Employee Benefits

Thomas R. Brous, Esquire

Where pension benefits are paid according to the terms of the plan (contract), there is no basis for a claim of unconstitutionality under the equal protection clause, the due process clause, or the impairment of contracts clause of the Missouri Constitution. Beard, et al. v. Missouri State Employees’ Retirement System, et al., No. 92142 (Mo. banc, August 28, 2012), Draper III, J.

Laurel Beard worked for the Department of Corrections for more than 26 years and was a member of Missouri State Employees’ Retirement System (MOSERS). Ms. Beard filed her application for retirement on June 18, 2009, and selected her retirement date to be August 1, 2009. She died July 29, 2009, without a surviving spouse or dependent children under the age of 21 years or totally incapacitated. Her heirs requested MOSERS to distribute Laurel’s retirement benefits to them as Laurel’s designated beneficiaries. Because MOSERS refused to distribute any benefits to the plaintiff-heirs, they sued.

Denial of benefits to the plaintiffs by MOSERS was based on §104.1030.1, RSMo, which states:  “If a member with five or more years of credited service or a vested former member dies before such member’s or such vested former member’s annuity starting date [i.e., retirement date], the applicable annuity provided in this section shall be paid.”  The section goes on to provide that if a member dies before their annuity starting date, the member’s annuity is to be paid to a surviving spouse or to dependent children.

There is no provision allowing a member’s annuity to be paid to a designated beneficiary if a member dies while employed and prior to the annuity starting date. Applying the plain language doctrine of statutory construction, the Supreme Court upheld the trial court’s judgment that the plaintiff-heirs were not entitled to a benefit from MOSERS.

The plaintiffs, in addition to their unsuccessful claim on the interpretation of §104.1030, also argued the statute was unconstitutional on three grounds. First, the section violates the equal protection clauses of both the U.S. and Missouri constitutions. Second, the section deprived the decedent of her property without due process of law. Finally, the section impairs the obligations the state owes to decedent under its contract (i.e., the pension plan).

Each one of these constitutional challenges is answered, the Supreme Court ruled, by the fact that under the terms of the contract decedent was not eligible to receive retirement benefits until she retired, and she died before she retired. Plaintiffs were not entitled to benefits from the plan as designated beneficiaries. Simply put, “[t]o enforce her contract does not involve any impairment of contract nor does it otherwise violate any constitutional provision.” Moreover, there was no deprivation of property, with or without due process of law, because under the contract she was not entitled to retirement benefits at the time she died because she had not retired.

The judgment of the trial court was affirmed.