The Issue Whether petitioners Hampton, Busbee, Davis and Robertson, as elected board members of the Escambia County Utilities Authority, are eligible for membership in the Elected State Officers' Class of the Florida Retirement System as "county elected officers" within the meaning of Section 121.052(1)(g), Florida Statutes (1985)?
Findings Of Fact By letter dated April 17, 1985, A. J. McMullian III, State Retirement Director, advised C. H. Wigley, Jr., Acting Executive Director of the Escambia County Utilities Authority (ECUA) that the individual petitioners were eligible for inclusion in the Regular Class, but not the Elected State; Officers' Class, of the Florida Retirement System. Respondent's Exhibit No. 8. "The major difference between the Elected State Officers' Class and the Regular Class is the ESOC members . receive a higher retirement benefit for the same number of years of service." (T. 38) To finance higher benefits the public employer pays a higher amount, set on "an actuarily sound basis." Deposition of Andrew J. McMullian, III, page 19. ECUA CREATED. A few years back, "Escambia County and the City of Pensaco1a, felt it was time . . . to combine . . . utilities' systems into one agency. The City had just completed construction of a twenty-million-gallon-a-day treatment plant and had excess capacity. [Unincorporated] Escambia County had the .,. customers but not the facilities ." (T. 74) "Escambia County was faced with extending or having to go to the bond market to borrow significant money to built] treatment facilities . . . [but] it was more practical that the City and County get together." (T. 88) By special act the legislature created the ECUA to purchase and operate the water and sewer systems that had belonged to both City and County, and to exercise "all powers with respect to water and sewer, and such other additional utilities as may be hereafter designated . . . which are . . . could be, or could have been but for this act, exercised by the City of Pensacola or Escambia County, Florida." Ch. 81-376, Section 3, Laws of Florida, (1981). The ECUA came into existence on October 1, 1981, (T. 90) and now provides natural gas service (T. 95) at least outside the franchised area of the City of Pensacola. Ch. 85-410, Section 5(r), Laws of Florida (1985). The ECUA is authorized to provide utility services to the extent of its capacity to do so even in areas outside Escambia County. Ch. 85-410, Section 5(q), Laws of Florida (1985). The original Special Act transferred city and county utility employees to the ECUA "without loss of benefits, Ch. 81- 376, Section 9(c), Laws of Florida (1981j, and specifically provided, with respect to retirement benefits: (b) The authority may provide social security for its employees pursuant to the provisions of chapter 650, Florida Statutes, and may bring its employees under the Florida Retirement System, the State and County Officers and Employees Retirement System, or any other qualified retirement program. (c) . . . Employees who are transferred to the authority and who are members of the retirement systems available to employees of the City of Pensacola or Escambia County shall not lose those pension or retirement rights or any reserves accrued to their benefit during the period of their employment by the city or county. Such employees may elect to retain the pension and retirement rights accrued during the period of their employment by the city or the county. Any employee so electing shall give written notice of his election, within thirty (30) days or such longer period of time determined by the authority after the effective date of the transfer, to the City Manager of the City of Pensacola or to the County Administrator of Escambia Coutny, as appropriate, who shall then process the notice. In the event any employees elect to retain their pension and retirement rights accrued during the period of their employment with the city or the county, or prior to such election, the authority shall pay into the appropriate retirement system during the period that such employees remain as authority employees, such sums of money as are paid by the city or the county for the benefit of such employees in order to guarantee their continuing participation in such retirement program. The authority may make appropriate deductions from the employees' salaries to preserve their retirement benefits. Chapter 81-376 Section 9(d), Laws of Florida (1981) Escambia County joined the Florida Retirement System effective October 1, 1982. (T. 90) None of the individual petitioners were transferred to the ECUA by Chapter 81-376, Section 9(c), Laws of Florida (1981), although Terry D. Busbee, the Chairman, had worked for Escambia County for 18 years, as Supervisor of Taxes, (T. 58) and W. F. Hampton was employed with a governmental agency participating in the Florida Retirement System as early as 1977. Petitioners' Exhibit No. 3. ELECTED BOARD As required by Chapter 81-376, Section 4, Laws of Florida (1981), the Escambia County Commission selected three members of the ECUA Board, two of whom were county commissioners; and the Pensacola City Council selected three members of the ECUA Board, two of whom were city councilmen. These six then selected the seventh and final ECUA board member. Thereafter, a second Special Act, Chapter 83-403, Laws of Florida (1983) and then a third amended the original Special Act, to provide that the successor of the third County Commission appointee and the "successors of the members of the Board of County Commissioners] and [City] Council appointed to" Chapter 84-427, Section 1, Laws of Florida (1984), the ECUA Board, would be elected in 1984, while the terms of the other two ECUA board members would, "expire upon the commencement of the terms of the members," Chapter 84-427, Section 1, Laws of Florida (1984), elected to succeed the county commission appointees and the city council members. These five were "eligible for reelection." Chapter 81- 376 Section 4(c), Laws of Florida (1984). The four individual petitioners in the present case seek membership in the Elected State Officers' Class effective January 8, 1985, the date the successor terms began. By passing a resolution and signing an agreement effective October 1, 1982, (T. 108), the ECUA joined the Florida Retirement System and "decided to purchase past service back to October, '81, for all employees who were employed as of October 1st, '82." (T. 107) See Respondent's Exhibit No. 5. Beginning with the 1984 elections, candidates for the ECUA Board had to meet the same qualifications as candidates for county office and had to live in the county commission district they sought to represent. Each of the five single-member districts has the same boundaries as the corresponding county commission district. Terms of ECUA board members are staggered just as county commissioners' terms are and, beginning in January 1987, all members will be elected for four-year terms, as county commissioners are. Each ECU board candidate is subject to state election laws governing filing papers, qualifying fees and the like, to the same extent as candidates for county office are; and each takes an oath before entering upon the duties of the office. Petitioners' Exhibit No. 2. The ECUA is on the same fiscal year as Escambia County, October 1 to September 30 (T. 63) and its territorial; jurisdiction is coextensive with Escambia County. The ECUA has all of the duties that Escambia County and the City of Pensacola had relative to water and sewer, before ECUA's creation. (T. 65) The ECUA's principal source of revenue is utility charges, at rates which it is empowered to establish, Chapter 81-376, Section 8, Laws of Florida (1981), although it receives state and federal grants (T. 93); and has authority to borrow money, and has in fact issued bonds. (T. 80) For the fiscal year ending September 30, 1984, Escambia County paid $2,230,040 to the Social Security system while ECUA paid $342,402.00 Petitioners' Exhibits 4 and 5. POWERS AND DUTIES The Special Act confers on the ECUA "all privileges, immunities and exemptions accorded political subdivisions of this state," Chapter 81-376, Section 5(j), Laws of Florida (1981) and makes ECUA's "property, facilities, services and activities . non-taxable." Chapter 81-376, Section 6, Laws of Florida (1981). For purposes of the Public Records Act, but not for the purposes of the Administrative Procedure Act, Chapter 81-376, Section 4(g), Laws of Florida (1981) provides that the ECUA "shall be deemed to be an 'agency'." The same provision specifies that the ECUA "shall be deemed an agency or authority of the county for purposes of S.286.011, Florida Statutes, the "'Government in the Sunshine Law'." Although it once contracted for accounting services from the county, (T. 101), the ECUA budget is .separate and distinct from the county budget. The State Comptroller's Office has determined that ECUA "is an independent authority for purposes of Chapter 218," Deposition of Billy J. Givens, page 8, and the ECUA has not disputed this determination, possibly because it was never advised of the determination as such. The ECUA uses the same financial reporting form that counties and independent districts use in filings required by law to be made with the State Comptroller. The ECUA treats at least some "county buildings-as customers for water and sewer purposes." (T. 70) In the spring of 1985, ECUA switched the tags on its vehicles from county tags to state tags. (T. 98) The ECUA must apply to Escambia County for permits in order to cross county rights of way (T. 101), just as the City of Pensacola did when it operated its water and sewer system. (T. 102) The ECUA also has to apply for a permit in order to cross city rights of way. (T. 101) Deposition of Charles W. Bates page 7. COUNTY OFFICERS The "Florida Retirement System . . . is a statewide consolidated system that covers public programs and employee groups on all levels of government, state, county, school board, cities, special districts . . . ." Deposition of Andrew J. McMullian, III, page 13. State retirement programs before the Florida Retirement System, which came into existence on December 1, 1970, did not distinguish between elected officials and regular employees. Deposition of Ruth Sansom, page 16. After the Elected State Officers' Class had been created, the law was again amended, effective July 1, 1981, to make "county elected officials, including any sheriff, tax collector, property appraiser, supervisor of elections, clerk of the circuit court, county commissioner, school board member, or elected school board superintendent," Section 121.052(1)(g), Florida Statutes (1985), eligible for participation in the Elected State Officers' Class. Chapter 81-214, Laws of Florida (1981). Aside from holders of the offices named, the Comptrollers of Orange and Escambia Counties and the Mayor of Metropolitan Dade County are enrolled in the Elected State Officers' Class. (T. 40) Respondent viewed the Mayor of Metropolitan Dade County as differing in name only from a county commissioner and allowed participation in the Elected State Officers' Class on that account. (T. 50) With respect to the Orange and Escambia County Comptrollers, "the majority in one case of the duties of the Clerk were transferred to the Comptroller and in the other case, it seems like it was about a 50/50 split of the prior duties being transferred over to the Comptroller." (T. 50) In these circumstances respondent decided that "based on the functions that they were performing, the duties of the office, that whether the title said Comptroller or Clerk, they essentially fit the definition." (T. 50) In response to a question from respondent's Assistant Director, Lew Dennard, respondent's chief legal officer, Augustus Aikens, Jr., wrote a memorandum dated October 20, 1981. Petitioners' Exhibit No. 1. As phrased by Mr. Aikens, the question was whether the statutory language "limits membership in the Elected State Officers' Class to those elected county officers who are enumerated in Section 121.052(1)(g)?" In the memorandum, Mr. Aikens declared himself of the opinion that the language "any county elected officer" was intended to establish the class of individuals eligible for participation in the Elected State Officers' Class; and the term "including" followed by an enumeration of elected county officers was merely intended to be descriptive of the individuals eligible for inclusion in the Elected State Officers' Class as county elected officers. Accordingly, the class is not exhausted by the enumeration found in subsection (g). Other elected county officers are also includable in the Elected State Officers' Class. Petitioner's Exhibit No. 1. On November 6, 1984, however, respondent promulgated Rule 22B- 1.05, Florida Administrative Code, which did not make participation in the Florida Retirement System mandatory for any county officer and provided: Effective July 1, 1981, participation in the Elected State Officers' Class of the Florida participation in the Elected State Officers' Class of the Florida Retirement System shall be optional for the following elected county officers: sheriff, tax collector, property appraiser, supervisor of elections, clerk of the circuit court, county commissioner, district school board member, and elected district school board superintendent. The elected officer may transfer to and participate in the Elected State Officers' Class by submitting an application to the Administrator within one year from July 1, 1981 if already in office on that date, or within one year from the date of election if elected after July 1, 1981. Officers appointed to fill an unexpired term may join the Elected State Officers' Class under this provision. An elected county officer who transfers to the Elected State Officers' Class and who fails to win reelection to an elected office shall cease to be a member of the class. If the member returns to a position covered under the Florida Retirement System he shall receive credit thereafter based on the class of membership of his position. 22B- 1.055(2)(d) In these proceedings, respondent takes the position that this rule provision, and the statutory language it implements preclude petitioners' participation in the Elected State Officers' Class of the Florida Retirement System.
Recommendation RECOMMENDED: That respondent grant the individual petitioners' requests to be included in the Elected State Officers' Class of the Florida Retirement System effective January 8, 1985. DONE and ENTERED this 27th day of February, 1986, in Tallahassee, Florida. ROBERT T. BENTON, II 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 27th day of February, 1986. COPIES FURNISHED: CARSON LINN, P.A. Cambridge Centre 253 East Virginia Street Tallahassee, Florida 32301 Ray Kievit 15 West Main Street Pensacola, Florida 32501 Andrew J. McMullian, III, Director Division of Retirement Building C Cedars Executive Center Tallahassee, Florida 32303 Stanley M. Danek, Esquire Cedars Executive Center 2539 North Monroe Street Suite 207-Building C Tallahassee, Florida 32303 APPENDIX Petitioners' proposed findings of fact one through five, seven through fourteen, sixteen, nineteen, twenty, twenty-three through twenty-seven, twenty nine, thirty-one, thirty-three, thirty-four and thirty-five have been adopted, in substance. Petitioners' proposed finding of fact six is supported by the weight of the evidence, except for the final sentence which states that ECUA board members are required to take the same oath of office as that sworn to by county commissioners." Although they are similar, the oaths are not identical. Petitioners' proposed finding of fact fifteen incorporates petitioners' exhibit 6 which is accurate except that it overlooks the initial two years (1985-1987) during which some of the ECUA board members have two-year terms. Petitioners' proposed findings of fact seventeen and eighteen fail to mention that ECUA also exercises powers and duties pertaining to what were city utilities. Petitioner's proposed finding of fact twenty-one is supported by the weight of the evidence except for the second sentence, which was not proven. Petitioners' proposed finding of fact twenty-two is accurate insofar as the date of the adoption of Rule 22B-1.055, Florida Administrative Code, but there was no competent evidence of the intent of the Division of Retirement, which, on this record, must be inferred from the language of the rule. Petitioners' proposed findings of feet twenty-eight, thirty and thirty-two pertain to the course of free-form proceedings, which became immaterial once formal proceedings began. Respondents' proposed findings of fact one through five, seven, eight, and nine have been adopted, in substance. Respondents' proposed finding of fact six is supported by the weight of the evidence, except that it was Ch. 83-403, Laws of Florida (l984) that made the ECOA board elective. After the Division informed Petitioners by letter dated April 17, 85 that they were ineligible "for membership in the Elected State Officers' Class", Petitioners filed their petition for formal administrative proceedings with the Division of Retirement on Hay 14, 1985. The petition was assigned to the Division of Administrative Hearings. The instant case was later consolidated with a rule challenge by Petitioners in DOAH Case No. 185-2518R. A Final Order in the rule challenge was entered by the Hearing Officer on February 27; 1986, holding that Rule 22B-1.055(2)(d), Florida Administrative Code, was an invalid exercise of delegated legislative authority. That Final Order was not appealed by the Division. HEARING OFFICER'S FINDINGS OF FACT Because the Division is accepting certain of the Hearing Officer's Findings of Fact and rejecting others in part, each finding of fact in the Recommended Order will be considered individually. Paragraph 1: Accepted. Paragraph 2: Accepted. Paragraph 3: Accepted. Paragraph 4: Accepted. Paragraph 5: Accepted. Paragraph 6: Accepted. Paragraph 7. Accepted in part, rejected in part. The jurisdiction of the Authority is greater than the prior jurisdiction of Escambia County since it may provide utility service to areas outside Escambia County. See Paragraph 2 of Recommended Order. The only source of revenue possessed by the Authority is utility rates paid by customers of its systems. Funds obtained from bond issues, loans, or the federal government, are not considered as revenue. Paragraph 8: Accepted. Paragraph 9: Accepted in part. The phrase ".possibly because it was never advised of the determination as such" is rejected as having no support in the record. Paragraph 10. Accepted. Paragraph 11. Accepted. Paragraph 12. Accepted. Paragraph 13. Accepted. ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF ADMINISTRATION DIVISION OF RETIREMENT ESCAMBIA COUNTY UTILITIES AUTHORITY, W. F. HAMPTON, TERRY BUSBEE, GEORGE DAVIS, and WILSON B. ROBERTSON, Petitioners, vs. DOR Case No. DR85-5 DOAH Case No. 85-1718 STATE OF FLORIDA, DEPARTMENT OF ADMINISTRATION, DIVISION OF RETIREMENT, Respondent. /
Findings Of Fact Petitioner was employed as a Police Sergeant with Metropolitan Dade County. He is 38 years old and has 13.83 years of creditable service under the Florida Retirement System. (Exhibit A) On February 16, 1973, Petitioner was involved in an automobile accident in Broward County, Florida while serving with a detached drug abuse unit. On February 25, 1974, Petitioner applied for disability retirement benefits under Section 121.091(4) and Section 121.021(13), Florida Statutes, stating: "I believe I am incapacitated for further service in Florida because of injuries received in an in-line-of-duty automobile accident that occurred on 16 February 1973." (Exhibit A) After considering the evidence submitted in support of Petitioner's application, the Administrator of the Florida Retirement System determined that insufficient information was submitted to substantiate a finding of total and permanent disability as provided by Section 121.091(4), Florida Statutes. As a result, Petitioner was notified on March 20, 1975 of the Administrator's intention to deny the subject disability retirement application. (Exhibit B) Notice of Petitioner's right to an administrative hearing pursuant to Chapter 120, Florida Statutes, was also provided at that time. On April 2, 1975, Petitioner notified the Respondent of his intention to Petition for an administrative determination of his disability application pursuant to Section 120.47(1), Florida Statutes. (Exhibit C) Whereupon, the Director of the Respondent requested that the Division of Administrative Hearings assign a hearing officer to conduct a hearing which was ultimately held at 1350 N.W. 12th Avenue, Miami, Florida on the 12th day of September, 1975. (Exhibit D) The first witness to appear at this hearing on Petitioner's behalf was Detective Pete Kreimes who is employed by Metropolitan Dade County. The witness testified that he was trained by the Petitioner for the narcotics section and the two later became personal friends. He has known Petitioner for about five (5) years. Mr. Kreimes testified that Petitioner was an outstanding investigator while employed by Metropolitan Dade County. While performing these duties, Petitioner participated in the physically demanding activities of a law enforcement officer. He related the circumstances surrounding Petitioner's accident of February 16, 1973, and the long range affects he felt the accident had on Petitioner's physical condition. This included Petitioner's apparent discomfort in walking, standing or sitting for extended periods of time. The witness also stated that Petitioner developed a serious drinking problem after the accident due to what he believed was the frustration of not being able to continue in police work and because of the financial problems being encountered. Mr. Kreimes felt there were no jobs available in the area of law enforcement wherein the Petitioner could render useful and efficient service on a full-time basis. The next witness to appear was one Dr. Gilbert. Dr. Gilbert is a Medical Doctor with specialties in Psychiatry and Neurology. He also holds a Ph.D.. degree in the field of Psychology. Dr. Gilbert detailed the neurological impairments to the cervical and lumbar areas of Petitioner's spine. The witness related that the Petitioner suffered from a post concussion syndrome following a brain concussion. The doctor also diagnosed a traumatic neurosis resulting from the pain and trauma of the accident and manifesting itself in tension and anxiety. The witness acknowledged Petitioner's allergies to various medications which might otherwise be used to alleviate muscle spasm, tension and some of the pain brought on by neurological probless. Dr. Gilbert felt that the combination of Petitioner's inability to alleviate pain in this manner and his various emotional problems led to the excessive use of alcohol. However, the witness did not feel that Petitioner's excessive use of alcohol was advisable; although, he did feel, considering Petitioner's allergies, that the only hope of Petitioner's dealing with his pain was by mental conditioning. Dr. Gilbert felt that the Petitioner had not reached maximum medical improvement, because he had not yet completed his diagnosis and work up on Petitioner's disability due to possible brain damage. However, he did feel that, due to the combination of Petitioner's post concussion syndrome, neurological and emotional problems, he was unemployable at this time, without regard to Petitioner's excessive drinking. Mr. Harold Dunsky also testified as an employment expert on behalf of the Petitioner. Mr. Dunsky holds B.A., M.A., and J.D. degrees and has worked in the area of job placement and vocational counseling for the State of Illinois and the U.S. Government for over twenty years. Mr. Dunsky testified that after interviewing the Petitioner and considering various unidentified medical reports, he felt the Petitioner was unemployable on a full-time basis. The final witness to testify was the Petitioner, Robert Barr. The Petitioner related his educational and employment experience which consisted of an in precriminology and approximately fourteen (14) years as a police officer with Metropolitan Dade County. Mr. Barr explained that the first indication of his allergy problems was in 1961 when his upper back, shoulders and arm began to ache while playing ball. As a result of his allergic reaction to the medication taken at this time, he suffered his first cardiac arrest. In 1966 the Petitioner suffered another cardiac arrest as a result of a penicillin shot administered during a bout with the flu. Another allergic reaction took place in a dentist's office in 1970 as a result of an injection of sodium penathol. The medical witnesses had been advised by Barr of his past allergic reactions. Petitioner next detailed the circumstances surrounding his accident in February of 1973. He also related his current physical limitations, his financial problems, his desire to return to the field of law enforcement and his frequent use of alcohol to alleviate his pains and problems. At this point the Deposition of Dr. William Scott Russell, Jr., Dadeland Medical Building, Suite 303, Miami, Florida, was made a part of the record. Dr. Russell is a neurologist who began treating the Petitioner on September 10, 1973. Dr. Russell testified that the Petitioner complained of shoulder and arm pain due to thoracic outlet syndrome. The witness stated that this could be caused by a so-called jerk-injury or as a secondary phenomena in association with muscle spasm produced by an underlying disc injury. Dr. Russell also explained an impairment to the lower lumbar region of Petitioner's spine. This was diagnosed as nerve roots irritation of the, S1 nerve root. (Dep. Russell, 20) The witness stated that the Petitioner had a history of low-back problems relating to an automobile accident which occurred several years prior to his accident in February of 1973. (Dep. Russell, p. 14) Dr. Russell stated that the Petitioner represented that the pain from his prior accident ceased over a period of eight (8) months. (Dep. Russell, p. 14 and 44) Dr. Russell stated that based upon Barr's statements to him Barr had apparently fully recovered from that accident. The witness also stated that the Petitioner had a congenital defect in the lower lumbar area of his spine. Dr. Russell however concluded that this congenital defect had not effected Barr prior to the February 1973 accident because Barr had not had any pain prior to that accident, and lack of pain would have been evidence of an absence of disease or problems with regard to the congenital defect. (Dep. Russell, p. 29) The witness testified further as follows: "Q. Doctor, do you have an opinion, based on the reasonable degree of medical probability, as to whether or not the laminectomy defect was, is related at all to the accident here? First of all, I don't think it is a laminectomy defect. I think a laminectomy implies a surgical defect. I think it is probably a bony, let's say a failure, of the bone to fuse over a specific area. Q. Does that contribute, Doctor, in your diagnosis of the disc, does that contribute to the pain and discomfort in the area that you found? A. By itself it should not but it can contribute to an unstable back which may, in turn, make it easier for that particular individual to have to sustain disc injury." (emphasis supplied) Dr. Russell also testified that the Petitioner had multiple and severe drug allergies. Dr. Russell testified that the Petitioner began consuming excessive amounts of alcohol as a substitute for various muscle relaxants. As a result of Petitioner's resort to alcohol he began experiencing episodes of alcoholic gastritis or peptic ulcer disease. (Dep. Russell, p. 38) When asked to express in layman's terms the extent of the Petitioner's physical limitations, Dr. Russell testified: "A. I don't -- I wouldn't consider him, at present, employable under any circumstances or under any quasi- responsible type position, either from the point of view of having to do any sort of physical activity or, I hate to say this, but from the point view of his reliability at this particular moment. Q. What do you mean by that, 'reliability'? A. I'm not certain that alcohol and reliability go hand in hand." (emphasis supplied)
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 in this proceeding is whether Petitioner was convicted of specified criminal offenses, requiring the forfeiture of all his rights and benefits under the Florida Retirement System, except for the return of accumulated contributions.
Findings Of Fact From 1999 until 2017, Bautista was an employee of the Miami-Dade County Public Schools (“MDPS”). On August 24, 2017, Bautista resigned from his position as principal of the Miami Jackson Adult Education Center, an office he had held since 2011. Bautista departed shortly after being arrested on charges of organized fraud, official misconduct, and grand theft. In the criminal Information leading to Bautista’s arrest, the State Attorney of the Eleventh Judicial Circuit alleged, in summary, that Bautista had used his position as principal to misappropriate between $20,000.00 and $50,000.00 of MDPS’s funds for personal expenses, and had destroyed official payroll records to cover his tracks. On or about July 10, 2019, Bautista pleaded nolo contendere in the Eleventh Judicial Circuit Court to one count of official misconduct, a felony of the third degree pursuant to section 838.022, Florida Statutes, and to one count of grand theft under section 812.014, Florida Statutes, also a third- degree felony. The court withheld adjudication of guilt and placed Bautista on community control, to be followed by probation. In addition, Bautista was ordered to pay restitution to MDPS in the amount of $41,798.22. SBA is an agency of the state of Florida whose jurisdiction includes the administration of the Florida Retirement System Investment Plan (the “Plan”). By letter dated August 14, 2019, SBA notified Bautista that his rights and benefits under the Plan are forfeit as a result of his pleas of no contest to the aforementioned criminal charges, which had arisen from acts allegedly committed by Bautista as an MDPS employee. SBA offered Bautista an opportunity to request a formal administrative proceeding to contest the determination, and Bautista timely requested a hearing. As grounds for opposing the forfeiture, Bautista claims that his former employer, MDPS, failed to provide him due process of law during the run-up to his forced resignation. He complains, as well, that “procedural irregularities” in the criminal prosecution likewise deprived him of due process. Next, Bautista notes that he never admitted guilt and insists that he is, in fact, innocent of the charges to which he pleaded no contest. Finally, Bautista argues that he was not “convicted” for purposes of forfeiture of retirement benefits, because the court withheld adjudication of guilt on the criminal charges against him. To be sure, if Bautista was not afforded due process or was otherwise victimized by prosecutorial abuse or inadequate legal representation, as he alleges, then Bautista might have suffered an injury for which the law affords redress. But this proceeding is not the vehicle, and DOAH is not the forum, for hearing such disputes. It does not minimize the seriousness of Bautista’s allegations to recognize that, even if true, none of them changes the undisputed facts that he pleaded nolo contendere to the crimes of official misconduct and grand theft, each of which is a “specified offense” under section 112.3173(2)(e), Florida Statutes. Conviction of a specified offense results in the forfeiture of retirement benefits pursuant to the plain language of section 112.3173(3).1 Thus, the MDPS investigation and any “irregularities” in the criminal prosecution are irrelevant to the issues at hand, and the undersigned declines to make findings of fact concerning Bautista’s allegations in this regard.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the State Board of Administration enter a final order determining that Joey Bautista forfeited all his rights and benefits under the Plan, except for the return of any accumulated contributions, when he pleaded nolo contendere to “specified offenses” committed prior to his retirement from public service. DONE AND ENTERED this 7th day of December, 2020, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 7th day of December, 2020. COPIES FURNISHED: Soeurette Michel, Esquire The Michel Law Firm, LLC Post Office Box 245131 Pembroke Pines, Florida 33024 (eServed) Rex D. Ware, Esquire Moffa, Sutton & Donnini, P.A. 3500 Financial Plaza, Suite 330 Tallahassee, Florida 32312 (eServed) Jonathon W. Taylor, Esquire Moffa, Sutton & Donnini, P.A. Trade Center South, Suite 930 100 West Cypress Creek Road Fort Lauderdale, Florida 33309 (eServed) Ash Williams, Executive Director and Chief Investment Officer State Board of Administration 1801 Hermitage Boulevard, Suite 100 Post Office Box 13300 Tallahassee, Florida 32317-3300
The Issue The issues in this case are whether Petitioner was properly enrolled in the Florida Retirement System (FRS) Hybrid Option Plan (Hybrid Option) in 2002, and whether he should be retroactively re-enrolled in the Florida 1 All statutory references are to the 2019 version of the Florida Statutes, except where indicated otherwise. Retirement System Pension Plan (Pension Plan) without having to pay a “buy-in” amount.
Findings Of Fact Mr. Marinak began employment with the Marion County Public School System, an FRS-participating employer, in 1989. At that time, the Pension Plan was the only retirement program available for eligible employees, and, thus, Petitioner was enrolled in the Pension Plan. The Pension Plan is administered by the Florida Division of Retirement (Division of Retirement), which is housed within the Department of Management Services. The Pension Plan is a defined benefit plan; the benefit is formula-based. The formula used for calculating a pension plan benefit is based on total years of service at the time of retirement, membership class, and average final compensation. Mr. Marinak has been continuously employed by an FRS-participating employer from 1989 to present. In 2002, the FRS Investment Plan (Investment Plan) became available to employees participating in FRS. The Investment Plan is administered by Respondent. The Investment Plan is a defined contribution plan; the benefit is based on gains and losses due to market performance. Mr. Marinak was provided a choice window of September 1, 2002, through November 30, 2002, to remain in the Pension Plan or switch to the Investment Plan. The parties stipulate that the Plan Choice Administrator at the time, now doing business as Voya, has records indicating Mr. Marinak elected the Hybrid Option by means of a telephone call on November 27, 2002. Voya no longer has a recording of the call. SBA does not have a recording of the telephone call either. The Hybrid Option is as its name indicates—it is a hybrid of the Pension Plan and the Investment Plan. When the Investment Plan was introduced in 2002, Pension Plan participants, with at least five years of service, could elect to enroll in the Investment Plan with a zero balance. With the election of the Hybrid Option, retirement funds from all years of service prior to the election remain in the Pension Plan; everything from the election forward is administered under the Investment Plan. Hybrid Option participants will receive the resulting defined benefit from the Pension Plan (earned prior to the election) upon retirement, plus the benefits from the investments in the Investment Plan after the election. The Pension Plan portion of the Hybrid Option remains with, and continues to be administered by, the Division of Retirement. The Investment Plan portion is administered by Respondent. Mr. Marinak disputes electing to enter the Hybrid Option. He credibly testified that he did not desire to transfer to the Investment Plan and has no recollection of authorizing such a transfer. Beginning at least as early as 2005, Respondent sent or otherwise made available to Mr. Marinak quarterly “FRS Investment Plan” statements. Mr. Marinak testified that he received these statements, but did not know what they meant. The earliest FRS Investment Plan statement documented by Respondent as having been sent to Mr. Marinak covered the period of January 1, 2005, to March 31, 2005. Mr. Marinak did not inquire about the statement or file a complaint with Respondent after receiving this statement. Beginning at least as early as 2008, the Department of Management Services sent or otherwise made available to Mr. Marinak annual “FRS Pension Plan – Hybrid Option” statements. These statements were sent to Mr. Marinak’s address of record at the time the statements were mailed. Mr. Marinak testified that the addresses where the statements were sent were, indeed, his addresses. Since the transfer in 2002, Mr. Marinak has updated his beneficiary designations for both the Pension Plan and Investment Plan portions of his Hybrid Option. In November 2008, Mr. Marinak communicated by e-mail with personnel at the Division of Retirement about the status of the Pension Plan and the years of service used to calculate his benefits. In December 2008, in response to his inquiry, the Division of Retirement prepared and provided to Mr. Marinak an Estimate of Retirement Benefit. The “Comments” section of the Estimate of Retirement Benefit stated as follows: This estimate is based on retirement at 30 years of service. It represents your 13.40 years of service in the Florida Retirement Pension Plan (8/1989 through 11/2002). You will have to terminate all employment with FRS employer to receive this benefit. You have an additional 6.00 years in the Hybrid Investment Plan through 11/2008; the years in the Hybrid Option are not used in calculating your monthly retirement benefit from the pension plan, which is why they are not reflected in your Member Annual Statement. Mr. Marinak did not inquire about the comment or file a complaint after receiving the Estimate of Retirement Benefit.2 Mr. Marinak testified that he saw the comment, but not being an expert in retirement financing, he did not comprehend what it meant. Mr. Marinak did not present documentary evidence or an audio recording demonstrating that he did not elect to transfer from the Pension Plan to the Hybrid Option. In early 2019, Mr. Marinak, nearing retirement, reviewed his retirement account and recognized that he was enrolled in the Hybrid Option. He contacted the Division of Retirement for guidance on how to switch back into the Pension Plan. The Division of Retirement informed Mr. Marinak that he may utilize a one-time “second election” to move back into the Pension Plan, but must pay a sum of approximately $160,000 as a “buy-in” amount to do so. This sum is derived from an actuarial calculation conducted by the Division of Retirement.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the State Board of Administration enter a final order dismissing Petitioner’s Florida Retirement System Investment Plan Petition for Hearing. DONE AND ENTERED this 27th day of July, 2020, in Tallahassee, Leon County, Florida. S JODI-ANN V. LIVINGSTONE 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 27th day of July, 2020. COPIES FURNISHED: Ruth E. Vafek, Esquire Ausley McMullen 123 South Calhoun Street Tallahassee, Florida 32301 (eServed) Herbert M. Hill Law Office of Herbert M. Hill, P.A. Post Office Box 2431 Orlando, Florida 32802 (eServed) Robert John Marinak 16531 Swan View Circle Odessa, Florida 33556 (eServed) Ash Williams, Executive Director and Chief Investment Officer State Board of Administration 1801 Hermitage Boulevard, Suite 100 Post Office Box 13300 Tallahassee, Florida 32317-3300
The Issue The issue in this case is whether or not the position Petitioner held with Brevard County, Florida, from December 5, 2005, to October 31, 2006, entitled him to service credit in the Florida Retirement System (FRS).
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following Findings of Fact are made: Petitioner is a member of the FRS. He first worked for the Florida Department of Transportation in October 1976 and remained with the Department of Transportation until January 1980, when he began working for Osceola County, Florida. He worked for Osceola County until May 1990, when he began working for Brevard County, Florida. He worked for Brevard County until 2004. At the time he was laid off by Brevard County, Petitioner had 25.5 years of credible service in the FRS. Petitioner's expressed desire was to complete 30 years of credible service in the FRS. To that end, he met with Brevard County officials seeking re-employment in a position that would qualify him for additional credible service. In October 2005, Petitioner met with several Brevard County employees, including the county manager and Human Resource director, seeking a job that would enable him to get 4.5 more years of credible FRS service. As a result of his meetings and efforts, on October 28, 2005, Petitioner was offered a part-time position as a park ranger with duties that included "monitoring any scheduled activities at Rodes [sic] Park on Friday and Saturday evenings from approximately 9:00 p.m. to 1:00 a.m., to ensure orderly behavior of park patrons." Accepting the offered position, Petitioner was employed as a Park Ranger I, with the stated job description. The following information appears on a Brevard County document titled "Authorization to Place Special Services Employee on Payroll" which memorialized his employment: Working Title: Park Ranger I, Part Time (less than 40 hrs per week); Hire Date: 12/03/05; and How many pay periods do you anticipate this job will last? 19 (PP) 38wks. Also noted on this document, "Enroll in FRS 95HA." An inter-office memorandum dated November 17, 2005, from Jeff Whitehead, south area parks operations manager to Peggy Busacca, county manager, regarding Petitioner's hiring, states in part: "This position will require an individual that has an extremely flexible schedule and that can be asked, at times, to report with very little notice. Furthermore, the majority of shifts will be on Friday and Saturday evenings, generally from 8:00 p.m. to 1:00 a.m. . . In addition, providing Mr. Bright with this opportunity will render him eligible to collect his retirement benefits." Frank Abbate, Brevard County Human Resource director, emailed Petitioner on December 19, 2005, stating, in part: "I'm glad to see that . . . you were able to get a position with Parks and Recreation that meets both[,] one of their Department's needs[,] as well as your interest in continuing to earn FRS service credits. I wish you the best and look forward to your achieving your goal of thirty years service under FRS!" Brevard County knew that Petitioner's employment was conditioned on his inclusion as a participant in the FRS, and, in fact, enrolled him in the FRS by making appropriate contributions on his behalf to FRS. At no time did Brevard County advise Petitioner that he was not participating in the FRS. Petitioner relied on Brevard County's assertion that he was an enrolled member of the FRS. Petitioner was hired with the mutual expectation that he would be available to work at Rhodes Park on any Friday and Saturday nights from 8:00 p.m. to 1:00 a.m. and that the employment would continue for 4.5 years so Petitioner would be able to obtain 30 years of credible FRS service. There was nothing "temporary" in the expectation of Petitioner and his employer regarding the duration of employment. During the period in question, December 2005 through October 2006, Petitioner worked at least one day per month. Petitioner's employment was continuing, not temporary, on-call, in that he was scheduled to be available to work at his assigned responsibility every Friday and Saturday. While Petitioner did not work every Friday and Saturday night, Petitioner did, in fact, work every Friday and Saturday night during the period in question, as requested by his employer, Brevard County. That is, he never failed to perform his assigned duties when requested. Petitioner was finally notified on November 7, 2007, that he was ineligible for participation in FRS. During this nearly two-year period of employment, Petitioner satisfactorily performed his employment responsibilities.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Department of Management Services, Division of Retirement, enter a final order finding that Petitioner, Thomas L. Bright, is eligible for participation in the Florida Retirement System, while employed by Brevard County from December 3, 2005, through October 31, 2006. DONE AND ENTERED this 10th day of October, 2008, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 10th day of October, 2008. COPIES FURNISHED: Geoffrey M. Christian, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 Brian D. Solomon, Esquire Brian D. Solomon, P.L. 101 East 13th Street St. Cloud, Florida 34769 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 4050 Esplanade Way Tallahassee, Florida 32399-0950
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts are found: During the development stage of a condominium project, known as Lake Villas Condominium, in Altamonte Springs, Florida, First Federal Savings and Loan of Orlando foreclosed on some forty (40) units of the project. At that time, approximately in November of 1975, thirty-one (31) units already had fee- simple owners or were under a lease/purchase option and they were not involved in the foreclosure proceedings. Mr. David McComb, a vice-president and mortgage loan officer with First Federal Savings and Loan of Orlando, was given the responsibility of assuring the completion of the remaining units, selling the units and setting up a homeowners' association for the Lake Villas Condominium. The petitioner Lake Villas Condominium Association's five-position board of directors was originally comprised of three members who were personnel of First Federal Savings and Loan of Orlando, so that First Federal would have majority control at a time when it held the ownership to the majority of the units. In June of 1976, thirty-seven of the seventy-one units had been sold to individuals. Thereafter, the composition of the petitioner's board of directors changed and the individual-unit owners held the majority of the five positions. Mr. McComb, as a representative of First Federal Savings and Loan of Orlando, remained on the board of directors and continued First Federal's attempts to sell the remaining unsold units. First Federal retained a sales representative who lived in one of the condominium units, operated her sales office from one of the vacant units owned by First Federal and was paid a real estate commission when she sold a unit. The sales contract on the last of the units owned by First Federal was closed on December 12, 1977. Prior to mid-1976, the Florida Power Corporation account for seven or eight common element meters was in the name of First Federal Savings and Loan of Orlando, doing business as Lake Villas Condominium Association, and the billing statements were mailed to the Orlando office of First Federal Savings and Loan. In June or July of 1976, after the majority of units had been purchased by individual owners and majority control of the board of directors was obtained by the individual owners, Mr. McComb of First Federal placed a telephone call to the respondent's Winter Park office. The purpose of this call was to inform respondent that First Federal wanted the account name and address for the seven or eight meters changed and to inform respondent that the Lake Villas Condominium Association had taken over responsibility for the accounts. Mr. McComb spoke on the telephone to a female who handled commercial accounts for the respondent's Winter Park office and informed her that he wanted the name of First Federal Savings and Loan taken off the account and the bills to be mailed to the Lake Villas Condominium Association at a post office box in Altamonte Springs. The female to whom Mr. McComb spoke took down the information regarding the account numbers and change of billing names and addresses, and told him she would take care of it. Mr. McComb did not inquire about a rate adjustment, and no discussion was had concerning rates for the seven or eight meters. Following the June or July, 1976, discussion between Mr. McComb and a female at the respondent's Winter Park office concerning a change in billing name and address, the billing statements were sent and received at the post office address of the Lake Villas Condominium Association, Inc. in Altamonte Springs. Approximately one year later, in mid-1977, Mr. McComb was forwarded some delinquent notices on the seven or eight meters. They had originally been sent to the petitioner's post office box in Altamonte Springs, but were thereafter forwarded to Mr. McComb's attention at First Federal. Mr. McComb noticed that, although the post office address had been changed, the accounts were still in the name of First Federal Savings and Loan of Orlando. He then placed another telephone call to the respondent's Winter Park office, spoke with a female in the commercial department and requested that the name of First Federal Savings and Loan of Orlando be removed from the account and that the Lake Villas Condominium Association, Inc. be inserted as the new-named customer. The female informed Mr. McComb that this request would be taken care of and that nothing further need be done. No inquiry by Mr. McComb or discussion was had concerning a rate adjustment for these seven or eight meters. Electricity for the individual living units of the Lake Villas Condominiums are separately metered. In addition, there are seven or eight separately billed meters which service the common areas of the condominium, such as the two swimming pools, the internal street and sidewalk lighting, the clubhouse and small post lamps for an open green area. From at least April of 1979 through October of 1980, no commercial activity occurred in any of the condominium units. In April of 1979, Mr. O. K. Armstrong became the manager of the Lake Villas Condominiums and was responsible for the association's financial transactions. He noticed in May of 1979 that the bills for the seven or eight subject meters contained the name of First Federal Savings and Loan of Orlando, though they did list the condominium's post office box number for the address. After speaking with Mr. McComb about the matter, Mr. Armstrong telephoned a Mr. Harbour at the respondent's Winter Park office. It was during this discussion that petitioner, through Mr. Armstrong, learned that the seven or eight common element meters might qualify for a residential, as opposed to the higher commercial, rate. Thereafter, the rates for the seven or eight meters were changed by Florida Power Corporation from commercial to residential. The request of Mr. Armstrong for a retroactive application of those residential rates to January 1, 1976, which would amount to a refund of all amounts paid in excess of the residential rates from that date, was denied by Mr. Harbour, respondent's office manager in Winter Park. During the hearing, the petitioner verbally amended the request for retroactive application of the residential rate from January 1, 1976, to July of 1976.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the petition filed by the Lake Villas Condominium Association, Inc. be DISMISSED. Respectfully submitted and entered this 17th day of June, 1981, in Tallahassee, Florida. DIANE D. TREMOR, 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 17th day of June, 1981. COPIES FURNISHED: James D. Mapp Hunter, Pattillo, Marchman, Mapp and Davis Post Office Box 340 Winter Park, Florida 32790 Blair W. Clack Assistant Counsel Post Office Box 14042 St. Petersburg, Florida 33733 Arthur Shell Public Service Commission Legal Department 101 East Gaines Street Tallahassee, Florida 32301 Steve Tribble, Clerk Florida Public Service Commission 101 East Gaines Street Tallahassee, Florida 32301
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.
The Issue The issues in this case are whether Petitioner was provided incorrect, inaccurate, and erroneous information, and, if so, if she may transfer to the Florida Retirement System (FRS) Pension Plan (Pension Plan) by paying a “buy-in” amount of $2,418.55, consistent with the amount quoted to Petitioner in January 2020.
Findings Of Fact Ms. Evangelisto has been continuously employed by an FRS- participating employer since August 2012. As a new employee of an FRS-participating employer, Ms. Evangelisto had a choice to enroll in one of two FRS retirement plans: the Pension Plan or the Investment Plan. The Pension Plan is administered by the Florida Division of Retirement (Division of Retirement), which is housed within the Department of Management Services. The Pension Plan is a defined benefit plan; the benefit is formula-based. The formula used for calculating a pension plan benefit is based on total years of creditable service at the time of retirement, membership class, and average final compensation. See § 121.091, Fla. Stat. The Investment Plan is administered by SBA. The Investment Plan is a defined contribution plan; the benefit is based on gains and losses due to market performance. On January 22, 2013, Ms. Evangelisto enrolled in the Investment Plan, with an effective date of February 1, 2013. This choice is considered Ms. Evangelisto’s initial election. Ms. Evangelisto is still enrolled in the Investment Plan. After making an initial election, an employee may make a “second election” if still employed with an FRS-participating employer, earning salary and service credit. Ms. Evangelisto may utilize a second election to move into the Pension Plan, but must pay a “buy-in” amount to do so. This sum is derived from an actuarial calculation conducted by the Division of Retirement. To effectuate a second election, Ms. Evangelisto must complete and submit a 2nd Election Retirement Plan Enrollment Form (2nd Election Form) to the Plan Choice Administrator. The 2nd Election Form may be obtained by calling the MyFRS Financial Guidance Line or through the MyFRS.com website. When completed, the form may be submitted by facsimile, mail, or by electronic submission through the MyFRS.com website. Respondent is required to provide FRS Investment Plan participants with educational services, including: disseminating educational materials; providing retirement planning education; explaining the Pension Plan and the Investment Plan; and offering financial planning guidance on matters such as investment diversification, investment risks, investment costs, and asset allocation. See § 121.4501(8)(b), Fla. Stat. Respondent provides these educational services through Ernst & Young (EY), a contracted third-party administrator. EY financial planners provide information to FRS employees via the MyFRS Financial Guidance Line. On multiple occasions over the years, going back to as early as July 2018, Ms. Evangelisto spoke to EY financial planners via the MyFRS Financial Guidance Line to request a calculation of her buy-in amount.2 In July 2018, Ms. Evangelisto contacted the MyFRS Guidance Line to request her buy-in amount. In August 2018, she received a comparison estimate. The comparison estimate provided the estimated buy-in amount, the current value of her Investment Plan, and the amount of out-of-pocket funds 2 Ms. Evangelisto testified that she made requests to determine her buy-in amount even prior to 2018. Ms. Evangelisto would have to pay to buy into the Pension Plan. This out-of- pocket sum is the result of the difference between the buy-in amount determined by the Division of Retirement and her Investment Plan account balance. The amounts contained in the comparison estimate are only valid for the calendar month in which they are issued. From July 2018, through March 2019, there were numerous communications between Petitioner and EY Financial Planners by telephone conversation, email, and through voice messages. Ms. Evangelisto made requests for buy-in amounts and received updated comparison estimates in November 2018 and March 2019. On January 13, 2020, Petitioner requested a calculation of her buy-in amount. On January 22, 2020, she received a comparison estimate which set forth an out-of-pocket cost of $2,418.55 to transfer to the Pension Plan. The estimate indicated that it was valid until January 31, 2020. On February 14, 2020, Petitioner requested another calculation of her buy-in amount. On March 12, 2020, she received a comparison estimate with an out-of-pocket cost of $7,198.64. The estimate indicated that it was valid until March 31, 2020. Ms. Evangelisto testified that she did not transfer to the Pension Plan, after being provided comparison estimates, because she did not have the funds to pay for the associated out-of-pocket cost. On June 24, 2020, Petitioner called the MyFRS Guidance Line to request yet another comparison estimate. During this conversation, Petitioner inquired about potential changes to the buy-in amount associated with becoming “vested.” The conversation was recorded and later transcribed by a court reporter: Ms. Evangelisto: Does the cost to buy into the pension change significantly once you would be vested at the eight years? EY financial planner: I actually don’t know if it would or not. Ms. Evangelisto: Okay. EY financial planner: I can try to find out. I don’t think it’s necessarily based on vesting, but more the years of service. Ms. Evangelisto: Okay. During the June 24, 2020, call, the EY financial planner told Ms. Evangelisto that she could expect the comparison estimate in three weeks. Ms. Evangelisto agreed to July 16, 2020, for a follow-up call. On July 9, 2020, Ms. Evangelisto received an email from EY, but the email did not contain the requested comparison report. On July 15, 2020, Ms. Evangelisto called the MyFRS Guidance Line to follow up on her June 24 request and to ask about the July 9 email. The EY financial planner calculated the buy-in costs for her over the phone. He provided a verbal, estimated out-of-pocket cost of $17,657.00 to buy into the Pension Plan. Surprised by this number, which was over $10,000 higher than the out-of-pocket estimate provided in March 2020, Ms. Evangelisto asked why the cost increased. This telephone call was also recorded and later transcribed by a court reporter. Relevant parts of the conversation are as follows: Ms. Evangelisto: Does it normally jump up heftily at eight years of service -- EY financial planner: No. No. Ms. Evangelisto: -- or like in a yearly increment? EY financial planner: No. Ms. Evangelisto: It doesn’t? EY financial planner: It -- okay, you have been watching in and monitoring it very closely, so you had in December, January, March, and now we are a July figure. If all of those other figures were consistent, while the increase due to the change in the underlying interest rate might have a negative impact, it shouldn’t be so much that it’s going to bump up the cost by another $10,000. The EY financial planner promised to look into the numbers to ensure they were not miscalculated. On the same day, the EY financial planner called Ms. Evangelisto back and left a voicemail. He stated that the out-of-pocket cost he provided on the earlier phone call was correct and that the number had substantially increased because Ms. Evangelisto hit the eight-year vesting mark.3 The previous calculations were based on having an unvested account balance. Ms. Evangelisto returned the EY financial planner’s call and he confirmed the information he provided in the voicemail. Ms. Evangelisto asked EY financial planners, on two occasions, if her buy-in amount (and resulting out-of-pocket costs) would increase upon becoming vested. On the first occasion, during the June 24 call, the EY financial planner told her that he “did not know” and would endeavor to provide her with an answer by July 16. Unfortunately for Ms. Evangelisto, the final date to make the switch to the Pension Plan before the substantial increase4 was June 30. Ms. Evangelisto reached out to the MyFRS Guidance Line on July 15, prior to her scheduled July 16 call. On this occasion, the EY financial planner provided incorrect information when he told her that buy-in amounts did not 3 In her Proposed Recommended Order, Ms. Evangelisto asserted that she became “vested” on July 1, 2020, after completing eight years of creditable service with FRS-participating employers. 4 It is important to note that the amount to buy into the Pension Plan increased every time Ms. Evangelisto requested a calculation, albeit not the sizeable jump that occurred when she became vested. substantially increase upon vesting. This proved to be inconsequential, however, as the increase to Ms. Evangelisto’s buy-in amount had occurred as of July 1, 2020, prior to the EY planner providing the incorrect information. An EY financial planner provided inaccurate information to Ms. Evangelisto when he indicated that no substantial jump would occur upon vesting. Nevertheless, Ms. Evangelisto is required to pay a buy-in amount as calculated by the Division of Retirement when she chooses to move forward with making the second election. Petitioner did not prove that she should be entitled to pay the buy-in amount calculated in January 2020. That amount was valid until January 31, 2020, and the document provided to Ms. Evangelisto clearly notified her of such. Ms. Evangelisto still has a one-time second election to move into the Pension Plan.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the State Board of Administration enter a final order dismissing Petitioner’s Florida Retirement System Investment Plan Petition for Hearing. DONE AND ENTERED this 21st day of January, 2021, in Tallahassee, Leon County, Florida. S JODI-ANN V. LIVINGSTONE Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us COPIES FURNISHED: Elisha Marie Evangelisto 4604 20th Avenue West Bradenton, Florida 34209 Deborah Stephens Minnis, Esquire Ausley McMullen, P.A. Post Office Box 391 Tallahassee, Florida 32302 Ash Williams, Executive Director & Chief Investment Officer State Board of Administration 1801 Hermitage Boulevard, Suite 100 Post Office Box 13300 Tallahassee, Florida 32317-3300
