Attorney General: John R. Shears, State Teachers' Retirement Board, 1993-003 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

January 27, 1993

John R. Shears
Administrator
State Teachers' Retirement Board
165 Capitol Avenue
Hartford, CT 06106

Dear Mr. Shears:

This is in response to your letter of September 11, 1992 in which you relate that the State Teachers' Retirement Board has requested an opinion of this office on the following question:

Does the Veterans' Reemployment Rights Act preserve a right for persons covered by the Act to purchase retirement service credit in the State Teachers' Retirement System under the terms of the state law governing such purchases of service credit as were in effect when such persons were inducted into the Armed Forces?

38 U.S.C. e 2021(a) of the Veterans' Reemployment Rights Act provides, with limited exceptions, that a person who leaves a position in the employ of any employer for service in the Armed Forces of the United States and is honorably discharged, and makes application for reemployment within ninety days of discharge from military service shall be restored to that position or a position of like seniority, status, and pay. 38 U.S.C. e 2021(b)(1)(A) of the Veterans' Reemployment Rights Act sets forth the seniority and benefit rights of those reemployed under the Act and provides:

Any person who is restored to or employed in a position in accordance with the provisions of ... subsection (a) of this section shall be considered as having been on furlough or leave of absence during such person's period of training and service in the Armed Forces, shall be so restored or reemployed without loss of seniority, shall be entitled to participate in insurance or other benefits offered by the employer pursuant to established rules and practices relating to employees on furlough or leave of absence in effect with the employer at the time such person was inducted into such forces, and shall not be discharged from such position without cause within one year after such restoration or reemployment.

Subsection (b)(1)(A) requires that reemployment shall be without loss of seniority. Entitlement to insurance (except health insurance which is governed by subsection (b)(1)(B)) and benefits other than seniority based benefits is governed by the same rules and practices the employer uses for those on furloughs or leaves of absence. Seniority based benefits are not subject to the rules and practices of the employer relating to employees on furlough or leave of absence under the terms of the Act.

The courts have analogized the seniority based benefit principle to riding an escalator. The returning veteran does not return to the employment escalator at the point where he left it to join the Armed Forces. A veteran steps back on the seniority escalator at the precise point he would have occupied had he kept his position continuously rather than enter the Armed Forces. Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 284 (1946). Seniority benefits such as pension and retirement benefits are, by their very nature, employment advantages that Congress intended to make uniformly available to veterans through the protective mechanism of the Veterans' Reemployment Rights Act. Bunnell v. New England Teamsters, 486 F. Supp. 714, 719 (D. Mass. 1980), aff'd. 655 F.2d 451 (1st Cir. 1981), cert. denied, 455 U.S. 908 (1982).

In Alabama Power Co. v. Davis, 431 U.S. 581 (1977), the Supreme Court held that pension credits are a form of seniority protected by the Veterans' Reemployment Rights Act and that a retired employee was entitled to be credited with the time spent in the military for purposes of calculating the employee's pension. The Court held that a veteran should receive "the pension to which he would have been entitled by virtue of his lengthy service if he had not been called to colors." Id., at 594. The Court also stated that the rules or practices of an employer cannot diminish the seniority based benefits which Congress secured veterans under the Act. Id., at 592.

The application of these pension-seniority rights under the Act to non-contributory pension systems is simple. The returning veteran/employee must be credited with the time spent in the military for purposes of calculating the employee's pension. However, the State Teachers' Retirement System is a contributory system with members contributing a statutorily mandated five percent of their salary to the Teachers' Retirement Fund. Conn. Gen. Stat. ee 10-183b(7), and 10-183kk are the current statutory provisions defining and mandating the five percent contribution which has existed since prior to 1917.

In order to put the veteran who returns to a position in Connecticut teaching service back on the seniority escalator at the precise point he would have occupied had he kept his position continuously and give him the pension to which he would have been entitled by virtue of his length of service, he must pay the fund the mandatory five percent contributions which he would have made had he kept his position continuously for the period of his military leave. 38 U.S.C, e 2021(b)(1)(A); Fishgold, supra; Alabama Power Co., supra.

This computation will require a determination of what the veteran would have made had he remained in Connecticut teaching service, rather than joined the military. In order to fulfill the mandate of the Act for returning Connecticut teachers covered by the Act, the returning teacher must pay the mandatory five percent contribution he would have made so that he may be credited with the time spent in the military for purposes of calculating the employee's pension. This is a requirement of the seniority provision of the Act, and flows from the Act itself, not from state law, rules or practice. The Veterans' Reemployment Rights Act is not intended to place returning servicemen in a better position than other employees. LiPani v. Bohack Corp., 546 F.2d 487, 491 (2d Cir. 1976). Since employees are required to contribute five percent of their salaries, returning reemployed veterans must contribute the equivalent five percent to be entitled to credit for their military service.

The federal government's interest in protecting veteran's reemployment rights is pervasive, and exhibits a clear intent to preempt conflicting state legislation. Mazak v. Florida Dept. of Admin. Div. of Retirement, 113 L.R.R.M. 3217, 97 Lab. Cas. (CCH) P 10,083(N.D.Fla. 1983). In Mazak, the district court held that a state statute which imposed a time limitation on the military service which a state employee could purchase for retirement credit was preempted by the Veteran's Reemployment Rights Act.

Similarly, in Dailey v. Public School Retirement System of Mo., 707 F. Supp. 1087 (E.D.Mo. 1989), and in Cronin v. Police Dept. of City of New York, 675 F. Supp. 847 (S.D.N.Y. 1987), state laws limiting the purchase of military credits for public school teachers and local police were held to be preempted by the Act. And in Jennings v. Illinois Office of Ed., 589 F.2d 935 (7th Cir. 1979), the court held that the procedures used to assert ones rights under the Act preempted the state statutory based procedure to collect unpaid wages in the Illinois Service Men's Employment Tenure Act because, "the Veterans' Reemployment Rights Act preempts state law." Id., at 944.

Although states are free to establish additional rights and protections supplemental to those that the Act provides, they are not free to restrict the reemployment rights that the Act has created. Peel v. Florida Dept. of Trans., 500 F.2d 1070, 1073-1074 (5th Cir. 1979). Thus, any state law, regulation, rule, or policy which conflicts with or limits the seniority rights secured by the Act is preempted by the seniority provisions of the Act. To the extent that Connecticut's statutes or regulations governing the Teachers' Retirement System and the purchase of credits for military service conflict with the seniority requirements of the Veterans' Reemployment Rights Act, they are preempted.

It should also be noted that there is no time limitation on an individual securing his seniority based retirement benefits under the Act. The purchase of the credit for the military leave by the employee submitting the five percent mandatory contribution on the salary he would have made had he continued employment may occur any time after his reemployment under the Act, including after retirement. The Act must be liberally and broadly construed for the benefit of veterans. Coffy v. Republic Steel Corp., 447 U.S. 191, 196 (1980). In contrast to the ninety day limitation on reemployment rights in the Act, the seniority rights which flow from the reemployment have no statutory time limitation. Thus, in Alabama Power, the Supreme Court held that a veteran who had already retired should receive credit toward his retirement for military service under the seniority rights provision of the Act. In Grzyb v. New River Co., 793 F.2d 590 (4th Cir. 1986), the court held that an employee who waited thirty-one years to claim his seniority based pension rights under the Act had not waited too long or waived his rights under the Act. In Beckley v. Lipe-Rollway Corp., 448 F. Supp. 563 (N.D.N.Y. 1978), an individual failed to object to the computation of his pension credits, which excluded his credits under the Act, within the thirty day time period as required by the terms of the pension plan. The court held that the thirty day limitation in the pension plan could not operate to extinguish or limit the seniority based pension rights under the Act.

Thus, a Connecticut teacher reemployed under the Act can purchase his retirement credits by submission of the required five percent calculated contribution at any time. Any state law or regulation which seeks to impose a time limit on such purchase, or direct that such payments must be made at a particular time would be preempted. For example, the limitation on the purchase of additional credited service to the time of retirement in Conn. Gen. Stat. e 10-183e(c) would not apply to the purchase of this time.

The answer to the Board's question then is that the purchase of retirement service credits for those reemployed pursuant to the Veterans' Reemployment Rights Act is governed by the seniority provisions and protections of the Act itself, and not by the terms of the state law governing such purchases of service credit as were in effect when such persons were inducted into the Armed Forces except to the extent that state law established additional rights and protections supplemental to those the Act provides. As more fully explained herein, a veteran/teacher reemployed under the Act is entitled to receive credit for the time spent in the military for purposes of calculating the veteran/teacher's pension by paying to the fund the mandatory five percent contribution on the salary he would have made had he remained employed as a Connecticut teacher, and he may make that required contribution to purchase those credits at any time after the return to Connecticut teaching service, including after retirement.

The Board additionally has sought our opinion on its obligation "to provide relief [to local public school teachers] which under the Veterans' Reemployment Rights Act is described as an obligation of the employer to the returning veteran." For most purposes the local public school system would have the obligations created under the Act, e.g., reemployment, and rights and benefits from seniority. However, as administrator of the Teachers' Retirement System and trustee of the Teachers' Retirement Fund, the Board would be an employer insofar as it determines eligibility and pays benefits, and would be subject to the responsibilities and obligations of an employer in performing those functions. Bunnell v. New England Teamsters, 486 F. Supp. 714 (D.C. Mass., 1980), aff'd 655 F.2d 451 (1st Cir. 1981), cert. denied, 455 U.S. 908 (1982).

Very truly yours,

RICHARD BLUMENTHAL
ATTORNEY GENERAL

Robert A. Whitehead
Assistant Attorney General

RB/RAW/eh


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