Request By:
Mr. Oliver VanMeter
Director of Public Utilities
City of Henderson
P.O. Box 716
Henderson, Kentucky 42420
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in answer to your letter of May 29 in which you state that the city of Henderson elected to operate its civil service program and pension system pursuant to Ch. 90 KRS and, particularly, its pension fund under KRS 90.410. One section in the local civil service ordinance provided that if a member terminates his employment other than by death or retirement, he shall be paid only one-half (1/2) of his contributions to the fund. You enclose a copy of a portion of the ordinance so indicating and at the same time a provision stating that payments into the pension fund by an employee constitutes a contract with the city. See § 35.21. Under the circumstances, you raise the following question:
"The question to be answered is, whether or not a third class city that has enacted by ordinance a pension system pursuant to KRS 90.410, has the power to enact and enforce as a part of that pension system a provision that members whose employment terminates prior to death or retirement are to receive as a refund only one-half (1/2) of their individual contributions."
Our response to your question would be in the affirmative. Neither KRS 90.410 nor any other provision under Ch. 90 KRS as it relates to pension funds adopted by cities of the third class contains any provision for refunding contributions though KRS 90.410 does create an inviolable contract between the city and its employees. This, however, simply guarantees tenure and pension benefits and not a refund of contributions unless the statute so provides. See
Holsclaw v. Stephens, Ky., 507 S.W.2d 62 (1974).
The case mentioned by you,
Holsclaw v. Stephens, supra, involves the effect of the adoption of the urban county government charter on the civil service statutes under which civil service was originally established and is not in point as the basic question concerning the refunding of contributions was not involved.
Referring next to the case of
City of Newport v. Shields, Ky., 521 S.W.2d 82 (1975), you will note the following concerning the rights of persons participating in pension fund plans, to wit:
"The rights of persons participating in a pension plan are governed entirely by the terms of the pension plan and the statutes under which it is operated.
Doyle v. French Tel. Cable Co., 244 App.Div. 586, 280 N.Y.S. 281 (1935);
Board of Education of Louisville v. City of Louisville, 288 Ky. 656, 157 S.W.2d 337 (1941). . . ."
Two cases more in point are the
City of Newport v. Shields, supra, and the later case of
Louisville Policemen's Retirement Fund v. Bryant, Ky., 556 S.W.2d 6 (1977). In this latter case, the court referred to the Newport case and had this to say:
"The statutes decisive of
City of Newport v. Shields, supra, entitled a policeman to a refund of his contributions to a pension fund when he withdrew from service with the city at any time prior to retirement and provided that his right to his contribution was vested. KRS 95.866; KRS 95.877. However, these statutes apply only to pension funds of cities of the second class. KRS 95.851(b). Newport is a city of the second class, but Louisville is a city of the first class.
"Police retirement funds for cities of the first class are governed by KRS 95.290. This statute provides that cities of the first class may enact ordinances establishing a police retirement fund. It makes no mention of either refunding of contribution or vesting of rights. It is apparent that the General Assembly has elected to leave these questions to the discretion of the legislative body of first class cities."
The Louisville Policemen's Retirement Fund case, supra, states the law applicable to the city of Henderson in our opinion since neither the statutes relating to cities of the first class nor those pertaining to the city of Henderson authorize the refunding of contributions upon termination of employees employment. Though KRS 90.410 and the civil service ordinance give such employees a vested interest in tenure and pension benefits, such interest does not include the right to a refund of contributions upon termination of employment. In any event, we might point out that no ordinance can expand upon the terms of a statute, and in this respect we refer you to McQuillin, Mun. Corps., Vol. 5, § 15.22, which states the following:
"It has been stated broadly that no municipal ordinance can go beyond, be broader than, add to, subtract from, modify, or affect, limit, amend, or change statutes, at least where the net result is one of conflict. . . ."
See also the case of
Boyle v. Campbell, Ky., 450 S.W.2d 265 (1970), and
Louisville and Nashville Railroad Company v. Commonwealth, Ky., 488 S.W.2d 329 (1972).
As pointed out in the Louisville Policemen's Retirement Fund case, it is apparent that the General Assembly has left to the city legislative body the discretion of determining whether or not it wishes to refund all or any part of the employee's pension fund contributions when employment is terminated.