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The Petitioner is not entitled to have the stipend she received for serving as Guidance "Associate" during the 2002-2005 school years included as regular compensation in the calculation of her superannuation retirement benefit as the remuneration for that stipend is not included in the relevant Collective Bargaining Agreement.
Pursuant to G.L. c. 32, § 16(4), the Petitioner, Ann Reen, is appealing the August 10, 2005 decision of the Respondent, Teachers' Retirement System, declining to include the stipends she received for serving as Guidance "Associate" during the 2002-2005 school years as regular compensation in the calculation of her superannuation retirement benefit. (Exhibit 5.) 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 December 8, 2009 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 1-6). The Petitioner's Pre-hearing Memorandum was marked as "A" for identification, the Respondent's Pre-hearing Memorandum was marked as "B" for identification, and the Parties' Joint Stipulation was marked as "C" for identification. The Petitioner testified in her own behalf. One cassette tape recording was made of the hearing. The record in this case was left open until January 5, 2010 for the filing of written closing memoranda.
Based on the testimony and evidence presented, I make the following findings of fact:
1. The Petitioner, Ann Reen, d.o.b. 6/5/42, was employed as a guidance counselor with the Danvers, MA Public School System from September of 1970 through June 30, 2005. (Testimony of the Petitioner.)
2. The Petitioner became a member of the Teachers' Retirement System in September of 1970. (Testimony of the Petitioner.)
3. During the 2002-2005 school years, in addition to her position as a guidance counselor, the Petitioner also served as Guidance "Associate." (Testimony of the Petitioner.)
4. Her duties as Guidance Associate included serving as a liaison with the principal of the Danvers High School, arranging the testing schedule for the PSATs and AP examinations, as well as organizing a parents' night for parents of college bound high school juniors. (Testimony of the Petitioner.)
5. Although the majority of her duties as a Guidance Associate were performed during the school year, the Petitioner was required to work one extra week before school started in the fall and after school ended in June to perform some of her functions as a Guidance Associate. (Testimony of the Petitioner.)
6. At all relevant times, the Petitioner's employment with the Danvers Public Schools was covered by a collective bargaining agreement entitled "Agreement for Unit A Between the Danvers Teachers Association and the Danvers School Committee" as extended by a June 14, 2004 Memorandum of Agreement. (Exhibit 2.)
7. The Collective Bargaining Agreement effective July 1, 2001 through June 30, 2004 lists the position of Associate with a stipend of $34 per day. There is a notation under the position "Associate" that states that the daily rate "to be changed to annual rate." (Exhibit 2.)
8. The Petitioner did not keep track of the number of hours or days that she performed the services of a Guidance Associate and did not have to submit a time sheet to her employer. (Testimony of the Petitioner.)
9. The Petitioner was not paid on an hourly or daily rate for providing the services of a Guidance Associate. Rather she was paid by two checks, one in December and the second in June every school year that she served as a Guidance Associate. (Testimony of the Petitioner.)
10. She was paid the following amounts on the following dates for serving as an Associate: $1,066.66 on 12/12/02; $2,133.34 on 6/12/03; $1,133.33 on 12/11/03; $2,266.67 on 6/10/04; $1,150.33 on 12/16/04, and $2,300.67 on 6/2/05. (Testimony of the Petitioner; Exhibit 3.)
11. Retirement deductions were taken from the stipend that the Petitioner received for serving in the position of Guidance Associate. (Testimony of the Petitioner.)
12. The successor Collective Bargaining Agreement effective July 1, 2005 to June 30, 2008 lists a fixed annual salary of $3,503 for serving as an Associate for the 2005-2006 school year with small increases every school year thereafter for the term of the Agreement. (Exhibit 4.)
13. The Petitioner filed an application for superannuation retirement benefits on April 15, 2005 with an effective retirement date of June 30, 2005. (Exhibit 1.)
14. By letter dated August 10, 2005, the Respondent notified the Petitioner that the stipends that she received for serving a Guidance Associate would not be included as regular compensation in the calculation of her superannuation retirement benefit. The Respondent also notified the Petitioner that it would be refunding the retirement contributions for these stipends. (Exhibit 5.)
15. By letter dated August 24, 2005, the Petitioner filed an appeal of this denial with the Contributory Retirement Appeal Board. (Exhibit 6)
There are no material issues of fact in dispute in this matter. The issue in this case is whether the Petitioner is entitled to have the stipends that she received for serving as a Guidance Associate during the 2002-2005 school years included as regular compensation in the calculation of her retirement benefit.
After reviewing the evidence presented in this case, I conclude that the Petitioner is not entitled to have these stipends considered as regular compensation as the Collective Bargaining Agreement covering the 2002-2005 school years does not provide for a fixed amount of compensation to be paid for providing these services each school year.
Regular compensation is defined in G.L. c. 32 §1 as:
Salary, 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 payment made as a result of giving notice of retirement ….
In the case of a teacher who is employed in a public day school who is a member of the teachers' retirement system, salary payable under the terms of an annual contract for additional services in such a school and also compensation for services rendered by said teacher in connection with a school lunch program or for services in connection with a program of instruction of physical education and athletic contests shall be regarded as regular compensation rather than as bonus or overtime and shall be included in the salary on which the pension is calculated ….
Chapter 32 does not define the term "annual contract." In 1994, the Teachers' Retirement System promulgated 807 CMR 6.01 which defines annual contract as the following:
In the case of a teacher, the annual contract is the collective bargaining agreement for the unit that governs the rights of the members whether it is a one year or multi-year agreement. In the case of an Administrator the annual contract is the individual employment agreement which governs the rights of the member whether it is a one year or multi-year agreement …. (emphasis supplied.)
The term regular compensation as defined by M.G.L. c. 32, § 1 and further defined by 840 CMR 15.03 includes … (b) Salary payable under the terms of an annual contract for additional services so long as (1) The additional services are set forth in the annual contract; (2) The additional services are educational in nature; (3) the remuneration for these services is provided in the annual contract; (4) The additional services are performed during the school year. (emphasis supplied).
In this case, the Collective Bargaining Agreement in effect during the 2002-2005 school years covering the Petitioner's employment specifically references the position of Associate. However, the stipend listed for such position is $34 a day with a notation that this stipend will be amended in the future to an annual amount.
At the hearing, the Petitioner credibly testified that she was not paid on a daily or hourly rate, but rather received stipends in two yearly payments, one in December and one in June. She argued that since the Collective Bargaining Agreement providing for a daily rate of compensation for serving as a Guidance Associate was in error, she should not be penalized for this mistake.
Notwithstanding the Petitioner's argument, 807 CMR 6.02(1)(b) requires that both the additional services and the remuneration received for these services must be clearly stated in the Collective Bargaining Agreement to be considered to be regular compensation.
In the case of Henry Kozloski v. Contributory Retirement Appeal Board, 61 Mass. App. Ct. 783, app. Rev. denied 442 Mass. 1112 (2004), the Appeals Court held that it is necessary to review the annual contract covering the individual's employment to determine whether an additional payment made to the employee is specifically included. In Kozloski, supra, the Petitioner's annual stipend for serving as audio-visual coordinator was not included in the collective bargaining agreement, the annual contract covering Mr. Kozloski's employment as a high school science teacher. The Appeals Court held: "[W]hether the omission was inadvertent or not, the position of audio-visual coordinator was simply not included in the relevant collective bargaining agreement under which Kozloski worked for the three-year period that was the basis for his pension calculation." The Court further held that, "to be eligible for inclusion in the pension calculation, the additional service stipend must have been provided for in the collective bargaining agreement." (emphasis supplied.)
In the case of Ristuccia v. CRAB, Suffolk Superior Court, Civil Action No. 01-1523-E (Burnes, J., 1/16/03), the Superior Court held that stipend amounts not specifically set out in the written Collective Bargaining Agreement are excluded from regular compensation, despite evidence that both the School Committee and the Teachers' Union had engaged in collective bargaining talks concerning this stipend but had never memorialized their agreement in writing.
Moreover, the stipends actually listed in the Collective Bargaining Agreement for serving as Guidance Associate also do not constitute regular compensation as they are variable, not fixed, based on a daily rate. In the case of Donald Hallett v. Contributory Retirement Appeal Board, 725 N.E. 2d 222 (2000). In Hallett, supra, the Massachusetts Supreme Judicial Court held that the hourly payments made to a teacher for teaching driver's education both before and after normal school hours did not constitute a salary for those additional services. As such, those payments were not considered to be regular compensation for the purposes of determining Mr. Hallett's retirement benefit. In Hallett, supra at 224, the Court noted that the relevant part of the statute specifies that only salary paid for additional services can be included in regular compensation. The Court further noted that salary is defined in Black's Law Dictionary 1337 (6th ed. 1990) as "a fixed periodical compensation paid for service rendered. A stated compensation paid periodically as by the year, month, or other fixed period, in contrast to wages which are normally based on an hourly rate."
Thus, in accordance with the decision in Hallett, in order for the stipends made to Ms. Reen for her services to be considered as salary paid for additional services and consequently regular compensation, these payments must have been for a fixed amount for the period of employment and not based on a daily rate for the number of days worked during that period.
For the foregoing reasons, I order that the decision of the Teachers' Retirement System declining to include the stipends that the Petitioner received for serving as a Guidance Associate during the 2002-2005 school years as regular compensation in the calculation of her superannuation retirement benefit be affirmed.
DIVISION OF ADMINISTRATIVE LAW APPEALS
Joan Freiman Fink, Esq.
Dated: January 8, 2010