994 N.E.2d 355
Mass.2013Background
- James T. Walsh, a vocational teacher who became an MTRS member in Oct. 1987, sought in Dec. 2005 to buy back three years (Feb. 1, 1977–Jan. 31, 1980) of prior trade service to increase his retirement credit.
- G. L. c. 32, § 4(1)(h1/2) permits such buybacks: makeup payments equal to 10% of the member’s regular annual compensation as of the member’s most recent date of entry into membership, plus “buyback interest.” The statute does not specify when interest accrues.
- MTRS promulgated 807 C.M.R. § 14.05 (approved by PERAC), providing that buyback interest is charged back to the years of service being purchased (i.e., beginning during the prior service period).
- Walsh argued interest should begin only at his MTRS entry date (Oct. 1987); MTRS assessed interest from Feb. 1, 1977, increasing Walsh’s cost by $7k–$8k.
- CRAB reversed an administrative hearing decision and sided with Walsh; Superior Court affirmed CRAB; MTRS appealed to the Supreme Judicial Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether G. L. c. 32, § 4(1)(h1/2) unambiguously sets the date buyback interest accrues | Walsh/CRAB: statutory phrase tying makeup payment to "member’s most recent date of entry" means interest accrues from entry date | MTRS: statute is silent/ambiguous; purpose of "makeup" is to approximate missed contributions, so interest should run from the years being purchased | Statute is silent/ambiguous on accrual date; court defers to MTRS regulation as a reasonable gap-filling interpretation |
| Whether CRAB’s contrary interpretation is entitled to deference over a duly promulgated regulation | CRAB: its adjudicatory interpretation should control | MTRS: a duly promulgated regulation has force of law and merits deference over a contrary adjudicatory reading | A properly promulgated regulation overrides a conflicting agency adjudicatory interpretation; courts defer to the regulation |
| Whether 807 C.M.R. § 14.05 is a reasonable resolution of the statutory silence | CRAB/Walsh: regulation is inconsistent with statutory text | MTRS: regulation reasonably implements statutory purpose to protect system’s financial integrity by approximating lost investment returns | Regulation is reasonable: aligns with statutory purposes and related provisions; promulgation was deliberative; court upholds it |
| Remedy for CRAB’s failure to apply the regulation | Walsh: judgment for CRAB should stand | MTRS: CRAB erred as a matter of law by not applying the regulation | Court reverses CRAB, vacates Superior Court judgment, and directs entry for MTRS |
Key Cases Cited
- Rosing v. Teachers’ Retirement Sys., 458 Mass. 283 (discussing retirement allowance basis)
- Pelonzi v. Retirement Bd. of Beverly, 451 Mass. 475 (treatment of creditable service)
- Rotondi v. Contributory Retirement Appeal Bd., 463 Mass. 644 (purchase of creditable service)
- Borden, Inc. v. Commissioner of Pub. Health, 388 Mass. 707 (force of duly promulgated regulations)
- Poe v. Sex Offender Registry Bd., 456 Mass. 801 (deference to regulations)
- Goldberg v. Board of Health of Granby, 444 Mass. 627 (two-step test for reviewing agency regulations)
- Biogen IDEC MA, Inc. v. Treasurer & Receiver Gen., 454 Mass. 174 (heightened deference to contemporaneous agency interpretation)
- Chevron U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 837 (framework for deference to administrative interpretations)
- State Bd. of Retirement v. Contributory Retirement Appeal Bd., 342 Mass. 58 (board’s duty to protect retirement system integrity)