Hackford v. Utah State Retirement , 437 P.3d 604 ( 2018 )


Menu:
  •                         
    2018 UT App 214
    THE UTAH COURT OF APPEALS
    PETE C. HACKFORD,
    Petitioner,
    v.
    UTAH STATE RETIREMENT BOARD,
    Respondent.
    Opinion
    No. 20161052-CA
    Filed November 16, 2018
    Original Proceeding in this Court
    Thomas J. Burns and John D. Walch, Attorneys
    for Petitioner
    David B. Hansen and Erin G. Christensen, Attorneys
    for Respondent
    JUDGE KATE A. TOOMEY authored this Opinion, in which
    JUDGES MICHELE M. CHRISTIANSEN FORSTER and DIANA HAGEN
    concurred.
    TOOMEY, Judge:
    ¶1     Pete C. Hackford seeks review of a decision of the Utah
    State Retirement Board (the Board) that his retirement benefits
    from two periods of public employment must be calculated
    separately and that his original retirement benefits remained
    subject to a statutory early age reduction. We decline to disturb
    the Board’s decision.
    ¶2     Hackford worked for the Utah Labor Commission in the
    Division of Boiler, Elevator, and Mine Safety (the Division) for
    nearly twenty years before seeking early retirement at age fifty.
    Upon employment, Hackford became a member of the Utah
    Retirement Systems’ (the URS) Tier 1 Noncontributory
    Retirement System, which allowed him to acquire retirement
    Hackford v. Utah State Retirement Board
    benefits without personally contributing to the retirement
    system. As an eligible veteran, Hackford elected to purchase a
    credit for his nearly six years of military service to be applied
    toward his years of service credit with the Division. This meant
    that in April 2011, when Hackford entered early retirement, he
    had accrued about twenty-five years of service credit that
    applied toward his retirement benefits.
    ¶3      When Hackford applied for retirement, he signed a
    “Notice of Post-Retirement Employment Restrictions,”
    indicating that he understood that “[his] monthly benefit will be
    cancelled if [he] return[ed] to employment with a participating
    employer within one year of [his] retirement date.” He also
    signed a statement acknowledging that he “read and
    underst[ood] the retirement options . . . , stipulations about
    alteration, addition, or cancellation of retirement, and other
    limitations” in accordance with the statutes governing the URS
    and the Board. See 
    Utah Code Ann. § 49-11-607
    (1) (LexisNexis
    2015). Because Hackford was fifty years old and retired with less
    than thirty years of service, his retirement allowance was subject
    to a statutory early age reduction. See 
    id.
     § 49-13-402(2)(b) (Supp.
    2018).
    ¶4     Hackford retired on May 1, 2011, and began receiving his
    monthly retirement allowance. But the Division reemployed him
    in his previous position the next month, on June 13, 2011. A
    retirement counselor for the URS informed Hackford that, upon
    reemployment, his retirement benefit would be cancelled and he
    would be reinstated in the retirement system. And when he
    retired a second time, his original retirement benefit calculation
    would resume and the additional years of post-retirement
    service credit would be calculated as an additional retirement
    benefit. Hackford told the retirement counselor that he
    understood how his retirement would be calculated in the
    future. In August 2011, the URS received a Post-Retirement
    Employment Form signed by Hackford, notifying it that
    Hackford was reemployed with the Division. Beginning July 1,
    2011, the URS cancelled Hackford’s retirement allowance and
    20161052-CA                     2                
    2018 UT App 214
    Hackford v. Utah State Retirement Board
    reinstated him to active member status in the retirement system.
    To date, Hackford is still employed with the Division.
    ¶5     In the fall of 2014, Hackford contacted the URS to request
    an estimate of his retirement benefit with projected retirement
    dates of either January 1, 2015, or May 1, 2016. The estimates
    provided that his original retirement allowance would resume,
    subject to the early age reduction, and that an additional
    allowance based upon the number of years of post-retirement
    reemployment service would be calculated separately.
    ¶6     Hackford requested to remove the early age reduction
    from his 2011 retirement allowance, which the URS denied. It
    explained that, “at the time [Hackford] retired in May of 2011,
    [he] discussed [his] retirement with a counselor, [was] informed
    of the statutory reduction in [his] benefit due to early retirement
    and the applicable return to work provisions, and [he] decided
    to retire anyway.” In addition, Hackford was informed at the
    time of his reemployment that his additional service credits
    would be calculated separately as additional benefits and “the
    benefit that was canceled [would] also be resumed.” (Quotation
    simplified.) Based on his reemployment following the original
    retirement, the URS determined that, under the Utah Code, he
    was “not entitled to have the original benefit recalculated by
    removing the age reduction” upon his second retirement.
    ¶7      Hackford appealed the denial to the Board by filing a
    Request for Board Action, arguing that the URS “misapplied”
    the relevant statutory provisions and “improperly reduce[d]
    [his] accrued benefit under [his retirement plan].” Hackford and
    the URS filed cross-motions for summary judgment with the
    Board after first filing stipulated findings of fact. In Hackford’s
    motion for summary judgment, he argued that the early age
    reduction was improper because he “worked for the [Division]
    continuously from 1991 to the present, with the exception of a
    45-day period in mid-2011.” The URS opposed Hackford’s
    motion, stating that Hackford “fail[ed] to disclose in any way
    that the missing ‘45-day period’ was the result of his retirement
    20161052-CA                     3               
    2018 UT App 214
    Hackford v. Utah State Retirement Board
    and that during this period he received a monthly defined
    benefit of retirement allowance as a qualified retiree under [the]
    Utah Code.” And in its own motion for summary judgment, the
    URS argued that, pursuant to the Utah Code, Hackford’s “2011
    retirement allowance [had] vested” and that his “retirement,
    including the early age reduction[,] is irrevocable and cannot
    now be altered.”
    ¶8     The Board heard arguments on the motions and
    ultimately determined that the URS correctly calculated
    Hackford’s retirement benefits. It concluded that, pursuant to
    Utah Code section 49-11-1204, 1 Hackford’s “new total
    [retirement] allowance” was “the sum of two amounts”:
    1) the original allowance from his retirement in
    2011 that was being paid at the time of cancellation
    [and reemployment], which would be resumed
    [upon his second retirement]; and 2) an additional
    allowance calculated based on the formula in effect
    at the date of the subsequent retirement for all
    service credit accrued between his retirement in
    2011 and a subsequent retirement date.
    See 
    Utah Code Ann. § 49-11-1204
    (2), (5)(b) (LexisNexis Supp.
    2018). The Board therefore granted summary judgment in favor
    of the URS.
    ¶9    Hackford seeks judicial review of the Board’s decision,
    contending that it misinterpreted Utah Code section 49-11-1204
    1. At the time of the appeal before the Board the relevant
    statutory provisions of the Utah Code were re-codified, but no
    substantive changes were made. Compare 
    Utah Code Ann. § 49-11-505
     (LexisNexis 2015), with 
    id.
     § 49-11-1204 (Supp. 2018).
    Both parties agree that the result of this dispute would be the
    same under either version of the Utah Code. We therefore refer
    to the most recent versions of the Utah Code.
    20161052-CA                     4               
    2018 UT App 214
    Hackford v. Utah State Retirement Board
    and thus erred by subjecting his retirement benefits to the “early
    age retirement reduction.” 2 The Board’s application or
    interpretation of a statute is a question of law that we review for
    correctness. McLeod v. Retirement Board, 
    2011 UT App 190
    , ¶ 9,
    
    257 P.3d 1090
    .
    ¶10 When interpreting statutes, “we look first to the statute’s
    plain language to determine its meaning.” Id. ¶ 12 (quotation
    simplified). “To determine the meaning of the plain language,
    we examine the statute in harmony with other statutes in the
    same chapter and related chapters.” Id. (quotation simplified).
    And we will liberally construe the provisions of the Utah State
    Retirement and Insurance Benefit Act “to provide maximum
    benefits and protections consistent with sound fiduciary and
    actuarial principles.” Id. (quotation simplified); see also 
    Utah Code Ann. § 49-11-103
    (2) (LexisNexis Supp. 2018).
    ¶11 Hackford contends the Board improperly determined that
    Utah Code section 49-11-1204(5)(b) applied to him, arguing that
    subsection (5)(b) could apply to him only if subsections (4)(a),
    (4)(b), and (3)(a) applied to him. We disagree.
    ¶12 When a retiree becomes “reemploy[ed] with a
    participating employer . . . within one year of the retiree’s
    retirement date,” the URS “shall cancel the retirement allowance
    of [that] retiree.” 
    Utah Code Ann. § 49-11-1204
    (2) (LexisNexis
    2. To the extent Hackford argues that the early age reduction will
    apply to his second retirement benefit calculation, we do not
    reach that argument. Because Hackford is still employed by the
    Division, the calculation of his second retirement allowance will
    be “based on the formula in effect at the date of the subsequent
    retirement for all service credit accrued between the first and
    subsequent retirement dates.” See 
    Utah Code Ann. § 49-11
    -
    1204(2), (5)(b) (LexisNexis Supp. 2018); see also 
    id.
     § 49-13-402(2)
    (providing the formula for retirement allowances based on age
    and years of service at the time of retirement).
    20161052-CA                     5                
    2018 UT App 214
    Hackford v. Utah State Retirement Board
    Supp. 2018). But when a retiree becomes reemployed more than
    one year after the retiree’s retirement date, the retiree “may elect
    to” either “(a) cancel the retiree’s retirement allowance and
    instead earn additional service credit” or “(b) continue to receive
    the retiree’s retirement allowance, forfeit earning additional
    service credit, and forfeit any retirement-related contribution
    from the participating employer that reemployed the retiree.” 
    Id.
    § 49-11-1204(3).
    ¶13 If the “retiree’s retirement allowance is cancelled,” either
    under subsection (2) or subsection (3)(a), “and the retiree is
    eligible for retirement coverage in a reemployed position, the
    office shall reinstate the retiree to active member status on the
    first day of the month following the date of the employee’s
    eligible reemployment.” Id. § 49-11-1204(4)(a). And if that retiree
    retires “two or more years after the date of reinstatement to
    active membership, the [URS] shall”:
    (i) resume the allowance that was being paid at the
    time of cancellation; and
    (ii) calculate an additional allowance for the retiree
    based on the formula in effect at the date of the
    subsequent retirement for all service credit accrued
    between the first and subsequent retirement dates.
    Id. § 49-11-1204(5)(b); see also id. § 49-11-607(1) (2015) (providing
    that “[a]fter the retirement date, which shall be set by a member
    in the member’s application for retirement, no alteration,
    addition, or cancellation of a benefit may be made except as
    provided” by law).
    ¶14 Hackford’s argument that subsection (5)(b) cannot apply
    to him because subsection (3)(a) does not apply to him is
    irrelevant. To begin with, while satisfaction of subsection (4)(a) is
    a predicate to reaching subsection (5)(b), the same cannot be said
    about subsection (3)(a). First, subsection (5)(b) expressly states
    that subsection (4)(a) must have been satisfied, but neither
    20161052-CA                      6               
    2018 UT App 214
    Hackford v. Utah State Retirement Board
    subsection (4)(a) nor subsection (5)(b) expressly requires
    subsection (3)(a) to be satisfied. Satisfaction of either subsection
    (2) or subsection (3)(a) will suffice to trigger subsection (4)(a)
    because subsection (4)(a) requires that the retiree’s retirement
    allowance is cancelled and the retiree, based on eligibility, is
    reinstated as an active member of the URS. See 
    id.
     § 49-11-
    1204(2)–(4)(a). Second, subsection (2) and subsection (3) are
    mutually exclusive. A reemployed retiree cannot become
    reemployed both within one year of the retiree’s original
    retirement date, see id. § 49-11-1204(2) (Supp. 2018), and also
    become reemployed more than one year after the original
    retirement, see id. § 49-11-1204(3).
    ¶15 Here, Hackford retired in May 2011 and received his
    retirement allowance for May and June 2011. In mid-June 2011,
    the Division reemployed him, and the URS reinstated him to
    active membership status in the retirement system and cancelled
    his retirement allowance effective July 1, 2011. See id. § 49-11-
    1204(2), (4)(a). Because Hackford became reemployed within one
    year of his retirement, subsection (2) applied and the URS
    followed the mandates of subsections (2) and (4)(a). Then, in
    2014, Hackford requested estimates of his retirement benefits for
    “projected” retirement dates of January 1, 2015, and May 1, 2016.
    Hackford therefore projected to retire a second time “two or
    more years after the date of [his] reinstatement to active
    membership,” triggering subsection (5)(b). Id. § 49-11-1204(5)(b).
    As a result, and as the statute requires, his retirement “allowance
    that was being paid at the time of cancellation”—in other words,
    his original retirement benefit—would resume on either of those
    projected dates and “an additional allowance . . . for all service
    credit accrued between the first and subsequent retirement
    dates” would be calculated “based on the formula in effect at the
    date of the subsequent retirement.” Id.
    ¶16 It appears Hackford argues in the alternative that only
    subsection (2) of Utah Code section 49-11-1204 applies to him
    and therefore his original retirement was cancelled altogether
    upon reemployment, allowing for a recalculation of his
    20161052-CA                     7                
    2018 UT App 214
    Hackford v. Utah State Retirement Board
    retirement in its entirety rather than as two separate periods of
    employment. We agree with the Board that if this was the
    legislature’s intent in enacting this provision, the rest of the
    statute remains silent as to “what happens next to a retiree like
    Hackford whose benefit is involuntarily cancelled due to
    reemployment within one year of the retirement date.” This
    would mean that the “benefit is cancelled, and no statutory
    provision exists to reinstate it.” Because Hackford retired in 2011
    and was reemployed, see 
    Utah Code Ann. § 49-11-1202
    (4)(a)
    (LexisNexis Supp. 2018) (defining a “retiree”), he became subject
    to the reemployment rules and restrictions found in Utah Code
    sections 49-11-1201 through 49-11-1208.
    ¶17 Interpreting the statute as Hackford suggests would
    produce an absurd result. Instead, we interpret the statute to
    comply with the legislative intent that the Utah State Retirement
    and Insurance Benefit Act “be liberally construed to provide
    maximum benefits and protections consistent with sounds
    fiduciary and actuarial principles.” McLeod v. Retirement Board,
    
    2011 UT App 190
    , ¶ 12, 
    257 P.3d 1090
     (quotation simplified); see
    also 
    Utah Code Ann. § 49-11-103
    (2) (LexisNexis Supp. 2018)
    (“This [Act] shall be liberally construed to provide maximum
    benefits and protections consistent with sound fiduciary and
    actuarial principles.”).
    ¶18 The Board therefore did not misinterpret or erroneously
    apply the statute. Because Hackford officially retired at age fifty
    with only twenty-five years of service credit, those retirement
    benefits will remain the same and subject to the early age
    reduction no matter when he chooses to retire a second time. See
    
    Utah Code Ann. § 49-11-1204
    (5)(b)(i); 
    id.
     § 49-11-607(1). We
    therefore decline to disturb the Board’s decision.
    20161052-CA                     8               
    2018 UT App 214
                                

Document Info

Docket Number: 20161052-CA

Citation Numbers: 2018 UT App 214, 437 P.3d 604

Judges: Toomey

Filed Date: 11/16/2018

Precedential Status: Precedential

Modified Date: 10/19/2024