Hackford v. Utah State Retirement , 437 P.3d 604 ( 2018 )

2018 UT App 214THE UTAH COURT OF APPEALS
PETE C. HACKFORD,
Petitioner,
v.
UTAH STATE RETIREMENT BOARD,
Respondent.
Opinion
No. 20161052-CA
Filed November 16, 2018
Original Proceeding in this Court
Thomas J. Burns and John D. Walch, Attorneys
for Petitioner
David B. Hansen and Erin G. Christensen, Attorneys
for Respondent
JUDGE KATE A. TOOMEY authored this Opinion, in which
JUDGES MICHELE M. CHRISTIANSEN FORSTER and DIANA HAGEN
concurred.
TOOMEY, Judge:
¶1 Pete C. Hackford seeks review of a decision of the Utah
State Retirement Board (the Board) that his retirement benefits
from two periods of public employment must be calculated
separately and that his original retirement benefits remained
subject to a statutory early age reduction. We decline to disturb
the Board’s decision.
¶2 Hackford worked for the Utah Labor Commission in the
Division of Boiler, Elevator, and Mine Safety (the Division) for
nearly twenty years before seeking early retirement at age fifty.
Upon employment, Hackford became a member of the Utah
Retirement Systems’ (the URS) Tier 1 Noncontributory
Retirement System, which allowed him to acquire retirement
Hackford v. Utah State Retirement Board
benefits without personally contributing to the retirement
system. As an eligible veteran, Hackford elected to purchase a
credit for his nearly six years of military service to be applied
toward his years of service credit with the Division. This meant
that in April 2011, when Hackford entered early retirement, he
had accrued about twenty-five years of service credit that
applied toward his retirement benefits.
¶3 When Hackford applied for retirement, he signed a
“Notice of Post-Retirement Employment Restrictions,”
indicating that he understood that “[his] monthly benefit will be
cancelled if [he] return[ed] to employment with a participating
employer within one year of [his] retirement date.” He also
signed a statement acknowledging that he “read and
underst[ood] the retirement options . . . , stipulations about
alteration, addition, or cancellation of retirement, and other
limitations” in accordance with the statutes governing the URS
and the Board. See Utah Code Ann. § 49-11-607(1) (LexisNexis
2015). Because Hackford was fifty years old and retired with less
than thirty years of service, his retirement allowance was subject
to a statutory early age reduction. See id. § 49-13-402(2)(b) (Supp.
2018).
¶4 Hackford retired on May 1, 2011, and began receiving his
monthly retirement allowance. But the Division reemployed him
in his previous position the next month, on June 13, 2011. A
retirement counselor for the URS informed Hackford that, upon
reemployment, his retirement benefit would be cancelled and he
would be reinstated in the retirement system. And when he
retired a second time, his original retirement benefit calculation
would resume and the additional years of post-retirement
service credit would be calculated as an additional retirement
benefit. Hackford told the retirement counselor that he
understood how his retirement would be calculated in the
future. In August 2011, the URS received a Post-Retirement
Employment Form signed by Hackford, notifying it that
Hackford was reemployed with the Division. Beginning July 1,
2011, the URS cancelled Hackford’s retirement allowance and
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reinstated him to active member status in the retirement system.
To date, Hackford is still employed with the Division.
¶5 In the fall of 2014, Hackford contacted the URS to request
an estimate of his retirement benefit with projected retirement
dates of either January 1, 2015, or May 1, 2016. The estimates
provided that his original retirement allowance would resume,
subject to the early age reduction, and that an additional
allowance based upon the number of years of post-retirement
reemployment service would be calculated separately.
¶6 Hackford requested to remove the early age reduction
from his 2011 retirement allowance, which the URS denied. It
explained that, “at the time [Hackford] retired in May of 2011,
[he] discussed [his] retirement with a counselor, [was] informed
of the statutory reduction in [his] benefit due to early retirement
and the applicable return to work provisions, and [he] decided
to retire anyway.” In addition, Hackford was informed at the
time of his reemployment that his additional service credits
would be calculated separately as additional benefits and “the
benefit that was canceled [would] also be resumed.” (Quotation
simplified.) Based on his reemployment following the original
retirement, the URS determined that, under the Utah Code, he
was “not entitled to have the original benefit recalculated by
removing the age reduction” upon his second retirement.
¶7 Hackford appealed the denial to the Board by filing a
Request for Board Action, arguing that the URS “misapplied”
the relevant statutory provisions and “improperly reduce[d]
[his] accrued benefit under [his retirement plan].” Hackford and
the URS filed cross-motions for summary judgment with the
Board after first filing stipulated findings of fact. In Hackford’s
motion for summary judgment, he argued that the early age
reduction was improper because he “worked for the [Division]
continuously from 1991 to the present, with the exception of a
45-day period in mid-2011.” The URS opposed Hackford’s
motion, stating that Hackford “fail[ed] to disclose in any way
that the missing ‘45-day period’ was the result of his retirement
20161052-CA 3 2018 UT App 214Hackford v. Utah State Retirement Board
and that during this period he received a monthly defined
benefit of retirement allowance as a qualified retiree under [the]
Utah Code.” And in its own motion for summary judgment, the
URS argued that, pursuant to the Utah Code, Hackford’s “2011
retirement allowance [had] vested” and that his “retirement,
including the early age reduction[,] is irrevocable and cannot
now be altered.”
¶8 The Board heard arguments on the motions and
ultimately determined that the URS correctly calculated
Hackford’s retirement benefits. It concluded that, pursuant to
Utah Code section 49-11-1204, 1 Hackford’s “new total
[retirement] allowance” was “the sum of two amounts”:
1) the original allowance from his retirement in
2011 that was being paid at the time of cancellation
[and reemployment], which would be resumed
[upon his second retirement]; and 2) an additional
allowance calculated based on the formula in effect
at the date of the subsequent retirement for all
service credit accrued between his retirement in
2011 and a subsequent retirement date.
See Utah Code Ann. § 49-11-1204(2), (5)(b) (LexisNexis Supp.
2018). The Board therefore granted summary judgment in favor
of the URS.
¶9 Hackford seeks judicial review of the Board’s decision,
contending that it misinterpreted Utah Code section 49-11-1204
1. At the time of the appeal before the Board the relevant
statutory provisions of the Utah Code were re-codified, but no
substantive changes were made. Compare Utah Code Ann.
§ 49-11-505 (LexisNexis 2015), with id. § 49-11-1204 (Supp. 2018).
Both parties agree that the result of this dispute would be the
same under either version of the Utah Code. We therefore refer
to the most recent versions of the Utah Code.
20161052-CA 4 2018 UT App 214Hackford v. Utah State Retirement Board
and thus erred by subjecting his retirement benefits to the “early
age retirement reduction.” 2 The Board’s application or
interpretation of a statute is a question of law that we review for
correctness. McLeod v. Retirement Board, 2011 UT App 190, ¶ 9,
257 P.3d 1090.
¶10 When interpreting statutes, “we look first to the statute’s
plain language to determine its meaning.” Id. ¶ 12 (quotation
simplified). “To determine the meaning of the plain language,
we examine the statute in harmony with other statutes in the
same chapter and related chapters.” Id. (quotation simplified).
And we will liberally construe the provisions of the Utah State
Retirement and Insurance Benefit Act “to provide maximum
benefits and protections consistent with sound fiduciary and
actuarial principles.” Id. (quotation simplified); see also Utah
Code Ann. § 49-11-103(2) (LexisNexis Supp. 2018).
¶11 Hackford contends the Board improperly determined that
Utah Code section 49-11-1204(5)(b) applied to him, arguing that
subsection (5)(b) could apply to him only if subsections (4)(a),
(4)(b), and (3)(a) applied to him. We disagree.
¶12 When a retiree becomes “reemploy[ed] with a
participating employer . . . within one year of the retiree’s
retirement date,” the URS “shall cancel the retirement allowance
of [that] retiree.” Utah Code Ann. § 49-11-1204(2) (LexisNexis
2. To the extent Hackford argues that the early age reduction will
apply to his second retirement benefit calculation, we do not
reach that argument. Because Hackford is still employed by the
Division, the calculation of his second retirement allowance will
be “based on the formula in effect at the date of the subsequent
retirement for all service credit accrued between the first and
subsequent retirement dates.” See Utah Code Ann. § 49-11-
1204(2), (5)(b) (LexisNexis Supp. 2018); see also id. § 49-13-402(2)
(providing the formula for retirement allowances based on age
and years of service at the time of retirement).
20161052-CA 5 2018 UT App 214Hackford v. Utah State Retirement Board
Supp. 2018). But when a retiree becomes reemployed more than
one year after the retiree’s retirement date, the retiree “may elect
to” either “(a) cancel the retiree’s retirement allowance and
instead earn additional service credit” or “(b) continue to receive
the retiree’s retirement allowance, forfeit earning additional
service credit, and forfeit any retirement-related contribution
from the participating employer that reemployed the retiree.” Id.§ 49-11-1204(3).
¶13 If the “retiree’s retirement allowance is cancelled,” either
under subsection (2) or subsection (3)(a), “and the retiree is
eligible for retirement coverage in a reemployed position, the
office shall reinstate the retiree to active member status on the
first day of the month following the date of the employee’s
eligible reemployment.” Id. § 49-11-1204(4)(a). And if that retiree
retires “two or more years after the date of reinstatement to
active membership, the [URS] shall”:
(i) resume the allowance that was being paid at the
time of cancellation; and
(ii) calculate an additional allowance for the retiree
based on the formula in effect at the date of the
subsequent retirement for all service credit accrued
between the first and subsequent retirement dates.
Id. § 49-11-1204(5)(b); see also id. § 49-11-607(1) (2015) (providing
that “[a]fter the retirement date, which shall be set by a member
in the member’s application for retirement, no alteration,
addition, or cancellation of a benefit may be made except as
provided” by law).
¶14 Hackford’s argument that subsection (5)(b) cannot apply
to him because subsection (3)(a) does not apply to him is
irrelevant. To begin with, while satisfaction of subsection (4)(a) is
a predicate to reaching subsection (5)(b), the same cannot be said
about subsection (3)(a). First, subsection (5)(b) expressly states
that subsection (4)(a) must have been satisfied, but neither
20161052-CA 6 2018 UT App 214Hackford v. Utah State Retirement Board
subsection (4)(a) nor subsection (5)(b) expressly requires
subsection (3)(a) to be satisfied. Satisfaction of either subsection
(2) or subsection (3)(a) will suffice to trigger subsection (4)(a)
because subsection (4)(a) requires that the retiree’s retirement
allowance is cancelled and the retiree, based on eligibility, is
reinstated as an active member of the URS. See id. § 49-11-
1204(2)–(4)(a). Second, subsection (2) and subsection (3) are
mutually exclusive. A reemployed retiree cannot become
reemployed both within one year of the retiree’s original
retirement date, see id. § 49-11-1204(2) (Supp. 2018), and also
become reemployed more than one year after the original
retirement, see id. § 49-11-1204(3).
¶15 Here, Hackford retired in May 2011 and received his
retirement allowance for May and June 2011. In mid-June 2011,
the Division reemployed him, and the URS reinstated him to
active membership status in the retirement system and cancelled
his retirement allowance effective July 1, 2011. See id. § 49-11-
1204(2), (4)(a). Because Hackford became reemployed within one
year of his retirement, subsection (2) applied and the URS
followed the mandates of subsections (2) and (4)(a). Then, in
2014, Hackford requested estimates of his retirement benefits for
“projected” retirement dates of January 1, 2015, and May 1, 2016.
Hackford therefore projected to retire a second time “two or
more years after the date of [his] reinstatement to active
membership,” triggering subsection (5)(b). Id. § 49-11-1204(5)(b).
As a result, and as the statute requires, his retirement “allowance
that was being paid at the time of cancellation”—in other words,
his original retirement benefit—would resume on either of those
projected dates and “an additional allowance . . . for all service
credit accrued between the first and subsequent retirement
dates” would be calculated “based on the formula in effect at the
date of the subsequent retirement.” Id.
¶16 It appears Hackford argues in the alternative that only
subsection (2) of Utah Code section 49-11-1204 applies to him
and therefore his original retirement was cancelled altogether
upon reemployment, allowing for a recalculation of his
20161052-CA 7 2018 UT App 214Hackford v. Utah State Retirement Board
retirement in its entirety rather than as two separate periods of
employment. We agree with the Board that if this was the
legislature’s intent in enacting this provision, the rest of the
statute remains silent as to “what happens next to a retiree like
Hackford whose benefit is involuntarily cancelled due to
reemployment within one year of the retirement date.” This
would mean that the “benefit is cancelled, and no statutory
provision exists to reinstate it.” Because Hackford retired in 2011
and was reemployed, see Utah Code Ann. § 49-11-1202(4)(a)
(LexisNexis Supp. 2018) (defining a “retiree”), he became subject
to the reemployment rules and restrictions found in Utah Code
sections 49-11-1201 through 49-11-1208.
¶17 Interpreting the statute as Hackford suggests would
produce an absurd result. Instead, we interpret the statute to
comply with the legislative intent that the Utah State Retirement
and Insurance Benefit Act “be liberally construed to provide
maximum benefits and protections consistent with sounds
fiduciary and actuarial principles.” McLeod v. Retirement Board,
2011 UT App 190, ¶ 12, 257 P.3d 1090 (quotation simplified); see
also Utah Code Ann. § 49-11-103(2) (LexisNexis Supp. 2018)
(“This [Act] shall be liberally construed to provide maximum
benefits and protections consistent with sound fiduciary and
actuarial principles.”).
¶18 The Board therefore did not misinterpret or erroneously
apply the statute. Because Hackford officially retired at age fifty
with only twenty-five years of service credit, those retirement
benefits will remain the same and subject to the early age
reduction no matter when he chooses to retire a second time. See
Utah Code Ann. § 49-11-1204(5)(b)(i); id. § 49-11-607(1). We
therefore decline to disturb the Board’s decision.
20161052-CA 8 2018 UT App 214