STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TYLER W. SMITH,

Petitioner,

vs.

DEPARTMENT OF MANAGEMENT SERVICES, DIVISION

OF RETIREMENT,

Respondent.

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) Case No. 10-9449

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RECOMMENDED ORDER

A hearing was held pursuant to notice, on December 15, 2010, via video teleconferencing with sites in Tallahassee and Daytona Beach, Florida, by Barbara J. Staros, assigned Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Tyler W. Smith, pro se

1349 Maywood Avenue

Deltona, Florida 32752

For Respondent: Geoffrey M. Christian, Esquire

Department of Management Services 4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399-0950

STATEMENT OF THE ISSUE

Whether Petitioner is eligible to participate in the SUSORPS or whether he is a retiree for purposes of Florida's state retirement system.

PRELIMINARY STATEMENT

By letter dated August 27, 2010, Respondent advised Petitioner Tyler W. Smith that his request to be classified as a regular state employee for retirement purposes was denied. The letter relied upon Section 121.35(5), Florida Statutes. The letter afforded Petitioner a point of entry to challenge Respondent's decision.

Petitioner disputed Respondent's decision and timely requested an administrative hearing. The request for hearing was forwarded to the Division of Administrative Hearings on or about October 5, 2010. A formal hearing was scheduled for December 15, 2010. The hearing took place as scheduled.

At hearing, Petitioner testified on his own behalf.

Petitioner's Exhibit numbered 1 was rejected and not entered into evidence. Respondent presented the testimony of one witness, Robert Henning. Respondent's Exhibits numbered 1 through 4 were admitted into evidence.

The hearing was not transcribed. Petitioner timely filed a post-hearing submission, and Respondent timely filed its

Proposed Recommended Order, which have been duly considered in the preparation of this Recommended Order.

References to the Florida Statutes will be to the 2010 version unless otherwise noted.

FINDINGS OF FACT

1. The Division of Retirement (Division) is, and was at the times material to this case, the state agency charged with the responsibility of administering the Florida Retirement System (FRS) and the State University System Optional Retirement Program (SUSORP).

2. Petitioner, Tyler Smith, was employed by the University of Central Florida (UCF) from August 8, 2003, until he resigned his employment with UCF on or about August 22, 2005.

3. When he was initially employed by UCF, Petitioner elected to join the SUSORP and selected TIAA-CREF as his provider company. During his initial employment, Petitioner's TIAA-CREF account was entirely funded by employer contributions. Petitioner did not make any personal contributions to the account.

4. In August 2005, Petitioner resigned his employment with UCF effective August 22, 2005.

5. On or about August 16, 2006, Petitioner took a distribution from his SUSORP TIAA-CREF account in the approximate amount of $6,772.23.

   
   

6. Petitioner asserts that, while he requested the total amount to be distributed to him in 2006, the entire amount was not so distributed. Petitioner maintains that there remains a balance of $2,432.66 in his TIAA-CREF account. That testimony is unrebutted and is accepted.

7. Petitioner became reemployed by UCF on or about August 8, 2010. Petitioner was advised by UCF that he was not

   eligible to rejoin the SUSORP and that if he disagreed with that determination, he could inquire with Respondent.

8. On or about August 17, 2010, Petitioner requested that Respondent review his status and provide a determination of his eligibility to participate in a state-administered program. At the time of this request, Petitioner was 36 years old.

9. Robert Henning is a Retirement Benefits Administrator for the Division. At hearing, he explained that if an employee takes a distribution upon termination from his employment, he is treated as a retiree. If that person returned to work prior to July 1, 2010, he would be eligible to rejoin the retirement system. However, if that person became re-employed after

   July 1, 2010, he would not be eligible to rejoin because of a change in the law.

10. By letter dated August 27, 2010, Petitioner was notified of Respondent's determination that, because he had terminated his employment and taken a distribution from his

    
    

    SUSORP TIAA-CREF account, he was deemed a retiree. The letter reads in pertinent part:

    This letter is in response to your request for your account to no longer reflect that you have retired under a state administered retirement plan.

    
    

    Under s. 121.35(5), Florida Statutes (F.S.), "retiree" means a former participant of the optional retirement program who has terminated employment and has taken a distribution as provided in this subsection. The distributions permitted under s.

    121.35(5), F.S., include a lump-sum distribution to the participant.

    
    

    Based upon the information provided by TIAA- CREF, you have taken a distribution as noted above and are properly reflected as a retiree within the definition provided in the statutes. Therefore, we are not able to comply with your request.

    
    

11. The August 27, 2010 letter also informed Petitioner of his right to request a hearing, which gave rise to this

    proceeding.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. §§ 120.569 and 120.57(1), Fla. Stat.

13. The burden of proof in an administrative proceeding is on the party asserting the affirmative of the issue unless the burden is established otherwise by statute. Young v. State, Dep't of Cmty. Aff., 567 So. 2d 2 (Fla. 3rd DCA 1990); Balino v.

    
    

    Dep't of HRS, 348 So. 2d 349 (Fla. 1st DCA 1977). Petitioner has the burden of proof in this proceeding.

14. The Division is the state agency responsible for administering the SUSORP. § 121.35(6)(a), Fla. Stat.

15. Section 121.35(5)(g) reads as follows:

    
    

    (5) BENEFITS.—

    
    

    * * *

    
    

    (g) For purposes of this section, "retiree" means a former participant of the [SUSORP] who has terminated employment and has taken a distribution as provided in this subsection, except for a mandatory distribution of a de minimus account authorized by the department.

    
    

16. Petitioner received a lump-sum distribution of employer-funded benefits after he left employment from UCF in 2006. The Summary of Withdrawal Form from TIAA-CREF was signed by Petitioner, but there is no signature or other information in the blanks under the heading of "employer authorization." The Summary of Withdrawal Form reflects "100%" from all categories listed, i.e., CREF Stock, CREF Global Equities, CREF Growth, and TIAA Real Estate. Exhibit 4 reflects that a "Single Sum Payment Warrant" was issued electronically on August 22, 2006, in the gross amount of $6,772.23.

17. However, Petitioner asserts that while he requested to withdraw the entirety of his retirement benefits in 2006, there still remains a balance of $2,432.66 in the retirement account.

    
    

    Therefore, he asserts that he did not receive a lump-sum distribution. However, the above-quoted language does not specify that the lump-sum distribution must be the sum total of the retirement account.

18. Petitioner further asserts that the Division has not correctly interpreted the statutory provision regarding the eligibility of persons to rejoin the retirement system.

19. Section 121.122 was amended in 2009 to add the following language: "(2) A retiree of a state-administered retirement system who is initially reemployed on or after July 1, 2010, is not eligible for renewed membership." Petitioner became re-employed with UCF in August 2010.

20. This change in the statutory language unfortunately prohibits Petitioner from rejoining the retirement system. Petitioner asserts that this language was meant to prevent "double-dipping" and is not applicable to him. While this is a harsh result for a person in his 30s, who became re-employed one month after the effective date of the statutory change, this is a legislative limitation giving no discretion to the Division in this regard.

21. The evidence established that Petitioner received a lump-sum distribution of employer-funded benefits after he left employment in 2006. Whether this was a total lump-sum or a partial lump-sum distribution does not alter the fact that he

received such a distribution as contemplated in section 121.35(5)(g). Accordingly, pursuant to section 121.122(2), he is not eligible for renewed membership in SUSORP.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is

RECOMMENDED:

That the Division of Retirement enter a final order denying Petitioner's request to restore his eligibility to participate in SUSORP.

DONE AND ENTERED this 23rd day of February, 2011, in Tallahassee, Leon County, Florida.

S

BARBARA J. STAROS

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of February, 2011.

COPIES FURNISHED:

Tyler W. Smith

1349 Maywood Avenue

Deltona, Florida 32725

Geoffrey M. Christian, Esquire Department of Management Services 4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399-0950

Sarabeth Snuggs, Director Division of Retirement

Department of Management Services Post Office Box 9000

Tallahassee, Florida 32315-9000

John Brenneis, General Counsel Department of Management Services Division of Retirement

4050 Esplanade Way

Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 10-009449

Orders for Case No: 10-009449