No. 80-3-628, On Appeal from the Order entered May 29, 1980, Court of Common Pleas, Civil Action - Law - Delaware County at No. 79-16641.
Robert A. Graci, Rex R. Gary, Asst. Dist. Attys., Susan J. Forney, Deputy Atty. Gen., for appellants.
Christopher F. Gorbey, Media, for appellee.
O'Brien, C.j., and Roberts, Nix, Larsen, Flaherty and McDermott, JJ. O'Brien, Former C.j., did not participate in the decision of this case. Hutchinson, J., did not participate in the consideration or decision of this case. Flaherty, J., concurred in the result. Roberts, C.j., filed a dissenting opinion in which Larsen, J., joined.
The Commonwealth, through its Attorney General and the District Attorney of Delaware County, filed suit in mandamus against appellee, Officers and Employees Retirement Board, to compel it to discontinue payment of retirement benefits to John H. Nacrelli, former Mayor of the City of Chester. Appellants contend that the mandate of the Public Employees Forfeiture Act, Act of July 8, 1978, P.L. 752, No. 140, 43 P.S. §§ 1311-1315 (Act 140), prevents the former Mayor from receiving retirement pay. Appellee defended in the lower court by challenging the constitutionality of Act 140. On May 29, 1980 the Court of Common Pleas dismissed appellants' complaint and entered judgment in favor of appellee. Jurisdiction to hear this direct appeal is vested in this Court under 42 Pa.C.S.A. § 722(7).
John Nacrelli was an employee of the City of Chester, Pennsylvania, continuously from April 6, 1959 through April 27, 1979, a period of over twenty (20) years. He was elected Mayor in November, 1969 and held that office until his resignation effective April 28, 1979. Less than three (3) months prior to his resignation he was convicted in the United States District Court for the Eastern District of Pennsylvania of charges of obstructing state or local law enforcement, 18 U.S.C. § 1511, participating in an enterprise which affected interstate commerce and conspiracy, 18 U.S.C. § 1962(c) and (d), and filing false income tax returns, 26 U.S.C. § 7206(1).
Mr. Nacrelli was a member of the pension plan for officers and employees of the City of Chester.*fn1 Under his membership
contract, Mr. Nacrelli contributed the sum of $13,222.47 through deductions from his paycheck over the twenty years of employment. On July 8, 1978, Act 140 was enacted by the legislature. It provides for forfeiture of benefits upon conviction of or plea of guilt or no defense to "any crime related to public office or public employment." The conviction or plea is deemed a breach of the public officer's or public employee's contract with his employer. The provisions of Act 140 were required to be retroactive to December 1, 1972.*fn2 The actions which formed the basis of the criminal proceeding in federal court occurred prior to the enactment of Act 140.*fn3
Appellee began to pay pension benefits to Mr. Nacrelli from April 28, 1979 and has continued to make retirement payments to him although appellant, the District Attorney
of Delaware County, demanded that appellee discontinue payment of the pension benefits. Appellants seek reversal of the court of common pleas, an order upon appellee to cease payment of all Commonwealth contributions to Mr. Nacrelli and that he be ordered to reimburse the City of Chester any amount received by him which exceeds his own contribution to the fund.*fn4
The question of the permissibility of unilateral legislative changes in the established contractual rights of public employees who are members of a retirement system is not new to this Court. It has long been recognized in Pennsylvania that the nature of retirement provisions for public employees is that of deferred compensation for service actually rendered in the past, Bellomini v. State Emp. Retirement Bd., 498 Pa. 204, 209, 445 A.2d 737, 739 (1982) (plurality opinion). Accord, McKenna v. State Emp. Retirement Bd., 495 Pa. 324, 433 A.2d 871 (1981); Harvey v. Allegheny County Retirement Board, 392 Pa. 421, 141 A.2d 197 (1958); Wright v. Retirement Board of Allegheny Co., 390 Pa. 75, 134 A.2d 231 (1957); Baker v. Retirement Board of Allegheny County, 374 Pa. 165, 97 A.2d 231 (1953); McBride v. Allegheny County Retirement Board, 330 Pa. 402, 199 A. 130 (1938); Retirement Board of Allegheny County v. McGovern, 316 Pa. 161, 174 A. 400 (1934).
And it is the law of this Commonwealth that unilateral modifications in the retirement system, after retirement eligibility requirements have been met, may not be adverse to the member. See, generally, Catania v. Com. State Employee's Retirement, 498 Pa. 684, 450 A.2d 1342 (1982) (plurality opinion); McKenna v. State Emp. Retirement Board, supra, Harvey v. Allegheny Co. Retirement Board, supra; ...