Whether Social Security qualifies as a “retirement allowance, annuity or pension,” disqualifying certain private school teachers from participation in the state pension system.

The plaintiffs are teachers who for part of their careers were employed by private schools that solely served special education students funded by the state. The issue is whether the plaintiffs should be permitted to buy into the state pension system, which is ordinarily reserved for public employees. Private teachers who solely serve state-funded students are permitted to purchase state pension credits for past private service as long as their private employment does not entitle them “to receive a retirement allowance, annuity or pension from any other source.” G.L. c. 32, § 4(1)(p). The plaintiffs are all eligible to receive Social Security for their private employment.

From 1975 to 2004, the Massachusetts Teachers’ Retirement System (TRS) did not consider Social Security a “retirement allowance, annuity or pension,” on the basis of a 1975 Attorney General opinion. In 2004, TRS changed its policy and denied teachers such as the plaintiffs access to state pension credits. The impetus for the change was an Appeals Court decision construing a different pension statute, G.L. c. 32, § 3(4A), and holding that Social Security fell within the definition of a “retirement allowance or other similar payment from the nonpublic school system, the federal government or any other source.” Dube v. CRAB, 50 Mass. App. Ct. 21, 24 (2000).

The issue is a narrow one of statutory construction – whether Social Security is a “retirement allowance, annuity or pension.” The Court will have a great deal of latitude in answering that question. Dube does not fully answer it, because it does not find that Social Security is a “retirement allowance” as opposed to “[an]other similar payment.” Social Security is in some contexts treated as interchangeable with private pensions, but in other contexts as an independent social safety net. And policy argues on the one hand that teachers should not be treated differently by the pension system because they deal with students whose care the state contracts out to private employers, but on the other hand that state pensions (which are funded partly by general tax revenue) should not go to private employees who have other means of support.

Interestingly, the relevant interpretive agency, the Contributory Retirement Appeals Board, is itself torn on the issue – although it upheld the TRS interpretation in this case in 2007, it reversed itself and TRS in 2008, holding that § 4(1)(p) did not bar teachers eligible for Social Security from buying into the state system. Sigman v. TRS, CR-05-534 (DALA 3/12/07, CRAB 12/23/08). Apparently TRS did not appeal that decision.