Robert L. Eddy v. Connecticut State Employees Retirement Commission (2011)

MEMORANDUM OF DECISION

Robert Eddy retired as a Tier 1, Plan B member of the State Employees Retirement System (SERS).   He retired under SERS on April 1, 2003 at the age of 58.   His monthly retirement benefit was calculated under the SERS formula used by the State Employees Retirement Commission (SERC) for over 40 years.   As part of this formula, the SERC used Eddy's “closest age” and determined him to be 59 for benefit purposes.

Since Eddy retired on April 1, 2003, he was also eligible to receive benefits under the Early Retirement Incentive Program (ERIP).   The ERIP was enacted to incentivize state employees to retire early so as to reduce the amount of currently employed state workers in order to reduce the state's deficit.   The ERIP offered three incentive years of credit (called “chips”) to certain Tier I and II members of SERS. These “chips” would be given to an employee to either increase their retirement age to 55 (if they had not otherwise reached that age) or to increase an employee's service credit (to be applied in their Tier I or II calculation), or both.   For example, if an employee was 53, he could use two “chips” to increase his age to 55, and then use a third “chip” to increase his service credit by one year.   In Eddy's case, since he was 58, all three “chips” went to increasing his service credit.

In accordance with his retirement under SERS, Eddy elected to use the “spouse option.”   Under this formula, his closest age was determined to be 59, and his wife's age was determined to be 54.   Eddy challenged the SERC's calculation, arguing that the Commission should have used his and his wife's “actual ages” in determining their retirement benefits.   By not doing this, Eddy argued, he lost out on about $609 per year in retirement benefits.   To support his position, Eddy pointed to language from the ERIP, section 6(D)(2) which says that “[a]ctual age should be used in calculation of all related benefits including, but not limited to, Plan B reductions and Group Life Insurance.”

Eddy appealed to the Subcommittee on Purchase of Service and Related Matters which recommended that the Commission deny Eddy's claim.   The Commission agreed.   Eddy appeals the Commission's decision to this court.

The issue before this court is whether or not the SERC acted unreasonably in determining that Eddy's retirement benefits under SERS be calculated based on his closest age or “actual age” as defined in the ERIP. The court finds that the SERC acted reasonably in their interpretation of the ERIP and the application of the “actual age” provision to Eddy's particular situation.

The applicable standard of review in an appeal from the decision of an administrative agency is very restricted.  New Haven v. Freedom of Information Commission, 205 Conn. 767, 773, 535 A.2d 1297 (1988).   As for conclusions of law reached administratively, the ultimate duty for this court is to determine, in view of all the evidence, “whether the agency, in issuing its order, acted unreasonably, arbitrarily, illegally or in abuse of its discretion.”  Dept. of Public Safety v. State Board of Labor Relations, 296 Conn. 594, 598–99, 996 A.2d 729 (2010).  “Although the interpretation of statutes is ultimately a question of law ․ it is the well established practice of this court to accord great deference to the construction given a statute by the agency charged with its enforcement ․ Conclusions of law reached by the administrative agency must stand if the court determines that they resulted from a correct application of the law to the facts found and could reasonably and logically follow from such facts.”  Celentano v. Rocque, 282 Conn. 645, 652, 923 A.2d 709 (2007).

“When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature ․ In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply ․” Dept. of Public Safety v. State Board of Labor Relations, supra 296 Conn. at 599–600.   Furthermore, the legislature's use of a broad term in an administrative context, without attempting to define that term, “evinces a legislative judgment that the agency should define the parameters of that term on a case-by case basis.”  Cos Cob Volunteer Fire Co. No. 1, Inc. v. Freedom of Information Commission, 212 Conn. 100, 106, 561 A.2d 429 (1989).

Even if the SERC is not offered the traditional deference afforded to time-tested interpretations of agencies, see MacDermid, Inc. v. Dept. of Environmental Protection, 257 Conn. 128, 137, 778 A.2d 7 (2001), its conclusion of law must still stand.   The SERC concluded that the ERIP did not change how it would calculate retirement benefits under the SERS. This position is not unreasonable and gives effect to the apparent intent of the legislature considering the fact that “actual age” is not defined in the ERIP.

The ERIP was not intended by the legislature to change how retirement benefits under the SERS would be calculated.   It was enacted as part of the deficit mitigation plan for the fiscal year of 2003 to incentivize state employees to retire early so the state could save money by not having them on the full-time payroll anymore.   Therefore, it was reasonable to assume that the undefined “actual age” reference in section 6(D) of the ERIP did not change in any way the manner in which retirement benefits were to be calculated.   If “actual age” did not apply, it was reasonable for the SERC to use Eddy's “closest age” in calculating his retirement benefits under the SERS. It operates in conjunction with the intent of the legislature if the ERIP is read to have been enacted to only facilitate early retirement for state employees.   Therefore the phrase, “actual age” can be interpreted to refer to the age at which the retiree would receive benefits under the ERIP. These benefits would include a bump up in age to meet the minimum age requirement for eligibility, or towards additional service credit, or for a combination of both.

The Commission's view that “actual age” referred to the fact that the non-ERIP adjusted age of the retiree was to be the starting point for calculation purposes as opposed to the ERIP-inflated age also provides a workable result.   The phrase “actual age” should refer to the non-adjusted age without the addition of incentive chips.   The ERIP was enacted to make employees who were otherwise not eligible for retirement in 2003, eligible to retire.   In no way would it be workable if a cost-saving statute was enacted to allow for state employees to retire early, and additionally bank up to three years for retirement benefits purposes.

Based on the foregoing, Eddy's appeal is denied.

By the Court,

OWENS, J.T.R.

Owens, Howard T., J.T.R.