STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LEO A. PRICE and ELIZABETH )

1. PRICE, )

   )

   Petitioners, )

   )

   vs. ) CASE NO. 80-1034

   )

   STATE OF FLORIDA, DIVISION )

   OF RETIREMENT, )

   )

   Respondent. )

   )

   
   

   RECOMMENDED ORDER

   
   

   THIS CASE came on for final hearing in Miami, Florida, on August 21, 1980, before the Division of Administrative Hearings and its duly designated Hearing Officer, WILLIAM B. THOMAS. The parties were represented by:

   
   

   APPEARANCES

   
   

   For Petitioners: Leo A. Price and

   Elizabeth R. Price, in pro per For Respondent: Diane K. Keisling, Esquire

   FINDINGS OF FACT

   
   

   1. The petitioners, Leo A. Price and Elizabeth R. Price, are husband and wife. They have been members of the Florida retirement System (FRS) since their transfer on January 1, 1979. Previously, the petitioners were members of the Teachers' Retirement System (TRS) Plan D. In order to transfer to FRS, they moved from TRS Plan D, to TRS Plan E, on December 31, 1978, and then into FRS on January 1, 1979.

      
      

   2. In transferring from TRS to FRS, a member is entitled to a refund of excess TRS contributions. In early 1979, Mr. Price received refund warrants totalling $16,060.61 which represented TRS contributions of $10,138.73 and accrued interest of $5,921.88. In early 1979, Mrs. Price received refund warrants totalling $17,515.03 which represented TRS contributions of $11,383.91 and accrued interest of $6,131.12. The petitioners failed to cash these refund warrants and to date have not negotiated them.

      
      

   3. In November, 1979, the petitioners visited the Division of Retirement and discussed the cashing of these warrants based on questions of taxation. This discussion was followed by a letter dated December 30, 1979, to A. J. McMullian III, State Retirement Director, in which the petitioners again discussed the taxation questions and advised the respondent that they had not cashed the warrants. They asked that new warrants be issued and that they be paid interest on the amount of the warrants for the period of time from the issuance to the cashing of the warrants. By letter dated January 25, 1980, Mr.

      McMullian advised the petitioners to cash the warrants and further told petitioners that interest could not be paid.

      
      

   4. In their petition for an administrative hearing, the petitioners alleged that they were under-refunded; however, at the hearing the parties stipulated that only two issues are presented for resolution:

      
      

      1. Whether the petitioners are entitled to interest on their contributions from July 1, 1978, through December 31, 1978, and

      2. Whether the petitioners are entitled to interest on the total amount of the uncashed warrants from the date of issuance to the present.

         
         

   5. Ruth Sansom, Assistant Bureau Chief, Bureau of Benefits, Division of Retirement, testified that she has worked with TRS and FRS in a supervisory capacity since 1963. In these seventeen years, Section 238.10, Florida Statutes, has consistently been construed as providing for the payment of interest on contributions based on a fiscal year. The fiscal year is from July

      1 to June 30. On June 30 of each year, interest is calculated on the total accumulated contributions then on deposit. If no contributions are on deposit on June 30, no interest is credited for this fiscal year. Since the petitioners received refunds of excess accumulated contributions on December 31, 1978, no interest was paid for the 1978-79 fiscal year because no contributions were on deposit on June 30, 1979. At the time that refund warrants are issued, the funds backing the warrants are transferred from the retirement system trust fund to the Treasurer's Office and the Division earns no more interest on these funds.

      
      

   6. The petitioners contend that they were advised by Leon Burnett of the Division of Retirement not to cash the warrants in their possession pending the outcome of this case. Ruth Sansom testified that it is standard practice to advise members not to cash benefit warrants if the amount of the benefit is in question, but that refund warrants may be cashed and adjustments made in the future.

      
      

   7. In a separate case (Case No. 80-1029), Mr. Price is challenging the amount of his benefit warrants. However, at the hearing in this case the petitioners did not understand the difference between a refund warrant and a benefit warrant, although this subject was discussed at their November, 1979, meeting with Mr. Burnett, and Mr. Price had in his possession both refund warrants and benefit warrants which had not been cashed.

      
      

      CONCLUSIONS OF LAW

      
      

   8. Section 238.10, Florida Statutes, provides:

      
      

      The Division of Retirement, annually, shall allow regular interest on the amount for the preceding year to the credit of each of the funds of the re- tirement system, and to the credit of the individual account therein, if any,

      from the interest and dividends earned from investments.

      In Section 238.01(12), Florida Statutes, regular interest is defined as "interest at such rate as may be set from time to time by the division."

      
      

   9. The Division has historically credited interest on the last day of the fiscal year, which runs from July 1 to June 30. The terms of Section 233.10 require that once a year interest be credited to the individual account, if any exists. Thus, if no account exists on the day when interest is credited, then no interest is payable for the entire year. This interpretation has been consistently followed for the seventeen years that Ms. Sansom has been working with the retirement systems.

      
      

   10. The construction of a statute by the agency charged with its enforcement is accorded considerable weight unless it is clearly contrary to the intent of the statute. Florida Dairy Farmers' Federation v. Borden Co., 155 So.2d 699 (Fla. 1st DCA 1963). Further, the practical construction placed on a statute by an agency, when not in conflict with the Constitution or the plain intent of the act, is of great persuasive force, especially when established by long usage. State ex rel Fronton Exhibition Co. vs. Stein, 144 Fla. 387, 198 So. 82 (1940). Thus, when the construction and application of a statute is supported by the language of the act and by long usage, it should be upheld.

       The petitioners had no TRS account on June 30, 1979. Therefore, they were not entitled to earn interest for the 1978-79 fiscal year.

       
       

   11. As to the second issue, the respondent is under no obligation to pay interest on the amount of the uncashed warrants. There is no statutory authorization for the payment of such interest, and the respondent earned none on these funds.

RECOMMENDATION

BASED UPON the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the petition of Leo A. Price and Elizabeth R. Price,

seeking interest on their contributions for the period of time from July 1,

1978, through December 31, 1978, be denied.

It is further

RECOMMENDED that the claim of the petitioners, Leo A. Price and Elizabeth

R. Price, for interest on the total amount of their uncashed warrants from the date of issuance, be denied.

THIS RECOMMENDED ORDER entered on this 19 day of September, 1980.

WILLIAM B. THOMAS

Hearing Officer

Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301

(904) 488-1779

Filed with the Clerk of the Division of Administrative Hearings this 19th day of September, 1980.

COPIES FURNISHED:

Leo A. Price and Elizabeth R. Price 1000 N.E. 96th Street

Miami, Shores, Florida 33138

Diane R. Keisling, Esquire Cedars Executive Center Suite 207C, Box 81

2639 North Monroe Street Tallahassee, Florida 32303

Docket for Case No: 80-001034

Orders for Case No: 80-001034