Lugar v. New
| Decision Date | 24 March 1981 |
| Docket Number | No. 2-979A294,2-979A294 |
| Citation | 418 N.E.2d 248 |
| Parties | James R. LUGAR, for Himself and on Behalf of all Others Similarly Situated, as a Class of Retired Indiana State Police Employees, Appellants (Plaintiffs Below), v. Jack L. NEW, as Treasurer of the State of Indiana, Mary D. Aikins Currie, as Auditor of the State of Indiana, Robert Debard, Superintendent of The Indiana State Police, Sgt. David J. Crose, Trooper James A. Theobald and Thomas L. Kuespert, as members of the Indiana State Police, Pension Advisory Board, and Roy Stebbing, as Consultant to the Indiana State Police Pension Advisory Board, Theodore Sendak, Attorney General of Indiana, Appellees (Defendants Below). |
| Court | Indiana Appellate Court |
Donald L. Adams, James W. Commons, Adams & Commons, Indianapolis, for appellants.
Linley E. Pearson, Atty. Gen., David A. Arthur, Deputy Atty. Gen., Indianapolis, for appellees.
Robert W. McNevin, Indianapolis, for amicus curiae.
James R. Lugar, representing a class of plaintiff-pensioners (hereinafter plaintiffs) appeals the judgment of the trial court allowing the simultaneous use of two reduction factors, one based on age and one based on years of service with the Indiana State Police in computing pension benefits, claiming such determination is constitutionally and statutorily infirm; the trial court's decision that the refusal of the Pension Fund to recalculate pension amounts of retired state police officers each time the law is changed is not constitutionally infirm nor contrary to the statute; and the trial court's conclusion that the refusal of the Pension Fund to grant supplemental pension benefits to employees who work less than 20 years is not constitutionally infirm nor contrary to statute.
We affirm.
The facts most favorable to the verdict of the trial court are as follows:
James R. Lugar represents a class of plaintiffs all of whom left the service of the Indiana State Police Department (hereinafter ISP) with less than twenty years of service, and prior to reaching age 55.
They allege that they are being discriminated against, and that the Indiana State Police Pension Trust Agreement (hereinafter Pension Fund) is violating Indiana law, by applying two "reduction formulas" to determine the amount of plaintiffs' pensions. One formula, which plaintiffs do not object to if applied alone, reduces a retiring ISP employee's pension by a pro rata amount for each year under twenty which he has served with the ISP at his date of retirement. The amount arrived at by applying this first reduction factor is then reduced again, by multiplying it again, this time by a percentage figure (less than 100%) based on the number of years below age 55 which the employee is at the date of The second count of plaintiffs' complaint stems from the timing of the computation of a retiree's benefits. The basic pension of a retiree is calculated as of the date of his retirement, and no further calculation or recalculation subsequent to that date is made. Plaintiffs argue that when the legislature amends the method of pension calculation (as it has done several times since the original passage of the Act in 1937), such amendments should be made retroactively applicable to retirees drawing pensions based on earlier, superseded formulation methods. Plaintiffs allege that each time the original act has been amended to change the method of calculation it has resulted in a higher pension classification providing for a greater dollar value pension to be paid to those affected by the amendments, and that therefore they have been harmed by denial of similar increases in their pensions.
his retirement. It is the application of this second multiplication (hereinafter age reduction factor) "on top of the first" which plaintiffs object to. They allege that the use of both reduction factors is not authorized by the statute, and that the use of a factor based on age is an unconstitutionally discriminatory criterion.
Finally, plaintiffs allege that they are being unlawfully and unconstitutionally discriminated against by the failure of the Pension Fund to pay them the increased supplemental pension benefits extended to ISP employees who retire with more than twenty years of service and who are at least 55 years old when they retire.
Following stipulations of facts by the parties, and the presentation of additional evidence at a bench trial, the court found for the Pension Fund on all issues, and plaintiffs perfected this appeal.
The issues stated by the parties are:
1. Under the law and constitution, can the Pension Fund use a reduction factor based both on the age of a retiree if below 55 and a reduction factor based on the years of service he has rendered if below 20?
2. Under the law and the constitution, can the Pension Fund refuse to recalculate the pension benefits of all retired ISP employees each time the law is changed to increase the pension benefits of persons not yet retired?
3. Under the law and the constitution, can the legislature enact a statute which provides increased (supplemental) pension benefits for ISP employees who remain on the department for more than twenty years and exclude from such supplemental pension benefits employees who have retired with less than twenty years of service?
ISSUE ONE Under the law and constitution, can the Pension Fund use a reduction factor based both on the age of a retiree if below 55 and a reduction factor based on the years of service he has rendered if below 20?
PARTIES' CONTENTIONS Plaintiffs contend that the use of an age reduction factor in addition to the reduction factor based on years of service less than 20 violates their rights by exceeding the authority of the applicable Indiana statute, and violates their constitutional rights by depriving them of equal protection against discrimination based on age. Pension Fund and Amicus contend that the age reduction factor was properly enacted pursuant to vote by the Plan membership, and that it is not constitutionally infirm because it is supported by a rational basis.
CONCLUSION The use of both reduction factors does not abridge the statutory nor the constitutional rights of plaintiffs.
Essentially, we are being asked to interpret the statute providing for the ISP Pension Fund. The portions of that statute at issue here are the following:
(c) The term 'employee beneficiary' means any eligible employee who has completed an application to become an employee beneficiary and made, or caused to be made, the proper deductions from his wages as required by the pension trust agreement.
(h) The term 'pension trust' means the agreement between the department and the trustee under the terms of which an actuarially sound retirement pension plan is established for the exclusive benefit of the employee beneficiaries subject to the following limitations:
(1) The normal retirement age may be earlier but not later than age seventy (70);
(8) To be entitled to the full amount of his basic pension classification, an employee beneficiary shall have contributed at least twenty (20) years of service to the department prior to retirement, otherwise he shall receive a proportionate pension.
The statute establishes a voluntary program administered under the terms of "the agreement." The statute allows latitude in the age of retirement with the sole requirement that no person may serve beyond age 70. All portions of the agreement must, under the terms of the statute, be conducive to "an actuarially sound" system. Another express guideline in the statute manifests the legislature's intent that no person receive a full pension unless he has rendered 20 years service. Consequently, those who retire with less than 20 years service receive a proportionate pension.
In interpreting a statute which is clear and unambiguous on its face, we must give the terms of the statute their plain meaning. Peru Cemetery Co. v. Mount Hope Cemetery of Peru (1946), 224 Ind. 202, 65 N.E.2d 849; State v. Mears (1938), 213 Ind. 257, 12 N.E.2d 343; Huber v. Robinson (1864), 23 Ind. 137; Budnick v. Budnick (1980), Ind.App., 413 N.E.2d 1023. Additionally, "(i)n ascertaining legislative intent, the entire statute and the object sought to be obtained must be considered." State v. Gilbert (1966), 247 Ind. 544, 219 N.E.2d 892, 895.
The primary object of statutory construction is to ascertain and effectuate the intent of the Legislature as shown by the whole act, the law existing before its passage, the changes made and the apparent motive for making them. (citations omitted).
A construction of a statute by the Legislature, if clearly indicated by subsequent enactments, whether valid or not, will be given consideration by the courts.
State v. Davis (1952), 230 Ind. 479, 104 N.E.2d 382, 383. See also, State v. Bigbee (1973), 260 Ind. 90, 292 N.E.2d 609.
We review the trial court's determination of the statute with these precepts in mind.
Testimony elicited at trial established that when the age reduction factor was enacted in 1953, the membership voted to accept the implementation of that addition to the pension formulation method. The enactment, by the Pension Fund, of the reduction factor is within the ambit of the statute which both provides latitude in the age of retirement (up to age 70) and, in any event, demands an actuarially sound plan. It is within the first guideline and promotes the second. It is neither "absurd" nor "illogical," and is within the scope of apparent legislative intent. Skirvin v. Review Board (1976), 171 Ind.App. 139, 355 N.E.2d 425.
Also, the legislature has acquiesced in this manner of computing the pension amount. In State ex rel. O'Neal v. Cros (1978), Ind.App., 378 N.E.2d 10, the court held that the legislature's failure to abolish a qualification requirement of continuity of service constituted "at least...
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