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Pursuant to G. L. c. 32, § 16(4), the Petitioner, John Peron, is appealing the January 25, 2007 decision of the Respondent, Massachusetts Teachers' Retirement System, excluding as regular compensation for retirement purposes, additional pay he received during his last year of service. (Ex. 3) The appeal was timely filed. (Ex. 2) Mr. Peron decided to waive hearing pursuant to 801 CMR 1.01(10)(c). (Ex. 1) I was assigned the case on November 7, 2007. The parties were instructed to file documents, an agreement of facts, and legal arguments by December 7, 2007. This date was extended to February 5, 2008 when the record closed. ("B") The parties made a joint filing. ("A")
Exhibit 1 - Mr. Peron's 11/1/07 letter waiving his hearing.
Exhibit 2 - Mr. Peron's 2/2/07 letter of appeal.
Exhibit 3 - 1/25/07 decision letter of the Massachusetts Teachers'
Exhibit 4 - Mr. Peron's Retirement Application, Part 2.
Exhibit 5 - 11/29/05 letter of Mr. Peron's Superintendent accepting his
resignation effective July 31, 2006.
Exhibit 6 - Mr. Peron's Retirement Application, Part 1.
Exhibit 7 - 5/17/06 Notice of Estimated Retirement Benefit.
Exhibit 8 - 5/22/06 Memorandum of Assistant Superintendent
Cameron to Mr. Peron.
Exhibit 9 - Mr. Peron's collective bargaining agreement covering
8/1/03 - 7/31/06.
1. John Peron, d.o.b. 1/2/48, worked full-time as a teacher-principal for the South Berkshire Regional School District from September 1, 1969 to June 30, 2003. He worked full-time as a principal for the Pittsfield Public Schools from August 1, 2003 to July 31, 2006. He worked all this time with membership in the Massachusetts Teachers' Retirement System. ("A". Exs. 4, 6 & 7.)
2. Mr. Peron decided to retire at the close of the 2005-2006 school year when he would reach an 80% benefit level. He informed his employer about this plan. He filed the necessary retirement forms to accomplish this. He had initially sought to retire on June 30, 2006, but changed that to July 31, 2006 to coincide with the end date of his collective bargaining agreement. In a November 29, 2005 letter, his employer acknowledged his plan to retire on July 31, 2006, and offered congratulations to him on his service. ("A". Exs. 4, 5, 6 & 7.)
3. The duties of a principal like Mr. Peron require a thorough knowledge and understanding of the school curricula, state required programs and standards, teacher contracts and teacher issues, and information about the students at the school. A principal like Mr. Peron has to take a lead role in various programs at the school, and has to be able to do teacher trainings, professional development for paraprofessionals, parent trainings, regularly attend various meetings at the state level, and develop plans for the school. When a new principal starts work in a school he or she has to be able to start in this leadership role right away. Simply reviewing manuals and job description information is insufficient to ensure a new principal can do that. It is a common practice for principals like Mr. Peron to transition their replacement. ("A". Exs. 1 & 2.)
4. Mr. Peron's collective bargaining agreement covering his last three years of work, at Article V, Section 4, contained the following provision relating to a principal performing the transition work for his or her replacement:
Extension of Work Year at Superintendent's Direction for Purposes of Transition
If the Employee retires during the life of this Agreement then the Superintendent may direct the Employee to work up to ten (10) additional days in order to facilitate the administrative transition to a new principal for the next school year. Such days shall be compensated at the current per diem rate. (Ex. 9)
5. In a memorandum of May 22, 2006 Assistant Superintendent William Cameron instructed Mr. Peron to "add ten (10) days to your mandatory work year in order to facilitate the administrative transition to a new principal … for the next school year … [a] work obligation … to be completed by not later than July 31, 2006." Mr. Cameron referenced the authority to order this as Article V, Section 4 of Mr. Peron's collective bargaining agreement. ("A". Ex. 8.)
6. Mr. Peron performed the required transition work with his replacement principal during the 2005-2006 school year. He was paid a per diem rate of $402 for ten days earning an additional $4,020.00. He received this total in a lump sum payment. ("A")
7. Mr. Peron had retirement deductions taken from this additional pay. ("A". Ex. 3.)
8. Mr. Peron retired effective July 31, 2006. The Massachusetts Teachers' Retirement System informed Mr. Peron by letter of January 25, 2007 that the $4,020.00 could not be included in calculating his retirement allowance because it was not regular compensation. Mr. Peron filed a timely appeal. ("A". Exs. 2 & 3.)
Even though Mr. Peron had no choice but to work the additional ten days to transition his replacement principal, and even though this extra work was set forth in his collective bargaining agreement, his claim must fail. The extra pay he received to do this transitioning work is not regular compensation for retirement purposes.
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 payments made as a result of giving
notice of retirement.
This definition also states in pertinent part:
In the case of a teacher 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 … shall be regarded as regular compensation rather than as bonus or overtime and shall be included in the salary on which deductions are to be paid to the annuity savings fund of the teachers' retirement system.
The additional $4,020.00 Mr. Peron was paid for doing the transition work must also satisfy the regulations promulgated by the Massachusetts Teachers' Retirement System to clarify what can be regular compensation for its members. Under this regulation, the $4,020.00 is not regular compensation for retirement purposes.
807 CMR 6.02(f) excludes from being regular compensation "[a]ny other payment made as a result of the employer's having knowledge of the member's retirement." Mr. Peron's employer knew he was retiring. He was also only eligible to receive this additional pay because he was retiring pursuant to the language used in Article V, Section 4 of his collective bargaining agreement. If he was just leaving for another school, he would not have been able to receive additional pay for transitioning his replacement.
Case law does not support Mr. Peron's claim.
The Supreme Judicial Court in Boston Association of School Administrators v. Boston Retirement Board, 383 Mass. 336, 341 (1981) explained that regular compensation connotes ordinary and recurrent payments, to "safeguard against the introduction into the [retirement allowance] computations of adventitious payments to employees which could place untoward, massive, continuing burdens on the retirement systems."
The Supreme Judicial Court in Hallet v. CRAB, 431 Mass. 66 (2000) concluded that additional pay a teacher received for teaching drivers' education by both classroom and road instruction, both before and after school hours, and paid at an hourly rate, was not regular compensation. The Court concluded: "Hourly compensation paid on an irregular basis is more akin to overtime payments than to annual salary." Id. at 70. Mr. Peron's collective bargaining agreement provision did not require that he work ten extra days. That was the maximum extra work he could be called upon to perform. Because the contract did not set a particular number of days between one and ten which would always be paid if this kind of extra work was performed, this extra day is within the reach of the Hallet ruling.
Because Mr. Peron only received the additional pay because he was retiring, and because his contract did not make the pay for the extra work a sum certain, and because it was paid on a per diem basis, the $4,020.00 is not regular compensation that can be used to compute his retirement allowance. The decision of the Massachusetts Teachers' Retirement System is affirmed.
DIVISION OF ADMINISTRATIVE LAW APPEALS
Sarah H. Luick, Esq.
DATED: April 18, 2008