holding that rights accrue only when an employee vests
How later courts described this case
- holding that rights accrue only when an employee vests
- relying on Ross v. Board of Trustees of Firemen's Relief and Pension Fund of Oklahoma City, 1949 OK 132, 207 P.2d 254
- "[U]nder Oklahoma law, the right to a pension would vest, or become absolute, upon the pension recipient's becoming eligible for payment of the pension.... [T]he right of a claimant to a pension is controlled by the terms of the statute in effect when the right to a pension vests and ... vesting occurs as of the date of retirement."
- pension recipient’s right to benefits vested upon recipient’s becoming eligible for payment of pension
Written by the judges who cited it.
The opinion
DOOLIN, Vice Chief Justice,
dissenting.
The Court today holds the right to retirement pension benefits provided to firefighters and police officers vest at the time those benefits become payable to those eligible. This decision ignores the fact that the promise of generous pension plan benefits are part of the basis of the bargain which induces persons to accept public employment.
When persons accept public employment, they are promised certain rights and benefits in exchange for their services. The retirement benefits are a valuable part of the consideration for entering into and continuing in public service. Since public employment seldom pays salaries comparable to those found in the private sector, these benefits are a prime inducement in the recruiting and retaining of qualified employees.
These mutually agreed upon benefits are deferred compensation and as such are vested contractual rights upon the acceptance of employment.
In Dangott v. ASG Industries, Inc., 558 P.2d 379 (Okl.1976) we cited with approval Cantor v. Berkshire Life Ins. Co., 171 Ohio St. 405 , 171 N.E.2d 518 (1960) which sets forth a contemporary and enlightned view of such contractual rights:
There has been, however, in recent years a gradual trend away from the gratuity theory of pensions. The courts, recognizing that a consideration flows to an employer as a result of such pension plans, in the form of a more stable and more contented labor force, have determined that such arrangements will give rise to contractual obligations enforceable by the employee who has complied with all the conditions of the plan, even though he has made no actual monetary contribution to the fund.”
The fact that the individual may have contributed to his pension fund, merely strengthens the thrust and force of the last cited Ohio case.
Other jurisdictions have faced this issue. In Betts v. Board of Administration, 21 Cal.3d 859 , 148 Cal.Rptr. 158 , 582 P.2d 614 (1978) the California Supreme Court said:
“A public employee’s pension constitutes an element of compensation, and a vested contractual right accrues upon the acceptance of employment.”
*354 In Leonard v. City of Seattle, 81 Wash.2d 479 , 503 P.2d 741 (1972) a declaratory judgment action to determine the validity of a forfeiture provision of pension law, the Washington Supreme Court discussed the nature of pension right and stated:
Pension rights, because of their nature as deferred compensation, vest upon the commencement of employment or service. They constitute property and as property amount to an estate. Plaintiffs property in a pension, therefore, seems to us to be much like his property interests in paid up insurance, his bank accounts, his home and furniture and his automobile. In short his pension rights are an integral part of his estate.”
I believe the cases cited above reflect a better reasoned and eminently fairer analysis of the nature of pension benefits. The class of plaintiffs in the instant case accepted employment contracts partly because of the pension plan, including the cost of living adjustments. The plaintiffs had a reasonable expectation that the contract of employment they agreed to upon the acceptance of employment would be honored by the employer. Today’s decision defeats their contractual rights and in my opinion is contrary to Art. V. § 54 of the Constitution of Oklahoma and may inhibit a party’s right to the fruits of his industry, Art. II § 2 Okla. Constitution.