Summary
In State ex rel. City of Manitowoc v. Police Pension Bd. for the City of Manitowoc, 56 Wis.2d 602, 203 N.W.2d 74 (1973), a retiring police officer sought to have the city's contributions to his pension plan, payments for health and life insurance premiums, and holiday pay allowances included in the calculation of his pension benefits.
Summary of this case from Craig v. City of HuntingtonOpinion
No. 233.
Argued November 1, 1972. —
Decided January 3, 1973.
APPEAL from a judgment of the circuit court for Manitowoc county: FERDINAND H. SCHLICHTING, Circuit Judge. Affirmed.
For the appellant there were briefs by John H. Bowers, James R. Hill, and Lawton Cates, all of Madison, and oral argument by Mr. Hill.
For the respondent there was a brief and oral argument by Everett B. Hale, city attorney of Manitowoc.
The city of Manitowoc, the respondent in this appeal, obtained a writ of certiorari from the circuit court by which it sought to challenge the validity of a determination by the defendant Police Pension Board for the city of Manitowoc that a retiring police officer was entitled to a pension calculated in part upon the city's pension contribution, health and life insurance premium contributions, and holiday pay allowances.
After the return to the writ the police pension board no longer actively appeared; however, the police-pensioner in question, Harry H. Kasten, was allowed to intervene. His interests were the same as the pension board and he fully participated in the hearing and is the appellant in this appeal.
The appellant Harry Kasten, age fifty-six, became a member of the Manitowoc police force on February 1, 1943, and attained the rank of lieutenant on September 1, 1967. He retired on August 24, 1970, after twenty-seven years of service and was granted a pension by the board pursuant to sec. 62.13 (9) (c) 3, Stats. On August 31, 1970, the board held a meeting to determine the amount of Kasten's pension. By a vote of four to three, a monthly pension of $458.83 was granted commencing on August 24, 1970. The pension was based upon the following components:
The members of the police pension board voting for the pension calculated by including the disputed base components were the chief of police, a police department detective and two police patrolmen; those voting against were the mayor, the city comptroller and the city treasurer.
One half of $917.65 would equal $458.83, which was granted by the board according to its interpretation of sec. 62.13 (9) (c) 3, Stats.
On September 23, 1970, the common council for the city of Manitowoc petitioned for a writ of certiorari from the circuit court for Manitowoc county to review the action of the board in granting the pension. The respondent-city alleged that the board's action in granting appellant's pension was erroneous, unjust, arbitrary, illegal and unlawful under sec. 62.13 (9) (c) 3, Stats. The city contended that the pension should have been based only upon one half of the following three items: Base pay, night shift pay and longevity pay. The aggregate of these equal $830, and one half of this is $415 per month. It alleged that the remaining items cannot be considered as compensation within the meaning of sec. 62.13 (9) (c) 3.
Except for the collective bargaining agreement covering the policemen, no other testimony or evidence was offered to the court — this being agreed upon by stipulation between the litigants. The matter was then submitted to the court upon briefs and oral argument. It was Kasten's position that the board's decision should be upheld, and that "compensation" for pension purposes includes all of the items set forth in the findings of the board.
The statute cited below provides that the monthly pension shall be equal to one half the pensioner's monthly compensation at the time of his retirement. The trial court found that the monthly compensation included the undisputed items of base pay, longevity pay, night shift pay and the disputed item of holiday pay, and that it excluded premiums paid by the city for health insurance, life insurance and pension contributions paid by the city on behalf of Mr. Kasten pursuant to the collective bargaining agreement.
This amount paid by the city into the pension fund was $33.20 per month, which was the statutory four percent of the officer's base pay, longevity pay and night shift pay, and is consistent with the city's position.
A judgment was entered which determined that the pension board committed an error of law by including the pension contributions and the health and life insurance in its determination of Mr. Kasten's pension benefits and vacated and set aside the board's order.
The intervenor, Kasten, appeals.
Applicable statutes:
Sec. 62.13 (9) (c) 3 provides:
"(9) POLICE PENSION FUND. . . .
"(c) Pensions. . . .
"3. Service. A member of the department who has served 22 years or more may apply to be retired or may be retired on motion of the board, except that a member joining the police department after January 1, 1940, must also have attained the age of 55 years. Upon such retirement, or upon discharge after such service, the board shall order to be paid him a monthly pension equal to one-half his monthly compensation at such time provided, however, that in the event that such member received an increase in his compensation in the year preceding his retirement, which said increase was granted for the purpose of increasing his pension, such increase in compensation shall be disregarded in computing the amount of his pension, and provided further that in the event that a member has been promoted in rank within the year preceding his retirement and said promotion results in an increase in his compensation, his pension shall be computed on the basis of the current compensation for the position from which he was promoted."
Sec. 62.13 (9) (a) 1 provides:
"(9) POLICE PENSION FUND. (a) Sources of the fund. 1. Each city of the second or third class shall have a police pension fund. There shall be paid into such fund the following: Two and one-half per cent of receipts from licenses; 4 per cent of the salary of each member of the department; 25 per cent of all fines imposed for violations of city ordinances; fines imposed on members for violation of department rules; deductions from salaries for time lost on account of sickness; rewards in moneys, fees, gifts or emoluments that may be paid or given for or on account of any service of the department or any member thereof, except when allowed to be retained by said member by resolution of the board of trustees of said fund, or given to endow a medal or other permanent competitive award; receipts from sales of unclaimed property; and earnings upon the deposit, loan or investment of said fund."
Sec. 62.13 (9) (a) 5 provides in part:
"The pensions provided by this section shall be paid in full when due and only from revenue received from the sources enumerated in par. (a) 1. . . ."
Sec. 62.135, Stats., provides:
" Contractual rights of firemen and policemen. Firemen and policemen have been attracted to and have remained in service despite ability to receive higher wages and salaries in other employment because of the deferred compensation for their services promised to them in the form of pensions and death benefits in retirement systems of which they have been contributing members. The purpose of creating this section is to strengthen the fire and police service in cities and villages in which firemen's and policemen's pension system exists by establishing the security of pensions and all other benefits provided by the firemen's and policemen's pension funds in such cities and villages.
"(1) All pensions and other benefits of firemen and policemen, whether in service or retired and of beneficiaries, including widows and children of deceased firemen and policemen, by or for whom contributions shall have been made to the firemen's and policemen's pension fund established pursuant to sections 61.65 and 62.13 shall be assured by benefit contracts.
"(2) Every fireman and policeman and beneficiary shall be deemed to have accepted the provisions hereof and shall by such acceptance have a benefit contract as of July 20, 1951, unless, within 30 days thereafter, he files with the board of trustees a written notice electing to have no such contract. The pensions and all other benefits in the amounts and on the terms and conditions and in all other respects as provided in sections 61.65 and 62.13 and then in effect in such city or village shall be obligations of such benefit contracts on the part of the city or village and the board of trustees and each fireman and policeman and beneficiary having such a benefit contract shall have a vested right to such pensions and other benefits and they shall not be diminished, impaired or increased by subsequent legislation nor by any other means.
"(3) . . .
"(4) It is declared to be the policy of the legislature that no provisions of section 61.65 or section 62.13 (9) or (10) shall be amended so as to increase or decrease the contributions of firemen or policemen into the firemen's or policemen's pension fund, or in any way to increase or decrease the benefits to firemen, policemen or their beneficiaries or change any of the requirements for eligibility to such benefits, nor shall section 61.65 or section 62.13 (9) or (10) be repealed until all of the obligations of such funds have been paid."
Does the term "monthly compensation" as used in sec. 62.13 (9) (c) 3, Stats., include employer contributions to the pension fund and health and life insurance in computing the employee's compensation for pension purposes?
The city of Manitowoc has a population of approximately 33,400 people. Under sec. 62.05 (1) (c), Stats., cities of 10,000 and less than 39,000 are cities of the third class. Being a third-class city, the respondent falls within the provisions of sec. 62.13 (9) (a) 1. This section sets out what sources make up the police pension fund. Sec. 62.13 (9) (a) 5 explicitly states that the pensions provided for by this section shall be paid in full only from the revenue received from the sources enumerated in sec. 62.13 (9) (a) 1. These enumerated sources of revenue are therefore exclusive. This section does not mention, infer or imply that Blue Cross insurance, life insurance or pension contributions paid by the city are included as a source of revenue in making such a determination. And these three items cannot be reasonably said to fall within the meaning of "4 per cent of the salary of each member of the department." On the other hand, base pay, longevity pay, night shift pay and holiday pay appear to be within the meaning of "salary" under sec. 62.13 (9) (a) 1. To support this proposition one only needs to look at sec. 62.135 (2), which states:
Except tax levies as provided for in sec. 62.13 (9) (a) 5, Stats.
". . . The pensions and all other benefits in the amounts and on the terms and conditions and in all other respects as provided in sections 61.65 and 62.13 and then in effect in such city or village shall be obligations of such benefit contracts on the part of the city or village and the board of trustees and each fireman and policeman and beneficiary having such a benefit contract shall have a vested right to such pensions and other benefits and they shall not be diminished, impaired or increased by subsequent legislation nor by any other means."
[In light of this provision a collective bargaining agreement cannot increase the sources of revenue that go into the pension fund or be determinative as to what "revenue" will be paid in order to calculate the applicant's pension because the "agreement" is another "means" within this section.] This is again reiterated and re-enforced by sub. (4) of sec. 62.135, Stats. — that is, sec. 62.13 (9) shall not be amended so as to increase or decrease the contributions of policemen into the policemen's pension fund.
Sentence modified on rehearing. See: post, p. 612a.
As a result, the collective bargaining agreement cannot alter the legislative pronouncement. Art. 8 of the agreement which states that ". . . $40 shall be used in computing the monthly compensation for pension purposes" is unenforceable as contrary to the legislative intent and policy under sec. 62.13 (9) (a), Stats., and subs. (2) and (4) of sec. 62.135. The reason is that art. 8 is an attempt to increase the sources of revenue which these statutory provisions have sought to prevent.
Appellant complains though, that since sec. 62.13 (9) (c) 3, Stats., states that "monthly compensation" is the test to determine his pension, then the court must include all insurance premiums and pension contributions. The basis for this position is that "compensation" and "salary" are not synonymous but rather two different things. The phrase "one-half of his monthly compensation" could only mean "salary" in order to be consistent with the meaning of sec. 62.13 (9) (a) 1 and 5 therein. Also, other provisions of ch. 62 indicate that the legislature used the words "compensation" and "salary" as interchangeable and synonymously. For example, sec. 62.13 (7) is headed "Compensation," but then refers to such compensation in the terms of the word "salaries" of the police chief and his subordinates. This is further supported by analogy to sec. 62.13 (9a) which deals with fourth-class cities. That section states that in cities of the fourth class the council may from time to time provide for the pensioning of members of the police department. Such pension shall not exceed one-half the salary of such officer at the time of his pensioning or death. To accept appellant's position that "monthly compensation" means more than "salary" would cause the question of why the legislature made such distinction between third- and fourth-class cities. If this was the case then, as respondent states:
Within the meaning of sec. 62.13 (9) (c) 3, Stats.
". . . the legislature is being extremely unfair, first to the police officers of cities of the fourth class who get short changed and secondly, to cities of the third class because of the additional financial burden they must bear. Why should there be a difference for a city which has a population of ten thousand and one, and another city with a population of nine thousand nine hundred and ninety-nine. We believe what the legislature had in mind when the legislature said one-half of the salary in section 62.13 (9a) Wisconsin Statutes they meant the same thing as when they said one-half his monthly compensation in section 62.13 (9) (c) 3."
This is not the first time the terms "compensation" and "salary" have been interpreted as synonymous. The synonymity of these words has been so interpreted in our constitution with respect to compensation for services of public officers and judges while in office. Milwaukee County v. Halsey (1912), 149 Wis. 82, 136 N.W. 139, and Angelo v. Railroad Comm. (1928), 194 Wis. 543, 217 N.W. 570. Sec. 62.13 (9) (c) 3, Stats., in and of itself by its prohibitive provisions, indicates the synonymity of these terms — that is, when there is an increase in compensation in the year preceding his retirement or when a member has been promoted in rank within the year preceding his retirement which increases his compensation, then these increases shall be disregarded in computing the amount of his pension.
The appellant argues that simply because the word "compensation" as used in the constitution adopted in 1848 has been construed by this court to be synonymous with salary, it does not follow that it has to have the same meaning in a statute in 1972. The argument continues, ". . . When our constitution was ratified in 1848, the payment of cash for services rendered was the only form of compensation in general use. No one worried much then about employer-paid insurance premiums or pension contributions. It is thus quite proper to say that the words salary and compensation meant the same thing in 1848." We are further admonished to construe the statute consistent with the meaning the words had when the legislature adopted the statute.
The legislature has long recognized a need for pensions for firemen and policemen. A cursory examination of the history of the statute reveals that for at least the last fifty years the legislature has limited the police pension benefits to one half of the monthly "compensation" of the officer at the time he retires. To follow the argument of the appellant, it is highly probable the legislature fifty years ago did not consider that compensation included such items as employer-paid insurance premiums and pension contributions.
Both parties cite several statutes, some of them dealing with pensions and some not, which used the words "compensation," "salary" and "earnings." These references are of very little assistance to us because the words in some sections are obviously interchangeable and in others the subject matter of the section is unrelated and words used are of no help in determining whether the compensation and salary are synonymous in the statute now under consideration.
Retirement pensions for public employees have become commonplace. They are justified, in part at least, by a legislative recognition as inducements to attract and keep competent qualified and industrious employees in public service. The question of whether pensions for public employees should be provided is clearly a public policy question to be decided by the legislature. Likewise the eligibility requirements, the amount of the pension and the factors used to determine the amount of the pension are legislative prerogatives and not matters to be determined by the courts. While as a generalization it can be said that uniformity of pensions for public employees is desirable, the legislature can, as a matter of special inducement for well-defined classifications of employees, including policemen, provide some special or additional benefits.
We are convinced that at the time the legislature provided for a pension equal to one half of the officer's monthly compensation, the legislature intended it to mean his monthly salary.
If, in view of modern day employment inducements, fringe benefits such as insurance premiums, pension fund contributions and perhaps others are to be included in the formula for calculating pension benefits for police and firemen, the legislature, as a matter of desirable public policy, can so provide. The court cannot.
By the Court. — Judgment affirmed.
The following memorandum was filed on March 27, 1973.
The briefs for rehearing raise no issue that was not fully argued and considered on appeal. However, we modify certain language of the opinion. As set forth at page 609 of the opinion, sec. 62.135 (2), Stats., provides:
". . . The pensions and all other benefits in the amounts and on the terms and conditions and in all other respects as provided in sections 61.65 and 62.13 and then in effect in such city or village shall be obligations of such benefit contracts on the part of the city or village and the board of trustees and each fireman and policeman and beneficiary having such a benefit contract shall have a vested right to such pensions and other benefits and they shall not be diminished, impaired or increased by subsequent legislation nor by any other means."
The opinion further states:
"In light of this provision a collective bargaining agreement cannot increase the sources of revenue that go into the pension fund or be determinative as to what `revenue' will be paid in order to calculate the applicant's pension because the `agreement' is another `means' within this section. . . . "
This statement could be construed to mean that a collective bargaining agreement can have no effect upon the amount of an applicant's pension; therefore, the following sentence is substituted:
"In light of this provision a collective bargaining agreement does not necessarily increase the sources of revenue that go into the pension fund, nor is it determinative as to what forms of revenue are encompassed within the term `compensation' when calculating an applicant's pension. While the amounts of the respective revenues comprising `compensation' may be determined through a collective bargaining agreement, subject to sec. 62.13 (9) (c) 3, Stats., this court cannot and will not look to the collective bargaining agreement for the definition of the term `compensation.'"
The motion for rehearing is denied, without costs.