Freeman v. Office of Pers. Mgmt.
| Decision Date | 03 April 2023 |
| Docket Number | AT-0831-17-0566-I-1 |
| Parties | MARY A. FREEMAN, Appellant, v. OFFICE OF PERSONNEL MANAGEMENT, Agency. |
| Court | Merit Systems Protection Board |
THIS FINAL ORDER IS NONPRECEDENTIAL[1]
Kenneth S. Ratley, Esquire, Augusta, Georgia, for the appellant.
Karla W. Yeakle, Washington, D.C., for the agency.
BEFORE Cathy A. Harris, Vice Chairman, Raymond A. Limon, Member Tristan L. Leavitt, Member. [2]
¶1 The Office of Personnel Management (OPM) has filed a petition for review of the initial decision, which reversed OPM's reconsideration decision finding that the appellant was ineligible for a deferred retirement annuity under the Civil Service Retirement System (CSRS). For the reasons discussed below, we GRANT OPM's petition for review, REVERSE the initial decision, and AFFIRM OPM's reconsideration decision.
¶2 The appellant separated from Federal service with the Department of Veterans Affairs (DVA) effective January 31 1990. Initial Appeal File (IAF), Tab 6 at 30-31. In 1994, she requested and received a refund of her CSRS retirement contributions. Id. at 24-27, 31. In June 2016, the appellant reached age 62 and applied for a deferred CSRS retirement annuity.[3] Id. at 11-16. On July 7, 2016, OPM issued a decision finding that the appellant was ineligible for an annuity based on her withdrawal of her CSRS retirement contributions in 1994. Id. at 10. The appellant requested reconsideration of this decision, id. at 9, and OPM issued a reconsideration decision on May 10, 2017, which affirmed its initial decision, id. at 6-8.
¶3 The appellant filed an appeal of OPM's final decision with the Board. IAF, Tab 1. She initially requested a hearing, id. at 4, but subsequently withdrew her request, IAF, Tab 12 at 1; Tab 15, Initial Decision (ID) at 1. The appellant asserted that the refund application form did not state that receiving the refund would void her annuity rights unless she became reemployed and redeposited the refund. IAF, Tab 14 at 13 (). The appellant further contended that, before she submitted the application, "federal agencies"[4] told her that she could repay the refund with interest if she subsequently decided that she wanted to receive an annuity; however, she was not informed that she must be reemployed to do so.[5] Id. The appellant claimed that, had she been informed of the consequences of obtaining a refund of her retirement contributions, she would not have requested one. Id. at 13-14.
¶4 Based on the written record, the administrative judge issued an initial decision reversing OPM's reconsideration decision. ID at 1, 7. The administrative judge found that the appellant should be permitted to revoke her election to withdraw her retirement contributions and redeposit the amount withdrawn with interest because the election was based upon inadequate and misleading information that would cause a reasonable person in the appellant's situation to be confused. ID at 5-6. Accordingly, the administrative judge ordered OPM to allow the appellant to revoke her election to withdraw her retirement contributions and repay the amount she withdrew with appropriate interest. ID at 7.
¶5 OPM has filed a petition for review. Petition for Review (PFR) File, Tab 1. The appellant has filed a response to the petition for review. PFR File, Tab 3.
The appellant is not eligible to redeposit her retirement contributions or to receive deferred annuity benefits.
¶6 An individual seeking retirement benefits bears the burden of proving entitlement to those benefits by preponderant evidence. Jordan v. Office of Personnel Management 100 M.S.P.R. 623, ¶ 7 (2005). It is well settled that the Government cannot pay benefits to an employee that are not otherwise permitted by law. See Office of Personnel Management v. Richmond, 496 U.S. 414, 416, 434 (1990) ( that the Government cannot be estopped from denying benefits not otherwise permitted by law even if the claimant was denied monetary benefits because of his reliance on the mistaken advice of a Government official); Danganan v. Office of Personnel Management, 55 M.S.P.R. 265, 269 (1992) (), aff'd, 19 F.3d 40 (Fed. Cir. 1994) (Table).
¶7 The administrative judge reversed OPM's reconsideration decision based on his finding that the appellant satisfied the following standard for determining whether an election of retirement options is voidable due to incorrect information: whether a reasonable person would have been confused under the particular circumstances. ID at 5. For the reasons discussed below, assuming arguendo that this standard was met here, we nonetheless find that the administrative judge erred in reversing OPM's reconsideration decision and ordering OPM to allow the appellant to revoke her election to withdraw her retirement contributions and to redeposit her withdrawn funds with interest. ID at 7.
¶8 In ordering this remedy, the administrative judge relied on cases in which the Board found that the appellant was entitled to void his election of a retirement option because he made the election in reliance on erroneous information provided by Government employees. ID at 5 (). Significantly, however, in those cases, the relevant statutory provisions did not prevent the remedial action ordered by the Board. In Froom, the Board reversed an initial decision and determined that the appellant was entitled to void his election to make a military service retirement credit deposit, and to a refund of that deposit, when he reasonably relied on erroneous information provided to him by OPM and the Social Security Administration (SSA) in making a deposit to ensure that he would retain CSRS service credit for his post-1956 active duty military service. The Board noted that, contrary to what OPM and the SSA advised the appellant, he was entitled to CSRS credit for his military service without having to make a deposit as a matter of law, as long as he did not qualify for old-age Social Security benefits when he became 62 years of age, which under the facts presented, he did not. The Board agreed with the appellant that a reasonable person would have been confused by the erroneous material information OPM and the SSA furnished him, and so the Board ordered OPM to refund the appellant's deposit that he made to retain CSRS service for his military service.
¶9 Likewise, in Cortinas, the appellant was receiving military retirement pay when he retired on disability. Cortinas, 32 M.S.P.R. at 514. The appellant elected to receive a monthly annuity rather than a lump-sum distribution because his employing agency informed him that his monthly annuity would be based on his military and civilian service. Id. at 515-16. In fact, however, 5 U.S.C. § 8339(g), with certain exceptions, excludes credit for military service. Id. at 514. Consequently, OPM computed the appellant's annuity based on his length of civil service and average salary, excluding credit for military service. Id. As a result, the amount of his monthly annuity was more than $300 less than the estimate provided by his employing agency. Id. at 516.
¶10 On appeal in Cortinas, the appellant acknowledged that OPM's annuity calculations were correct, but contended that its decision should be reversed and that he should be provided with an opportunity to make an informed decision regarding available retirement options because his election of retirement options was based on the incorrect information provided by his employing agency. Id. at 515. The administrative judge rejected the appellant's argument and affirmed OPM's decision, finding that, even if the appellant was misled or given erroneous information, an agency cannot be estopped from enforcing the requirements of a statute. Id. at 514-15.
¶11 The Board reversed the initial decision and ordered OPM to inform the appellant of his retirement options and allow him to apply for a change in his annuity. Cortinas, 32 M.S.P.R. at 516-17. The Board found the estoppel issue relied on by the administrative judge was inapplicable because providing the appellant equitable relief would not require a waiver or nullification of statutory provisions. Id. at 516.
¶12 Here, however, the relief ordered by the administrative judge would require a waiver or nullification of statutory provisions. With exceptions not applicable in this appeal,[6] the receipt of a refund of CSRS retirement contributions voids all annuity rights based on the service for which the refund is made until the recipient is reemployed by the Federal Government in a covered position and redeposits the funds previously withdrawn. 5 U.S.C. §§ 8334(d), 8342(a); Youngblood v. Office of Personnel Management, 108 M.S.P.R. 278, ¶ 12 (2008). Thus, an annuitant must be in a current covered Federal position to make a redeposit of refunded CSRS credit. 5 U.S.C. § 8334(d).
¶13 In this case, because the appellant requested and received a refund of her CSRS retirement contributions, and she is not a current Federal employee making retirement contributions, she is not entitled to redeposit her withdrawn contributions or to receive an annuity. See Mahan v. Office of Personnel Management, 47 M.S.P.R. 639, 641-42 (1991) (...
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