STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AUBURN D. HOOD, )

)

Petitioner, )

)

vs. ) CASE NO. 77-1754

) STATE OF FLORIDA, DEPARTMENT ) OF ADMINISTRATION, DIVISION ) OF RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Michael R.N. McDonnell, Hearing Officer for the Division of Administrative Hearings, at 9:00 a.m., on March 2, 1978, in Room 104, Collins Building, Corner of Gaines and Adams Streets, Tallahassee, Florida.

Petitioner was represented by John J. Chamblee, Jr., Esquire, and Susan E. Hicks, Esquire, of the law office of Richard H. Frank, P.A., 341 Plant Avenue, Tampa, Florida 33606. Respondent was represented by L. Keith Pafford, Esquire, Division of Retirement, 530 Carlton Building, Tallahassee, Florida 32304.

FINDINGS OF FACT

1. The Petitioner, Auburn D. Hood (hereafter Hood), began teaching in the Florida school system in 1930. From 1937 to 1938, he took a leave of absence to attend the University of Florida. In 1940, he joined the Teachers' Retirement System (hereafter TRS) with coverage under Plan A of that system. He continued to teach in the Florida school system, taking a two year military leave from 1940 to 1942, until 1945, when he became disabled. Hood secured annual health leaves of absence and continued to make retirement contributions until 1951, when the Board of Trustees decided that no further leaves of absence would be approved. At this time, Hood's retirement contributions for 1951-52 were returned.

   
   

2. In 1947, acting on the advice of K. D. Farris, the auditor of TRS, Hood changed from Plan A to Plan B. Plan B provided for a 9.66 percent contribution rate as opposed to the 4.51 percent rate under Plan A.

   
   

3. In May 1951, Hood applied for disability retirement on the basis of his physician's certification that his condition consisted of (1) Hypotension, (2) psycotic [sic], (3) dizziness, (4) generalized weakness, (5) occasional blackout and (6) insomnia. Hood's disability retirement was approved by the TRS medical board on September 7, 1951, and became effective August 31, 1951.

4. In the fall of 1967, Hood obtained certification from his physician that he was capable of returning to teaching. He was subsequently removed from disability retirement by the TRS Medical Board and reenrolled in TRS under Plan A.

   
   

5. On or about December 1, 1970, Hood signed an application to transfer from TRS to the new Florida Retirement System (hereafter FRS). Hood began receiving FRS service credit and participating in Social Security at that time. Social Security coverage is not extended to members of TRS and must be provided in conjunction with FRS membership.

   
   

6. TRS Plan A is not a fixed benefit plan. Benefits under this plan consist of an annuity equivalent to the members' actuarial contributions plus a pension equivalent to 1/140 of the member's average final compensation multiplied by each year of membership service. On the other hand, FRS is a fixed benefit of service. Therefore, the Division of Retirement makes TRS TRS service credit compatible with FRS credit for those transferring into the new system by bringing them into FRS through TRS Plan E, which is the only fixed benefit plan in TRS. This resulted in the need to upgrade Hood's TRS Plan A credit to the more costly TRS Plan E. Hood was given until the date he chose to retire to balance his account in this respect.

   
   

7. On June 27, 1971, Chapter 71-347, Laws of Florida, became effective and amended Section 238.07, Florida Statutes, entitled "Retirement System for School Teachers" as follows:

   
   

   Any person who was a member of the Teachers' Retirement System prior to December 1, 1970, and who has collected a disability retirement allowance from the Teachers' Retirement System and has returned to active teaching service, shall be deemed to have been on health leave of absence each year between the date of his disability retirement and his return to service and may elect to receive service credit for each year upon payment of the required contributions plus regular interest.

   
   

8. Commencing July 27, 1971, Hood received communications from K. D. Farris, at that time Administrator of TRS, informing Hood of the amount he would have to contribute to TRS to take advantage of the quoted portion of Chapter 238, Florida Statutes. Hood's first payment was returned by the current Director of the Division of Retirement, Robert Kennedy, who informed Hood that the new law was inapplicable to him because he was now a member of FRS.

   
   

9. During the 1977 session of the Florida Legislature, a claims bill was passed in favor of Hood appropriating the sum of $4,350.93 as compensation for damages incurred by him. The preamble to the bill recites among other things, that Hood had transferred from the TRS to the FRS prior to the enactment of Chapter 71-347, Laws of Florida, cited previously in this order. Hood subsequently accepted the benefits of the claims bill passed in his favor and endorsed the proceeds over to the FRS. As a condition precedent to passage of the claims bill, flood declared in a notarized statement that he would retire from the teaching profession as of June 30, 1977, and endorse the funds over to FRS to insure to his personal retirement account. The funds were subsequently endorsed over to FRS. The funds received by Hood from the claims bill equal the

   amount necessary to balance his account by upgrading his former TRS Plan A service to the fixed benefit Plan E service of TRS.

   
   

10. In September, 1977, Hood attempted to purchase service credit for the sixteen (16) years he was on disability retirement pursuant to Chapter 71-347, Laws of Florida. On or about September 13, 1977, the Division of Retirement declared that Hood could not purchase such service credit at which time Hood instituted the instant proceeding.

    
    

    CONCLUSIONS OF LAW

    
    

11. Hood asserts that the issue of whether he is entitled to purchase the sixteen (16) years of service credit involves two points. First, whether Chapter 71-347 applies to Hood even if he were assumed not to have been a member of TRS upon its effective date and second, if that question is answered in the negative, whether Hood effectively transferred from TRS to FRS prior to the effective date of Chapter 71-347.

    
    

12. Hood contends that, on its face, the statute applies to him since he was a member of TRS prior to December 1, 1970, he collected a disability retirement allowance from TRS and he subsequently returned to active teaching. Thus argues Hood, the benefits of Chapter 71-347 should be available to him without regard to the question of whether he was a member of TRS at the time the statute was passed. This contention is erroneous. Chapter 71-347 amends only Chapter 238, Florida Statutes, which is the statute dealing with TRS. The provisions of that statute apply only to members of TRS and do not purport to extend benefits to persons covered by other State retirement plans.

    
    

13. The remaining question to be answered then is whether Hood is to be regarded as having been a member of TRS at the time of the enactment of Chapter 71-347, so as to be eligible to claim its benefits. It is concluded that Hood is estopped from claiming any right under Chapter 71-347 by virtue of his acceptance of the benefits of House Bill 40, a special act designed to compensate Hood for any damage he may have incurred by virtue of his ineligibility to participate in the provisions of Chapter 71-347.

    
    

14. A person may be estopped from asserting rights otherwise existing by virtue of the acceptance and retention, by one having knowledge or notice of the facts, of benefits from a statute which he might have rejected or contested. Billings v. City of Orlando, 287 So.2d 316 (Fla. 1973). In the instant case, Hood accepted and retained the benefits of House Bill 40. Hood had complete knowledge and notice of the facts and, indeed, played a material part in urging the passage of House Bill 40 when he might have rejected or contested the benefits of that bill if he had taken issue with it. By accepting the benefits of House Bill 40, Hood has precluded himself from rejecting or repudiating its provisions. Thus, he may not properly assert rights which might otherwise exist by virtue of Chapter 71-347.

    
    

15. Hood also asserts that he is entitled to a refund of portions of monies paid to the Division of Retirement because his contribution amounts were inaccurately computed. However, Section 215.16, Florida Statutes, which sets forth the procedure for recovering monies paid into the State Treasury in error, provides that the Comptroller has authority to make refunds upon proper application. Since the statutory procedures for refund have not been followed, the claim for refund must be denied without prejudice to Hood to properly assert his claim in accordance with the statute. For these reasons, it is

RECOMMENDED that Hood's request to purchase service credit for the sixteen

(16) years he was on disability retirement be denied.

DONE and ENTERED this 26 day of April, 1978, in Tallahassee, Florida.

MICHAEL R. N. MCDONNELL

Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

John J. Chamblee, Jr., Esquire Susan E. Hicks, Esquire

341 Plan Avenue Tampa, Florida 33606

L. Keith Pafford, Esquire Division of Retirement

530 Carlton Building Tallahassee, Florida 32304

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF ADMINISTRATION

DIVISION OF RETIREMENT

AUBURN D. HOOD,

Petitioner,

vs. DOAH CASE NO. 77-1754

STATE OF FLORIDA, DEPARTMENT OF ADMINISTRATION, DIVISION OF RETIREMENT,

Respondent.

/

FINAL ORDER

Pursuant to notice, an administrative hearing was held before Michael R. N. McDonnell, Hearing Officer for the Division of Administrative Hearings, at 9:00

a.m., on March 2, 1978, in Room 104, Collins Building, corner of Gaines and Adams Streets, Tallahassee, Florida.

Petitioner was represented by John J. Chamblee, Jr., Esquire, and Susan E. Hicks, of the law office of Richard H. Frank, P.A., 341 Plant Avenue, Tampa, Florida 33606. Respondent was represented by L. Keith Pafford, Esquire, Division of Retirement, 530 Carlton Building, Tallahassee, Florida 32304.

The following issues were presented at the above hearing:

1. Whether Section 238.07(15B) was added to the Teachers' Retirement System (TRS) subsequent to Petitioner's transfer to the Florida Retirement System (FRS), thus precluding him from purchasing retirement credit for the sixteen-year period he was receiving TRS disability retirement benefits;

   
   

2. Whether Section 238.07(15B) applies to Petitioner regardless of the fact that he may have been a member of FRS when the section was added to TRS;

   
   

3. Whether Petitioner owes $4,350.93, as computed by Respondent, to balance his retirement account, or whether be owes some lesser amount; and

   
   

4. Whether the $4,350.93 appropriated for Petitioner in a special claims bill (HB-40), subsequently endorsed by Petitioner over to Respondent and used by Respondent to balance Petitioner's retirement account was merely appropriated as compensatory damages and not for the purpose of balancing his retirement account.

The Hearing Officer issued his order on April 26, 1978, finding:

1. Petitioned became a member of FRS and began participating in social security (which is not available to members of TRS) in December, 1970. (Rec. Order p. 2) Petitioner withdrew from TRS prior to the enactment of Section 238.07(15B) making the section inapplicable to him. (Rec. Order p. 4);

   
   

2. Section 238.07(15B) of the Teachers' Retirement System Act applies only to members of TRS and does not extend benefits to members of other retirement systems;

   
   

3. The $4,350.93 appropriated by HB-40 equaled the amount necessary to balance Petitioner's retirement account (without regard to Petitioner's claim for sixteen years of service credit representing the period he was drawing TRS disability retirement benefits). (Rec. Order p. 4); and

   
   

4. HB-40 appropriated the amount necessary to balance Petitioner's retirement account in recognition of the fact that a dispute existed over the amount necessary to accomplish the same, and the fact that Petitioner could not take advantage of Section 238.07(15B). Petitioner urged passage of the claims bill and executed a notarized statement that if the bill passed, she would endorse the funds over to his retirement account and retire. Therefore, petitioner is estopped from accepting the benefits of HB-40 and then renewing his claim that he owes less than $4,350.93 to balance his retirement account, and that he remains eligible to take advantage of Section 238.07(15B). (Rec. Order pp. 3-5)

Petitioner took the following exceptions to the Hearing Officer's recommended order:

1. The evidence does not support the finding that Petitioner transferred to FRS and began participating in social security in December, 1970;

   
   

2. The evidence does not support the finding that the funds appropriated by HB-40 were the amount necessary to balance Petitioner's retirement account. More specifically, Respondent failed to credit Petitioner with $1,374.96 he had on deposit with TRS as of August 1, 1951; and

   
   

3. The evidence does not support the finding that Petitioner is estopped from accepting the benefits of HB-40 and then renewing his claim that he owes less than $4,350.93 to balance his retirement account and that he remains eligible to take advantage of Section 238.07(15B).

Oral argument was heard on Petitioner's exceptions on June 5, 1978.

The following findings and conclusions are made after careful consideration of the record, the Hearing Officer's recommendations, Petitioner's exceptions and oral argument presented thereon:

FINDINGS OF FACT

1. Petitioner began teaching in Florida in 1930. From 1936 to 1938, he took leave of absence to attend the University of Florida.

   
   

2. In 1940, Petitioner joined TRS (Chapter 238, Florida Statutes) participating in Plan A.

   
   

3. Plan A is not a "fixed benefit" plan. In other words, members of Plan A do not receive a retirement benefit based on a fixed percentage of their average final compensation for each year of creditable service. Benefits under Plan A consist of an annuity which is the actuarial equivalent of the member's accumulated contributions plus a pension equivalent to 1/140th of the member's average final compensation multiplied by each year of membership service.

   
   

   The retirement age under Plan A is 60 years. It is the least expensive TRS plan in terms of member contributions (4.51 percent of salary for a male member entering the system at Petitioner's age).

   
   

4. In 1947, (while he was on leave of absence for illness) Petitioner transferred to TRS Plan D. The retirement age under Plan D is age 50 with 25 yours of creditable service. The Plan D contribution rate is 9.66 percent of salary for a male entering the system at Petitioner's age. Like Plan A, it is not a "fixed benefit" plan.

   
   

5. With exception of the period from 1942-1944 when Petitioner was on military leave-of-absence, he continued to teach until 1945.

   
   

6. In 1945, Petitioner was granted an illness leave-of-absence by the Bay County Board of Public Instruction for the 1945-46 school year. Four months later, Petitioner was granted an illness leave-of-absence by the Washington County Board of Public Instruction for the 1946-47 school year.

   
   

7. Petitioner continued to obtain illness leaves-of-absence certifications from Washington County until 1951 when the TRS Board of Trustees (Consisting of the State Board of Education and two teacher members) decided that no further leaves would be approved.

8. After notification of this fact, Petitioner informed Respondent that he was interested in retiring on disability under Plan A. He requested information as to the monthly benefit and the amount of refund he would receive when his Plan D service was downgraded to Plan A. This information was provided by return mail.

   
   

9. In May, 1951, Petitioner applied for disability retirement on the basis of his physician's certification that he suffered from: "(1) Hypotension, (2) psycotic [sic], (3) dizziness (4) generalized weakness, (5) occasional blackout and (6) insomnia." Petitioner's disability retirement under Plan A was approved by the TRS Medical Board on September 7, 1951, and became effective August 31, 1951.

   
   

10. In the fall of 1967, Petitioner obtained certification from his physician that he was capable of returning to teaching. He was subsequently removed from disability retirement by the TRS Medical Board and reenrolled in TRS, Plan A.

    
    

11. On or about October 15, 1970, Petitioner signed an application electing social security coverage and applying for transfer from TRS to the newly created FRS. He began receiving FRS service credit and participating in social security when FRS was activated in December, 1970. Social security coverage is not extended to members of TRS and must be provided in conjunction with FRS membership.

    
    

12. While many individuals, such as Petitioner, transferred from TRS Plan A into FRS, TRS Plan A service is not compatable with FRS service. Unlike TRS Plan A, FRS is a "fixed benefit" system with retirement benefits based on a fixed percentage of average final compensation per year of creditable service.

    
    

    The only TRS plan compatable with FRS is TRS Plan E, which is also a "fixed benefit" plan. Before Petitioner could use his TRS service to retire under FRS, it had to be upgraded from the least expensive Plan A to the more costly Plan E which provides a 2 percent credit for each year of service compared to a variable, but maximum credit of 1.42 percent provided by Plan A.

    
    

    While Petitioner was transferred from TRS to FRS in December, 1970, he had until retirement to upgrade his TRS service and pay the additional contributions required to balance his retirement account.

    
    

13. On June 27, 1971, Chapter 71-347, Laws of Florida, became effective amending the Teachers' Retirement System Act to create Section 238.07(1513). This section provides that:

    
    

    "Any person who was a member of the Teachers' Retirement System prior to December 1, 1970, and who has collected a disability retirement allowance from the Teachers' Retirement System and has returned to active teaching service, shall be deemed to have been on health leave of absence each year between the date of his disability retirement and his return to service and may elect to receive service credit for each year upon payment of the required contributions plus regular interest."

14. Commencing July 27, 1971, Petitioner received communications from K.

    D. Farris informing him of the amount he would have to contribute to TRS to take advantage of Section 238.07(15B). Subsequently, however, Petitioner's first payment was returned when it was discovered that the provision was inapplicable to him because he had previously transferred into FRS.

    
    

15. A dispute also arose when Petitioner began to Plan E and balance his retirement account.

    
    

    Petitioner had previously been credited with the total amount of contributions he had paid into TRS prior to his disability retirement from 1951 to 1967. However, $1,374.96 of the contributions originally credited had previously been charged off from d951 to 1967 as the annuity portion of his Plan A disability retirement benefit.

    
    

16. During the 1977 session of the Florida Legislature, a claims bill was passed in favor of Petitioner appropriating the $4,340.93 Respondent advised was necessary to balance Petitioner's retirement account. The preamble to the bill recites, among other things, the disagreement over the amount necessary to balance Petitioner's retirement account and the fact that Petitioner had transferred from TRS to FRS prior to the enactment of Section 238.07(15B).

    
    

    As a condition precedent to passage of the claims bill, Petitioner declared in a notarized statement that he would retire from the teaching profession as of June 30, 1977, and endorse the funds over to FRS to inure to his personal retirement account. Petitioner subsequently accepted the benefits of the claims bill passed in his favor and endorsed the proceeds over to FRS. The funds were used to balance his account.

    
    

17. Petitioner applied for retirement and was retired under FRS effective July 1, 1977.

    
    

18. After retiring, Petitioner again attempted to invoke the provisions of Section 238.07(15B) to purchase credit for the sixteen years he was retired on disability. He also demanded a refund of that portion of the funds appropriated by the claims bill that he felt were in excess of the amount necessary to balance bin retirement account.

CONCLUSIONS

1. Petitioner became a member of FRS and began participating in social security (which is not available to members of TRS) in December, 1970. Petitioner withdrew from TRS prior to the enactment of Section 238.07(1513) making the section inapplicable to him;

   
   

2. Section 238.07(15B) of the Teacher's Retirement System Act applies only to members of TRS and does not extend benefits to members of other retirement systems;

   
   

3. The $4,350.93 appropriated by HB-40 equaled the amount necessary to balance Petitioner's retirement account (without regard to Petitioner's claim for sixteen years of service credit representing the period he was drawing TRS disability retirement benefits); and

   
   

4. HB-40 appropriated the aunt necessary to balance Petitioner's retirement account in recognition of the fact that a dispute existed over the amount necessary to accomplish the same, and the fact the Petitioner could not

take advantage of Section 238.07(15B). Petitioner urged passage of the claims bill and executed a notarized statement that, if the bill passed, he would endorse the funds over to his retirement account and retire. Therefore, Petitioner is estopped from accepting the benefits of HB-40 and then renewing his claim that he owes less than $4,350.93 to balance his retirement account and that he remains eligible to take advantage of Section 238.07(15B).

ORDER

Petitioner's request to purchase service credit for the sixteen years he was retired on disability and obtain a refund of any portion of the money he paid into the Florida Retirement System Trust Fund to balance his retirement account prior to retirement is hereby denied.

Done and ordered this 20th day of June, 1978, in Tallahassee, Florida.

Robert L. Kennedy Jr. State Retirement Director

Docket for Case No: 77-001754

Orders for Case No: 77-001754