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Nielsen v. Retirement Board

Court of Appeals of Utah

May 23, 2019

Marjean Searcy Nielsen and University of Utah, Petitioners,
v.
Retirement Board, Respondent.

          Original Proceeding in this Court

          Heather S. White, Robert T. Denny, and Rachel E. Phillips, Attorneys for Petitioner Marjean Searcy Nielsen

          Sean D. Reyes and Brent A. Burnett, Attorneys for Petitioner University of Utah

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

          Judge Kate Appleby authored this Opinion, in which Judges Ryan M. Harris and Diana Hagen concurred.

          APPLEBY, JUDGE.

         ¶1 Marjean Searcy Nielsen and the University of Utah (University) seek judicial review of the Utah State Retirement Board's (Board) final order, arguing that the Board erred in determining that Nielsen was not entitled to continue participating in Utah Retirement Systems' Public Employee Noncontributory Retirement System (URS Plan). We conclude the Board's determination was based on an erroneous interpretation and application of the law, and Nielsen has been substantially prejudiced by its error. We therefore set aside the Board's order and instruct it to hold further proceedings consistent with this opinion.

         BACKGROUND

         ¶2 In 2013, Nielsen had accrued 20.65 years of service credit in the URS Plan working with various participating employers. That year, she began working for the University in a position statutorily classified to participate in a non-URS retirement system (Alternate Plan). Because she had service credit in the URS Plan before the date of her University employment, she was entitled to a "one-time irrevocable election to continue participation" in the URS Plan. Utah Code Ann. § 49-13-204(2)(c) (LexisNexis Supp. 2018).

         ¶3 Nielsen claims she accepted her position at the University in part because she knew she could continue participating in the URS Plan. Before beginning her new employment, Nielsen claims she telephoned the Utah State Retirement Office (URS) and asked if she needed to take any steps to maintain active participation in the URS Plan. According to Nielsen, a URS representative told her she was "good to go" and did not need to take any affirmative steps. Nielsen does not remember the name of the URS representative, and URS has no record of any such conversation. In any event, upon commencing her employment with the University, Nielsen did not affirmatively choose to participate in the Alternate Plan and-perhaps in reliance on her phone call with URS-she did not take any steps to continue participating in the URS Plan. Accordingly, the University enrolled her by default in the Alternate Plan.

         ¶4 Nielsen participated in the Alternate Plan for about two years, but claims not to have noticed she was not enrolled in the URS Plan until January 2015. Because Nielsen would lose a significant amount of retirement benefits by not participating in the URS Plan, she and the University discussed how she might re-enroll. An email dated January 28, 2015, from a University staff member said, "I have told [Nielsen] that she needs to resign from her position at the [University] then we will re-hire her in the same position after 32 days. At that time, she can enroll in the [URS Plan]."

         ¶5 In February 2015, Nielsen resigned from her University position. Thirty-six days later, the University rehired Nielsen to the same position from which she resigned. When she was rehired, Nielsen "signed an Irrevocable Retirement Plan Election to request participation [in the URS Plan]." The University certified to URS that, beginning the day Nielsen was rehired, she was eligible to participate in the URS Plan. About seven months after Nielsen was rehired, URS notified her she was not entitled to participate in the URS Plan. It explained that, because she made an "irrevocable election . . . to participate in [the Alternate Plan]" in 2013, she was not eligible to participate in the URS Plan while employed at the University.

         ¶6 Nielsen appealed URS's decision to the Board's executive director. The executive director upheld URS's decision, explaining that when Nielsen "began employment with the University of Utah, . . . [she] had a one time opportunity under statute to elect to continue with [the URS Plan] but did not do so." His letter to Nielsen added, "Unfortunately, I do not have the discretion to contradict the statute and allow you another election to rejoin [the URS Plan]."

         ¶7 Nielsen filed a "Request for Board Action," and the University was joined as a third-party respondent. Nielsen, the University, and URS each filed a motion for summary judgment. Nielsen and the University argued that, under the plain language of Utah Code section 49-13-204(2)(c), she was entitled to continue participation in the URS Plan. Nielsen presented evidence showing she would "lose over ...


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