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Hackford v. Utah State Retirement Board

Court of Appeals of Utah

November 16, 2018

Pete C. Hackford, Petitioner,
v.
Utah State Retirement Board, Respondent.

          Original Proceeding in this Court.

          Thomas J. Burns and John D. Walch, Attorneys for Petitioner.

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

          Judge Kate A. Toomey authored this Opinion, in which Judges Michele M. Christiansen Forster and Diana Hagen concurred.

          OPINION

          TOOMEY, JUDGE.

         ¶1 Pete C. Hackford seeks review of a decision of the Utah State Retirement Board (the Board) that his retirement benefits from two periods of public employment must be calculated separately and that his original retirement benefits remained subject to a statutory early age reduction. We decline to disturb the Board's decision.

         ¶2 Hackford worked for the Utah Labor Commission in the Division of Boiler, Elevator, and Mine Safety (the Division) for nearly twenty years before seeking early retirement at age fifty. Upon employment, Hackford became a member of the Utah Retirement Systems' (the URS) Tier 1 Noncontributory Retirement System, which allowed him to acquire retirement benefits without personally contributing to the retirement system. As an eligible veteran, Hackford elected to purchase a credit for his nearly six years of military service to be applied toward his years of service credit with the Division. This meant that in April 2011, when Hackford entered early retirement, he had accrued about twenty-five years of service credit that applied toward his retirement benefits.

         ¶3 When Hackford applied for retirement, he signed a "Notice of Post-Retirement Employment Restrictions," indicating that he understood that "[his] monthly benefit will be cancelled if [he] return[ed] to employment with a participating employer within one year of [his] retirement date." He also signed a statement acknowledging that he "read and underst[ood] the retirement options . . ., stipulations about alteration, addition, or cancellation of retirement, and other limitations" in accordance with the statutes governing the URS and the Board. See Utah Code Ann. § 49-11-607(1) (LexisNexis 2015). Because Hackford was fifty years old and retired with less than thirty years of service, his retirement allowance was subject to a statutory early age reduction. See id. § 49-13-402(2)(b) (Supp. 2018).

         ¶4 Hackford retired on May 1, 2011, and began receiving his monthly retirement allowance. But the Division reemployed him in his previous position the next month, on June 13, 2011. A retirement counselor for the URS informed Hackford that, upon reemployment, his retirement benefit would be cancelled and he would be reinstated in the retirement system. And when he retired a second time, his original retirement benefit calculation would resume and the additional years of post-retirement service credit would be calculated as an additional retirement benefit. Hackford told the retirement counselor that he understood how his retirement would be calculated in the future. In August 2011, the URS received a Post-Retirement Employment Form signed by Hackford, notifying it that Hackford was reemployed with the Division. Beginning July 1, 2011, the URS cancelled Hackford's retirement allowance and reinstated him to active member status in the retirement system. To date, Hackford is still employed with the Division.

         ¶5 In the fall of 2014, Hackford contacted the URS to request an estimate of his retirement benefit with projected retirement dates of either January 1, 2015, or May 1, 2016. The estimates provided that his original retirement allowance would resume, subject to the early age reduction, and that an additional allowance based upon the number of years of post-retirement reemployment service would be calculated separately.

         ¶6 Hackford requested to remove the early age reduction from his 2011 retirement allowance, which the URS denied. It explained that, "at the time [Hackford] retired in May of 2011, [he] discussed [his] retirement with a counselor, [was] informed of the statutory reduction in [his] benefit due to early retirement and the applicable return to work provisions, and [he] decided to retire anyway." In addition, Hackford was informed at the time of his reemployment that his additional service credits would be calculated separately as additional benefits and "the benefit that was canceled [would] also be resumed." (Quotation simplified.) Based on his reemployment following the original retirement, the URS determined that, under the Utah Code, he was "not entitled to have the original benefit recalculated by removing the age reduction" upon his second retirement.

         ¶7 Hackford appealed the denial to the Board by filing a Request for Board Action, arguing that the URS "misapplied" the relevant statutory provisions and "improperly reduce[d] [his] accrued benefit under [his retirement plan]." Hackford and the URS filed cross-motions for summary judgment with the Board after first filing stipulated findings of fact. In Hackford's motion for summary judgment, he argued that the early age reduction was improper because he "worked for the [Division] continuously from 1991 to the present, with the exception of a 45-day period in mid-2011." The URS opposed Hackford's motion, stating that Hackford "fail[ed] to disclose in any way that the missing '45-day period' was the result of his retirement and that during this period he received a monthly defined benefit of retirement allowance as a qualified retiree under [the] Utah Code." And in its own motion for summary judgment, the URS argued that, pursuant to the Utah Code, Hackford's "2011 retirement allowance [had] vested" and that his "retirement, including the early age reduction[, ] is irrevocable and cannot now be altered."

         ¶8 The Board heard arguments on the motions and ultimately determined that the URS correctly calculated Hackford's retirement benefits. It concluded that, pursuant to Utah Code section 49-11-1204, [1] Hackford's "new total [retirement] allowance" was "the sum of two amounts":

1) the original allowance from his retirement in 2011 that was being paid at the time of cancellation [and reemployment], which would be resumed [upon his second retirement]; and 2) an additional allowance calculated based on the formula in effect at the date of the subsequent retirement for all service ...

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