March 2, 1989 Number 3

March 2, 1989 Number 3 Honorable Arthur M. Mason Chief Administrative Justice of the Trial Court New Court House Pemberton Square Boston, MA 02108 Dear Justice Mason: You have requested my opinion as to whether an amendment to G.L.c. 32, S. 65C as set forth in St. 1987, c. 697, S. 100 applies to the pension or retirement allowanceof a Trial Court Justice who retired before the effective date of the amendment and is presently sitting as a Recall Justice under G.L.c 211BS. 14. * For the reasons set forth below, it is my opinion that the so-called "pop-up" provision provided by the amended statute, G.L.c. 32, S. 65C, does not apply to judges who retired before the effective date of the amendment, January 12, 1988, regardless of whether they have subsequently been recalled. Chapter 697 of the Acts of 1987 (the "Act") changed a number of the provisions of the retirement laws applicable to public employees. Those changes which are relevant to the subject matter of this opinion concern pension options available to retiring state employees. Under the prior statutory scheme, judges could elect to receive a reduced pension with the provision that their surviving spouse would receive two-thirds of that reduced pension. If the spouse predeceased the judge, however, the judge would continue to receive the reduced pension allowance. St. 1978, c. 393, S. 15. Section 100 of the Act altered this scheme by providing a "pop-up" provision. Basically, this provision provides that if a judge elects a reduced pension allowance with a survivor benefit for his or her spouse, but the spouse predeceases the judge, the judge will be entitled to a full pension allowance. Two other sections of the Act, S. 42 and S. 99 provide similar "pop-up" options for public employees and veterans, respectively. Although S. 135 of the Act provided that S. 42 and S. 99 were to apply as of the effective date of the Act, there is no specific provision in the Act regarding an effective date for S. 100. Three interpretations of S. 65C as amended by S. 100 of the Act have been proposed. The first suggestion is that the pop-up provision is not limited to judges retiring after the statute's effective date. Under this view, any retired judge qualifies to elect the pop-up provision at any time. Alternatively, it has been suggested that judges serving under the recall provisions who step down subsequent to the Act's effective date are entitled tp the benefits of the "pop-up" provision because this act constitutes a "reapplication" for retirement. Finally, the Division of Public Employee Retirement Administration has taken the position that S. 100 of the Act should be applied only to judges who retire on or after the effective date of the Act, 1 Chapter 21 1 A, S. 16 is the comparable recall provision for appellate justice. With regard to the question presented, this opinion applies to justices recalled under either provision. 120 P.D. 12 regardless of whether they have been recalled. For the reasons which follow, I conclude that any judge, whether on recall or not, who retired before the effective date of the Act is precluded from electing the "pop-up" provision. I begin with the controlling proposition that in interpreting the statute we must determine intent primarily from the "natural import in common and approved usage" of the words, considered in reference to conditions at the time of enactment and the objective to be fulfilled; and should give meaning to every word, assuming none to be superfluous. International Organization of Masters, etc. v. Woods Hole, M.V. & N. SS. Authority, 392 Mass 811, 813, (1984). The relevant statutory language reads: A chief justice, [or] justice hereinafter in this section called judged, who is retired or resigns and who is entitled to a pension or retirement allowance may elect to receive, in lieu thereof, a pension or reitrement allowance for life at a lesser annual rate with provision that upon his death, leaving as a survivor a surviving spouse, two-thirds of such pension, shall be paid to such surviving spouse; provided, however, that if such surviving spouse dies on or after the date such lesser retirement allowance becomes effective and before the death of such member, such member thereafter shall be paid a full retirement allowance Such election shall be in writing on a prescribed form and filed with the appropriate retiring authority at the time of retirement or resignation or within thirty days thereafter. G.L.c S. 65C (emphasis added). While a cursory reading of this provision might suggest that judges who have already retired, whether on recall or not, can elect the new pop-up provision, the first sentence read in conjunction with the entire first paragraph compels the opposite result. As an initial matter, use of the words "who is entitled to a pension" would appear to contemplate those judges who are not yet receiving their pension. Had the Legislature intended to allow previously retired judges to take advantage of the pop-up provision, language such as "and who is receiving a pension" or "and receives a pension" would have been incorporated to indicate the legislative intent to include those judges currently retired. The fourth sentence requires judges to elect an option "at the time of retirement or resignation or within thirty days thereafter". Judges who have retired prior to the enactment of the amendments cannot possibly meet this requirement of the statute. Having already retired they cannot submit their written election under this amended statory provision "at the time of retirement or resignation or within thirty days thereafter" since that time period has already passed .^ My construction of the "pop-up" clause as available only to those judges who 2 The general statutory scheme of Chapter 32 mirrors the immutability of electing an option before retiring under S. 65C. G.L.c. 32, S. 12(1) allows a retiree to change his or her elected option in three ways; anytime before the State Board of Retirement receives the retiree's written application for reitrement; within the fifteen day period after receipt of the application; or before the date the retiree's alowance becomes effective. Under this scheme, the selection of an option is a condition precedent to retiring and cannot be changed after the retirement date. P.D. 12 121 retire subsuquent to the date of its enactment is also buttressed by the canons of statutory construction. Ordinarily, statutes should be construed as having a prospective operation only, unless the statute plainly indicates an intent to operate retroactively. Nantucket Conservation Foundation, Inc. v. Russell Management, Inc., 380 Mass 212, 214 (1980); Spooner v. General Accident & Fire Assurance Corp., Ltd., 379 Mass 377, 379 (1979); see also Forbes V. United States, All F. Supp. 840, 843 (D. Mass. 1979). Similarly, it is a wellestablished principle of statutory construction that statutes affecting substantive rights, such as the pension rights of justices, are presumed to be prospective unless a contrary intent is clearly expressed. See Goldstein Oil CO., v. C.K. Smith Co., 20 Mass. App. Ct. 243 (1985) (statute repealing interstate commerce exemption under c. 93A was substantive and should not be applied retroactively). As noted above, § 135 of the Act provided an effective date for various provisions including §§42 and 99, but not § 100. In the absence of any specific indication that the Legislature intended that § 100 be applied retroactively, these traditional principles of statutory construction dictate that the provision should be interpreted prospectively.^ That the Legislature intended prospective application of the amendment is substantiated by the fact that the statute mandates that each option be self- financing. Section 65C requires that on the date of retirement or resignation the value of benefits under each option (65A, 65B, 65C and 65D) be actuarially the same. ^ Thus, each option must be self-contained and self-financing. Under the prior scheme, a retiree who chose option 65C received a lesser pension than the full pension allowance in order to provide for his or her beneficiary. Of course, this lesser pension amount did not take into account the potential cost of the "pop-up" provision. Under the amended scheme, all other variables remaining 3 Previous interpretations by both the Attorney General and the Legislature support the argument that § 65C should be applied prospectively. St. 1968, c. 699, which replaced the pre-existing version of G.L. c. 32, § 65C, was passed to broaden the class of widows covered by the section to include the widows of special justices. Language containe in that statute, "A chief justice or special justice, who is retired or who resigns and who is entitled to a pension for life", remains in force today. The 1968 act is similar to the 1987 amendment to § 65C in that there was no effective date mentioned in the 1968 act. In the absence of any effective date for the statute, the Attorney General interpreted its provisions as prospective only and placed the effective date of the act ninety days following the approval date. 1970/71 Op. Att'y Gen. No. 16, Rep. A.G., Pub. Doc No. 12 at 58 (1970). Id. 4 The pertinent language of the statute reads: "The yearly amount of such lesser retirement allowance shall be determined so that the value, on the date such allowance becomes effective, of the prospective payments to such member and to such surviving spouse shall be the actuarial equivalent of the value on such date of the full retirement allowance; provided, however, that the yearly amount of such lesser retirement allowance shall be decreased to reflect the costs to the system of providing full retirement allowances in accordance with the first sentance of this paragraph." G.L. c. 32, § 65C. 122 P.D. 12 constant, a retiree would receive a lesser amount in choosing option 65C, because the option 65C pension is actuarially determined taking into account the possible higher cost of the "pop-up". Thus, the cost of the "pop-up" is borne by the employees who select the option and in this sense is self-contained and self-financing.* In order to maintain the self-financing aspect of the statute, a retroactive application of the "pop-up" provision to previously retired judges would require a redetermination of their pension allowances. Such a redetermination would be virtually impossible and could lead to cost overruns and violate the self-financing provision, as the entire system is predicated on the immutability of choosing one or another of the particular options. Calculation of a retiree's pension involves a complicated balancing of many factors including the salary of the retiree, length of service and age of the judge and his or her spouse, if applicable. All of these variables, as well as factors such as interest accumulation and mortality rates, are time-sensitive. It is simply impossible to redetermine a pension in light of a new system where, under a pre-existing determination, part of the accrued pension has been paid out. What appears to be a minor readjustment in the pension calculation could actually affect the stability of the system as a whole and violate the statutorily mandated self-financing provision." Moreover, the pension system currently supports a large portion of unfunded liability that the Legislature has mandated must be reduced. See St. 1987, C. 697. Any additional cost incurred due to the application of the pop-up provision to already retired judges would be inconsistent with that goal. For all of these reasons I conclude that § 100 of the Act shouldbe construed 5 A hypothetical example is illustrative: A male judge retired before the 1987 amendment might receive a full pension allowance (option 65A) of 100. This same retiree would receive 80 under option 65C and his spouse upon his death would receive two-thirds of 80. If his spouse predeceased him then he would still only receive a pension allowance of 80. His pension would not "pop-up" to the full 100. Under the new "pop-up" scheme the same retiree would receive 100 as his full pension allowance but would now receive 77 under option 65C, taking into account the additional possible "pop-up" cost. If he predeceased his spouse, she would receive two-thirds of 77. If his spouse predeceases him, his pension would "pop-up" and he would receive the full 100. The extra cost of providing this contingency is reflected in a lower pension allowance under the "pop-up" provision. 6 Other sections of chapter 32 make clear both the very limited opportunities for re-entering the state retirement system, opportunities which are spelled out in detail through clear and specific legislation, and the means for doing so. For example, under G.L. c. 32, § 5(l)(g) a retiree elected to public office or appointed to office for a term of years may become an "active member" of the retirement system if the retiree pays back the "total amount of any such allowance received from the date of his retirement to the date of his again becoming a member in service". The other statutory avenue for return to active service is found under G.L. c 32, § 8(2), which provides for members retired on disability to be reinstated once physically able. P.D. 12 123 prospectively. An act with an emergency preamble is effective as of the signature date, in this case, January 12, 1988. See Opinion of the Justices to the Governor, 368 Mass. 889 (1975). Therefore, any justices reitred on or after the effective date would be able to take advantage of the pop-up provision. Any justices retired prior to that date would be precluded from electing the pop-up provision. The only question remaining concerns the availability of the pop-up clause to retired justices presently serving on recall under either G.L. c. 21 IB, § 14 or 21 1 A, § 16. It has been suggested that because a retired justice must notify the Massachusetts Board of Retirement after completing recall, this notification serves as a "re-application for retirement" .allowing the retired recall justice to elect the pop-up provision. This interpretation, however, both mischaracterizes the status of a recall justice who completes his or her service and would lead to an unreasonable construction where a more sensible one already exists. See Manning v. Boston Redevelopment Authority, 400 Mass. 444, 453 (1987); see also Green v. Board ofAppeal ofNorwood, 358 Mass. 253, 258 (1970). As is noted above, when a judge retires, his or her pension is calculated taking into account a number of variable factors relating to the retirement date including age, options available, and highest average salary for a three year period. When a judge goes on recall status under G.L. c. 21 1 A, § 16, or c. 21 IB, § 14, the judge waives his or her right to pension benefits in accordance with G.L. c. 32, § 91 and § 90B. The waiver, however, only acts as a temporary suspension of that judge's pension. ' The view that a judge's pension status remains static once determined is supported by decisions of the Supreme Judicial Court. Klapacs v. Contributory Reitrement Appeal Board, 340 Mass. 732 (1960), see Nippe v. Commissioner of Revenue, 380 Mass. 431, 433 (1980) ("Once the irrevocable election was made, he had no control over the pension in any way. He could not change the beneficiary, surrender or cancel the pension, assign it, or borrow funds against it."); see also 1961/62 Op. Att'y Gen., Rep. A.G., Pub. Doc No. 12 at 163 (1962). There is nothing about recall status which modifies the immutability of a judge's pension once determined. He or she cannot elect another option under which to retire, change beneficiaries or pick a new retirement date after completing the recall term. Nor are pension benefits readjusted because of a higher age or other determining factor such as salary.^ 7 Chapter 32, § 90B allows waiver "for such period as he may specify " The justice may "include a provision that shall remain in effect until further notice." Since the terms of recall cannot exceed ninety days, c. 21 1 A, § 16 and c. 21 IB, § 14, a recall justice could inform the Retirement Board of his or her initiation and completion date at the same time. In any case, the Retirement Board requires official notification from the Chief Administrative Justice of the Trial Court's office before reinstating a justice's retirement allowance. 8 In addition, the language of the relevant provisions regarding recall justices echo this interpretation. G.L. c. 211 A, § 16 reads "A retired chief justice or 124 F.D. 12 As a final matter, G.L.c 211 A, § 16 requires that recall justices receive all other benefits which a regular incumbent receives. It has been suggested that the new pop-up option is one such benefits. This view is not persuasive. ALthough recall justices are entitled to comparable salary, vacation time, sick leave, and health insurance, they are not in the identical position of a regular incumbent vis-a-vis retirement benefits. Most significantly, recall justices, unlike regular incumbents have no pension deductions taken from their salary and are not considered active members in the retirement system, as noted above. For all of the above reasons, I conclude that recall judges and non-recall judges who retired prior to January 12, 1988 cannot avail themselves of the newly amended pop-up provision contained in St. 1987, c. 697, § 100. Very truly yours, JAMES M. SHANNON ATTORNEY GENERAL associate justice " (Emphasis added.) Similarly G.L.c. 21 IB, § 14 reads "A retired justice of the trial court " waiver of retirement allowance by public employees as passed by the Legislature was entitled "An Act authorizing certain retired persons and those claiming under them to waive their rights to any portion of their retirement allowance." (Emphasis added.) St. 1955, c. 590, § 1. The plain meaning of this language indicates that only those justices already retired are affected by this section. P.D. 12 125