COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss. DIVISION OF ADMINISTRATIVE LAW APPEALS


Appeal of:

Jeanne Penrod,

Petitioner

v. CR-06-1068

Waltham Retirement Board,
Teachers' Retirement System,

Respondents

Appearance for Petitioner:

Patrick N. Bryant, Esq.

Sandulli, Grace P.C.
1 State Street, Suite 200
Boston, Ma. 02109

Appearance for Respondent, Waltham Retirement Board:

Michael Sacco, Esq.

285 College Highway
P.O. Box 479
Southampton, Ma. 01073

Appearance for Respondent, Teachers' Retirement System:

None

Administrative Magistrate:

Joan Freiman Fink, Esq.

DECISION

Pursuant to G.L. c. 32 §16(4), the Petitioner, Jeanne Penrod, is appealing the November 13, 2006 decision of the Respondent, Waltham Retirement Board, concerning the calculation of her creditable service (Exhibit 1). The appeal was timely filed in accordance with the provisions of G.L. c. 32 §16(4).

A hearing pursuant to G.L. c. 7 §4H was held on January 16, 2008 at the offices of the Division of Administrative Law Appeals, 98 N. Washington Street, Boston, Ma. Various documents were entered into evidence at the hearing (Exhibits 1 - 39). The Petitioner's Pre-hearing Memorandum was marked as "A" for identification and the Respondent's Pre-hearing Memorandum was marked as "B" for identification. The parties agreed to stipulations of fact, waived their right to present testimony and then elected to present written closing arguments. The record in this case was left open until March 4, 2008 for the filing of written closing arguments. One cassette tape recording was made of the hearing.

FINDINGS OF FACT

Based on the testimony and evidence presented, I make the following findings of fact:

1. The Petitioner, Jeanne Penrod, d.o.b. 11/25/46, commenced employment with the City of Waltham Police Department as a School Traffic Supervisor, a part-time position, on December 1, 1971 (stipulation of the parties).

2. During her career as a School Traffic Supervisor, Ms. Penrod worked twenty hours per week (stipulation of the parties).

3. On May 26, 1983, the Waltham Retirement Board voted to allow School Traffic Supervisors to join the Waltham Retirement System effective September 1983. Prior to that time, School Traffic Supervisors were excluded from membership on the basis that they were part-time employees (Exhibit 33).

4. The Petitioner became a member of the Waltham Retirement System effective September 1, 1983 (Exhibit 4).

5. In 1986, the Waltham Retirement Board allowed the Petitioner to purchase creditable service between December 1, 1971 and August 31, 1983. By letter dated June 12, 1986, the Waltham Retirement Board notified the Petitioner that her purchase amounted to 11 years and 9 months of creditable service (Exhibit 5).

6. On January 3, 1989, the then Division of Public Employee Retirement Administration (PERA) approved the Waltham Retirement Board's creditable service regulation providing as follows: "Individuals employed as School Traffic Supervisors in the Police Department of the City of Waltham, shall be granted creditable service equal to twelve (12) months for each year of employment if and only if their employment equals that of the total number of hours prescribed by the City of Waltham for that job title or position. [If] such individual, if at any time, accepts employment in another department of any political subdivision of the Commonwealth of Massachusetts, [he/she] shall be granted a maximum of six (6) months for each year of employment as a School Traffic Supervisor" (Exhibit 23).

7. The Petitioner's last day of membership in the Waltham Retirement System was September 7, 1992 (Exhibit 8, stipulation of the parties).

8. On September 8, 1992, the Petitioner became employed as a teacher in the Waltham Public School System and became a member of the Teachers' Retirement System (Exhibit 9).

9. On March 24, 1993, the Waltham Retirement System transferred to the Teachers' Retirement System the amount of $5,610.81, representing the contributions (both withheld from her membership service and submitted as part of the 1986 purchase of past service rendered) and the interest that had accrued on said contributions (Exhibit 13).

10. On the transfer form, the Waltham Retirement Board noted that this amount represented service credit for the periods between September 1, 1983 and September 7, 1992 and between December 1, 1971 and August 31, 1983. The Board further noted that this service credit was only 50% because the Petitioner had taken a full-time position when she joined the Teachers' Retirement System. As such, the Board transferred creditable service of 10 years, 4 months, and 18 days (Exhibit 13).

11. By letter dated March 23, 2001, the then Teachers' Retirement Board responded to a request by the Petitioner to provide a breakdown of her creditable service with the Teachers' Retirement System (Exhibit 19).

12. In this letter of March 23, 2001, the Teachers' Retirement Board noted that Ms. Penrod had 10.3933 years of creditable service with the Waltham Retirement System representing the periods between December 1, 1971 and August 31, 1983 and between September 1, 1983 and September 7, 1992. Based on these calculations which the Teachers' Retirement Board noted would not be verified until Ms. Penrod's actual time of retirement, the Board calculated that the Petitioner had accrued an estimated 20.1933 years of creditable service as of June 30, 2001 (Exhibit 19).

13. By letter dated August 29, 2006, the Petitioner requested a hearing before the Waltham Retirement Board to discuss the proration of her service with the Waltham Retirement System when the service was transferred to the Teachers' Retirement System (Exhibit 21).

14. At its September 21, 2006 meeting, the Waltham Retirement Board considered the Petitioner's request and voted to affirm the reduced creditable service, citing its 1989 regulation regarding creditable service (Exhibit 22).

15. On November 13, 2006, the Waltham Retirement Board denied the Petitioner's request for a hearing and noted that she could accept said letter as a denial in order to file an appeal with the Contributory Retirement Appeal Board (Exhibit 1).

16. By letter dated November 21, 2006, the Petitioner filed an appeal with the Contributory Retirement Appeal Board of the decision of the Waltham Retirement Board not to reconsider its calculation of creditable service. By letter of December 4, 2006, the Petitioner amended her appeal to include the Teachers' Retirement System (Exhibits 2&3).

CONCLUSION

The issue to be decided in this case is whether the Waltham Retirement Board properly prorated the Petitioner's creditable service at the time her service was transferred to the Teachers' Retirement System in 1993.

Ms. Penrod was employed on a part-time basis, twenty-hours per week, for the City of Waltham Police Department as a School Traffic Supervisor commencing on December 1, 1971. At that time, she was denied membership in the Waltham Retirement System as the System did not permit seasonal and part-time employees to become members. In 1983, the Waltham Retirement Board voted to allow School Traffic Supervisors membership in the system and on September 1, 1983, Ms. Penrod became a member of the Waltham Retirement System. She remained a member of the Waltham Retirement System through September 7, 1992. In 1986, she purchased her pre-membership service for the period of December 1, 1971 through August 31, 1983. At that time, the Waltham Retirement Board confirmed that she was entitled to 11 years and 9 months of creditable service or full-time creditable service for that period. As of January 1, 1989, the Petitioner had earned approximately 17 years and 1 month of creditable service.

On January 3, 1989, the then Division of Public Employee Retirement Administration (PERA) approved a regulation promulgated by the Waltham Retirement Board's providing as follows:

"Individuals employed as School Traffic Supervisors in the Police Department of the City of Waltham, shall be granted creditable service equal to twelve (12) months for each year of employment if and only if their employment equals that of the total number of hours prescribed by the City of Waltham for that job title or position. [If] such individual, if at any time, accepts employment in another department of any political subdivision of the Commonwealth of Massachusetts, [he/she] shall be granted a maximum of six (6) months for each year of employment as a School Traffic Supervisor."

On September 8, 1992, the Petitioner became a teacher and a member of the Teachers' Retirement System. The Petitioner's annuity was then transferred to the Teachers' Retirement System. The Waltham Retirement Board accepted liability for her service as a School Traffic Supervisor on a pro-rated basis claiming that since she had worked on a half-time basis for the entire period of her employment, she was only entitled to prorated creditable service.

After reviewing the evidence presented in this hearing, I conclude that the Waltham Retirement Board erred when it prorated the Petitioner's creditable service prior to January 3, 1989 as this decision is contrary to the holding in the case of Nancy Madden v. CRAB & another, 431 Mass. 697, 52 Mass. App. Ct. 69 (2000). In Madden, supra, the Supreme Judicial Court held that a Retirement Board could not pro-rate a member's service if at the time the service was actually rendered, the Board had not promulgated a regulation providing for such pro-ration.

Prior to 1989, the Waltham Retirement Board had no regulation providing for proration of service for members who worked less than thirty-five hours a week or dictating the consequences if such members subsequently accepted positions where they worked thirty-five hours or more per week. Prior to 1989, the Waltham Retirement Board considered the Petitioner to have 11 years and 9 months of creditable service for her 1971-1983 employment plus an additional 5 years and 4 months of creditable service for her employment between September 1, 1983 and January 3, 1989.

The Waltham Retirement Board argues that at the time that the Petitioner became a member of the Waltham Retirement System in 1983, the Board had a long-standing practice of prorating all creditable service for employees who had rendered service both in a full-time and part-time capacity. This practice was subsequently codified in its January 3, 1989 regulation relating to pro-ration of service. Accordingly, the Waltham Retirement Board asserts that the proration of the Petitioner's service from 1971 through September 8, 1992, when she became a member of the Teachers' Retirement System should be upheld.

Notwithstanding the argument raised by the Waltham Retirement Board, in the Madden case, supra, the Court struck down a retirement system's reduction of a member's creditable service under similar circumstances. Ms. Madden had joined the Teachers' Retirement System in 1973, serving in a part-time position. At that time, although the Teachers' Retirement System had a long-standing practice of prorating service for members who switched from part-time to full-time employment, it had no regulation in effect providing for such proration. A regulation providing for the proration of part-time service was subsequently promulgated by the Teachers' Retirement System. 807 CMR 3.04 (2) which became effective November 9, 1990 provided that for services rendered by a teacher after November 9, 1990, the teacher be credited with pro-rated years of service for part-time service. In 1994, Ms. Madden increased to full-time employment and at that time, the Teachers' Retirement System applied the 1990 regulation and prorated her service earned during her part-time employment. In reversing the Teachers' Retirement System, the Court in Madden, supra, rejected the System's reliance on its past practice and held that a retirement system many not retroactively apply a regulation that reduces service rendered prior to the regulation's implementation. The Court further noted that retirement systems may apply a regulation prospectively to service rendered thereafter.

For the foregoing reasons, the Waltham Retirement Board is hereby ordered to accept liability for the Petitioner's full-time creditable service for her part-time employment as a School Traffic Supervisor from December 1, 1971 through January 3, 1989, the effective date of its regulation relating to proration of part-time service. The Waltham Retirement Board is further ordered to accept liability for the Petitioner's part-time service from January 3, 1989 through September 7, 1992, her last date of membership in the Waltham Retirement System on a prorated basis in accordance with its 1989 regulation. The Teachers' Retirement Board is ordered to make the appropriate adjustment to the Petitioner's creditable service consistent with this decision.

SO ORDERED.

DIVISION OF ADMINISTRATIVE LAW APPEALS

Joan Freiman Fink
Administrative Magistrate

Dated: 4/4/08


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