STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS
THOMAS L. WADE, )
)
Petitioner, )
)
vs. ) CASE NO. 90-5769
) DIVISION OF RETIREMENT, )
)
Respondent. )
)
RECOMMENDED ORDER
Upon due notice, this cause came on for formal hearing on February 11, 1991 in Tallahassee, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.
APPEARANCES
FOR PETITIONER: Thomas L. Wade, pro se
602 Concord Road
Tallahassee, Florida 32308
FOR RESPONDENT: Larry D. Scott
Assistant Division Attorney Division of Retirement Legal Office 2639 North Monroe Street Tallahassee, Florida 32399-1560
STATEMENT OF THE ISSUE(S)
Whether or not Respondent has correctly computed Petitioner's retirement
pay.
PRELIMINARY STATEMENT
This cause arose under Section 120.57(1) F.S. The Petition was filed with
the responding agency and referred to the Division of Administrative Hearings. However, at the beginning of formal hearing, Petitioner orally attacked Rule
22B-4.004 F.A.C. as arbitrary and capricious. Therefore, Petitioner was advised by the undersigned that the result of the formal proceedings in this cause could not be a final order invalidating Division of Retirement Rule 22B-4.004 F.A.C. since he had not filed a petition directly with the Division of Administrative Hearings, which petition had been determined to be facially legally sufficient by the Division Director, and to which the Director had specifically assigned the undersigned.
Petitioner presented the oral testimony of Larry R. Hunnicut, Luther Bowen, and Deette Preacher. Petitioner's Exhibits P-1 through P-4 were admitted in evidence.
Respondent recalled Mr. Hunnicut to testify orally. Respondent had Exhibits R-1 through R-4 admitted in evidence.
No transcript was provided. All timely filed proposed findings of fact have been ruled on in the Appendix to this Recommended Order, pursuant to Section 120.59(2) F.S.
FINDINGS OF FACT
Petitioner wrote the agency and asked how to challenge Rule 22B-4.004
F.A.C. His letter/petition also challenged the method used by the Division of Retirement to determine his average final compensation for retirement purposes. His letter/petition was referred to the Division of Administrative Hearings in a Section 120.57(1) F.S. context to determine Petitioner's claim for higher retirement benefits. Petitioner filed no rule challenge petition directly with the Division of Administrative Hearings.
Respondent, Division of Retirement of the Department of Administration, is the agency charged, pursuant to Chapter 121 F.S. (The Florida Retirement Act), with administration of the state retirement system. Petitioner is a retired member of the Florida Retirement System.
The facts in this cause are largely undisputed. At issue is whether or not the agency has correctly applied the existing statute and rules in its calculation of Petitioner's "average final compensation."
Prior to June 30, 1986, Petitioner had worked for the Florida Legislature for a number of years. He quit that position effective at the close of business June 30, 1986. Petitioner thereafter was re-employed by the Department of Agriculture at a much lower rate of pay, from which employment he retired effective August 31, 1990.
As of June 30, 1986, the last day of the 1985-1986 fiscal year, Petitioner had accrued 360 hours of annual leave. Thereafter, in September of the 1986-1987 fiscal year, he was paid $11,286.00 for his annual leave accrued prior to June 30, 1986 and prior to his eventual retirement.
Petitioner's annual leave which had accrued prior to June 30, 1986 was calculated by the State as: "360 hours @ $31.35 per hour = $11,286.00." For this annual leave payment of $11,286.00 made to Petitioner in September 1986, the State also calculated the State's applicable retirement contribution of
$1,381.41 and the State's share of the applicable social security contribution as $671.82 for a total of $13,339.23 in benefits accrued and obligated from the State to Petitioner before the end of the 1985-1986 fiscal year.
Simultaneously, the State calculated 146.75 sick leave hours @ $31.35 per hour for a total of $4600.61. No retirement or social security amounts were calculated on top of the accrued sick leave. (Exhibit P-3, p.5) Accordingly, it is clear that the State effectively treated the annual leave which Petitioner "cashed-in" in 1986 as "compensation" subject to retirement benefits but did not calculate his sick leave as "compensation." Rule 22B-3.011(10) F.A.C. requires retirement benefits to be paid at the rate in effect when paid, not the rate in effect when earned. Rule 22B-6.001(1) F.A.C. provides that only the payment for that portion representing annual leave may be considered as "compensation."
For the fiscal year 1982-1983, Petitioner earned $56,046.00 in salary. For the fiscal year 1983-1984, he earned $57,816.00 in salary. For the fiscal year 1984-1985, he earned $60,800.00 in salary. For the fiscal year 1985-1986, he earned $64,172.00 in salary. These four fiscal years are among Petitioner's five highest average annual fiscal years of compensation prior to retirement. Petitioner and Respondent do not dispute the foregoing figures or that those fiscal years and those figures must be calculated into the Petitioner's average final compensation, if fiscal years are used. (Exhibit R-1, which was also Exhibit 4 to Mr. Hunnicut's Deposition, R-4)
Also, pursuant to Section 121.021(24) F.S., "...The payment for accumulated annual leave in excess of 500 hours, and bonuses, whether paid as salary or otherwise, shall not be used in the calculation of average final compensation." Therefore, accumulated annual leave not in excess of 500 hours paid as salary or otherwise may be used in the calculation of average final compensation. Thus, the $11,286.00 of compensation benefits earned before the end of fiscal 1985-1986, one of Petitioner's highest annual fiscal years of compensation prior to retirement, may be added into that fiscal year's salary earnings to obtain a higher fiscal year compensation, and, ultimately, a higher average final compensation.
Rule 22B-6.001(1) F.A.C. also considers accumulated annual leave payments up to a maximum of 500 hours to be "compensation." Rule 22B- 6.001(6)(a)1. F.A.C. likewise lumps accumulated annual leave payments, as defined in 22B-6.001(1), not to exceed 500 hours, as part of an employee's "average final compensation." Rule 22B-6.001(15)(a)2. F.A.C. defines "compensation or gross compensation" as including accumulated annual leave payments, as defined in Rule 22B-6.001(1) F.A.C.
Petitioner's payment for 360 hours of annual leave accrued over several years with the Legislature prior to June 30, 1986. As of June 30, 1986, the payment for that annual leave was owed to him. The State was obligated in that amount as of that date. The 360-hour obligation was certified forward at June 30, 1986 and charged to the expenses of the state for its 1985-1986 fiscal year. However, it was an obligation paid in the State's September 1986-1987 fiscal year. Mr. Bowen, Deputy Director, Administrative Services Division, Joint Legislative Management Committee, who was previously the Legislative Fiscal Officer, and who was accepted as an expert in accounting and in generally accepted accounting principles (GAAP), testified that this certification forward of the Petitioner's annual leave accords with GAAP and is uniformly used by all state agencies and that the information is transmitted to the State Comptroller's records when an employee resigns prior to the end of a fiscal year. Petitioner was treated no differently than anyone else in his situation with regard to this certification forward. However, per Mr. Bowen, if GAAP were applied to Petitioner's final retirement, Petitioner's annual leave payment earned prior to June 30, 1986 and certified forward into the 1986-1987 fiscal year would be credited to his 1985-1986 retirement.
For the fiscal year 1981-1982, Petitioner earned $52,956.00 in salary. The Division used this fiscal year as one of Petitioner's five highest average annual fiscal years of compensation.
Upon final retirement in 1990, Petitioner sought to have the amount of
$11,286.00 for 360 hours of annual leave accrued over several years preceding his June 30, 1986 quitting date, for which hours the State was obligated in fiscal year 1985-1986, and which the State finally actually did pay him in fiscal 1986-1987, included in fiscal 1985-1986 for the computation of his
average final compensation. The agency refused to do this. Alternatively, Petitioner contended that his average final compensation should have been calculated using all consecutive salary payments from October 1981 through September 1986 (his 5 highest calendar years or years commencing on an annual calendar anniversary), instead of using all consecutive payments from July 1981 through June 1986 (his 5 highest fiscal years) as Respondent had done. (Exhibit R-1) In Petitioner's situation, in which he had worked a full fiscal year in 1986-1987, the Division of Retirement also used a 17% percentage (2 months fraction) of his 1990-1991 fiscal year salary added to an 83% percentage (fraction) of his 1981-1982 fiscal year to obtain the fifth complete fiscal year. The Division also gave Petitioner credit toward retirement for 240 hours of annual leave accrued through his August 31, 1990 final termination date within the 1990-1991 fiscal year because the State actually paid him in the same fiscal year that it became obligated to pay him. (Exhibit R-4)
Deette Preacher, C.P.A., C.F.E., Financial Administrator, Division of Accounting and Auditing, State Comptroller's Office, was accepted as an expert in state financial procedures and records. He considered "consistency" to constitute recording a transaction in the same manner throughout all of the different records in which the transaction is recorded, and opined that it would be easier, more logical, and in accord with GAAP if the Division of Retirement had converted the 60-month continuous period of October 1, 1981 to September 30, 1986 of Petitioner's salary payments to fiscal years as opposed to the method used by the Division of Retirement which had used noncontinuous periods to arrive at "fiscal years."
Larry Hunnicut, Retirement Administrator, Division of Retirement, who was also designated by and authorized to speak for Respondent, testified that although the Division of Retirement interprets the applicable statute and rules to require the use of fiscal years in computing an employee's retirement benefits, it also interprets these provisions to permit the inclusion of up to
500 hours payment for annual leave to be included in the computation of an employee's retirement benefits, that the agency uses transactions recorded in the State Comptroller's records as a basis for its calculations, and that it is normal to percentage (fractionalize) portions of fiscal years.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause. See, Section 120.57(1) F.S.
Contrariwise to the Division of Retirement's calculations, Petitioner asserts either one of two other applications of the statute should be utilized so as to arrive at his personal "best and highest" salary years. First, he argued that the Division should have added the fractionalized (percentaged 25%) portion of his 1986-1987 fiscal year (July 1, 1986-September 30, 1986) to the fractionalized (percentaged 75%) portion of his 1981-1982 fiscal year (October 1, 1981-June 30, 1982) to the 1982-1983, 1983-1984, 1984-1985, 1985-1986 fiscal years to constitute his "5 highest fiscal years." Alternatively, Petitioner contends that the 360 hours of annual leave totalling $11,286.00 should have been included in the Division's calculation of his average final compensation.
Section 121.021(24) F.S. (1989), which defines "average final compensation," provides, in pertinent part:
"Average final compensation" means the average annual compensation of the 5 best years of creditable service prior to retirement, termination, or death. For disability benefits, the term "average final compensation" means the average annual compensation of the total number of years of creditable service, not to exceed 5 if less than 10 years of creditable service have been completed. Each year used in the calculation of average final compensation shall commence on an annual calendar anniversary of the date of determination of such average final compensation. The payment for accumulated sick leave, accumulated annual leave in excess of 500 hours, and bonuses, whether paid as salary or otherwise, shall not be used in
the calculation of the average final compensation. (Emphasis supplied)
Section 121.031(1) F.S. (1989), which grants the Division broad rulemaking authority, reads in part as follows:
The Department of Administration, through the Division of Retirement, shall make such rules as are necessary for the effective and efficient administration of this system.
Pursuant to its rulemaking authority, the Division of Retirement has promulgated Rules 22B-6.001(1), 22B-6.001(6)(a)1., 22B-6.001(15), and 22B- 6.001(28) F.A.C., which read in part (all emphasis supplied):
ACCUMULATED ANNUAL LEAVE PAYMENT -- Means leave accrued during an employee's career which was intended for the employee's personal use, and for which payment is made either in a lump sum or over several months or years prior to retirement or termination. General leave, which may be used for both sickness and vacation, is considered accumulated annual leave. When leave is initially accrued separately as annual leave or sick leave and later combined into a consolidated leave account at year end, termination, or retirement, only the payment
for that portion which represents annual leave shall be considered compensation. If any single lump-sum annual leave payment, made anytime during the member's employment, exceeds 500 hours, only a maximum of 500
hours of such annual leave payment shall be considered as compensation. Accumulated annual leave payments that may be included in
the Average Final Compensation are limited to a combined total of 500 hours as provided in subsection (6).
* * *
AVERAGE FINAL COMPENSATION -- Means the average of the 5 highest fiscal years of compensation for creditable service prior to retirement, termination or death calculated in accordance with section 22B-4.004(1).
The average final compensation shall include:
(1). Accumulated annual leave payments as defined in 22B-6.001(1), not to exceed 500 hours.
2. All payments defined as compensation in 22B-6.001(15).
* * *
COMPENSATION OR GROSS COMPENSATION --
Compensation means the total gross monthly salary paid a member, including:
...
2. Accumulated annual leave payments, as defined in Rule 22B-6.001(1);
* * *
(28) FISCAL YEAR -- Means a period of time beginning July 1 and ending on the following June 30, both dates inclusive.
Although Petitioner specifically wrote the Respondent referring agency and inquired how to challenge a rule, his petition was referred by the agency to the Division of Administrative Hearings in a Section 120.57(1) F.S. context. Petitioner has not framed a separate Section 120.56 F.S. rule challenge filed directly with the Division of Administrative Hearings. Therefore, no rule may be invalidated in this proceeding.
Agency rules, the agency's interpretation of its rules, and the agency's interpretation of the statute it administers are entitled to great weight and may not be overturned unless clearly erroneous. See, Department of Professional Regulation, Board of Medical Examiners v. Durrance, 455 So. 2d 575 (Fla. 1st DCA 1984).
In the posture of this Section 120.57(1) F.S. case, Petitioner bears the burden to prove that the agency's application of its rule has been arbitrary and capricious. See, Agrico Chemical Co. v. State Dept. of Environmental Regulation, 365 So. 2d 759 (Fla. 1st DCA 1978). The evidence in this case falls short of that standard, too.
Petitioner cannot force the agency into a calendar year application when its rules clearly provide for the use of fiscal years. He also has not shown that somehow he has been treated differently than all others in a similar retirement situation. Nonetheless, Petitioner must prevail herein because the agency did not apply its rules in para materia and did not calculate annual leave as required by its rules and as reflected in Petitioner's personnel records.
Petitioner's earned "compensation" for retirement purposes constituted more than just his salary. The three hundred and sixty hours of annual leave accrued prior to retirement constitute "compensation" due in one of Petitioner's five highest annual fiscal years prior to retirement. See, Section 121.021(24)
F.S. and all rules cited supra. He is therefore entitled to have the correct amount calculated as part of his compensation for fiscal 1985-1986. Respondent has failed to do this, and the error should be corrected.
Once the addition of $11,286.00 to Petitioner's 1985-1986 gross salary is accomplished, Petitioner's highest fiscal years to be averaged are 1981-1982, 1982-1983, 1983-1984, 1984-1985, and 1985-1986. With the adjustment to 1985- 1986, the Division would then be correct under its rules in averaging these five fiscal years according to the formula set forth in Rule 22B-4.004 F.A.C.
Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration, Division of Retirement, enter a final order adding $11,286.00 to Petitioner's $64,172.00 salary as already calculated for fiscal year 1985-1986, and using that figure together with Petitioner's fiscal years 1981-1982, 1982-1983, 1983-1984, 1984-1985 salaries so as to calculate Petitioner's average final compensation for retirement purposes.
DONE and ENTERED this 14th day of May, 1991 in Tallahassee, Florida.
ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 14th day of May, 1991.
APPENDIX TO RECOMMENDED ORDER
The following constitute specific rulings pursuant to Section 120.59(2)
F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF:
There are no PFOF 1-4.
5, 5a Covered in the COL.
6 Covered in FOF 5 and 10.
7, 8, 10, 13 The recitation of the witnesses' qualifications and how exhibits came to be admitted is subordinate or unnecessary to the facts as found. The disputed material facts are resolved within the RO. Accepted that the 360 hours of annual leave accrued to Petitioner or obligated the State in 1985-1986 but
that the monies therefor were not paid until the 1986-1987 fiscal year. Petitioner's choice of language utilized in this PFOF is confusing and misleading and is not adopted for those reasons.
9, 11 Covered in FOF 10 and 12-14 except for subordinate and unnecessary material which is rejected. Mere recitation of testimony is likewise rejected.
12, 16 Subordinate and cumulative.
Accepted in FOF 13, but not dispositive.
Accepted but unnecessary and not dispositive of the properly raised issues herein.
Respondent's PFOF:
1 Largely subordinate and unnecessary. Covered as necessary in the Preliminary Statement and the COL.
4-8 Covered in FOF 1 and 2 and the COL.
9 Unnecessary and unproven.
COPIES FURNISHED:
Mr. Thomas L. Wade 602 Concord Road
Tallahassee, Florida 32308
Larry D. Scott
Assistant Division Attorney Division of Retirement Legal Office
2639 North Monroe Street, Building C Tallahassee, Florida 32399-1560
A. J. McMullian, III, Director Division of Retirement
Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, FL 32399-1560
John A. Pieno, Secretary Department of Administration
435 Carlton Building Tallahassee, FL 32399-1550
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency that will issue the
final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
=================================================================
AGENCY FINAL ORDER
=================================================================
THOMAS L. WADE
STATE OF FLORIDA DEPARTMENT OF ADMINISTRATION
DIVISION OF RETIREMENT
vs.
Petitioner, DOR CASE NO. DR9O-06 DOAH CASE NO. 90-5769
DIVISION OF RETIREMENT,
Respondent.
/
FINAL ORDER
On February 11, 1991, the duly appointed Hearing Officer of the Division of Administrative Hearings in the above-styled and numbered cause, completed and submitted to the Division of Retirement of the Department of Administration and to all parties in the cause, a Recommended Order. A copy of that Recommended Order is attached hereto, incorporated by reference herein, and made a part hereof as "Exhibit A".
Pursuant to Rule 28-5.404, Florida Administrative Code, and Section l20.57(l)(b)9., Florida Statutes (1989), the parties were allowed twenty (20) days within which to submit written exceptions to that Recommended Order.
Neither Petitioner nor the Respondent submitted any written exceptions. Pursuant to Section l20.57(l)(b)10., Florida Statutes (1989), that Recommended Order came before the undersigned Director of the Division of Retirement, an agency head, for review and issuance of a final agency order.
The Record in this cause consists of all documents filed herein either with the Hearing Officer or with the Division of Retirement, including all documents received in evidence at the hearing as exhibits.
BACKGROUND
By letter dated August 23, 1990, the Petitioner, Thomas L. Wade, contested the method utilized by the Division to compute his Average Final Compensation (AFC) in calculating under the Florida Retirement System (FRS) law his earned monthly retirement benefit. According to Mr. Wade, the Division's use of five best fiscal years instead of five best years was contrary to legislative intent. It was his contention that by using fiscal years as opposed to five best years he lost 360 hours of annual leave payment that was not included in his AFC computation for retirement purposes. Mr. Wade suggested the annual calendar dates of August 9th through August 8th or September 1st through August 31st, whichever would be the most advantageous for the computation of the highest AFC.
The Division in its final agency action letter pointed out that pursuant to statutory authority and its rules, the use of the State's fiscal year, beginning July 1st, and ending June 30th, was mandated; and since the annual leave payment ($11,286 which was made in September 1986) was not received in one of Mr. Wade's highest five fiscal years, this payment was not included in the computation of his AFC.
FINDINGS OF FACT
Section 120.57(l)(b)l0., Florida Statutes (1989), in part provides:
The agency may adopt the recommended order
as the final order of the agency. The agency in its final order may reject or modify
the conclusions of law and interpretation of administrative rules in the recommended order, but may not reject or modify the findings of fact unless the agency first determines from a review of the complete record, and states with particularity in the order, that the findings of fact were not based upon competent substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law.
After review of the entire record in the case, the Division rejects some of the Findings of Fact and accepts other findings as set forth by the Hearing Officer in her Recommended Order.
RULING ON FINDINGS OF FACT
The Findings of Fact set forth in paragraph 1 are accepted.
The Findings of Fact set forth in paragraph 2 are accepted.
The Findings of Fact set forth in paragraph 3 are accepted.
The Findings of Fact set forth in paragraph 4 are rejected as not supported by competent, substantial evidence, except for the finding that Mr. wade was re-employed at a much lower rate of pay. Mr. Wade terminated his employment with the Legislature on August 8, 1986, and received salary through that date. He was re-employed by the Department of Banking and Finance and not the Department of Agriculture as stated in the Recommended Order. In addition, although Mr. Wade terminated his employment for retirement reasons on August 31, 1990, his effective date of retirement was September 1, 1990, as provided by the FRS law and rules.
The Findings of Fact set forth in paragraph 5 are rejected as not supported by competent, substantial evidence. Petitioner was paid in September 1986 for his accrued annual leave, which also included leave credits earned in July and August 1986 before his termination on August 8, 1986. Mr. Wade was employed with the Department of Banking and Finance effective August 11, 1986, and began to earn additional leave credits which he continued to accrue until he retired effective September 1, 1990.
The Findings of Fact as set forth in paragraph 6 are rejected as not supported by competent, substantial evidence. Petitioner's annual leave includes leave earned in July and August 1986, which could not be paid until he terminated employment in August 1986. Further, in Chapter 650, Florida Statutes, the Division of Retirement is named as the state agency with the authority for administering Social Security for public employees and the Federal Insurance Contributions Act (FICA) in Florida, including adoption of rules for the reporting of FICA contributions which are due when paid, not when earned.
In addition, the Hearing Officer also incorrectly cited Rule 22B-3.0l1(1), F.A.C., which reads: "contributions" and not "benefits."
The Findings of Fact set forth in paragraph 7 are accepted.
The Findings of Fact as set forth in paragraph 8 are accepted in part and rejected in part. That portion of the Findings concluding that $11,286.00 should be added to the Petitioner's salary compensation for the 1985 - 86 fiscal year to obtain a higher AFC is rejected as not supported by competent, substantial evidence. In addition, the 1986 lump sum annual leave payment ($11,286) was not paid to Mr. Wade until after he was separated from state employment effective August 8, 1986. Payment was made in September 1986 and this payment cannot be added to the Petitioner's salary compensation for the 1985 - 86 fiscal year.
The Findings of Fact set forth in paragraph 9 are accepted.
The Findings of Fact as set forth in paragraph 10 are accepted in part and rejected in part as not supported by competent, substantial evidence. The Petitioner was employed by the Legislature through August 8, 1986. In addition, payment for accrued annual leave credits cannot be made to a state employee until his employment has been terminated which did not occur until August 8, 1986. That portion of the paragraph regarding the application of Generally Accepted Accounting Principles (GAAP) in the computation of retirement benefits pursuant to Chapter 121, Florida Statutes, and the FRS rules, in addition to not being relevant, is rejected as not supported by competent, substantial evidence. GAAP is not applicable as this case is governed by the rules of the Division of Retirement. The Petitioner was terminated in August 1986; therefore, the September 1986 lump sum annual leave payment ($11,286) is a part of the Petitioner's salary compensation for the 1986 - 87 fiscal year.
The Findings of Fact set forth in paragraph 11 are accepted.
The Findings of Fact set forth in paragraph 12 are accepted in part and rejected in part. The Petitioner's employment did not terminate with the Legislature until August 8, 1986, and he did not receive the payment ($11,286) for his accrued annual leave, which included leave accrued as of June 30, 1986, as well as leave earned in July and August 1986, until September 1986. The payment was calculated for fiscal year 1986 - 1987 which was not one of Mr. Wade's highest fiscal years.
The Findings of Fact set forth in paragraph 13 are accepted. However, these findings are irrelevant as GAAP is not applicable to this case.
The Findings of Fact set forth in paragraph 14 are accepted.
CONCLUSIONS OF LAW
The Division of Retirement has jurisdiction of the
parties and the subject matter of this proceeding. Section 120.57(l)(b)10., Florida Statutes (1989).
The Hearing Officer correctly concluded in paragraphs 1 through 8 that the Division's rules were valid and its interpretation and application of those rules were not arbitrary and capricious. The statutory and rule analysis on these points are correct and accepted. Paragraphs 1 through 8 are incorporated by reference in this Final Order. Additionally, that portion of paragraph 9, in which the Hearing Officer correctly concluded that the Petitioner could not force the Division into a calendar year application when the FRS rules clearly provide for the use of fiscal years, is correct and incorporated by reference in this Final Order.
In the remaining portion of paragraph 9, the Hearing Officer concluded the Division did not apply its rules correctly by not calculating annual leave as required by its rules and as reflected in the Petitioner's personnel records. That portion of paragraph 9, paragraph 10, and paragraph 11 are not supported by the Hearing Officer's Findings of Fact and constitute a clearly erroneous application of the law; therefore, those conclusions are rejected. Section 120.57(l)(b)10., Florida Statutes (1989).
Pursuant to Chapter 650, Florida Statutes (1989), the Division of Retirement is the agent for the Federal Social Security Administration and has the responsibility for the collection of FICA taxes from state employees. Section 650.04(2) Florida Statutes provides:
The contribution imposed by this section shall be collected by deducting the amount of the contribution from wages as and when paid, but failure to make such deduction shall not relieve the employee from liability for such contribution. (emphasis added).
Rule 22B-3.011(1)(a), F.A.C., Payment of Contributions, provides in pertinent part:
All retirement and Social Security contributions for current services rendered by covered employees shall be paid to the Division of Retirement. The required rate of contribution shall be the rate in effect at the time the member is paid, as determined by his class of membership. All contributions shall be paid as follows:
Retirement contributions for each payroll period are due and payable each month no later than the 20th day of the month following the month in which covered wages are paid. Provided, however, if the due date falls on a weekend or holiday, the due date shall be the next succeeding workday. (emphasis added).
The rationale set forth by the Hearing Officer in the rejected conclusions is inconsistent with her ruling that the Division's use of fiscal years was correct. The issue upon which the Hearing Officer ruled in the Petitioner's favor was not set forth in the argument of Petitioner. By deciding the merits of this case on that issue, the Hearing Officer denied the Division the opportunity to effectively address that issue.
The Petitioner was terminated on August 8, 1986. Payment for his accrued annual leave was not made nor received by him until September 1986, after his separation from state employment pursuant to Legislative Personnel Policies. Therefore, the annual leave payment was correctly assigned by the Division to the 1986 - 87 fiscal year, which was not one of Mr. Wade's highest fiscal years.
Based upon the competent, substantial evidence in the record, as evidenced by testimony and exhibits, the Division established that compensation for annual leave or salary is computed for retirement purposes in the fiscal year when paid. (emphasis added). FRS Rules 22B-6.001(1), 22B-6.001(6)(a)l., 22B-6.001(15), and 22B-6.001(29), F.A.C.
The testimony of Mr. Bowen regarding GAAP and the concept of certification forward is not applicable in this case. The calculations of a member's AFC is done pursuant to rules of the Division of Retirement; therefore, GAAP and its principles are not relevant to this case. The Division's rules were found valid by the Hearing Officer and not contested by the Petitioner.
FRS Rule 22B-4.004, F.A.C., provides the manner by which the AFC of a member is calculated. The use of GAAP may result in varing AFC for members. That result would be arbitrary. It is noted that the Hearing Officer placed undue weight on the testimony of Mr. Bowen regarding the application of GAAP, despite his admission that he was not familiar with the Division's rules and had never calculated an AFC.
Based upon the Findings of Fact set forth in this Order which are supported by competent, substantial evidence, the recommendation of the Hearing Officer is rejected. The annual leave payment ($11,286) received by the Petitioner in September 1986 was correctly assigned to the 1986 - 87 fiscal year which was not one of the Petitioner's high five fiscal years; therefore, the payment was not included in calculating his AFC upon his retirement effective September 1, 1990.
WHEREFORE, based upon the foregoing, the Division determines that no error was made in the calculation of the Petitioner's AFC and that the Division properly calculated his AFC in accordance with appropriate provisions of the FRS Rules.
It is therefore, ORDERED AND DIRECTED that Petitioner's request for recalculation and modification of his AFC is DENIED.
DONE AND ORDERED this 5 day of August, 1991, at Tallahassee, Leon County, Florida.
NOTICE OF RIGHT TO JUDICIAL REVIEW
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE
COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF RETIREMENT, AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
J. McMulliian III, Director Division of Retirement
Cedars Executive Center 2639 North Monroe Street Tallahassee, FL 32399-1560
CLERK' S CERTIFICATE
I HEREBY CERTIFY that this Final Order was filed with the Clerk of the Division of Retirement on this 6 day of August, 1991.
Division of Retirement Cedars Executive Center 2639 North Monroe Street
Tallahassee, Florida 32399-1560
(904) 487-1230
Copies furnished to:
Mr. Thomas L. Wade 602 Concord Road
Tallahassee, Florida 32308
Honorab1e Ella Jane P. Davis Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
Larry D. Scott, Esquire Assistant Division Attorney Department of Administration Division of Retirement Cedars Executive Center Building C
2639 North Monroe Street Tallahassee, Florida 32399-1560
| Issue Date | Proceedings |
|---|---|
| May 14, 1991 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 05, 1991 | Agency Final Order | |
| May 14, 1991 | Recommended Order | Construes ""earned compensation"" for retirement rate re: exisiting rule. petition under Section 120.57 insufficient to challenge rule per 120.56 |
