2007-779, PETITION OF FARMINGTON TEACHERS ASSOCIATION, NEA-NEW HAMPSHIRE

In this petition for a writ of certiorari, the Farmington

general, on the brief), for the State, as amicus curiae. Kelly A. Ayotte, attorney general (Richard W. Head, associate attorney

the respondent. Foley Law Office, of Concord (Peter T. Foley on the brief and orally), for

the petitioner, NEA-New Hampshire. to press. Errors may be reported by E-mail at the following address: James F. Allmendinger, of Concord, staff attorney, by brief and orally, for

(New Hampshire Retirement System)

No. 2007-779 editorial errors in order that corrections may be made before the opinion goes Original Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as retired. This petition for a writ of certiorari followed.

p. 2 retirement allowance payments made to four of the teachers who had already

plan for the school year.

been made to their NHRS records. issue did not qualify as “earnable compensation” and that adjustments had Contribution and Pension Adjustment,” advising them that the payments at hearings examiner’s recommendations, but waived recoupment of the recoupment of the amounts overpaid to the members.” The board approved the if they were salary’ are not earnable compensation and direct the staff to seek

and Medicaid taxes, and the employer and employee contributions to the NHRS must retain membership in the health care plan and the dental the health insurance premium, both the employer and employee share of FICA

provided the eight teachers with a “Notice of Earnable Compensation,

decision that certain payments to teachers in Farmington that were treated ‘as

retirement, and the like, on these additional monies. The member at the end of the year, each teacher paid back to the school district the cost of the district’s share of the increased social security tax, state salary. The member is responsible for reimbursing the district for

comply with RSA chapter 100-A (2001 & Supp. 2008). The NHRS subsequently

examiner recommended that the board “uphold the NHRS administrative staff’s administrative hearing was held before a hearings examiner. The hearings The petitioner appealed this decision to the board and a three-day

federal income tax on the additional money. Either bi-weekly or in a lump sum insurance premium was added to each teacher’s paycheck. The teachers paid year, elect to have his/her fringe benefits counted as if they were provision and the amount of each teacher’s employer-provided health legality. After investigation, the NHRS concluded that section 9.9 did not school district employee sent a copy to the NHRS and inquired about its The NHRS became aware of section 9.9 in October 2003 when a former

notification to the business office by August 15 for the next school All eight teachers filed an election with the school district under this

contained Article IX, Section 9.9 (section 9.9) that provided: In the 2002-2005 agreement the age was lowered to fifty.

A professional who has reached the age of 55 may, upon

bargaining agreements with the school district. Each of these agreements which represents the eight teachers, entered into a series of collective The facts are not in dispute. Between 1996 and 2005, the petitioner,

p. 3 market value of non-cash compensation such as meals or living

period of time relevant to this appeal, “earnable compensation” was defined in earning years of NHRS creditable service. RSA 100-A:1, XVIII. During the ascribe the plain and ordinary meaning to the words used.”

compensation paid to the member by the employer, plus the fair

Hampstead, 157 N.H. 477, 483 (2008). “We interpret legislative intent from the equal to the “average earnable compensation” in the member’s three highest Bennett v. Town of (2005) (quotation omitted). “When examining the language of a statute, we McDonald v. Town of Effingham Zoning Bd. of Adjustment, 152 N.H. 171, 174 to the petitioners. the legislature as expressed in the words of a statute considered as a whole.” activities or for other extra or special duty, and other whether the NHRS was unjust and unreasonable in denying any further relief Vehicles, 155 N.H. 197, 198 (2007). “We are the final arbiter of the intent of earnable compensation and then apply the amended rule prospectively; and (3) question of law that we review de novo. Hudson v. Director, N.H. Div. of Motor Resolution of this petition requires statutory interpretation, which is a

304.02(a). RSA 100-A:1, XVII (2001) (amended 2008); see N.H. Admin. Rules, Ret

compensation.” RSA 100-A:5, I. A member’s “average final compensation” is retired member’s service retirement allowance is tied to his or her “average final fixed annual “retirement allowance.” RSA 100-A:5. The dollar amount of a of living bonus, additional pay for extracurricular and instructional holiday and vacation pay, sick pay, longevity or severance pay, cost promulgate an amended rule to clarify the requirements under the definition of [T]he full base rate of compensation paid plus any overtime pay,

discretion or acted arbitrarily, unreasonably, or capriciously.”

Under the NHRS, one of the benefits each eligible retiree receives is a

statutory definition of “earnable compensation” pursuant to RSA 100-A:1, XVII; Bailey, 146 N.H. 197, 198 (2001) (quotation omitted). insurance benefits counted “as if they were salary” does not fall under the Petition of conclusion which cannot legally or reasonably be made, or abused its to jurisdiction, authority or observance of the law, whereby it arrived at a “Our standard of review is whether the board acted illegally with respect

unreasonable in concluding that the negotiated agreement to have health The petitioner raises three issues: (1) whether the NHRS was which the employee must reimburse the employer.

p. 4 employer” does not include employer-provided health insurance premiums for RSA 100-A:1, XVII, and that “other compensation paid to the member by the not fall under the statutory definition of “earnable compensation” pursuant to

For these reasons, we hold that the mechanism employed in section 9.9 does

apparent pay increase had to be returned to the Farmington School District.”

the member could keep it and spend it however he or she pleased. All of the went up. However, that money was never paid to the member in the sense that to increase because the number on the face of the paycheck and on the W2 any additional salary but, rather, simply had their fringe benefits counted for the total amount of the increased pay. Thus, the teachers did not receive school district’s health plan and to subsequently reimburse the school district

found, “After the election of section 9.9 treatment, a member’s salary appeared 4 salary” and in return, the teachers agreed to retain their memberships in the NHRS calculated her retirement award without including her severance pay in petitioner retired and her severance pay was not received for one year, the

In

“earnable compensation” under RSA chapter 100-A. As the hearings examiner amounts, we conclude that the reimbursed payments do not constitute Because the teachers were not authorized to keep any of the additional teachers by having their health insurance benefits “counted as if they were the school district agreed to increase the amount of pay credited to the that must then be returned to the employer. Under the terms of section 9.9, the amount was not actually paid to her until a year after she retired. After the Milette, the petitioner was entitled to severance pay upon her retirement, but payments from earnable compensation without a properly promulgated rule. System, 141 N.H. 342 (1996), the NHRS may not exclude the section 9.9 The petitioner argues that pursuant to Milette v. N.H. Retirement

additional amounts to the school district by the end of the school year.

the statute does not include payment of the cash equivalent of a fringe benefit

of their bi-weekly paychecks conditioned upon their agreement to repay the in their annual compensation. Rather, they received an increase in the amount Pursuant to section 9.9, the teachers did not receive any actual increase the member by the employer.” We believe, however, that “compensation” under compensation” is “very broad” in that it includes “other compensation paid to they were salary, to enhance their retirement pensions. within the language of RSA 100-A:1, XVII because the phrase “earnable

statute in the context of the overall statutory scheme and not in isolation.”

The petitioner argues that the salary payments under section 9.9 fall

(citation omitted).

add language that the legislature did not see fit to include. We interpret a statute as written and will not consider what the legislature might have said or p. 5 Because we hold that

add or delete requirements contained in the plain language of the statute. used in RSA 100-A:1, XVII. In making this determination, the board did not section 9.9 payments do not qualify as “earnable compensation” as the term is

severance pay.” disagree. As discussed above, we affirm the board’s determination that the delay of several weeks from a delay of one year in the actual payment of

policy, any employee who elects not to receive medical and dental insurance who elects insurance coverage under a spouse’s plan. Under the buy-back already offers a separate buy-back provision, Policy #4234, for any employee Dept. Retire. Sys., 692 P.2d 834 (Wash. Ct. App. 1984). The school district such payments “without properly promulgating an amended rule.” We are made in lieu of health insurance coverage. See Hitchcock v. Wash. St. concluded that “[n]othing in the plain language of the rule distinguishes a characterized as an insurance buy-back provision whereby salary payments We likewise disagree with the petitioner that section 9.9 can be

against the retrospective application of an amended rule. the circumstances presented, we need not address the petitioner’s arguments some later date. The board argued that of ‘interpreting’ a rule that is clear and unambiguous on its face.” Milette does not require the promulgation of a rule under without properly promulgating an amended rule – through the mere expedient

in order to be included in the calculation of the employee’s retirement benefits.”

pursuant to section 9.9, the NHRS may not interpret the statute to exclude frame in order to be included in the calculation of retirement benefits. We on the face of the statute to limit or exclude the payments made to the teachers pursuant to RSA 100-A:1, XVII. The petitioner relies upon Milette to argue that because there is nothing

47.

in the rule,” we would not permit an agency “to add or delete requirements – interpretation of its own rule where there was some ambiguity or inconsistency

Id. at 346. While we “would accord deference to an agency’s the employee’s severance pay be paid ‘at termination,’ or by any other deadline,

requiring severance pay to be paid within the “customary and usual” time severance paid “after separation from service” should be understood as should be included in her “earnable compensation” for her last year of service Ret 310.03(b), which requires the board to consider in its calculations benefits. The issue before us was whether the petitioner’s severance pay severance at termination or else it could not be included in the calculation of New Hampshire Administrative Rules,

statute for actual payment of such pay, the calculation of retirement benefits Id. at 345. Accordingly, because there was no time frame set forth in the

We held that the statute contained “no reference to any requirement that

expected. The board determined that the statute required payment of the calculation, resulting in an award substantially less than the petitioner enriched if their contributions were returned to them again.

was unaware of the section 9.9 payments. The board declined to refund

additional monies received. the form of excess pension benefits. They would be unjustly

beneficiaries” in accordance with the statute.

conclusion which cannot legally or reasonably be made, or abused its

recoupment of the benefits received by them during the years that the NHRS DALIANIS, DUGGAN and HICKS, JJ., concurred.

Rather, they were mandated to retain membership in the school district’s 802 (1998) (brackets omitted). health insurance benefits and were not “compensated” for any such loss. Petition of Barney, 142 N.H. 798, “fiduciary obligation to manage the NHRS for the benefit of its members and Bailey, 14 p. 6 6 N.H at 198. Rather, the board has acted in furtherance of its

We cannot conclude that the board in so deciding “arrived at a

retirement system. As to the four teachers who had retired, the board waived employees paid to cover the employer’s share of the contribution to the board, the NHRS reimbursed the school district the amount of money the the amount of their total excess contributions. The [teachers] have The [teachers] have received total excess benefits that are 10 times chooses. In contrast, under section 9.9, the teachers did not give up their retirement system. earn based on artificially inflated earnable compensation figures. that the teachers should be reimbursed for the contributions they made to the [t]he [teachers] have all received pension benefits that they did not denying “any further relief” to the teachers. Specifically, the petitioner argues

As to the four teachers who had not retired before the appeal to the

to the employee.” The employee may use these payments in any way he or she unnecessary premiums while at the same time providing an attractive incentive insurance coverage. The policy is “intended to relieve the District from paying The final issue is whether the NHRS was unjust and unreasonable in

total premium the district would otherwise pay for that employee’s health through the school district receives a sum equivalent to twenty percent of the