*1 February 27, 1959.] En Banc. 34084. [No.
King County Employees’ al., Respondents, et Association Employees’ Board,
v. The Retirement State
Appellant.1 1 Reported in 336 P. *2 Haydn Attorney Lloyd General, G. Baker and H.
Hilling, Assistants, for appellant. Mary Krug, Rupp Schweppe Ellen
McMicken, & respondents. Newbould, L. Marshall R. McCor- Soelen,
A. C. Van A. Boyle, mick, Robert R. amici Hamilton, and Clarence M. curiae. Employees’ System J. The State Retirement
Finley, chapter p. created Laws of retire- It is a employees ment for the benefit of the state political King county qualified its em- subdivisions. as an ployer employees mem- under the its have become Employees’ System. bers of the State Retirement provided The act to which an em- various benefits ployee may be on service, entitled his retirement from optional, compulsory, whether his retirement be re- disability. annuity; (1) sult of a These consist of benefits pension; (3) membership pen- a basic service service (4) prior pension. sion; service purposes,
For effective administrative the act created board, which consists of four state officers employees. three state this board is committed the ad- To *3 management system. and ministration of the retirement present appeal In the are concerned we portion annuity of the act which relates to to be benefits paid system. of the members requirеd monthly
A is member make contributions annuity payable upon to establish benefits which become qualification his her for retirement. the au- Pursuant to original thority (in 1947) adopted in it, vested annuity male as the standard lives initial basis annuity paid determination of the benefits to be its retirement; members board decided that the same computation annuity used for table would be benefits employees. female both male and adopted a miscellaneous order,2 the board which required by prescribe the Retirement Board is law to 2 “Whereas, retiring interest basis to be used to convert a and member’s annuity part will accumulated contributions to an become a
his retirement allowance and originally Retirement Board and still has in “Whereas, Annuity members, female, male and the 1937 Standard use for all Table computed with interest at for male lives 2%% “Whereas, are rates women lower than those of any employee, upon her that, thereafter,
announced female computed annuity on retirement, would her benefits have annuity lives. of the 1937 table for basis standard female employees female The order no retroactive effect on had previously who had retired. annuity the normal
Thе 1937 tables are based on standard age. any given expectancy life men and Since women at longer expectancy for standard tables reflect standard monthly men, women than for the use of the 1937 computing table for lives female monthly annuity pay- specific will a decrease in result in (However, employees upon retirement. female ments to average, monthly payments re- will, on the smaller longer period retired than the case of for a of time ceived average, employees. male that, The net on the male result employees total over-all will rеceive the same female annuities.) feeling aggrieved by employees re- order, herein, The request hearing quested The the retirement board. before hearing, Following hearing granted, held. applied to was valid as that the order determined prior system had not retired who all female members superior appeal An was taken to date. effective its county, provided 41.40.420. RCW Thurston court for findings superior fact, conclusions court entered setting judgment board’s order as aside the law, apply the retirement female members of to all would joined prior The retirement effective date. to its who had appealed. board has *4 resulting present overstating men the amount of annuities
granted upon to women retirement and practice general public systems “Whereas, of to it is the retirement converting equitable make an distinction as to sex when accumulated contribution to annuities Therefore, resolved, An- it Standard “Now be aforesaid pertaining
nuity male life be in use for all Table values continued May 1, 1953, upon that effective the 1937 Standard men retirement and computed Annuity pertaining female life with interest values Table retiring after date.” for all women said 2[4% at be question first of error a assignment involves Appellant’s as to the of court. oral argument jurisdiction superior En re- Banc, counsel upon rehearing, however, appellant’s marked of the of the board question adopt power tables from time was one serious to time of interest, requested and he court to this as public treat for if in or- application declaratory necessary judgment der to determine that We will assume that point. appellant has abandoned its assignment first of error. second of error raises the
Appellant’s assignment question of the court’s fact аsserts superior finding power. Appellant that, (RCW 41.40.420), under the statute court superior is an a court —not trier of the and that facts; appellate has no to enter of fact other than those any findings of the board. This raises an procedural important point which must be of before we disposed further. proceed
The procedure challenging an order of the retirement statutory. board is entirely (as RCW 41.40.420 amended 1953)3 sets out after procedure hearing be- appeal fore the Since question board. raised is one first im- of the pression regarding interpretation retirement we 3 “Apрeal thirty days any from board. Within after final decision and by claimant, order the retirement board has been communicated to the may appeal superior county such claimant to the court Thurston appeal upon appeal only equity, such shall be heard as a case in but such may such issues of law be as were The raised raised before the board. proceedings every appeal summary, such shall informal be but opportunity upon full to be heard the issues of law shall be had before judgment pronounced. appeal perfected by serving Such shall be appeal by secretary on notice of the executive of the copy personal mailing service thereof the said executive sec retary filing appeal together proof with of service notice filing together clerk of the The and the thereof with the court. service proof thirty days, appeal, within of service a notice all shall jurisdictional. secretary thirty days The within after executive shall receipt appeal notice of serve and on behalf of the retire of such file attorney appearance upon appellant or his ment bоard notice appeal thereupon be deemed at issue. exec record and such shall appellant secretary promptly and file with the utive shall serve hearing copy complete court, clerk a certified of the record of the of the being shall, upon filed, become so before the retirement Appeal judgment case. shall lie from the record in such superior supreme court as in other cases.” court
6 ascertaining guides the ex- in as
have no decisions serve findings reviewing power in of the court tent in mind must bear made the retirement board. We fact controlling legislative fаctor. stat- intent that the “only upon appeal, expressly provides issues such that, ute may raised before board.” of law be raised as were (1941), ours.) Lbr. (Italics Paul & Tacoma Co. In In re St. (2d) (2d) 877, this court considered 7 Wn. 110 P. unemployment language meaning found in the of identical compensation said: act. The court legislature, passing act, “The in conscious of this provisions compensation act, of the workmen’s which reads: “ may only appeal ‘. . but raise such is- such applica- properly or in his sues of law fact as were tion for included
rehearing, depart- complete in or in the rеcord § § [P. 3488]. Stat., Rem. C. ment.’ Rev. drafting interpreting In that section. and of our decisions ap- evidently patterned the it consideration, act under compensation peal provisions from that of the workmen’s limiting power intent act and with the evident court in cause it left out the words reviewing questions act, be- of fact under the in are contained ‘or fact’ which the old act. question “Looking quoted portion rela- the act to the having superior appeals court, and to the tive to taken nature, of this former to statutes mind our decisions relative deter- hold that the administrative we are constrained court on the unless mination of the facts is conclusive wholly dependent support wholly or without evidential arbitrary capricious. clearly question upon It or law, or the case sits as court which tries that the certain seems powers. re- equity The court shall limited court of previously raised. have been law which view the issues the commissioner review the The court shall far it is in so the facts review The court shall act. necessary has acted commissioner whether to determine applied properly arbitrarily capriciously, he whether or facts.” the law to those Shingle 19 Wn. Mills Lbr. & In re Poison
See, also, 143P. may legislature have drafting act, those of the provisions after appeal thereof patterned the unemployment compensation act, words, because the crucial compensation contained in fact, the workmen’s were not included in the retirement act. foregoing,
In view of the view of the fact that *6 support there substantial evidence record findings, board’s it was error for the trial refuse court to accept findings of the retirement board. pass question
We now the of whether the retirement properly interpreted applied the law to the facts as found. neсessary
It is first to determine whether the retire^ adopt ment board has the tables applicable time, from time to and to make them to all mem prior bers who have not retired to the effective date of the adopting order the new tables. We believe the answer inis the affirmative. clarity, necessary by
For it is to set out what is an meant annuity employees’ under the act, how the contribu- tions are to be handled.
n An monthly “payments is defined as the for life derived from accumulated contributions of a member.” 41.40.010(17). RCW “Accumulated contributions’ means purchase the sum of all contributions for the of аnnuities standing to the credit of a member in his individual ac- together regular count interest thereon.” 41.40- RCW (14). purpose .010 The act creates three funds accounting (1) internal record of the retirement board: employees’ savings (2) fund; a benefit fund; account employees’ savings an income fund. “The fund shall be fund which shall be accumulated the contributions compensation purchase from of members for the of an- provide nuities. The retirement board shall for the mainte- nance of an individual account with each member of the re- system showing tirement amount of con- member’s together tributions with interest accumulations thereon. (as 1953). Upon . . RCW 41.40.100 amended retire- member, ment of a his accumulated contributions are trans- “employees’ from ferred benefit fund” to the “benefit Upon service, fund.” retirement for the member account begins which in- to draw a service retirement allowance annuity; his "... be the actu- cludes shall equivalent at the time his accumulated contributions arial (as retirement; ...” 41.40.190 amended of his RCW equivalent’ equal 1953). means a “‘Actuarial benefit upon computed of such value when the basis may adopted the retirement board.” other tables as be (as 1957). 41.40.010(24) RCW amended actuary person An skilled mathematical. calcula- profession tions whose is the calculation of insurance risks “ ” through premiums. equivalent’ The term ‘Actuarial computed equal its definition “a as benefit of value when may the basis and other of such ” clearly . ., the retirement has reference the mathematical calculations to be made rela- *7 tive to a member’s accumulated contributions —calculations made in order those accumulated contributions to distribute monthly payment the on basis over remainder his her a of requires reasonably This the life. most accurate tables logicаl available; most accurate be those the tables would recently the board. most “. . directs retirement to . RCW 41.04.050 the board commencing five-year period after At least once in each investigation . . cause an actuarial to be June . 8,1949, mortality, compensation, service, into other the made experience the retire- of members of the and beneficiaries system, retire- the condition of the into financial ment Upon system. . further, “. the And, ...” ment investigation the retirement of such actuarial basis regulations adopt tables, schedules, factors, and such shall findings necessary light of the of the in the deemed as are system, operation actuary proper the retirement for the reading portions the it is clear—from believe We especially previous pages, and from act set out a legislature intended the reading act—that the whole portion fund” to be self- annuity the “benefit account possible mortality in use sufficient. This is if the tables accurately expectancy of mem- reflect life they steadily rapidly bers With increas- when retire. ing expectancy country throughout present this impossible century, it be the retirement board would carry responsibility making provi- to out its effective adopt sions act unless it could new and more accurate they from time, tables time and direct that applied to all members who retire When thereafter. legislature gave responsibility retirement board the making provisions effective the gave
simultaneously authority to the board “the make regulations necessary all rules therefor.” Respondents argue that, under Bakenhus v. Seattle they acquired 48 Wn. P. right annuity they contractual to an em commenced ployment provisions under of the statute. cor This is rect; but one must look to the statute to determine what that annuity previously is. And we have demonstrated that the provides computed act that the is to be on the basis recently adopted prior of the most plain retirement of a member, member. The under the wording acquire statute, does not a vested contrac right tual based on use employee when became a member of the retirement system; acquires employee right rather, “a vested equal benefit of value” to her his or accumulated contribu paid monthly is to be tions, on a basis re over the Any computations mainder of his or her life. based *8 mortality rejected by tables the bоard—because ex from perience investigation they properly and actuarial did not expectancy retiring life reflect the of members —would be actuarially give unsound, employees and would not the what they for. had contracted that adopt conclude the board has the
We purpose from tables time to time for the en of deavoring expectancy to reflect the accurate life of members they Birnbaum retire. See v. New York State
10
Teachers Retirement 4 System (1956), 356, Misc. 156 (2d) 620; Y.N. O’Dea v. Public School S. Re Employees’ Board, tirement Pa., 66 Co. Dauph. Rep., board, еvidence, The fact that the substantial found that there is a difference in the of male expectancy female is a sufficient basis for dif employees adopting ferent tables to be applied employees according to sex. ' of We now turn of the question propriety in board’s action in table involved adopting at the case contend that new Respondents strenuously bar. can be accordance with the only procedure set out RCW 41.04.050.4 We do not agree with of that the act. section of respondents’ interpretation We that RCW 41.04.050 should not be con believe it board; a limitation on the of the contains powers strued as is limitation the board’s and it powers, on pos no express under ex the rule of only sible to argue limiting exclusion. ex rel. mention and State Becker implied press 340, 133 507, P. (2d) this court Wn. Wiley v. rule, said, respect following: be This rule should if and when it applied . . “. intent. We from quote Craw- determining legislative aids in Construction, 336, 195: ford, p. § Statutory 4 “ col- board of each retirement shall . . The retirement necessary keep for an such data as shall in convenient form lect and system, of and liabilities the retirement assets actuarial valuation service, mortality, investigation making into the an actuarial for experience compensation, of the members beneficiaries and other period five-year system. each com- At least once in of the retirement mencing board shall cause an actu- the retirement June after mortality, compensation, service, investigation made into the to be arial of the retire- experience and beneficiaries of the members and other system. system, condition the retirement the financial and into ment by actuary appointed qualified investigation be made shall Such after board; months commenced within six shall be retirement completed an period within addi- and shall be be studied close adequate filing retirement with the months six tional Upon system. the basis such report of the retirement on status adopt tables, investigation such board shall actuarial necessary light regulations as are deemed schedules, factors, and operation actuary proper the retirement findings making provisions and RCW of this section system, effective Supp. 2; 10726n.]” Rem. § c 78 § [1949 and 41.04.060. 41.04.040
11 “ principle words, ‘In other is to used as ascertaining legislative it is means of intent where defeating apparent in- doubtful, and not as means of ” lеgislature.’ tent of the previously apparent We have stated that intent legislature annuity portion was to have the previ self-sufficient, retirement allowance also and we have ously powers td called attention to the broad of the board purposes provisions effectuate the the act. does This give arbitrarily adopt not unlimited board new: An tables. examination the record convinces arbitrarily adopting us did not act the mor tality presently respondents; by table under attack report actuary board heard the oral on his acted proving oral advice. Thе burden of the choice of arbitrary upon respondents. They to be rested not have proved their case. respondents
The final contention made is change estopped that the board is as employees sys who became members of retirement prior tem adopting to the effective date of the order Respondents they table. contend that were misled to theif by propaganda explaining detriment used the board in argu prospective members. This ment does not stand on a firm foundation. one deals When statutory presumed with a he is commission, statutory authority; know thе limits of he its vested statutory body ascertaining deals with such without those Mag peril. limits, he does so at his own State v. Northwest (1947), (2d) (2d) 1, nesite Co. 28 643; Wn. 182P. Strand v. (1943), (2d) (2d) State 107, 16 Wn. 132P. Bennett v. 1011; Grays County (1942), (2d) (2d) Harbor 15 130 Wn. P. Department Budget 1041; ex rel. Finance, State & Busi (1940), (2d) County Thurston 633, 108 ness v. Wn. P. especially This true when, here, 828. the contractual rights acquired completely statutory. are rel. See State ex Estop Booth v. Tatro 199Wash. 92 P. pel promise asserted to enforce a will never be which is con-
trary policy North- to the statute and to the thereof. State v. County, Magnesite supra; Grays Co., west Bennett v. Harbor supra. clearly legislative policy, as *10 It would frustrаte the respondents out, the doc- hereinbefore set to allow invoke estoppel table trine of in order under a to retire not accu- which the retirement board has found does reflect system rately expectancy at of the members of the the Respondents time receive the of retirement. would then way annuity payments in- more in of than the statute the jeopardizing integrity cost financial tended—at a the system. denying application of further reason for the the A estoppel respondents that have the doctrine this case is clearly necessary prove to invoke failed to that “it is injustice.” prevent manifest State v. in order to doctrine supra. Magnesite clearly record shows Co., The Northwest prevent, invoking rather to, the doctrine could lead than injustice. manifest correctly applied retirement board law
The superior follows, therefore, It that the facts of this case. superior judgment court should be The court erred. reinstated. the retirement board reversed, and the order of It sois ordered. J., Mallery,
Weaver, C. Rosellini, Hill, Donworth, JJ., concur. following (dissenting) reasons: dissent for the J. Ott, —I equi- majority have concluded that the doctrine of Thе applicable against estoppel is not the state because
table statutory commission, he with a board or deals “When one statutory presumed know the limits of vested au- its thority.” agree quarrel I rule, but do not with
I have no majority’s application in- rule to facts of stant case. chapter employees’ act, of 1947, Laws
The state provide p. what are to not 1168, does system. operation this This is vested used in the acting authority The within its in the board. system prospective for approached members rep- purpose membership soliciting therein, their resented that the be based both sexes would the 1937 table for male lives. Under the determining whether the same table would be used for solely for females was a determination within discretion of the board. that, record shows at the time the 1937 for male adopted by board,
lives was female the 1937 table for expectancy lives showed their life exceeded that of years. knowledge, males five With this the board never- adopted ap- theless 1937table for male lives and made it plicable seceretary to both sexes. The executive of the re- tirement board testified that one table was the reason that desired make the retirement prospective simplify more-attractive to members, to *11 explanation benefits, and to make the system complicated. administration less Prospective system members of the were informed of the they receive, benefits would and were entitled to rely upon representations, the board’s since there was no against prohibition adopting in the act the board’s the same mortality table for both sexes. Carlyon,
In 166 (2d) 498, State v. Wash. 500, 7 P. 572 (1932), sought preference general state a over creditors coupons by reason of certain sold to the state. We said: mеrely seeking “Here, state, creditor, as a to collect manifestly proprietary it a fund which holds in a capacity. cases, In all such the trend of our decisions has been to hold public corporation, county, such as a which is a subdivi- principles state, sion to the same honesty common justice private and natural as would obtain between con- (Franklin County cerns 999), Carstens, v. 68 176, Wash. 122 Pac. by principles and that the state equi- is bound itself estoppel, and in its business relations with individuals expect must not more treatment than is be- favorable fair (Italics mine.) tween men.” Again, (2d) in Strand v. State, 16 Wn. 117, 132 P. (2d) (1943), 1011 we said: genеrally recognized by has
“It been this court that the doctrine of state equitable estoppel would apply against when in its acting proprietary capacity. [Citing cases.]”
In the instant case, the state was in a acting proprietary capacity when it solicited annuity plán membership for which the member consideration. paid
Estoppel will not be asserted to enforce a contract where, is contrary statute, to the but the rule is otherwise here, the statute grants the under which authority board acted it there no dif- represented would be ferentiation between the sexes. sinсe,
The shown, state that has majority no been injustice although the will be monthly annuity women payments than men, smaller those for will receive them the women longer period of time. that women Assuming, arguendo, men in employees state have than longer expectancy any same does not follow that those occupation, relied at the representations who the board they longer. injustice time will live The joined lies in securing system by misrepresent- membership reliance would ing the benefits that member receive. thereon, from their local retirement withdrew respondents the state which was jоin system, repre- systems order of “common more attractive. The principles sented to be the state justice” require natural honesty of the board’s act. validity deny estopped are con- reached majority conclusions v. court in Eisenbacher decision of this to the recent trary wherein 333 P. Tacoma, 53 Wn. *12 we said: a who to accepts job
“. . An employee contracts applicable or system relief plan and pension in accord substantially relief plan system or a pension same; the governing existing legislation then the imposed cannot be system or plan of a pension modifications the are to changes equitable unless the employee on the ...” employee in sexes both allowed to were The benefits same
(A) had The legislature existing legislation. with the accord adopt to power legislative the board to the delegated applicable table to all which would be beneficiaries under the act.
(B) primary Eiseribacher The rule announced the any pension program must decision of a is that modification equitable employee. be A modification which admit- to the tedly existing right employee’s benefits, the to decreases grants compensating benefit, to no cannot be said equitable.
(C) majority in The the instant case conclusion the permits impair pension the the state’s contract board to employees, in a manner which with certain women the legislature Eiseribacher held itself could not case the do. The act the the contract the embodies terms of between employees, not reserve to the state modify state its and did pension its the the by employees they previously adopted accepted when joined system. express In the absence of this reservation original (legislative act), contract thе state is without change power to its terms. majority rights The conclude contractual respondents, as evidenced statute in effect at the they system, joined right
time do not include the receive benefits based table in agree. I at effect that time. cannot adopting
The act does not indicate board’s order subsequent majority is to be state retroactive. retroactive, that, unless the orders are actuarially fund would become unsound, in view of rising expectancy. Assuming, arguendo, actuarially that the fund is unsound, agents they of the state knew such be the fact respondents join system. inducеd the Whether actuarially fund, fact, bewill unsound can be determined person when the last to receive under benefits regard, reading is deceased. this of the act clearly legislature recognized that the evidences the solem- nity obligations any of its contractual and intended that by appropriation. fund be met future deficit *13 16
Further, the 1947 1951, 1953, and 1955 recognized thereto, amendments that there different were categories rights, employees, dependent with different membership system. The the date of their recognizes categories “original members,” 1955statute six became and defines “new member” as one who such after April except provided 1, act. as otherwise RCW employee’s 41.40.010.If it were an intended that contractual legislature rights retirement, not until would did vest his categories whereby special not have these certain created preserved “original benefits members.” were nothing in the amendments Since there is the act or legislative that the thereto would indicate a intent which changed effect, I am have a retroactive tables were to original respondents, are members, that the as convinced computed upon the annuities entitled to receivе membership. inception their in force at the Retirement In Birnbaum v. New York State Teachers System, 984 Y. N. Y. S. N. 176 highest in' a appellate York, of-New of the state tribunal reviewing Conway Judge majority opinion Chief written holding strikingly after that ours, similar statute mortality subsequent adoption diminished table which of a reached had not of those who benefits impairment violation of contract against impairment, prohibition held, such constitutional further, the Education Law to construe it is reasonable “. . authorizing (1) periodic the State Teachers review as being System tables used of the
Retirement adoption (2) tables, of new compute annuities, computa- the use persons enter the such the annuities tion system thereafter.” jurisdictions of other decisions are not concede I controlling However, the cited New York case here. based judicial principles application and inter- of sound upon the sovereign contracts with servants, state’s its pretation sovereign honestly to deal require state Such faithfully people. those who serve fairly *14 should be government and fairness honesty principles Washington. state guide the rule should be affirmed. stated, the judgment For the reasons JJ., concur with J. Ott, Hunter, Foster Petition for denied. rehearing 1959. September Department April 9, 34544. Two. 1959.] [No. E. Siemion, Albin Appellant, Washington,
The State of v. Respondent.1 1 Reported in 337 P.