The opinion of the court was delivered by: Judge Smith-ribner
Argued: September 11, 2008
BEFORE: HONORABLE DORIS A. SMITH-RIBNER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE JAMES R. KELLEY, Senior Judge
The City of Pottsville (City) appeals from the January 4, 2008 order of the Court of Common Pleas of Schuylkill County that granted the motion for summary judgment filed by Ronald and Susan Gontarchick and Marlin, Mary Ann and Matthew Reed (collectively, Appellees), and denied the City's cross-motion for summary judgment. This case presents an issue of first impression concerning the calculation of pension benefits for retired police officers pursuant to Section 4303 of The Third Class City Code (Code), Act of June 23, 1931, P.L. 932, as amended, 53 P.S. §39303, and Pottsville City Ordinance No. 525, §46-10(B). The question involved as stated by the City is whether the trial court committed an error of law in holding that Appellees' pension benefits provided for under the Code and under the City's Ordinance may be calculated based on the amount of the retired officers' last month's salary prior to retirement as opposed to being calculated based on an average of the preceding twelve months of salary before retirement.
Section 4301 of the Code, 53 P.S. §39301, provides that cities shall by ordinance establish a police pension fund that must be maintained by an equal and proportionate monthly charge against each member of the police force. Section 4303(a), 53 P.S. §39303(a), directs that police pensions be calculated as follows:
The basis of the apportionment of the pension shall be determined by the rate of the monthly pay of the member at the date of . retirement, or the highest average annual salary which the member received during any five years of service preceding . retirement, whichever is the higher, and except as to service increments provided for in subsection (b) of this section, shall not in any case exceed in any year one-half the annual pay of such member computed at such monthly or average annual rate, whichever is the higher.
In accordance with the foregoing provision, the City adopted Ordinance No. 525, which provides the following at Section 46-10(B):
The amount of pension shall be 1/2 of the monthly salary of the member at the date of retirement or 1/2 of the highest average annual salary which the member received during any five years of service next preceding the date of retirement, whichever is the higher, and except as to service increments hereinafter provided. For purposes of calculating the monthly or average annual salary of the member, the following definitions and rules shall, in addition to any applicable provisions of the Third Class City Code, apply:
(1) Salary shall include overtime and accumulated compensatory time which shall be allocated to the year or years in which such compensatory time was earned by the member.
(2) Salary shall not include payments for sick time buy-back and/or unused sick and vacation time.
The parties stipulated to the pertinent facts and filed in the trial court a statement of undisputed material facts. See City's Motion for Summary Judgment, Ex. A; Reproduced Record (R.R.) at 26a.
Appellee Ronald Gontarchick (Gontarchick) was hired by the City as a full-time police officer on August 28, 1971 and retired as a captain on March 12, 2003 after completing over thirty-one years and six months of service. Appellee Marlin Reed (Reed) was hired as a full-time police officer on January 9, 1975 and retired as a corporal on March 28, 2003 after completing over twenty-eight years and two months of service. Having met the age and service requirements, Gontarchick and Reed qualified for superannuation retirement under the Code. On March 11, 2003, Gontarchick submitted a demand to the City for pension benefits based on his monthly salary, clothing allowance, compensatory time, overtime pay and service increment. Reed submitted his demand on March 29, 2003.
The City Pension Board calculated Appellees' pension benefits in accordance with its custom and past practice of using the "rate of the monthly pay" method based on the average of the employees' last twelve months of salary before their retirement.*fn1 The pensions were approved, and Appellees currently receive benefits based on the City's calculations. Appellees filed their lawsuit*fn2 seeking a recalculation of benefits based upon their last month's salary, including clothing allowance, compensatory time, ...