities having a population less than 75,000, be ratified by vote of the people. The fund for such system is created: (1) By an assessment of the teachers not exceeding 1 per cent of their salaries or such greater percentage as the board of directors may authorize and a majority of the teachers agree to pay; (2) by a tax not exceeding the amount assessed against the teachers; and (3) from the interest on any fund created by gift or otherwise. The directors of the school district are the trustees, formulate the plan of retirement and make rules and regulations for the operation of the system.
At the effective date of chapter 97, which provides for the new state system, each plaintiff school district had in effect its own pension plan under the authority of what is now sections 294.8 et seq. The Des Moines system was first established in 1918 and now has over 900 members. Various provisions of the Des Moines plan together with the law under which it was established are explained in Talbott v. Independent School Dist. of Des Moines, 230 Iowa 949, 299 N.W. 556, 137 A.L.R. 234.
The principal question presented is whether plaintiff districts may, as they desire, maintain and support the new state system and also continue to support their own previously established systems. Defendant employment security commission (which, as stated, administers the state system) has ruled they may do so. The attorney general of the state, to the contrary, ruled that as to any particular group of teachers only one retirement system maintained in part by taxation may be in operation at any particular time. Upon the strength of the attorney general's opinion, defendant comptroller refused to approve budget estimates of some of plaintiff districts which contained estimated levies for support of both systems. The Des Moines district certified that for 1946 $127,000 was required to be levied for support of its own plan and $28,000 for support of the state system.
The controversy, therefore, is between plaintiff districts, a teacher in the Des Moines district and defendant (employment security) commission, on the one hand, and defendants treasurer and comptroller, on the other. Fred E. Moore, a Des Moines taxpayer, has intervened on the side of the treasurer and comptroller. The trial court held in favor of plaintiffs and the commission, contrary to the ruling of the attorney general. Defendants treasurer and comptroller and intervenor Moore have appealed.
A related question is presented by the petition of intervention of the board of water works trustees of Des Moines and one of its employees, Edna Harnagel, and the answers thereto. Chapter 412, Code 1946, enacted in 1945 by the 51st G. A., authorizes the establishment, in cities having a population of 5000 or more, of a pension and annuity retirement system for employees of municipally owned and operated public utilities. Chapter 412 is similar to sections 294.8 et seq. heretofore summarized, under which the pension plans of plaintiff districts were established, except: The amount of assessments upon wages for support of the plan is not limited by chapter 412, the employer's contribution is from moneys derived from operation of the utility rather than from taxation, the city council or board authorized by law to manage the utility formulates the system, makes rules and regulations therefor and is authorized to contract with a legal reserve insurance company for the payment of the pensions and annuities.
Pursuant to chapter 412 the board of water works trustees of Des Moines adopted its pension plan on December 10, 1945. It has about 150 employees. It desires to continue its own plan and also to participate in the state system created in 1945 by chapter 97. It asked in its petition of intervention, in which an employee joined, for a declaratory judgment that it has such right. The trial court so adjudged and defendants treasurer and comptroller and the intervening taxpayer have also appealed from this adjudication. Defendant commission has adopted the argument of the water works board as well as that of plaintiffs.
The vital provisions of chapter 97 () here involved are:
'97.45 Definitions. When used in this chapter: * * *
'2. The term 'employment' means any service performed after December 31, 1945, under an employer employee relationship, under the provisions of this chapter, except:
'a. Any service performed in the employ of any employer which has of the effective date of this chapter its own retirement plan.
'b. Any service performed in any calendar quarter in which the remuneration for such services does not exceed the sum of fifty dollars, unless * * *.
'3. a. The term 'employer' means the state of Iowa, the counties, municipalities and public school districts therein and all of the political subdivisions thereof and all of their departments and instrumentalities, all hereinafter called political subdivisions excepting only those whose employees are now covered by a retirement plan in which such political subdivision participates in financing. Provided, that such excepted political subdivision may by election come under the provisions of this chapter in accordance with the regulations prescribed by the commission. * * *
'13. Exclusion from benefits: Members of the state legislature, officials * * * elected by the vote of the people; employees who are members of any other retirement system in the state which is maintained in whole or in part by public contributions unless such political subdivision or its instrumentalities as a whole elects to adopt this system * * *.
I. The provisions of special importance here are those we have italicized. Appellees concede a political subdivision 'whose employees are now covered by a retirement plan' to which the subdivision contributes does not automatically participate in the state system. Appellants in turn concede that such subdivision may 'by election' adopt the state system. They contend, however, as the attorney general ruled, such subdivision cannot adopt the state system without rejecting its own retirement plan.
Like the trial court, we cannot agree with appellants' contention. It is a complete answer that nothing in the statutes forbids a political subdivision from continuing its own retirement plan in order to adopt the state system. We have no power to write such a provision into the law. Iowa Public Service Co v. Rhode, 230 Iowa 751, 754, 298 N.W. 794, 796; Eysink v. Board of Sup'rs of Jasper County,...
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