Officer’s Time As Teacher Does Not Count Towards Police Retirement

Charles Loftus became a member of the Arizona State University Public Safety Personnel Retirement System when he was hired in 1986 as a police officer for Arizona State University. In the fall of 2005, ASU’s Department of Criminal Justice and Criminology hired Loftus as a faculty associate to teach certain courses. Loftus’s employment as a faculty associate was dependent on sufficient enrollment for each course and other needs of the department. ASU designated Loftus’s faculty-associate position as a “temporary appointment” that would “not lead to tenure consideration.”

Loftus taught classes on an as-needed basis pursuant to this arrangement at least through the spring of 2008. In addition to serving as a faculty associate for the Department of Criminal Justice and Criminology, Loftus also served as a faculty associate for ASU’s East College of Social and Behavioral Sciences department. Because the ASU Police Department considered his teaching position to be “off-duty employment,” it had to approve it – which it did.

ASU initially deducted the public safety pension contribution not only from Loftus’s regular salary as a full-time ASU police officer but also from his pay for teaching as a faculty associate. Although ASU paid both salaries in one paycheck, his paycheck distinguished between his regular police officer salary and his teaching salary. In 2007, however, ASU stopped deducting the pension contribution from Loftus’s teaching salary and eventually refused his request that it reinstate the deduction.

Loftus challenged ASU’s decision through the court system. Eventually, the Arizona Court of Appeals upheld ASU’s decision.

Loftus contended all the salary he received from ASU constituted System-eligible compensation. He argued that because, as an ASU police officer, he was a System-participating employee and ASU was a System-participating employer, he was entitled to aggregate his teaching salary and his police officer salary as System-eligible compensation. In other words, Loftus claimed that System-eligible compensation follows the person, not the work. On the other hand, ASU argued that System-eligible compensation follows the work, not the person, and thus the type of activity, not the employer.

The Court found that “both interpretations of the statutory definitions of compensation and base salary are plausible. Under the System’s governing statutes, each participating employer must deduct, and each member must contribute, the pension contribution from a member’s compensation. Within the definition of compensation, ‘base salary’ is defined as ‘the amount of compensation each employee is regularly paid for personal services rendered to an employer before the addition of any extra monies, including overtime pay, shift differential pay, holiday pay, longevity pay, fringe benefit pay and similar extra payments.’ Thus, base salary is not simply an amount of money, but is a function of two concepts: (1) Employee status (‘the amount of compensation each employee is regularly paid’) and (2) the nature of the work performed by the employee for the employer (‘for personal services rendered to an employer’).

“In turn, a ‘member’ is a ‘full-time employee’ who, as relevant here, is (1) ‘included in a group designated as eligible employees under a joinder agreement entered into by their employer,’ (2) ‘regularly assigned to hazardous duty,’ (3) ‘receiving compensation for personal services rendered to an employer,’ and (4) ‘customarily employed at least 40 hours per week.’ Reading these definitions and requirements as a whole, the definition of base salary is tied to the employee’s regular assignment to hazardous duty – a member is a full-time employee who receives compensation for the personal services he or she renders when ‘regularly assigned to hazardous duty.’ Loftus was obligated to make, and ASU was required to deduct, the pension contribution from the compensation Loftus was ‘regularly paid for personal services rendered’ to ASU when he was ‘regularly assigned to hazardous duty.’ Only the salary regularly paid for personal services rendered to the employer in that specific capacity qualifies as System-eligible compensation.”

Loftus v. Arizona State University Public Safety Personnel Retirement System Local Bd., 2011 WL 1814234 (Ariz. App. Div. 1 2011).

This article appears in the August 2011 issue