STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6245

September 5, 1984

RETIREMENT AND PENSIONS:

Township police and fire fighters' retirement system--purchase of service credit as condition of reemployment of separated fire fighters

Township police and fire fighters' retirement system--authority of retirement board over prior service credits

Repayment of accumulated contributions withdrawn from a township police and fire fighters' retirement system with interest within one year of reemployment by the township is not a condition precedent for reemployment or continued employment by the township.

In order for a person to secure prior service credit, the person must repay the entire amount of contributions withdrawn from a township police and fire fighters' retirement system, including interest received, plus interest of 2% from the date of withdrawal, within one year from the date of reemployment by the township.

A township police and fire fighters' retirement board has no authority to compel a member of the system to purchase prior service credit from the system.

A township police and fire fighters' retirement board is not authorized to grant any extension of time in which a member may purchase prior service credit.

Prior service credit may not be awarded the member until the member repays, in full, within the period of one year from the date of reemployment, the entire amount received from the system, plus the statutory rate of 2% interest from the date of withdrawal of contributions.

The Honorable Gary M. Owen

State Representative

The Capitol

Lansing, Michigan

You have stated that four former members of a township police and fire fighters' retirement system, who withdrew their contributions to the system at the time of being laid off, have been reinstated as fire fighters by the township but have declined to repay the withdrawn contributions. You have asked seven questions relative to the effects of the failure or refusal of these fire fighters to repay refunded contributions within one year of return to employment as a fireman, the first of which is:

1937 PA 345; MCLA 38.551 et seq; MSA 5.3375(1) et seq, Sec. 11 provides for the establishment of a retirement system for fire fighters and/or police employed by a municipality upon the approval of the electors of the municipality. 1937 PA 345, supra, Sec. 8(2) provides, in pertinent part:

A retirement system authorized by 1937 PA 345, supra, is purely statutory, and the retirement board administering the system is limited in its authority to that provided by the Legislature. OAG, 1963-1964, No 4155, p 453 (August 31, 1964).

In responding to your first question it is essential to ascertain the intent of the Legislature with respect to the following language in section 8(2) of 1937 PA 345, supra:

A literal interpretation of that clause, out of context, would make repayment of amounts withdrawn mandatory. Such interpretation may, arguably, serve to affect adversely the employment status of otherwise qualified individuals. This interpretation is inconsistent with the intent of the Legislature.

The title to 1937 PA 345, supra, provides:

Thus, it is apparent that the Legislature intended that the provisions of 1937 PA 345, supra, relate solely to the establishment, maintenance, and administration of a retirement system. The Act contains no indication that the Legislature contemplated the establishment therein of conditions of employment. In this connection, it is to be noted that the Legislature in 1935 PA 78; MCLA 38.501 et seq; MSA 5.3351 et seq, did establish a board of civil service commissioners for cities having fully paid members in the fire and/or police departments for the purpose, inter alia, of establishing employment criteria therefor.

Provisions are found in the Public School Employees' Retirement Act of 1979; 1980 PA 300; MCLA 38.1301 et seq; MSA 15.893(111) et seq, and in 1943 PA 240; MCLA 38.1 et seq; MSA 3.981(1) et seq, which created the state employees' retirement system, and which provide for repayment of withdrawn contributions. Section 66 of 1980 PA 300, supra, authorizes an individual who, upon ceasing to be a public school employee, withdraws accumulated contributions from the retirement system to repay such contributions upon becoming reemployed and thereby to receive credit for service previously rendered. 1943 PA 240, supra, Sec. 28, authorized employees, upon reemployment, to restore amounts previously withdrawn. In pertinent part, it provides:

The state employees' retirement board, which is responsible for the administration of the state employees' retirement system, has construed the language of said section 28 as authorizing former employees, upon reemployment, to obtain credit for prior service only upon the repayment of amounts previously withdrawn. It is well settled that the construction given a statute by the agency charged with executing it is entitled to respectful consideration. Boyer-Campbell Co. v Fry, 271 Mich 282, 296; 260 NW 165 (1935).

Although the language employed by the Legislature with respect to the respective retirement systems discussed above is somewhat at variance, the policy of the Legislature with respect thereto is clear, namely, to permit employees who have withdrawn contributions upon termination of employment to purchase credit for the prior service by repaying the amounts withdrawn plus interest when such person again becomes a member of the retirement system involved. Nowhere has the Legislature indicated that it was intended that reemployment be denied or that such repayments be mandatory except as to those persons who seek credit for prior service.

In response to your first question, it is my opinion that policemen or fire fighter members of a township police and fire fighters' retirement system seeking to obtain credit for prior service must comply with the requirements of section 8 of 1937 PA 345, supra, by making such repayment within a period of one year from the date of reemployment. It is my further opinion that the requirement of section 8(2) does not constitute a condition precedent for reemployment or continued employment by the township.

Your second question is:

In view of the foregoing discussion in connection with, and in answer to your first question, certain aspects of your remaining questions are moot. Therefore, they will be dealt with only to the extent not heretofore covered.

Section 8(2) of 1937 PA 345, supra, fails to provide the retirement board with any authority to recover amounts previously withdrawn from reemployed individuals.

It is my opinion in answer to your second question that the board is under no obligation to recover monies from those who do not seek credit for prior service.

Your third question is:

Responding to your third question, it is my opinion that individuals who fail to repay amounts previously withdrawn within one year following reemployment may not receive credit for such prior service.

Your fourth question is:

With respect to your fourth question, it is axiomatic that if the language employed in a statute is plain, certain and unambiguous, a bare reading suffices and no interpretation is necessary. City of Grand Rapids v Crocker, 219 Mich 178, 182; 188 NW 221 (1922); In re Chamberlain's Estate, 298 Mich 278, 283; 299 NW 82 (1941). The language of section 8(2) of 1937 PA 345, supra, is plain, certain and unambiguous in requiring the repayment of amounts previously withdrawn within one year following reemployment. This provision is not subject to interpretation.

In answer to your fourth question, it is my opinion that a township police and fire fighters' retirement board is precluded from granting extensions of the one-year repayment period.

Your fifth question is:

The language of section 8(2) of 1937 PA 345, supra, is plain, certain and unambiguous. The statute provides that should an individual become separated, a written request for a refund may be made and the individual shall be paid all contributions together with interest, not to exceed 2% per annum. Should such individual become reemployed and desire to purchase prior service credit, this may be accomplished by paying the entire amount previously withdrawn with interest at 2% per year. The employment of the term 'amount previously withdrawn' is all inclusive and dictates that repayment of both the contributions and interest is required. In addition, interest at the rate of 2% per year is to be computed and paid from the date of withdrawal.

It is my opinion in answer to your fifth question that in order for an employee to obtain prior service credit, the employee must repay the entire amount of the contributions refunded to the employee, including interest paid to the employee, plus interest of 2% per year from the date of withdrawal.

Your sixth question is:

In answer to your sixth question, section 8(2) of 1937 PA 345, supra, dictates that the payment must be made within one year following reemployment. Commitment is defined by Webster's Third New International Dictionary as a pledge to do something. The requirement that amounts previously withdrawn be repaid within one year is explicit and may not be satisfied by a promise or pledge to do so whether within the ensuing one-year period or later.

In answer to your sixth question it is my opinion that repayment must be made in full within one year after reemployment.

Your seventh question is:

Since my response to question six was in the negative, no response is necessary to your last question.

Frank J. Kelley