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Pursuant to G.L. c. 32 §16(4), the Petitioner, John Pike, is appealing the January 31, 2007 decision of the Respondent, Melrose Retirement Board, to recoup an overpayment of $20,571.80 as a result of excessive earnings for the year 2006 in accordance with the provisions of G.L. c.32 §91(a) (Exhibits 1 & 2). 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 February 27, 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 - 14). 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 Petitioner testified in his own behalf as did James F. Smith, a retired Melrose Police Officer. Three cassette tape recordings were made of the hearing.
Based on the testimony and evidence presented, I make the following findings of fact:
1. The Petitioner, John Pike, d.o.b. 1/10/47, commenced employment as a police officer with the City of Melrose Police Department in January of 1980. He became a member of the Melrose Retirement System at that time (testimony of the Petitioner).
2. The Petitioner remained as a police officer with the City of Melrose until October 31, 2003 when he retired with superannuation retirement benefits (testimony of the Petitioner).
3. During the calendar year 2006, the Petitioner received retirement benefits totaling $43,210.08 (testimony of the Petitioner).
4. Shortly after he retired, the Petitioner was informed by Barbara Wells, a member of the Melrose Retirement Board, that there was a limitation on the amount of money he could make from public employment after he retired. Ms. Wells also informed the Petitioner that he would be notified well in advance if he was in jeopardy of exceeding the allowance statutory amount of earnings from post-retirement employment (testimony of the Petitioner, testimony of James Smith).
5. In November of 2005, the Petitioner was asked by the Melrose Police Department if he were interested in earning some additional compensation by working special police details. The Petitioner agreed to work some special police details (testimony of the Petitioner).
6. During November and December of 2005, the Petitioner received $4,000 for working special police details (testimony of the Petitioner).
7. During 2006, the Petitioner performed special police details for which he received compensation from the City of Melrose in the amount of $31,467.00 (testimony of the Petitioner).
8. No taxes were deducted from the Petitioner's earnings from special police details in 2006, and he was given a 1099 at the end of the year indicating income in the amount of $31,467.00 (testimony of the Petitioner).
9. Upon being informed by the Melrose Retirement Board at some point in 2006 that he had exceeded the statutory limitation on earnings from post-retirement public employment, the Petitioner inquired as to whether the limitation applied to him since private vendors had paid for the special police details (testimony of the Petitioner).
10. On August 10, 2006, the Melrose Retirement Board wrote to the Public Employee Retirement Administration Commission (PERAC) seeking an opinion as to whether retirees who work police details would be subject to the earnings limitations imposed by G.L. c. 32 §91(b), where the funding for the services is derived from payments made by private contractors (Exhibit 4).
11. On October 11, 2006, PERAC responded that the Petitioner, in performing special police details, was in the "service of a municipality" as outlined in G.L. c. 32 §91 (a) and as such subject to the earnings limitations imposed by section 91(b) (Exhibit 5).
12. The treasurer of the City of Melrose failed to seek return of excess earnings paid to the Petitioner for 2006 (testimony of the Petitioner).
13. On October 27, 2006, the Melrose Retirement Board wrote to the Petitioner concerning the repayment of excess earnings for 2006 indicating that "the Board is willing to work with you on the repayment ..." (Exhibit 6).
14. The Petitioner attended a meeting of the Melrose Retirement Board on January 23, 2007 (Exhibit 1).
15. On January 31, 2007, the Melrose Retirement Board notified the Petitioner in writing that it had affirmed its earlier decision to require him to return his 2006 excess earnings (Exhibit 1).
16. On February 12, 2007, the Petitioner filed an appeal of this decision with the Contributory Retirement Appeal Board (Exhibit 1A).
G.L. c. 32 §91(a) states in pertinent part that: "No person while receiving a pension, disability pension, or retirement allowance from the commonwealth, or from any county, city, town or district, shall, after the date of his retirement be paid for any service rendered to the commonwealth or any county, city, town or district …"
G.L. c. 32 §91(b) states in pertinent part that: "any person who has been retired and who is receiving a pension or retirement allowance,…may…be employed in the service of the …city…for not more than nine hundred and sixty hours in the aggregate, in any calendar year; provided that the earnings there from when added to any pension or retirement allowance he is receiving do not exceed the salary that is being paid for the position from which he was retired…"
G.L. c. 32 §91(c) provides in pertinent part that with respect to each person referenced in paragraph (B) if the earnings from employment in the service of the city exceed the amount allowable under paragraph (B), the retiree "shall return to the appropriate treasurer…all such earnings as are in excess of said allowance amount. The amount of any excess not so returned may be recovered in an action of contract by the appropriate treasurer or other person responsible for the payment of the compensation of any such person."
Thus, in accordance with the provisions of G.L. c. 32 §91(a-c), a retiree who is receiving a retirement allowance from the commonwealth or any county, city, town, or district may be employed in the service of the commonwealth, county, city, town, or district for not more than nine hundred and sixty hours in the aggregate, provided that the earnings there from when added to any pension or retirement allowance he is receiving do not exceed the salary that is being paid for the position from which he is retired. The retiree has the responsibility to certify to his employer the number of hours that he has been employed in any calendar year, as well as the amount of earnings there from. If the hours exceed 960, or the earnings, when added to the pension being paid to the retiree, exceeds the amount allowable, he shall return all earnings that are in excess of said allowable amount to the appropriate treasurer or other person(s) responsible for the payment of compensation.
In this case, the Petitioner had excess earnings in 2006. In accordance with the provisions of G.L. c. 32 §91(c), since the treasurer of the City of Melrose did not collect these excess earnings, the responsibility fell to the Melrose Retirement Board to recoup the excess amount. "In the absence of a return of such amounts to the employing agency, the excess earnings may be recovered by the retirement board that pays the employee his pension." Bristol County Retirement Board v. Contributory Retirement Appeal Board, 65 Mass. App. Ct. 443, 445 (2006) citing Flanagan v. Contributory Retirement Appeal Board, 51 Mass. App. Ct. 862, 866-868 (2001).
The Petitioner does not dispute that he had excess earnings. Rather, he argues that since private vendors paid for the services of police officers who served special police details, these payments were not made by a public entity and as such, do not fall within the statutory restrictions imposed by G.L. c. 32 §91 (a-c).
Notwithstanding the Petitioner's argument, the fact that payments made to the Petitioner were derived by or through private entities does not eliminate the statutory restrictions imposed by G.L. c. 32 §91(a-c). As PERAC noted in its response to the Melrose Retirement Board, the Petitioner, in performing special police details, "is performing work duties for the municipality for the benefit of a private contractor while not working directly for the private contractor itself." Accordingly, PERAC determined that the Petitioner, while performing special police details, "is in the service of the municipality as the member is being paid in the same manner as active police officers and performing the same duties as police officers." In addition, by working special police details, the Petitioner was performing duties specifically designed to ensure the safety and well-being of the general public.
At the hearing, the Petitioner stressed that he was not notified in advance that by accepting extra special paid details in 2006, he would have excess earnings. Unfortunately, there is no provision of Chapter 32 that requires a retirement board or appointing authority to provide advance earnings calculations to a retired member. Rather, the provisions of G.L. c. 32 §91(c) place the burden on the retired member to certify the number of days or hours which he has been employed in any calendar year and the amount of earnings from that employment.
Since the Respondent has established that Mr. Pike had excess earnings for calendar year 2006, he is required pursuant to the provisions of G.L. c. 32 §91 (c) to return the appropriate amount to the Melrose Retirement Board. Regarding the actual calculation of the Petitioner's excess earnings, James Smith, a retired Melrose Police Officer, gave credible testimony at the hearing to the effect that as a result of a new Collective Bargaining Agreement effective in 2006, the salary that the Petitioner would have received had he remained employed by the Melrose Police Department in 2006 was higher than the salary that the Respondent used in the calculation of his excess earnings.
In accordance with the foregoing, the decision of the Melrose Retirement Board to require the Petitioner to return excess earnings is affirmed. The Melrose Retirement Board is hereby ordered to make an adjustment in the calculation of the Petitioner's excess earnings for calendar year 2006 based on the provisions outlined in the most recent Collective Bargaining Agreement relating to the salaries of police officers. The Melrose Retirement Board is further ordered to assist the Petitioner in returning these excess earnings in a manner that is fair and equitable to him as well as permissible under the provisions of G.L. 32.
DIVISION OF ADMINISTRATIVE LAW APPEALS
Joan Freiman Fink