## Facts

- Before 1967, Minnesota’s judicial-retirement statute provided that a qualified district court judge, upon retirement, would receive for life a pension equal to **one-half of the “compensation allotted to the office,”** which operated as a continuing link to the salary paid to sitting judges.
- In **1967**, the legislature amended the statute to limit the pension to **one-half of the compensation allotted for the office at the time of retirement**, ending automatic post-retirement increases tied to later judicial salary raises.
- In **1969**, the legislature amended the statute again to provide a pension equal to **one-half of the compensation allotted to the office at the time of retirement or on July 1, 1967, whichever was greater**, further fixing the benchmark for calculating retirement benefits.
- Minnesota’s retirement scheme also addressed judges who elected retirement while still in an unexpired elected term, including requirements connected to receiving retirement payments rather than continuing to draw a judicial salary.
- Six district court judges filed declaratory-judgment actions seeking a ruling that the 1967 and 1969 amendments could not constitutionally reduce the retirement benefits they claimed under the pre-1967 formula.
- The judges were in different timing positions:
  - **Four** judges had **already retired** before the new legislation took effect.
  - Judge **J. K. Underhill** **elected retirement** before the statutes took effect but **continued working** until after they took effect.
  - Judge **Harold E. Flynn** **retired after** the statutes took effect.
- The cases were submitted on **stipulated facts**, consolidated, and decided together in the trial court.
- The trial court concluded that the new statutes **did not apply** to judges who had **elected to retire before** the statutes’ effective dates, but **did apply** to judges who **elected retirement after** those dates—meaning **only Flynn’s** pension would be reduced under the amendments.
- The parties sought appellate review of those rulings in the Minnesota Supreme Court.

## Issues

1. Did Minnesota’s judicial-retirement statute create a contractual right to a pension calculated as one-half of the salary paid to sitting judges, such that later legislation could not reduce that benefit for judges whose rights had already vested?
2. When, for purposes of the Contracts Clauses, did a judge’s right to the pre-1967 pension formula vest—upon entering service, upon meeting service/age requirements, or upon retirement (including an effective election to retire)?

## Decision

- The Minnesota Supreme Court treated judicial retirement benefits as part of the judge’s compensation arrangement and held that, for judges who had vested rights under the pre-1967 plan, the benefit could not be reduced by later statutory amendments without impairing contractual obligations.
- The court agreed that the legislature could change the retirement formula **prospectively** for judges whose right to the earlier formula **had not vested** before the amendments became effective.
- The court held that judges who had **retired** before the effective dates, and judges who had **effectively elected retirement** before those dates (even if they continued working past the effective date), were protected from having their pension calculation cut back by the 1967 and 1969 amendments.
- The court left the amended formula in place for judges who **first elected retirement after** the effective dates, which meant that **Judge Flynn** was subject to the 1967/1969 limitations.

## Legal Principles

- Public retirement benefits may constitute **contractual obligations** rather than a revocable gratuity.
- The federal and state **Contracts Clauses** limit the state’s ability to apply later statutes to **reduce vested pension benefits**.
- A judge’s right to a particular pension formula vests when the judge has satisfied the statutory conditions and has made an effective, legally operative **election to retire** under the statute (not merely by serving while an earlier statute was in force).
- Legislatures may revise pension formulas for the future as to employees or officials whose rights to the earlier formula have **not yet vested**.

## Conclusion

Sylvestre holds that Minnesota’s judicial retirement scheme created enforceable contractual pension rights once a judge’s entitlement to the pre-1967 benefit formula vested through retirement or an effective election of retirement, and that the 1967 and 1969 amendments could not be applied to cut back those vested benefits, though the amendments could govern judges who elected retirement only after the statutes took effect.


Sylvestre v. Minnesota, 214 N.W.2d 658 (1973)