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STATE EMPLOYES' RETIREMENT BOARD v. ADAM T. BOWER (03/24/71)

decided: March 24, 1971.

STATE EMPLOYES' RETIREMENT BOARD
v.
ADAM T. BOWER



Appeal to the Court of Common Pleas of Dauphin County from the decision of the State Employes' Retirement Board in case of State Employes' Retirement Board v. Adam T. Bower. Appeal transferred September 1, 1970, to the Commonwealth Court of Pennsylvania.

COUNSEL

Robert E. Woodside, with him Woodside, Woodside & Zwally, for appellant.

Raymond Kleiman, Deputy Attorney General, with him Fred Speaker, Attorney General, for appellee.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Manderino, Mencer and Rogers. Opinion by Judge Wilkinson.

Author: Wilkinson

[ 1 Pa. Commw. Page 538]

On January 7, 1969, at the age of 64, Adam T. Bower, appellant, retired as a state employee after serving in the House of Representatives from 1939 to 1966, inclusive, and as chief clerk of the House of Representatives in 1967 and 1968. He qualified as a state employee under the State Employes' Retirement System and received credit for two years' service as a member of class A and 28 years' service as a member of class D.

On retirement, appellant was confronted with a choice among several options as set forth in the State Employes' Retirement Code of 1959 in section 404, entitled "Members' Options." Act of June 1, 1959, P.L. 392, as amended, 71 P.S. 1725-404. He determined that the "present value" of his retirement, calculated as of that time, was $256,300. The "present value" is placed in quotation marks since this is a calculation made by the State Employes' Retirement Board before applying the limitation of section 401(1)(d.3) added to the Act

[ 1 Pa. Commw. Page 539]

    of 1959 by amendment: "Except in the case of any member who has served as a constitutional officer of the General Assembly, the total superannuation retirement allowance payable to a member of Class D-3, after election of an option, as provided in section 404, shall not exceed twelve thousand dollars (12,000) per year." Act of July 29, 1965, P.L. 264, 71 P.S. 1725-401(1)(d.3).

He determined further that if he chose option 2, whereby he would receive an annuity for life and on his death, his wife, if she survived, would receive the same annuity for her life, he and she would receive $1,152.96 per month. This was the maximum he could receive after giving weight to the $12,000 limitation on the benefits accruing as a result of his years in the legislature. The present value of such an annuity was determined to be $163,544. It is the loss of this difference, or $92,756, that gives rise to this appeal.

The Board, acting on the advice of the Attorney General, declined to pay appellant the $92,756 as a lump sum or in any other form. Appellant contests this decision as being (1) an improper interpretation of section 401(1)(d.3) and section 404, and (2) unconstitutional if applied to him since he was eligible to retire prior to the passage of the Act of June 29, 1965. We cannot agree with appellant's position and must affirm the decision of the State Employes' Retirement Board.

It is our opinion that the proper interpretation of the Retirement Code is that no lump sum payment can be made to any retiring member other than a lump sum equal to his accumulated deductions standing in his individual credit in the member's annuity savings account. If he elects this lump sum, he would thereby forego his right to an annuity or a retirement allowance payable ...


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