| Date: | 05/30/2025 |
|---|---|
| Organization: | Division of Administrative Law Appeals |
| Docket Number: | CR-22-0452 |
A police officer seeking to purchase prior creditable service as a reserve police officer must first show that they earned at least $5,000.00 for each year. G.L. c. 32, § 4(1)(o). In a memorandum, the Public Employee Retirement Administration Commission (“PERAC”) provided guidance to retirement boards that the source of the $5,000.00 is not limited to “regular compensation” and can include other income, such as detail pay. After two police officers sought to purchase their prior service, the Gloucester Board of Retirement asked PERAC to reconsider its position. PERAC denied the request and the Board appealed. Because PERAC’s interpretation is correct, the Gloucester Retirement Board must follow it when processing the officers’ applications.
INTRODUCTION
The Gloucester Retirement Board (“Board”) timely appeals the Public Employee Retirement Administration Commission’s (“PERAC”) opinion that police officers may purchase their prior service as reserve police officers if they earned more than $5,000.00 dollars annually from, among other things, detail pay. In a letter, the Board requested that PERAC reconsider its position as stated in PERAC’s Memo #38/2020, which PERAC declined to do. After the case was docketed, I held a status conference with the Board and PERAC questioning whether the Board had standing. The Board (and PERAC) both argued it did, and they submitted additional documents to show the Board’s letter to PERAC was in response to actual requests to purchase this prior service by several officers.
With the additional submissions, I also issued an order giving the individual officers an opportunity to intervene; Julio Mercado and Andrew Marques responded, and I allowed their requests to intervene on November 4, 2024. I then gave the intervenors an opportunity to file their own briefs and exhibits, which they did through counsel.
I held a motion hearing on April 2, 2025 with all the parties to determine whether the matter could be decided on the papers. 801 Code Mass. Regs. § 1.01(10)(c). The parties agreed there were no facts in dispute and an evidentiary hearing was unnecessary. I then allowed the parties until April 18, 2025 to submit further briefs, which they did. I now enter exhibits J1-J11 and In1-In5 into evidence.[1]
FINDINGS OF FACT
DISCUSSION
I sua sponte raised the issue of standing with the parties. The Board is appealing PERAC’s refusal to reconsider its advisory opinion. For a decision to be appealable, the decision needs to be binding and there must be an aggrieved party. Marlborough Ret. Bd. v. Public Employee Ret. Admin. Commission, CR-19-0014 (Div. Admin. Law Apps. Apr. 9, 2021). Sometimes, boards make requests to PERAC and disagree with PERAC’s responses. Few of those requests give boards standing to appeal PERAC’s opinions. See Gloucester Ret. Bd. v. PERAC, CR-21-217, 2022 WL 16921454 (Div. Admin. Law Apps. Jun. 10, 2022), and cases cited. That said, because boards are bound by PERAC’s opinions, the Contributory Retirement Appeals Board (“CRAB”) has explained certain narrow circumstances in which a board may appeal a PERAC opinion: “[i]f a retirement board disagrees with the interpretation of the retirement law adopted in a PERAC memorandum as applied to a particular case, it may request a ruling from PERAC, which would be appealable by an aggrieved party under G.L. c. 32, § 16(4).” Grimes v. Malden Ret. Bd., CR-15-05, 2016 WL 11956883 (Contributory Ret. App. Bd. Nov. 18, 2016).
I raised this issue with the parties because I was initially unsure how the appeal started. However, the parties have satisfied me that the Board’s request to PERAC was not hypothetical, but in response to actual members seeking to purchase their prior service. Like Grimes advised, the Board here “request[ed] a ruling as applied to a particular case.” Grimes, supra. PERAC recognized the Board’s request and issued it an appealable letter under Barnstable County Ret. Bd. v. PERAC, CR-07-163, 2012 WL 13406336 (Contributory Ret. App. Bd. Feb. 17, 2012). Having followed CRAB’s guidance, the Board has standing to appeal.
The retirement allowance of a Massachusetts public employee is based in part on the duration of their “creditable service.” G.L. c. 32, § 5(2). Normally, creditable service spans the employee’s work for government units, starting when they became a member of a state or local retirement system. G.L. c. 32, § 4(1)(a). In some cases, the employee is entitled to purchase previous service that was not originally treated as creditable service. G.L. c. 32, § 4.
Additionally, certain types of prior service are entitled to an “enhanced credit” under G.L. c. 32, § 4(2)(b). Shailor v. Bristol Cty. Ret. Bd., CR-20-0343, 2025 WL 1092641 (Contributory Ret. App. Bd. Feb. 5, 2025). Specifically, for some reserve police officers,[4] “the board shall credit as full-time service not to exceed a maximum of five years that period of time during which a [reserve police officer] was on his respective list and was eligible for assignment to duty subsequent to his appointment[.]” G.L. c. 32, § 4(2)(b).
In 2009, the Legislature amended chapter 32 so that service “in a position receiving compensation of less than $5,000 annually, which service occurs on or after July 1, 2009, shall not constitute creditable service for purposes of this chapter.” G.L. c. 32, § 4(1)(o).[5] This amendment applies to reserve police officers seeking the enhanced credit under § 4(2)(b). Plymouth Ret. Bd., supra.
Following Gomes, PERAC released two memoranda that explained the implications regarding the application of § 4(1)(o) to § 4(2)(b) credit for reserve police officers. Relevant here is PERAC’s explanation for how to calculate the $5,000 threshold:
Q. The Gomes decision mandated that a person must receive $5,000 or more in a year for such service to be considered creditable service. Should the $5,000 compensation include detail pay? The person is able to do detail pay only because of the position that they hold.
PERAC’s RESPONSE: Yes, detail pay and other such pay should be counted as compensation. Section 4(1)(o), the “Under $5,000 Rule” refers to “receiving compensation” and not “regular compensation.” It must be remembered that this interpretation pertains only to those being given credit for the service at issue in the Gomes case. Much of that service, some of it being sporadic by nature, would not fit into the definition of “regular compensation.”
PERAC Memo #38/2020.
PERAC “shall have general responsibility for the efficient administration of the public employee retirement system, under chapter 32.” G.L. c. 7, § 50. “PERA[C] ha[s] considerable leeway in interpreting a statute it is charged with enforcing.” Barnstable Cty. Ret. Bd. v. Contributory Ret. App. Bd., 43 Mass. App. Ct. 341, 345 (1997). Accordingly, “PERAC may issue memoranda interpreting G.L. c. 32 which are binding on retirement boards unless they are manifestly unreasonable.” Guido and Revere Ret. Sys. v. Public Employee Ret. Admin. Commission, CR-12-422 (Div. Admin Law App. Oct. 2, 2015), citing Barnstable, at 347. On appeal to DALA, “PERAC’s memorandum is an ‘interpretive’ rule and is entitled to persuasive weight.” Stanton v. State Bd. of Ret., CR-18-399, 2023 WL 11806178 (Contributory Ret. App. Bd. Oct. 11, 2023), citing Grimes, supra, in turn quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).
PERAC’s explanation is simple and persuasive: throughout chapter 32, and specifically throughout § 4, the Legislature used both “compensation” and “regular compensation.” “Where the Legislature used different language in different paragraphs of the same statute, it intended different meanings.” Com. v. Williamson, 462 Mass. 676 (2012) quoting Ginther v. Commissioner of Ins., 427 Mass. 319, 324 (1998); see also G.L. c. 4, § 6 (“Words and phrases shall be construed according to the common and approved usage of the language; but technical words and phrases and such others as may have acquired a peculiar and appropriate meaning in law shall be construed and understood according to such meaning.”). Thus, the terms are not used synonymously in § 4; the term “compensation” in § 4(1)(o) is no accident, as I discuss further below.
The Board argues the opposite, that the word “regular” should be read into § 4(1)(o) even though it is not there. Its concern appears to be that members will get credit for certain compensation, i.e. overtime or detail, which did not require them to make retirement contributions. And since members make retirement contributions only when they receive “regular compensation,” that must be what the statute intended. But the Board’s argument runs counter to the general principles of statutory interpretation discussed above.
Also, PERAC was aware of this fact, as it explained in its pleadings:
[M]uch of Section 4(2)(b) service would not fit into the definition of “regular compensation” and therefore, would be unable to be purchased. Specifically, reserve, permanent-intermittent or call firefighters, or reserve or permanent-intermittent police officers have schedules which by their very nature are sporadic and not guaranteed. This service would not normally be considered “regular compensation.” Thus, Section 4(2)(b) was enacted by the Legislature to ensure that this type of service for police officers and firefighters would be eligible for purchase. Without Section 4(2)(b), police officers and firefighters would largely be ineligible to buy back their previous reserve or permanent-intermittent service because such service usually does not meet the definition of “regular compensation” as being predetermined, nondiscretionary, and guaranteed.
Furthermore, the Legislature could not have intended that by enacting Section 4(1)(o) they would essentially be eliminating this special, augmented benefit[.]
PERAC pre-hearing memorandum, pgs. 10-11. Thus, PERAC provides a good explanation for why its interpretation conforms to the statute’s intent. See Florio v. MTRS, CR-18-509, at *3, 2025 WL 1092638 (Contributory Ret. App. Bd. Mar. 26, 2025), citing Bronstein v. Prudential Ins. Co. of America, 390 Mass. 701 (1984) (if statutory language unclear, can look to Legislature’s intent, “particularly with regard to the public policy benefits of a particular reading”).
I also asked the parties if they were aware of any other provision of chapter 32 which references “compensation” but has been interpreted to mean what the Board suggests, “regular compensation.” Neither party found an example that answers that exact question, but all suggested some analogies. The Board noted that the term “compensation” appears many times throughout chapter 32 (and offered an impressive addendum noting many, if not most, of those references). The Board then highlighted some examples of where it believes the term “compensation” is used, but a different term is implied. See, e.g., G.L. c. 32, § 12C (arguably using the term “annual compensation” as synonym for “regular compensation”). These examples, while useful, are not directly on point because they do not address the interpretation the Board urges here.[6]
For their part, the Respondents and Intervenors also failed to find any specific instances where the term “compensation” was interpreted to mean “regular compensation.” That, however, bolsters their argument. In fact, PERAC points to one case in which the opposite was true—where the term “compensation” was not interpreted to mean “regular compensation.” Dougherty v. MTRS, CR-04-259, 2005 WL 4541637 (Div. Admin. Law App. Jun. 9, 2005). In Dougherty, DALA explained that while a teacher could purchase prior non-public school service for “five per cent of the compensation received,” G.L. c. 32, § 4(1)(p)(emphasis added),[7] that did not mean the prior service was considered “regular compensation.” Id. (“The fact that a member can purchase as creditable service a period of non-public school service does not transfer the salary earned at the non-public school into regular compensation.”). This research further supports PERAC’s interpretation.
