The Issue Whether Petitioner is eligible to participate in the Deferred Retirement Option Program.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Petitioner is now, and has been since 1976, a firefighter employed by Miami-Dade County and, as such, a Special Risk member of the Florida Retirement System. Petitioner's date of birth is September 19, 1937. Accordingly, on July 1, 1998, the effective date of DROP, Petitioner was 61 years of age and had approximately 22 years of creditable service as a Special Risk member of the Florida Retirement System. Petitioner was aware that he needed to file an application to join DROP within 12 months of July 1, 1998, but he opted not to file such an application because he believed that the retirement benefits he would receive if he joined DROP within this 12-month period would not be enough for him to "live on" after he stopped working.2 Petitioner thought that it would be in his best interest, instead, to wait until 2003 to retire (and enjoy higher retirement benefits). On June 7, 2001, Petitioner sent an e-mail to Governor Bush, which read, in pertinent part, as follows: Yesterday I met with the head spokesman of FL. State Retirement concerning my participation in the D.R.O.P. [and] he advised me to send this note. As you know it started in 1998 at which time I was offered a small window because of my age (unlawful discrimination) for which I was not able to get into because of the insignificant amount offered as permanent retirement. Since then, as anticipated, my retirement has increased from the high 30's to the low 60's due thanks to you . . . Now, I am asking, by special request, to be allowed to enter into the D.R.O.P. either to finish these two years or to be given an opportunity to go for the whole 5 years, which I doubt I would complete. . . . Petitioner's e-mail correspondence was referred to the State Retirement Director who, by letter dated June 8, 2001, advised Petitioner that Petitioner's "request to join DROP at this late date must be denied."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a final order finding that Respondent is not eligible to participate in DROP because he did not elect to do so within the time frame prescribed by Subsection (13)(a)2. of Section 121.091, Florida Statutes. DONE AND ENTERED this 14th day of December, 2001, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of December, 2001.
The Issue Whether Petitioner is eligible to receive retirement credit for the period of his employment with the Florida Bar from July 1, 1977 through June 4, 1981.
Findings Of Fact Petitioner was employed by the Florida Bar from July 1, 1977 to June 4, 1981. The record is unclear as to the nature of his employment at the Florida Bar. He is presently employed as a professor at Florida State University and has approximately 24 years' credit in the Florida Retirement System (FRS). Employees of the Florida Bar are paid as part of an overall budgetary process generated primarily from members' dues. Their salaries are not established by or funded by legislative appropriation. The Florida Bar has its own pension system that is a defined contribution plan funded entirely by the Florida Bar. The Bar employees contribute nothing to their pension system. This system has been in place since approximately 1970. Salaries of state officers and employees are reported from the State Comptroller to the Division of State Retirement. No salaries of the Florida Bar were paid or reported to the Division for the period of time Petitioner was employed at the Florida Bar. In the 1970's the FRS went from an employee/employer funded system to a strictly employer funded system which became known as a non-contributory system. The Florida Bar does not participate as a paying agency of the FRS and employees of The Florida Bar do not participate in any state employee benefit system. Beginning in 1955, until the establishment of the FRS, the Florida Board of Bar Examiners participated in the former public retirement system. When the FRS was created, participants, such as the Florida Board of Bar Examiners, began reporting into the new system and were allowed to participate in the new system. Mr. Ragsdale, administrator of the enrollment section of the Division, established that the employees of the Board of Bar Examiners participated by contributing into the former retirement system.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department of Management Services, Division of Retirement, enter a final order denying Petitioner's request for retirement service credit for the period of his employment with the Florida Bar. DONE AND ENTERED this 14th day of September, 2001, in Tallahassee, Leon County, Florida. BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of September, 2001.
Findings Of Fact The petitioner, Leo A. Price, was a member of the Florida Retirement System (FRS) at the time of his retirement in June, 1979. He became an FRS member on January 1, 1979, by transferring from the Teachers' Retirement System (TRS). Mr. Price was appointed to a teaching position for the 1950-51 school year on June 8, 1950, by the Board of Public Instruction of Dade County, Florida. He performed some limited duties for the Board of Public Instruction at the beginning of the 1950-51 school year, but his service was cut short as a result of illness. He received no salary payments for this service. Mr. Price recovered from his illness and began teaching in Dade County on January 31, 1951. He enrolled in the Teachers' Retirement System in February, 1951, and represented on his enrollment blank that he began service on January 31, 1951, and that he had not taught in Florida in prior years. Enrollment forms are required prior to membership in TRS. Mr. Price taught continuously from January 31, 1951, through June 30, 1979. On June 20, 1979, the School Board of Dade County retroactively approved a leave of absence for Mr. Price for the period from September, 1950, through January 30, 1951. No leave of absence had been authorized by the School Board prior to this retroactive authorization. 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, no member has been allowed a service credit for a leave of absence that was retroactively granted.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the claim of petitioner, Leo A. Price, seeking a service credit for the period of time from September, 1950, through January, 1951, be denied. It is further RECOMMENDED that the claim of petitioner, Leo A. Price, for interest on all uncashed benefit warrants, be denied. THIS RECOMMENDED ORDER entered this 19 day of September, 1980. WILLIAM B. THOMAS Hearing Officer Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of September, 1980. COPIES FURNISHED: Leo A. Price 1000 N. E. 96th Street Miami Shores, Florida 33138 Diane R. Keisling, Esquire Suite 207C, Box 81 Cedars Executive Center 2639 North Monroe Street Tallahassee, Florida 32303
The Issue The issue presented is whether Petitioner's application for retroactive retirement benefits should be granted.
Findings Of Fact Petitioner was employed by the Palm Beach County Sheriff's Office for approximately twelve years, working in a special risk capacity. As a result of that employment, he was a member of the Florida Retirement System. In 1972 Petitioner completed Respondent's form FRS-M10 setting forth his membership as a special risk member of the Florida Retirement System as of November 1, 1970. Petitioner resigned his position on March 15, 1982, when he was 47 years of age and had more than ten years of creditable service. At the time of his resignation, he was employed in the position of Inspector, Director of Law Enforcement, the third in command at the Sheriff's Office. There are approximately 550,000 active members in the Florida Retirement System. Many members choose not to submit an application for retirement benefits on their normal retirement date for a variety of reasons. An application for retirement benefits is a prerequisite for the establishment of an effective retirement date for a member of the Florida Retirement System. In September of 1991, Petitioner applied for retirement benefits. At the time of his application, he was 57 years of age. Petitioner never contacted Respondent to request information or advice regarding his retirement benefits prior to filing his retirement application in September of 1991. Based upon receipt of Petitioner's application for retirement benefits in September of 1991, Respondent established October 1, 1991, as Petitioner's effective retirement date. In October of 1986 Petitioner received from the Palm Beach County Sheriff's Office a copy of some of Respondent's forms which are utilized by persons filing applications for retirement benefits. Some of the information included in that package relates to persons who are regular members of the Florida Retirement System, not special risk members.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's request to change his effective retirement date and denying Petitioner's request for retroactive retirement benefits. DONE and ENTERED this 1st day of September, 1992, at Tallahassee, Florida. LINDA M. RIGOT 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 1st day of September, 1992. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 92-0849 Petitioner's proposed findings of fact numbered 1 and 3-5 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 2 has been rejected as being contrary to the evidence in this cause. Petitioner's proposed findings of fact numbered 6-13 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Respondent's proposed findings of fact numbered 1-10 have been adopted either verbatim or in substance in this Recommended Order. COPIES FURNISHED: Mary Alice Gwynn, Esquire Suite 302 215 Fifth Street West Palm Beach, Florida 33401 Larry D. Scott, Esquire Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee FL 32399-1560 A. J. McMullian, III, Director Division of Retirement Building C Cedars Executive Center 2639 North Monroe Street Tallahassee, Florida 32399-1560 Larry Strong Acting Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Sally T. Sperling commenced teaching for the Leon County School Board in 1969 as an elementary teacher at Sabal Palm Elementary School. Following maternity leave and absences to continue her education, Mrs. Sperling returned to the Leon County School System in 1971 as a full-time teacher and subsequently gained continuing contract status before resigning in 1976. In 1978 Petitioner submitted an application (Exhibit 5) for part-time employment with the Leon County School System in which she indicated a desire to work "perhaps, three days per week. She was employed in the Adult Education Program at Lively Vocational-Technical School in Tallahassee teaching remedial reading. The form contract used by the Leon County School Board for Petitioner's employment is the same that is used for all instructional personnel. The contract purported to run for one year and Petitioner was paid on an hourly basis, with no minimum or maximum hours specified. Full-time teachers are hired on an annual basis. Some of the teachers in the Adult Education Program are full-time teachers and are on annual or continuing contracts. Most of the teachers in the Adult Education Programs are part-time teachers and are paid only for the hours they teach. Petitioner taught remedial reading classes and sufficient interest in this course has been maintained so the program has continued semester after semester for the four years Petitioner has taught adult education courses. Other Adult Education Programs in which sufficient interest has not developed have been dropped. Funding for Adult Education Programs depends upon the number of students attending the classes. If this number drops below the number required to keep the course self-sufficient, the course will be dropped. In such a case the teacher of the course will not remain on the Leon County payroll, as no hours will be devoted to teaching this course. Unless an actual course is taught, the part-time teacher is not paid. Teachers on annual contracts are paid for the full year regardless of the number of hours of classes taught. At the time Petitioner was hired she was given a packet of information (Exhibit 7) but was not specifically told that part-time teachers are not eligible for the Florida Retirement System. During the four years Petitioner has been employed as a part-time teacher she has had no social security deductions taken from her pay and has earned no annual or sick leave. Pursuant to an agreement between the state and federal governments all members of the Florida Retirement System are covered by social security and FICA deductions are taken from their pay. This deduction is indicated on the check stub given to the employee with each pay check. State employees not under the Florida Retirement System and not specifically made parts of the Social Security System are not covered by social security. Full-time teachers are considered salaried employees holding a regularly established position. They are paid from funds provided in the "100" account. Part-time employees are designated as Other Personal Services (OPS) and are paid from funds in the "700" account. These accounting codes are established by the Department of Education to provide uniformity in accounting in the various school systems. The accounting code designation from which fund the employee is paid gives a quick reference to the status of the employee. When the pay records show Petitioner is paid from "751" funds, there will be no state retirement or FICA contributions from the code that disburses those funds. When the Florida Retirement System replaced older state retirement systems, some confusion developed regarding the status of personnel hired temporarily and retained on the payroll for an extended period. This confusion carried over to part-time teachers in the Adult Education Programs throughout the state. Some of the counties placed these part-time teachers in the Florida Retirement System where they have been covered for nearly ten years. The Division of Retirement is in the process of removing those people from the retirement system. At the time Petitioner wads hired she did not believe she was eligible for the Florida Retirement System and no FICA deductions were ever taken from her pay. After a visiting friend advised her she might be eligible for the Florida Retirement System Petitioner initiated the inquiries that led to these proceedings.
The Issue The issue in this case is whether the Petitioner, Mr. Robert P. Hatcher, is eligible to retire under the Florida Retirement System rather than under the Teachers' Retirement System.
Findings Of Fact The Petitioner was employed by the Hillsborough County School Board on August 25, 1959, and was enrolled in the Teachers' Retirement System (TRS) at that time. The Petitioner worked for the Palm Beach County School Board for 27 years, from 1966 through May 15, 1992. The Petitioner worked with no breaks in service during all years in which the Legislature provided open enrollment periods for members of the TRS to transfer to the Florida Retirement System (FRS). The Petitioner was aware of the open enrollment periods, but declined all opportunities to transfer to the FRS. In this regard, the Petitioner specifically rejected membership in the FRS for the 1974 and 1978 open enrollment periods by signed ballots dated November 27, 1974, and November 2, 1978. Petitioner voluntarily terminated his employment with the Palm Beach County School Board on May 15, 1992. Following his termination with the Palm Beach County School Board, Petitioner began seeking employment with an agency that participated in the FRS in order to become eligible to transfer from the TRS to the FRS. The Petitioner's first contact with the Okeechobee County School Board (OCSB) was approximately two years ago when Dr. Mary Gray, Petitioner's acquaintance, introduced Petitioner to Mr. Owens. The Petitioner approached Mr. Owens in an attempt to obtain employment with the OCSB. The Petitioner sought employment with the OCSB for the sole purpose of obtaining entry into the FRS. Mr. Owens recruited and interviewed the Petitioner for the position of Custodian I at the OCSB. At the time the Petitioner was recruited and interviewed, Mr. Owens knew the Petitioner wanted to work for the OCSB for the sole purpose of establishing retirement eligibility. The Petitioner requested that he be hired to work only long enough to establish retirement eligibility by working for a state employer that was a member of the Florida Retirement System. Prior to the Petitioner's request, the OCSB had never had such a request before. The OCSB hired the Petitioner with the knowledge that he had health problems and believing that he would not be able to perform the duties of custodian for more than a short period of time. By letter dated June 23, 1993, the OCSB approved the Petitioner's employment as Custodian I for the OCSB effective June 30, 1993. The Custodian I position was classified as a regular position, not a short-term position. The Petitioner reported to work at the Okeechobee High School on June 30, 1993. He answered phones for several hours, performed some inventory work, then resigned that afternoon. The OCSB acknowledged receipt of the Petitioner's resignation letter, effective June 30, 1993, by letter dated August 2, 1993. The Petitioner submitted an application for membership in the FRS to the OCSB on June 30, 1993. Prior to his employment with the OCSB, the Petitioner investigated the possibility of transferring from the TRS to the FRS. The Petitioner was neither told nor did he receive any written communication by the DOR that he could transfer to the FRS based upon employment for one day. By letter dated August 16, 1993, the Respondent notified the Petitioner that he could not obtain entry into the FRS because his employment was not bona fide, but that he could retire under the TRS. If the Petitioner were to retire under the TRS, his Option 1 monthly benefit payment would be $2,571.64; his Option 3 monthly benefit payment would be $2,396.25. Under the FRS, Petitioner's Option 1 monthly benefit payment would be $3,054.91; his Option 3 monthly benefit payment would be $2,771.20.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Division of Retirement issue a final order concluding that the Petitioner is not eligible for participation in the Florida Retirement System and denying Petitioner's application for transfer from the Teachers' Retirement System to the Florida Retirement System. DONE AND ENTERED this 6th day of January 1994 in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 6th day of January 1994. APPENDIX The following are my specific rulings on all proposed findings of fact submitted by all parties. Findings submitted by Petitioner: Paragraphs a and b: Accepted in substance. Paragraph c: Accepted in part and rejected in part; accepted that the Petitioner obtained the described employment, but rejected that the employment was bona fide. Paragraph d: Accepted in part and rejected in part. The conclusion that the one day was sufficient to qualify the Petitioner for transfer to FRS is rejected as incorrect and as not warranted by the evidence; the remainder of the facts in this paragraph are accepted. Paragraph e: Rejected as constituting a conclusion of law, rather than a proposed finding of fact; a conclusion which is, in any event, not warranted by the evidence in this case. Paragraph f: Rejected as constituting a conclusion of law, rather than a proposed finding of fact; a conclusion which is, in any event, not warranted by the evidence in this case. Findings submitted by Respondent: All of the proposed findings of fact submitted by the Respondent have been accepted in whole or in substance in the Findings of Fact made in this Recommended Order. COPIES FURNISHED: Jodi B. Jennings, Esquire Division of Retirement Building C Cedars Executive Center 2639 North Monroe Street Tallahassee, Florida 32399-1560 Allan L. Hoffman, Esquire 1610 Southern Boulevard West Palm Beach, Florida 3406 J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Sylvan Strickland, Acting General Counsel Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue Whether Petitioner must forfeit and repay distributions he received from the Deferred Retirement Option Program and subsequent monthly retirement benefits received as a consequence of his election to the position of County Commissioner of Jefferson County within six months of terminating state employment.
Findings Of Fact 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). Petitioner, John Nelson, was employed by the Department of Financial Services (DFS) from October 1977 through July 31, 2010. For the last five years of his employment with DFS, Petitioner participated in the Deferred Retirement Option Program (DROP). Prior to ending his DROP participation, Petitioner completed a DROP Termination Notification Form (DP-TERM Rev. 06/06) on April 23, 2010, confirming he would terminate employment on July 31, 2010. The DROP Termination Notification was also signed by a representative from FRS confirming Petitioner's employment termination date and reads in pertinent part: I understand that I cannot work for any Florida Retirement System (FRS) covered employer during the calendar month following my DROP termination date or my DROP participation will be null and void. If I fail to meet this requirement, I will forfeit my accumulated DROP benefit including interest. I also understand that I may not be reemployed by any FRS employer in any capacity including part-time, temporary, other personal services (OPS) or non-Division approved contractual services during the calendar month immediately following my DROP termination date. If I fail to meet this requirement, I will forfeit my accumulated DROP benefit, including interest retroactive to me enrollment date in the DROP. The above-referenced version of the DP-TERM (Revised 6/06) has been incorporated by reference into Florida Administrative Code Rule 60S-9.001(ee). Due to significant statutory changes made by the Legislature, the Division sent to Petitioner a second DROP Termination Notification, (Form DP-TERM revised 04/10) which he signed on June 9, 2010. The wording in the revised form reflected statutory changes which would take effect July 1, 2010. The revised form states in pertinent part: If your DROP termination date is on or after July 1, 2010: Your termination requirement means you cannot remain employed or become re-employed with any Florida Retirement System (FRS) covered employer during the FIRST SIX calendar months following your DROP termination date. This includes but is not limited to: Part-time work, temporary work, other personal services (OPS), substitute teaching or non-Division approved contractual services. During the 7th-12th calendar months following your DROP termination date, you may return to work for a participating FRS employer but must suspend your retirement benefit for any of these months your[sic] are employed. There are no reemployment exceptions during the reemployment limitation period. After the 12th calendar month following your DROP termination date, there are no employment restrictions. If you fail to meet the termination requirements noted above, you will void (cancel) your retirement and DROP participation, you must repay all retirement benefits received including your DROP accumulation, and you must apply to establish a future retirement date. If you void your retirement your employer will be responsible for making retroactive retirement contributions and you will be awarded service credit for the period during which you were in DROP through your new termination date. Your eligibility for DROP participation will be determined by your future retirement date and you may lose your eligibility to participate in DROP. (emphasis added). The revised form DP-TERM (Revised 04/10) has not yet been adopted as a rule. At the time of hearing, rulemaking had been initiated. Petitioner terminated his employment with DFS on the agreed termination date of July 31, 2010, and was no longer an employee of DFS after that date. Sometime between July 31, 2010, and November 2010, Petitioner was paid his accumulated DROP monies in the amount of $181,635.09, in the form of a direct rollover into an eligible retirement account. Petitioner was also paid monthly retirement benefits for the months of August through November 2010, in the total amount of $11,286.76. The Division deactivated Petitioner's monthly retirement benefits in December 2011. The total amount of retirement benefits paid to Petitioner after terminating employment with DFS is $191,921.85, which the Division seeks to recover. In April of 2010, at the urging of community members, Petitioner registered to run for public office in Jefferson County, Florida. He won the election and was sworn into office as a Jefferson County Commissioner on November 16, 2010. Tyler McNeill is the Chief Deputy Clerk and Human Resources Officer for Jefferson County. Following Petitioner's election as a County Commissioner, Mr. McNeill began to process a small packet of employment-related documents which he provides to elected officials. Mr. McNeill went to Petitioner's home on a Sunday evening to get the necessary papers signed. Prior to this meeting, Petitioner was unaware that Jefferson County participates in the FRS. Petitioner described his reaction to learning this as "shocking." When Mr. McNeill and Petitioner got to the FRS form, Petitioner did not want to sign it and informed Mr. McNeill of that. Mr. McNeill described Petitioner as appearing physically ill, shocked, and "so upset" upon learning that the County was an FRS participating employer. On November 22, 2010, Petitioner and Mr. McNeill called Ira Gaines, FRS Benefits Administrator, using a speakerphone. At the time they placed this call, Petitioner had not yet signed the employment documents supplied to him by Mr. McNeill, and Petitioner informed Mr. Gaines of this. During this conversation, Petitioner expressed his willingness to resign from office and refuse to accept payment from the County for his newly elected position. According to Mr. McNeill, Petitioner was not yet eligible to receive compensation from the County because the employment papers had not yet been processed. Mr. McNeill testified that he would have been able to discard the documents. During this telephone conversation, Mr. Gaines advised that Petitioner was legally a person employed by the County by virtue of his being sworn into office on November 16, 2010. Mr. Gaines equated bring sworn into office as being an employee. At hearing, Mr. Gaines reiterated his position: that he did not know any way Petitioner could not be enrolled in FRS when occupying an elected position. As a result of this telephone conversation with Mr. Gaines and in reliance on Mr. Gaines' advice, Mr. McNeill processed Petitioner's employment papers including the FRS reenrollment form. Mr. Gaines then began receiving salary payments for being a county commissioner. On December 6, 2010, Mr. Gaines sent a letter to Petitioner stating that his election to the position of County Commissioner had voided his DROP participation, and consequently, Petitioner would have to repay $181,635.09 for the DROP payment, and $11,286.76 in monthly retirement benefits. The letter further informed that Petitioner will continue to earn credit as an elected official in the Elected Officer's Class of FRS membership and that Petitioner's retirement account would be adjusted to reflect service from August 2005 through July 2010 (his DROP period) which he estimated would increase Petitioner's retirement benefits by $1,200 per month. In response to the December 6, 2010 letter, Petitioner appealed the voiding of his DROP participation. By letter dated February 1, 2011, the Division denied the request. The February 1, 2011 letter also informed Petitioner of his right to request a hearing, which gave rise to this proceeding.
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 rescinding the February 1, 2011, notification letter requiring reimbursement of Petitioner's DROP distribution and reimbursement of Petitioner's monthly retirement benefits from August 2010 through December 2010 when those benefits were discontinued; reinstating those monthly benefits beginning six months following the completion of Petitioner's DROP period, and nullifying Petitioner's reenrollment in the Elected Officers' Class of FRS membership. DONE AND ENTERED this 8th day of March, 2012, 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 8th day of March, 2012.
The Issue Whether Petitioner qualifies for retirement benefits as a joint annuitant of the late Roy Hartley, Jr.
Findings Of Fact Roy Hartley, Jr., died on June 11, 1994, with more than ten years of service as a member of the Florida Retirement System (FRS). Mr. Hartley was employed as a police officer with the Metro Dade Police Department. His Social Security Number was 267-70-3906. At the time of his death, Mr. Hartley had personally contributed the sum of $655.38 to the FRS. On October 29, 1993, Mr. Hartley designated Petitioner as the beneficiary of his retirement benefits on FRS Form M-10. After Mr. Hartley's death, Petitioner applied to the State of Florida, Division of Retirement, for benefits as Mr. Hartley's designated beneficiary. To be entitled to monthly retirement benefits, Petitioner must establish that she was a dependent of Mr. Hartley so as to qualify as a joint annuitant of his monthly retirement benefits. Section 121.091(7)(g), Florida Statutes (1994), contains the option that Petitioner seeks to exercise: (7)(g) The designated beneficiary who is the surviving spouse or other dependent of a member whose employment is terminated by death subsequent to the completion of 10 years of credible service but prior to actual retirement may elect to receive a deferred monthly benefit as if the member had lived and had elected a deferred monthly benefit, as provided in paragraph (5)(b), calculated on the basis of the average final compensation and creditable service of the member at his death and the age the member would have attained on the commencement date of the deferred benefit elected by his beneficiary, paid in accordance with option 3 of paragraph (6)(a). Section 121.021(28)(c), Florida Statutes, contains the definition of the term "dependent beneficiary" that is pertinent to this proceeding: (28) Dependent beneficiary means any person designated by the member to receive a retirement benefit upon the member's death who is either: * * * (c) A person who is financially dependent for no less than one-half of his support from the deceased at retirement or at time of the death of such member, whichever occurs first. Rule 60S-6.001(34), Florida Administrative Code, defines the term "joint annuitant" as follows: JOINT ANNUITANT -- Means . . . any other person who is financially dependent where the other person is someone who is receiving one-half or more of his support from the member or is eligible to be claimed as a dependent or exemption on the Federal income tax return of the member. Petitioner and Mr. Hartley were not married, but they were living together at the time of his death. Except for a relatively short breakup, they had lived together for thirteen years. Petitioner was not claimed as a dependent on Mr. Hartley's federal income tax return. At the times pertinent to this proceeding, Petitioner worked part-time as a bartender. Respondent requires a person who is claiming to be a dependent of a deceased member pursuant to Section 121.021(28)(c), Florida Statutes, to document that the member contributed more than half of the alleged dependent's support. Stanley Colvin, the administrator of Respondent's retirement section, established that the Respondent typically reviews financial data for the year preceding the member's death in determining whether the deceased member contributed half of the alleged dependent's support. In making this determination, the Respondent determines the amount that the alleged dependent has to contribute to his or her own support and thereafter requires the alleged dependent to establish that the member contributed an amount equal to or more than that amount. Since the member died in June of 1994, Respondent in this case examined the W-2 statements for Petitioner and for Mr. Hartley for several years proceeding his death and for the year 1994. The 1993 W-2 statements reflect that Mr. Hartley had income from his employment of $67,360.23 while Petitioner had income from her employment of $9,450.00. Based on the differences between their earnings, it did not appear that there would be a problem with Petitioner's claim when Respondent's staff first reviewed the claim. The house in which Petitioner and Mr. Hartley lived at the time of his death was titled solely in the name of the Petitioner. This house was purchased in 1992. The fact that Petitioner owned the house only in her name caused Respondent's staff to question this claim. After learning about the house, Respondent's staff asked Petitioner to document that Mr. Hartley contributed more than half of her support and requested that she provide copies of cancelled checks and tax returns. In response to that request, Petitioner provided copies of certain cancelled checks and copies of her tax returns for 1992 and 1993. 1/ Mr. Hartley and Petitioner routinely gambled at Seminole Bingo. The down payment for the house came from their bingo winnings. Although they both gambled at bingo, Petitioner usually sat in the chair so that she would be the one to claim any bingo winnings. These winnings were reported on Petitioner's income taxes for the years 1992 and 1993. For 1992, Petitioner claimed bingo winnings in the amount of $60,531 and wagering losses in the amount $45,850. For 1993, Petitioner claimed bingo winnings in the amount of $21,860 and wagering losses in an equal amount. Petitioner's federal income tax return for 1993 reflected an adjusted gross income of $31,508. This sum included bingo winnings of $21,860. Petitioner testified, credibly, that they did not go to bingo as frequently in 1994 because Mr. Hartley had become interested in racing automobiles, but there was no evidence as to whether Petitioner or Mr. Hartley won at bingo during 1994 prior to Mr. Hartley's death. After reviewing the documentation provided by Petitioner, the Respondent denied monthly benefits to her. Respondent's denial was based on its interpretation of its rule that all income, including gambling winnings, should be considered as being available for the support of a person claiming to be a dependent of a member of the FRS. 2/ Respondent is not concerned with whether the alleged dependent loses his or her winnings at bingo or uses the winnings to pay bills. Respondent allocated the house payments, household expenses, and grocery costs paid by Mr. Hartley to have been one-half for Petitioner's support and the other half for his own support. 3. Respondent determined, correctly, that the documentation did not support a findings that Mr. Hartley contributed more than half of Petitioner's support when the bingo winnings were considered. Respondent advised Petitioner that she was entitled to a refund of Mr. Hartley's contribution to the FRS in the amount of $655.38. Petitioner established that Mr. Hartley paid the house payment ($683.00 per month in 1994), that he paid most of the household expenses, and that he routinely gave Petitioner cash for food, clothes, and miscellaneous expenses. The only bill routinely paid by Petitioner was the utility bill. She also paid her car bill and her auto insurance bill. Mr. Hartley occasionally assisted her with those bills. Based on the totality of the evidence, 4/ including the discrepancy between Mr. Hartley's earned income and Petitioner's earned income, 5/ the fact that Mr. Hartley paid the housing expenses, except for utilities, and the fact that he routinely gave Petitioner cash to use for her support, it is found that Mr. Hartley contributed more than $10,000 a year toward Petitioner's support. The evidence does not, however, support a finding that Mr. Hartley contributed more than $31,000 a year toward Petitioner's support. 6/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order that adopts the findings of fact and conclusions of law contained herein and approves Petitioner's application for monthly benefits as a joint annuitant of Roy Hartley, Jr. DONE AND ENTERED this 1st day of August, 1996, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, 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 1st day of August, 1996.
The Issue The issue for consideration in this matter is whether Peter McRedmond, the deceased, should have been permitted to change the beneficiary on his state retirement plan to elect an annuity for the benefit of his estate and the Intervenor, Martin Horton.
Findings Of Fact At all times pertinent to the issues herein, the Respondent, Division of Retirement, was the state agency responsible for the control, operation and monitoring of the State Retirement System. Petitioner, Eugene McRedmond, is the surviving brother of Peter McRedmond, deceased, a former member of the Florida Retirement System. Intervenor, Martin V. Horton, is the former live-in friend and companion to Peter McRedmond and the individual who claims an interest in Peter's retirements benefits. For some period prior to 1988, Peter McRedmond was employed at Manatee Community College as a psychology professor and as such was a member of the Florida Retirement System, (FRS). He was so employed until he retired for disability in early 1990. Before that time, however, in August or September, 1988, he was diagnosed as having AIDS by Dr. Warren D. Kuippers, a physician with the Community Migrant Health Center. Tests taken at or around that time indicated he was suffering from toxoplasmosis, a disease of the brain in which significant portions of that organ are eaten by parasites, resulting in intermittent periods of impaired judgement and reasoning ability. He also suffered numerous other medical problems including weight loss, a wasting syndrome, general weakness and fatigue. Notwithstanding the seriousness of his illness, because Mr. McRedmond wanted to qualify for retirement under the FRS system, he continued to work for another year to meet the minimum requirements for retirement. On April 27, 1990, he made application for disability retirement to be effective July 1, 1990. As a part of that application, Mr. McRedmond selected Option 1 under the FRS as the method under which he desired his benefits be paid and named the Intervenor, Mr. Horton, as his designated beneficiary to receive any benefits legally due after his death. Mr. McRedmond could have elected to receive benefits under either Option 1 or Option 2 of the plan. Option 3 was not available to him because of his marital status. Under Option 1, he would receive payments of $639.33 per month for the remainder of his life, regardless of how long he lived. Under Option 2, he would have been paid a slightly lesser monthly sum, $587.51, for the rest of his life, but not less than 10 calendar years, and if he were to die before 10 years were up, the payments would go to his designated beneficiary. In May, 1990, consistent with the procedure then in effect within the Division, Mr. McRedmond was sent a second Option selection form to give him as much information as was possib1e and to make sure he understood what he was doing as it related to his option selection. Mr. McRedmond again selected Option 1, had his signature notarized, and returned the executed form to the Division. The individual who performed the notary service did not recall the transaction but indicated her routine practice was not to notarize a document for anyone who did not appear to know what he was doing. Peter McRedmond died on August 23, 1990 from the disease with which he was afflicted. Several months before his death, in mid June, 1990, Mr. McRedmond and Mr. Horton discussed finances and what Horton could expect after McRedmond's death. It is clear that Mr. McRedmond wanted to make arrangements for Mr. Horton to finish his education without having to work while doing so. At that time, McRedmond's life insurance policy, in the face amount of $60,000.00, had Horton as the beneficiary. Shortly before his death, however, upon the prompting of his brother, Eugene, Petitioner herein, Peter McRedmond directed the policy be changed to make his estate the beneficiary. This was done by Eugene through a power of attorney. There was also some discussion of an additional $500.00 per month which was to go to Mr. Horton, but no one, other than Mr. Horton, recalls this. Also shortly before his death, Mr. McRedmond and Mr. Horton travelled to the family home in Connecticut for several weeks. During that time, Mr. McRedmond had at least one major seizure and family members noticed that while he was sometimes forgetful, for the most part his thinking was rational and normal. There can be little doubt that Mr. McRedmond had deep feelings for Mr. Horton and wanted the latter to be provided for after his death. Friends of both relate the numerous comments McRedmond made to that effect and are convinced that at the time he made the contested election, Mr. McRedmond was not of sound mind sufficient to knowingly make the choice he made. To be sure, the ravages of his disease had taken its toll and there were numerous occasions on which he was not lucid or competent to determine issues such as here. On the other hand, the benefits administrator with whom McRedmond talked at the time he selected his retirement plan option was totally satisfied that at that time, he fully understood the nature and effect of the option he selected and was choosing that which was consistent with his desires at the time. By the same token, the notary, whose testimony was noted previously herein, also was satisfied he knew what he was doing at the time of the second election. In its final configuration, Mr. McRedmond's estate includes all his assets, including the proceeds of the insurance policy previously designated to go to Mr. Horton, for a total of approximately $120,000.00. According to the terms of the will, the estate is to be put into a trust from which Mr. Norton is to receive $1,000.00 per month for his lifetime, as well as all his medical expenses. Since Mr. Horton has tested HIV positive, these can be expected to be extensive. Eugene McRedmond is the executor of the estate. Petitioner and Mr. Horton claim that since the trust contains all of Peter's assets existing at his death, the only other source of the additional $500.00 per month would be the benefits from the FRS. Both cite this as evidence of Mr. McRedmond's intent that the option selection providing for payment after death was his intention. This does not necessarily follow, however. Notwithstanding what Petitioner and Intervenor state were his intentions, Mr. McRedomnd took no action to make the change in option selection which would have effectuated them. Instead, he went out of town to visit family for several weeks, and even after receipt of the first retirement check, received on July 31, 1990, still took no action to make the change. During this period, after the return from Connecticut, Mr. McRedmond's condition deteriorated to the point he was often bedridden and was periodically unaware. However, there is ample evidence to indicate that he was often lucid during this period and still took no action to change his retirement option. During this time, Mr. Horton conducted come of Mr. McRedmond's business affairs for him pursuant to specific instructions. These included making bank deposits and as a part of one of these deposits, when Horton was to deposit two checks as requested by McRedmond, he also deposited the first retirement check. Horton and Eugene McRedmond both claim that at no time did Peter McRedmond ask or authorize him to do so. In a visit that Petitioner made to his brother in early August, 1990, just weeks prior to Peter's death, according to Petitioner his brother explained he had selected the wrong retirement option and requested that Eugene attempt to change the election. Peter gave Eugene a Power of Attorney with which he was to do this as well as to change the beneficiary on the life insurance policy. Consistent with those instructions, Eugene wrote a letter to the Division explaining the situation and that the check had been deposited by mistake. On August 13, 1990, Eugene telephonically contacted the Division where he spoke with Melanie White. During this conversation, in which he again spelled out the circumstances which he believed constituted the mistaken election, he was told to file a power of attorney. When he did this, the Division would not honor it claiming that since it had been executed in May, 1990, some three months earlier, it was not current. Subsequent to the death of Peter McRedmond and the filing of the claim against the Division, Eugene McRedmond and Martin Horton have entered into an agreement whereby any sums recovered from the Division will be split with 25% going to Mr. Horton and 75% going to the Trust. Upon the death of Mr. Horton, any sums remaining in the trust will be split by Eugene McRedmond and another brother.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner's and Intervenor's claims for retirement benefits under Option 2 of the Florida Retirement System retirement plan, on behalf of Peter McRedmond, be denied. RECOMMENDED in Tallahassee, Florida this 29th day of July, 1991. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Buildi5g 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clark of the Division of Administrative Hearings this 29th day of July, 1991 APPENDIX TO RECOMMENDED ORDER IN CASE NUMBER 90-7104 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER AND INTERVENOR: Accepted and incorporated herein. Accepted and incorporated herein. First two sentences accepted and incorporated herein. Third sentence not proven. & 5. Accepted and incorporated herein. Accepted and incorporated herein. Accepted that Peter McRedmond had numerous conversations with friends about providing for Mr. Horton, but it was not established that he mentioned using his retirement benefits for that purpose. & 9. Accepted and incorporated herein. Accepted and incorporated herein. Rejected as not necessarily following from the facts. Rejected as speculation not supported by fact, except that Petitioner claims Peter desired to change the option selection. First sentence accepted. Second sentence accepted in so far as it asserts Peter told Horton he would receive a monthly sum of $1,000.00. Balance rejected. Accepted and incorporated herein. Rejected as speculation and conclusion except for first sentence and first clause of second sentence. Accepted and incorporated herein. 17.-20. Accepted and incorporated herein. 21. First and second and last sentences accepted. 22.-24. Accepted. Accepted and incorporated herein. Accepted. & 28. Accepted. 29. Irrelevant. FOR THE RESPONDENT: 1-4. Accepted and incorporated herein. Accepted and incorporated herein. & 7. Accepted and incorporated herein. 8.-10. Accepted. Ultimate finding accepted. On the date he filed his application, Peter McRedmond was capable of understanding what he was doing and the implications thereof. & 13. Rejected as comments of the evidence and not Findings of Fact. First four sentences accepted. Remainder rejected except that McRedmond wanted Horton to get at least $1,000.00 per month for life, and more if possible. & 16. Accepted except for last two sentences of 16. Accepted except for last sentence which is a comment on the evidence and not a Finding of Fact. Accepted. & 20. Accepted and incorporated herein. Accepted. & 23. Accepted and incorporated herein. 24. Accepted and incorporated herein. COPIES FURNISHED: Edward S. Stafman, Esquire Stafman & Saunders 318 North Calhoun Street Tallahassee, Florida 32301 Stanley M. Danek, Esquire Department of Administration Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 A. J. McMullian, III Director Division of Retirement Cedars Executive Center, Bldg. C 1639 North Monroe Street Tallahassee, Florida 32399-1560 John A. Pieno Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Linda Stalvey Acting General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
Findings Of Fact The Respondent, State of Florida, Division of Retirement, is charged with the general administration and the responsibility for the proper operation of the retirement system, and for implementing the provisions of Chapter 238, Florida Statutes. The Division of Retirement was created in 1972, and is the trustee of the annuities savings trust fund and the pension accumulation trust fund of which Petitioners are beneficiaries. In this capacity Respondent is successor to prior trustees, the Teachers Retirement System and the State Board of Administration. Subsection 238.07(2)(d), Florida Statutes, provides for a teacher's retirement upon reaching the age of 50 after 25 years of service (known as Plan D). Petitioners retired in 1973 an 1974, having satisfied the requirements of Plan D and are receiving retirement allowances under this plan. The allowance consists of a pension funded by the State of Florida and an annuity funded by member contributions. Petitioner, Rex C. Bishop, was a teacher in the Dade County Public School System from 1949 until his retirement under Plan D in 1974. At retirement on August 1, 1974, Mr. Bishop began receiving an annual retirement allowance of $5,656.40 which included an annual pension of $3,477.65 and an equal annuity of $2,178.75. The annuity was financed by the member's accumulated contributions plus accrued interest of $34,422.07, resulting in a monthly benefit of $471.37 under the option chosen by Mr. Bishop. Petitioner, Jessie N. Karp, was a teacher in the Alachua County Public Schools from 1950 until 1969, at Lake City Community College from 1969 through 1972, and the University of Florida, Gainesville, Florida, from 1972 until her retirement in 1973 under Plan D. At retirement on July 1, 1973, Mrs. Karp began receiving an annual retirement allowance of $4,158.85 which included an annual pension of $2,676.67 and an annual annuity of $1,482.18. The annuity was financed by the member's accumulated contributions plus accrued interest of $25,111.13, resulting in a monthly benefit of $346.58 under the option chosen by Mrs. Karp. Petitioner, Stanley G. Rosenberger, was a member of the faculty of the University of Florida, Gainesville, Florida, from 1947 until his retirement in 1974 under Plan D. At retirement on January 1, 1975, Mr. Rosenberger began receiving an annual retirement allowance of $7,446.33 which included an annual pension of $4,708.44 and an annual annuity of $2,737.89. The annuity was financed by the member's accumulated contributions plus accrued interest of $41,572.08, resulting in a monthly benefit of $620.53 under the option chosen by Mr. Rosenberger. Plan D provides for a pension to be funded from monies paid by the State equal to one one-hundredth (one percent) of the average final compensation times the number of years served. Plan D also includes a variable annuity funded by the member's accumulated contributions. The total benefit or retirement allowance is not a fixed percent of average salary because the annuity is variable. However, Plan D was designed to provide an annual retirement benefit equal to approximately one-half of the average final compensation after twenty-five years of service at age fifty. This would require an annuity of one percent, which would approximately match the state funded pension. 1/ When Mr. Rosenberger, who was the only Petitioner to testify in this proceeding, elected to participate in Plan D effective in 1947, he was advised by the personnel administrators at both the Florida Agricultural Extension Service and the University of Florida that he would receive half of his average income at the retirement age of 50 after 25 years of service. This information was consistent with the goal of Plan D as established in Chapter 238, Florida Statutes. An actuary had assisted in setting up Plan D in 1947, based on 1939 data. However, no actuary was utilized again until about 1955. By the early 1950's, it became apparent to retirement system administrators that Plan D was not obtaining the funds required for the one percent annuity. Factors contributing to annuity benefits of less than one percent included increasing average salaries, low earnings on investments, and a limitation on contribution rates. The rate of contribution to Plan D as initially set by the actuarial firm of George Buck & Company, New York, was 9.24 percent to 13.58 percent of salary depending upon the member's age at entry into Plan D. That rate of contribution was later raised to 9.49 percent to 13.83 percent based on a legislative increase in the Survivor's Benefit Fund under Subsection 238.09(5), Florida Statutes (1957). The actuarial funding of a one percent annuity would ultimately have necessitated raising the contribution rate to between fifteen and twenty percent of salary during the years of active employment. Rather than increase contribution rates to levels considered prohibitive, retirement system administrators closed Plan D to new members on July 1, 1951. When the annuity funding problems became apparent to administrators, various meetings were held with teachers' groups and letters were mailed to personnel officials in the state school system to advise Plan D members that they could not expect the proposed one percent annuity to be realized. However, retirement system officials did not attempt to inform individual members of the Plan D annuity shortfall since mailing addresses were not maintained. Petitioner Rosenberger first became aware of the shortfall in 1972, when he began preparing for retirement. Until 1957, the funds were invested by the Board of Trustees of the Teachers Retirement System. During this period, investments were limited by law to government guaranteed securities. Interest was distributed to member accounts by determining total earnings in the annuity trust fund, subtracting expenses, and distributing the remainder proportionally to each member's account. The interest credited to members' accounts from 1947 to 1957 did not exceed three percent. After 1957, the State Board of Administration assumed responsibility for investing all state funds including retirement funds. Interest credited to member accounts increased from three percent in 1957 to seven percent in 1974. During comparable years, U.S. Treasury Note interest payments generally exceeded these annual interest credits by one to two percentage points. High grade corporate bond interest rates and new home mortgage yields were substantially higher than the interest credited to member accounts during comparable years. The annuities Petitioners now receive are the actuarial equivalent of their accumulated contributions on the basis of the assumptions in effect at the time of their retirement in 1973 and 1974. Had Petitioners retired before an annuity rate table change in 1972, they would have received a 15 percent higher annuity with respect to their final salaries. These reduced rates resulted from changes in mortality assumptions and interest rates, and cost of living escalation mandated by the Legislature. As a result of changes in the system and the early funding shortfalls, each Petitioner suffers a deficit in anticipated retirement benefits in excess of $1,000 annually. However, each Petitioner had the opportunity to make a lump sum contribution to the retirement trust account in order to assure a retirement allowance equal to one-half of his or her prospective average final compensation. See Subsection 238.09(1)(f), Florida Statutes. Mr. Rosenberger specifically declined the limp sum contribution option when it was called to his attention. The remaining Petitioners were presumably aware of this provision and likewise declined.
Recommendation From the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration, Division of Retirement, enter a final order dismissing the Petition. 2/ DONE AND ENTERED this 12th day of May, 1981, in Tallahassee, Leon County, Florida. R. T. CARPENTER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 1981.
