Pub. Sch. Ret. Sys. of St. Louis v. State
| Decision Date | 11 August 2020 |
| Docket Number | No. ED 108450,ED 108450 |
| Parties | PUBLIC SCHOOL RETIREMENT SYSTEM OF the CITY OF ST. LOUIS, et al., Appellants, v. STATE of Missouri, et al., Respondents. |
| Court | Missouri Court of Appeals |
For Appellants: Matthew J. Gierse, James P. Faul, 4399 Laclede Ave., St. Louis, MO 63108.
For Respondent State of Missouri: Robert J. Isaacson, P.O. Box 861, St. Louis, MO 63188.
For Respondents St. Louis Public Schools, Board of Education of the City of St. Louis, and Special Administrative Board of the Transitional School District: Grant D. Wiens, 555 Maryville University Dr., Ste. 240, St. Louis, MO 63131.
For Respondents Confluence Academy and Confluence Academy d/b/a Grant Center Arts Academy: Margaret A. Hesse, James R. Layton, Veronica E. Potter, 34 N. Meramec Ave., Ste. 600, St. Louis, MO 63105.
For Respondents Missouri State Employee's Retirement System, Public School Retirement System of Missouri and Public Education, Missouri Department of Transportation and Highway Patrol Retirement: Lawrence C. Friedman, Jeffrey R. Fink, One U.S. Bank Plaza, St. Louis, MO 63101.
For Respondents Missouri County Employees’ Retirement Fund: Lewis R. Mills, Jr., Meredith P. Jacobowitz, 211 N. Broadway, Ste. 3600, St. Louis, MO 63102.
This case arises out of recent legislative changes to statutes pertaining to public employee retirement. Appellants Public School Retirement System of the City of St. Louis, Board of Trustees of the Public School Retirement System of the City of St. Louis, Joseph W.B. Clark, Jr. and William Andrew Clark1 (collectively, "the Retirement System") appeal from the circuit court's Order and Judgment in favor of Defendants Special Administrative Board of the Transitional School District of the City of St. Louis and St. Louis Public Schools (collectively, "School District"), Confluence Academy, Inc. ("Confluence"), and the State of Missouri ("the State"). The Retirement System asserts that the circuit court erred in concluding (1) that the legislative changes to retirement eligibility requirements do not constitute a benefit increase, supplement or enhancement under Section 105.684,2 (2) that the Retirement System is not an "other political subdivision" entitled to the protections of Missouri's Hancock Amendment, and (3) that while Section 169.597 provides the Retirement System with standing to bring a declaratory judgment action relating to the Hancock Amendment, it does not grant the Retirement System the substantive protections of the Hancock Amendment. We affirm.
In May 2017, the Missouri Legislature passed Truly Agreed to and Finally Passed Senate Bill 62 ("TAFP SB 62"), which was signed into law in July 2017. TAFP SB 62 repealed fourteen sections and enacted fifteen new sections relating to public employee retirement. Among other things, TAFP SB 62 modified the retirement eligibility requirements for public school teachers and the employer contribution formula of the Public School Retirement System of the City of St. Louis. Prior to the changes contained in TAFP SB 62, eligibility for retirement benefits was governed by what was known as "the Rule of 85," which meant members of the Retirement System were eligible for normal pension benefits when their ages and years of credited service totaled a sum of not less than 85. TAFP SB 62 changed that eligibility threshold from 85 to 80 ("the Rule of 80"). Section 169.460.1, RSMo Supp. 2018.
The Public School Retirement System of the City of St. Louis is the statutory retirement system for certain employees of the St. Louis Public Schools and of charter schools operating in the City of St. Louis. Following the passage of TAFP SB 62, the Retirement System filed an action in the Circuit Court of the City of St. Louis seeking a declaratory judgment and preliminary and permanent injunctions. Named as defendants in the petition were Defendant Confluence, which operates a charter school system, and Defendant School District, both of which submit contributions to the Retirement System on behalf of participant employees. The State was also named as a defendant as it, through various officers, enacted and intends to enforce the provisions of the law at issue.
Count I of the Retirement System's Second Amended Petition sought a declaration that TAFP SB 62's change from the Rule of 85 to the Rule of 80 cannot become effective until the Retirement System's actuary makes certain findings pursuant to Sections 105.660 through 105.685. Counts II and III alleged that TAFP SB 62 violates the Hancock Amendment by creating an unfunded mandate and by reducing the state-financed proportion of the costs of an existing activity or service. Finally, Count IV alleged that TAFP SB 62 violates the "original purpose" clause of Article III, Section 21, of the Missouri Constitution.
The State moved for judgment on the pleadings as to all four counts of the Second Amended Petition. Defendants Confluence and School District joined as to Counts II through IV. The Retirement System also filed a motion for summary judgment. The circuit court granted the Defendants’ motions for judgment on the pleadings and denied the Retirement System's motion for summary judgment. The Retirement System subsequently filed this appeal with respect to Counts I through III, but does not appeal the circuit court's judgment as to Count IV.
All three of the Retirement System's points relied on challenge the circuit court's Order and Judgment, which granted the motions for judgment on the pleadings filed by Defendants. "Judgment on the pleadings addresses a question of law, which we review de novo." City of Dardenne Prairie v. Adams Concrete and Masonry, LLC , 529 S.W.3d 12, 17 (Mo. App. E.D. 2017). "For the purposes of the motion, the moving party admits the truth of all well-pleaded facts in the opposing party's pleadings." Id. Similar to a motion to dismiss, a motion for judgment on the pleadings will only be granted when, "assuming the facts pleaded by the opposite party to be true, these facts nevertheless are insufficient to warrant relief as a matter of law." Id. This Court will affirm a judgment on the pleadings "only where under the conceded facts, a judgment different from that pronounced could not be rendered notwithstanding any evidence which might be produced." Id. (quoting Armstrong v. Cape Girardeau Physician Assocs. , 49 S.W.3d 821, 824 (Mo. App. E.D. 2001) ).
In its first point, the Retirement System argues that the circuit court erred in concluding that Section 105.684, which prohibits certain benefit increases unless specific conditions are met, is inapplicable to TAFP SB 62 and its change from the Rule of 85 to the Rule of 80. The circuit court reasoned that Section 105.684 does not apply because the change did not constitute a benefit increase, supplement or enhancement.
"The primary rule of statutory construction is to ascertain the intent of the legislature from the language used, to give effect to the intent if possible, and to consider the words in their plain and ordinary meaning." Donaldson v. Crawford , 230 S.W.3d 340, 342 (Mo. banc 2007). "The plain meaning of words, as found in the dictionary, will be used unless the legislature provides a different definition." Lincoln Indus., Inc. v. Dir. of Revenue , 51 S.W.3d 462, 465 (Mo. banc 2001).
Section 105.684.1 provides, in relevant part:
Notwithstanding any law to the contrary, no plan shall adopt or implement any additional benefit increase, supplement, enhancement, lump sum benefit payments to participants, or cost-of-living adjustment beyond current plan provisions in effect prior to August 28, 2007, which would, in aggregate with any other proposed plan provisions, increase the plan's actuarial accrued liability when valued by an actuary using the same methods and assumptions as used in the most recent periodic valuation, unless the plan's actuary determines that the funded ratio of the most recent periodic actuarial valuation and prior to such adoption or implementation is at least eighty percent and will not be less than seventy-five percent after such adoption or implementation.
The Retirement System contends that the change to the Rule of 80 is an additional "benefit increase, supplement, [or] enhancement" under Section 105.684, and therefore, it cannot take effect until its actuary makes certain findings. Chapter 105 does not define "benefit increase, supplement, [or] enhancement." Accordingly, this Court will apply the ordinary meaning as found in the dictionary. See Lincoln Indus., Inc. , 51 S.W.3d at 465.
The term "benefit" is defined as "a cash payment or service provided for under an annuity, pension plan, or insurance policy." WEBSTER'S THIRD NEW INT'L DICT. 204 (3d ed. 2002). Here, the change to the Rule of 80 does not increase, supplement or enhance the amount of the "cash payment or service" that eligible retirees receive under the plan, but instead only changes the eligibility criteria for those benefits. Therefore, Section 105.684 is inapplicable to TAFP SB 62's change to the Rule of 80.
The Retirement System contends that the change to the Rule of 80 has resulted in some members receiving an increase in their benefit amounts. Specifically, the Retirement System points to certain members who previously received early pension benefits under the Rule of 85 but who are now eligible for a normal pension under the Rule of 80. Under the Rule of 85, those members (whose ages and years of credited service totaled between 80 and 84) received an early pension with the benefits reduced by an early retirement penalty. See Section 169.460.3. Now, under the Rule of 80, those members receive a normal pension, which the Retirement System characterizes as a...
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