SSR 69-7: SECTION 218(s). -- STATE AND LOCAL COVERAGE -- COMMISSIONER'S RULING ON STATE'S REQUEST FOR REVIEW -- WEST VIRGINIA -- POLICEMEN OF CITY OF NEW MARTINSVILLE
20 CFR 404.1270-404.1274
SSR 69-7
- Upon review pursuant to the State's request under section 218(s) of the Social Security Act, the Commissioner affirmed the allowance of credit of an overpayment based on a determination that services performed by wage earners as policemen of the city of New Martinsville were excluded from coverage under sections 218(d)(1) and 218(d)(5)(A) of the Social Security Act.
The State of West Virginia timely requested review pursuant to section 218(d) of an allowance of credit issued based on a determination that policemen employed by the city of New Martinsville, West Virginia, were in positions under a retirement system at the time the city's nonproprietary absolute coverage group was included in the State's section 218 agreement and that their services were therefore not covered under the State's coverage agreement. The Secretary has delegated to the Commissioner of Social Security authority to make reviews and findings and to give notice of his findings as required by section 218(s).
The designated absolute coverage group composed of the employees of the city of New Martinsville performing nonproprietary (governmental) functions was included in the West Virginia Federal-State agreement with coverage effective January 1, 1951. Wage reports and contribution returns for the city's governmental employees, including policemen, have been regularly and timely made. (Modification 128, which was executed on September 16, 1964, removed the distinction between proprietary and nonproprietary functions in all affected political subdivisions in the State effective July 1, 1964.) On November 16, 1964, the wage earner, a policeman in the city of new Martinsville, initiated an earnings discrepancy to ascertain whether or not the city was correctly deducting social security contributions from his pay.
In an opinion dated May 1, 1964, the State's Attorney General had held that under West Virginia law all cities having police and fire departments supported in whole or in part at public expense were required to establish pension or relief funds for their policemen and firemen with the exception of (1) class III home rule cities and (2) special charter cities having charter provisions which conflicted with the State statute requiring the establishment of such funds. Evidence obtained established that New Martinsville did not fall within the scope of these two exceptions. The State law (Section 8-6-10 of the West Virginia Code) requiring the establishment of a retirement system was in effect on January 1, 1951, and thereafter.
On March 13, 1967, the city took legal steps to become a home rule city, intending thereby to come within the exceptions in the Attorney General's opinion and to provide coverage for the services of its policemen. However, the State was advised that in view of the provisions of section 218(d)(1) of the Social Security Act, the city's action would not accomplish the desired effect. The pertinent provisions of the Social Security Act, as amended, are:
- Section 218(b)(4):
- The term "retirement system" means a pension, annuity, retirement, or similar fund or system established by a State or by a political subdivision thereof.
- Section 218(d)(1):
- No agreement with any State may be made applicable (either in the original agreement or by any modifications thereof) to any service performed by employees as members of any coverage group in positions covered by a retirement system either (A) on the date such agreement is made applicable to such coverage group or (B) on the date of enactment of the succeeding paragraph of this subsection (except in the case of positions which are, by reason of action by such State or political subdivision thereof, as may be appropriate, taken prior to the date of enactment of such succeeding paragraph, no longer covered by a retirement system on the date referred to in clause (A), and except in the case of positions excluded by paragraph (5)(A)) . . . .
- Section 218(d)(3):
- Notwithstanding paragraph (1), an agreement with a State may be made applicable (either in the original agreement or by any modification thereof) to service performed by employees in positions covered by a retirement system . . . if the governor of the State, or an official of the State designated by him for the purpose, certifies to the Secretary of Health, Education, and Welfare that the following conditions have been met: . . .
- Section 218(d)(5)(A):
- Nothing in paragraph (3) of this subsection shall authorize the extension of the insurance system established by this title to service in any policeman's or fireman's position.
Pertinent provisions of the West Virginia Code are:
- Code 8-1-2: Except as otherwise provided in this Code or by special charter, all municipal corporations in this State are subject to the provisions contained in this chapter and may exercise the powers conferred by this chapter, although such provisions or powers are not imposed or conferred by their charter; and so far as this chapter confers power on a municipal corporation or the authorities thereof, not conferred by the charter thereof, this chapter shall constitute an amendment to said charter: . . .
- Code 8-6-10: In any municipal corporation in this State having, or which may hereafter have, a fire department and a police department, or either of such departments, supported in whole or in part at public expense, the council or other governing body shall, by ordinance, provide for the establishment and maintenance of a firemen's pension or relief fund, and for a policemen's pension or relief fund, . . .
- Code 8A-4-11: (relating to home rule cities): Cities of Class I and Class II shall, and cities of Class III may provide for pension and relief funds for firemen or policemen, or both, by charter provisions, or by ordinance, in accordance with sections ten through twenty-one, article six, chapter eight of the official Code . . .
There is no disagreement as to the facts. It is the State's position that policemen employed by the city of New Martinsville were not in positions under a retirement system at the time the city's nonproprietary absolute coverage group was covered under the State's section 218 agreement. It agrees that the provisions of Section 8-6-10 of the Code of West Virginia apply to the city of New Martinsville. It contends, however, that title 42, section 418(b)(4) of the United States Code annotated, defines "retirement system" only as a fund or system "established by a State or a political subdivision thereof." It further contends that the word "establish" means to "bring into existence" and that the policemen of New Martinsville cannot be considered to be in positions under a retirement system until such time as the city takes positive steps to implement the mandatory provisions of Section 8-6-10 of the Code.
The Commissioner found, upon review pursuant to the State's request, that policemen in New Martinsville were in positions under a retirement system for social security purposes at the time coverage was made effective for the city's nonproprietary absolute coverage group and that their services were therefore excluded from coverage under sections 218(d)(1) and 218(d)(5)(A) of the Social Security Act. This finding is based on the fact that (1) Section 8-6-10 of the Code of West Virginia, which requires certain cities to establish retirement systems for their policemen and firemen, applies to the city of New Martinsville, and (2) this section of the Code was in effect at the time coverage was extended to the absolute coverage group involved.
The word "establish" as it related to retirement systems in section 218(b)(4) of the Social Security Act is not defined. Consequently, the laws and court decisions of the State involved must be considered when a question arises as to whether or not a retirement system has been "established" under circumstances similar to those involved in this case. When it is found that State law imposes a mandatory duty on a political subdivision to provide a retirement system for a designated group of employees and rights are thereby created which said employees may pursue in a court of law, the law itself creates the retirement system, irrespective of its implementation or nonimplementation by the political subdivision. To find otherwise would be inconsistent with the State's interpretation of its own law.
In this case, the Attorney General has acknowledged the mandatory nature of Section 8-6-10 of the West Virginia Code and its applicability to the city of New Martinsville. Also, the Supreme Court of West Virginia has acknowledged the mandatory nature of this section and related sections of the Code and has granted relief thereunder. On the basis of this finding the Commissioner affirmed the allowance of credit.