SSR 72-35c: SECTIONS 218(s) (42 U.S.C. 418(s)). -- STATE AND LOCAL COVERAGE -- STATUS OF POLICEMEN OF CITY OF NEW MARTINSVILLE -- WEST VIRGINIA
20 CFR 404.1270-404.1274
SSR 72-35c
State of West Virginia v. Richardson, U.S.D.C., S.D. W. Va., Civ. No. 68-66 CH (10/18/71) (CCH U.I.R. Fed. Par. 16,455)
- Administrative decision, affirming allowance of credit of overpayment based on determination that services performed by individuals as policemen of City of New Martinsville were excluded from coverage of State and local employees by Federal-State agreement under section 218(d)(1) of Social Security Act, affirmed. (See SSR 69-7, C.B. 1969, p. 82.) Failure of City of New Martinsville to enact ordinance providing for State-mandated pension fund for policemen, could not have effect of negating coverage of policemen's positions under such State "retirement system" and concomitant exclusion of those positions from coverage under Federal agreement with West Virginia under section 218 of Social Security Act.
FIELD, JR., District Judge: Pursuant to Title 42, U.S.C. § 418(A)(1), plaintiff here seeks a redetermination of the correctness of a decision issued on May 9, 1968, by the Commissioner of Social Security acting on behalf of the defendant Secretary. The Commissioner's decision affirmed a ruling made by the Department of Health, Education and Welfare on April 25, 1967, excluding members of the police force of New Martinsville, West Virginia, from Social Security.
In 1951, the State of West Virginia and the Federal Security Administrator (predecessor to the Secretary of Health, Education and Welfare) entered into an agreement pursuant to § 218 of the Social Security Act, 42 U.S.C. 418, whereby the insurance system established by Title II of the Social Security Act was extended to all services performed by individuals in coverage groups specified therein, as employees of the State and as employees of political subdivisions of the State, except services expressly excluded from the agreement. This agreement extended Social Security coverage, effective January 1, 1951 to services performed by individuals as employees of the City of New Martinsville, West Virginia. The agreement, however, expressly excluded from coverage "[a]ny service performed by an employee in a position which, on the effective date specified under Part (1) of this agreement, is covered by a retirement system."
From the date of the agreement between the State and the Federal Security Administrator until April 25, 1967, West Virginia made Social Security payments based on services in positions of policemen employed by the City of New Martinsville. As stated, on that date the Department of Health, Education and Welfare determined that New Martinsville's policemen were ineligible for Social Security coverage under the agreement concluded between the State of West Virginia and the Federal Security Administrator, because on January 1, 1951, the effective date of the agreement, the policemen were "covered by a retirement system" within the meaning of Section 218(d) of the Social Security Act, 42 U.S.C. 418(d).
Both parties have moved for summary judgment, it being agreed that there are no issues other than the question of law: Were the policemen of New Martinsville in "positions covered by a retirement system" on January 1, 1951? The parties have stipulated that (1) on January 1, 1951, and at all times since that date the City of New Martinsville has had a police department supported at public expense; (2) the provisions of West Virginia Code, Chapter 8, Article 6, Section 10, were applicable to the City of New Martinsville on January 1, 1951; and (3) the City of New Martinsville has never enacted an ordinance providing for a policemen's pension or relief fund as required by the aforementioned Chapter 8, Article 6, Section 10 of the West Virginia Code.
At all times material to this dispute, West Virginia Code, Chapter 8, Article 6, Section 10, has provided that:
- 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 councilor other governing body shall, by ordinance, provide for the establishment and maintenance of a fireman's pension or relief fund, and for a policeman's pension or relief fund, for the purposes hereinafter enumerated, and thereupon there shall be created boards of trustees who shall administer and distribute the funds authorized to be raised by this section and succeeding sections. (emphasis added)
Similar provisions were adopted in 1969 when the quoted statute was repealed as part of the recodification of the entire basic municipal law of West Virginia, and now appearing in Code Sections 8-22-16 through 8-22-28.
To avoid the constitutional difficulties inherent in levying taxes paid by the employer directly upon the state, the Social Security Act as passed in 1935 expressly excluded from coverage:
- Service performed in the employ of a State, a political subdivision thereof, or an instrumentality of one or more States or political subdivisions * * * Ch. 531, Section 210(b)(6), 49 Stat. 625.
In 1950, the Act was amended to allow the Federal Security Administrator to enter into voluntary agreements with the states to include state employees in the Social Security system. The Act still excludes state employees from coverage, but the 1950 amendment provides that this exclusion does not apply to "service included under an agreement under Section 418 of this title." Section 418 of Title 42 now provides in part:
- (a)(1) the Secretary of Health, Education and Welfare shall, at the request of any State, enter into an agreement with such State for the purpose of extending the insurance system established by this sub-chapter to services performed by individuals as employees of such State or any political subdivision thereof. Each such agreement shall contain such provisions, not inconsistent with the provisions of the section, as the State may request.
However, the coverage afforded state employees by such voluntary agreements is limited by subsection 418(d)(1), which provides:
- No agreement with any State may be made applicable (either in the original agreement or by any modification thereof) to any service performed by employees as members of any coverage group in positions covered by a retirement system * * * on the date such agreement is made applicable to such coverage group * * * (emphasis added)
I am of the opinion that the policemen of New Martinsville were in "positions covered by a retirement system" as contemplated by this statute on the first day of January, 1951. As a general rule the Social Security Act excludes from coverage the employees of a state and its political subdivisions, and agreements concluded under Section 418 of Title 42 constitute exceptions to this general rule, and the Social Security Act permits the states to exercise a high degree of control over Section 418 agreements. Specifically, these arguments (sic) can be initiated only by the states, and will contain "such provisions, not inconsistent with the provisions of this section (Section 418), as the State may request."
West Virginia's agreement expressly excludes employees "in positions covered by a retirement system." As defined by Section 218(d) of the Social Security Act, 42 U.S.C. 418(b)(4), "[t]he term 'retirement system' means a pension, annuity, retirement, or similar fund or system established by a State or by a political subdivision thereof." At the time West Virginia entered into its Section 418 agreement, Chapter 8, Article 6, Section 10 of the West Virginia Code required New Martinsville, a political subdivision of the State, to, "by ordinance, provide for the establishment and maintenance of a * * * policemen's pension or relief fund." This placed a mandatory obligation upon the City of New Martinsville, and in discussing the absolute obligation of a municipality to obey legislative mandates, the West Virginia Supreme Court of Appeals in another context stated:
- Any other inference or conclusion would produce the intolerable result of permitting the municipality, by disregarding or ignoring the clear mandate of * * * the Acts of the Legislature * * * to conduct the election * * * in violation of the election laws of this State. No municipality can take advantage of its own unauthorized or wrongful action. Dotson v. Gilbert, 129 W. Va. 130 at p. 140, 39 S.E. 2d 108 at p. 113 (1946).
"A 'position covered by a state retirement system' cannot be transmitted (sic) into a position not covered by failure of the state to collect contributions from those holding the position." Secretary of Health, Education and Welfare v. Snell, 416 F.2d 840 at p. 843 (5th Cir. 1969). Likewise, unless this Court should see fit to permit a municipality to take advantage of its own inaction, a position for which a state by legislation has provided a state retirement system cannot be transmuted into a position not covered thereby merely by the failure of a political subdivision of the State to comply with an express statutory mandate. To rule otherwise would be tantamount to holding that a political subdivision could determine the scope of the agreement between the State and the Department of Health, Education and Welfare. The instances are few in which one party can affect the scope of an agreement between two other parties, and certainly a municipality possessing only such powers as it has derived from the State does not have the authority to affect the scope of the agreement involved in this dispute. See State v. Duffield, 149 W. Va. 19, 138 S.E. 2d 351 (1964).
The inescapable conclusion in a case such as the one presented here was succinctly stated in Secretary of Health, Education and Welfare v. Snell, 416 F.2d 840 at p. 843 (5th Cir. 1969).
- The statutory scheme does no more than give the state an opportunity to act so as to trigger federal benefits for its employees not receiving state benefits. We cannot infer from this a congressional guarantee of federal benefits where the state so fails to operate its system that those who are in covered positions and should receive state benefits do not do so. The thrust of the statute is opportunity for the state to bring its employees within reach of benefits, either state or federal, by an effectual state-triggered meshing of the systems. It is not one of federal commitment to close every state-caused loophole or hiatus in the state benefit system.
In the light of the foregoing observations, IT IS ORDERED that the motion of the plaintiff for summary judgment be and the same is hereby denied, and the motion of the defendant for summary judgment be and it is hereby granted.