Susan Lagerman v. Arizona State Retirement System

IN THE
SUPREME COURT OF THE STATE OF ARIZONA
SUSAN LAGERMAN,
Plaintiff/Appellant,

v.

ARIZONA STATE RETIREMENT SYSTEM,
Defendant/Appellee.

No. CV-19-0101-PR
Filed May 14, 2020

Appeal from the Superior Court in Maricopa County
The Honorable Patricia A. Starr, Judge
No. LC2017-000102-001
AFFIRMED

Opinion of the Court of Appeals, Division One
246 Ariz. 270 (App. 2019)
AFFIRMED IN PART AND VACATED IN PART

COUNSEL:

J. Alex Grimsley (argued), Dickinson Wright PLLC, Phoenix; and Thomas
Griffin, Robaina & Kresin PLLC, Phoenix, Attorneys for Susan Lagerman

Mark Brnovich, Arizona Attorney General, Kathleen P. Sweeney, Senior
Appellate Counsel, Phoenix; and Timothy J. Berg (argued), Ryan C. Curtis,
Fennemore Craig, P.C., Phoenix, Attorneys for Arizona State Retirement
System
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

JUSTICE MONTGOMERY authored the opinion of the Court, in which
CHIEF JUSTICE BRUTINEL, VICE CHIEF JUSTICE TIMMER and
JUSTICES BOLICK, GOULD, LOPEZ, and PELANDER (RETIRED) 1 joined.

JUSTICE MONTGOMERY, opinion of the Court:

¶1 This case involves two distinct yet interrelated issues
concerning the administration of the Arizona State Retirement System
(“ASRS”). 2 First, we consider whether requiring submittal of a retirement
application pursuant to A.R.S. § 38-757(A) as a condition for receiving
retirement benefits violates article 29, section 1(D) of the Arizona
Constitution, which prohibits the diminishment or impairment of public
retirement system benefits. Second, we determine whether all the
conditions for electing a retirement date set forth in A.R.S. § 38-764(A)
must be satisfied or if meeting any one may suffice.

¶2 We hold that the requirement to submit a retirement
application for receipt of retirement benefits pursuant to § 38-757(A) does
not violate article 29, section 1(D), and that all conditions listed in § 38-
764(A) must be satisfied in order to elect a retirement date under the Plan.

I.
¶3 Susan Lagerman began her Plan-qualified employment as a
securities examiner with the Arizona Corporation Commission in 1978. She
continued in the Plan as an attorney with the Arizona Attorney General’s

1 Justice James P. Beene has recused himself from this case. Pursuant to
article 6, section 3 of the Arizona Constitution, the Honorable John
Pelander, Justice of the Arizona Supreme Court (Retired), was designated
to sit in this matter.
2 Arizona statutes use “ASRS” when referring to both the retirement plan

and the agency administering that plan. To avoid any confusion, we use
”Agency” when referring to ASRS personnel and their actions and use
“Plan” when referring to the retirement plan.

2
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

Office from 1981 to February 17, 2003. She became eligible for a normal
retirement on July 23, 2005. 3

¶4 On April 6, 2016, Lagerman submitted an application for
retirement, listing July 23, 2005 as her date for commencing retirement. The
Agency rejected the July 23 date as her retirement date and instead used the
April 6 date. The financial consequence of the Agency’s decision to
Lagerman is significant. The benefit payments between the 2005 date and
the date she submitted her application in 2016 is approximately $220,000.

¶5 Lagerman unsuccessfully appealed the Agency’s decision to
the Agency Assistant Director and then to the Director. She then appealed
the decision to the Office of Administrative Hearings and argued that the
plain language of § 38-764(A) permitted her to choose July 23, 2005 as her
retirement commencement date. Throughout, the Agency maintained that
§ 38-764(A) requires a retiring member to choose a date for commencing
retirement that is not earlier than the day following termination of
employment and not earlier than the date of submission of a retirement
application. The administrative law judge recommended affirming the
determination that Lagerman’s retirement date was April 6, 2016, and the
Agency Appeals Committee accepted that recommendation.

¶6 Lagerman then sought judicial review in superior court
pursuant to the Administrative Review Act. A.R.S. § 12-901, et seq. The
court affirmed the Agency’s decision.

¶7 Lagerman appealed, and the court of appeals affirmed the
superior court. Lagerman v. Ariz. State Ret. Sys., 246 Ariz. 270, 272 ¶ 2 (App.
2019). The court rejected her interpretation of § 38-764(A), concluding that
the statute precludes electing a retirement date before the Agency receives
a retirement application and that such a result does not diminish or impair

3“Normal retirement” for members who began work before July 1, 2011 can
occur when a Plan member reaches age sixty-two with ten years of service,
reaches age sixty-five, or, as in Lagerman’s case, when a member’s
combined age and years of service equals eighty. See A.R.S. § 38-711(27)(a).
3
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

her benefits in violation of § 38-757(A) or article 29, section 1(D) of the
Arizona Constitution. See id.

¶8 We granted review because the terms and conditions for
beginning retirement and the receipt of retirement benefits under the Plan
are legal issues of first impression with statewide importance. We have
jurisdiction under article 6, section 5(3) of the Arizona Constitution.

II.
¶9 The Plan is a defined benefit plan that provides retirement
benefits to employees of the State of Arizona and employees of
participating political subdivisions. See A.R.S. §§ 38-711(13), -711(23), and
-712(B). Public employees in Arizona are required to participate if they are
working at least twenty hours each week for at least twenty weeks in a fiscal
year with a participating Plan employer. A.R.S. §§ 38-736(A), -711(23)(b).

¶10 There are three categories of Plan members: active, inactive,
and retired. Active members contribute to the Plan and work the required
hours for membership. See A.R.S. § 38-711(1), -711(23)(b). Inactive
members are those who previously made contributions to the Plan but are
not currently contributing, are not eligible for active membership, and have
not withdrawn their contributions or begun receiving retirement benefits.
A.R.S. § 38-711(16). Retired members are currently receiving Plan
retirement benefits. A.R.S. § 38-711(30).

¶11 Plan members do not necessarily retire when they end
employment. There are several possible post-employment scenarios. First,
when members terminate employment, they can seek a return of their own
contributions plus those of the employer, if applicable, with interest. A.R.S.
§ 38-740. Second, members can terminate employment and simply leave
their contributions with the Plan where their contributions, along with a
percentage of the employer’s contributions based on years of service, plus
any interest may be returned to the member at a later date or used as a
survivor benefit payable to a designated beneficiary following the
member’s death. A.R.S. §§ 38-740, -762. Third, members may later return
to employment with a Plan employer and resume making contributions.
4
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

A.R.S. § 38-766. Finally, members may choose to retire when they reach
their normal retirement date. See A.R.S. § 38-711(27).

III.
¶12 Lagerman contends that her right to a retirement benefit was
unconditional and nonforfeitable as of her July 23, 2005 retirement date
pursuant to § 38-757(A). Thus, she claims that her right to collect retirement
benefits was not contingent on submitting a retirement application, which
she insists is just a procedural step. Therefore, any delay in initiating
payment of her monthly benefit—regardless of when she submitted a
retirement application—requires either a lump sum payment with interest
or an increase in future payments to account for benefits not paid in the
interim. Otherwise, she asserts, the failure to account for amounts not paid
diminishes or impairs her benefits contrary to article 29, section 1(D) of the
Arizona Constitution. Lagerman additionally argues that § 38-764(A)
permits her to elect a retirement date that satisfies any of the conditions
listed therein.

¶13 We review de novo an administrative decision based on an
interpretation of law. See A.R.S. § 12–910(E); see also Forest Guardians v.
Wells, 201 Ariz. 255, 259 ¶ 9 (2001). “If a statute is subject to only one
reasonable interpretation, we apply it without further analysis.” Glazer v.
State, 237 Ariz. 160, 163 ¶ 12 (2015). Statutes that address the same subject
or general purpose “should be read together and harmonized when
possible.” David C. v. Alexis S., 240 Ariz. 53, 55 ¶ 9 (2016). “[I]f possible this
court construes statutes to avoid rendering them unconstitutional.” Hayes
v. Cont’l Ins. Co., 178 Ariz. 264, 272 (1994).

A.
¶14 Arizona Revised Statutes § 38-757 provides:
A. After application on a form prescribed by the director, a
member may retire on reaching the member’s normal
retirement date. Except as provided in § 13-713, a member’s
right to the member’s normal retirement benefit as described
in subsection B of this section is nonforfeitable by an employer

5
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

or ASRS on attainment of the member’s normal retirement
date.
B. Except as provided in § 38-768, a member who meets the
requirements for retirement benefits at normal retirement
shall receive a monthly life annuity . . . .
....

¶15 Reading subsections (A) and (B) together, as the reference to
subsection (B) in subsection (A) necessarily requires, it is clear that a
member shall receive a monthly annuity payment after applying on the
prescribed form and reaching the normal retirement date. The fact that a
Plan member’s right to a normal retirement benefit is nonforfeitable as of
the normal retirement date, except as provided in § 13-713, 4 does not
eliminate the statutory requirements a member must satisfy in order to
receive the benefit. Before submitting an application and attaining a normal
retirement date, a member is not entitled to receive retirement benefits. The
statute, by its terms, renders submitting a retirement application a
substantive condition precedent for receiving retirement benefits; the
application is not just a procedural step.

¶16 In Hall v. Elected Officials’ Retirement Plan, we surveyed
previous cases involving pension rights to conclude that “a public
employee’s interest in a retirement benefit or pension becomes a right or
entitlement at the outset of employment, but the right to begin collecting
pension benefits is contingent upon completing the requirements for
retirement eligibility.” 241 Ariz. 33, 44 ¶ 33 (2016) (citing Fields v. Elected
Officials’ Ret. Plan, 234 Ariz. 214, 221 ¶ 31 (2014) (providing that although
the right to receive a pension “vest[s] upon acceptance of employment,” the
pension is “subject to conditions precedent, such as completing the term of
employment”) and Krucker v. Goddard, 99 Ariz. 227, 230 (1965) (providing
that a plan member’s right to withdraw contributions vested because he
“had fulfilled every condition precedent to having his contributions
returned”)).

4 The legislature added § 13-713 in 2011, providing for forfeiture of rights
and benefits under the Plan in the event a Plan member is convicted of
certain felonies committed in the course of public employment.
6
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

¶17 Consequently, although Lagerman’s right to retirement
benefits was nonforfeitable as of July 23, 2005, the Plan was not obligated
to pay her until she satisfied all the requirements to receive benefits by
submitting her retirement application on April 6, 2016. Because the Plan
has paid her a monthly benefit after she complied with the provisions of
§ 38-757, no diminishment or impairment of her benefits has occurred in
violation of article 29, section 1(D) of the Arizona Constitution.

1.
¶18 Lagerman’s assertion that the nonforfeitability language in
§ 38-757(A) requires the Plan to pay her benefits as of her normal retirement
date, regardless of when she submits a retirement application, is
inconsistent with other provisions governing the Plan. Only two sections
make allowance for a retroactive payment of benefits. When a change or
error in Agency records results in a member receiving less than the correct
amount, A.R.S. § 38-765 requires the Agency to “correct the error and as far
as practicable . . . adjust the payments in a manner so that the actuarial
equivalent of the benefit to which the member or beneficiary was correctly
entitled is paid.” And A.R.S. § 38-715(D)(4) authorizes the Agency director,
with the approval of the Agency board, to “[m]ake retirement under this
article effective retroactively to on or after the day following the date
employment is terminated if the member was unable to apply before the
retroactive effective date through no fault of the member.” Neither
circumstance is before us. 5 Finally, the methodology used to determine the
annual value of the Plan as required by A.R.S. § 38-714 is not structured to
account for liabilities based on mere attainment of a normal retirement date.
See ASRS 2019 Comprehensive Annual Financial Report, 98
https://www.azasrs.gov/sites/default/files/2019_ASRS_CAFR_Web.pdf.
Instead, the methodology takes into account retirements. See id.

5 Although Lagerman raised the issue of a retroactive retirement pursuant
to § 38-715(D)(4) before the court of appeals, she did not raise it in her
petition to this Court.
7
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

2.
¶19 Requiring the submission of a retirement application as a
condition for receiving benefits accords with other statutory provisions
governing the administration of the Plan. For example, at retirement, a
member must provide the Agency with information regarding the type of
benefit payment the member wants to receive, the identity and age of the
member’s designated beneficiary, the member’s choice of health care
options, and any required spouse information. See A.R.S. §§ 38-758, -760,
and -776.

¶20 Retiring members can choose to receive their retirement
benefit as a joint and survivor annuity, a period-certain annuity, a straight
life annuity, or take a lump sum at the time of retirement and thereafter
receive a life annuity. A.R.S. § 38-760(B). In the case of a joint and survivor
or period-certain annuity, members must have designated a beneficiary.
See id. In either instance, the monthly benefit payment is modified based
on the ages of the retiring member and the designated beneficiary at the
time of retirement. Ariz. Admin. Code R8-2-126(F). For Lagerman, a
straight life annuity monthly benefit would have been $1,930.09, while a
joint and survivor annuity, which she chose, is $1,708.32. Members also
have options regarding whether and how to participate in health insurance
options for themselves or their family as provided by the Plan. A.R.S. §§
38-782, -783. Lastly, if a member is married at the time of retirement, the
spouse must be named as a contingent annuitant or the spouse must waive
the designation. A.R.S. § 38-760(C), -776. Failure to name a spouse or
submit a waiver from a spouse will result in the Plan cancelling the
member’s retirement and the member will have to reapply. A.R.S. § 38-
760(C).

¶21 The retirement application thus also provides necessary
information for the Plan to administer benefits to retiring members.
Without the information provided with the application, the Plan would not
be able to calculate the proper payment for a member’s monthly retirement
benefit, provide the elected health care benefits, identify beneficiaries for
calculating any payment modifications, or know who to make benefit
payments to upon the retired member’s death. Furthermore, until
Lagerman chose the type of annuity she wanted to receive and designated

8
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

her beneficiary at the time of her actual retirement, the Agency could not
have determined its liability for Lagerman’s retirement benefit.

B.
¶22 Lagerman points out that the Arizona Legislature amended
§ 38-757(A) in 2013, adding the second sentence referencing § 13-713 and
the nonforfeitability language. She characterizes this amendment as
evidencing the legislature’s intent to conform the Plan to federal law
regarding nonforfeitability because it bore the heading “Federal
Conforming Changes” in the accompanying Senate Fact Sheet. See Ariz.
State Senate Final Amended Fact Sheet for S.B. 1170, 51st Leg., 1st Reg. Sess.
(Jul. 11, 2013). Lagerman notes that this nonforfeitability language tracks
similar language in 26 U.S.C. § 411(a) 6 of the Internal Revenue Code, 29
U.S.C. § 1053(a) 7 of the Employee Retirement Income Security Act
(“ERISA”), and 26 C.F.R. § 1-411(a). 8 Lagerman thus concludes that federal
pension law and federal cases addressing nonforfeitability in pension
benefits are equally applicable to § 38-757(A).

¶23 However, as “a plan established and maintained for its
employees . . . by the government of [Arizona],” the Plan is a government
plan. See 26 U.S.C. § 414(d); see also 29 U.S.C. § 1002(32); and A.R.S. § 38-
712. Therefore, the Plan is exempt from the provisions of ERISA. See 29
U.S.C. § 1003(b)(1) (“The provisions of [ERISA] shall not apply to any
employee benefit plan if such plan is a governmental plan . . . .”). The Plan
is also generally exempt from 26 U.S.C. § 411, except for the need to meet
minimum vesting requirements. See 26 U.S.C. § 411(e).

6 “A trust shall not constitute a qualified trust under section 401(a) unless
the plan . . . provides that an employee's right to his normal retirement
benefit is nonforfeitable upon the attainment of normal retirement
age . . . .”
7 “Each pension plan shall provide that an employee's right to his normal

retirement benefit is nonforfeitable upon the attainment of normal
retirement age . . . .”
8 “A plan is not a qualified plan . . . unless—The plan provides that an

employee's right to his normal retirement benefit . . . is nonforfeitable . . .
upon and after the attainment of normal retirement age.”
9
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

1.
¶24 Even if Lagerman were correct that the legislature intended
to conform the Plan to federal pension law concerning the nonforfeitability
of pension benefits, her conclusion that § 38-757(A) requires the Plan to pay
her retirement benefits beginning on July 23, 2005 is incorrect. The cases
she cites interpreting ERISA, though not controlling, are consistent with the
Agency’s administration of retirement under the Plan.

¶25 The facts of Contilli v. Local 705 International Brotherhood of
Teamsters Pension Fund help illustrate the difference between attaining a
normal retirement age and actually retiring for purposes of receiving
retirement benefits. 559 F.3d 720 (7th Cir. 2009). There, the plaintiff reached
normal retirement age when he turned 65 on August 30, 1995, but he did
not actually retire until October 1997. Id. at 721. The plaintiff then applied
for retirement benefits in January 1998 and began receiving benefits in
February. Id. At issue was the plan’s failure to pay benefits as of the date
he retired and to make an actuarial adjustment to account for the time
between his retirement in October and when he began receiving his pension
in February. Id. at 722. The court reviewed the distinction between being
eligible for retirement and actually retiring when considering the need for
an actuarial adjustment for any delay in paying benefits and explained:
There is an exception to the actuarial-adjustment requirement
for a participant who puts off retirement while continuing to
work. See 29 U.S.C. § 1053(a)(3)(B). So the Fund was entitled
to start Contilli’s pension in November 1997, when he retired,
rather than in September 1995, the month after his 65th
birthday; it did not need to send him catch-up checks for those
two years or make any adjustment other than what the plan
itself required . . . . But once Contilli retired his entitlement
was fixed, and the Fund’s failure to pay any month’s benefit
worked a forfeiture of that amount.
Id.; see also Cotter v. Eastern Conference of Teamsters Retirement Plan, 898 F.2d
424, 426 (4th Cir. 1990) (noting difference between eligibility for benefits
and entitlement to receive benefits).

10
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

¶26 Like the Fund in Contilli, the Agency is not obligated to pay
Lagerman “catch-up checks” or to make an actuarial adjustment to account
for the time between her normal retirement date and the date on which she
submitted her retirement application and actually retired. Instead, the
Agency was required to pay—and has paid—Lagerman the amount of her
retirement benefit she had a nonforfeitable right to and that was “fixed” as
of her retirement date, April 6, 2016.

2.
¶27 In the other case cited by Lagerman, Canseco v. Construction
Laborers Pension Trust for Southern California, 93 F.3d 600 (9th Cir. 1996), the
court considered whether a retirement application was in fact a condition
for eligibility to receive retirement benefits. The Canseco court highlighted
the fact that the structure of the plan addressed retirement eligibility and
applying for benefits separately in different sections, stating:

Finally, the structure of the [] plan reinforces our conclusion
that the plan does not require an application as a condition of
eligibility. Article 2 and Article 5 cover separate provisions of
the plan: Article 2 governs “Eligibility for Retirement
Benefits,” while Article 5 governs “Payment of Benefits.” The
separation of these provisions into different articles . . .
indicates that eligibility for retirement benefits is wholly
independent from the payment of those benefits.
Id. at 607.

¶28 Unlike the plan in Canseco, the requirements for normal
retirement for Lagerman are set forth in one place in § 38-757, which
explicitly states that “[a]fter application . . . a member may retire on reaching
the member’s normal retirement date.” § 38-757(A) (emphasis added). The
requirement to submit a retirement application and being eligible for
retirement are inextricable conditions precedent to eligibility for receipt of
Plan retirement benefits.

11
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

C.
¶29 With respect to commencing retirement, § 38-764 provides:
A. Retirement is deemed to commence on a date elected by
the member. That date shall not be earlier than the day
following the date of termination of employment, the date
ASRS receives the member’s completed retirement
application or the date specified by the member pursuant to
subsection I of this section.
....
I. A member who attains a normal retirement date may retire
at any time without terminating employment if the member
is employed for less than the hours required for active
membership pursuant to § 38-711, paragraph 23, subdivision
(b).

¶30 Lagerman contends that “or” in subsection (A) is used in the
disjunctive, permitting her to elect a retirement date for any of the three
events listed. Accordingly, she could elect a date that is not earlier than the
day following the date she terminated employment, or the date the Agency
received her completed retirement application, or the date she specified
pursuant to subsection (I). Therefore, she could submit a retirement
application in 2016 with an effective retirement date in 2005. We disagree.

¶31 The consequence of a negative phrase—“shall not be earlier
than”—preceding “or” in subsection (A) is that the conditions listed are
each prohibited. See Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 119 (2012) (addressing the singular negation-
effect that occurs when a disjunctive “or” is preceded by “not” to prohibit
any and all items in a list); see also Schane v. International Brotherhood of
Teamsters Union Local No. 710 Pension Fund Pension Plan, 760 F.3d 585, 589
(7th Cir. 2014) (illustrating “that not (X or Y) is equivalent to not X and not
Y” (emphasis omitted)). Thus, § 38-764(A) requires a member to elect a
retirement date that is not earlier than the day following her termination of
employment, not earlier than the date of receipt of her retirement
application, and not earlier than the date on which she specifies pursuant to
§ 38-764(I).

12
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

¶32 The statute’s history supports this interpretation as well.
Before the 1999 amendments that added subsection (I) to § 38-764 and the
reference to (I) in subsection (A), § 38-764(A) read “[r]etirement is deemed
to commence on a date elected by the member. That date shall not be earlier
than the day following the date of termination of employment or the date
ASRS receives the member’s completed retirement application.” Applying
the singular-negation effect to the pre-1999 version of § 38-764(A), with the
same occurrence of “or” preceded by a negative, yields the same result. A
member was required to elect a retirement date that was not earlier than the
date the member terminated employment and not earlier than the date the
member submitted a completed retirement application.

¶33 There is no evidence the legislature sought to alter the
conditions for electing a retirement date when it amended the statute in
1999. Both the Senate Fact Sheet and House Bill Summary for the
amendments characterized the changes as “[c]larif[ying] that a member
who has attained a normal retirement date but continues to work less than
the hours required for active ASRS membership may do so without
interrupting that member’s retirement pension.” Ariz. State Senate Fact
Sheet for S.B. 1083, 44th Leg., 1st Reg. Sess. (May 27, 1999); Ariz. State House
Bill Summary for S.B. 1083, 44th Leg., 1st Reg. Sess. (Mar. 25, 1999).

¶34 Lagerman further asserts that if “or” is read in this manner, it
creates a conflict between subsections (A) and (I). Specifically, she points
out that a member who elects to retire but continues in employment under
(I) necessarily retires “earlier than the day following the date of termination
of employment,” which is not permitted by the first clause in the second
sentence of (A). However, the conflict she identifies is resolved by reading
(A) and (I) together, as the reference to (I) in subsection (A) requires, with
other provisions governing active membership in the Plan.

¶35 “When possible, we seek to harmonize statutory provisions
and avoid interpretations that result in contradictory provisions.” Premier
Physicians Grp., PLLC v. Navarro, 240 Ariz. 193, 195 ¶ 9 (2016). The first
clause of the second sentence in (A) contemplates an active member’s
termination of employment with a Plan employer. The consequence of

13
 SUSAN LAGERMAN V. ARIZONA STATE RETIREMENT SYSTEM
Opinion of the Court

ceasing employment is that the member is no longer working and therefore
is not an active member, as referenced in subsection (I). The third clause of
the second sentence in (A) applies to an active member who elects to retire
but also elects to continue working under the option offered by subsection
(I). Subsection (I) specifically provides that members selecting this option
must end active membership by working “less than the hours required for
active membership pursuant to § 38-711, paragraph 23, subdivision (b).”
Read together then, both (A) and (I) require a member to cease working the
hours that would qualify a member for active membership in the Plan as a
condition for electing a retirement date. That the member must choose how
to comply with this condition—terminating employment or working fewer
hours than required for active membership—does not constitute a conflict
between subsections (A) and (I).

IV.

¶36 Because the Plan processed Lagerman’s retirement date as
provided for in statute and calculated her chosen monthly life annuity
benefit as required, the Plan complied with § 38-757(A), and no forfeiture,
diminishment or impairment of Lagerman’s normal retirement benefits
occurred in violation of article 29, section 1(D) of the Arizona Constitution.

¶37 Section 38-764(A) requires a member to elect a date for
retirement that follows termination of active membership in the Plan and
submission of a completed retirement application. Therefore, Lagerman’s
effective date of retirement is April 6, 2016.

¶38 Because she is not the prevailing party, we deny Lagerman’s
request for attorney fees.

V.
¶39 We affirm the trial court’s judgment. We vacate all but ¶¶ 19-
24 of the court of appeals’ opinion but affirm that court’s conclusion and
result.

14