Rosing v. Teachers' Ret. Sys.

• Decision Date: 12 November 2010
• Docket Number: SJC-10588.
• Citation: 936 N.E.2d 875,458 Mass. 283
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Andrew ROSING v. TEACHERS' RETIREMENT SYSTEM & another (and two companion cases ).

936 N.E.2d 875

458 Mass. 283

Andrew ROSING

v.

TEACHERS' RETIREMENT SYSTEM & another ¹ (and two companion cases ²).

SJC-10588.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Sept. 13, 2010.

Decided Nov. 12, 2010.

Joseph Sandulli, Boston, for Andrew Rosing & others.

Robert L. Quinan, Jr., Assistant Attorney General, for Contributory Retirement Appeal Board.

James H. Salvie, Special Assistant Attorney General (James C. O'Leary with him) for Teachers' Retirement System.

Grace H. Lee & Melinda E. Troy, for State Board of Retirement, amicus curiae, submitted a brief.

Present: IRELAND, SPINA, CORDY, BOTSFORD, & GANTS, JJ.

IRELAND, J.

We transferred these cases from the Appeals Court to determine whether, under G.L. c. 32, § 4(1)( p ), retiredteachers who are members of the Commonwealth's teachers' retirement system (members) are eligible to purchase creditable service toward retirement (credit or service credit) for their nonpublic school work with special needs students at institutions funded, in whole or part, by the Commonwealth, for which they have earned Social Security benefits. Although G.L. c. 32, § 4(1)( p ), allows a member to purchase credit for certain nonpublic school employment, if the member is "entitled to receive a retirement allowance, annuity or pension from any other source," the member is barred from such purchase (exclusion). In 2004, after almost thirty years of allowing members to purchase credit regardless of whether they were entitled to Social Security benefits, the teachers' retirement board (board) reversed its interpretation of this provision and denied each of the plaintiffs the right to purchase such credit. When the plaintiffs appealed, the board argued that each had earned Social Security benefits and thus their service fell under the statute's exclusionary language. The division of administrative law appeals (DALA), Contributory Retirement Appeal Board (CRAB), and a Superior Court judge, who consolidated the cases as to the Social Security issue, affirmed.³ See G.L. c. 32, § 16(4); G.L. c. 30A, § 14. However, just after the cases were heard in the Superior Court, CRAB determined, in another case, that the board's 2004 interpretation of the statute was erroneous. Sigman vs. Teachers' Retirement Sys., CRAB Docket No. CR-05-0534 (Dec. 23, 2008). The plaintiffs' position is now supported by CRAB.⁴ Because we conclude that Social Security benefits do not fall under the statute's exclusion, we reverse.

Statutory provisions and background. A detailed overview of the statutory provisions, administrative practice, and case law is in order.

1. Pursuant to G.L. c. 32, §§ 1-28A, public employees in the Commonwealth, including public school teachers, earn a retirement benefit in exchange for their services. Moreover, State or municipal employees who participate in the State retirement system do not pay into, and are not eligible to receive, Social Security retirement benefits for that service pursuant to an agreement executed between the Commonwealth and the Federal government in the 1950s. See 42 U.S.C. § 418 (2006).

Members are allowed, under certain conditions, to purchase credits for their employment in nonpublic schools under G.L. c. 32, § 4(1)( p ), inserted by St.1973, c. 760, which governs purchases of creditable service for work performed after 1973.⁵

General Laws c. 32, § 4(1)( p ), states, in pertinent part:

"Any member of a contributory retirement system who is engaged in a teaching position and holds a certificate issued by the department of education ... and who was previously engaged in teaching pupils in any non-public school in the commonwealth, if the tuition of all such pupils taught was financed in part or in full by the commonwealth may ... establish such service as creditable service ... with the maximum credit for service in such non-public schools not to exceed ten years; provided, that no credit shall be allowed and no payment shall be accepted for any service for which the member shall be entitled to receive a retirement allowance, annuity or pension from any other source " (emphasis added).

In enacting this provision, the Legislature overrode the veto of Governor Francis W. Sargent, who stated that he was concerned about the costs to taxpayers.⁶ It is important to note that § 4(1)( p ) was enacted the year following the enactment of a statute mandating that school districts provide a program of evaluation and placement of children with special needs.G.L. c. 71B, inserted by St.1972, c. 766, § 11. General Laws c. 71B, authorized school districts to enter into contracts with private schools, agencies, or institutions to provide an appropriate educational environment for such children where the school district itself could not. Commonwealth v. School Comm. of Springfield, 382 Mass. 665, 667-668, 417 N.E.2d 408 (1981) (holding that entering into contracts with nonpublic schools did not violate art. 46, § 2, as amended by art. 103, of the Amendments to the Massachusetts Constitution prohibiting aid to nonpublic schools).

In October, 1974, the board voted to request an opinion from the Attorney General concerning the exact issue we are asked to decide: whether Social Security benefits qualified as "a retirement allowance, annuity or pension from any other source" under the statute. The Attorney General responded that the provision appeared to be an effort on the part of the Legislature to "fill a gap in the pension laws for public service rendered but not otherwise credited [and was] aimed at precluding any unjust double credit." He stated that the provision was limited to service in nonpublic schools where tuition is financed in full or part by the Commonwealth. He stated that the terms "retirement allowance," "pension," and "annuity" are defined in G.L. c. 32, § 1, with reference to the State system, not the Federal system.⁷ He stated that Social Security was not just a retirement system and was not referred to explicitly in the statute. See note 11, infra. He reasoned that, because any employment in a nonpublicschool would be covered by the Social Security Act, to interpret the language of § 4(1) ( p ) to exclude service covered by Social Security benefits would render the statutory provision "a nullity and frustrate the legislative intent." Rep. A.G., Pub. Doc. No. 12, at 92, 93-94 (1975).

For almost thirty years, from 1975 until 2004, the board interpreted § 4(1)( p ) to permit eligible members to purchase credit without regard to their eligibility for Social Security benefits. CRAB also abided by this interpretation of the statute.

2. Almost twenty years after it enacted § 4(1)( p ), the Legislature added § 3(4A), to G.L. c. 32, inserted by St.1992, c. 333. See note 5, supra. Section 3(4A) also governs the purchase of credit for certain services in nonpublic schools before 1973, and has similar, but not identical, language to § 4(1)( p ). It states, in relevant part:

"Any member in service ... of the teachers' retirement system ... and who was previously engaged in teaching pupils or as an administrator in a nonpublic school prior to January [1, 1973,] may ... pay into the annuity savings fund ... with a maximum credit for service in nonpublic schools not to exceed ten years; provided that no credit shall be allowed and no payment shall be accepted for any service on account of which the member shall be entitled to receive a retirement allowance or other similar payment from the nonpublic school system, the federal government or any other source ..." (emphasis added).

G.L. c. 32, § 3(4A), as appearing in St.1994, c. 60, § 63.

It appears that this bill was advocated by members who were former nuns who had previously taught in private religious schools, and who were excluded from participating in the Social Security system prior to 1973. The limiting language "no credit shall be allowed and no payment shall be accepted for any service on account of which the member shall be entitled to receive a retirement allowance or other similar payment from the nonpublic school system, the federal government or any other source" was suggested by Governor William F. Weld, who was concerned that, without such language, the provisions could be interpreted to include not only the target group of teachers (i.e., those not covered by Social Security before 1973), but also any member whose nonpublic school did not have a pension program before 1973.⁸ The Legislature, however, did not amend § 4(1)( p ) to mirror § 3(4A).

3. In 1999 and 2000, the Appeals Court interpreted certainprovisions of §§ 3(4A) and 4(1)( p ). See Flaherty v. Contributory Retirement Appeal Bd., 48 Mass.App.Ct. 132, 717 N.E.2d 1041 (1999) ( Flaherty ); Dube v. Contributory Retirement Appeal Bd., 50 Mass.App.Ct. 21, 733 N.E.2d 1089 (2000) ( Dube ). In Flaherty, the plaintiff was a member who had earned service credit before and after 1973. Therefore, she applied for a total of fourteen years of credit, under both G.L. c. 32, § 3(4A), and § 4(1)( p ). Flaherty, supra at 133-134, 717 N.E.2d 1041. In affirming the decision of CRAB that the plaintiff was not entitled to a maximum of ten years under each statutory provision, the court stated that the two provisions were related and that the maximum creditable service a member could receive was ten years. Id. at 134-135, 717 N.E.2d 1041. The focus in Dube was on the exclusionary language in § 3(4A) that referencespayments by the Federal government, language that is absent from § 4(1)( p ). Dube, supra at 22, 733 N.E.2d 1089. The parties in Dube did not dispute whether the reference, in § 3(4A), to the Federal government as a source of "retirement allowance or other similar payment," covered Social Security payments. Id. at 22-23, 733 N.E.2d 1089. Instead, the plaintiff argued that the earnings through which he could receive Social Security benefits did not come solely from his employment in a nonpublic school and thus the exclusion in § 3(4A) did not apply to him. Id. at...