Court Opinion

ID: 3187377
Source: CourtListenerOpinion
Date Created: 2016-03-21 21:00:33.419927+00
Date Added: 2024-06-11T13:29:10.074537
License: Public Domain

UNITED STATES OF AMERICA
                        MERIT SYSTEMS PROTECTION BOARD

     BOBBY SWAIN,                                    DOCKET NUMBER
                         Appellant,                  AT-831M-15-0544-I-1

                  v.

     OFFICE OF PERSONNEL                             DATE: March 21, 2016
       MANAGEMENT,
                   Agency.

                  THIS ORDER IS NONPRECEDENTIAL 1

           Bobby Swain, Covington, Georgia, pro se.

           Roxann Johnson, Washington, D.C., for the agency.

                                           BEFORE

                              Susan Tsui Grundmann, Chairman
                                 Mark A. Robbins, Member

                                      REMAND ORDER

¶1         The Office of Personnel Management (OPM) has filed a petition for review
     of the initial decision, which found that it failed to establish the existence of a
     Civil Service Retirement System (CSRS) annuity overpayment. For the reasons
     discussed below, we GRANT OPM’s petition for review, VACATE the initial

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        A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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

     decision, and REMAND the case to the regional office for further adjudication in
     accordance with this Order.

                                     BACKGROUND
¶2        The appellant retired from Federal service effective June 4, 2004, under the
     CSRS Offset system. Initial Appeal File (IAF), Tab 5 at 37-41. The appellant
     separately applied for disability benefits with the Social Security Administration
     (SSA), which approved his application and began paying him those benefits in
     December 2004.     IAF, Tab 1 at 8.      OPM issued the appellant notice in
     August 2014, that his CSRS annuity would be offset by $291 each month based
     on his eligibility for Social Security old-age insurance benefits, and it informed
     him that he had received an overpayment of $12,444 because this offset should
     have begun when he turned 62 years old in April 2011.        Id. at 70-74.    OPM
     subsequently rescinded its overpayment notice and issued the appellant an
     amended notice explaining that the offset should have begun in May 2011, the
     month after he turned 62, and that he was overpaid by $12,153. Id. at 25. The
     appellant requested reconsideration from OPM, which issued a final decision
     affirming its finding of an overpayment of $12,153.      Id. at 5-10.   In its final
     decision, OPM explained that, although the appellant was not at fault for causing
     the overpayment, recovery of the overpayment would not be against equity and
     good conscience, and it imposed a 36-month repayment schedule. Id.
¶3        The appellant timely filed an appeal challenging OPM’s determination that
     he had received an overpayment, and arguing in the alternative that the
     overpayment should be waived.         IAF, Tab 1.     Following a hearing, the
     administrative judge issued an initial decision finding that OPM had not
     established the existence of an overpayment. IAF, Tab 14, Initial Decision (ID).
     He found that only Social Security old-age insurance benefits could offset a
     CSRS annuity under 5 U.S.C. § 8349, and thus he concluded that OPM failed to
     prove that the appellant received such benefits beginning in May 2011. ID at 3-5.
                                                                                       3

     Rather, the administrative judge found it undisputed that the appellant received
     Social Security disability insurance benefits beginning in December 2004, and
     that he would continue to receive such benefits until he became eligible for
     old-age insurance benefits upon turning 66.             ID at 4 (citing 20 C.F.R.
     § 404.321(c)(1)) (explaining that disability benefits terminate the month before
     the appellant attains full retirement age), section 404.409(a)). The administrative
     judge thus reversed OPM’s reconsideration decision without addressing whether
     the overpayment should be waived, or whether there should be an adjustment to
     the repayment schedule. ID at 5.
¶4        OPM has filed a petition for review of the initial decision, and the appellant
     has filed an opposition. Petition for Review (PFR) File, Tabs 1, 4.

                                        DISCUSSION
¶5        CSRS     Offset   generally   covers   employees     who   were   hired   after
     December 31, 1983, and were required to make Old Age, Survivor, and Disability
     Insurance payments into the Social Security system. See Wible v. Department of
     the Army, 120 M.S.P.R. 333, ¶ 6 (2013).      When an employee in CSRS Offset
     retires, OPM calculates the retirement annuity using the same method as a CSRS
     employee, but, when the individual becomes eligible to draw Social Security
     payments, the CSRS annuity payment is reduced by the amount of Social Security
     benefit attributed to the covered Government service. Id. This basic principle of
     CSRS Offset is codified at 5 U.S.C. § 8349, which provides in relevant part that
     “if an individual under [5 U.S.C. § 8402(b)(2)] is entitled, or would on proper
     application be entitled, to old-age insurance benefits under title II of the Social
     Security Act, the annuity otherwise payable to such individual shall be reduced
     under this section.”   5 U.S.C. § 8349(a)(1).   The criteria used to calculate an
     annuity under CSRS Offset is located at 5 U.S.C. § 8349(a)(2)-(5).        See also
     5 C.F.R. part 831, subpart J.
                                                                                           4

¶6         In his initial decision, the administrative judge found that only Social
     Security old-age insurance benefit payments can offset a CSRS annuity under
     section 8349.      ID at 3-5.   He further explained that an individual cannot
     simultaneously receive both old-age insurance benefits and disability insurance
     benefits under the Social Security Act, and that disability insurance benefits
     automatically convert to old-age insurance benefits once an individual reaches
     full retirement age. ID at 4. The administrative judge thus concluded that the
     appellant could not have been receiving old-age insurance benefits while he was
     receiving disability insurance benefits and that OPM therefore failed to establish
     that the benefits he received were benefits that would have subjected his CSRS
     annuity to an offset under section 8349.         ID at 4-5.    We disagree with the
     administrative judge that the record was sufficiently developed to make
     this conclusion.
¶7         For purposes of determining the appellant’s annuity offset under 5 U.S.C.
     § 8349, we find that the record is unclear as to whether the appellant was entitled
     to old-age insurance benefits upon turning 62 years old.             Specifically, the
     appellant submitted a decision letter on appeal from SSA informing him that he
     was entitled to Social Security disability benefits retroactive to June 2004. IAF,
     Tab 1. However, in March 2011, SSA provided notice to OPM that the appellant
     was entitled to old-age benefits effective in May 2011.         IAF, Tab 5 at 35. In
     computing the appellant’s annuity, OPM must rely on SSA’s certification of an
     annuitant’s eligibility for old-age insurance benefits. See 5 U.S.C. § 8347(m)(3).
     Accordingly, we remand this appeal for further factual findings regarding the
     appellant’s entitlement to old-age insurance benefits upon turning 62 years old,
     including soliciting information from SSA regarding his entitlement. 2

     2
       The appellant has filed a motion to submit additional evidence in the form of a letter
     from SSA, which he states shows when his disability benefits were converted to old-age
     insurance benefits. PFR File, Tab 7. The agency also has submitted additional
     evidence on review. PFR File, Tab 1. We need not rule on the appellant’s motion or
     consider the agency’s evidence at this time, but such evidence may be relevant to the
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¶8         Additionally, upon our review of the record, it appears that OPM reduced
     the appellant’s monthly CSRS annuity in May 2011.                  IAF, Tab 5 at 32.
     Specifically, OPM’s retirement calculations reflect that the appellant received
     $2,427 per month between December 1, 2008, and April 30, 2011, and that,
     effective May 1, 2011, his monthly annuity was reduced by over $500, to $1,925.
     Id. The appellant submitted corroborating evidence showing a reduction in the
     net annuity payment he received. Id. at 13-15. This reduction coincides with the
     appellant turning 62 years of age. Id. at 37 (reflecting the appellant’s date of
     birth). There are several possible explanations for this reduction 3; the record,
     however, contains no such explanation.         See Sansom v. Office of Personnel
     Management, 62 M.S.P.R. 560, 563 (1994).              Accordingly, on remand, the
     administrative judge also must determine the reason, or reasons, for the $502
     reduction in the appellant’s CSRS annuity payment beginning in May 2011. If
     the administrative judge determines that OPM indeed has proven the existence
     and amount of the overpayment, then he should determine whether the appellant
     has established an entitlement to a waiver of the overpayment or an adjustment in
     the repayment schedule imposed by OPM. See Fearon v. Office of Personnel
     Management, 107 M.S.P.R. 122, ¶¶ 7, 14 (2007), modified on other grounds by
     Alexander v. Office of Personnel Management, 114 M.S.P.R. 122 (2010).

     determination on remand. Therefore, on remand, the administrative judge should afford
     the parties an opportunity to submit their evidence on remand, and he should consider it
     in determining the appellant’s entitlement to old-age benefits.
     3
       OPM’s reconsideration decision, for example, alludes to a mistaken calculation
     concerning the appellant’s post-1956 military service credit. IAF, Tab 5 at 10.
                                                                                   6

                                         ORDER
¶9        For the reasons discussed above, we remand this case to the regional office
     for further adjudication in accordance with this Remand Order.

     FOR THE BOARD:                          ______________________________
                                             William D. Spencer
                                             Clerk of the Board
     Washington, D.C.