Clark v. State Teachers Retirement Sys.
2018 Ohio 4680
Ohio Ct. App.2018Background
- Public higher-education faculty (appellants) elected Alternative Retirement Plans (ARPs) instead of STRS defined-benefit plan; employers pay a mitigating rate to offset ARP/DC Plan impact on STRS.
- ORSC set ARP mitigating rate at 5.76% (2000) under R.C. 3305.06(D) based on actuarial study; STRS set its DC Plan rate at 3.5% (2000).
- R.C. 3305.061 (2001) provided that the ARP mitigating rate "shall not exceed" the corresponding DC Plan mitigating rate and that any change required by that section takes effect the same day as the DC Plan change.
- In July 2013 STRS raised the DC Plan mitigating rate to 4.5% and collected 4.5% from ARP employers; appellants sued for equitable restitution of the extra 1% collected from July 2013 to Sept. 2015.
- Trial court granted summary judgment for STRS, reasoning R.C. 3305.061 operated to cap and make "effective" the ARP rate equal to the DC rate; the court of appeals reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.C. 3305.061 authorized STRS to increase ARP mitigating rate to match a raised DC Plan rate | Clark: ORSC had exclusive authority to change ARP rate; 3305.061 did not authorize STRS to raise ARP rates to match DC increases | STRS: 3305.061 makes ARP rate effectively equal to DC rate whenever DC rate is below ORSC rate, so raising DC to 4.5% authorized collection at 4.5% from ARPs | Court: 3305.061 only requires ARP rate not to exceed DC rate; it operates to reduce ARP rate to match a lower DC rate but does not mandate increases to ARP rate when DC rises; ORSC retained authority to change ARP rate |
| Whether 3305.061 converts ORSC-set ARP rate into an "effective" rate limited by DC Plan rate such that STRS may collect up to the DC rate | Clark: The statute does not transform ORSC's rate into STRS's controllable figure; ORSC-set rate remains controlling absent ORSC action | STRS: The statute functionally capped ARP collections at the DC rate and thus permitted collection at the DC rate when it rose | Court: The statute imposes a ceiling; it prevents collection above DC rate but does not itself increase ARP rate to match DC Plan increases |
| Entitlement to equitable restitution for amounts collected after DC rate rise | Clark: STRS unlawfully collected the additional 1% and was unjustly enriched | STRS: Collections were authorized under its interpretation of statute | Court: Because prior legal ruling (in trial court) was erroneous, remanded for trial court to consider plaintiffs' unjust-enrichment summary judgment motion and merits |
Key Cases Cited
- State v. Elam, 68 Ohio St.3d 585 (statutory interpretation follows plain meaning)
- State ex rel. Carna v. Teays Valley Local Sch. Dist. Bd. of Edn., 131 Ohio St.3d 478 (give effect to plain statutory language)
- Commerce & Indus. Ins. Co. v. Toledo, 45 Ohio St.3d 96 (read words and phrases in context)
- East Ohio Gas Co. v. Pub. Util. Comm., 39 Ohio St.3d 295 (avoid redundant or ignored statutory words)
- In re Duke Energy Ohio, Inc., 150 Ohio St.3d 437 (in pari materia rule for related statutes)
- State ex rel. Gill v. School Emp. Retirement Sys. of Ohio, 121 Ohio St.3d 567 (deference to agency interpretations if statute ambiguous)
- Johnson v. Microsoft Corp., 106 Ohio St.3d 278 (unjust enrichment elements)