ORDERS:
STATEMENT OF THE CASE
The above-captioned case is before the Court pursuant to S.C. Code Ann. § 9-21-60 (Supp. 2006) upon the request of Petitioner Janet L. Cash (“Petitioner”) for a contested case hearing. In this matter, Petitioner challenges Final Agency Determination No. 08-018, issued by Respondent South Carolina Budget and Control Board, South Carolina Retirement Systems (“Retirement Systems”), in which the Retirement Systems denied her request to use Paid Time Off (PTO) in the calculation of her Average Final Compensation and denied her request to purchase additional service credit. On April 8, 2009, Respondent Retirement Systems filed a Motion for Summary Judgment, in which it contends that there is no genuine issue as to any material fact in this case and that it is entitled to judgment in its favor as a matter of law under the applicable statutes and case law. Petitioner filed a response in opposition to the Motion for Summary Judgment on April 23, 2009. The Court heard arguments on the Retirement Systems’ Motion for Summary Judgment on Thursday, April 23, 2009, at the Administrative Law Court in Columbia, South Carolina. Having fully considered the arguments presented at that hearing and in the parties’ previous filings and having carefully examined the applicable law, I find that the Retirement Systems’ Motion for Summary Judgment must be granted for the reasons set forth below.
BACKGROUND
Petitioner Janet L. Cash is a retired member of the South Carolina Retirement System (“SCRS” or “System”), who retired under the Teacher and Employee Retention Incentive (“TERI”) Program on June 30, 2004, in connection with her employment with Spartanburg Regional Health Services District, Inc. Petitioner terminated her TERI participation on October 29, 2004. Following Petitioner’s retirement and entry into the TERI Program, SCRS estimated her Average Final Compensation (“AFC”) as being $136,941.43 based on the contributions and salary information that had been submitted to the Retirement System on Petitioner’s behalf by her employer. As part of finalizing the Petitioner’s AFC, the Retirement System received Form 6203, the Retirement Systems Certification of Final Retirement Deductions for the Teacher and Employee Retention Incentive Plan, from the Petitioner’s employer on November 10, 2004. This Form indicated that Petitioner had received payment for more than 45 days of annual leave at retirement and had an annual budgeted salary of $127,557.66. In an attempt to reconcile the difference in Petitioner’s estimated AFC of $136,941.43 and the annual budgeted salary reported on Form 6203 of $127,557.66, SCRS contacted Petitioner’s employer for further information. SCRS learned that employer and employee retirement contributions had been submitted to the SCRS on Petitioner’s behalf based on certain amounts of Paid Time-Off (PTO). In October of 2007, Petitioner’s employer provided information that indicated the amounts of PTO upon which contributions had been made and the quarters in which the contributions were made. Based on receipt of the information from Petitioner’s employer in October of 2007, the SCRS removed the PTO from the calculation of the Petitioner’s AFC and completed the Petitioner’s AFC calculation resulting in an AFC of $128,529.86. Petitioner’s employer was notified to file the necessary Supplemental Contribution Reports with SCRS in order to receive a refund of the employer and employee contributions erroneously remitted on the PTO funds. By filings dated April 29, 2008, the Petitioner’s employer filed the required Supplemental Contribution Reports with the SCRS which corroborated the information that had been provided in October of 2007 regarding the PTO which had been included in Petitioner’s AFC. Relative to the calculation of the Petitioner’s AFC, these Supplemental Contribution Reports indicate that Petitioner’s employer had incorrectly reported wages and made retirement contributions on PTO for the quarters ending June 30, 2001 through June 30 2004, the twelve consecutive quarters which produced the Petitioner’s highest average earnable compensation. The employer also provided additional information at this time and, based on the removal of the PTO and the additional information provided, the Petitioner’s AFC was adjusted to $128,378.21. The SCRS calculated the Petitioner’s AFC of $128,378.21 using her regular salary for the 12 quarters producing the highest average salary and included her final payment for 45 days of unused leave at retirement.
The Petitioner was notified of her adjusted AFC based on the information provided by the Petitioner’s employer in October of 2007. The Petitioner wrote to the SCRS on November 19, 2007, requesting detailed information concerning the calculation of her AFC. The SCRS responded with a letter and detailed spreadsheet on November 30, 2007. The Petitioner was notified of her completed final AFC by letter dated June 17, 2008. By letter dated August 8, 2008, Petitioner’s counsel challenged the adjustment made to Petitioner’s AFC by removing the PTO. Petitioner suggested that a fair remedy to the situation would be to allow Petitioner to purchase additional service credit so that her retirement benefit would be increased. A Final Agency Determination by the Director of the Retirement Systems denying Petitioner’s claims was issued on October 17, 2008. Petitioner thereafter filed a request for contested case hearing at the Administrative Law Court.
DISCUSSION
Summary judgment is proper in a case when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), SCRCP; see also, e.g., Henderson v. Allied Signal Inc., 373 S.C. 179, 183, 644 S.E.2d 724, 726 (2007). The purpose of summary judgment is to expedite disposition of cases that do not require the services of a fact finder. Austin v. Beaufort County Sheriff’s Office, 377 S.C. 31, 34, 659 S.E.2d 122, 123 (2008). Accordingly, where no further development of the facts is necessary to clarify the application of a statute, summary judgment is a proper means of disposing of a purely legal question of statutory interpretation, even where the case presents a novel issue of statutory construction. See, e.g., Med. Univ. of S.C. v. Arnaud, 360 S.C. 615, 620 n.6, 602 S.E.2d 747, 749 n.6 (2004).
A. Calculation of Final Benefits
The Petitioner’s claim related to the calculation of her benefits involves the determination by SCRS that paid time off (PTO) received by the Petitioner prior to her retirement cannot be included in her Average Final Compensation (AFC) calculation. Petitioner does not appear to contest that PTO such as the Petitioner received is not to be included in her AFC calculation. Rather, the Petitioner seeks an equitable remedy based on circumstances surrounding her donation of the PTO and the delays in finalizing her retirement benefit. The law, however, does not allow for the inclusion of the PTO in the calculation of the Petitioner’s retirement benefit regardless of the circumstances.
The relevant law in this matter is found in S.C. Code Ann. § 9-1-10(4). Section 9-1-10(4) provides a definition for “average final compensation” and states:
"Average final compensation" with respect to those members retiring on or after July 1, 1986, means the average annual earnable compensation of a member during the twelve consecutive quarters of his creditable service on which regular contributions as a member were made to the system producing the highest such average; a quarter means a period January through March, April through June, July through September, or October through December. An amount up to and including forty-five days' termination pay for unused annual leave at retirement may be added to the average final compensation… .
In Duvall v. South Carolina Budget and Control Board, South Carolina Retirement System, 377 S.C. 36, 659 S.E.2d 125 (2008), the Supreme Court interpreted the provisions of Section 9-1-10(4) and held that:
The statutory language defining average final compensation clearly indicates that a maximum of 45 days’ pay for unused annual leave should be used to calculate the average final compensation. Thus, even if additional payments for annual leave are made at a time other than “at retirement,” those payments should not be included. In our opinion, the Legislature’s inclusion of the terms “termination pay” and “at retirement” was not futile; instead, when these terms are read in context with the entire definition of average final compensation, the language clearly establishes the intent to cap how much unused annual leave may be figured into the retirement calculation.
659 S.E.2d at 128.
Clearly, the Supreme Court has determined that the laws regarding the use of paid unused leave in the determination of AFC establish a cap and allow only such leave as is paid “at retirement” to be included in the calculation. In Duvall, the Court explained that allowing a member to calculate his AFC by adding (1) his pre-retirement payments for excess unused leave; (2) his regular salary for the 12 quarters prior to retirement; and (3) his final payment at retirement for 45 days of unused annual leave would inflate his average final compensation and produce an absurd result unintended by the Legislature. See id. 659 S.E.2d at 128. In this case, The Respondent has calculated the Petitioner’s average final compensation using her regular salary for the 12 quarters producing the highest average salary and included her final payment for 45 days of unused leave at retirement. To also allow for the inclusion of the pre-retirement payments for PTO in this case would greatly inflate the Petitioner’s average final compensation and produce the very result the Duvall Court found to be unlawful. Therefore, the Respondent correctly removed Petitioner’s PTO from the calculation of her AFC.
B. Additional Service Purchase
The Petitioner seeks to purchase additional service credit. The Petitioner seeks this purchase as an equitable remedy for the exclusion of the PTO mentioned above from the calculation of her AFC. Ostensibly, the increase in service credit would off-set the exclusion of the PTO in the calculation of Petitioner’s retirement benefit. Unfortunately, the law does not allow members who are not active to purchase service credit.
S.C. Code Ann. §9-1-1140 provides authority for members of the South Carolina Retirement System to purchase additional service credit which can be included in the formula used to calculate retirement benefits. Subsections (A) through (G) of Section 9-1-1140 allow an “active member” to purchase service credit for periods of public service, educational service, military service, approved leaves of absence, nonqualified service, service in the State’s Optional Retirement Program and previously withdrawn service. As can be seen by the language of each subsection of Section 9-1-1140, the ability to establish such service is available only to “active members.” An “active member” means an employee who is compensated by an employer participating in SCRS and who is making regular retirement contributions to the system. S.C. Code Ann. Section 9-1-10(2) (Supp. 2005).
“Retirement” occurs when a member withdraws from active service and receives a retirement allowance granted under the system. S.C. Code Ann. Section 9-1-10(26) (Supp. 2005). Petitioner retired from employment with Spartanburg Regional Health Services District, Inc. on June 30, 2004. Clearly, Petitioner is not an active member of SCRS. Therefore, Petitioner is not eligible to purchase service credit pursuant to Section 9-1-1140 and the Respondent correctly denied her claim in this matter.
ORDER
As there are no genuine issues as to any material facts in this matter and as the Retirement Systems has properly denied Petitioner’s request to use Paid Time Off (PTO) in the calculation of her Average Final Compensation and denied her request to purchase additional service credit, I find that the Retirement Systems is entitled to judgment in its favor in this case as a matter of law. Therefore,
IT IS HEREBY ORDERED that Respondent South Carolina Retirement Systems’ Motion for Summary Judgment is GRANTED.
AND IT IS SO ORDERED.
______________________________
The Honorable John D. McLeod
Administrative Law Judge
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