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TAYLOR v. ABERNATHY (09/27/66)

decided: September 27, 1966.


Appeals from orders of Court of Common Pleas of Mercer County, Sept. T., 1964, Nos. 8, 264, 265, and 192, in cases of Lawrence M. Taylor v. Jack Abernathy, John Evans, Jr., Basil Scott et al.; Ethel F. King v. Firemen's Pension Fund of Sharon; The Merchants and Manufacturers National Bank of Sharon, administrator c.t.a. of estate of Mildred S. Miller, deceased, John Phillips Miller and Robert Skyrm v. The Police Pension Fund Commission of the City of Sharon; City of Sharon and The Police Pension Fund Commission of the City of Sharon v. Lawrence M. Taylor, The Merchants and Manufacturers National Bank of Sharon, as administrators c.t.a. of estate of Mildred S. Miller, deceased, William J. Thomas et al.


W. Allen Dill, Solicitor, for City of Sharon, Police Pension Fund Commission, and Firemen's Pension Fund.

John Q. Stranahan, with him Stranahan & Stranahan, for appellee.

Nathan Routman, with him Routman, Moore & Goldstone, for appellees.

Albert E. Acker, with him Cusick, Madden, Joyce, Acker and McKay, for certain members of Police Pension Fund.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Chief Justice Bell dissents. Dissenting Opinion by Mr. Justice Cohen.

Author: Roberts

[ 422 Pa. Page 633]

This appeal involves a challenge to the validity of certain pension plans adopted by the City of Sharon for the benefit of retiring police and firemen. Four cases were consolidated on this appeal, and, although each must ultimately be considered on its own particular factual configuration, all raise the same basic issue upon which the resolution of the other issues involved depends: were the ordinances establishing the pension plans in conformity with their enabling statutes?

Since it is beyond dispute that a municipality has no power to enact ordinances except as authorized by the Legislature, and that any ordinance not in conformity with its enabling statute is void, Allentown School Dist. Mercantile Tax Case, 370 Pa. 161, 87 A.2d 480 (1952); Genkinger v. New Castle, 368 Pa. 547, 84 A.2d 303 (1951); Murray v. Philadelphia, 364 Pa. 157, 71 A.2d 280 (1950); Kline v. Harrisburg, 362 Pa. 438, 68 A.2d 182 (1949), it is clear that if the challenged ordinances are determined not to conform in any material respect with their enabling legislation, they must be declared invalid. Cf. Allentown School Dist. Mercantile Tax Case, supra.

The statutes directing municipalities of the third class to adopt pension plans for police*fn1 and firemen*fn2 set forth in detail the requirements for the establishment and operation of such funds. However, in our view the present ordinances so deviate from the letter and spirit of the enabling legislation as to render unnecessary a section by section analysis and comparison in order to ascertain whether the challenged plans are in conflict with or unauthorized by the enabling acts.

[ 422 Pa. Page 634]

As stated by the court below, "it is inherent in the concept of any retirement plan that whatever the amount of monthly retirement pay or delayed compensation may be, it is to be continued during the entire lifetime of the recipient."*fn3 The plans here in dispute do not provide for lifetime payments, and, for that reason, cannot be said to provide for the system of retirement benefits contemplated by the Legislature.

Under the city's plans,*fn4 a monthly deduction is made from the wages of each participating member and credited, along with a contribution from the city, to an individual account maintained for that person. Although the funds are treated as one for investment purposes during the period of a member's employment, upon retirement, that portion of the fund attributable to the retiree is removed from the fund and a new, segregated account established. From that point, the retiree no longer shares in the income received by the general fund.

The retiring member selects an amount which he desires to receive monthly from his account, with the limitation that the amount chosen may be no less than $50 nor more than one-half his salary at retirement. If these monthly payments exhaust his account during his lifetime, no further benefits under the plans can be

[ 422 Pa. Page 635]

    received. If a member dies, either before retirement or before exhausting his account, the amount remaining therein is paid in a lump sum to his widow, minor children or estate.*fn5

No extended discussion is required to demonstrate the weakness of this plan. The system of delayed compensation as contemplated by the Legislature is designed "to aid employees who have served a long period of time in public employment and have reached an age where through decreased earning power because of impairment of mental or bodily vigor, they are compelled to separate themselves from active service." Retirement Board v. McGovern, 316 Pa. 161, 164, 174 Atl. 400, 402 (1934). The plans adopted by the City of Sharon would abandon the retiree during the very period when assistance was most needed and clearly intended by the Legislature to be forthcoming. In the absence of a provision for lifetime benefits for the retiree, we are unable to conclude that the plans here adopted conform to the legislative intent as embodied in the enabling acts.

Moreover, the limitation upon the benefits to which the retiree is entitled is so interrelated to the other features of the plans, such as permitting the retiree to select the amount of his retirement pay, and the payment of the balance of a retiree's segregated account to his family upon his death, that we are unable to do other than hold that both ordinances are invalid in their entirety.*fn6

[ 422 Pa. Page 636]

We are therefore confronted with the tasks of determining the effect of this invalidation upon the rights of the respective claimants whose actions have been consolidated on this appeal.


Taylor v. Abernathy (No. 185)

Lawrence Taylor is a former Sharon police officer who retired in 1956 after 20 years continuous service. At that time, his portion of the general pension fund, amounting to $14,154.32, was transferred to a separate account established in his individual name. Mr. Taylor chose to receive the sum of $180 per month from his account. These payments continued until January 1964, at which time he was notified that no funds remained in his account and that he would thus receive no further pension payments. Taylor was then 70 years of age.

A complaint in mandamus was filed by Taylor to compel the city council of Sharon to enact a valid police pension ordinance providing for lifetime benefits and to resume his monthly payments of $180, retroactive to January 1, 1964. Following a hearing, the court below entered the following order: "And Now, March 29, 1965, it is ordered that the Council of the City of Sharon shall proceed forthwith to amend Ordinance

[ 422 Pa. Page 637]

No. 66-52 in such a manner as to comply with the mandatory requirements of the Police Pension Fund Provisions of the Third-Class City Code. Council is to use its own discretion as to those portions which are discretionary, but providing therein that officers who shall have retired on or before March 29, 1965, shall continue to receive the monthly retirement pay at the rate designated by them at the time of their retirement until the end of their lives, effective from the date when the said payments were discontinued, December, 1963, and, in the case of any such officers whose pay ...

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