Appeal from the Order of the State Employes' Retirement Board in case of In the Matter of the Petition of Clarence E. Bowers, Deceased, dated February 18, 1976.
Elliot A. Strokoff, with him Jerome H. Gerber, and Handler, Gerber and Weinstock, for appellant.
Raymond Kleiman, Deputy Attorney General, with him Robert P. Kane, Attorney General, for appellee.
Judges Crumlish, Jr., Wilkinson, Jr. and Mencer, sitting as a panel of three. Opinion by Judge Mencer.
[ 29 Pa. Commw. Page 562]
Olivette S. Bowers (claimant) has brought this appeal from an adjudication of the State Employes' Retirement
[ 29 Pa. Commw. Page 563]
Board (Board). The Board held that the claimant, whose husband at the time of his death was a member of the State retirement system, had properly received benefits totaling $21,209.94 but was not entitled to an additional $10,890 payable to widows of Class A members of the retirement system. We agree.
Clarence Bowers died on August 14, 1964, after working for the Liquor Control Board and making retirement contributions for over 30 years. Several months before his death, he requested to be recertified to Class A from Class B to obtain higher retirement benefits. In order to receive the higher (Class A) benefits classification, he was obligated to pay the sum of $1907.20 into the retirement fund. He elected to make up this amount by increasing his payroll deductions rather than making a lump-sum payment. At the time of his death, Mr. Bowers had made sufficient increased payments to be entitled to 6 months credit at the Class A rate. After his death, the claimant indicated her desire to make a lump-sum payment of the balance of the amount owing in order to receive the larger (Class A) benefit. The Board did not accept this payment and calculated the benefit paid to the claimant by prorating the amount between Class A and Class B service, based on the amount of back payments actually made.
In construing the statutes applicable to this case, we must keep in mind that the retirement system creates a contract between the Commonwealth and its employes, and such contracts should be liberally construed to give effect to the intentions of the parties. Kline v. State Employes' Retirement Board, 353 Pa. 79, 84-85, 44 A.2d 267, 269 (1945). At the same time, however, we must be guided by the rule of construction that, "[w]hen the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit."
[ 29 Pa. Commw. Page 564]
Statutory Construction Act of 1972, 1 Pa. C.S. § 1921(b).
The central questions before us are who is entitled to make back payments and when may such payments be made under the State Employes' Retirement Code of 1959*fn1 (Code). Section 303(2) of the Code, as amended by ...