644 So. 2d 938 | Ala. Civ. App. | 1993
This is an appeal from a declaratory judgment which determined, inter alia, that the Board of Control of the Employees' Retirement System of Alabama (ERS) had misapplied the law governing reemployment of state retirees and that Johnny B. Nesmith's performance of an employment contract with the City of Cullman (City) would not constitute a "return to active service" within the meaning of the applicable law.
ERS was established for the purpose of providing retirement benefits to state employees and employees of the state's political subdivisions. See §§
The record shows that Nesmith was employed by the State of Alabama as a state trooper from May 1964 until his retirement in June 1989, whereupon, as a member of ERS, he began to receive retirement benefits. In July or August of 1990, principals of the Cullman County Multi-Agency Drug Task Force (MADTF) contacted Nesmith with regard to offering him a one-year contract to work as an investigator with its drug unit, which was then in its organizational stage. MADTF was to be, and is, funded through a grant to the City from the Alabama Department of Economic and Community Affairs (ADECA).
Nesmith expressed interest in the investigator's job, and, accordingly, an agreement between the City and Nesmith was drafted, stating that the City desired to engage Nesmith "to render certain technical or professional services" in connection with MADTF. The terms of the contract provided for a total annual compensation of $25,000, payable in biweekly installments. Although the City participates in ERS pursuant to §
Pursuant to §
Upon review of the contract, the administrative staff of ERS advised the City that Nesmith's employment with the City would, in fact, constitute a "return to active service" under §
Thereafter, Nesmith initiated a declaratory judgment action against ERS, ERS secretary-treasurer David G. Bronner, and the Board of Control, seeking, inter alia, an order reversing the decision of the Board of Control and allowing Nesmith to contract with the City without suspension of his state retirement benefits.
The case was submitted to the Circuit Court of Montgomery County upon the pleadings, a joint stipulation of facts, and various exhibits. Following oral argument by counsel for the parties, the trial court found in Nesmith's favor. The trial court held, in essence, that §
We find no merit in this argument. The remedial purposes of the Declaratory Judgment Act and the mandate for its liberal construction and application, §
Section
"EFFECT OF RETURN TO ACTIVE SERVICE. — Should any beneficiary be restored to active service from service retirement . . ., his retirement allowance shall be suspended until he again withdraws from service. . . ."
ERS has administratively defined "restored to active service" in Rule
"A person will be considered to have returned to service within the provisions of Code of Ala. 1975, §
36-27-16 (e), requiring suspension of benefits if such person has begun employment with the state or a unit participating in the Employees' Retirement System under Code of Ala. 1975, §36-27-6 , in any position whether or not such position is a covered position, except that a person who is elected by the public to serve in an elective office with the state or a political subdivision of the state, which office is not covered, shall not be considered to have returned to service. . . ."
Assessing the legitimacy of Rule
"For the Retirement System to apply the provisions of §
36-27-16 (e)(1) to re-employed State retirees who are not receiving any retirement benefits in their new employment is beyond the scope of the legislative directive as set forth in §36-27-16 (e)(1). The Court finds that such an expansion of the legislative act, in fact, constitutes legislation by administrative fiat."
With respect to §
"The Court determines this language to mean that retirement benefits are to be suspended when the retired employee returns to active service within the purview of the Retirement Act itself and when the retired employee receives credit for additional employer contributions toward additional future retirement. This court cannot find a rational basis for the denial of retirement benefits to the Plaintiff in this case because of his contract with the City of Cullman. Mr. Nesmith was not going to receive any retirement benefits whatsoever from the City of Cullman by employer contribution or otherwise.
"The Court cannot find a rational basis for treating this Plaintiff differently from *942 retired State employees who Defendants permit to receive full retirement benefits when they go to work for governmental agencies or 'units' outside the Retirement System or for private employers. The denial or suspension of benefits to Mr. Nesmith under the facts and circumstances of this case would be arbitrary and capricious."
(Emphasis in trial court order.)
We adopt the above quoted parts of the trial court's order as part of this court's opinion.
Although the legislature delegated to ERS's Board of Control the ability to establish rules and regulations for the administration of funds in ERS, §
ERS maintains that the intent of, and its interpretation of, §
Nesmith would be in the same position as a retired employee who works for and is paid with public funds by a governmental entity not participating in ERS under §
ERS also contends that in interpreting §
We realize that the best scenario for ERS would be for an employee not to retire after becoming eligible; however, our legislature has provided that a member of ERS may retire upon reaching eligibility and receive retirement benefits unless the member is restored to active service. If the legislature wishes to further restrict the receipt of retirement benefits from ERS by an eligible member, that is the duty of the legislature. It is not the judiciary's function to usurp the role of the legislature by judicial legislation. Employees' RetirementSystem of Alabama v. Head,
We agree with the trial court's ruling that suspension of Nesmith's retirement benefits would be arbitrary and capricious. We further agree that Nesmith's performance of the employment contract with the City would not constitute being"restored to active service" *943
within the meaning of §
We hold that if an eligible employee within the ERS elects to retire, and if the retiree's future employment does not impact ERS by the acquiring of additional retirement benefits, then the retiree has not been restored to active service and ERS is without authority to deny or suspend that retiree's retirement benefits.
The judgment of the trial court is due to be affirmed.
AFFIRMED.
THIGPEN and YATES, JJ., concur.