Petitioner Kenneth Reed is appealing the Hull Retirement Board's determination that he had to refund a portion of his 2005 disability retirement allowance because he had "excess earnings" within the meaning of G.L. c. 32, § 91A, for the 2005 calendar year. Mr. Reed timely appealed the Board's decision pursuant to the provisions of G.L. c. 32, § 16(4).
I held a hearing on February 7, 2008, at the office of the Division of Administrative Law Appeals, 98 North Washington Street, Boston. The parties submitted a joint pre-hearing memorandum, which was marked as Exhibit A for identification. Twelve exhibits (Exhibits 1-12) were entered into evidence and Mr. Reed testified on his own behalf. The Board did not present any witnesses. There is one tape of the hearing.
After the hearing, I left the record open until March 6, 2008 to allow the parties to submit additional evidence concerning (1) Mr. Reed's rate of pay when he retired in 1995; and (2) whether that pay corresponded to the salary of a Journeyman Lineman or a Head Lineman in the International Brotherhood of Electrical Workers Local Union No. 104. On February 28, 2008, the Board filed eight additional exhibits. On March 4, 2008, Mr. Reed's counsel filed a letter stating that he did not object to the admission of the Board's additional exhibits. I therefore admitted the following exhibits into the record:
Exhibit 13: Memo from Roger Jackson to Elizabeth Bryan and Emily O'Brien re: employee grade/wages (undated)
Exhibit 14: Memo from Roger Jackson to Elizabeth Bryan, dated March 12, 1990, re: payroll adjustment
Exhibit 15: Memo from Roger Jackson to Elizabeth Bryan, dated December 20, 1990, re: payroll
Exhibit 16: Memo from Roger Jackson to Elizabeth Bryan, dated December 20, 1990, re: payroll, with several lines of handwritten notes
Exhibit 17: Agreement between the Town of Hull Municipal Lighting Plant and the International Brotherhood of Electrical Workers Local Union No. 104, for the period January 1, 1991 to December 31, 1992
Exhibit 18: Memo from Roger Jackson to Ken Reed, dated September 27, 1991, re: line grade
Exhibit 19: Mr. Reed's payroll record for the period ending December 31, 1991
Exhibit 20: Mr. Reed's payroll record for the period ending September 30, 1993
FINDINGS OF FACT
Based on all of the evidence presented, reasonable inferences drawn from the evidence, and my assessment of the credibility of the witness, I make the following findings of fact.
1. Kenneth Reed was born on April 19, 1964. He began working for the Hull Municipal Lighting Department (the "Lighting Department") in July 1988 as a Third Class Lineman. (Testimony; Exhibit 4).
2. In 1989, Mr. Reed was promoted to the position of Second Class Lineman. (Exhibits 8, 13).
3. In 1991, Mr. Reed was promoted to the position of First Class Lineman. (Exhibits 8, 18).
4. On December 30, 1992, Mr. Reed was injured in the course of performing his work duties. (Testimony; Exhibit 4).
5. Mr. Reed did not return to work after the accident. (Testimony).
6. On March 1, 1995, Mr. Reed retired for accidental disability pursuant to G.L. c. 32, § 7. (Testimony; Stipulated Fact No. 1).
7. During the time that Mr. Reed worked for the Lighting Department, the salaries for Lighting Department linemen were set by a contract with the International Brotherhood of Electrical Workers Local Union No. 104 (the "Local 104"). (Testimony; Exhibit 17).
8. Between 1991 and 1995, the salary for a First Class Lineman in the Lighting Department corresponded to the salary of a Journeyman Lineman in the Local 104. (Exhibits 8, 15, 17-19).
9. In 2005, the Local 104 contract referred to a Journeyman Lineman as a Lineman. (Exhibit 1).
10. If Mr. Reed had been a First Class Lineman in the Lighting Department in 2005, his salary would have corresponded to the salary of a Lineman in the Local 104. (Exhibits 1, 8, 15, 17-19)
11. Between January 1, 2005 and August 28, 2005, the rate of pay for a Lineman in the Local 104 was $32.94 an hour. (Stipulated Fact No. 6; Exhibit 10).
12. Between August 29, 2005 and December 31, 2005, the rate of pay for a Lineman in the Local 104 was $34.35 an hour. (Stipulated Fact No. 6; Exhibit 10).
13. In 2005, Mr. Reed had $46,236.84 in earned income. (Stipulated Fact No. 3; Exhibit 5).
14. In 2005, Mr. Reed received an accidental disability retirement allowance of $34,490.52. (Stipulated Fact No. 4).
15. On April 18, 2006, Mr. Reed filed with the Public Employee Retirement Administration Commission an Annual Statement of Earned Income pursuant to G.L. c. 32, § 91A, for the 2005 calendar year. (Stipulated Fact No. 3; Exhibit 5).
16. After holding hearings on November 21, 2006 and December 19, 2006, the Hull Retirement Board determined that in 2005, Mr. Reed had earned $6,478.96 in excess income within the meaning of G.L. c. 32, § 91A. The Board therefore voted to recover $6,478.96 in retirement benefits from Mr. Reed. (Exhibit 1).
17. On December 19, 2006, the Board notified Mr. Reed of its decision to recover $6,478.96 in retirement benefits from him. (Exhibit 1).
18. On January 2, 2007, Mr. Reed appealed the Board's decision. (Exhibit 2).
19. After Mr. Reed filed his appeal, the Board recalculated the amount it believed Mr. Reed had to refund to the Board. (Exhibit 8).
20. On February 2, 2007, the Board notified Mr. Reed that it had recalculated the amount he owed the Board and that the new amount was $6,253.36. (Exhibit 8).
The Hull Retirement Board's decision to recover $6,253.36 from Mr. Reed in accordance with G.L. c. 32, § 91A, is affirmed.
Chapter 32 limits the amount of earned income a disability retiree may receive in a year. See G.L. c. 32, § 91A. If a retiree's earned income plus his retirement allowance in any one year exceeds the salary he would have earned had he remained in the same job from which he retired plus $5,000, the retiree must refund the portion of his retirement allowance that is equal to such excess. Id. The pertinent section of Chapter 32 states as follows:
If such earnings exceed an amount which, when added to the member's retirement allowance, is greater than the amount of regular compensation which would have been payable to such member if such member had continued in service in the grade held by him at the time he was retired plus the sum of five thousand dollars, said member shall refund the portion of his retirement allowance for such preceding year equal to such excess …. Id.
When Mr. Reed retired, he was a First Class Lineman and his salary was equivalent to the salary received by a Journeyman Lineman in the Local 104. In 2005, the Local 104 contract referred to a Journeyman Lineman as a Lineman. In 2005, therefore, if Mr. Reed "had continued in service in the grade held by him at the time he was retired," he would have been paid the same salary as a Lineman in the Local 104. See G.L. c. 32, § 91A. Between January 1, 2005 and August 28, 2005, the hourly rate for a Lineman in the Local 104 was $32.94; from August 29, 2005 to December 31, 2005, the hourly rate was $34.35. Thus, if Mr. Reed had remained in the position from which he retired, he would have earned $32.94 an hour for the first thirty-five weeks of 2005 and $34.35 an hour for the remaining seventeen weeks, for a total of $69,474.00:
$32.94/hour x 40 hours/week x 35 weeks = $46,116.00
$34.35/hour x 40 hours/week x 17 weeks = $23,358.00
Total = $69,474.00
Adding $5,000 to this amount equals $74,474.00. Under Chapter 32, therefore, Mr. Reed's income limit in 2005 was $74,474.00. See G.L. c. 32, § 91A (refund requirement triggered if earned income plus retirement allowance exceeds current salary for retiree's last-held job plus $5,000).
In 2005, Mr. Reed earned $46,236.84 and received an accidental disability retirement allowance of $34,490.52, for a total income of $80,727.36:
Earned income $46,236.84
Retirement allowance + $34,490.52
Total = $80,727.36
Therefore, in 2005, Mr. Reed had excess earnings of $6,253.36:
Actual income in 2005 $80,727.36
Income limit in 2005 (i.e.,
2005 Lineman Salary plus $5,000) - $74,474.00
Excess earnings per G.L. 32, § 91A $ 6,253.36
Mr. Reed contends that when he retired, his salary was equivalent to that of a Head Lineman - rather than a Lineman - in the Local 104. At the hearing, he testified that in order to attract good linemen, the Lighting Department paid one pay grade above the rate paid to Local 104 linemen who worked outside of Hull. Thus, while Mr. Reed was a First Class Lineman, he received the salary of a Local 104 Head Lineman.
I do not credit Mr. Reed's testimony. Mr. Reed's memory of events was not reliable and his testimony on cross-examination was evasive. Although he testified that he began in the Lighting Department as a Second Class Lineman, in fact he was hired as a Third Class Lineman. See Exhibits 8, 13. Additionally, when asked whether he had any of his old payroll records, he did not answer the question posed but instead stated that the information was "easily obtainable" from the Town of Hull. Finally, there are no documents or other evidence that Mr. Reed ever received a Head Lineman's salary. Instead, all of the documents in evidence indicate that Mr. Reed was being paid as a First Class Lineman when he retired. In this regard, I note that while Mr. Reed was given additional time to produce documents and witnesses to support his claim, he did not do so.
Based on the foregoing, the Board's decision is affirmed.
DIVISION OF ADMINISTRATIVE LAW APPEALS
Natalie S. Monroe
Dated: June 27, 2008