COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss. Division of Administrative Law Appeals

Judith Rowell, Arlene Sampson,
Gerald Kazanjian, Linda King,
Carol Salvi, Sarah Currie, and
Patricia Fountain,

Petitioners

v. Docket Nos. CR-06-420; CR-06-444;
CR-06-456; CR-06-474; CR-06-491;
CR-06-492; and, CR-06-513

Teachers' Retirement System,

Respondent

Appearance for all Petitioner:

Haidee Morris, Esq.

American Federation of Teachers
Massachusetts
38 Chauncy Street, Suite 402
Boston, MA 02111

Appearance for Respondent:

James O'Leary, Esq.

Teachers' Retirement System
One Charles Park
Cambridge, MA 02142

Administrative Magistrate:

Sarah H. Luick, Esq.


DECISION


Pursuant to G.L. c. 32, § 16(4), the Petitioners, Judith Rowell, Arlene Sampson, Gerald Kazanjian, Linda King, Carol Salvi, Sarah Currie, and Patricia Fountain, are appealing their individual decisions issued by the Respondent, Teachers' Retirement Board, denying their requests to have included in the calculation of their retirement allowances, their collective bargaining agreement (CBA), step 14 salary increase effective for each of these Holliston Public School teachers during the school year preceding their effective dates of retirement. (Exs. G, 1, 6, 11, 15, 19, 23 & 27) Their appeals were timely filed. (Exs. G, 2, 7, 16, 20, 24 & 28) The cases were consolidated for hearing due to this common issue. (Ex. A) The Petitioners, all represented by the same counsel, requested that they be permitted to waive their right to a hearing pursuant to 801 CMR 1.01(10)(c), and the Respondent agreed. (Ex. C) The parties filed a set of agreed-upon exhibits that were received in evidence. (Exs. 1 - 34) The parties also filed a set of stipulations of fact (Ex. G), and filed briefs (Exs. D & E), and a copy of an amendment to the Public Employee Retirement Administration Commission (PERAC) regulation 840 CMR 15.03 regarding salary enhancement and salary augmentation plans. Included was information regarding the effective date of the amendment. I have also obtained, and received in evidence PERAC Memorandum #12/2006 dated January 31, 2006 and PERAC Memorandum #25/2006 dated April 19, 2006. These memoranda, issued to all the retirement boards, both addressed this amendment. I also included a May 2006 Memorandum of PERAC's General Counsel addressing the impact of the amendment. All these additional PERAC documents were downloaded from the PERAC website ( www.mass.gov/PERAC). (Ex. F) The record closed May 9, 2008.
The exhibits received in evidence are listed in Attachment 1.

FINDINGS OF FACT

1. Arlene Sampson, Judith Rowell, Gerald Kazanjian, Linda King, Carol Salvi, Sarah Currie, and Patricia Fountain are now retired members of the Teachers' Retirement System who had teaching careers with the Holliston Public Schools. They all retired effective June 30, 2006. (Exs. G, 5, 10, 14, 18, 22, 26 & 30)

2. Each of these teachers was subject to the same CBA regarding the terms and conditions of their employment, including their salaries. (Exs. G, 33 & 34)

3. By the last year each of these teachers worked, they had reached the top step on the CBA salary schedule. (Exs. G, 33 & 34)

4. The CBA in effect during the last years of these teachers' employment with the Holliston Public Schools covered the time period of September 1, 2005 through August 31, 2008. Paragraph A of Article III of the CBA provided for salary schedules to determine teacher salaries during each of the school years addressed by the CBA. Article IV (Salary Policy), subparagraph A.2 titled "Granting or Withholding Increments" made clear that the salary increments of the salary schedule "are granted on merit recommendation from the administration and may be withheld if teacher performance and/or professional achievement and attitudes do not, in the opinion of the administration and/or the Committee, warrant the normal salary increment." Subparagraph A.3 of Article IV, titled "Merit Increments," allowed for a salary increase "beyond the regular salary increment … indefinitely or … for one year only." Subparagraph A.4, titled "Annual Increments," called for these increments to "be determined in June at the same time as elections for the following school year." (Ex. 34)

5. Subparagraph B.3 of Article IV, titled "Placement on Schedules," provided:
Employees that wish to be considered for placement on the fourteenth (14th) step are eligible only under the following conditions:

• Employees must have accumulated at least twenty (20)
years of service … at the conclusion of their final year
of service ….

• Employees must have accumulated at least ninety (90)
sick days as of the date of notification to the Superintendent.

On or before the first of March in the year prior to their final full year of service, employees must provide the Superintendent notice by submitting a written letter of resignation effective either the last day of their last full year of service or the ninety first (91st) day of the school year following the employee's final full year of service. Placement on the fourteenth (14th) step is for one year only. Notice of resignation, once accepted, is irrevocable.

For employees wishing to resign effective either the last day of the 2005-2006 school year or the ninety first (91st) day of the 2006-2007 school year, employees must provide the Superintendent notice by submitting a written letter of resignation effective either the last day of the 2005-2006 school year, or the ninety first (91st) day of the 2006-2007 school year by June 1, 2005. (Ex. 34)

6. Subparagraph G of Article IV of the CBA titled, "Early Retirement

Incentive" provided:

The Holliston School Committee may authorize an Early Retirement Incentive Program. This program may be revised or offered based upon prevailing economic conditions. Any teacher retiring in a given fiscal year shall be entitled to receive any Early Retirement Incentive Plan offered in that fiscal year provided the teacher meets all qualifications for the plan. (Ex. 34)

7. CBA Appendix A at A-1, A-2, and A-3 provided the salary schedule steps one through fourteen for each school year of the CBA. Across each step were criteria relating to education and experience factors, creating a range of seven salaries within each step. The range for salary increases between Step 12 and Step 13 across seven categories was: for school year 2005-2006, $3,530, $3,617, $3,720, $3,827, $3,952, $4,091, and $4,097; for school year 2006-2007, $3,618, $3,708, $3,812, $3,922, $4,051, $4,193, and $4,199; and, for school year 2007-2008, $3,727, $3,819, $3,927, $4,040, $4,173, $4,319, and $4,326. The range of salary increases between Step 13 and Step 14 did not follow this same pattern across the seven categories. Rather, for all three years covered by the CBA, the Step 14 salary was always $5,000 higher than the highest Step 13 salary. Therefore, the incremental method employed for increases between Steps 1 through 13 and across the seven categories in each step was not followed for increases from Step 13 to Step 14. (Ex. 34)

8. PERAC amended its regulation on regular compensation, 840 CMR 15.03 at (2)(c), effective April 7, 2006, to provide that for a limited time period, certain salary augmentation plans and salary enhancement programs, as described in the amendment could be regular compensation. 840 CMR 15.03(2) now reads:

Any extraordinary or ad hoc payment amount shall be excluded from regular compensation. Exclusions shall include but not be limited to:

(a) any amounts paid for hours worked beyond the member's normal
work schedule;

(b) any amounts paid as premiums for working holidays, except as
authorized by law;

(c) any amounts paid as bonuses other than cost-of-living bonuses,
provided that any payment to an employee or group of employees which will not recur or which will recur for only a limited or definite term will be considered a bonus, and further provided that any payments to an employee or group of employees as part of a salary augmentation plan or salary enhancement program which is provided for in an individual contract in effect on or before January 25, 2006 or in a collective bargaining agreement in effect on or before January 25, 2006, including payments under such a plan or program which will not recur or which will recur for only a limited or definite term, shall be treated as regular compensation; and further provided, that any employee who is covered by such an agreement or contract on January 25, 2006 and who begins, at any time during the life of a collective bargaining agreement or individual employment contract in effect on or before January 25, 2006, to receive benefits and make retirement contributions pursuant to a salary augmentation plan or salary enhancement program under such a collective bargaining agreement or individual employment contract, may complete the plan or program under that agreement or contract or under a successor collective bargaining agreement or individual employment contract, provided that the successor collective bargaining agreement or individual employment contract contains a salary augmentation plan or salary enhancement program; and further provided that the amount of the salary augmentation plan or salary enhancement program under a successor collective bargaining agreement or individual employment contract which shall be treated as regular compensation shall not exceed the amount of the salary augmentation plan or salary enhancement program provided under the collective bargaining agreement or individual employment contract in effect on or before January 25, 2006, and further provided that any member who has previously retired and is receiving benefits as of April 7, 2006 under the provisions of a salary augmentation plan or salary enhancement program shall have that plan deemed in compliance with the provisions of M. G. L. c. 32.

(d) any amounts paid in lieu of or for unused vacation, sick leave, or other leave;
(e) severance pay;

(f) any amounts paid as early retirement incentives; and

(g) any other payments made as a result of the member giving notice of retirement. (Ex. F)

9. The payment of the CBA Step 14 salary increase was paid over the course
of the school year in the same manner as all other salaries were paid. (Exs. 33 & 34)

10. Before the effective date of the amendment, PERAC issued Memorandum
12/2006 on January 31, 2006 to all the retirement boards discussing whether or not payments received pursuant to salary augmentation plans and salary enhancement plans can be regular compensation. The narrow nature of the amendment was noted with the key date being January 25, 2006 as to when such plans or programs had to be in effect. PERAC further noted in regard to such plans:

Only those plans that are otherwise consistent with the provisions of G. L.
c. 32 will be granted this status. Thus, a plan that requires notice of retirement or termination in order to be eligible to participate will not be considered to be regular compensation because G. L. c. 32, § 1 specifically excludes such payments. (Ex. F) (Emphasis added.)

PERAC issued Memorandum #25/2006 on April 19, 2006 to announce that the amendment had passed effective April 6, 2006. (Ex. F)

11. A May, 2006 Memorandum of PERAC's general counsel addressed the impact of this amendment. The document is entitled, "What is Regular Compensation? What is the Impact of the Amendments to 840 CMR 15.03?" In the section addressing why this amendment was needed, there was a discussion about how early retirement incentive programs came to be excluded from being regular compensation. There was also a discussion on why payments received under the longevity plan in the case of Christensen v. CRAB & Teachers' Retirement System, 42 Mass. App. Ct. 544 (1997), the "Lexington Plan," were found to be regular compensation. The Memorandum went on to discuss how "PERAC audits revealed calculations or retirement deductions made pursuant to collective bargaining agreements or contracts that appeared to be inconsistent with the definition of regular compensation … [including payments through] salary augmentation plans or salary enhancement programs." The Memorandum pointed out that some of the provisions PERAC reviewed "included a requirement that the member terminate or retire at the end of the enhancement period, and that the "amounts of the salary increases were often greater than those discussed in the Lexington Plan." (Ex. F)

12. PERAC's May 2006 Memorandum noted that payments that are "[n]on-discriminatory and generally available for employees who are similarly situated relative to the purpose of the payment," can be regular compensation under the amendment, even if the payments are "[l]ump-sum or retroactive payments," so long as they are "attributed to the period in which the services were actually rendered." The memorandum included among the acceptable payment plans, "[t]he annual rate of compensation in an approved salary schedule." (Ex. F)

13. PERAC's May 2006 memorandum addressed specifically salary augmentation plans and salary enhancement programs pursuant to a CBA. These payment provisions were discussed as, a temporary increase in salary that is made available to employees who meet eligibility criteria, for example, having attained a certain number of years of service … accumulated a specified amount of sick leave …. [t]he increase is not as the result of performance of additional duties. Some of the plans required a notice of retirement or an agreement to go off the payroll at the end of the … period.

* * *

Employers and employees are not precluded from including a salary augmentation plan or a salary enhancement program in a contract/agreement, but the treatment as regular compensation is to be determined by the Retirement Board in a manner consistent with the statutes, regulations and relevant cases. (Ex. F)

14. Ms. Rowell, d.o.b. 12/9/47, had over 90 sick days, 35 years of teaching in the Holliston Public Schools, and resigned to be effective the last day of the 2005-2006 school year when she was fifty-eight. She never revoked her resignation, which was accepted. She sought and received the Step 14 salary during her last year of teaching, She did not connect her resignation letter to retiring at the same time. (Exs. G, 1, 2, 3, 4, 5 & 34)

15. Ms. Sampson, d.o.b. 9/30/44, had over 150 sick days, 31 years of teaching in the Holliston Public Schools, and resigned to be effective the last day of the 2005-2006 school year when she was sixty-two. She never revoked her resignation, which was accepted. She did not connect her resignation letter to retiring at the same time. She sought and received the Step 14 salary during her last year of teaching. (Exs. G, 6, 7, 8, 9, 10 & 34)

16. Mr. Kazanjian, d.o.b. 10/8/45, had over 90 sick days, 36 years of teaching in the Holliston Public Schools, and resigned to be effective the last day of the 2005-2006 school year when he was sixty-one. He never revoked his resignation, which was accepted. He sought and received the Step 14 salary during his last year of teaching. (Exs. G, 11, 12, 13, 14 & 34)

17. Ms. King, d.o.b. 5/31/49, had over 90 sick days, 35 years of teaching in the Holliston Public Schools, and resigned to be effective the last day of the 2005-2006 school year when she was fifty-seven. She never revoked her resignation, which was accepted. She sought and received the Step 14 salary during her last year of teaching. (Exs. G, 15, 16, 17, 18 & 34)

18. Ms. Salvi, d.o.b. 3/13/46, had over 90 sick days, 32 years of teaching in the Holliston Public Schools, and resigned to be effective the last day of the 2005-2006 school year when she was sixty. She never revoked her resignation, which was accepted. She sought and received the Step 14 salary during her last year of teaching. (Exs. G, 19, 20, 21, 22 & 34)

19. Ms. Currie, d.o.b. 3/31/48, had over 90 sick days, 36 years of teaching in the Holliston Public Schools, and resigned to be effective the last day of the 2005-2006 school year when she was fifty-eight. She never revoked her resignation, which was accepted. She sought and received the Step 14 salary during her last year of teaching. (Exs. G, 23, 24, 25, 26 & 34)

20. Ms. Fountain, d.o.b. 5/15/48, had over 90 sick days, 34 years of teaching in the Holliston Public Schools, and resigned to be effective the last day of the 2005-2006 school year when she was fifty-eight. She never revoked her resignation, which was accepted. She sought and received the Step 14 salary during her last year of teaching. (Exs. G, 27, 28, 29, 30 & 34)

21. Ms. Rowell filed for retirement on or about January 27, 2006. Ms. Sampson filed for retirement on or about February 9, 2006. Mr. Kazanjian filed for retirement on or about March 6, 2006. Ms. King filed for retirement on or about February 1, 2006. Ms. Salvi filed for retirement on or about February 3, 2006. Ms. Currie filed for retirement on or about January 27, 2006. Ms. Fountain filed for retirement on or about March 14, 2006. (Exs. 4, 9, 13, 17, 21, 25 & 29)

22. In calculating the retirement allowances for Ms. Rowell, Ms. Sampson, Mr. Kazanjian, Ms. King, Ms. Salvi, Ms. Currie, and Ms. Fountain, the Teachers' Retirement System did not include the $5,000 increase in salary that each of them received during their last year of teaching due to receiving the Step 14 salary. The Teachers' Retirement System found that this extra $5,000 was not regular compensation because to get it the teacher had to resign. Therefore, the retirement calculation used the Step 13 salary each had been entitled to had each of them not been eligible to receive the Step 14 salary. (Exs. G, 1, 6, 11, 15, 19, 23, 27, 31 & 32)

23. Each of the teachers received a separate letter of decision from the Teachers' Retirement Board, noting the $5,000 Step 14 salary increase was not regular compensation for retirement purposes. Ms. Rowell's decision letter was dated June 29, 2006. She filed an appeal by letter of July 6, 2006, received July 6, 2006. Ms. Sampson's decision letter was dated June 28, 2006. She filed an appeal by letter of July 6, 2006, received July 10, 2006. Mr. Kazanjian's decision letter was dated June 30, 2006. He filed an appeal by letter of July 10, 2006, received July 12, 2006. Ms. King's decision letter was dated June 30, 2006. She filed an appeal by letter of July 16, 2006 in which she stated she received the decision letter on July 7, 2006. This letter was postmarked July 17, 2006 and received July 18, 2006. Ms. Salvi's decision letter was dated July 11, 2006. She filed an appeal by letter of July 17, 2006, received July 20, 2006. Ms. Currie's decision letter was dated July 3, 2006. She filed an appeal by letter of July 18, 2006 in which she stated she received the decision letter on July 7, 2006. This letter was postmarked July 19, 2006 and received July 20, 2006. Ms. Fountain's decision letter was dated July 18, 2006. She filed an appeal by letter of July 30, 2006, received August 2, 2006. (Exs. 1, 2, 6, 7, 11, 12, 15, 16, 19, 20, 23, 24, 27 & 28)

24. Each teacher's decision letter was sent by the Teachers' Retirement System by first class mail on or about the date of the decision letter. Each teacher received the decision letter a few days after the mailing. (Exs. 1, 2, 6, 7, 11, 12, 15, 16, 19, 23, 24, 27 & 28)

25. A few appeal letters were faxed to DALA on dates within fifteen days after the teacher received the decision letter. Each appeal letter that was mailed was postmarked within fifteen days after the decision letter was received. (Exs. 1, 2, 6, 7, 11, 12, 15, 16, 19, 23, 24, 27 & 28)

Conclusion

Timeliness of two of the Appeals

I reviewed the dates of the letters of decision and the letters of appeal. Most of the appeal letters were filed through the mails, but a few were filed by fax. All but two Petitioners quite clearly had timely filed appeals. Only Ms. King and Ms. Currie have filing dates for their appeals that are fifteen days beyond the dates on their decision letters. Ms. King appealed her June 30, 2006 decision letter by a letter of appeal dated July 16, 2006, postmarked July 17, 2006 and received by DALA on July 18, 2006. Ms. Currie appealed her July 3, 2006 decision letter by a letter of appeal dated July 18, 2006, postmarked July 19, 2006 and received by DALA on July 20, 2006. G.L. c. 32, § 16(4) requires that a timely appeal is accomplished "by filing … a claim in writing within fifteen days of notification of such action or decision of the retirement board." (Emphasis added.) In each of the decision letters, the Teachers' Retirement System provided the address of where to file the appeal, and properly instructed each of the teachers "to file an appeal with the Division of Administrative Law Appeals within fifteen (15) days from the date you receive this letter." (Exs. 1, 6, 11, 15, 19, 23 & 27)

Ms. King and Mr. Currie each assert in their letters of appeal that they received their decision letters on July 7, 2006, but that is the only evidence presented on the date of notification. It is the date when notification is received that triggers the start of the fifteen day time period for accomplishing the appeal. No evidence has been presented as to what day the Teachers' Retirement System mailed either of these letters of decision, and no evidence has been presented that notification was provided to Ms. King and Ms. Currie earlier than their receipt of their decision letters through the mail. There is no notation, as would be expected on the letters of decision, to show these letters had been delivered by some faster method than by simply being placed in the mail as first class mail, or that these two Petitioners learned about the decision at the Teachers' Retirement System meeting discussing their claims. Ms. King's filing of the appeal letter is only eighteen days and Ms. Currie's filing of the appeal letter is only seventeen days following the date on the letters of decision. The envelopes containing their letters of appeal are postmarked July 17 and 19, 2006, respectively. I conclude it is reasonable to assume a few days went by before they each received their decision letters in the mail, assuming the letters were mailed the same day they were dated.

There are cases where DALA and CRAB have found appeals not to be timely filed. In the cases where the local boards had provided the proper information in the decision letters on how to accomplish the appeal, including where to file the appeal and noting the fifteen day time period, the cases show failures to meet the fifteen day requirement largely involved long time periods between the dates on the letters of decision and the dates when the appeal letters were filed. I do not find these cases to be controlling on Ms. King's and Ms. Currie's circumstances. See, for example, Maye-Wilson v. Boston Retirement Board, CR-06-177 (DALA, 5/18/07) (No CRAB decision) (letter of decision was dated March 7, 2005, but the letter of appeal was not received until March 2006); and, Bogan v. Teachers' Retirement System, CR-05-945 (DALA, 9/21/07) (No CRAB decision) (letter of decision was dated August 24, 2005, but the letter of appeal was not received until September 22, 2005).

The discussion about the timeliness of the appeal in the case of Falmouth v. Civil Service Commission & Deutchmann, 447 Mass. 814 (2006) is instructive. The Supreme Judicial Court addressed timeliness in the context of an appeal pursuant to G.L. c. 31, § 43, involving a ten day period in which to file the appeal after receiving notice of the Appointing Authority decision. The Civil Service Commission had adopted in its particular rules of procedure in place at the time, the postmark rule, which uses the postmark date on an envelope to determine whether the appeal time period has been satisfied, that is, the date the appeal letter was mailed. Id. at 817 Mr. Deutchmann's letter of decision had been hand delivered to him on December 7, 1998. The letter contained his appeal rights to the Civil Service Commission. His letter of appeal was dated December 17, 1998, and the Civil Service Commission stamped the letter as received on December 23, 1998. The envelope the letter arrived in was not in evidence. The Court found his appeal to be timely, upholding the use of the postmark rule, and noting how a number of statutes and some regulations contain "presumptions that mail delivery takes between two and five days." Id. at 816 at Footnote 3. This discussion in Falmouth v. Civil Service Commission and Deutchmann, supra, supports a determination that Ms. King and Ms. Currie received their letters of decision a few days after their decision letters were mailed. Therefore, even without consideration of the veracity of their statements in their letters of appeal regarding receipt of the decision letters not until July 7, 2006, I conclude they both filed timely appeals.

Merits

I conclude that the Step 14 salary increase over the Step 13 salary level for each of these Petitioners of a one time $5,000 salary enhancement or salary augmentation cannot be regular compensation. It does not come under the reach of the amendment to the PERAC regulation at 840 CMR 15.03(2)(c) because, in order to receive it, a teacher is required to execute, before the beginning of the school year in which it is payable, an irrevocable resignation effective the end of the school year. This determination is consistent with the statute, regulations, and case law addressing the features that payments need to have to be regular compensation. It is also consistent with PERAC's Memoranda issued at the time the amendment became effective. Those Memoranda explain that the amendment was never intended to be inconsistent with the definition of regular compensation in G.L. c. 32, § 1, but was only meant to capture those salary augmentation and enhancement plans that are like the Christensen, supra, longevity plans even if involving just one time payments. The definition of regular compensation in Section 1 states in pertinent part that it is:

[S]alary, wages or other compensation in whatever form, lawfully
determined for the individual service of the employee by the employing authority, not including bonus, overtime, severance pay for any and all unused sick leave, early retirement incentives, or any other payments made as a result of giving notice of retirement ….

Although the CBA requirements for receiving the Step 14 increase did not require that the teacher retire, given the need to have at least twenty years within the Holliston School System, with all these Petitioners having over thirty years in this school system with ages ranging from fifty-seven to sixty-two, the fact that they all also retired makes sense. They would have all been close to their maximum level of retirement benefit based on their years of service and ages pursuant to G.L. c. 32, § 5.

In Marilyn Kruger v. Teachers' Retirement Board, CR-96-754 (DALA, 5/29/97) (No CRAB Decision), a teacher under her CBA had a choice of selecting respectively, two percent, four percent, and five percent salary increases over the three years of the CBA (Choice 1), or selecting a six percent salary increase during the first year of the CBA with no increases in her salary for the next two years of the CBA (Choice 2) and with these salaries being "5% less than the schedules in Choice 1." No language in the CBA made selecting the choice of the first year six percent increase contingent upon retiring or terminating employment in the school system. Ms. Kruger selected to receive the six percent increase during the first year of the CBA, which was also her last year of teaching before retiring. The Teachers' Retirement System did not include this six percent increase in her retirement calculation as regular compensation, finding it was a payment linked directly to her retirement, and Administrative Magistrate Fletcher agreed. She found it was a payment linked to retirement which could not be regular compensation under the definition in G.L. c. 32, §1. She explained there was "a disincentive not to select Choice 2 [the first year six percent increase] unless retirement is planned." The Kruger case shows the importance of how the terms of salary enhancement and salary augmentation plans can impact a determination of whether the payment can be regular compensation.

Younger teachers who irrevocably resigned and who qualified to receive the Step 14 increase because they had at least twenty years of teaching service in the Holliston School System, might not have opted to retire, and instead might have tried to find further teacher employment in another public school system toward gaining a larger retirement allowance. Nevertheless, such teachers are not able to have the Step 14 increase treated as regular compensation due to the irrevocable resignation requirement.

Except for the irrevocable resignation requirement, this Step 14 salary enhancement or augmentation plan could have fit within the PERAC amendment to 840 CMR 15.03(2)(c) as it would have been consistent with the kind of plan found in Christensen, supra, or the "Lexington Plan" the PERAC Memoranda discuss. In Christensen, a one time set of enhanced longevity payments in a CBA that was a separate provision from a severance payment in the same CBA and a separate provision from the CBA's regular longevity payment schedule, was found to be regular compensation by not being tied to a need to resign or to retire to receive it, even though Ms. Christensen did retire after receiving the payments and as a result received an enhanced retirement allowance. Id. at 548.

In Mastroianni v. PERAC & CRAB, Mass. Appeals Court No. 96-P-772 (Rule 1:28) (3/4/97), the Appeals Court found Mr. Mastroianni's salary increase was directly linked to his agreement to irrevocably resign from his job as the only trigger for receiving the increase. Mr. Mastroianni had provided evidence to show the salary increase was a make-up payment for prior, not given but expected, salary increases in years past that other department heads had received and that negotiations with his town employer recognized he had not received. Nevertheless, the Appeals Court found no evidence to demonstrate this increase was a make-up payment for prior unpaid salary for services rendered since there was no reference to that fact within either the letter of resignation or in the Town Warrant containing this salary boost. The Appeals Court further explained that even though there is no provision in the G.L. c. 32, § 1 definition of regular compensation that specifically precludes a resignation incentive from being regular compensation, such a payment in the form of a salary boost will not be regular compensation when it is a one time payment in the last year of employment, is not found to be related to services performed, and is paid only in consideration of an agreement to resign as it was for Mr. Mastroianni.

These two cases show how these Petitioners cannot overcome the fact that the one time Step 14 salary boost is not related to services performed but to their irrevocable resignations. 807 CMR 6.01 is the regulation of the Teachers' Retirement System on regular compensation, and at 6.01(2)(f), it excludes from regular compensation, "[a]ny other payment made as a result of the employer having knowledge of the member's retirement." Given the Christensen and Mastroianni decisions, this regulation must be viewed as also reaching a one time salary boost given out only because of a teacher's agreement to execute an irrevocable resignation. This reasoning is also consistent with the principles set forth in Boston Association of School Administrators & Supervisors v. Boston Retirement Board, 383 Mass. 336 (1981). In this case the Supreme Judicial Court found retirement incentives could not be regular compensation because regular compensation "imports the idea of ordinariness or normality as well as the idea of recurrence." The payments in this case were found to be in the nature of a bonus. Id. at 341. The Court explained that preventing such ad hoc payments from being regular compensation provided "a safeguard against the introduction into the [retirement] computations of adventitious payments to employees which could place untoward, massive, continuing burdens on the retirement systems." Id.

For these reasons, the appeals filed by Ms. King and Ms. Currie are timely filed, and the decisions of the Teachers' Retirement System as to each of these Petitioners, is affirmed.

SO ORDERED.

DIVISION OF ADMINISTRATIVE
LAW APPEALS


/s/ Sarah H. Luick, Esq.
Administrative Magistrate

DATED: March 13, 2009

 


ATTACHMENT 1
EXHIBITS
A. Assented to motion to consolidate cases and ruling to allow motion.
B. Withdrawal of appeals regarding ancillary claims by Rowell and Kazanjian.
C. Assented to motion of all Petitioners to waive their right to a hearing pursuant to 801 CMR 1.01(10(c).

D. Petitioners' Memorandum.

E. Respondent's Memorandum.

F. Amendment to PERAC Regulation 840 CMR 15.03, PERAC Memorandums #12/2006 and # 25/2006, and Memorandum of PERAC General Counsel on amendment to 840 CMR 15.03.

G. Stipulated facts.

1. 6/29/06 Respondent's decision letter to Judith Rowell.
2. 7/6/06 Ms. Rowell's letter of appeal.
3. 5/16/05 Ms. Rowell's resignation letter.
4. 1/25/06 Ms. Rowell's retirement application.
5. 6/30/06 Respondent's "Notice of Estimated Retirement Benefit" for Ms.
Rowell.

6. 6/28/06 Respondent's decision letter to Arlene Sampson.
7. 7/6/06 Ms. Sampson's letter of appeal.
8. 5/23/05 Ms. Sampson's resignation letter.
9. 2/9/06 Ms. Sampson's retirement application.
10. 7/12/06 Respondent's "Notice of Estimated Retirement Benefit" for Ms.
Sampson.

11. 6/30/06 Respondent's decision letter to Gerald Kazanjian.

12. 7/10/06 Mr. Kazanjian's letter of appeal.

13. 3/6/06 Mr. Kazanjian's retirement application.

14. 7/10/06 Respondent's "Notice of Estimated Retirement Benefit" for Mr.
Kazanjian.

15. 6/30/06 Respondent's decision letter to Linda King.

16. 7/16/06 Ms. King's letter of appeal with postmarked envelope.

17. 2/1/06 Ms. King's retirement application.

18. 4/10/06 and 7/5/06 Respondent's "Notices of Estimated Retirement Benefit" for Ms. King.

19. 7/11/06 Respondent's decision letter to Carol Salvi.

20. 7/17/06 Ms. Salvi's letter of appeal.

21. 2/3/06 Ms. Salvi's retirement application.

22. 4/10/06 and 7/10/06 Respondent's "Notice of Estimated Retirement Benefit"
for Ms. Salvi.

23. 7/3/06 Respondent's decision letter to Sarah Currie.

24. 7/18/06 Ms. Currie's letter of appeal with postmarked envelope.

25. 1/27/06 Ms. Currie's retirement application.

26. 4/10/06 and 7/5/06 Respondent's "Notice of Estimated Retirement Benefit" for Ms. Currie.

27. 7/18/06 Respondent's decision letter to Patricia Fountain.

28. 7/30/06 Ms. Fountain's letter of appeal.

29. 3/14/06 Ms. Fountain's retirement application.

30. 8/17/06 Respondent's "Notice of Estimated Retirement Benefit" for Ms.
Fountain.

31. 6/27/06 emails from Respondent to the Holliston Public Schools regarding
salary information on Ms. Rowell, Ms. Sampson and Ms. Fountain.

32. 6/28/06 and 6/29/06 emails from Respondent to the Holliston Public Schools
regarding salary information on Mr. Kazanjian, Ms. King and Ms. Salvi.

33. 9/1/02 - 8/31/05 CBA covering the Petitioners' employment.

34. 9/1/05 - 8/31/08 CBA covering the Petitioners' employment.