PENSION FUND - CITY FIREMEN - INVESTMENT OF MONEY IN FIREMEN'S PENSION IN CLASSES OF INVESTMENTS

PENSION FUND - CITY FIREMEN - INVESTMENT OF MONEY IN FIREMEN'S PENSION IN CLASSES OF INVESTMENTS.

A city firemen's pension board organized under RCW 41.16.020 is authorized to invest moneys in its firemen's pension fund in the classes of investments enumerated in the amendatory language of § 1, chapter 211, Laws of 1969, Ex. Sess. (RCW 35.39.040).

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                                                              September 23, 1969

Honorable Duane Berentson
State Representative, 40th District
P.O. Box 426
Burlington, Washington 98233

                                                                                                                 Cite as:  AGO 1969 No. 17

Dear Sir:

            By letter previously acknowledged you have requested the opinion of this office on a question which we paraphrase as follows:

            Is a city firemen's pension board, organized under RCW 41.16.020, authorized to invest moneys in its firemen's pension fund in the classes of investments enumerated in the amendatory language of § 1, chapter 211, Laws of 1969, Ex. Sess. (RCW 35.39.040)?

            We answer your question in the affirmative for the reasons which appear in the analysis below.

                                                                     ANALYSIS

            RCW 35.39.040, as amended by § 1, chapter 211, Laws of 1969, Ex. Sess., enumerates a comprehensive list of governmental and corporate securities in which municipal pension funds may be invested.  While the 1969 amendment somewhat altered the contents of this list, it made no change in the opening clause of the statute, which reads as follows:

             [[Orig. Op. Page 2]]

            "Any city or town now or hereafter operating an employes' [[employees']]pension system, established and operated pursuant to state statute or charter provision, or any pension system operating now or hereafter under state statute or charter provision exclusively for employees of cities or towns, is authorized to invest pension fund moneys in . . . [certain enumerated classes of investments]. . . . and not otherwise: . . ."  (Emphasis supplied.)

            The other statute to be noted in considering your question is RCW 41.16.040, which grants specific authority to each municipal firemen's pension board to invest "the moneys in the [firemen's pension] fund" in a somewhat more limited list of securities than is now set forth in RCW 35.39.040, supra, as amended.  The issue raised by your inquiry is whether the provisions of RCW 41.16.040, as thus described, are exclusive with respect to the investment of firemen's pension fund moneys.

            We think it obvious that the firemen's relief and pension systems created by chapters 41.16 and 41.18 RCW are ". . . employees' pension system[s], established and operated pursuant to state statute. . . ." or ". . . pension system[s] operating . . . under state statute . . . exclusively for employees of cities or towns . . ." within the meaning of RCW 35.39.040 (as amended).  Furthermore, there is no language in the statute which could be construed as denying the firemen's pension board1/ created by RCW 41.16.020 the authority to invest pension fund money in the classes of investments enumerated in RCW 35.39.040 (as amended).

            Lastly, as we will now explain in some detail, we do not believe that the specific investment powers granted to each municipal firemen's pension board by RCW 41.16.040,supra, should be regarded as exclusive so as to bar as well the board's use of RCW 35.39.040 (as amended).

            An explanation of this conclusion will require a brief discussion of the history of the firemen's pension systems as they have developed in this state since the first relatively comprehensive firemen's pension act was enacted as chapter 50, Laws of 1909.  That enactment contained no provision for  [[Orig. Op. Page 3]] the investment by the board of trustees of "The Firemen's Relief and Pension Fund" created thereby.  However, § 15, chapter 196, Laws of 1919 (which constituted a revision of the 1909 firemen's relief and pension fund act) contained the following language:

            ". . . The board of trustees [of the 'Firemen's Relief and Pension Fund'] by a two-thirds vote shall have the power to invest all funds, or any part thereof not required for immediate use, in government, county or city bonds, to be taken in the name of the firemen's relief and pension fund of such city or town and deposited in such bank or banks or vaults together with other securities of such city or town; by the same vote the board shall have power to sell and dispose of any securities."

            Section 12, chapter 86, Laws of 1929, reenacted verbatim the language of § 15, chapter 196, Laws of 1919, quoted above, permitting the board of trustees to invest pension funds in certain municipal bonds.

            Subsequently, in 1943, the predecessor of the present RCW 35.39.040,supra, was enacted as § 2, chapter 92, Laws of 1943.  That section permitted

            "Any city or town now or hereafter operating an employees' pension system, established and operated pursuant to state statute or charter provision, . . ."

            to invest pension funds in certain classes of securities.2/ 

             [[Orig. Op. Page 4]] Decisive of the issue at hand, we think, are the provisions of § 3, chapter 92, Laws of 1943,3/ as follows:

            "This act shall be deemed cumulative and not exclusive and shall be additional to any other power or authority granted any city or town."

            As heretofore noted, at the time of the enactment of § 2, chapter 92, Laws of 1943 (the predecessor of the present RCW 35.39.040 (as amended)), legislation expressly authorizing the investment of firemen's pension funds had been enacted (§ 12, chapter 86, Laws of 1929, the predecessor of the present RCW 41.16.040).  Therefore, we think that the legislative intent of § 3, chapter 92, Laws of 1943, carried forward as RCW 35.39.050, was and is that the investment powers thereby granted to cities and towns are to be considered as being in addition to those granted to the firemen's pension board by RCW 41.16.040 (4).  Thus, moneys in the firemen's pension fund may be invested in either the types of securities listed in RCW 41.16.040 (4)or the types of investments enumerated in the language added to RCW 35.39.040 by § 1, chapter 211, Laws of 1969, Ex. Sess.4/

             In thus concluding, we have not overlooked the phrase ". . . and not otherwise . . ." contained in this 1969 amendment to RCW 35.39.040.  Most certainly, this phrase limits any municipal pension board which is dependent solely upon this statute for its investment authority to investments of the type expressly provided for therein.  We do not, however,  [[Orig. Op. Page 5]] believe that this phrase should be construed as an implied repealer of the provisions of RCW 41.16.040 (4).  Notably, the 1969 legislature, which enacted the amendment in question, also had under consideration a uniform "public pension and retirement funds act" (S.B. No. 156, H.B. No. 266), which would have amendedboth RCW 35.39.040 and 41.16.040 (4) so as to provide for identical investment powers.

            The proposed amendment to RCW 41.16.040 (4) did not pass, but language of § 3 of that bill ultimately became the amendment to RCW 35.39.040.  In light of the legislature's decisionnot to repeal or amend RCW 41.16.040 (4) to conform to the amendment to RCW 35.39.040, we think that the investment powers available under RCW 41.16.040 were intended to remain unabated.

            We trust the foregoing will be of assistance to you.

Very truly yours,

SLADE GORTON
Attorney General