LITTLE ROCK — An elected Garland County official failed to take the steps necessary to qualify for a pension when she took herself off the payroll - but didn’t vacate her office - for three months in 2008, the Arkansas Supreme Court ruled Thursday.
In a unanimous decision, the court upheld findings by the Arkansas Public Employees Retirement System’s board and Pulaski County Circuit Judge Timothy Fox that former Garland County Treasurer Jo West Taylor did not properly “terminate” her employment when she applied for retirement.
But the court overturned Fox on another point, agreeing with the retirement system that, while she was not eligible for a pension, Taylor was also not eligible to resume accruing service credit after she returned to the payroll.
“Her failure to terminate her employment did not mean that she was not retired, only that she was required to forfeit her retirement benefits until she fulfilled the termination requirement,” Associate Justice Josephine Linker Hart wrote in the opinion.
The retirement system cut off the benefits to West Taylor and 10 other city and county elected officials in 2010 and 2011 after finding that they failed to properly terminate employment, a requirement under Arkansas Code 24-4-520.
Each of the officials took themselves off the payroll without vacating their offices to meet a requirement that they sever their employment for at least 90 days to qualify for a pension.
The officials then returned to the payroll, receiving salaries and pensions at the same time.
The system cut off Taylor’s benefits in 2010. That year, she was voted out of office along with two other Garland County officials who were also found to have retired improperly. The three officials’ pension payments resumed in 2011 after their county employment ended.
At stake in the appeal was whether Taylor was entitled to recoup the eight months of benefits that she lost, or, if not, whether her benefits should be recalculated to reflect the time she worked after applying for retirement in 2008.
Represented by attorney Denise Hoggard of Little Rock, Taylor contended that retirement system counselors told her she could terminate her employment by simply taking herself off the payroll.
She also cited Arkansas Code 24-4-101, which requires employees to earn a wage that is “substantially gainful” to qualify for membership in the retirement system.
Hart wrote that “more is required to terminate employment” than going without pay. She noted that Taylor continued to go to her office and sign official documents while off the payroll and never furnished a letter of resignation to the retirement system or Quorum Court.
“While we decline to set out all the steps required to legally terminate employment for the purpose of drawing a public retirement, we affirm the Board’s determination that the steps that Taylor did take failed to satisfy the statute,” Hart wrote.
Hart also agreed with the retirement system that Taylor did not follow the steps required to revoke her retirement and begin receiving service credit again.
If the court had upheld Fox on that point, the retirement system would have had to recalculate the benefits of Taylor and the other elected officials whose benefits were cut off, Jay Wills, the system’s attorney said.
“APERS is pleased with the win in the sense that it held what the board thought was the appropriate application of the law,” Wills said.
Taylor and Hoggard didn’t return calls seeking comment.
The state Legislature in 2009 increased to six months the amount of time most elected officials and employees must sever their employment to qualify for pensions. Another law in 2011 increased the minimum separation period for certain elected officials to one year.
Taylor, former Garland County Assessor Brenda Short, former Garland County Circuit Clerk Vicki Rima and current Woodruff County Treasurer Marlene Hite filed a lawsuit Nov. 30 over the retirement system’s decision to cut off their benefits, but they dropped the lawsuit last month.
Arkansas, Pages 9 on 02/08/2013