O'Connor v. State Teachers' Retirement System

43 Cal. App. 4th 1610, 51 Cal. Rptr. 2d 540, 96 Cal. Daily Op. Serv. 2193, 96 Daily Journal DAR 3592, 1996 Cal. App. LEXIS 273
CourtCalifornia Court of Appeal
DecidedMarch 28, 1996
DocketDocket Nos. B082583, B083642
StatusPublished
Cited by17 cases

This text of 43 Cal. App. 4th 1610 (O'Connor v. State Teachers' Retirement System) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
O'Connor v. State Teachers' Retirement System, 43 Cal. App. 4th 1610, 51 Cal. Rptr. 2d 540, 96 Cal. Daily Op. Serv. 2193, 96 Daily Journal DAR 3592, 1996 Cal. App. LEXIS 273 (Cal. Ct. App. 1996).

Opinion

Opinion

ALDRICH, J.

Introduction

These two consolidated appeals involve the calculation of retirement allowance for a member of the State Teachers’ Retirement System (STRS) who holds two full-time teaching positions simultaneously. Both actions arose after the member-teachers filed petitions for writ of administrative mandate pursuant to Code of Civil Procedure section 1094.5.

In the first lawsuit, L. Edmund Kellogg requested an administrative hearing after the STRS Board informed him it had calculated his retirement benefits based on one of his two full-time positions only and considered the other full-time position to be overtime. After the administrative law judge ruled in favor of STRS and the Teachers’ Retirement Board Benefits, and *1614 Services Committee adopted the decision, Kellogg filed a petition for writ of mandate. The trial court granted the writ finding in favor of Kellogg, that the calculation of his retirement allowance should be based on both full-time teaching positions. STRS has appealed.

In the second action, under the same circumstances, the administrative law judge ruled, as had the administrative court in Kellogg’s case, in favor of STRS, rejecting Robert J. O’Connor’s challenge to STRS’s method of calculation. However, unlike Kellogg’s case, the trial court denied O’Con-nor’s petition for writ of mandate. O’Connor filed this appeal.

Pursuant to the State Teachers’ Retirement Law, Education Code section 22000 et seq., 1 we hold the trial court in O’Connor v. STRS correctly concluded as a matter of law, that STRS should calculate a teacher’s retirement allowance based on the aggregate of the teacher’s salaries up to the equivalent of a single, full-time job carrying the highest compensation. We therefore further hold the conclusion of law of the trial court in Kellogg v. STRS that the STRS Board must calculate the member’s retirement allowance based on both full-time positions was error. Accordingly, the judgment in Kellogg v. STRS is reversed and the judgment in O’Connor v. STRS is affirmed.

Factual and Procedural Synopsis

A. STRS.

STRS is the state agency responsible for managing contributions made by employees and member school districts to the State Teachers’ Retirement Fund (the Fund). There are 1,190 such districts, including the Los Angeles Unified School District (LAUSD), the Los Angeles Community College District (LACCD) and the Pasadena City College District (PCCD). The large school districts report directly to STRS while the smaller ones funnel their reports through their respective counties.

STRS is managed by the Teachers’ Retirement Board (the Board) (§ 22200). The Board’s duties include receiving and investing contributions *1615 from members and employers, and calculating and paying retirement allowances.

B. L. Edmund Kellogg.

Kellogg initially became a member of STRS in the early 1970’s and had been employed by PCCD as a full-time professor since 1975. In 1986, while still employed full-time at PCCD, Kellogg accepted a separate teaching position at Los Angeles Mission College, in the LACCD. In 1988, the latter position expanded to full-time status. Both employers are member districts in the retirement benefits plan administered by STRS. Mandatory contributions were made from Kellogg’s salaries at both PCCD and LACCD to invest in the Fund. Upon his employment, Kellogg notified the people who hired him at Los Angeles Mission College of the fact he was also employed at PCCD. Kellogg’s new contract contained the clause, “ T am not under contract to provide services for any other school district during the period of this agreement[.]’ ” Kellogg crossed out this sentence and initialed his deletion. In such form, Kellogg’s employers at Los Angeles Mission College signed the contract.

On February 24, 1992, Kellogg requested STRS calculate his retirement benefits based on the combined salaries from both employers of $90,000. STRS informed Kellogg that pursuant to the Education Code he would only be credited for the salary from the equivalent of one full-time teaching position and that the remainder of his salary was considered “overtime” which is not creditable to his retirement allowance. Kellogg requested an administrative hearing.

C. Robert J. O’Connor.

O’Connor was employed in four separate school districts during his 24-year teaching career. O’Connor was a teacher in the LAUSD for 17 years, and in LACCD for 24 years. Since the 1988-1989 academic year, O’Connor has been employed full-time by both districts concurrently. Mandatory contributions were made to O’Connor’s STRS account during all of the years he was employed in each position.

On May 14, 1992, O’Connor requested STRS calculate his retirement benefits. In response, STRS informed O’Connor he would be credited only the benefits from his position at LACCD.

Insisting STRS should compute his service retirement allowance based on the sum of his two salaries for the years immediately antedating his retirement, O’Connor requested an administrative hearing. O’Connor’s hearing was held one day after Kellogg’s.

*1616 D. The Hearings.

The same witnesses testified at both hearings.

Alfred L. Ray III, manager of the service retirement section responsible for calculating estimated retirement allowances for employees who apply to STRS, explained the method for computing retirement benefits is determined by statute. The benefit is based on “final compensation,” which is the average salary eamable for the highest three consecutive years of credited service. STRS calculates the benefit as 2 percent of “final compensation” multiplied by the number of years of the employee’s service. Service is based on work in a position requiring membership in STRS. There is no restriction on the number of years of service that can be credited to an employee. 2 A member, i.e., employee, will earn service credit and receive a retirement allowance so long as the required contributions are paid to STRS.

Other factors however limit the size of an employee’s retirement allowance. For example, Ray explained, STRS cannot calculate retirement allowance based on actual earnings because the statute’s definition of “final compensation” utilizes the word “eamable” salary not actual “earning.”

When an employee’s annualized earnings are greater than the maximum salary eamable in one full-time position, STRS will generally credit to the member’s retirement allowance the service from the position with the higher pay rate so as to give the member the advantage. To the extent the earnings are in excess of the annualized rate of one full-time position, the “excess” is credited as “overtime.” Overtime may not be used to calculate the employee’s retirement allowance.

Each member has one STRS account regardless of the number of jobs the member holds and regardless of the number of employers for which that member works.

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43 Cal. App. 4th 1610, 51 Cal. Rptr. 2d 540, 96 Cal. Daily Op. Serv. 2193, 96 Daily Journal DAR 3592, 1996 Cal. App. LEXIS 273, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oconnor-v-state-teachers-retirement-system-calctapp-1996.