Spousal Benefit: Employees Win First Round But Wait Continues For A Final Decision

NOVEMBER 2003
- Association Takes On Fight For Member's Spouse - Employees, who have been denied the right to retire under the spousal
benefit provision because of the law's repeal this past July, have won
the first battle. But unfortunately, final victory cannot yet be
declared, as members, along with their spouses who are affected by the
repeal, must continue to wait for a decision from the state's appeal
board.

As reported in our September Voice,
the spousal benefit provision was repealed, effective July 1. It
enabled a married employee under age 55, whose spouse had already
retired from public service, to also retire with their pension
calculated as if they were 55 and therefore at a higher rate.

A
controversy arose as to whether the spousal benefit's repeal should be
applied to employees who were members of the retirement system before
July 1, but filed for the spousal benefit after that date. With the
state's early retirement incentive program (ERI) underway and local
ERIs also being implemented, there has been growing interest in this
issue within public retirement circles.

DALA Agrees With Association

According
to Association Counsel Bill Rehrey, "It's only natural that employees
who are planning to retire soon, possibly under an ERI, would want to
know if they can apply the spousal benefit before they actually retire.
Our Association has tried to do what it can to expedite the
decision-making process.

"We took on
the case of a member's wife, Margaret Thompson, who was a career state
employee and wanted to retire along with her her husband, John, who
retired a year ago and is an Association member. "However, when she
applied for the spousal benefit, her application was denied since she
filed after July 1. We believe that if Margaret wasn't eligible, then
we'd be hard pressed to find an employee who would be," states Rehrey.

Once
Thompson filed her appeal with the Contributory Retirement Appeal Board
(CRAB) this past August, our Association got to work preparing a brief
and other paperwork necessary to have her appeal heard as soon as
possible. The thrust of the Association's legal argument was that the
right of an employee, like Margaret Thompson, to use the spousal
benefit was protected against the repeal by the retirement law (Chapter
32).

Remarkably, a decision was
handed down, in less than than two weeks, by the Division of
Administrative Law Appeals (DALA), which heard Thompson's appeal for
CRAB. In its decision, DALA agreed with the Association that the
retirement law did protect an employee, like Thompson, from the repeal
and that she is entitled to retire under the spousal benefit.

"While
we won the first round, it's not over yet since CRAB, as the pension
law allows, is reviewing DALA's decision," reports Rehrey. CRAB can
take 6 months before issuing its decision.

"We
understand that members and their spouses, who may want to retire with
the spousal benefit before this year ends, are anxious to know the
final outcome," says Association President Ralph White. "While we'll
continue to do what we can to move things along, hopefully retirement
boards will also do what they can to assist prospective retirees,
wanting to apply for the spousal benefit, during this uncertain period."

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