State Emps. Ass'n of N.H. v. N.H. Div. of Pers.

• Decision Date: 18 February 2009
• Docket Number: No. 2008–257.,2008–257.
• Citation: 158 N.H. 338,965 A.2d 1116
• Court: New Hampshire Supreme Court
• Parties: STATE EMPLOYEES ASSOCIATION OF NEW HAMPSHIRE, SEIU, LOCAL 1984 and another. v. NEW HAMPSHIRE DIVISION OF PERSONNEL.

158 N.H. 338

965 A.2d 1116

STATE EMPLOYEES ASSOCIATION OF NEW HAMPSHIRE, SEIU, LOCAL 1984 and another.

v.NEW HAMPSHIRE DIVISION OF PERSONNEL.

No. 2008–257.

Supreme Court of New Hampshire.

Argued: Nov. 19, 2008.

Opinion Issued: Feb. 18, 2009.

Molan, Milner & Krupski, PLLC, of Concord (Glenn R. Milner on the brief and orally), for the petitioners.

Kelly A. Ayotte, attorney general (Michael K. Brown, senior assistant attorney general, on the memorandum of law and orally), for the respondent.

HICKS, J.

The petitioners, the State Employees Association of New Hampshire, SEIU, Local 1984 (SEA), William E. Evans and John R. Bush, appeal an order of the Superior Court (Conboy, J.) ruling that service credit purchased pursuant to RSA 100–A:4, VII (Supp.2006) (repealed 2007) does not qualify for determining eligibility for medical benefits coverage under RSA 21–I:30 (Supp.2008). We affirm.

The facts in this case are not in dispute. The petitioners are two state employees and the SEA, which describes itself as "a voluntary labor organization and the exclusive representative for more than 10,000 state employees who are eligible to receive certain retirement benefits from the [New Hampshire Retirement System (NHRS) ]." The two individual petitioners, Evans and Bush, are apparently group I members of NHRS. Group I members are "employees and teachers," RSA 100–A:1, X(a) (2001), terms further defined in RSA 100–A:1, V and VI (Supp.2008). The other classification of state employees referred to in this opinion is group II, whose members are "permanent policemen and permanent firemen," RSA 100–A:1, X(b) (2001), categories further defined and delineated in RSA 100–A:1, VII (Supp.2008), VII-a (Supp.2008), VII-b (2001) and VIII (2001). For reasons explained below, this decision concerns only the benefits available to some group I members.

The respondent, the New Hampshire Division of Personnel (division), is a division established within the department of administrative services, an agency of the state. RSA 21–I:1, :42 (Supp.2008). The division is charged with, among other things, "[o]verseeing administration of all employee benefit programs other than those related to the [NHRS]." RSA 21–I:42, VIII.

Two types of state employee benefits are relevant to the instant action: retirement allowances payable by NHRS pursuant to RSA chapter 100–A (2001 & Supp.2008), and "group hospitalization, hospital medical care, surgical care and other medical benefits," RSA 21–I:30, I, provided to state employees, state retirees and certain of their family members pursuant to RSA 21–I:26 to :36 (2000 & Supp.2008). Both statutory schemes use some form of the term "creditable service" to calculate various benefits or to define eligibility for them. For instance, RSA 100–A:5, I(b) (2001) provides that the service retirement allowance payable thereunder to group I employee or teacher members is equal to a certain percentage of "the member's average final compensation multiplied by the number of years of creditable service."

RSA 21–I:30, which directs the state to pay a premium "toward group hospitalization, hospital medical care, surgical care and other medical benefits plan or a self-funded alternative" for, inter alia, retired employees of the state, uses a similar phrase to define that term. RSA 21–I:30 provides, in part:

II. For the purposes of this section, "retired employee" means each group II state employee who retires. "Retired employee" also means each group I state employee who:

(a) Has at least 10 years of creditable service for the state if the employee's service began prior to July 1, 2003 or 20 years of creditable service if the employee's service began on or after July 1, 2003, and who also is at least 60 years of age at the time of retirement; or

(b) Has at least 30 years of creditable service for the state at the time of retirement, regardless of the employee's age;....

....

III. Any vested deferred state retiree may receive medical and surgical benefits under this section if the vested deferred state retiree is eligible. To be eligible, a vested deferred state retiree shall have at least 10 years of creditable service with the state if the employee's service began prior to July 1, 2003 or 20 years of creditable service if the employee's service began on or after July 1, 2003. In addition, if the vested deferred state retiree is a member of group I, such retiree shall be at least 60 years of age to be eligible. If the vested deferred state retiree is a member of group II, such retiree shall not be eligible until 20 years from the date of becoming a member of group II and shall be at least 45 years of age.

IV. Each state employee who has at least 10 years of creditable service for the state if the employee's service began prior to July 1, 2003 or 20 years of creditable service if the employee's service began on or after July 1, 2003, and who elects to take a reduced service retirement allowance shall be defined as a "retired employee" for the purposes of being eligible to receive medical and surgical benefits under this section when the state employee reaches age 60.

RSA 21–I:30.

RSA 100–A:1 defines certain "words and phrases as used in [RSA chapter 100–A], unless a different meaning is plainly required by the context." RSA 100–A:1 (2001). In general, "creditable service," RSA 100–A:1, XVI (2001), means "service rendered while a member of the retirement system," RSA 100–A:1, XIV (2001), plus service under a predecessor retirement system "for which credit was given under the terms of one or more of the predecessor systems, and as set forth under this chapter," RSA 100–A:1, XV (Supp.2008). See RSA 100–A:1, XVI (defining "[c]reditable service" to "mean prior service plus membership service, as provided in RSA 100–A:4"). The term "[s]ervice," in turn, is defined as "service as an employee, a teacher, a permanent policeman or a permanent fireman which is paid for by an employer." RSA 100–A:1, XIII (2001).

RSA chapter 100–A also offers limited opportunities for certain members to purchase credit for service rendered for public employers other than the State of New Hampshire, or for certain breaks in service. See, e.g., RSA 100–A:4, VI (Supp.2008) (allowing purchase of credit for active service in the United States armed services); :4, VIII (Supp.2008) (allowing purchase of service credit following break in service to join Peace Corps or AmeriCorps); RSA 100–A:4–b (Supp.2008) (allowing certain group I members to purchase credit for out-of-state service); RSA 100–A:4–c (Supp.2008) (allowing certain group II members to purchase credit for out-of-state service). In 2006, the legislature enacted RSA 100–A:4, VII, which, until its repeal in 2007, allowed certain members of the retirement system to purchase up to five years additional credit. Specifically, RSA 100–A:4, VII provided:

VII. Notwithstanding any provision of this section, a member in active service in the retirement system who currently has at least 5 years of creditable service in the state, shall be entitled to receive credit for not less than one month nor more than 5 years of nonqualified service credit within the meaning of section 415(n) of the United States Internal Revenue Code of 1986, as amended, upon payment by the member of the full actuarial cost of such credit and upon approval of the board, subject to the following:

(a) Credit shall not be granted until the active member has fully paid for the nonqualified service in a lump sum or by installment payments as permitted by the board. The actuarial cost shall be the product of the member's annual rate of compensation at the time of buy-in, multiplied by the sum of the member and employer contribution rates in effect with respect to the member at the time of buy-in, multiplied by the number of years of nonqualified service credit bought. The member's payment shall be credited to the member annuity savings fund.

(b) "Nonqualified service credit" means time that is not otherwise purchasable under this chapter.

(c) Requests concerning the purchase of nonqualified service credit pursuant to this paragraph shall be limited to 2 such requests per member per calendar year.

RSA 100–A:4, VII.

On October 20, 2006, the division issued Personnel Memorandum 07–01 "to clarify whether the purchase of nonqualified service credit [under RSA 100–A:4, VII] impacts eligibility for state-paid retiree health benefits pursuant to RSA 21–I:30." The memorandum notes that the question is only relevant to group I members because RSA 21–I:30 does not tie the eligibility of group II members to years of creditable service. With respect to group I members, the memorandum states:

The language in RSA [21–I:30] requires a retiring Group I employee, in addition to meeting a number of other specified conditions, to have a certain number of years of "creditable service for the state" to qualify for the health care benefit. Nonqualified, non-state service is not "creditable service for the state" and for this reason, the purchase of nonqualified service credit would not count toward determining the eligibility of a Group I member for the state-paid retiree health benefit.

The petitioners brought the instant action seeking, inter alia, a declaratory judgment "that creditable service purchase[d] by a state employee pursuant to [ RSA 100–A:4, VII] can be utilized for purposes of determining eligibility as a retired employee pursuant to RSA 21–I:30." (Emphasis omitted.) The division filed a motion to dismiss, which the trial court treated as a motion for summary judgment and granted. The court found the term "creditable service for the state" ambiguous and looked to legislative history to decipher its meaning. The court "acknowledge[d] that the language of RSA 100–A:4, VII is not a model of clarity," and found no indication in the legislative history of the lawmakers' intent in enacting it. From the intent expressed in the legislative history of RSA 21–I:30, however, the court...