No. 142 E.D. Appeal Docket 1983, Appeal from the Order of August 31, 1983 by the Commonwealth Court at No. 14 T.D. 1982, denying the City of Philadelphia's application for reconsideration of the Order of June 20, 1983, reversing the Order of the Court of Common Pleas of Philadelphia County, August Term, 1976, No. 2352, entered on October 9, 1979 and certified on November 1, 1979.
Barbara R. Axelrod, Deputy Cty. Sol., Philadelphia, for appellant.
Neil Jokelson, Philadelphia, for appellee.
Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ.
Before us is the City of Philadelphia's appeal from the Order and Opinion of the Commonwealth Court reversing the Court of Common Pleas of Philadelphia County and holding that the pension ordinance of the City of Philadelphia, as applied to former Philadelphia City Commissioner Maurice Osser, was an unconstitutional impairment of his contractual rights to pension benefits. 75 Pa. Commw 145, 461 A.2d 639. The court based its holding on our decision in Commonwealth ex rel. Zimmerman v. Officers and Employees Retirement Board, (Nacrelli I), 501 Pa. 293, 461 A.2d 593 (1983). Following a review of the record, we find
that the Commonwealth Court misinterpreted our holding in Nacrelli and, therefore, reverse.
The facts relevant to the disposition of this appeal can be briefly stated. Appellee Maurice Osser began his employment with the City of Philadelphia as City Commissioner on January 7, 1952, and served in that capacity until December 21, 1972. The date on which Appellee began his employment with the City was also the effective date of Philadelphia's newly-adopted Home Rule Charter, Pa.Code, Title 351. Pursuant to that Charter, the City was required to have the Board of Pensions and Retirement submit to the City Council a pension and retirement plan for all officers and employees of the City. In the interim, the City continued to operate its pension plan under then-existing state law, Act of May 20, 1915, P.L. 566, 53 P.S. § 13431 et seq. On January 1, 1957, the pension plan required under the Philadelphia Home Rule Charter became effective, City of Philadelphia, Pa., Ordinances, p. 883 (December 3, 1956). Under § 105.1 of the ordinance, members covered under the old pension plan had the option to "irrevocably elect" to transfer into the new system or to remain in the old. On July 14, 1958, Appellee elected to transfer into the new system by executing the proper forms and remitting the cost differential between the two plans.
The new system, unlike the old, contained a disqualification section which provided as follows:
Section 217. Disqualification.
217.1. Notwithstanding any other provision of this Article, no employee nor any beneficiary designated by or for any employee shall be entitled to receive any retirement or other benefit or payment of any kind except a return of contribution paid ...