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Ostler v. Retirement Board and Salt Lake Community College

Court of Appeals of Utah

June 15, 2017

Neal K. Ostler, Petitioner,
v.
Retirement Board and Salt Lake Community College, Respondents.

         Original Proceeding in this Court

          Florence M. Vincent and Tara Pincock, Attorneys for Petitioner

          David B. Hansen and Erin G. Christensen, Attorneys for Respondent Retirement Board

          Sean D. Reyes and Erin T. Middleton, Attorneys for Respondent Salt Lake Community College

          Judge Michele M. Christiansen authored this Opinion, in which Judges J. Frederic Voros Jr. and David N. Mortensen concurred.

          CHRISTIANSEN, Judge:

         ¶1 Neal K. Ostler petitions for judicial review of the Utah State Retirement Board's order denying him pension benefits. He contends that the withdrawal of member contributions he made over the course of about 15 years should not have resulted in forfeiture of all 15 years of service credit he accrued. He further contends that the statute of limitations did not begin to run on his claim that he was eligible for other service credit, because he had not yet retired. We conclude that the Board correctly interpreted the forfeiture statute and that Ostler's other claims are barred by res judicata. Consequently, we decline to disturb the Board's decision.

         BACKGROUND

         ¶2 The legislature enacted the Utah State Retirement and Insurance Benefit Act to establish and administer a state retirement system. See Utah Code Ann. § 49-11-103(1) (LexisNexis 2015). The resulting program is known as Utah Retirement Systems (URS) and is governed by the Board. Id.; id. § 49-11-201. An individual employed by a participating public employer may qualify to become a member of URS. Those who do may be eligible to participate in a defined-contribution plan (e.g., a 401(k)) and/or a defined-benefit plan, often referred to as a pension plan.

         ¶3 An employer who participates in a pension plan may choose between two contribution schemes. The first is a non-contributory defined-benefit plan where only the employer pays money into the plan. See, e.g., id. § 49-13-301(1). The second is a contributory defined-benefit plan where both the member and the employer deposit money into the plan. See, e.g., id. § 49-14-301(1).

         ¶4 Member contributions vest immediately. See, e.g., id. § 49-14-301(5)(c). Upon the termination of employment, the member may withdraw his or her member contributions (also referred to as "receiving a refund" from the plan) or may leave them in the pension plan. Id. § 49-11-501(1). When a member withdraws his or her personal contributions, the associated service credit is forfeited. Id. § 49-11-501(5); id. § 49-11-102(51) (defining "service credit"). But a member who is reemployed by a participating employer may reinstate that service credit by redepositing the withdrawn contributions along with any applicable interest. Id. § 49-11-502.

         ¶5 Under either type of defined-benefit plan, members only qualify for pension benefits once they have accrued at least 4 years of service credit. See, e.g., id. § 49-13-401. The amount of a member's pension benefits is dependent on his or her total amount of service credit.

         ¶6 During his career, Ostler was a member of both contributory and non-contributory retirement systems. To begin with, Ostler was employed by the Salt Lake County Sheriff's Office and the Department of Corrections between 1972 and 1988. By virtue of this employment, he was a member of the Public Safety Contributory Retirement System. Ostler made member contributions to the system and his employers made employer contributions. During this employment, he accrued 15.167 years of service credit. In 1990, having been terminated from public employment, Ostler elected to receive a refund of his member contributions-roughly $27, 000. Ostler admitted that he knew that he would have to redeposit the funds (plus interest) in order to reinstate his service credit. He did not do so.

         ¶7 Ostler was also employed at various times from 1988 to 2004 by several other entities that participated in the Public Employees' Noncontributory Retirement System, including the Utah Department of Commerce, the Davis Applied Technology Center, and Salt Lake City Corporation. In these positions, he accrued 3.352 years of service credit. Finally, from 1992 to 1998, Ostler also worked as an adjunct employee of Salt Lake Community College (SLCC). Because the position was temporary and part-time, SLCC did not ...


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