UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD 

DEFOREST J. PETERSDORF,

Appellant,

v.

OFFICE OF PERSONNEL 

MANAGEMENT,

Agency.

DOCKET NUMBER

SF-831M-15-0452-I-1

DATE: December 8, 2015

THIS FINAL ORDER IS NONPRECEDENTIAL1

Paul Meadowbrook, Esquire, Albany, Oregon, for the appellant.

Kristine Prentice, Washington, D.C., for the agency.

BEFORE

Susan Tsui Grundmann, Chairman

Mark A. Robbins, Member

FINAL ORDER

¶1 The appellant has filed a petition for review of the initial decision, which 

affirmed the reconsideration decision of the Office of Personnel Management 

(OPM) denying the appellant’s request for a waiver of the overpayment of 

annuity benefits. Generally, we grant petitions such as this one only when: the 

 1 A nonprecedential order is one that the Board has determined does not add 

significantly to the body of MSPB case law. Parties may cite nonprecedential orders, 

but such orders have no precedential value; the Board and administrative judges are not 

required to follow or distinguish them in any future decisions. In contrast, a 

precedential decision issued as an Opinion and Order has been identified by the Board 

as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
2

initial decision contains erroneous findings of material fact; the initial decision is 

based on an erroneous interpretation of statute or regulation or the erroneous 

application of the law to the facts of the case; the administrative judge’s rulings 

during either the course of the appeal or the initial decision were not consistent 

with required procedures or involved an abuse of discretion, and the resulting 

error affected the outcome of the case; or new and material evidence or legal 

argument is available that, despite the petitioner’s due diligence, was not 

available when the record closed. See title 5 of the Code of Federal Regulations, 

section 1201.115 (5 C.F.R. § 1201.115). After fully considering the filings in this 

appeal, we conclude that the petitioner has not established any basis under section 

1201.115 for granting the petition for review. Therefore, we DENY the petition 

for review and AFFIRM the initial decision, which is now the Board’s final 

decision. 5 C.F.R. § 1201.113(b). 

BACKGROUND

¶2 The appellant retired under the Civil Service Retirement System (CSRS)

effective in March 2008. 2

 Initial Appeal File (IAF), Tab 6 at 32-35. At that 

point, he elected a partial survivor annuity for his spouse. Id. at 34. In

June 2009, he faxed a request to OPM to increase his survivor annuity. IAF, Tab 

6 at 27, Tab 14, Hearing Compact Disc (HCD). According to the appellant, OPM 

confirmed receipt of his request over the telephone later that month. HCD; IAF, 

Tab 6 at 14. The appellant stated that he again contacted OPM in October 2009 

and June 2010 and that OPM assured him at those times that he would be 

contacted soon. HCD; IAF, Tab 6 at 14. The appellant stated that he sent 

additional information to OPM in April 2011, but, after hearing nothing from 

 2 Because the regulations relating to overpayments under CSRS and the Federal 

Employees’ Retirement System (FERS) are substantively identical, we have relied on 

cases involving overpayments under FERS in our analysis of the present appeal. 

Compare 5 C.F.R. §§ 831.1401-1407, with 5 C.F.R. §§ 845.301-307; see James v. 

Office of Personnel Management, 72 M.S.P.R. 211, 216 n.3 (1996).
3

OPM, assumed that his request was lost or denied. IAF, Tab 6 at 14. OPM 

acknowledged the appellant’s request when it issued a letter in August 2014, 

sixty-two months after the appellant faxed his request. Id. at 20-21. OPM stated

that it had received the appellant’s request to change his survivor election and 

informed him that he should complete and sign the attached election form if he 

still wanted to change his survivor election. Id. OPM also informed the appellant 

that he had to pay a required deposit of $9,289.50, which covered the first 18 

months after his retirement. Id. at 22. OPM further stated that, after the 

appellant made this deposit, it then would calculate the overpayment covering the 

period after the first 18 months following his retirement until the present (August 

2014). Id. at 20-22. The appellant paid the $9,289.50 deposit covering the first 

18 months after his retirement. Id. at 15, 22.

¶3 In September 2014, OPM notified the appellant that the overpayment for the 

period from September 2009 to August 2014 was $11,948.06 and that it would 

collect this overpayment in 36 installments of $331.89 and a final installment of 

$0.02. IAF, Tab 6 at 15-16. The appellant requested a waiver of the 

overpayment. Id. at 11. In his request, he asserted, inter alia, that the lengthy 

delay of more than 5 years in processing his election was not his fault, it would 

be unfair to expect him to repay the overpayment since he did not cause the delay, 

and timely processing of his original request would have eliminated the 

overpayment. Id. at 13. The appellant did not, however, submit a financial 

resources questionnaire, which OPM stated was required for waiver requests 

based upon financial hardship. Id. at 17. OPM issued a reconsideration decision 

in February 2015 affirming its initial overpayment decision. Id. at 6-9.

¶4 The appellant filed this Board appeal challenging the reconsideration 

decision. IAF, Tab 1. He requested a hearing. Id. During a telephonic 

prehearing conference, the appellant stated that he was not disputing the amount 

of the overpayment and was not claiming financial hardship, but that he was 

instead asserting that recovery of the overpayment would be unconscionable and 
4

that OPM was grossly negligent. IAF, Tab 13. At that time, OPM acknowledged

that the appellant was not at fault in creating the overpayment. Id. After holding 

the requested hearing, the administrative judge issued an initial decision 

affirming OPM’s reconsideration decision. IAF, Tab 15, Initial Decision (ID). 

Specifically, she found that the appellant failed to establish, by substantial 

evidence, that he was entitled to a waiver of the overpayment based upon equity 

and good conscience. ID at 4-6.

¶5 The appellant has filed a timely petition for review. Petition for Review 

(PFR) File, Tab 3. On review, he asserts that: (1) had OPM timely processed his 

request, there would be no second overpayment charge of $11,948.06, which, he 

presumes, includes principal, interest, and a 24.5 percent service charge; (2) OPM 

has not offered an explanation for its delay and was grossly negligent; and (3) the 

Board should remand the appeal to OPM to explain why it failed to act on the 

appellant’s request in a timely fashion and to state how much additional interest 

and service charges resulted from the long delay in acting on the request. Id. 

at 6-7. OPM has responded in opposition to the petition for review. PFR File, 

Tab 6.

DISCUSSION OF ARGUMENTS ON REVIEW

¶6 OPM bears the burden of proving, by preponderant evidence, the existence 

and amount of an annuity overpayment. 3

 Davis v. Office of Personnel 

Management, 109 M.S.P.R. 48, ¶ 7 (2008) (citing 5 C.F.R. § 831.1407(a)). If the 

appellant claims a waiver of the overpayment, he bears the burden of establishing 

his entitlement to a waiver by substantial evidence. 4

 Id., ¶ 11 (citing 5 C.F.R. 

 3 A preponderance of the evidence is that degree of relevant evidence that a reasonable 

person, considering the record as a whole, would accept as sufficient to find that a 

contested fact is more likely to be true than untrue. 5 C.F.R. § 1201.4(q).

4 Substantial evidence is defined as the degree of relevant evidence that a reasonable 

person, considering the record as a whole, might accept as adequate to support a 

conclusion, even though other reasonable persons might disagree. 5 C.F.R. § 1201.4(p). 

This is a lower standard of proof than preponderance of the evidence. Id.
5

§ 831.1407(b)). A waiver may be granted when the annuitant is without fault and 

recovery would be against equity and good conscience. Id. (citing 5 U.S.C. 

§ 8346(b), 5 C.F.R. § 831.1403(a)). Generally, recovery is against equity and 

good conscience when: it would cause financial hardship; the annuitant can show 

that, because of the overpayment, he relinquished a valuable right or changed 

positions for the worse; or recovery would be unconscionable under the 

circumstances. Id. (citing 5 C.F.R. § 831.1403(a)).

¶7 Here, we agree with the administrative judge that the existence and amount 

of the overpayment is not in dispute and is supported by the record. ID at 3; IAF, 

Tab 6 at 10. We also agree with the administrative judge that the appellant was 

without fault in creating or contributing to the overpayment, which was due to 

OPM’s failure to timely adjust his annuity after he requested to provide an 

increased survivor annuity for his spouse. ID at 4; IAF, Tab 6 at 20, 27. Thus, 

the only issue for us to decide is whether the appellant is entitled to a waiver 

based upon equity and good conscience. The appellant does not assert that 

recovery of the annuity would cause him financial hardship or that he 

relinquished a valuable right or changed positions for the worse. IAF, Tab 13. 

We therefore only must determine whether the appellant has shown that he is 

entitled to a waiver based upon the fact that recovery of the overpayment would 

be unconscionable. As explained below, we find that the appellant has not shown 

that he is entitled to a waiver on this basis.

¶8 The Board will consider all relevant factors under a 

“totality-of-the-circumstances” approach to determine whether recovery of an 

annuity overpayment is unconscionable. Spinella v. Office of Personnel 

Management, 109 M.S.P.R. 185, ¶ 7 (2008). The unconscionability standard is a 

high one, and a waiver based on this standard will be granted only under

exceptional circumstances. Id. Such circumstances include, but are not limited 

to, cases where there has been an exceptionally lengthy delay by OPM in 

adjusting an annuity, or where OPM is otherwise grossly negligent in handling 
6

the case. Id. Further, egregious delay by OPM may justify a finding that 

recovery would be unconscionable. Id. However, a lengthy delay in adjusting an 

annuity is not by itself a finding of unconsionability. Id., ¶ 9.

¶9 We find that OPM’s 62-month delay in processing the appellant’s request 

for an increased survivor annuity was lengthy and OPM did not justify the delay. 

However, we find that the length of the delay is insufficient on its own to 

establish that recovery of the overpayment would be unconscionable. The Board 

has previously found that a 55-month delay between the appellant’s election and 

the processing of the election was, based on the totality of the circumstances,

egregious and that recovery was thus unconscionable. Cassity v. Office of 

Personnel Management, 55 M.S.P.R. 25, 28-29 (1992), overruled on other 

grounds by Steele v. Office of Personnel Management, 57 M.S.P.R. 458, 461-63 

(1993). Conversely, the Board has found that a 79-month delay in correcting an 

appellant’s high-3 average salary and adjusting his annuity did not constitute

gross negligence and that, absent other exceptional circumstances, recovery of the 

resulting overpayment was not unconscionable. Spinella, 109 M.S.P.R. 185, ¶ 10. 

Thus, although we do not absolve OPM of its unexplained failure to adjust the 

appellant’s annuity, we must consider other factors in determining whether 

recovery of the overpayment would be unconscionable. 

¶10 First, we find that the appellant’s choice to confirm his election after OPM 

notified him that he would incur an additional overpayment weighs against a 

finding that recovery is unconscionable. In August 2014, OPM notified the 

appellant that, if he still wanted to change his survivor annuity election, he should 

make the required deposit covering the first 18 months after his retirement. IAF, 

Tab 6 at 20-22. OPM also stated that if the appellant made this deposit, it would 

then calculate the overpayment he owed for the period after the first 18 months 

after his retirement. Id. at 22. If the appellant did not want to incur an additional 

overpayment, he could have chosen not to change his election. However, he paid
7

the initial deposit and pursued his election, despite having been notified that he 

would later be required to repay an additional overpayment. Id. at 15, 22.

¶11 Second, we find the fact that the overpayment occurred after the appellant 

made a voluntary election that was not an attempt to remedy any prior errors also 

weighs against a finding that recovery is unconscionable. Although he initially 

elected a partial survivor annuity at retirement, the appellant voluntarily decided

to change this annuity to a full survivor annuity. IAF, Tab 6 at 27; see 5 C.F.R. 

§ 831.622(b)(1). The appellant does not claim that this change was an attempt to 

remedy any prior errors. The U.S. Court of Appeals for the Federal Circuit has 

held that recovery of an overpayment is not against equity and good conscience 

when the overpayment resulted from the voluntary acts of the appellant. Day v. 

Office of Personnel Management, 873 F.2d 291, 293 (Fed. Cir. 1989) (finding that 

recovery of an overpayment was not against equity and good conscience where 

the overpayment resulted from the appellant’s voluntary acceptance of his 

restoration to duty); see Day v. Office of Personnel Management, 833 F.2d 1580, 

1581 (Fed. Cir. 1987). Moreover, OPM’s Policy Guidelines state that recovery of 

overpayments caused by a nonremedial voluntary election with a retroactive

effective date is automatically not against equity and good conscience. Policy 

Guidelines on the Disposition of Overpayments under the Civil Service 

Retirement System and Federal Employees’ Retirement System § I.C.5.d (1995) 

(hereinafter Policy Guidelines), located in IAF, Tab 6 at 42-76. The Board has 

held that the Policy Guidelines are entitled to great deference. See, e.g., Hunter 

v. Office of Personnel Management, 109 M.S.P.R. 514, ¶ 14 (2008), aff’d, No. 

2008-3354, 2009 WL 174169 (Fed. Cir. Jan. 27, 2009). Thus, we find the 

voluntary and retroactive nature of the appellant’s election weighs against a 

finding that recovery would be unconscionable.

¶12 We additionally find that OPM’s actions after its discovery of the 

overpayment weigh against a finding that collection of the overpayment would be 

unconscionable. After OPM formally acknowledged the appellant’s application 
8

in August 2014, and he paid the deposit for the 18 months after his retirement, 

OPM issued a notice in September 2014 that informed him of the additional 

overpayment that he owed. IAF, Tab 6 at 15. The appellant requested a waiver 

of the overpayment at the end of September 2014. Id. at 11-12. OPM issued its 

reconsideration decision at the end of February 2015. Id. at 6-9. We find that 

OPM’s response after August 2014 constitutes relatively prompt action and thus 

find that the response time weighs against a finding that recovery would be 

unconscionable.

5

 See Taylor v. Office of Personnel Management, 87 M.S.P.R. 

214, ¶ 20 (2000).

¶13 Finally, although the appellant asserts that OPM’s delay has resulted in an 

additional service charge and additional interest that was added to his second 

overpayment, this is not the case. PFR File, Tab 3 at 6-7. As required by 

regulation, the overpayment of $9,289.50 for the appellant’s first 18 months after 

retirement included a principal of $3,404.83, interest of $423.61, and a 24.5% 

service charge of $5,461.06 (election survivor base amount of $44,835.03 – prior 

survivor base amount of $22,545.00 x 24.5%). IAF, Tab 6 at 22; see 5 C.F.R. 

§§ 831.622(b)(1), 831.662. Conversely, the appellant’s overpayment for the time 

after the first 18 months was calculated strictly by subtracting the gross annuity 

that was due to him if he had elected the maximum survivor annuity from the 

annuity that was paid to him during that same period. IAF, Tab 6 at 10-11. Thus, 

although the appellant already paid interest and a service charge as part of the 

 5 Policy Guidelines § 1.C.4. provides that individuals who know or suspect that they are 

receiving overpayments are expected to set aside the amount overpaid pending 

recoupment and that, absent exceptional circumstances, recovery of such overpayments 

is not against equity and good conscience. IAF, Tab 6 at 53; see Zucker v. Office of 

Personnel Management, 114 M.S.P.R. 288, ¶ 7 (2010). Here, the appellant stated that

he assumed that his request was denied after OPM did not respond to his April 2011 

submission. IAF, Tab 6 at 14. Because we find that recovery of the overpayment is 

otherwise not against equity and good conscience, we need not address whether the 

appellant should have set aside the overpayment amount.
9

deposit to cover the first 18 months after his retirement, the overpayment at issue

does not include these additional charges.

¶14 In light of the foregoing, including our consideration of the totality of the 

circumstances, and the fact that the unconscionability criterion is a high standard 

justifying waiver only under exceptional circumstances, we find that the appellant 

has failed to meet his burden. Accordingly, we deny his petition for review and 

affirm the initial decision. 6

NOTICE TO THE APPELLANT REGARDING

YOUR FURTHER REVIEW RIGHTS

You have the right to request review of this final decision by the United 

States Court of Appeals for the Federal Circuit. You must submit your request to 

the court at the following address: 

United States Court of Appeals

for the Federal Circuit

717 Madison Place, N.W.

Washington, DC 20439

The court must receive your request for review no later than 60 calendar days 

after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec. 27, 

2012). If you choose to file, be very careful to file on time. The court has held 

that normally it does not have the authority to waive this statutory deadline and 

that filings that do not comply with the deadline must be dismissed. See Pinat v. 

Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991). 

If you need further information about your right to appeal this decision to 

court, you should refer to the Federal law that gives you this right. It is found in 

title 5 of the United States Code, section 7703 (5 U.S.C. § 7703) (as rev. eff. Dec. 

27, 2012). You may read this law as well as other sections of the United States 

 6 The appellant has not requested an adjustment of the repayment schedule and has not 

submitted either a financial resources questionnaire or other financial data. 

Accordingly, we do not address the issue of whether the appellant is entitled to an 

adjustment of the repayment schedule based on financial hardship.
10

Code, at our website, http://www.mspb.gov/appeals/uscode.htm. Additional 

information is available at the court’s website, www.cafc.uscourts.gov. Of 

particular relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” 

which is contained within the court’s Rules of Practice, and Forms 5, 6, and 11.

If you are interested in securing pro bono representation for an appeal to 

the United States Court of Appeals for the Federal Circuit, you may visit our 

website at http://www.mspb.gov/probono for information regarding pro bono 

representation for Merit Systems Protection Board appellants before the Federal 

Circuit. The Merit Systems Protection Board neither endorses the services 

provided by any attorney nor warrants that any attorney will accept representation 

in a given case. 

FOR THE BOARD:

Washington, D.C.

______________________________

William D. Spencer

Clerk of the Board