199 A. 130 | Pa. | 1938
Plaintiff, an employee of Allegheny County from 1910 until June 16, 1932, retired. Under pertinent legislation he received retirement pay until August 1, 1933, when it was suspended by the Retirement Board for the reason that since that date he was continuously employed by the Commonwealth of Pennsylvania. A petition for mandamus was filed to compel the Board to resume his retirement allowance and to pay the sums due *404 from August 1st to date. The Board justified suspension under the Act of May 22, 1933, P. L. 840.1
Petitioner retired under the Act of May 2, 1929, P. L. 1278.2 Under relevant acts, county employees were required to contribute each month to the retirement fund a certain percentage of their salary, and county employees who might leave the service of the county before becoming eligible for retirement could receive back their contributions from the county. Employees were entitled to retirement pay when they attained the age of 50, had been employed by the county for 20 years, and had contributed to the fund as required by the Act.
The court below sustained plaintiff's demurrer to respondent's return for the reason that the Act of 1933 was not applicable, hence this appeal.
We endeavored to demonstrate in Retirement Board of AlleghenyCounty v. McGovern et al., Commrs.,
In Lynch v. United States,
It is well established that the constitutional prohibition against impairment of contracts applies to the State or its subdivisions as obligor. See Lynch v. United States, supra. This Court recently assumed this point in the case of Beloff v.Margiotti,
So strong is this vested right it has been held that the contract clause of the Federal Constitution forbids impairment by the states, not only by statute, but also by amendment to or change of the state constitution: Central of Georgia RailwayCo. v. Wright,
But, it is urged that within the Act there is a reservation of power to alter the retirement system and to amend the Act; that this reservation prevents what would otherwise be a violation of the contract clause offensive to state and federal constitutions. The Act of 1929, Section 315, substantially re-enacting Section 5 of the Act of 1919, provides that the Board "may adopt, amend, revise and abolish, in its discretion, such regulations, not inconsistent with law, as it deems necessary." As we pointed out in the McGovern case: "The legislature may from time to time, within the confines of that established relation, alter, change, amend, and render intact the actuarial soundness of the system so as to strengthen its fibers in any way it sees fit. Changes in *408 details, such as length of service required, contributions needed, and age requirements, to keep the fund on sound actuarial practices, are essential. Flexibility in component parts is a paramount necessity to guard against changed conditions and to permit keeping abreast with actuarial science. The basis is contribution from the county or state and from employee members." The Board may from time to time adopt improved administrative methods, — technical changes in detail, — and may, while the employee's right is inchoate, adopt such regulation for the betterment of the retirement fund's security. It may increase payments or require other actuarial changes to protect the established principal, but as to employees who have through time built up or acquired their right to retirement pay, on the assurance from the government that it would be fully met, the government must understand that a definite fixed obligation has been assumed.
The Board also argues that without reference to the Act of 1933, one in active duty is not eligible for retirement payments, and refers to People ex rel. Luthardt v. RetirementBoard,
Retirement pay is a part of the compensation for services rendered during active employment. Plaintiff's rights under the Retirement Act, having vested upon his becoming eligible for retirement, could not be impaired by legislation. Upon subsequently accepting a position with a different branch of the State government his rights to retirement pay were not waived. Accepting employment by the State is not a waiver of retirement rights. If the State may constitutionally provide that an individual's rights are to be extinguished as here, conceivably the State may so increase the number of contingencies upon which the employees' interest shall cease, as to actually force a surrender of all rights.
Our Act establishing the county employees' retirement system, and also the acts providing for retirement of State employees, employees of cities of the first class, teachers, and motor police, recognize the employee as being a party to the contract.
In many other states the same conclusion as that reached by this Court in the McGovern case has been adopted. Cobbs v. HomeIns. Co. of N.Y.,
A case closely analogous to the present case, Roddy v.Valentine,
In Trotzier v. McElroy et al.,
State ex rel. Holton v. City of Tampa,
The court below was correct in sustaining appellee's demurrer to the return to the petition, not because Section 326 of the Act of 1933 is inapplicable to appellee, but for the reasons set forth in this opinion. The validity of the section as applied prospectively to one becoming eligible for retirement in the future, is not here decided. That question will be disposed of when a competent case arises.
Judgment on the demurrer is affirmed; costs to be paid by appellants.