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PENNSYLVANIA ASSOCIATION STATE MENTAL HOSPITAL PHYSICIANS v. STATE EMPLOYEES' RETIREMENT BOARD (07/30/76)

decided: July 30, 1976.

PENNSYLVANIA ASSOCIATION OF STATE MENTAL HOSPITAL PHYSICIANS, INC. ET AL., PLAINTIFFS
v.
STATE EMPLOYEES' RETIREMENT BOARD, ET AL., DEFENDANTS



Original jurisdiction in case of Pennsylvania Association of State Mental Hospital Physicians, Inc.; Ruth C. Sabatino, an Individual on behalf of herself and all others similarly situated; Mary L. Hansen, M.D., an Individual on behalf of herself, and all others similarly situated; A. Victor Hansen, Jr., M.D., an Individual on behalf of himself, and all others similarly situated; and F. Lewis Bartlett, M.D., an Individual on behalf of himself, and all others similarly situated v. State Employees' Retirement Board; Sol E. Zubrow, in his capacity as Chairman of the State Employees' Retirement Board; Honorable C. Delores Tucker, in her dual capacity as Secretary of the Commonwealth and as Vice-Chairman of the State Employees' Retirement Board; Frank M. Happ, in his capacity as member of the State Employees' Retirement Board; William J. Moran, in his capacity as member of the State Employees' Retirement Board; Honorable Paul J. Smith, in his capacity as member of the State Employees' Retirement Board; Honorable Vincent Yakowicz, in his capacity as member of the State Employees' Retirement Board; Richard L. Witmer, in his capacity as Executive Secretary of the State Employees' Retirement Board; Grace M. Sloan, in her capacity as Treasurer of the Commonwealth of Pennsylvania; and Honorable Milton J. Shapp, in his capacity as Governor of the Commonwealth of Pennsylvania.

COUNSEL

Richard B. Sigmond, with him Leonard Spear, and Meranze, Katz, Spear & Wilderman, for plaintiffs.

Melvin R. Shuster, Deputy Attorney General, with him Raymond Kleiman, Deputy Attorney General, J. Justin Blewitt, Jr., Deputy Attorney General, and Robert P. Kane, Attorney General, for defendants.

President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, and Blatt. Judges Kramer and Rogers did not participate. Opinion by Judge Wilkinson.

Author: Wilkinson

[ 25 Pa. Commw. Page 634]

The instant case concerns the retirement service credits earned by part-time employees of the Commonwealth of Pennsylvania. At least from 1959 and including part of 1969, part-time workers receiving an annual salary were advised, and the State Employees' Retirement Board (Board) systematically calculated retirement benefits on the basis, that one year of credit would be earned for each year the employee earned an annual salary.

In mid 1969 the Board requested an attorney general's opinion on the propriety of the system of computation of retirement credits of part-time employees for the purposes of eligibility and vesting. The opinion, issued in response to this request, advised that part-time employees were eligible to receive credit for pension fund purposes, only in an amount corresponding

[ 25 Pa. Commw. Page 635]

    to the amount of time worked by the individual as a percentage of full-time employment.*fn1 The opinion was applied to recompute, at a percentage basis, credit for earlier service rendered by part-time employees and was applied thereafter for any additional part-time employment retirement credit.

In 1969, and until amended in 1974, Section 204(1) of the State Employes' Retirement Code of 1959, Act of June 1, 1959, P.L. 392, as amended, 71 § 17205-204(1), provided, in pertinent part:

"In computing the length of service of a contributor for retirement purposes, a year of service shall mean a period of twelve (12) months during which a contributor is a State employe and for which he receives an annual salary or other compensation. The time during which a State employe is on furlough or on leave of absence without pay shall not be counted in computing the credited service or the final average salary of the contributor. . . ."

In 1974, the legislature adopted the State Employees' Retirement Code, 71 Pa. C.S. § 5101 et seq. This enactment, at 71 Pa. C.S. § 5302(a), altered the method of computation of retirement credits by providing:

"In computing credited State service of a member for the determination of benefits, a full-time salaried State employee including any member of the General Assembly, shall receive credit for service in each period for which he makes contributions as required but in no case shall he receive more than one year's credit for any twelve consecutive months or twenty-six consecutive biweekly pay periods. A perdiem or hourly

[ 25 Pa. Commw. Page 636]

State employee shall receive one year of credited service for each non-overlapping period of twelve consecutive months or twenty-six consecutive biweekly pay periods in which he is employed and for which he contributes for at least two hundred twenty days or one thousand six hundred fifty hours of employment. If the member was employed and contributed for less than two hundred twenty days or one thousand six hundred fifty hours, he shall be credited with a fractional portion of a year determined by the ratio of the number of days or hours of service actually rendered to two hundred twenty days or one thousand six hundred fifty hours, as the case may be. A part-time salaried employee shall be credited with the fractional portion of the year which corresponds to the number of hours or days of service actually rendered in relation to one thousand six hundred fifty hours or ...


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