Pensive About Pensions

By Donna Walter

Change in state

law should mean

earlier retirement

pay, ex-judge says

A former state administrative judge should have started receiving pension payments when he turned 62 despite how the law read when he left the bench, his lawyer argued before the Missouri Supreme Court.

But the Missouri State Employees’ Retirement System countered that awarding those benefits to Robert H. Sihnhold would violate the Missouri Constitution’s prohibition against granting extra compensation to former state employees.

“There’s no doubt Judge Sihnhold will be receiving more money,” his lawyer, Jay Angoff, said during oral arguments on Wednesday, “but that doesn’t mean it’s a grant of compensation.”

Sihnhold, who is now 64, was a workers’ compensation judge for the Division of Workers’ Compensation from 1975 to 1989. He left the division’s St. Louis office to enter private practice.

At the time, former or current administrative law judges who had served 12 or more years were eligible for pension payments when they turned 65. But in 1999, state lawmakers lowered the age to 62. Sihnhold argues that, although the law changed after he left the bench, the way it now reads entitled him to start receiving pension payments two years ago. If the court agrees, it would boost his total retirement compensation by about $86,500.

Angoff, who is of counsel at Roger G. Brown & Associates in Jefferson City, told the court the $86,500 doesn’t qualify as a grant of compensation because it would come out of the MOSERS fund, not the general revenue.

“We look at the source of the funds,” he said.

The difference between pension benefits coming from a trust or from general revenue hasn’t been raised in a Missouri court before now, Angoff said.

Attorney Allen D. Allred, who represented the Missouri State Employees’ Retirement System, argued that the source of the funds doesn’t matter. Paying Sihnhold the additional money would violate the constitution regardless, he said.

“This court looked at the issue of extra compensation [in earlier pension cases], and there was no distinction there because, I submit to you, there is no distinction,” said Allred, of Thompson Coburn.

Both sides cited three pension cases: State ex rel. Cleaveland v. Bond, Police Retirement System v. Kansas City and Retirement System of St. Louis v. City of St. Louis.

In Cleaveland, the Supreme Court in 1975 said a state law giving retirement benefits to judges did not apply to those no longer in office when the statute was enacted. In Police Retirement System, another 1975 decision, the court rejected cost-of-living adjustments to police officers who retired before the effective date of the statute. And in Retirement System of St. Louis, handed down in 1989, the Missouri Court of Appeals in St. Louis rejected the attempt by retired police officers to get refunds of their contributions to the system — a right given to active police officers.

The Supreme Court would have to overturn these decisions if it were to rule in favor of Sihnhold, Allred argued.

Angoff disagreed. He told the court it could easily distinguish Sihnhold’s case from the earlier cases because Sihnhold hasn’t yet retired, even though he had left the bench.

“There’s no question there’s authority in Missouri that’s not helpful to our case,” Angoff said. “Those can be distinguished under facts … I think the most important thing is the trend in the law … is toward recognizing that money that comes from trust funds is different from money that comes from general revenue.”

Allred said Cleaveland is on point with this case and urged the court to follow the 32-year-old decision.

The court also could base its decision on another provision of the workers’ comp law, Section 287.845, Allred argued. That provision states that the retirement benefits of an administrative law judge is determined by the law in effect when the judge’s employment was terminated.

Because Sihnhold left the division in 1989, that’s the version of the law that applies, Allred said. That means Sihnhold wouldn’t be eligible to receive his pension benefits until he turns 65 in June.

Allred also argued that a decision favoring Sihnhold would have a negative effect on the funding of the state retirement system.

Angoff downplayed that argument, noting that the retirement fund has $717 million more than it assumed it would have as of June 30.

According to the fund’s annual report, its assets total more than $8 billion.

Originally published by Donna Walter.

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