Attorney General: Robert G. Jaekle, Auditors of Public Accounts, 1993-038 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

December 22, 1993

Robert G. Jaekle
Kevin P. Johnston
Auditors of Public Accounts
State Capitol
210 Capitol Avenue
Hartford, CT 06106

Dear Mr. Jaekle and Mr. Johnston:

By letter dated December 2, 1992, you have requested an opinion as to whether the State Employees' Retirement Commission [hereinafter Commission or SERC] has the authority to place Nicholas A. Cioffi, who joined the State Employees' Retirement System [hereinafter SERS or the Retirement System] after July 1, 1984, in Tier I of that system, with no Social Security coverage. Our answer to this question is no. You have also inquired concerning the applicability of Conn.Gen.Stat. 3-7, regarding compromise of disputed claims, to SERC's actions in the instant case. We reply that the circumstances presented here preclude the application of section 3-7.

The relevant facts that we have gathered from materials provided by you and by SERC are as follows: Commissioner Cioffi was a member of the Judges and Compensation Commissioners' Retirement System until January 30, 1991. He was then appointed as the Commissioner of the Department of Public Safety, on January 31, 1991. His department submitted forms to SERC that indicated that Commissioner Cioffi was a member of Tier I of the Retirement System, who was not covered by Social Security.1 Therefore, Social Security contributions were not deducted from his paycheck.

Commissioner Cioffi's placement in Tier I was discovered by the Retirement Division in March, 1992. The Division instructed the Department of Public Safety to change Commissioner Cioffi's paperwork to reflect inclusion in Tier II, hazardous duty. Social Security contributions are collected from employees in Tier II.

Commissioner Cioffi appealed this determination to SERC on March 25, 1992. He was informed that his appeal would be construed as a petition for a declaratory ruling and presented to the Retirement Commission. A ruling was never issued, however, because, on May 21, 1992, SERC voted to accept a "good faith compromise" of Commissioner Cioffi's claim that he was a Tier I member who was not required to participate in Social Security. Pursuant to that compromise, SERC voted to permit Commissioner Cioffi to remain in Tier I, with no Social Security coverage, for the period from January 31, 1991 to March 20, 1992. It also voted to treat him as a Tier II member with Social Security coverage thereafter. You have inquired as to whether this action violates the statutory provisions governing tier membership and Conn.Gen.Stat. 3-7.

Connecticut statutes clearly delineate the class of state employees included in Tier II of SERS. Pursuant to Conn.Gen.Stat. 5-192e(a), this includes "all members who first join the state employees retirement system after July 1, 1984," id. Pursuant to Conn.Gen.Stat. 5-192g(a), "Membership in the tier II plan shall be required for each state employee, whether or not exempt from the classified service, appointed after January 1, 1984...."

Commissioner Cioffi meets the criteria in section 5-192e(a) for inclusion in Tier II. He is a state employee who first joined SERS after July 1, 1984. Prior to that time he was a member of a different retirement system, the Judges and Compensation Commissioners' Retirement System. Commissioner Cioffi also falls into the category of employees described in section 5-192g(a), as he was appointed Commissioner of Public Safety after January 1, 1984. Therefore, the plain language of sections 5-192e(a) and 5-192g(a) mandated that he be enrolled in Tier II on January 31, 1991, when he was appointed Commissioner. A statute must be interpreted so as to give effect to the legislative intent expressed by its plain language. Vaillancourt v. New Britain Machine/Litton, 224 Conn. 382, 390, 618 A.2d 1340, 1344 (1993); All Brand Importers, Inc. v. Department of Liquor Control, 213 Conn. 184, 194-95, 567 A.2d 1156, 1162-63 (1989). For this reason, the Department of Public Safety was in error when it placed Commissioner Cioffi in Tier I.

Because sections 5-192e(a) and 5-192g(a) required placement in Tier II from the time of Commissioner Cioffi's appointment as Commissioner of Public Safety, SERC lacked authority to permit Tier I placement after this occurred. It is axiomatic that SERC, as an administrative agency, is bound by the statutory provisions that govern its operations. See Stern v. Medical Examining Bd., 208 Conn. 492, 498, 545 A.2d 1080, 1083 (1988); Castro v. Viera, 207 Conn. 420, 428, 541 A.2d 1216, 1220 (1988). Furthermore, the retirement statutes themselves specifically place this obligation on the Commission. "In conducting the business of the [retirement] system, ... the retirement commission shall act ... (3) in accordance with the provisions of the general statutes...." Conn.Gen.Stat.  5-155a(c).

The Commission's fiduciary duties with respect to the system do not, in any way, extend its powers beyond their statutory limits. Section 5-155a(c)(2) of the Connecticut General Statutes does require SERC to act "in accordance with strict fiduciary standards and responsibilities." However, this language cannot be interpreted to supersede the obligation to adhere to applicable statutory provisions, which is codified in subsection (c)(3) of section 5-155a. Since these two subsections are part of the same statutory enactment, they are required to be read together to create a consistent whole. See Gifford v. Freedom of Information Comm'n, 227 Conn. 641, 658,--A.2d--(1993); Board of Education v. State Bd. of Labor Relations, 217 Conn. 110, 116, 584 A.2d 1172, 1175 (1991). Therefore, section 5-155a(c)(2) must be interpreted in a manner that complies with the mandate of subsection (c)(3) to act within statutory limits. For this reason, the grant of fiduciary authority to SERC does not permit it to waive statutory requirements.2

Similarly, the Commission's authority to settle disputed retirement claims does not authorize it to release disputants from statutory obligations. Section 3-7 of the Connecticut General Statutes does grant broad authority to the state to settle disputed claims by or against state agencies. Conn.Gen.Stat. 3-7(c); see Darien v. State, 141 Conn. 336, 345, 106 A.2d 181, 185 (1954). However, that statute does not apply under the facts presented in the instant case.

In summary, the State Employees' Retirement Commission may not ignore statutory mandates that govern the administration of the State Employees' Retirement System in order to resolve a contested claim. Neither the Commission's fiduciary responsibilities, nor any power to compromise disputed claims creates such authority. Since Conn.Gen.Stat. 5-192e(a) and 5-192g(a) compelled Tier II membership for Commissioner Cioffi from the date he was appointed Commissioner of Public Safety, SERC cannot place him in Tier I for any part of this period. Therefore, Commissioner Cioffi has the financial obligation to cover whatever employee costs are involved in Tier II membership, from the date of his appointment, forward.3

Very truly yours,

Richard Blumenthal
Attorney General

Laurie Adler
Assistant Attorney General

RB/LA/jcb


1 Membership in Tier I can be in Part A, with no social security coverage, or Part B, with such coverage. Conn.Gen.Stat. 5-157(a).

2 It is doubtful that the conferring of fiduciary responsibilities can ever act to increase the authority of the body on whom they are bestowed. Rather, this serves to limit the bounds of acceptable behavior, imposing a duty of good faith and candor in the performance of whatever duties have otherwise been assigned to the fiduciary. Albom v. Katz Corp., 39 Conn.Supp. 533, 535-36, 466 A.2d 1206, 1208 (App.Sess.1983). In the instant case, the duties assigned to the fiduciary, SERC, are prescribed by statute, and such duties require it to apply, rather than waive, the provisions of the State Employees' Retirement Act, Conn.Gen.Stat.  5-152 to 5-192x. Indeed, section 5-155a(a) of the Connecticut General Statutes directs, "Each trustee ... will not knowingly violate or willingly permit to be violated any of the provisions of law applicable to the state retirement system."

3 It should be noted that the failure of Commissioner Cioffi to contribute to Social Security resulted in an underpayment of withholding taxes by the Commissioner. The Comptroller, rather than SERC, has authority over such payments. Conn.Gen.Stat. 3-119(a).


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