Schmidt v. Wisconsin Employe Trust Funds Bd.
| Decision Date | 04 January 1990 |
| Docket Number | No. 88-0246,88-0246 |
| Citation | 449 N.W.2d 268,153 Wis.2d 35 |
| Parties | , 57 Ed. Law Rep. 1022 James SCHMIDT, Plaintiff-Appellant, v. WISCONSIN EMPLOYE TRUST FUNDS BOARD, Defendant-Respondent-Petitioner. |
| Court | Wisconsin Supreme Court |
Warren M. Schmidt, Asst. Atty. Gen., with whom on the briefs was Donald J. Hanaway, Atty. Gen., for defendant-respondent-petitioner.
Simon M. Karter, argued, and Wyngaard & Wilson, Madison, for plaintiff-appellant.
Richard V. Graylow and Lawton & Cates, S.C., Madison, amicus curiae for American Federation of State, County and Municipal Employees and Professional Fire Fighters of Wisconsin.
The issue before us is whether the court of appeals correctly interpreted and applied the language of sec. 42.245(1), Stats.1965 1 to hold that the appellant, James Schmidt, is entitled to three years of creditable teaching service. The three years represent one-half of the six years of prior teaching service accumulated. At issue are the rights retained under the State Teachers Retirement System Fund for the period 1957 to 1963 after Schmidt withdrew his member deposits and signed a waiver of rights to state deposits which accumulated during those six years. We hold that the plain language of sec. 42.245(1) clearly supports the conclusion that Schmidt is entitled to "creditable service" credit for three years of the six years of teaching service performed by him prior to September 11, 1965. Therefore, we affirm the decision of the court of appeals which reversed the order of the circuit court, and we remand the matter to the Employe Trust Funds Board for proceedings consistent with this opinion.
Schmidt began teaching at a Wisconsin public school in 1957. His salary was subject to mandatory employer and employee contributions to the state teacher's retirement fund (fund). In 1957, the fund provided a "separate group" annuity plan and a new "combined group" annuity plan. Sec. 42.241(1), Stats. Schmidt was automatically made a member of the combined group pursuant to sec. 42.241(2)(b). The combined group offered a choice of two annuity plans, fixed and variable. Schmidt belonged to the fixed annuity plan governed by sec. 42.242. He stopped teaching in June, 1963, and applied at that time for separation benefits from the fund. Those benefits consisted of his contributions to the fund ("member deposits"), plus interest. Section 42.242(5).
Because he was a member of the combined group fixed annuity plan, sec. 42.242(5), Stats., required that Schmidt sign a "full and complete discharge and release of all right, interest or claim ... to state deposit accumulations" in order to receive his member contribution plus interest as accrued between 1957 and 1963. On December 6, 1963, Schmidt signed such a release and received his full separation benefit. The full text of the waiver provision on the application stated:
I hereby apply for the accumulation from my members deposits made while a member of the combined group based on teaching service performed after June 30, 1957, and agree that payment of said accumulation shall constitute a full and complete discharge and release of all right, interest or claim on my part to state deposit accumulations based on teaching service performed after June 30, 1957.
Schmidt returned to teaching in the Wisconsin public school system in 1964. His salary was again subject to mandatory member and employer contributions to the fund, and, again, he was a member of the combined group. On September 11, 1965, the fund offered a third basic annuity plan, the "formula group" plan, created and governed by secs. 42.244 and 42.245, Stats. Members of the combined and separate groups could elect membership in the formula group. Schmidt chose to become a formula group member.
The retirement benefit available under the formula group plan is determined in part by multiplying the participant's number of years of "creditable service" by the sum of a percentage of the employee's "final average compensation" and another factor not relevant to this review. Section 42.245(2)(b)2 a, Stats. Thus, an employee's years of "creditable service" is an important factor in computing the size of the retirement benefit a participant will receive under the formula group plan.
Following the creation of the formula group annuity plan, the Department of Employe Trust Funds (department) began an audit of teacher accounts to establish which years of teaching constituted years of "creditable service" under the formula group plan. The department completed the audit in 1977. Subsequent to the audit, the annual statements of members' accounts were adjusted to reflect new computations of past service years to reflect the new "creditable service" standard. Schmidt's adjusted statement of account indicated six fewer years of service than had his pre-audit statements. The difference was attributed to his receipt of separation benefits for the years 1957 to 1963.
Procedurally, the department refused to give Schmidt "creditable service" credit for the six years in question, 1957 to 1963. Pursuant to sec. 40.03(1)(j), Stats.1981, he appealed to the Employe Trust Funds Board (the Board). At a meeting held April 8, 1986, the Board denied Schmidt the relief sought through his appeal based on language in sec. 42.243(5), although the Board used the language of sec. 42.242(5), the relevant combined group waiver statute. Subsequent to this first appeal, Schmidt hired an attorney. The attorney wrote the department requesting reconsideration of its decision and reinstatement of three of the six years pursuant to sec. 42.245(1)(c). The Board denied the request for reconsideration without comment on sec. 42.245(1)(c).
Schmidt then sought and was granted certiorari review in the circuit court of the Board's decision under sec. 40.08(12), Stats. His petition for certiorari alleged that the Board's refusal to grant him "creditable service" credit for three of the six years violated sec. 42.245(1)(c) and was arbitrary, oppressive and without foundation in law. In an order and memorandum decision dated November 6, 1987, the circuit court for Dane county, Judge William D. Byrne, affirmed the order of the Board. The circuit court's rationale held that when Schmidt signed the waiver of state deposit accumulations and received his separation benefit for teaching service from 1957 to 1963, under the plain language of sec. 42.245(1)(c), he surrendered the right to have any credit later reinstated for that period.
Schmidt then appealed to the court of appeals which reversed the circuit court. 2 The court of appeals held that under sec. 42.245(1)(c), Stats., Schmidt was entitled to three years of creditable service for the years 1957 to 1963. The court of appeals remanded the matter to the Board for purposes of granting the creditable service credits. The Board petitioned this court for review pursuant to sec. 808.10 (1979), and we granted the petition.
On certiorari, courts review an agency's decision by determining whether the agency kept within its jurisdiction, acted according to law, acted arbitrarily, and made, under the evidence presented, a reasonable order or determination upon the issue in question. St. ex rel. Brookside v. Jefferson Bd., 131 Wis.2d 101, 119-20, 388 N.W.2d 593 (1986).
The facts in this case are undisputed, and the issue before us requires us to interpret statutory language. The meaning of a statute is a question of law which we review without deference to the lower courts. In Interest of J.V.R., 127 Wis.2d 192, 199, 378 N.W.2d 266 (1985). On any question of statutory construction the initial inquiry is to the plain meaning of the statute. If the statute is unambiguous, resort to judicial rules of interpretation and construction is not permitted, and the words of the statute must be given their obvious and intended meaning. State Historical Society v. Maple Bluff, 112 Wis.2d 246, 252-53, 332 N.W.2d 792 (1983).
Although we review statutory construction de novo, great weight is ordinarily accorded to the reasonable construction and interpretation of a statute by the administrative agency charged with the responsibility of its application. Pigeon v. ILHR Department, 109 Wis.2d 519, 525, 326 N.W.2d 752 (1982). However, Schmidt argued to the court of appeals, and the record so reflects, that the Board did not expressly base its determination to deny Schmidt's appeal on the language of sec. 42.245(1), Stats. Instead the Board's decision expressly mentioned only sec. 42.243(5), and recited the express language of sec. 42.242(5). The Board argued that Schmidt did not raise a sec. 42.245(1) issue until reaching the circuit court. Rather than reverse and remand the case to the Board for its interpretation of sec. 42.245(1), the court of appeals took the case in the interest of judicial economy citing Wirth v. Ehly, 93 Wis.2d 433, 444, 287 N.W.2d 140, 146 (1980) as its authority. Schmidt, 148 Wis.2d at 849, 436 N.W.2d 918. We choose to do the same.
Section 42.245(1)(a), Stats.1965 in relevant part provides:
42.245 Benefits under the formula group. This section shall apply only to members of the formula group....
(1) CREDITABLE SERVICE (a) Creditable service shall be expressed in years and such fractions thereof as the board determines. The creditable service of each member any time prior to July 1, 1966, shall be the number of years of service as a teacher in Wisconsin teaching (including prior service) theretofore creditable to him pursuant to the applicable statutes and rules,....
We find this language to be clear on its face in that it provides the standard by which creditable service is to be determined. Creditable service for years prior to July 1, 1966, is determined by looking at statutes and rules applicable to the member at that time to determine whether the number of years of service as a teacher in Wisconsin teaching that have accrued are ...
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