Court Opinion

ID: 2793115
Source: CourtListenerOpinion
Date Created: 2015-04-10 21:00:23.58867+00
Date Added: 2024-06-11T11:29:03.792035
License: Public Domain

UNITED STATES OF AMERICA
                       MERIT SYSTEMS PROTECTION BOARD

     DANIEL A. GROVER,                               DOCKET NUMBER
                   Appellant,                        CH-0831-13-2586-B-1

                  v.

     OFFICE OF PERSONNEL                             DATE: April 10, 2015
       MANAGEMENT,
                   Agency.

             THIS FINAL ORDER IS NO NPRECEDENTIAL 1

           Norman Jackman, Esquire, Cambridge, Massachusetts, for the appellant.

           Karla W. Yeakle, 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 remand initial decision,
     which affirmed the initial decision of the Office of Personnel Management (OPM)
     regarding the calculation of his retirement annuity. Generally, we grant petitions
     such as this one only when: the initial decision contains erroneous findings of

     1
        A nonprecedential order is one that the Board has determined does not add
     sign ificantly 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 Parties may cite nonprecedential orders,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

     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
     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, and based on the following points and authorities, 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 remand initial decision, which is now the Board’s final decision. 5 C.F.R.
     § 1201.113(b).
¶2        The appellant is a former Customs Officer who retired from the Department
     of Homeland Security, Customs and Border Protection, on August 2, 2008.
     Remand Appeal File (RAF), Tab 6 at 3. For retirement purposes, he was covered
     under the Civil Service Retirement System (CSRS), though because of a break in
     service after December 31, 1986, he was under the CSRS Offset plan. Id. at 3-4.
     Additionally, he participated in “premium conversion,” wherein he paid his share
     of health insurance premiums using pre-tax dollars, reducing the amount of his
     income that would count for retirement purposes. See id. at 4; RAF, Tab 20 at 7.
     As a Customs Officer, inclusion of overtime in his retirement deductions was
     subject to the limitations set forth in the Customs Officers’ Pay Reform Act of
     1993 (COPRA), Pub. L. No. 103-66, § 13812, 107 Stat. 317, 670 (Aug. 10, 1993).
¶3        The appellant’s retirement annuity was calculated pursuant to the provisions
     of 5 U.S.C. § 8339(a). A basic element of that computation is “average pay,”
     which is the largest annual rate resulting from averaging an annuitant’s rates of
     basic pay in effect over any 3 consecutive years of creditable service.
     See 5 U.S.C. § 8331(4).
                                                                                       3

¶4         OPM has recalculated the appellant’s annuity several times since his
     retirement in order to correct multiple errors.     When he retired, the National
     Finance Center (NFC) prepared and certified his Individual Retirement Record
     (IRR), Standard Form 2806. 2 RAF, Tab 6 at 3; see id., Attachment (Att.) 1. OPM
     determined his high-three average pay to be $83,164. RAF, Tab 6 at 5; see id.,
     Att. 3.   OPM subsequently found this calculation to be incorrect because it did
     not accurately reflect his salary for 2008, compare id., Att. 3, with Att. 5, and
     recomputed his average pay to be $88,450, RAF, Tab 6 at 5; see id., Att. 5. This
     calculation was also erroneous, as OPM applied the wrong conversion factor for
     some of his earnings for 2008, artificially inflating his pay. 3   See RAF, Tab 6 at
     5.
¶5         The appellant continued to allege that his average pay calculations were
     wrong, and on September 18, 2009, OPM issued a final decision determining his
     annuity, which he appealed to the Board.         Initial Appeal File (IAF), Tab 1,
     Exhibit (Ex.) 3.    While the appeal was in process, OPM rescinded the final
     decision. Id. The administrative judge thus dismissed the appeal for a lack of
     jurisdiction.   Grover v. Office of Personnel Management, MSPB Docket No.
     CH-0831-10-0006-I-1, Initial Decision (Nov. 10, 2009).
¶6         The appellant filed a second Board appeal on March 29, 2011. Grover v.
     Office of Personnel Management, MSPB Docket No. CH-0831-11-0458-I-1,
     Initial Decision at 1 (Dec. 9, 2011) (hereinafter Grover II). On the same day, the
     NFC certified a corrected breakdown of the appellant’s premium conversion
     retirement deductions. See RAF, Tab 6, Att. 7. OPM issued an initial decision on
     September 20, 2011, recalculating the appellant’s annuity based on a new average

     2
        The initial IRRs from NFC did not contain information about the appellant’s
     retirement deductions under premium conversion; they were corrected on November 17,
     2008. RAF, Tab 6 at 5, Tab 20 at 7; see RAF, Tab 6, Attachment (Att.) 2.
     3
       OPM bases average pay on retirement deductions as reflected on the IRR. RAF, Tab 6
     at 4-5; see, e.g., id., Atts. 4, 6.
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     pay of $90,542.      Grover II at 2; RAF, Tab 6 at 5; see id., Att. 8.            The
     administrative judge dismissed the appeal for lack of jurisdiction on December 9,
     2011, because OPM had not yet issued the reconsideration decision requested by
     the appellant. Grover II at 2.
¶7           OPM rescinded its September 20, 2011 initial decision on September 10,
     2012,     again   finding   the    appellant’s    annuity     had   been    improperly
     calculated.    See IAF, Tab 1 at 11.      OPM explained that its computation was
     inconsistent with COPRA and advised the appellant that he would be issued a
     new initial decision with reconsideration rights.       Id.     On May 31, 2013, the
     appellant asked OPM to issue a decision. Id. at 12. After failing to receive a
     response from OPM, he filed the instant appeal on August 19, 2013. IAF, Tab 1.
     On October 2, 2013, OPM issued an initial decision recalculating his average pay
     as $88,964. IAF, Tab 13 at 5-6, 9; RAF, Tab 6 at 6; see id., Atts. 10-11. The
     appellant did not request reconsideration of that decision, and the administrative
     judge dismissed the appeal for lack of jurisdiction on December 2, 2013. IAF,
     Tab 17 at 4. On review, we found OPM’s October 2, 2013 initial decision to be
     tantamount to a final decision and remanded the matter to the regional office for
     adjudication on the merits.       See Grover v. Office of Personnel Management,
     MSPB Docket No. CH-0831-13-2586-I-1, Remand Order at 4 (Mar. 7, 2014).
¶8           While the appeal was pending on remand, OPM issued an April 3, 2014
     letter explaining why its October 2, 2013 initial decision was correct. RAF, Tab
     6 at 3-7.     The administrative judge granted the appellant’s motion to compel
     discovery, 4 see RAF, Tabs 5, 7, and he received approximately 1500 pages of
     documents in connection with his request, RAF, Tab 9 at 4. He did not, however,
     file   any new     information    with   the   administrative    judge   correcting or

     4
       The administrative judge specifically required OPM to provide “[a]ll such documents
     that are related in any way to the determination of the amount of Appellant’s annuity,
     including, but not lim ited to, the entire file on Appellant maintained at Boyers,
     Pennsylvania, whether in hard copy or stored in computers.” RAF, Tab 5 at 5.
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      supplementing the data shown on his IRR. The administrative judge thus issued
      an initial decision affirming OPM’s October 2, 2013 initial decision. RAF, Tab
      22, Initial Decision (ID) at 2, 8. The appeal is again before the Board on review.
      Remand Petition for Review (RPFR) File, Tab 1.
¶9         The appellant contends that the appeal was incorrectly decided. He argued
      before the administrative judge and now asserts that, pursuant to 19 C.F.R.
      § 24.16(b)(13), his high-three average pay should include $17,500 in overtime
      pay (representing the statutory cap for such pay). 5 See RAF, Tabs 15, 17. He
      argues that, based on his pay stubs for the years 2005 through 2008, his
      high-three average pay should be $106,278.57. See RPFR File, Tab 1 at 5; see
      also RAF, Tab 15, Ex. 2. OPM averred and continues to assert that the October
      2, 2013 computation to determine average pay was correct and included all
      allowable overtime pay. See RAF, Tab 12 at 1-2, Tab 16 at 4-5, Tab 20 at 5-8;
      RPFR File, Tab 4.
¶10        OPM’s calculations are correct based on the IRRs that NFC submitted.
      Because he was under CSRS Offset, OPM was required to reduce the appellant’s
      CSRS annuity pursuant to Title II of the Social Security Act. 6          5 U.S.C.
      § 8349(a)(1); 5 C.F.R. § 831.1005. To compensate for the reduced annuity, his

      5
        COPRA capped the overtime and premium pay that any customs officer could receive
      during a fiscal year. See COPRA § 13811(a) (codified at 19 U.S.C. § 267(c)(1)). For
      fiscal year 2005, the cap was raised to $35,000. Department of Homeland Security
      Appropriations Bill, 2005, Pub. L. No. 108-334, 118 Stat. 1298 (Oct. 18, 2004).
      Overtime for purposes of calculating “basic pay” under CSRS cannot “exceed 50
      percent of any statutory maximum in overtime pay for customs officers which is in
      effect for the year involved.” 5 U.S.C. § 8331(3)(G).
      6
        Federal employees who became subject to CSRS on or after January 1, 1984, are
      subject to mandatory Social Security coverage under the Social Security Amendments
      of 1983, Pub. L. No. 98-21, § 101, 97 Stat. 65, 70 (Apr. 20, 1983) (codified at
      42 U.S.C. § 410(a)(5)). Because the appellant separated from employment for more
      than a year between November 30, 1986, and December 12, 1988, he was placed in the
      CSRS Offset plan and had to pay Social Security taxes plus a reduced retirement
      deduction to the CSRS fund. RAF, Tab 20 at 7; see 42 U.S.C. § 410(a)(5)(B)(i)(I);
      5 U.S.C. § 8349.
                                                                                          6

      retirement deductions were taken at a lower rate after he returned to service on
      December 12, 1988. RAF, Tab 6 at 4. The appellant was also under premium
      conversion starting in 2003 and used pre-tax dollars to pay his health insurance
      premiums.    Pre-tax dollars, however, are subject to the full CSRS retirement
      deductions rather than the lesser CSRS Offset deductions.            Id.   Thus, the
      appellant’s IRR shows two separate line items representing retirement deductions
      for 2003 and each year thereafter. One line item represents the reduced CSRS
      deductions, taken at .80 percent (1.3% effective July 6, 2008), and the other
      represents regular deductions of 7.0 percent (7.5% effective July 6, 2008). Id.;
      see id., Att. 2. As with all Customs employees under COPRA, OPM computed
      the appellant’s high-three average pay based on a formula that incorporates
      retirement deductions rather than actual earnings. 7 RAF, Tab 6 at 4-5, Tab 20 at
      7-8; see RAF, Tab 6, Att. 11.
¶11        The appellant asserts, as he did before the administrative judge, that OPM
      failed to include in its calculation all of the overtime to which he was entitled. It
      is undisputed that certain overtime pay for customs officers is considered basic
      pay for retirement purposes. 19 C.F.R. § 24.16(b)(13) (“Overtime pay, within the
      limits prescribed by the Act, is includable for Federal retirement benefit
      purposes.”). Because retirement deductions are withheld as a percentage of basic
      pay, they would have necessarily included all allowable overtime pay. We also
      note that the appellant’s certified IRR states that overtime pay up to the statutory
      maximums was included in his retirement deductions. See RAF, Tab 6, Att. 2.
¶12        Payments of money from the civil service retirement fund are limited to
      those authorized by statute.         See Office of Personnel Management v.

      7
        OPM explained that, under COPRA, average salary is based on retirement deductions
      converted to earnings. RAF, Tab 6 at 4. Indeed, only pay subject to retirement
      deductions may be used to compute average pay for retirement purposes. RAF, Tab 20
      at 7. Using these retirement deductions rather than actual earnings to compute average
      pay allows OPM to readily account for any additional pay beyond base pay that is
      subject to retirement deductions. See id. at 8.
                                                                                  7

Richmond, 496 U.S. 414, 416, 434 (1990).         Neither the Board nor OPM has
discretion to change the eligibility requirements for any retirement benefit. See
Allen v. Office of Personnel Management, 77 M.S.P.R. 212, 216 (1998).
Although it is unfortunate that the appellant had to endure multiple recalculations
of his annuity, he nevertheless failed to meet his burden to prove that OPM’s final
calculations were erroneous and that he is entitled to a larger annuity.        See
Sanderson v. Office of Personnel Management, 72 M.S.P.R. 311, 317 (1996) (it is
well settled that an appellant bears the burden of proving by preponderant
evidence his entitlement to a civil service retirement annuity), aff’d, 129 F.3d 134
(Fed. Cir. 1997) (Table); 5 C.F.R. § 1201.56(a)(2).    Accordingly, we affirm the
remand initial decision.

                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.
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Dec. 27, 2012). You may read this law as well as other sections of the United
States   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 your court
appeal, you may visit our website at http://www.mspb.gov/probono for a list of
attorneys who have expressed interest in providing pro bono representation for
Merit Systems Protection Board appellants before the court. 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:                             ______________________________
                                           William D. Spencer
                                           Clerk of the Board
Washington, D.C.