Court Opinion

ID: 209892
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:00:58+00
Date Added: 2024-06-11T17:27:58.560010
License: Public Domain

United States Court of Appeals for the Federal Circuit

                                     2007-3180

          LINDA M. SPRINGER, Director, Office of Personnel Management,

                                                          Petitioner,

                                         v.

                                JAMES R. ADKINS,

                                                          Respondent,

                                        and

                     MERIT SYSTEMS PROTECTION BOARD,

                                                          Respondent.

       Dawn S. Conrad, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for petitioner. With
her on the brief were Jeanne E. Davidson, Director, and Todd M. Hughes, Deputy
Director. Of counsel on the brief was Earl A. Sanders, Special Counsel, Office of
General Counsel, Office of Personnel Management.

      Emily Johnson Henn, Covington & Burling, LLP, of Washington, DC, argued for
respondent, James R. Adkins. With her on the brief was Robert A. Long, Jr.

      Calvin M. Morrow, Attorney, Office of the General Counsel, Merit Systems
Protection Board, of Washington, DC, argued for respondent, Merit Systems Protection
Board. With him on the brief were B. Chad Bungard, General Counsel, and Rosa M.
Koppel, Deputy General Counsel.

Appealed from: Merit Systems Protection Board
 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

                                       2007-3180

             LINDA M. SPRINGER, Director, Office of Personnel Management,

                                                            Petitioner,

                                            v.

                                   JAMES R. ADKINS,

                                                            Respondent,

                                           and

                        MERIT SYSTEMS PROTECTION BOARD,

                                                             Respondent.

   Petition for review of the Merit Systems Protection Board, in DE0842050280-R-1.

                               ______________________

                                DECIDED: May 14, 2008
                               _______________________

Before NEWMAN, MAYER and LOURIE, Circuit Judges.

MAYER, Circuit Judge.

          The Office of Personnel Management (“OPM”) appeals the final decision of the

Merit Systems Protection Board in Docket No. DE-0842-05-0280-R-1 granting James R.

Adkins an increased annuity payment under the Federal Employees’ Retirement

System (“FERS”).       Because the board correctly interpreted the statutes governing

FERS in light of Pitsker v. Office of Pers. Mgmt., 234 F.3d 1378 (Fed. Cir. 2000), we

affirm.
                                     BACKGROUND

       Adkins served as a firefighter in the United States Air Force from October 8, 1976

until October 7, 1980. He then served as a civilian federal firefighter for 22 years

spanning December 21, 1981 until December 13, 2003, when disability forced him to

retire at 45 years of age. As a civilian firefighter, a portion of his wages was deposited

into a Civil Service Retirement System (“CSRS”) account until January 3, 1999, after

which his account was converted to a FERS account, and a portion of his wages was

deposited there. Under FERS, firefighters are considered a special employee class

having “duties requiring young and physically able employees” and therefore are

entitled to earlier retirement and an enhanced annuity. S. Rep. No. 99-166, at 6-7

(1985), as reprinted in 1986 U.S.C.C.A.N. 1405, 1411. Therefore FERS required him to

deposit one-half percent more of his wages than he would have if he had been a regular

employee. See 5 U.S.C. § 8422. Upon retiring on disability, Adkins began receiving

retirement benefits in December of 2003.

       In June of 2004, he requested OPM to provide him a comparison of his benefits

as calculated under the disability annuity versus his benefits as they would have been

calculated if he had been well enough to serve as a firefighter until normal retirement.

In a July 26, 2004 letter, OPM responded, “[F]ormer agency records reveal that you had

sufficient creditable Federal service for entitlement to a [non-disability] FERS firefighter

annuity benefit.”   On August 10, 2004, Adkins requested that OPM recalculate his

retirement annuity, but in an initial decision dated February 9, 2005, it denied his

request.    OPM again noted that had he “retired under the firefighters retirement

provisions (and all of [his] civilian service qualified as firefighter service),” his annuity

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 would have been higher than the disability annuity he was receiving. In this way, OPM

 stated that Adkins was receiving the same benefits that federal employees in non-

 hazardous positions were receiving when they retired under disability. Adkins filed a

 timely request for reconsideration on March 7, 2005, again requesting recalculation of

 his annuity. In a final decision dated March 24, 2005, OPM denied his request, stating

 that he lacked the requisite age and years of service for normal, “Immediate Retirement”

 under FERS’ “special Law enforcement/Firefighter provision,” 5 U.S.C. § 8412(d). 1

 Under OPM’s interpretation, section 8412(d) requires the annuitant to have 25 years of

 creditable law enforcement or firefighter service, or at least 20 years of creditable

 service when the annuitant reaches age 50. OPM did not count Adkins’ 4 years of

 military service to reach the 25 year cutoff leaving him ineligible under section

 8412(d)(1). Even though he had 20 years of service at retirement, because he was only

 45 years of age, OPM found him ineligible under section 8412(d)(2) as well.

        Adkins, acting pro se, then appealed this final decision to the Merit Systems

 Protection Board. In an initial decision of the board, an administrative judge affirmed

 OPM’s ruling, after which Adkins timely filed a petition for review to the full board. On

 May 30, 2006, the board denied the petition, but simultaneously reopened the case on

 1
   5 U.S.C. § 8412(d) (Immediate retirement) provides in pertinent part:
  An employee who is separated from the service . . . --
     (1) after completing 25 years of service as a law enforcement officer, member of the
          Capitol Police or Supreme Court Police, firefighter, or nuclear materials courier,
          or any combination of such service totaling at least 25 years, or
     (2) after becoming 50 years of age and completing 20 years of service as a law
          enforcement officer, member of the Capitol Police or Supreme Court Police,
          firefighter, or nuclear materials courier, or any combination of such service
          totaling at least 20 years,
is entitled to an annuity.

 2007-3180                                   3
its own motion to consider whether his disability annuity was originally computed

correctly. The board found that OPM had miscalculated Adkins’ retirement annuity.

Adopting the Pitsker reasoning as it applied to the CSRS retirement program, the board

held that when a firefighter retires under disability, FERS, too, requires computing the

annuity under the enhanced calculus of 5 U.S.C. § 8415(d) without incorporating the

age and time of service requirements of immediate retirement under section 8412(d).

The board then ordered OPM to recalculate Adkins’ annuity using the formula in section

8415(d), retroactive to when he became an annuitant. OPM sought reconsideration,

arguing that the board erred in extending Pitsker to FERS and, specifically, that it

misinterpreted 5 U.S.C. §§ 8415(d) and 8452(d)(1). The board denied the motion, and

OPM appealed to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).

                                     DISCUSSION

      This court must affirm a decision of the Merit Systems Protection Board unless it

is (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

law; (2) obtained without procedures required by law, rule, or regulation having been

followed; or (3) unsupported by substantial evidence. 5 U.S.C. § 7703(c).         OPM’s

challenge to the board’s statutory interpretation presents a question of law which this

court reviews de novo. Lachance v. White, 174 F.3d 1378, 1380 (Fed. Cir. 1999).

“Statutory construction must begin with the language employed by Congress and the

assumption that the ordinary meaning of that language accurately expresses the

legislative purpose.” Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S.

246, 252 (2004) (quoting Park ‘N Fly, Inc. v Dollar Park & Fly, Inc., 469 U.S. 189, 194

(1985)).

2007-3180                                  4
       The question presented in this case is analogous to that which was presented in

Pitsker, 234 F.3d 1378: whether a federal firefighter who retires on disability before

reaching 50 years of age and 20 years of service is entitled to receive an enhanced

annuity computed under 5 U.S.C. § 8415(d) 2 as opposed to 5 U.S.C. § 8452(a) 3 .

Whereas Pitsker concerned a federal law enforcement officer enrolled in the Civil

Service Retirement System (“CSRS”) and forced to retire under disability before fulfilling

the age and time-of-service requirement, the present case concerns a federal firefighter

enrolled in the FERS program and forced to retire under disability before fulfilling the

age and time-of-service requirement. Specifically, as in Pitsker, we review whether the

phrase “computed under section 8415” also requires disability annuitants to satisfy the

immediate retirement age and years of service requirement of the statutes cross-

referenced by 5 U.S.C. § 8415.

2
  5 U.S.C. § 8415(d) (Computation of basic annuity) provides:
The annuity of an employee retiring under subsection (d) or (e) of section 8412 or under
subsection (a), (b), or (c) of section 8425 is--
(1) 1 7/10 percent of that individual’s average pay multiplied by so much of such
individual’s total service as does not exceed 20 years; plus
(2) 1 percent of that individual’s average pay multiplied by so much of such individual’s
total service as exceeds 20 years.
3
  5 U.S.C. § 8452 (Computation of disability annuity) provides in pertinent part:
(a)(1)(A) Except as provided in . . . subsection (b), (c), or (d), the annuity of an annuitant
under this subchapter --
(i) for the period beginning on the date on which such annuity commences . . . and
ending at the end of the twelfth month beginning on or after such date, shall be equal to
60 percent of the annuitant’s average pay; and
(ii) after the end of the period referred to in clause (i), shall be equal to 40 percent of the
annuitant’s average pay.
***
(d)(1) The annuity to which an annuitant is entitled under this section ([after reducing by
the amount of social security disability insurance benefits received]) shall not be less
than the amount of an annuity computed under section 8415 (excluding subsection (g)
of such section).

2007-3180                                     5
      Computation of an annuity for a disabled annuitant under FERS requires leap-

frogging among many complex and related provisions. Like its predecessor CSRS,

FERS has three eligibility criteria: immediate retirement, mandatory retirement, and

disability retirement. Those employees that reach a certain age and years of service in

specified positions (including firefighters) enter mandatory retirement under 5 U.S.C.

§ 8425, while those employees that have 18 months of creditable service but are unable

to continue their employment due to disability enter disability retirement under section

8451. All others may only retire when they reach the age and years of service criteria of

immediate retirement under section 8412. Section 8451 (disability retirement) provides

that “[a]n employee who completes at least 18 months of [creditable service] and has

become disabled shall be retired on the employee’s own application or on application by

the employee’s agency” if the employee is adjudged disabled by OPM. It continues, “(c)

[a]n employee . . . retiring under this section is entitled to an annuity computed under

section 8452.”   Section 8452 (computation of disability annuity) then provides that

subject to a reduction for Social Security disability insurance benefits, the annuity is

generally 60 percent of the annuitant’s average pay for the first year followed by 40

percent thereafter, but that “(d)(1) [t]he annuity to which an annuitant is entitled under

this section . . . shall not be less than the amount of an annuity computed under section

8415.” Section 8415 presents the method of computing a basic annuity, computing an

annuity schedule for normal employees under one formula, while computing the annuity

schedule for certain enumerated employees, including firefighters, under different

formulas.

2007-3180                                   6
       The statutory structure for determining an annuity under FERS is analogous to

that of CSRS discussed in Pitsker. This is not accidental, because FERS was designed

to improve upon CSRS, with the disability section in particular having minimal

differences to CSRS. See, e.g., S. Rep. 99-166, at 21 (1985), as reprinted in 1986

U.S.C.C.A.N. 1405, 1426 (“To minimize differences from the CSRS, the majority of

standards and procedures applicable to [FERS] are identical to those of the CSRS.”).

CSRS has three eligibility sections which FERS mirrors, immediate retirement under

5 U.S.C. § 8336, mandatory separation under 5 U.S.C. § 8335, and disability retirement

under 5 U.S.C. § 8337.      CSRS is the source of FERS’ enhanced treatment of

firefighters and other occupations requiring youthful employees, and both allows them

the same earlier retirement at 50 years of age and 20 years of service, see section

8336(c), and requires them to retire at 57 years of age and 20 years of service, see

section 8335(b). Beginning in 1975, CSRS, like FERS, requires firefighters to deposit a

half-percent larger portion of their salaries into their retirement accounts. See 5 U.S.C.

§ 8334(c). Calculation for disability retirement occurs pursuant to 5 U.S.C. § 8337(a),

which includes a cross-reference to a standard calculation method in 5 U.S.C.

§ 8339(g), but allows the annuity to be “computed under” other enumerated sections

should they result in a higher annuity, such as 5 U.S.C. § 8339(d) which was at issue in

Pitsker.   Section 8339(d) provides a formula for calculating annuities generally for

employees “retiring under” sections 8335(b) (mandatory separation) and 8336(c)

(immediate retirement). This is perfectly analogous to FERS section 8415(d), which

provides a formula for calculating annuities generally for annuitants “retiring under”

sections 8412(d) and (e) (immediate retirement) and 8425(a), (b), and (c) (mandatory

2007-3180                                   7
retirement).   In Pitsker, we held that when calculating an annuity under disability

retirement in section 8339(d) pursuant to the rule in section 8337(a), CSRS disallows

incorporating age and years of service requirements of immediate retirement from

cross-referenced section 8336(c). See Pitsker, 234 F.3d at 1383-84. We reached this

conclusion because of the plain language of the statutes and their legislative intent.

See id. at 1382-84.

       The issue here is that the portion of FERS section 8415 concerning firefighters’

annuities, subsection (d), cross references section 8412(d) (immediate retirement). Just

as in Pitsker, we find that the plain language of the statutes in view of the legislative

intent disallows incorporation of the age and years of service requirements of 8412(d).

At first blush, it may seem appropriate to jump to section 8412(d) and note its age and

years of service requirements which seem to render section 8415(d) inapplicable.

However, there are at least three reasons why incorporating the age and years of

service requirements of section 8412(d) into the calculation of section 8415 violates the

plain language of section 8452.

        The primary reason is that section 8415 begins by stating its general use is in

computing “the annuity of an employee retiring under this subchapter.” “This

subchapter” refers to Chapter 84, Subchapter II, Basic Annuity, which includes section

8412 (immediate retirement), but not section 8451 (disability retirement). An annuitant

retiring under disability retirement is not retiring under immediate retirement. Because

disability retirement includes its own eligibility criteria based entirely on whether an

employee is fit to perform his duties, it is clear therefore that in referencing section 8415

in section 8452(d), Congress did not intend to incorporate the age and years of service

2007-3180                                    8
requirements of immediate retirement under section 8412, but instead intended only to

incorporate the formulas detailed in section 8415. This is analogous to our reasoning in

Pitsker, where we said “[t]he phrase ‘computed under’ in section 8337(a) [disability

retirement in CSRS] requires section 8339(d) [annuity computation] to be used for

calculation only, without regard to section 8339(d)’s cross-references to other eligibility

sections.” Pitsker, 234 F.3d at 1382. Indeed, the argument is stronger in the case of

FERS because Congress removed the reference to eligibility in FERS section 8452(d)

which was in dispute in Pitsker. Compare 5 U.S.C. § 8452(d) (“The annuity . . . shall not

be less than the amount of an annuity computed under section 8415”) with 5 U.S.C.

§8337(a) (“An annuity authorized by this section is computed under section 8339(g) of

this title, unless the employee or Member is eligible for a higher annuity computed under

section 8339(a) through (e), (n), (q), (r), or (s).”) (emphasis added); see also Pitsker,

234 F.3d at 1383.

        Secondly, where Congress intended to incorporate an eligibility requirement, it

said so explicitly, as it did in section 8452(c) which reads:

       Except as provided in subsection (d), the annuity of an annuitant under
       this subchapter [Disability Benefits] shall be computed under section 8415
       if--
       (1) such annuity commences, or is restored [after the annuitant reaches
       62 years of age]; or
       (2) as of the day on which such an annuity commences, or is restored, the
       annuitant satisfies the age and service requirements for entitlement to an
       annuity under section 8412 (other than subsection (g) of such section).

5 U.S.C. § 8452(c) (emphasis added). In both prongs of section 8452(c), the age or

years of service requirement is written directly into the statute. Section 8452(d) has no

such explicit requirement. “Where Congress includes particular language in one section

of a statute but omits it in another section of the same Act, it is generally presumed that

2007-3180                                     9
Congress acts intentionally and purposely in the disparate inclusion or exclusion.”

Russello v. United States, 464 U.S. 16, 23 (1983) (citations omitted).

       Finally, incorporating the age and years of service requirements into this

calculation would produce an absurd result, which is to be avoided if at all possible.

See Pitsker, 234 F.3d at 1383 (citing Haggar Co. v. Helvering, 308 U.S. 389, 394

(1940)). Under an interpretation where the borrowed section 8415 incorporates the

requirements of the cross-referenced section 8412, no firefighter retiring due to disability

under section 8451 would be able to receive the enhanced annuity despite having paid

a higher deduction into the system for which he cannot receive a refund unless he were

simultaneously eligible to immediately retire under the non-disability section 8412.

Indeed, there is no situation in which any portion of section 8415 could apply when

borrowed by section 8452(d) unless the employee is also eligible to retire under section

8412, because each of section 8415’s subsections states that the employee is retiring

under a subchapter or section having the age and service requirements of section 8412.

For example, section 8415(a) states that it applies to “an employee retiring under this

subchapter,” Subchapter II, Basic Annuity, which includes section 8412, and section

8415(d) states that it applies to “an employee retiring under subsection (d) or (e) of

section 8412 or under subsection (a), (b), or (c) of section 8425,” the latter of which

itself requires meeting section 8412 eligibility. A reading requiring the incorporation of

the age and service requirements of 8412 would therefore render section 8452(d) a

nullity. Therefore, we hold that retirement under section 8451 does not incorporate the

age and years of service requirements of section 8412 except where explicitly stated.

2007-3180                                   10
       OPM argues that interpreting section 8452(d) in this way renders section 8452(c)

superfluous because there is no reason a disabled firefighter annuitant meeting its

requirements would need to use that section if he is already entitled to receive

enhanced annuity benefits under sections 8452(d)(1) and 8415(d). This argument is

flawed. Section 8452(c), like section 8452(d), is not limited to firefighters, but applies to

any disabled employee. Unlike section 8452(d), which guarantees the annuity will be at

least as large as one computed under section 8415, section 8452(c) requires calculating

a disabled employee’s annuity under section 8415 if the annuity commences or is

restored when the employee is 62 years of age or is otherwise eligible for immediate

retirement under section 8412. Thus, an employee meeting these 8452(c) criteria will

not have an annuity calculated under the formula of section 8452(a). Section 8452(d),

however, leaves this possibility available if calculating the annuity under section 8452(a)

results in a greater annuity than if calculated under the appropriate subsection of

section 8415.

       OPM also argues that calculating a disabled firefighter’s annuity in this way will

grant him an unfair windfall.      In support, it notes that section 8452(b) requires

recalculation of an annuitant’s benefits at age 62 to convert disability annuitants to

voluntary retirement benefits, while section 8425 would require a working firefighter to

retire at age 57. 4 In that final span of 5 years, a disabled firefighter may use his time on

4
  5 U.S.C. § 8425 provides in relevant part:
(b)(1) A law enforcement officer, firefighter, or nuclear materials courier who is
otherwise eligible for immediate retirement under section 8412(d) shall be separated
from the service on the last day of the month in which that law enforcement officer,
firefighter, or nuclear materials courier, as the case may be, becomes 57 years of age
or completes 20 years of service if then over that age.

2007-3180                                    11
disability retirement as creditable service for use in calculating final benefits under

section 8452(b). Therefore, a disabled firefighter would receive higher benefits than

one who continued working. However, as Adkins rightly argues, a firefighter that was

able to continue working until he was forced to retire at 57, would also have received

periodic step increases in pay on top of cost-of-living adjustments for his service, as well

as any promotions. The disability-retired firefighter in the same span would only receive

cost-of-living adjustments pursuant to section 8452(d)(2). We see no windfall for the

disability-retired firefighter to provide a reason to disregard the plain language of section

8452(d). 5

       Finally, OPM argues that the board erred by extending Pitsker to FERS. While

we disagree, we believe FERS supports the conclusion we reach here on its own, with

or without Pitsker. FERS has the same statutory structure that led us to reason that

“computing under” a formula mentioned in a different section does not incorporate any

eligibility requirements that different section may cross-reference. OPM is correct that

the FERS and CSRS statutes are clearly different in the formulas by which they

calculate annuities, but the actual FERS formulas, which were designed to coordinate

with Social Security, are not at issue in this case. OPM fails to identify any relevant

differences in structure that would prevent us from applying the same reasoning to

FERS as we did with CSRS. Even the operative language we focused on in Pitsker,

5
  We cannot help but observe that, while OPM is concerned about a hypothetical
windfall to a disabled federal firefighter in comparison to an able-bodied firefighter, it is
apparently less concerned that a federal firefighter so injured in the course of his duties
that he is forced to retire is being denied the benefits for which he paid extra each
month.

2007-3180                                    12
“computed under” in CSRS section 8337(a), is identical and serves the same purpose in

FERS section 8452(d).

                                     CONCLUSION

       For the foregoing reasons, we conclude that under the plain language of the

statute, the FERS disability annuity provisions require that a firefighter annuitant’s

benefits be the greater of that which is computed under 5 U.S.C. §§ 8452(a) and

8415(d) without incorporating the age and time of service requirements of section 8412.

Accordingly, the decision of the board is affirmed.

                                       AFFIRMED.

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