Lebron v. Pub. Sch. Employees' Ret. Bd.

• Decision Date: 30 October 2020
• Docket Number: No. 1265 C.D. 2019,1265 C.D. 2019
• Citation: 245 A.3d 300
• Parties: Jose E. LEBRON, Petitioner v. PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD, Respondent
• Court: Pennsylvania Commonwealth Court

245 A.3d 300

Jose E. LEBRON, Petitioner

v.PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD, Respondent

No. 1265 C.D. 2019

Commonwealth Court of Pennsylvania.

Argued September 15, 2020

Decided October 30, 2020

Reargument Denied December 21, 2020

Elliot A. Strokoff, Harrisburg, for Petitioner.

Kathrin V. Smith, Deputy Chief Counsel, Harrisburg, for Respondent.

BEFORE: HONORABLE P. KEVIN BROBSON, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE CHRISTINE FIZZANO CANNON, Judge

OPINION BY JUDGE COVEY

Jose E. Lebron (Dr. Lebron) petitions this Court for review of the Public School Employees' Retirement Board's (Board) August 16, 2019¹ order denying his request for post-retirement employment without annuity loss and an adjustment waiver, and affirming the Public School Employees' Retirement System's (PSERS) determination that Dr. Lebron shall repay retirement benefits.² Dr. Lebron presents four issues for this Court's review: (1) whether the Board's refusal to enact regulations concerning emergency/personnel shortage returns to employment pursuant to Section 8346(b) of the Public School Employees' Retirement Code (Retirement Code), 24 Pa.C.S. § 8346(b) (also known as Act 63 of 2004, or Act 2004-63), or to issue a written policy notifying PSERS retirees of the standards for same, deprived Dr. Lebron of his due process rights; (2) whether the Board erred by shifting the burden of establishing an emergency or personnel shortage to Dr. Lebron, when evidence concerning the same is in the possession of the School District of Philadelphia's (SDP) agent, ASPIRA, Inc. of Pennsylvania (ASPIRA), or PSERS; (3) whether the Board erred by not accepting ASPIRA's judgment that an emergency or shortage of appropriate personnel existed; and (4) whether the Board erred by determining that Dr. Lebron did not qualify for the hardship exception under Section 8303.1 of the Retirement Code, 24 Pa.C.S. § 8303.1. After review, we affirm in part, reverse in part, and vacate and remand in part.

Facts

The facts of this case are largely undisputed. Dr. Lebron began employment with the SDP as a teacher in 1970. He became a PSERS member in 1973. See Reproduced Record (R.R.) at 127a, 134a. The SDP employed Dr. Lebron as a principal from October 1983 until he retired, effective July 1, 2007.

Section 8346 of the Retirement Code states, in relevant part:

(a) General rule.-- If an annuitant returns to school service ..., any annuity payable to him under this part shall cease effective upon the date of his return to school service ....

(a.1) Return of benefits.-- In the event an annuitant whose annuity from the system ceases pursuant to this section receives any annuity payment ... on or after the date of his return to school service ..., the annuitant shall return to the [B]oard the amount so received from the system plus statutory interest. ...

....

(b) Return to school service during emergency.-- When, in the judgment of the employer, an emergency creates an increase in the work load such that there is serious impairment of service to the public or in the event of a shortage of appropriate subject certified teachers or other personnel, an annuitant or participant receiving distributions may be returned to school service for a period not to extend beyond the school year during which the emergency or shortage occurs, without loss of his annuity or distributions, provided that the annuitant meets the conditions set forth in subsection (b.2) [(relating to age and breaks in service)]. The annuitant or participant receiving distributions shall not be entitled to earn any credited service, and no contributions may be made to the fund or the trust by the annuitant or participant receiving distributions, the employer or the Commonwealth on account of such employment. Such service shall not be subject to member or participant contributions or be eligible for qualification as creditable school service or for participation in the plan, mandatory pickup participant contributions, voluntary contributions or employer defined contributions.

24 Pa.C.S. § 8346.³ Section 8102 of the Retirement Code defines "[s]chool year" as "[t]he 12-month period which the governmental entity uses for purposes of administration regardless of the actual time during which a member renders service." 24 Pa.C.S. § 8102. Section 211.3(g) of the Board's Regulations states: "For the purpose of the Retirement Code, the school year commences on July 1 and ends on June 30 of the following year." 22 Pa. Code § 211.3(g).

Thus, when a PSERS annuitant returns to work in the public schools pursuant to Section 8346(b) of the Retirement Code (i.e., for emergency or shortage of appropriate personnel during a school year), his/her PSERS annuity distributions continue uninterrupted. See R.R. at 181a, 206a. If an annuitant's return to service is not for reasons of emergency or shortage of appropriate personnel, and/or exceeds the subject school year, his/her PSERS annuity distributions must cease. See R.R. at 181a.

On July 19, 2004, PSERS published on its website an explanation of how "Act [63 of] 2004[ ] Affects Retirees Working After Retirement." R.R. at 421a-424a. Although Dr. Lebron does not recall if he specifically reviewed that publication, he admitted that, as a PSERS member and SDP principal, he was more or less familiar with the Retirement Code, and understood that there were consequences to working in public schools after retirement; in particular, that there were limited exceptions for returning to service, and such return could not exceed one school year. See R.R. at 128a-129a, 134a, 139a.

On June 28, 2007, Dr. Lebron attended a PSERS retirement exit counseling session, during which the retirement counselor reviewed, and Dr. Lebron acknowledged his understanding, that he could work in the public schools and still collect his retirement benefits only if there was an emergency or shortage of appropriate personnel and the period of time was limited to one school year, which was from July 1 through June 30 of the following year. See R.R. at 98a, 130a-132a, 206a; Dr. Lebron Br. App. A, Board Op., Findings of Fact (FOFs) 6-8. That same day, Dr. Lebron submitted his application to PSERS to retire effective July 1, 2007 (Retirement Application). In the Retirement Application, Dr. Lebron certified to PSERS his understanding that he was prohibited from working in a Pennsylvania public school while simultaneously collecting his monthly annuity, except pursuant to Act 63 of 2004. See R.R. at 132a-133a; FOF 10.

By September 6, 2007 Initial Benefit Letter, PSERS notified Dr. Lebron that his monthly gross benefit would be $6,925.08, and included the following notice:

EMPLOYMENT AFTER RETIREMENT

Passed on July 4, 2004, Act 2004-63 permits a PSERS retiree to be employed by a Pennsylvania public school in emergency, shortage of personnel, and extracurricular situations without loss of the retiree's monthly benefit.

The law defines an emergency/shortage of personnel situation as ‘[w]hen, in the judgment of the employer, an emergency creates an increase in the work load such that there is serious impairment of service to the public or in the event of a shortage of appropriate subject certified teachers or other personnel.’ ... Both emergency and shortage of personnel situations are restricted to a period not to extend beyond the school year during which the emergency or shortage occurs. ...

In all situations, a member may not contribute, earn any credited service, nor have the Commonwealth or employer contribute on account of such employment.

If a retiree returns to service that does not qualify under Act 2004-63, he or she must advise their [sic] employer of the prior service and should also send a letter to PSERS. This letter should include the retiree's return to service date so that the member's pension may be stopped before an overpayment occurs.

R.R. at 369a (emphasis in original); FOF 13. Dr. Lebron testified that he read and understood the September 6, 2007 Initial Benefit Letter and the notice. See R.R. at 135a-136a, 184a; FOF 14.

By April 15, 2009 Finalized Benefit Letter, PSERS informed Dr. Lebron that his finalized gross monthly benefit was $7,703.08, and included the following:

EMPLOYMENT AFTER RETIREMENT

If you return to work, it is your responsibility to notify the employer that you are a PSERS retiree.

Act 2004-63 permits a PSERS retiree to be employed by a Pennsylvania public school (including charter schools) in an emergency or shortage of personnel and extracurricular situations (certain conditions apply) without loss of the retiree's monthly benefit.

Employers must determine that an emergency or shortage exists and make a ‘good faith’ effort to hire non-retirees first. Please refer to your Retired Member Handbook [(Handbook)] or PSERS' [w]eb[site] for detailed information.

If a retiree's return to service does not qualify under Act 2004-63, the retiree should immediately send a letter to PSERS. This letter should include the retiree's return to service date so that the retiree's monthly benefit may be stopped before an overpayment occurs.

R.R. at 373a (emphasis in original); FOF 16. Dr. Lebron testified that he saw and understood the April 15, 2009 Finalized Benefit Letter and the post-retirement employment explanation. See R.R. at 136a-137a, 185a-186a; FOF 17.

Dr. Lebron also testified that he received and read PSERS' Handbook, which explained, in relevant part:

Returning to School Service After Retirement

Act 2004-63 expanded the period of time and conditions under which PSERS retirees may return to Pennsylvania public school employment without loss of their monthly retirement benefit. This law specifically defines the ability of a PSERS retiree to be employed by a Pennsylvania public school in an emergency, shortage of personnel, and extracurricular situations. Public schools include charter schools ....

If you retired under a regular retirement benefit, you may return to Pennsylvania public school employment under the following

...