Board of Trustees of the Maryland State Retirement & Pension Systems v. Hughes

664 A.2d 1250, 340 Md. 1, 1995 Md. LEXIS 132
CourtCourt of Appeals of Maryland
DecidedSeptember 19, 1995
DocketNo. 138
StatusPublished
Cited by25 cases

This text of 664 A.2d 1250 (Board of Trustees of the Maryland State Retirement & Pension Systems v. Hughes) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Board of Trustees of the Maryland State Retirement & Pension Systems v. Hughes, 664 A.2d 1250, 340 Md. 1, 1995 Md. LEXIS 132 (Md. 1995).

Opinions

CHASANOW, Judge.

We are called upon in this ease to determine whether former Governor Harry Hughes was entitled to receive both his State pension and a State salary while he served as Governor of the State of Maryland. For the reasons discussed below, we hold that former Governor Hughes was not entitled to receive both his State pension and a State salary during his tenure as Governor.

I.

This appeal arises out of a decision by the Board of Trustees of the Maryland State Retirement and Pension Systems (the Board) holding that the Maryland State Retirement Agency (the Agency) properly suspended former Governor Harry Hughes’s (Hughes) retirement benefits during his tenure as Governor. Prior to his election as Governor, Hughes had twenty-two years of State service both as a member of the General Assembly and later as the Secretary of the State Department of Transportation. By virtue of his State service, Hughes earned retirement benefits under the Employees’ Retirement System of the State of Maryland (the ERS). Hughes was eligible under Maryland Code (1957, 1988 Repl. Vol.), Article 73B, § 11(12)1 to receive retirement benefits upon his retirement on June 1, 1977. Section 11(12) provides in pertinent part:

“[I]f any person, while being a member of the State Employees’ Retirement System, has been or may hereafter be [4]*4appointed or elected to any State office, or promoted by an express appointment by the appointing authority with the express concurrence of the Secretary of Personnel to any position within the State government which is not a part of the classified service and which is not covered by the provisions of Article 64A ... for a fixed or indefinite term and not be continued in office after serving in such position for a period of one (1) year, reappointed or reelected, provided that the termination of employment was involuntary, except for officials elected or appointed prior to July 22,1981, as determined by the Secretary of Personnel, after the completion of sixteen years of creditable service, regardless of age, such member may elect, in lieu of the withdrawal of his accumulated contributions, to have such contributions paid to him in an annuity of equivalent actuarial value, in which event he shall also be paid a pension equal to the ordinary disability pension that would have been payable at such time had he been retired on an ordinary disability retirement____ Should such beneficiary be appointed or elected to any office, the salary or compensation of which is paid by the State, his retirement allowance shall cease, and he may again become a member of the retirement system and shall contribute thereafter at the same rate he paid prior to his retirement____”

After Hughes was nominated for Governor in 1978, the Agency wrote Hughes a letter notifying him that if he is elected Governor his retirement allowance would cease under § 11(12). That letter stated:

“As you know, you retired under the provisions of Article 73B, Section 11(12) which reads in part:
‘Should such beneficiary be appointed or elected to any office, the salary or compensation of which is paid by the State, his retirement allowance shall cease, and he may again become a member of the retirement system and shall contribute thereafter at the same rate he paid prior to his retirement____

[5]*5Once Hughes was elected and assumed the Governor’s office on January 17, 1979 and began to receive a State salary, the Agency suspended payment of his ERS retirement allowance. When Hughes left the office of Governor, the Agency reinstated the retirement benefits Hughes had accrued based on his service as a member of the General Assembly and as Secretary of the Department of Transportation and this pension was paid concurrently with his gubernatorial pension.

In May of 1987, Hughes requested Bennett H. Shaver, then Executive Director of the Agency, to review the appropriateness of the Agency’s suspension of his retirement benefits while he served as Governor. Mr. Shaver advised Hughes that the Agency’s decision to suspend his retirement benefits was in accordance with applicable law. Hughes wrote another letter to Mr. Shaver contending that because his gubernatorial pension was covered under a different retirement system than the ERS, the retirement benefits he was receiving pursuant to § 11(12) should not have been suspended. Mr. Shaver again informed Hughes that the Agency’s decision to suspend his retirement benefits was done in accordance with applicable law. Nevertheless, after Hughes wrote another letter expressing dissatisfaction with the Agency’s response, Mr. Shaver wrote a letter to the Attorney General requesting that the Attorney General issue an opinion regarding whether § 11(12) mandated the cessation of Hughes’s retirement benefits during his tenure as Governor. The Attorney General issued an opinion which agreed with the Agency’s decision to suspend Hughes’s retirement benefits while he was serving as Governor. In his opinion, the Attorney General concluded:

“The provision for suspension of retirement benefits is evidently designed to prevent ‘double-dipping’—that is, the simultaneous receipt of retirement benefits and a salary from the State. That policy is similarly embodied in provisions regarding other retirement systems____ As this office observed in connection with a provision that reduces a judge’s pension under certain circumstances, ‘that policy is not uniquely applied to only one class of retirees. Rather, it [6]*6is a policy similarly reflected in other statutes, applicable to other State retirees____’ ” (Citations omitted).

73 Op.Att’y Gen. 304, 308-09 (1988) (quoting 69 Op.Att’y Gen. 260, 267 (1984)). Approximately three years after the Attorney General’s opinion, Hughes requested a hearing on whether the Agency appropriately suspended his retirement benefits during his tenure as Governor. The Agency granted the request for a hearing and the matter was referred to the Office of Administrative Hearings. A hearing was held before Administrative Law Judge Louis N. Hurwitz on May 1, 1992. Following the hearing, the Administrative Law Judge issued a proposed decision which agreed with the opinion of the Attorney General that the Agency appropriately suspended retirement benefits to Hughes while he was serving as Governor. The Administrative Law Judge noted that § ll(12)’s purpose and effect is to prevent a beneficiary from receiving ERS benefits while receiving a State salary and that the General Assembly “carved out no ... exception for Governor Hughes.” The Administrative Law Judge concluded that “[w]hile other pensions have been established since the creation of the ERS ..., [n]o law was enacted establishing a separate, distinct and unique pension system [for governors and the gubernatorial retirement plan] cannot be interpreted or misconstrued as being separate and distinct from the ERS.” Thus, the judge concluded that the Agency’s decision to suspend Hughes’s retirement benefits was appropriate. The Board adopted the Administrative Law Judge’s recommendation as its final administrative decision.

Hughes appealed the Board’s decision to the Circuit Court for Baltimore City. The circuit court (Byrnes, J.) determined that the issue could not be resolved on the record and remanded the case to the Agency for the taking of additional evidence.

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Bluebook (online)
664 A.2d 1250, 340 Md. 1, 1995 Md. LEXIS 132, Counsel Stack Legal Research, https://law.counselstack.com/opinion/board-of-trustees-of-the-maryland-state-retirement-pension-systems-v-md-1995.