holding that where the statute excluded a “lumpsum” payment to a “terminating employee” from salary, the payment should not be added to the employee’s average salary for the calculation of his retirement pension
How later courts described this case
- holding that where the statute excluded a “lumpsum” payment to a “terminating employee” from salary, the payment should not be added to the employee’s average salary for the calculation of his retirement pension
Written by the judges who cited it.
The opinion
Richard B. Adkisson, Chief Justice, dissenting. The majority correctly state the issue, which is whether the lump sum payment for accrued annual leave is salary for the purpose of computing retirement benefits under the State Police Retirement System.
Appellant’s retirement benefits are based upon his “final average salary.” Ark. Stat. Ann. § 42-451(B)(¿) (Repl. 1979). “Salary” means the compensation paid a member for service rendered by him as a state police officer.” Ark. Stat. Ann. § 42-451 (B)(k) (Repl. 1979).
Accrued annual leave is additional compensation earned by the employee. Ark. Stat. Ann. § 13-349(L) (Repl. 1979). And, it is based upon completed months of service. Ark. Stat. Ann. § 12-2367(a) (Repl. 1979). When the employee retires, the unused annual leave to his credit is paid to him as a lump sum payment. Ark. Stat. Ann. § 12-2367(k) (Repl. 1979).
Since lump payments are earned compensation for service rendered, those payments must be included as “salary” for the purpose of computing retirement benefits. Under the act creating the State Police Retirement System, the only exclusion from salary is “reimbursement for lodging, meals, or travel expense.” Ark. Stat. Ann. § 42-451(B)(k) (Repl. 1979).
The majority’s conclusion that appellant seeks to use 37 months to compute three years’ salary is unfounded. Thirty days is the maximum time accruable and subject to lump sum payment; however, it must have been earned within the last three years. Ark. Stat. Ann. § 12-2367(a) and (k) (Repl. 1979). Payment for overtime, lump sum accrued leave, and overlapping pay periods are variable components of salary which must necessarily inflate the line item (fixed) salary set by the Legislature. And, when the total salary is computed for each employee, it is likely that each salary will differ. Since all salaries are computed under the same statutes, there is no discrimination among employees.
The majority, in attempting to buttress their conclusion, misconstrue Ark. Stat. Ann. § 13-349(A) (Repl. 1979) by ignoring its provision which excludes lump sum payments, overtime payments, and overlapping pay, as salary, only “as contemplated by Section 4 of Article 16 of the Constitution of the State of Arkansas.”
This court has previously delineated what is contemplated by Section 4 of Article 16 of the Arkansas Constitution in Director of Bureau of Legislative Research v. Mackrell, 212 Ark. 40 , 204 S.W. 2d 893 (1947); there we said the primary purpose of this provision is “to prevent the expenditure of the people’s tax money without having first procured their consent, expressed in legislative enactments which do not contravene these constitutional provisions.”
Here, it is not contested that the Legislature appropriated the funds for payment of the additional compensation for overtime, lump sum accrued annual leave, and overlapping pay periods. Although these payments are necessarily variable, they nevertheless represent compensation for service rendered as enacted by the Legislature. As stated earlier, the terms “salary” and “compensation” are used interchangeably in the statutes under consideration. This usage is further evidenced by Ark. Stat. Ann. § 12-2501Q) (Repl. 1979) (State Employees Retirement System Act) which states: “Compensation means the salary or wages paid ... by a public employer . . . for personal services rendered. ...”
The undisputed evidence before the trial court was that both “the overtime payments referred to in Ark. Stat. Ann. § 13-349(A)(1) and payment for overlapping pay periods in § 13-349(A)(3) are clearly compensation for services and therefore salary under the law.” The payment for lump sum annual leave which is sandwiched between these provisions in Ark. Stat. Ann. § 13-349(A)(2) must, therefore, also be salary.
The trial court correctly held:
The purpose of Ark. Stat. Ann. § 13-349(A) is to avoid the constitutional line item restriction on salaries [the fixed component of salary] set forth in the Arkansas Constitution, Art. 16, Sec. 4. The lump sum payment to the plaintiff at his retirement was for services rendered and constitutes salary [the variable component of salary] within Ark. Stat. Ann. §§ 42-45l(B)(k) and 12-2501(J).
The legislative intent in this case can be determined from the plain language expressed in this legislation. No room is left for this court to speculate as to what we think the language should have said.
For the reasons stated, I would affirm.
I am hereby authorized to state that Holt, J., joins me in this dissent.