Court Opinion

ID: 9384808
Source: CourtListenerOpinion
Date Created: 2023-04-05 06:00:16.967932+00
Date Added: 2024-06-11T17:17:56.600326
License: Public Domain

UNITED STATES OF AMERICA
                   MERIT SYSTEMS PROTECTION BOARD

MARY A. FREEMAN,                                DOCKET NUMBER
             Appellant,                         AT-0831-17-0566-I-1

             v.

OFFICE OF PERSONNEL                             DATE: April 3, 2023
  MANAGEMENT,
              Agency.

        THIS FINAL ORDER IS NONPRECEDENTIAL 1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
   A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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
  Member Leavitt’s name is included in decisions on which the three -member Board
completed the voting process prior to his March 1, 2023 departure.
                                                                                           2

                                         FINAL ORDER

¶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.

                                         BACKGROUND
¶2         T he 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 (affidavit of the appellant) . The appellant further

     3
       Although the appellant mistakenly submitted the application form for a deferred
     retirement under the Federal Employees Retirement System, IAF, Tab 6 at 11, OPM
     processed the form as an application for a deferred retirement under CSRS. Id. at 6, 10.
                                                                                            3

     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.

     4
      The appellant does not identify these agencies by name but appears to be referring to
     OPM and DVA. IAF, Tab 14 at 3.
     5
       On her Board appeal form and in her request for reconsideration of OPM’s initial
     decision, the appellant provides a somewhat different account of the information she
     received regarding her eligibility for a deferred retirement annuity. IAF, Tab 1 at 5, 7;
     Tab 6 at 9. In those submissions, she states that she was told that she would be entitled
     to a deferred retirement annuity at age 62 without redepositing the refund. Id.
                                                                                       4

                                        ANALYSIS
     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 permitte d
     by law. See Office of Personnel Management v. Richmond, 496 U.S. 414, 416,
     434 (1990) (holding 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)
     (holding that, although there was no evidence that the appellant was aware that he
     would forfeit any retirement benefits if he withdrew his retirement contributions,
     OPM could not be required to pay the annuity because he did not meet the
     statutory requirements), 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 particu lar
     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 err oneous information
     provided by Government employees. ID at 5 (citing Froom v. Office of Personnel
                                                                                        5

      Management, 107 M.S.P.R. 607 (2008) and Cortinas v. Office of Personnel
      Management, 32 M.S.P.R. 513 (1987)). Significantly, however, in those cases,
      the relevant statutory provisions did not prevent the remedia l 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 rev ersed and
                                                                                            6

      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 unt il 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);

      6
        There are two statutory exceptions to the general rule that receipt of retirement
      contributions voids an interest in the CSRS until reemployment in the Federal service.
      ID at 3-4. The first, 5 U.S.C. § 8343a, provides for alternative forms of annuities to
      employees with life-threatening afflictions or other critical medical conditions at the
      time of retirement. The second, 5 U.S.C. § 8334(d)(2), addresses annuity-eligible
      employees who do not make the deposit required to receive service credit. The
      circumstances alleged by the appellant do not fall within the purview of either of these
      statutory provisions.
      An individual also may avoid the rule that receipt of a refund of retirement
      contributions voids annuity rights if she was mentally incompetent when she applied for
      the refund. See Yarbrough v. Office of Personnel Management, 770 F.2d 1056, 1060
      (Fed. Cir. 1985). Here, the appellant has not alleged that she was mentally incompetent
      when she signed the refund application.
                                                                                            7

      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) (holding that, because the
      appellant requested and received a refund of her contributions to the civil service
      retirement fund, and she has not been reemployed in a covered position in the
      Federal service, any right she had to an annuity was extinguished).            In other
      words, 5 U.S.C. § 8334(d) precludes the remedy ordered by the administrative
      judge.      Accordingly, we reverse the initial decision and sustain OPM’s
      reconsideration decision denying the appellant’s request for a deferred retirement
      annuity.

                                NOTICE OF APPEAL RIGHTS 7
               The initial decision, as supplemented by this Final Order, constitutes the
      Board’s final decision in this matter.      5 C.F.R. § 1201.113.      You may obtain
      review of this final decision. 5 U.S.C. § 7703(a)(1). By statute, the nature of
      your claims determines the time limit for seeking such review and the appropriate
      forum with which to file. 5 U.S.C. § 7703(b). Although we offer the following
      summary of available appeal rights, the Merit Systems Protection Board does not
      provide legal advice on which option is most appropriate for your situation and
      the rights described below do not represent a statement of how courts will rule
      regarding which cases fall within their jurisdiction. If you wish to seek review of

      7
        Since the issuance of the initial decision in this matter, the Board may have updated
      the notice of review rights included in final decisions. As indicated in the notice, the
      Board cannot advise which option is most appropriate in any matter.
                                                                                        8

this final decision, you should immediately review the law applicable to your
claims and carefully follow all filing time limits and requirements. Failure to file
within the applicable time limit may result in the dismissal of your case by your
chosen forum.
      Please read carefully each of the three main possible choices of review
below to decide which one applies to your particular case. If you have questions
about whether a particular forum is the appropriate one to review your case, you
should contact that forum for more information.

      (1) Judicial review in general. As a general rule, an appellant seeking
judicial review of a final Board order must file a petition for review with the U.S.
Court of Appeals for the Federal Circuit, which must be received by the court
within 60 calendar days of the date of issuance of this decision.               5 U.S.C.
§ 7703(b)(1)(A).
      If you submit a petition for review to the U.S. Court of Appeals for the
Federal   Circuit,   you   must   submit   your   petition   to   the   court    at   the
following address:
                              U.S. Court of Appeals
                              for the Federal Circuit
                             717 Madison Place, N.W.
                             Washington, D.C. 20439

      Additional information about the U.S. Court of Appeals for the Federal
Circuit 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, 10, and 11.
      If you are interested in securing pro bono representation for an appeal to
the U.S. 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
                                                                                    9

Board neither endorses the services provided by any att orney nor warrants that
any attorney will accept representation in a given case.

      (2) Judicial   or   EEOC     review   of   cases     involving    a   claim   of
discrimination. This option applies to you only if you have claimed that you
were affected by an action that is appealable to the Board and that such action
was based, in whole or in part, on unlawful discrimination. If so, you may obtain
judicial review of this decision—including a disposition of your discrimination
claims—by filing a civil action with an appropriate U.S. district court (not the
U.S. Court of Appeals for the Federal Circuit), within 30 calendar days after you
receive this decision.     5 U.S.C. § 7703(b)(2); see Perry v. Merit Systems
Protection Board, 582 U.S. ____ , 137 S. Ct. 1975 (2017).              If you have a
representative in this case, and your representative receives this decision before
you do, then you must file with the district court no later than 30 calendar days
after your representative receives this decision. If the action involves a claim of
discrimination based on race, color, religion, sex, national origin, or a disabling
condition, you may be entitled to representation by a court-appointed lawyer and
to waiver of any requirement of prepayment of fees, costs, or other security. See
42 U.S.C. § 2000e-5(f) and 29 U.S.C. § 794a.
      Contact information for U.S. district courts can be found at their respective
websites, which can be accessed through the link below:
      http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.
      Alternatively, you may request review by the Equal Employment
Opportunity Commission (EEOC) of your discrimination claims only, excluding
all other issues. 5 U.S.C. § 7702(b)(1). You must file any such request with the
EEOC’s Office of Federal Operations within 30 calendar days after you receive
this decision. 5 U.S.C. § 7702(b)(1). If you have a representative in this case,
and your representative receives this decision before you do, then you must file
                                                                                     10

with the EEOC no later than 30 calendar days after your representative receives
this decision.
      If you submit a request for review to the EEOC by regular U.S. mail, the
address of the EEOC is:
                            Office of Federal Operations
                     Equal Employment Opportunity Commission
                                  P.O. Box 77960
                             Washington, D.C. 20013

      If you submit a request for review to the EEOC via commercial delivery or
by a method requiring a signature, it must be addressed to:
                            Office of Federal Operations
                     Equal Employment Opportunity Commission
                                 131 M Street, N.E.
                                   Suite 5SW12G
                             Washington, D.C. 20507

      (3) Judicial    review    pursuant     to   the    Whistleblower      Protection
Enhancement Act of 2012. This option applies to you only if you have raised
claims of reprisal for whistleblowing disclosures under 5 U.S.C. § 2302(b)(8) or
other protected activities listed in 5 U.S.C. § 2302(b)(9)(A)(i), (B), (C), or (D).
If so, and your judicial petition for review “raises no challenge to the Board’s
disposition of allegations of a prohibited personnel practice described in section
2302(b) other than practices described in section 2302(b)(8), or 2302(b)(9)(A)(i),
(B), (C), or (D),” then you may file a petition for judicial review either with the
U.S. Court of Appeals for the Federal Circuit or any court of appeals of
competent jurisdiction. 8   The court of appeals must receive your petition for

8
   The original statutory provision that provided for judicial review of certain
whistleblower claims by any court of appeals of competent jurisdiction expired on
December 27, 2017. The All Circuit Review Act, signed into law by the President on
July 7, 2018, permanently allows appellants to file petitions for judicial review of
MSPB decisions in certain whistleblower reprisal cases with the U.S. Court of Appeals
for the Federal Circuit or any other circuit court of appeals of competent jurisdiction.
                                                                                 11

review within 60 days of the date of issuance of this decision.           5 U.S.C.
§ 7703(b)(1)(B).
      If you submit a petition for judicial review to the U.S. Court of Appeals for
the Federal Circuit, you must submit your petition to the court at the
following address:
                             U.S. Court of Appeals
                             for the Federal Circuit
                            717 Madison Place, N.W.
                            Washington, D.C. 20439

      Additional information about the U.S. Court of Appeals for the Federal
Circuit 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, 10, and 11.
      If you are interested in securing pro bono representation for an appeal to
the U.S. 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
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.

The All Circuit Review Act is retroactive to November 26, 2017. Pub. L. No. 115-195,
132 Stat. 1510.
                                                                       12

      Contact information for the courts of appeals can be found at their
respective websites, which can be accessed through the link below:
      http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.

FOR THE BOARD:                                  /s/ for
                                        Jennifer Everling
                                        Acting Clerk of the Board
Washington, D.C.