may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
In the Matter of: The Appeal of Roger Ogren
to the Board of Trustees of the State of
Minnesota Teachers Retirement Association.
Filed March 18, 1997
Minnesota Teachers Retirement Association
File No. 62262
Hubert H. Humphrey III, Attorney General, Jon K. Murphy, Assistant Attorney General, 525 Park Street, Suite 200, St. Paul, MN 55103 (for Respondent)
Considered and decided by Short, Presiding Judge, Amundson, Judge, and Harten, Judge.
Relator Roger Ogren challenges the decision of the Teachers Retirement Association, arguing that the doctrines of promissory and equitable estoppel preclude alteration of his retirement benefit from the amount calculated in his pre-retirement estimate statement. We affirm.
Anticipating possible retirement, Ogren had a pre-retirement counseling interview with a retirement association representative on April 23, 1993. At that meeting, he was provided with a "Monthly Retirement Annuity Estimate," which estimated a "Life E-2" annuity benefit for him to be $4,893 per month. This estimate was based on Ogren's "high-five average salary" of $76,461. On February 7, 1994, Ogren submitted his resignation to the school district to be effective on June 30, 1994.
On April 4, 1994, Ogren received a letter from the retirement association that estimated a "Life Plan E-2" annuity benefit for him to be $4,873.00 per month. This estimate was based on Ogren's "high-five average salary" of $76,142.00. Subsequently, Ogren filled out an application for his retirement annuity, indicating his selection of the "Life Plan E-2" annuity benefit.
On September 28, 1994, before receiving his first annuity payment, Ogren received a call from a retirement association representative stating that his projected retirement annuity benefit had been incorrectly calculated. This discussion was followed by a letter that informed Ogren that his retirement annuity benefit would be reduced because the previous estimates of his annuity were based on an erroneous calculation of his salaries. The letter said the salaries used to calculate his "high-five average salary" erroneously included certain fringe benefits that should have been excluded. Therefore, according to the statutory definition of "salary," which excludes the value of certain fringe benefits, the retirement association recalculated Ogren's benefit by subtracting the fringe benefits that could not be used. See Minn. Stat. § 354.05, subd. 35. The retirement association determined Ogren's "high-five average salary" to be $71,303.45, which equates to a monthly benefit of $4,815.41.
Upon notification of the reduction in his retirement benefit, Ogren appealed to the retirement association's executive director. His appeal was rejected. He then appealed that decision to the retirement association board of trustees and a hearing on the matter was held. The board denied Ogren's appeal, stating that the benefit estimates provided to Ogren were only projections, not final calculations. This appeal followed.
Ogren argues that the doctrines of promissory and equitable estoppel bar the retirement association from reducing his retirement annuity benefit. He contends that regardless of whether the estoppel is characterized as promissory or equitable, the retirement association should be estopped from modifying his retirement benefit after he retired from the amount calculated in his pre-retirement estimate statement. We disagree.
But before analyzing the elements of promissory and equitable estoppel, the first issue to be addressed is whether the retirement association had the authority to act. If the retiremenet association had no authority to act, its action cannot be made effective by estoppel. See Axelson, 544 N.W.2d at 299-300. Thus, the threshold issue that must be addressed is whether the retirement association had the authority to pay Ogren the benefit amount calculated in the pre-retirement benefit estimates.
The retirement association is a state-created board that administers a pension plan for Minnesota's public school teachers, administrators, and principals in accordance with the provisions of the Teachers Retirement Act. See Minn. Stat. ch. 354. In chapter 354, the Minnesota legislature mandated how the retirement association is to calculate members' retirement benefits. The retirement association must refer to specific sections of chapter 354 when calculating a "high-five average salary" and ultimately determining a monthly annuity. The law in force when a claim to the pension arises governs the right to that pension. Axelson, 544 N.W.2d at 300.
Here, Ogren had a right to recover benefits (a claim to pension) from the retirement association on June 30, 1994, when his retirement became effective. At that time, "salary" was defined as:
the compensation, upon which member contributions are required and made, that is paid to a teacher before any allowable reductions permitted under the federal Internal Revenue Code of 1986, * * * for employee selected fringe benefits, tax sheltered annuities, deferred compensation, or any combination of these items.
Minn. Stat. § 354.05, subd. 35(a) (1992). "Salary" did not include, among other things:
(3) payments in lieu of any employer paid group insurance coverage, including the difference between single and family premium rates, that may be paid to a member with single coverage;
(4) any form of payment made in lieu of any other employer paid fringe benefit or expense.
Id., subd. 35(b).
Thus, the retirement association must calculate Ogren's "high-five average salary" using this definition of "salary." The salaries used to produce his pre-retirement estimates included payments in lieu of "employer paid group insurance coverage" and "employer paid fringe benefits." Thus, the estimates were calculated improperly and cannot be used to determine Ogren's monthly annuity. See id. The retirement association does not have the authority to calculate Ogren's "high-five average salary" by using a different definition of "salary" from that provided in Minn. Stat. § 354.05, subd. 35, so neither promissory nor equitable estoppel can be employed to vouchsafe the pre-retirement estimate provided by the association calculating Ogren's retirement benefit.