APPEAL
FROM THE PULASKI COUNTY CIRCUIT COURT, TWELFTH DIVISION [NO.
60CV-17-6502] HONORABLE ALICE S. GRAY, JUDGE.
Frances Morris Finley, for appellant.
Jessica Middleton, for appellee.
BART
F. VIRDEN, JUDGE.
Darann
Diane Harrison appeals the Pulaski County Circuit Court's
dismissal of her petition for review of the Arkansas Public
Employees' Retirement System (APERS) decision denying her
request for payment of survivor benefits and the agency's
conclusion that there were no accumulated contributions held
by APERS. We affirm.
I.
Relevant Facts
Gladis
Bright was an employee of the Marianna Public School System
from January 1978 until June 1990.[1] Bright filed her application
for retirement on November 4, 2015, and unfortunately, she
passed away only four days later. On November 17, 2015,
APERS, unaware of Bright's death, sent her a letter
informing her that she was a noncontributory member with
twelve years and six months of service as of June 1990. The
letter stated that Bright had selected annuity Option A120
and had designated Harrison, her daughter, as her
beneficiary. The letter explained that if Bright died before
she received all 120 payments, her designated beneficiary
would receive the same benefit amount that she had been
receiving. The section entitled "Survivor Benefit"
set forth that
[b]ecause you are vested for benefits, your eligible
survivors may qualify for payments should you decease prior
to retirement. Please advise your family to contact this
office for information in the event of your death. A spouse,
to whom you've been married at least one year, will be
eligible for a benefit figured as if you retired on the day
prior to your death and elected Option B75. Dependent
children are also eligible for survivor benefits. There is no
redactor for age applied to these benefits.
On
April 23, 2016, Harrison's attorney received an email
from Jay Wills[2] who informed him that because Bright
passed away two months before her retirement was effective
and before the A120 annuity payments had begun, and because
Harrison was not a surviving spouse or a dependent minor
child, no benefits were available to her. Wills explained
that if Bright had passed away after the annuity payments had
commenced, Harrison would have been eligible to collect the
remainder of the payments. Wills also explained that Bright
was not a contributory member; thus, there were no
accumulated retirement contributions to pass to the estate.
Harrison
appealed the decision to the APERS Board of Trustees
("Board"). The parties stipulated that Bright was a
noncontributory member of APERS for twelve years and six
months, that she filed her application for retirement on
November 4, 2015, that Bright selected the annuity Option
A120, that she designated her daughter as the beneficiary,
and that Bright died on November 8, 2015, about two months
before her retirement date of January 1, 2016.
APERS
provided the Board with a written determination in which it
concluded the following: Arkansas Code Annotated section
24-4-608(a) (Repl. 2014) requires that an employee file a
retirement application no less than thirty days before the
first of the month in which he or she desires to retire, and
Bright requested that her retirement begin January 1, 2016.
Bright selected A120 retirement benefits under Arkansas Code
Annotated section 24-4-606(a)(2) (Repl. 2014). Bright died
before her retirement began, and because her retirement was
not effective when she died, Arkansas Code Annotated 24-4-608
governed any survivor benefits. Under Arkansas Code Annotated
section 24-4-608, only the surviving spouse, dependent
parents, or dependent children are entitled to survivor's
benefits. Bright was not a contributory member, and Arkansas
Code Annotated section 24-4-101(12) (Supp. 2017) defines
contributory member as one who contributes 5 percent or 6
percent of compensation to APERS. Subsection (26) defines
"noncontributory member" as "one who does not
contribute a portion of compensation." Arkansas Code
Annotated section 24-4-602 (Repl. 2014) allows a refund of a
deceased contributory member's own contributions, and
employer contributions are not refunded.
At the
hearing, Harrison contended that because Bright chose annuity
Option A120, and not Option B75, APERS erroneously based its
decision on section 24-4-608. Harrison also asserted that
pursuant to section 24-4-608(g) and section 24-4-1102 (Repl.
2014) she is entitled to receive all employer contributions
that accumulated during Bright's employment.
Wills
refuted Harrison's claim that she is entitled to collect
Bright's annuity payments because, Wills explained,
Bright passed away before she reached retirement, and the
balance of an annuity is paid to a beneficiary only when the
employee's retirement has begun. Wills testified at the
hearing that because Bright passed away before her retirement
began on January 1, she was not a retirant and section
24-4-608, known as the "death in service" statute,
applies here. Wills explained that the death-in-service
statute provides that only dependent children, a spouse, and
dependent parents are eligible for survivor benefits.
Wills
also testified that pursuant to Arkansas Code Annotated
section 24-4-602, if an employee dies before all the annuity
payments are made to the retirant, those contributions must
either be refunded to the estate or paid to the designated
beneficiary. Wills explained that as a noncontributory
member, Bright had no contributions to refund. Wills
responded to Harrison's assertion that section 24-4-1102
allows her to inherit any accumulated employer contributions.
Wills testified that, in fact, the purpose of section 24-
4-1102
is to allow the employer to "pick up" for the
employee what would have been the tax liability for
retirement contributions. On November 9, 2017, Harrison filed
a petition for judicial review of the Board's decision,
and ultimately, the circuit court affirmed the agency
decision and denied her ...