The Issue The issues in these cases relate to the criteria required of municipal pension plans to qualify for state premium tax monies . Chapters 175 and 185, Florida Statutes, provide for pension plans for firefighters and police officers, and authorize two types of pension plans. "Chapter plans" are created by state law, and "local law plans" are created either by special act of the Legislature or by municipal ordinance. In a series of cases, various municipalities and the LEAGUE OF CITIES have challenged the DIVISION OF RETIREMENT's application of statutory criteria to local law plans. On April 11, 1996, a Final Order was entered in Case No. 95-5089RU finding that the DIVISION's policies in this regard violated Section 120.535, Florida Statutes. The Final Order in case No. 96-5089RU is on appeal to the First District Court of Appeal. On August 6, 1996, a Final Order was entered in consolidated Cases Nos. 96-2724RX, 96-2725RX, 96-2871RU, and 96-2874RU, finding that the DIVISION's policies violated Section 120.56, Florida Statutes. Specifically, the issues in these cases now under consideration, are 1) whether the CITY OF ST. PETERSBURG is entitled to premium tax monies for the 1994 and 1995 calendar years; 2) whether the DIVISION OF RETIREMENT has met the requirements of Section 120.57(1)(b)15, Florida Statutes, and demonstrated that the application of the statutory criteria to local law plans is within the scope of delegated legislative authority; 3) whether the DIVISION's promulgation of proposed rules on July 12, 1996, justifies the DIVISION's withholding of the CITY OF ST. PETERSBURG's premium tax monies for calendar years 1994 and 1995; and, 4) whether the DIVISION has acted in bad faith, thereby entitling the CITY OF ST. PETERSBURG to an award of attorneys fees and costs in this case. The gist of the CITY OF ST. PETERSBURG's Petitions is that the DIVISION is attempting by non-rule policy to impose the same requirements relating to terms, conditions, and benefits on local law plans that the DIVISION requires of chapter plans. Specifically, the alleged non-rule policies of the DIVISION of which the CITY complains are: 1) the definition of "credited service"; 2) the definition of "average final compensation"; 3) the disallowance of a Social Security offset; 4) the interpretation of "disability retirement"; 5) the requirement that all of the CITY's pension plans be in compliance in order to receive state funds; 6) the release of funds to other municipalities not found in compliance; 7) the failure to enforce Rule 60Z-1.004, Florida Administrative Code, which defines "credited service;" and, 8) the application to other municipalities of a declaratory statement issued to the City of Boca Raton. As indicated above, and set forth more fully below, the requirements imposed by the DIVISION OF RETIREMENT for local law plans to receive premium tax monies have been the subject of extensive litigation. In rejecting a challenge to the constitutionality of Chapters 175 and 185, Florida Statutes, the court in City of Orlando v. State Department of Insurance, 528 So.2d 468 (Fla. 1st DCA 1988) stated: Chapters 175 and 185 create a purely voluntary program whereby municipalities may receive state- collected taxes, imposed on property and casualty insurance premiums, with which to fund retirement programs for local police and fire fighters. In exchange for receipt of these funds, the legislature has established certain criteria under which the funds must be operated and managed. Id. at 469. The dispute in these cases again focuses on determining what criteria the legislature has established for the operation and management of such local pension plans in order to establish whether a local plan complies with the statute for purposes of receiving premium tax monies. Petitioner, CITY OF ST. PETERSBURG, and Intervenor, CITIES, take the position that Respondent, DIVISION OF RETIREMENT, has made non-rule policy statements (which are now promulgated as proposed rules), and required compliance therewith, which go beyond the criteria established by the legislature for participation in the program. Petitioner contends that such statements are "rules" under Section 120.52(16), Florida Statutes, that these "rules" violate Section 120.56, Florida Statutes, as invalid exercises of delegated legislative authority, and that the DIVISION is prohibited from applying these policies as justification for withholding premium tax monies. Respondent, DIVISION OF RETIREMENT, takes the position that the policy statements have now been promulgated as proposed rules, that the DIVISION has complied with Section 120.535(5), Florida Statutes, and is authorized to apply the policies of the proposed rules to withhold premium tax monies. The DIVISION further contends that the policy statements (now proposed rules) merely apply the provisions of Chapters 175 and 185, Florida Statutes, as intended by the legislature, and therefore the DIVISION has demonstrated pursuant to Section 120.57(1)(b)15, Florida Statutes, that the policy statements are within delegated legislative authority.
Findings Of Fact To the extent relevant, the Findings of Fact in the Final Order in case No. 95-5089RU are adopted and incorporated by reference. Parties Petitioner, the CITY OF ST. PETERSBURG (CITY), is a municipality of the State of Florida which participates in the voluntary program to receive state- collected taxes imposed on property and casualty insurance (premium tax monies) with which to fund retirement programs for its municipal fire fighters and police under Chapters 175 and 185, Florida Statutes, respectively. Intervenors, CITY OF LARGO, CITY OF PALATKA and the TOWN OF LANTANA, also are State of Florida municipalities participating in such local plans for fire fighters and police. LARGO, PALATKA and LANTANA have had their premium tax monies withheld by the DIVISION for the 1995 calendar year. Intervenor, FLORIDA LEAGUE OF CITIES, represents municipalities voluntarily participating in distribution of Chapter 175 and 185 premium tax monies to fund retirement plans for firefighters and police officers. Respondent, DIVISION OF RETIREMENT (DIVISION), is the agency of the State of Florida charged with the statutory duty to administer the voluntary program by which municipalities receive state-collected taxes imposed on property and casualty insurance (premium tax monies) with which to fund local plans under Chapters 175 and 185, Florida Statutes. Prior to 1993, the Florida Department of Insurance was the responsible state agency to administer Chapters 175 and 185, Florida Statutes. Intervenors, MICHAEL MOORE and RICHARD FEINBERG are municipal fire fighters with the CITY and have standing to intervene in this proceeding. Intervenor, RUSSELL M. RIZZO, is a municipal police officer with the CITY and has standing to intervene in this proceeding. History Chapters 175 and 185, Florida Statutes, relating to pension plans for fire fighters and police, authorize two types of retirement or pension plans. One type is called "chapter plans" and the other is known as "local law plans." Chapter plans are created under state law, and the provisions of Chapters 175 and 185, Florida Statutes, control the plans' terms, conditions and benefits. Local law plans are purely voluntary and are created either by special act of the Legislature or by municipal ordinance. The special act or municipal ordinance contain the provisions relating to the terms, conditions, and benefits of the local law retirement plan. Both chapter plans and local law plans receive funds from the state-collected premium tax on property and casualty insurance. The CITY has operated local law retirement plans for fire fighters and police since 1951. The CITY's police and fire fighter plans were first chartered by special act of the Legislature. The fire fighter charter plan has been closed to new members since approximately 1970. The CITY in 1970 established a supplemental retirement plan for fire fighters which was enacted by CITY ordinance. The CITY's police and fire fighter pension plans are subject to union negotiation, and cannot be unilaterally amended. City of Tallahassee v. Public Employee Relations Commission, 393 So.2d 1147 (Fla. 1st DCA 1981). In this respect, the CITY may not have the authority to make unilateral changes to its local law plans in order to comply with directives of the DIVISION. The CITY has voluntarily participated on a continuing basis in the program created under Chapters 175 and 185, Florida Statutes, whereby the CITY has received state-collected taxes imposed on property and casualty insurance premiums with which to fund its local plans for fire fighters and police. The CITY has received such funds until calendar year 1994. In 1986 the Legislature significantly amended Chapters 175 and 185, Florida Statutes. See Chapters 86-41 and 86-42, Laws of Florida. Chapter 86-41 pertained to municipal fire fighters; Chapter 86-42 pertained to municipal police officers. As indicated above, the constitutionality of these statutes was upheld in City of Orlando v. State Department of Insurance, supra. In section 1. of each act, the Legislature added substantially the same legislative intent language: Therefore, the Legislature declares that it is a proper and legitimate state purpose to provide a uniform retirement system for the benefit of fire fighters as hereinafter defined, and intends, in implementing the provisions of s. 14, Art. X of the State Constitution as they relate to municipal fire fighters' pension trust fund systems and plans, that such retirement systems or plans to be managed, administered, operated, and funded in such manner as to maximize the protection of the fire fighters' pension trust funds. This chapter hereby establishes minimum standards for the operation and funding of municipal fire fighters' pension trust fund systems and plans. After the enactment of Chapters 86-41 and 86-42, Laws of Florida, the Department of Insurance undertook rulemaking to implement the provisions of the acts. The CITY and the LEAGUE challenged the proposed rules under Section 120.54, Florida Statutes. The Department's proposed rules were upheld by a DOAH Hearing Officer. On appeal, the First District Court of Appeal reversed the order of the Hearing Officer, and held that the majority of the department's proposed rules were invalid because statutory provisions governing chapter pension plans, which were not made expressly applicable by the Legislature to local fire fighter and police plans, did not preempt municipal power with respect to pension plans. Florida League of Cities, Inc. v. Department of Insurance, 540 So.2d 850 (Fla. 1st DCA 1989) review denied 545 So.2d 1367 (Fla. 1989), [hereinafter referred to as the "Rules Case"]. In 1988 the CITY and the Department of Insurance engaged in litigation regarding the compliance of the CITY's local law plans with the Department's construction of the statute. This litigation was ultimately settled by the Department's agreement not to withhold the CITY's premium tax funds. During 1990 and 1991, the Department of Insurance also engaged in litigation with numerous other municipalities regarding compliance of local law plans with the provisions of Chapters 175 and 185, Florida Statutes. The Department settled these cases and continued to distribute premium tax funds to these local law plans with the understanding that the disputed issues would be better resolved through rulemaking. The Department of Insurance conducted staff workshops to discuss rulemaking; however, the Department did not thereafter initiate formal rulemaking under Chapter 120, Florida Statutes, with regard to promulgation by rule of compliance requirements for local law plans under Chapters 175 and 185, Florida Statutes. In 1993, the Legislature transferred statutory responsibility for the administration of Chapters 175 and 185, Florida Statutes, from the Department of Insurance to the DIVISION. The legislative transfer effected a transfer of all programs as well as personnel. Since the legislative transfer in 1993, the DIVISION has made a continuous and good faith effort to present these issues to the Legislature for resolution. In this continuing effort to address these issue legislatively, during the 1996 Session, HB 1951 and SB 2484 were introduced. These bills specifically provided legislative clarification of the issues presented in these cases. Prior to the 1996 Session, the CITY filed its Petition in case No. 95- 5089RU. On April 11, 1996, the Final Order was entered in case. No. 95-5089RU holding that the DIVISION's non-rule policies violated Section 120.535, Florida Statutes. On May 10, 1996, the CITY filed its Notice of Appeal which is pending in the First District Court of Appeal, Case No. 96-1817. The DIVISION has made a continuing good faith effort to present these issues to the Legislature for resolution. As indicated above, HB 1951 and SB 2484, specifically addressing and clarifying the issues raised in these proceedings, were introduced during the 1996 Session. On April 30, 1996, HB 1951 was passed by the Florida House of Representatives; however, HB 1951 along with SB 2484 died in the Florida Senate on May 4, 1996. The 1996 Florida Legislature failed to enact any legislation addressing or otherwise clarifying the issues raised in these proceedings. On May 31, 1996, the DIVISION noticed a rules workshop addressing these issues in the Florida Administrative Weekly. On June 12, 1996, the DIVISION disseminated proposed rules. On June 21, 1996, the DIVISION conducted the rules workshop. On July 12, 1996, the DIVISION published proposed rules and amendments, 60Z-1.004, 60Z-1.006, 60Z-1.026, 60Z-1.027, 60Z-1.028, 60Z-2.017, 60Z-2.018, and 60Z-2.019, which address the issues raised in these proceedings. On July 30, 1996, the CITY and the LEAGUE OF CITIES, pursuant to Section 120.54 Florida Statutes, filed Petitions challenging the DIVISION's proposed rules. The Section 120.54 petitions, cases Nos.96-3560RP and 96-3561RP, are scheduled for hearing August 29, 1996. On August 6, 1996, the Final Order was entered in consolidated Cases Nos. 96-2724RX, 96-2725RX, 96-2871RU, and 96-2874RU holding that the DIVISION's policies violated Section 120.56, Florida Statutes. Stipulated Facts The following facts verbatim were set forth by the parties in the Prehearing Stipulation: The DIVISION admits to the authenticity of all documents contained within its files, including, but not limited to, interoffice memoranda, correspondence to and from the DIVISION and/or the Department of Insurance which are contained in the files of the Division, and any correspondence copied to the DIVISION and/or the Department of Insurance which are contained in the files of the DIVISION. The DIVISION takes the position that Sections 175.032 and 185.02, Florida Statutes, (Definitions), apply to local law plans. (The) Position of (the agency in) Declaratory Statement DMS-DR-94-18 was issued to the City of Boca Raton pursuant to Section 120.565, Florida Statutes. It is the position of the DIVISION that a plan containing a mandatory retirement age violates the Older Worker Benefits Protection Act; and that pension plans which violate this federal law are not eligible for distribution of premium tax funds under Sections 175.351 and 185.35, Florida Statutes. It is the position of the DIVISION that fire fighters disabled from duties of a fireman as defined in Section 175.032, Florida Statutes, are eligible for disability benefits. The CITY admits that the Social Security offset contained in its supplemental fire pension plans could possibly reduce a fire fighter's pension below two (2) percent for each year of credited service; however, the CITY specifically has no knowledge that this has or will occur. The CITY admits that Sergeant Rizzo has accrued in excess of thirty- two (32) years of service. The CITY admits that the police pension plan contains a maximum pension plan benefit of sixty (60) percent of the highest pay step of the lowest rank held during the previous three (3) years, which benefit Sgt. Rizzo became eligible for after twenty-five (25) years of active service. The CITY admits after thirty (30) years of service Sgt. Rizzo will retire with a pension benefit equal to less than two (2) percent for each year of active service. The CITY admits that Sgt. Rizzo was permitted to cease all employee contributions to his pension plan after twenty-five (25) years of service. The 1994 premium taxes are withheld from the CITY by the DIVISION. Prior to 1994 the DIVISION, or its predecessor agency, the Department of Insurance, have never withheld Chapter 175 or 185 insurance tax premium moneys from the CITY. The DIVISION has not initiated the rulemaking process with regard to definition of the term "average final compensation" in Section 175.351, Florida Statutes, and there are currently no existing promulgated rules that apply to local law plan definitions for "average final compensation" for the DIVISION. The DIVISION has not initiated the rulemaking process with regard to definition of the term "average final compensation" in Section 185.35, Florida Statutes, and there are currently no existing promulgated rules that apply to local law plan definitions for "average final compensation" for the DIVISION. It is the position of the DIVISION that Rule 60Z-1.004, Florida Administrative Code, defining "credited service" contradicts Chapter 185, Florida Statutes, and is not enforced. It is the position of the DIVISION that all municipal pension plans submitted for review must comply with the non-rule policy at issue in the present case in order to receive Chapter moneys pursuant to Sections 175.351 and 185.35, Florida Statutes. It is the position of the DIVISION that the pension plans of the City of St. Petersburg do not fulfill the requirements of Section 175.351, Florida Statutes, to qualify for release of state premium tax moneys. It is the position of the DIVISION that the pension plans of the City of St. Petersburg do not fulfill the requirements of Section 185.35, Florida Statutes, to qualify for release of state premium tax moneys. It is the position of the DIVISION that the term "credited years of service" as used in Sections 175.351(4) and 185.35(1)(d), Florida Statutes, is to be defined in accordance with the term "aggregate number of years of service" and "aggregate number of years of service with the municipality" under Sections 175.032(1)(a) and 185(1)(b), Florida Statutes, respectively. It is the position of the DIVISION that it has the authority under Chapters 175 and 185, Florida Statutes, and Chapter 60Z, Florida Administrative Code, to withhold Chapter 175 and 185 premium tax money to plans not in compliance with Sections 175.351 and 185.35. It is the position of the DIVISION that it has the authority to release payment of Chapter 175 and 185 premium tax moneys to plans not in compliance with Sections 175.351 and 185.35, Florida Statutes, provided the municipality is making good faith efforts to bring the violations into compliance.
The Issue The issue in this case is whether Petitioner held a "regularly established position" during the period from January 1979 through June 1979, when she worked as a teacher's assistant for a district school board; if so, then she would be entitled to receive retirement service credit for the period, which Respondent so far has declined to grant.
Findings Of Fact Historical Facts Petitioner Silvia Urrechaga ("Urrechaga") worked for nearly 30 years, in various positions, as an employee of the Miami-Dade County School Board ("MDCSB"). As an employee of a district school board, she became a member of the Florida Retirement System ("FRS"), which is administered by Respondent Department of Management Services, Division of Retirement ("Division"). It is undisputed that, before July 1, 1979 (and thus at all times material to this case), local employers (such as district school boards) that participated in the FRS had the authority to determine, in the exercise of discretion, which of their employees would be covered under the FRS. At that time, the Division did not have the authority to review and overrule local employers' decisions in this regard. From January 1979 through June 1979, Urrechaga was employed as a teacher's assistant. A "Request for Personnel Action" memorandum dated January 8, 1979, memorializes MDCSB's hiring of Urrechaga to fill this part-time hourly position. The memorandum specified that Urrechaga would be "paid from discretionary funds until [the] end of [the] 78/79 school year." On or around January 19, 1979, a "Personnel Transaction Form" was completed, wherein it was recorded that, effective January 8, 1979, Urrechaga would participate in Retirement Plan "F." It is undisputed that Plan "F" meant the FRS. It is further recorded on the personnel form that MDCSB would contribute 9.1 percent of Urrechaga's salary into the FRS trust to fund her retirement benefit. An Annual Earnings Report for the 1978-79 school year shows that for the payroll period ending February 6, 1979——her first as a teacher's assistant——Urrechaga was paid a gross salary of $208.89, and that MDCSB deposited 9.1 percent thereof, or $19.01, into the FRS trust for the benefit of Urrechaga, a Plan "F" participant. Beginning with the very next pay period, however, and continuing through the end of June 1979, Urrechaga's retirement plan designation on the Annual Earnings Report is "J" rather than "F." It is undisputed that "J" meant no retirement benefit. Consistent with that designation, MDCSB (apparently) did not contribute to the FRS on Urrechaga's behalf for the pay periods ending February 9, 1979 through June 22, 1979, at least according to the Annual Earnings Report. MDCSB does not presently have any records documenting the grounds, if there were any, for removing Urrechaga from the FRS. There are likewise no existing records reflecting that Urrechaga was notified contemporaneously that, wittingly or unwittingly, she had been taken out of the retirement plan. It is reasonable to infer, and the undersigned does so, that MDCSB neither informed Urrechaga that she was being excluded from participation in the FRS nor notified her about any administrative remedies that she might have had in consequence of such action. Years later, after an issue had arisen regarding whether Urrechaga is entitled to retirement service credit for the months from January 1979 through June 1979, MDCSB investigated the situation and concluded that Urrechaga had been removed from the retirement plan by mistake. This determination was reported to the Division by MDCSB's Retirement Coordinator, Maria Y. Perez, in a letter dated July 23, 2003, which provided in pertinent part as follows: In reviewing the payroll/personnel records of Ms. Urrechaga, it's [sic] been determined that from January, 1979 through June, 1980, she was excluded from the retirement plan in error. Ms. Urrechaga was hired January 8, 1979, as a part-time hourly teacher assistant, job code 4259, a position eligible for retirement coverage[,] and [she] worked though June, 1979 [in that position.] The Division refused to accept MDCSB's determination, however, on the ground that it was not supported by sufficient proof that Urrechaga had been paid out of a "regular salary account." Consequently, by letter to the Division dated February 28, 2006, Ms. Perez reiterated MDCSB's conclusion, stating in relevant part as follows: Although I cannot provide you with a specific account serial number listing indicating [sic] that specifically Ms. Urrechaga was in a regularly established position; all our hourly teachers assistants were hired in a regularly established position, particularly as late as 1979, and not in a [sic] Other Personnel Services accounts. As support for this statement, Ms. Perez furnished the Division with the records of several other teacher's assistants who, the records unambiguously show, had been treated by MDCSB as FRS participants at the time that Urrechaga, who held the same employment position, had been excluded from the retirement plan. As of the final hearing, Ms. Perez continued to be MDCSB's Retirement Coordinator, a position she had held since 1982. In that capacity, Ms. Perez was MDCSB's senior management person in charge of retirement matters. Ms. Perez's communications to the Division regarding Urrechaga, which were written in her official capacity as MDCSB's agent, did not give voice to mere personal opinions, but rather——as statements clearly falling within the scope of her agency and authority——constituted MDCSB's official statements on the subject of Urrechaga's retirement benefit.1 In other words, Ms. Perez's letters to the Division concerning Urrechaga's retirement benefit expressed an agency determination of Urrechaga's substantial interests, namely the conclusion that Urrechaga had worked for MDCSB in a regularly established position and, accordingly, was supposed to have been a participant in the FRS during the period from January 1979 through June 1979, notwithstanding that conflicting statements in contemporaneously prepared documents give rise to some confusion concerning her participation therein.2 Determinations of Ultimate Fact From January 1979 through June 1979, Urrechaga worked in a "regularly established position" as a teacher's assistant with MDCSB. As an employee in such a position, Urrechaga was entitled to participate in the FRS, and she earned retirement service credit for her work during the period at issue.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division enter a final order awarding Urrechaga the retirement service credit that she earned for working in a regularly established position as a teacher's assistant with MDCSB during the period from January 1979 through June 1979. DONE AND ENTERED this 11th day of December, 2006, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 11th day of December, 2006.
The Issue The issue in this matter is whether Respondent has forfeited his rights and benefits under the City of Tampa General Employees Retirement Fund pursuant to section 112.3173, Florida Statutes (2015).1/
Findings Of Fact The Fund is a public retirement system as defined by Florida law. The Fund is charged with administering and managing a pension plan for employees of the City of Tampa (the “City”). Respondent was most recently employed by the City beginning on October 31, 2005. Respondent worked as a Fleet Mechanic Supervisor I for the City’s Logistics and Asset Management/Fleet Management department. The City terminated Respondent on January 21, 2015, based on theft of City property. By reason of his employment with the City, Respondent was enrolled in the pension plan administered by the Fund. After six years of employment, Respondent vested in the pension plan. According to the Notice of Disciplinary Action, dated January 21, 2015, the City terminated Respondent based on his admission to stealing certain property belonging to the City. On January 5, 2015, Respondent was interviewed by the Tampa Police Department (“TPD”) as part of an investigation into stolen property. During this interview, Respondent confessed to stealing a set of tires owned by the City and installing them on his personal vehicle. After the City learned of Respondent’s admission to the theft of City property, the City terminated Respondent’s employment. Kimberley Marple, an Employee Relations Specialist Supervisor for the City, testified on behalf of the City and explained that the City maintains a zero tolerance policy for removal of or taking City property for personal use. Consequently, when the City learned of Respondent’s admission to TPD, he was fired. Based on the evidence and testimony presented at the final hearing, the preponderance of the evidence establishes that the City terminated Respondent’s employment by reason of his admission to theft of City property. Therefore, the Fund met its burden of proving a legal basis under section 112.3173 for Respondent’s forfeiture of all rights and benefits to the Fund’s pension plan.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the City of Tampa General Employees Retirement Fund enter a final order finding that Respondent, Mario Perez, was a public employee who, by reason of his admitted commission of a “specified offense” under section 112.3173(2)(e), forfeited all rights and benefits in the pension plan administered by the Fund. DONE AND ENTERED this 23rd day of August, 2017, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of August, 2017.
The Issue Whether the Petitioner is entitled to a refund of amounts contributed to the State and County Officers' and Employees' Retirement System.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Division of Retirement is the state agency charged with the responsibility for administering the State and County Officers' and Employees' Retirement System. Section 122.13, Florida Statutes. Ms. Cook worked as a nurse's aide for Jackson Memorial Hospital from November 1960 until September 1968, when she resigned. As an employee of Dade County, Ms. Cook participated in the state retirement system under the State and County Officers' and Employees' Retirement System, which is governed by Chapter 122, Florida Statutes, and she made employee contributions to the Retirement System Trust Fund. In October 1968, the Division of Retirement received a "Request for Refund" card bearing Ms. Cook's name, social security number, and address and bearing what purported to be Ms. Cook's signature in two places on the card. On October 23, 1968, the state issued warrant number 66611 in the amount of $904.95, drawn from the State Retirement Trust Fund against Ms. Cook's retirement contributions; on December 15, 1968, the state automatically issued warrant number 106270 in the amount of $42.08 drawn from the State Retirement Trust Fund against Ms. Cook's retirement contributions, which closed her retirement account. In December 1997, Ms. Cook contacted the Division requesting information regarding retirement benefits under the Florida Retirement System. She was told that she was not a vested member of the system and that she was not eligible for retirement benefits. She was also advised by the Division that its records showed that her accumulated contributions of $947.03 were paid to her in 1968. Ms. Cook denied signing the "Request for Refund" card, and she denied receiving either of the two refund checks. The address on the "Request for Refund" card submitted on October 1968 is listed as "6600 NW 1st Place, Miami, Fla." Ms. Cook currently resides at that address and has resided at that address continuously since in 1968. The signatures on the 1968 "Request for Refund" card differ in some respects from the signatures appearing on the letters and pleadings from 1997 and 1998 that are part of the record in this case. However, there are also substantial similarities between the signatures on the "Request for Refund" card and the signatures appearing on documents in the record of this case. The evidence presented in this case is not sufficient to establish that Ms. Cook is now entitled to a refund of contributions she made to the state retirement system between 1960 and 1968.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division of Retirement enter a final order denying the request of Audrey Cook for a refund of contributions she made to the state Retirement Trust Fund from 1960 to 1968. DONE AND ENTERED this 13th day of July, 1998, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 Filed with the Clerk of the Division of Administrative Hearings this 13th day of July, 1998. COPIES FURNISHED: Larry D. Scott, Senior Attorney Division of Retirement Cedars Executive Center 2639 North Monroe Street, Building C Tallahassee, Florida 32399 Audrey P. Cook 6600 Northwest 1st Place Miami, Florida 33150 Mr. A. J. McMullen, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560
Findings Of Fact Jean E. Preus is a registered real estate broker and was so registered at all times here relevant. Tax Shelter Real Estate, Inc., and Tax Shelter Real Estate of America, Inc., are corporate brokers registered by the Florida Board of Real Estate and were so registered at all times here relevant. Tax Shelter Real Estate, Inc., and Tax Shelter Real Estate of America, Inc., are wholly owned subsidiaries of another corporation controlled by S. William Preus, the husband of Respondent. The family owns the majority, if not all, of the stock in this controlling corporation. S. William Preus is president of Corporate Financial Planning of Florida, whose business is primarily providing computer printouts and expertise to insurance agents setting up retirement plans for clients. Preus holds the degree of Chartered Life Underwriter (CLU) although at present he sells no insurance, but deals primarily with the insurance companies in assisting their agents. On 28 October 1980 at the request of insurance agents, Edward LaGrave and Don Hansman, S. William Preus, enroute from a seminar in Daytona to his office in St. Petersburg, met with the owners of Peebles Tractor Company in Winter Haven, Florida, to present information on a Keogh Plan for employees of Peebles. Jean E. Preus accompanied her husband to this meeting. LaGrave and Hansman provided Preus with a list of employees of Peebles, their ages and salaries, from which it was determined that some $27,000 per year could be invested in an employee retirement plan such as a Keogh Plan. In the presentation Preus used prototype trust documents prepared by Lincoln Trust Company and, if the Peebles Tractor Company opted for the plan he presented, it was his intention to forward the application to Lincoln Trust to serve as trustee of the plan. Preus had purchased one or more time-sharing condominium units and was impressed with the appreciation he had noticed in the selling price of such units in the past two years. He was especially impressed with the Bahia Mar development at which he had purchased a unit and who had additional time-sharing units to sell. Time-sharing is those housing units sold to various individuals for one week out of the year as a vacation home with the capability of swapping usage with similar units in other places. At Bahia Mar the unit owner sold one- week usage per year on a 99-year lease with the property managed by the developer and rented if the owner does not want to occupy the unit during his week's ownership. Preus proposed time-sharing units as a suitable investment vehicle for the Peebles Tractor Company employees retirement fund and Jean E. Preus showed pictures of the condominium units they owned at Bahia Mar. Peebles was not interested in purchasing time-sharing units for their employees' retirement fund and no sales were made. Had Peebles bought any of the Bahia Mar units, Respondents would have received a ten percent commission. Preus had obtained the Lincoln Trust forms from Lincoln Trust Company at an earlier date by simply requesting the forms. He obtained additional forms from Flagship Bank in a similar fashion. William A. Preus, the adult son of Respondent who also works with his father, had called Lincoln Trust before the October 28 meeting and learned the fees had been changed since the forms he had on hand were printed. He amended the forms used by S. William Preus to reflect this change in the fees charged by Lincoln Trust Company when the presentation was made to Peebles Tractor Company. The day following the Peebles meeting Preus contacted Lincoln Trust Company and learned they would no longer accept financed real estate in an employee retirement plan for which they served as trustee. Specifically, they would not accept funds to invest in financed time-shared condominium units. Formerly, Lincoln Trust had accepted financed raw land at Sugarwood Mills (in Florida) in such a retirement plan (Exhibit 11). In order to protect employee benefit plans Congress enacted the Employees Retirement Income Security Act (ERISA), 29 USCS 1001, et seq. Tax advantages accrue to those plans complying with ERISA, the federal tax laws and regulations promulgated pursuant thereto. All investments are not acceptable; however, the principal requirement is that funds placed in such accounts be prudently invested. Regulations have been promulgated disqualifying investments and certain personal property such as gold coins in ERISA plans, which type investment was formerly allowed. No regulations specifically authorize or bar ERISA investments in time-shared condominium units. Although trustees such as Lincoln Trust Company will not accept time-shared units in ERISA accounts, testimony was presented that Flagship Bank of Tampa would accept such investments in ERISA accounts. No evidence was presented that Jean E. Preus made any representations regarding the acceptability of time-shared units in an employee retirement account. According to her testimony she has no knowledge of ERISA plans and her participation in the October 28 1980, meeting was limited to showing pictures of and describing the time-shared unit she owned at Bahia Mar.
The Issue The issues are whether Respondent Francis Thompson's interests in the pension plan are forfeited under the law, whether he should be required to repay all monies received less accumulated contributions, and whether Respondent Patricia R. Thompson's interest in the plan is forfeited upon the forfeiture of the rights of her former husband.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: The City of Daytona Beach (City) is a municipal corporation created as a political subdivision of the State of Florida. Petitioner, Board of Trustees of the City of Daytona Beach Police and Fire Department Pension Fund (Board), was established by Special Act of the Legislature in 1959, as amended in 1965. The Board is responsible for administering the City's police and fire department retirement plan (plan) and paying benefits to eligible participants subject, however, to the requirements of Chapter 112, Part VII, Florida Statutes. Respondent, Francis Thompson, is a plan participant, having retired as a police officer with the City of Daytona Beach Police Department on September 24, 1994. His dates of service are from July 31, 1972, to July 30, 1977, and from June 19, 1983, to September 24, 1994. Under the terms of the plan, upon retirement, Francis Thompson was entitled to $1439.84 per month in retirement benefits. Sometime prior to his retirement, however, his marriage to Patricia R. Thompson was dissolved. As a part of the settlement between the parties, Francis Thompson agreed to transfer a portion of his benefits (48.75% had he retired on January 31, 1992), but not to exceed a total liability of $31,000.000, plus twelve percent simple interest on the unpaid balance computed from January 31, 1992. This agreement is embodied in a Domestic Relations Order entered on March 30, 1993, by the Circuit Court, in and for Volusia County, Florida. Although the City was never given notice of this proceeding nor an opportunity to participate, the order reflects that a copy of the same was served upon the plan administrator. Notwithstanding the above action, Section 10 of Sub-Part D of the City Code provides that "the right of a person to a pension . . . shall be unassignable." In other words, Francis Thompson was prohibited from assigning his plan benefits to another person. Faced with a court order which directed the City to pay a portion of the benefits to a third party, the plan administrator consulted with the City's legal counsel, who advised the adminstrator to "follow the intent" of the court's order and begin paying a portion of the benefits to the former wife. It is noted, however, that Patricia R. Thompson did not receive an interest in the plan by the court's order; rather, she obtained entitlement to a portion of the benefits of a plan member. Between September 1995 and the end of November 1997, Patricia R. Thompson has received $24,199.32 in benefits. As of the same date, Francis Thompson received a total of $55,333.18 in benefits. Based upon a belief that Francis Thompson had been convicted of a specified offense related to conduct prior to his retirement, on August 5, 1997, the Board initiated this proceeding for the purpose of terminating all of his rights and benefits under the plan and requiring him to return $42,655.20, plus all distributions, if any, made subsequent to June 1997. Because Patricia R. Thompson is now receiving a portion of her former husband's benefits, she was also named as a party. Between 1987 and 1994, Francis Thompson was evidence custodian and in charge of the evidence and property room for the City of Daytona Beach Police Department. In that position of special trust, he was responsible for keeping all weapons, drugs, moneys, and other property seized or held by the Police Department. The position of evidence custodian was a position that required the City to trust that the custodian would properly perform his responsibilities and duties. It is undisputed that during his tenure as evidence custodian, Francis Thompson removed multiple firearms from the evidence and property room and shipped them to another person in the State of Pennsylvania for personal use. The Police Department could not find any evidence that the firearms had been properly logged or recorded for removal in accordance with proper protocol. By engaging in this conduct, Respondent violated the City's trust. On June 27, 1996, Francis Thompson was convicted of multiple felony violations of the United States Code in the United States District Court, Eastern District of Pennsylvania, in Case No. 2:95CR00232-1. One of these offenses was "shipping stolen firearms in interstate commerce." Because the offense involved the commission of a theft by a public employee from his employer, it constituted a "specified offense" as defined by Sections 112.3173(2)(e)2. and 6., Florida Statutes (1997). The conviction for a specified offense calls for forfeiture of all retirement benefits under Section 112.3173(2)(e)2., Florida Statutes (1997). Finally, it is noted that the illicit activity occurred while Respondent was employed as evidence custodian with the City's Police Department. Throughout his term of employment with the City, Francis Thompson made accumulated contributions to the plan totaling $29,173.21. As of November 30, 1997, the plan administrator had distributed plan benefits in the amount of $79,532.50, or $50,359.29 more than contributions. At hearing, Respondent's present wife, Patricia B. Thompson, testified on his behalf. Her testimony was limited to a request that, due to financial and health problems incurred by her incarcerated husband, the undersigned appoint counsel on his behalf. That request was denied.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Board of Trustees of the City of Daytona Beach Police and Fire Department Pension Fund enter a final order determining that Francis Thompson's interest in the plan, including past payments made and future benefits payable by the plan, less accumulated contributions shall be forfeited by the Board pursuant to law; that all persons deriving an interest through his interest in the plan, including his present and former wife shall forfeit all future payments from the plan upon the issuance of a final order; and that Francis Thompson shall pay back to the Board all payments in excess of his accumulated contributions in such manner as the Board may determine. DONE AND ENTERED this 21st day of January, 1998, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (850) 488-9675, SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 21st day of January, 1998. COPIES FURNISHED: Margaret T. Roberts, Esquire Post Office Box 832 New Smyrna Beach, Florida 32170-0832 David D. Fuller, Esquire 220 South Ridgewood Avenue Suite 210 Daytona Beach, Florida 32114 Francis Thompson Registry Number 17952-018 Eglin Air Force Base Prison Camp Post Office Box 600 Eglin Air Force Base, Florida 32542 James C. Maniak Plan Administrator City of Daytona Beach Post Office Box 2451 Daytona Beach, Florida 32115-2451
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.
The Issue The issue in this case is whether James B. Anderson, a deceased retiree in the Florida Retirement System Pension Plan, selected Option 1 (maximum retiree’s monthly benefit without any spousal benefit after death of the retiree) or Option 3 (a reduced retiree’s monthly benefit with continued spousal benefit after death of the retiree).
Findings Of Fact On June 30, 2007, the named Petitioner, James B. Anderson, terminated his employment with the University of South Florida (USF) at the age of 69 years and 9 months. At the time, his tenure at USF spanned 27 years and entitled him to receive pension benefits under the Florida State Retirement System Pension Plan. Also on June 30, 2007, Mr. Anderson completed an application for retirement. By applying Mr. Anderson, who was USF’s Director of Insurance and Risk Management, acknowledged that he would not be able to add service, change options, change his type of retirement (regular, disability, and early) or elect the Investment Plan once his retirement became final, which would be when he cashed or deposited any benefit payment. Also on July 2, 2007, Mr. Anderson and his wife, Mitzi Anderson, executed a Statutory Official Form FRS 110 before a notary public. By doing so, they selected Option 1, which provides the maximum pension benefits to Mr. Anderson until his death and no pension benefits to his wife after his death. The form stated clearly, in bold print, that Option 1 did not provide a continuing benefit after Mr. Anderson’s death and that the selection of Option 1 would be final when Mr. Anderson cashed or deposited any benefit payment. The next day, Mr. Anderson faxed the executed form to the Division of Retirement, which mailed Mr. Anderson an acknowledgement of receipt of the executed form. The acknowledgement included a clear statement, in bold print, that Mr. Anderson would not be able to change his benefit option selection after retirement and that his retirement would become final when he cashed or deposited any benefit payment. Mr. Anderson had second thoughts about his benefit option selection and contacted Donna Pepper, a retirement specialist employed by USF, to discuss changing to Option 3, which would give him a reduced pension benefit that would continue and be paid to his wife after his death. On July 6, 2007, Ms. Pepper sent an email to Mr. Anderson stating: “Here is another option selection form so that you can change your option.” The email attached a blank Statutory Official Form FRS 110. Ms. Pepper’s email also stated: “As we discussed, you may want to indicate that this form should supersede the previously submitted form.” It also advised the Petitioner to keep a copy for his records and send the original to the Division of Retirement as soon as possible. On July 20, 2007, at 12:53 p.m., a comment was entered on the Integrated Retirement Information System (IRIS) telephone log, documenting that Mr. Anderson was considering changing his benefit option selection and would “either FAX a form with a change of option on it or call to let them know he would not make the change.” The comment also documented that Jan Steller in retirement payroll was asked to hold Mr. Anderson’s first check until “this is resolved.” Later the same day, at 2:30 p.m., another comment was added to document that Mr. Anderson had called back to say he had decided to stay with Option 1 and that Jan Steller had been called back and asked “to release his check.” On July 31, 2007, an initial pension check was sent to Mr. Anderson in the amount of $4,188.45, in accordance with his selection of benefit Option 1, which was about $1,200 more than it would be under Option 3. This check was not immediately cashed. On August 31, 2007, a second Option 1 pension check in the same amount was sent to Mr. Anderson. On September 4, 2007, Mr. Anderson deposited the first two benefit checks into his Bank of America account. He continued to receive and cash or deposit monthly Option 1 benefit checks through January 2015. Mr. Anderson died on February 14, 2015. His wife notified the Division of Retirement, which stopped benefit payments in accordance with Mr. Anderson’s Option 1 selection. In March 2015, Mrs. Anderson found among her husband’s papers a copy of an executed Form FRS 110 that selected Option 3. Notwithstanding the telephonic communications with the Division of Retirement on July 20, 2007, the executed form indicates that it was notarized on July 23, 2007. Included in handwriting at the bottom of the executed form was the language, as suggested by Ms. Pepper: “This option supersedes option dated 7-02-07.” Mrs. Anderson also found a copy of Donna Pepper’s e-mail dated July 6, 2007, with instructions on how to change the selection of pension payments. Mrs. Anderson sent copies to the Division of Retirement and requested Option 3 spousal benefit payments. The Division of Retirement denied Mrs. Anderson’s request because it did not receive an Option 3 benefit selection before the copy Mrs. Anderson sent in March 2015. There was no evidence that the form was sent to the Division of Retirement before then. This, together with the fact that Mr. Anderson received and cashed or deposited seven and a half years’ worth of monthly Option 1 benefit checks, which were each over $1,200 more than the Option 3 benefit would have been, support a finding that Mr. Anderson actually selected Option 1 and never switched to Option 3. It is not clear from the evidence why Mr. Anderson kept a copy of an executed change from Option 1 to Option 3 after deciding not to send it to the Division of Retirement.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of Retirement, enter a final order finding that Mr. Anderson selected benefit Option 1, finally and irrevocably and that Mrs. Anderson is not entitled to Option 3 spousal benefits. DONE AND ENTERED this 22nd day of January, 2016, in Tallahassee, Leon County, Florida. S J. LAWRENCE JOHNSTON 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 22nd day of January, 2016. COPIES FURNISHED: Nicholas E. Karatinos, Esquire Law Office of Karatinos Suite 101 18920 North Dale Mabry Highway Lutz, Florida 33540 (eServed) Joe Thompson, Esquire Department of Management Services Suite 160 4050 Esplanade Way Tallahassee, Florida 32399 (eServed) Dan Drake, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 (eServed) J. Andrew Atkinson, General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Ste. 160 Tallahassee, Florida 32399-0950 (eServed)
The Issue Whether Petitioners are entitled to, and should receive, survivor retirement benefits from the Florida Retirement System account of their deceased mother, Adrianna Davis, which are presently being paid to their sister, Earnese Davis?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Adrianna Davis was a public school teacher in Broward County for more than 35 years before her retirement in or about the end of January of 1991. She enrolled in the Teacher's Retirement System of Florida in 1955, when she started her teaching career. On the enrollment form that she filled out, she designated her father, Charles Williams, who is now deceased, as her beneficiary. Adrianna subsequently became a member of the Florida Retirement System. At the time of her death, Adrianna had two adult sons, Kevin and Eddie Davis, (the Petitioners in this case) and one adult daughter, Earnese Davis, (the Intervenor in this case), all three of whom lived with her in the house she and the children's aunt co-owned. Adrianna was the undisputed head of the household and its primary decision maker. Although Earnese lived under the same roof as her brothers, she did not have a good relationship with them. Shortly after the beginning of the 1990-91 school year, Adrianna was told by a physician that he suspected that she had cancer. In October or November, she underwent exploratory surgery. The surgery confirmed that she had cancer, which was determined to be inoperable. Following the exploratory surgery, Adrianna received chemotherapy and radiation treatment. Adrianna was admitted to Humana Hospital Bennett (now Westside Regional Medical Center and hereinafter referred to as "Humana") on December 6, 1990. She was brought to Humana by Earnese, who remained with her in the hospital during the entire period of her hospitalization. 1/ After a medical history was taken and a physical examination was conducted, the following initial "assessment" was made of Adrianna's condition by the admitting physician: "Lung carcinoma with dehydration post chemotherapy." Approximately two days prior to her December 6, 1990, hospitalization, Adrianna had asked Earnese to go to the Broward County School Board (hereinafter referred to as the "School Board") offices to obtain a Florida Retirement System Application for Service Retirement form (hereinafter referred to as a "Form 11). Form 11 has four sections that need to be filled out. In the first section of Form 11 (hereinafter referred to as "Section 1"), the following information has to be provided: the applicant's name; the applicant's social security number; the applicant's job title; the applicant's birth date; the applicant's present or last employer; the applicant's home address and home and work phone numbers; and the date of termination of applicant's employment. In the second section of Form 11 (hereinafter referred to as "Section 2"), the following information has to be provided: the name of the beneficiary designated by the applicant; the beneficiary's social security number; the relationship of the beneficiary to the applicant; the beneficiary's home mailing address; and the "option" selected by the applicant. 2/ The following advisement is printed at the top of Section 2: "All previous beneficiary designations are null and void." The third section of Form 11 (hereinafter referred to as "Section 3") contains the following statement, underneath which the applicant has to place his or her signature "in [the] presence of [a] notary:" "I UNDERSTAND I MUST TERMINATE ALL EMPLOYMENT WITH FRS EMPLOYERS TO RECEIVE A RETIREMENT BENEFIT UNDER CHAPTER 121, FLORIDA STATUTES." It also has a certificate that has to be completed and signed by the notary public in whose presence the applicant signs this section of the form. The fourth and last section of Form 11 (hereinafter referred to as "Section 4") contains the following certification that has to be completed, signed and dated by an authorized representative of the applicant's employer, "if termination was within the last 2 years:" "This is to certify that was employed by this agency and will terminate or has terminated on / / , with the last day worked on / / ." As her mother had asked her to do, Earnese went to the to the School Board offices at 1320 Southwest 4th Street in Fort Lauderdale to pick up a Form There she met with Victoria Moten, a School Board retirement specialist. 3/ Earnese told Moten about her mother's situation. She explained that her mother was ill and it looked like she was "not going to make it." 4/ Moten obtained a blank Form 11. After typing in the information that needed to be provided in Section 1 of the form, Moten handed the partially completed form to Earnese and indicated what further steps needed to be taken in order to complete the application process. After her visit with Moten, Earnese returned home and gave her mother the partially completed Form 11 (with only Section 1 filled in) that Moten had provided Earnese with earlier that day (hereinafter referred to as the "Designation Form"). Adrianna kept the Designation Form in her possession and took it with her (in a knapsack, along with other papers) to the hospital on December 6, 1990. She explained to Earnese that she wanted to have the Designation Form filled out while she was in the hospital. It was Adrianna, not Earnese, who brought up the subject. On the morning of December 10, 1990, while Adrianna was still in the hospital, she told Earnese that she wanted to designate Earnese as the sole beneficiary of her retirement benefits so that Earnese would be able to get her "life together" and she asked Earnese to fill out Section 2 of the Designation Form accordingly. 5/ Adrianna also requested Earnese to obtain the services of a notary public to assist in filling out Section 3 of the Designation Form. Earnese thereupon left her mother's hospital room (without the Designation Form, which remained with Adrianna) to find a Florida notary public in the hospital. Her search was successful. She made contact with Elizabeth Sarkissian (now Gassew), a registered nurse and a Florida notary public, 6/ who agreed to help in filling out Section 3 of the Designation Form. Earnese returned to her mother's room with Sarkissian. Earnese filled out Section 2 of the Designation Form in accordance with her mother's previous instructions. Sarkissian, upon entering the room, engaged in conversation with Adrianna, who was sitting up in her hospital bed. Adrianna was alert and oriented. She spoke clearly and responded appropriately to questions Sarkissian asked her. By all appearances, she was in no way mentally incapacitated. After Earnese had finished filling out Section 2 of the Designation Form, Adrianna signed Section 3 of the form in Sarkissian's and Earnese's presence. 7/ Sarkissian then completed and signed the notary certificate underneath Adrianna's signature (in Section 3 of the Designation Form), 8/ after which the form (now with Sections 1, 2 and 3 filled in) was returned to the knapsack in which Adrianna kept the papers she had brought with her to the hospital. Her presence no longer needed, Sarkissian left Adrianna's hospital room. Sarkissian's visit lasted approximately five or ten minutes. Later that day (December 10, 1990), in the evening, Adrianna underwent a surgical procedure involving the insertion of a vascular access port. Adrianna was discharged from the hospital on December 12, 1991. She took the knapsack which contained the Designation Form home with her. Adrianna kept the Designation Form in her possession until January 3, 1991, when she gave it to Earnese, with instructions that Earnese deliver it to Moten for filing. Earnese followed her mother's instructions. Later that same day (January 3, 1991), she went to Moten's office (without her mother) and handed Moten the Designation Form. Moten thereupon completed Section 4 of the form. The now fully completed form was then filed for processing. In June of 1991, Adrianna went into a coma and eventually died. At the time of her death, the Designation Form (which, in Section 2, designated Earnese as the sole Option 2 beneficiary of Adrianna's retirement benefits) was the most recent designation of beneficiary form executed by Adrianna. At no time subsequent to signing the Designation Form did she express to Earnese a desire to make any changes to Section 2 of the form, nor were any such changes made. It has not been shown that Adrianna's designation of Earnese as the sole beneficiary of her retirement benefits was the product of any fraud, misrepresentation, trickery, coercion, undue influence, active procurement, or suggestion on Earnese's part or that it was anything other than a decision made freely, voluntarily and knowingly by a woman who, although terminally ill, was in all respects capable of making such a decision 9/ and fully understood the consequences her decision. On or about July 18, 1991, through the submission of a completed Application of Beneficiary for Retirement Benefits form, Earnese requested that the Division begin to pay her Adrianna's retirement benefits. On the form, Earnese designated her brothers, Eddie and Kevin, as the first and second contingent beneficiaries, respectively, of these benefits in the event of her death. Earnese has received monthly payments from her mother's retirement account since July of 1991. 10/ She currently receives a monthly payment of $1,986.30.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Division enter a final order refusing to grant Petitioners' request that it treat as a nullity Adrianna Davis' written designation of Earnese Davis as her sole beneficiary and, based upon such nullification, discontinue paying Adrianna's retirement benefits to Earnese Davis and instead pay them to Petitioners. 13/ DONE AND ENTERED in Tallahassee, Leon County, Florida, this 8th day of February, 1996. STUART M. LERNER, 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 8th day of February, 1996.
The Issue Whether Respondent, Department of Management Services, Division of Retirement (“Respondent”), is entitled to a deduction of the retirement benefits to be paid to Aubrie-Elle Perez, and if Respondent is entitled to a deduction, whether the deduction should be in the amount of the gross disbursements of $19,833.21 or the net payments to Edward Perez (“Lt. Perez”) in the amount of $17,017.80.
Findings Of Fact The FRS is a public retirement system as defined by Florida law. There are approximately 400,000 active members within the FRS. Respondent is charged with managing, governing, and administering the FRS. In 1997, Lt. Perez began employment with the Miami-Dade County Fire Department. For over 16 years, Lt. Perez served as a fire fighter with the Miami-Dade County Fire Department, his last position being a Lieutenant. Lt. Perez was a vested member of the FRS. Upon his initial employment and enrollment with the FRS in 1997, Lt. Perez entered the Investment Plan and made a retirement benefits election designating that if he died before his retirement and chose not to designate a beneficiary, retirement benefits would be paid in accordance with section 121.091(8), Florida Statutes. Lt. Perez chose not to designate a beneficiary. Thus, according to this statute, retirement benefits would first be paid to Lt. Perez’s spouse, and if no spouse, then to his only child, the Petitioner. Tragically, on April 7, 2013, Lt. Perez collapsed at the fire station. Subsequently, Lt. Perez was diagnosed with a grade-four malignant brain tumor known as a glioblastoma multi-forming--a very aggressive and generally terminal form of brain cancer. There is no cure and the median survival rate for adults with this form of brain cancer is 9 to 14 months. Due to his terminal brain cancer and the treatments he had undergone and was undergoing, Lt. Perez was unable to continue his duties with the Miami-Dade County Fire Department. On February 19, 2014, a two-page FRS Investment Plan Application for Disability Retirement Form PR-13 (“application for disability retirement”), and an FRS Investment Option Selection Form PR-11o (“option selection form”), were submitted to Respondent for Lt. Perez. They were sent to Respondent by mail by Lt. Perez’s sister, Alecs Perez-Crespo. The effect of the application for disability retirement and the selection of Option 1 on the option selection form would be to transfer the monies from the Investment Plan into the Pension Plan, and convert Lt. Perez’s accumulated Investment Plan retirement benefits to monthly disability retirement benefits during his lifetime. Then, upon his death, the monthly benefit payments would stop, and the beneficiary would receive only a relatively small amount, if any--a refund of contributions Lt. Perez had paid into the Investment Plan retirement account, which are in excess of the amount he received in benefits, not including the transferred Investment Plan account balance.2/ The two-page application for disability retirement was not completed by the member, Lt. Perez, and was not signed by Lt. Perez in the presence of a notary public. The option selection form was not completed by the member, Lt. Perez, and was not signed by Lt. Perez in the presence of a notary public. Affirmative medical and factual evidence establishes, and rebuts any legal presumption to the contrary, that Lt. Perez was not mentally, physically, cognitively, or legally competent to execute the option selection form or the application for disability retirement in February 2014, or to understand their legal nature and effect. Nevertheless, Respondent processed the application for disability retirement and option selection form. As a result, Lt. Perez was deemed to have retired effective April 1, 2014, and he forfeited approximately $238,000, which was transferred from the Investment Plan to the Pension Plan. Subsequently, two disability retirement benefit warrants were issued by the State of Florida, Department of Financial Services, to Lt. Perez, via the Pension Plan, in care of Alecs Perez-Crespo, POA. The dates of these warrants are April 30, 2014, and May 30, 2014. Both warrants were endorsed by Ms. Perez-Crespo, “POA For Edward Perez.” Respondent made these disability retirement gross benefit disbursements resulting in net payments to Lt. Perez on the following dates and in the following amounts: April 30, 2014: gross disbursement of $4,950.63, less deducted taxes of $413.20, for a net payment to Lt. Perez of $4,537.43; May 30, 2014: gross disbursement of $4,950.63, less taxes of $413.20 and less a medical insurance deduction of $386.00, for a net payment to Lt. Perez of $4,151.43.3/ A direct deposit authorization for electronic transfer of future retirement benefit warrants into a checking account solely in the name of Lt. Perez was signed by Alecs Perez Crespo, “POA for Edward Perez,” on May 9, 2014. Two additional disability retirement gross benefit disbursements resulting in net payments to Lt. Perez were sent to the checking account of Lt. Perez on the following dates and in the following amounts: June 30, 2014: gross disbursement of $4,950.63, less taxes of $413.20 and less a medical deduction of $386.00, for a net payment to Lt. Perez of $4,151.43; July 31, 2014: gross disbursement of $4,981.32, less taxes of $417.81 and less a medical insurance deduction of $386.00, for a net payment to Lt. Perez of $4,177.51, bringing the total sum of the gross disbursements for the four payments made to Lt. Perez $19,833.21, and the total sum of the net disbursements for the four payments made to Lt. Perez $17,017.80. The net sum of $17,017.80 issued by the Pension Plan as disability retirement benefits to Lt. Perez was deposited into Lt. Perez’s checking account. Accordingly, $19,833.21 (gross)/ $17,017.80 (net), was received by Lt. Perez. Lt. Perez died on July 16, 2014, from the cancer. At the time of Lt. Perez’s death, Petitioner was, and remains, his sole surviving child (natural or adopted). Lt. Perez was not married at the time of his death and, thus, left no surviving spouse. Because of the receipt of the four payments during his lifetime, which are applied first to the personal contributions made by Lt. Perez into the Investment Plan during his lifetime, the amount of Lt. Perez’s small contributions into the plan were exhausted by the time of his death. Therefore, if the option selection form is valid, Petitioner, as the sole beneficiary and child of Lt. Perez, would receive nothing. Respondent concedes that notwithstanding the facial appearance of the option selection form and application for disability retirement, the documents are void and invalid because they failed to comply with the statutory, rule, and manual requirements applicable to properly effectuate the Option 1 selection, in that they were not completed by the member, Lt. Perez, and not signed by Lt. Perez in the presence of a notary public. Respondent concedes that due to Lt. Perez lacking the mental, cognitive, physical, and legal capacity to understand the nature and legal effect of executing the option selection form and application for disability retirement, the purported execution by Lt. Perez of the option selection form and of the application for disability retirement are void and invalid. Respondent concedes that the option selection form is invalid and void ab initio, and Lt. Perez’s earlier selection in 1997, pursuant to section 121.091(8), should be reinstated under the FRS Investment Plan. Respondent concedes that with Lt. Perez having died in 2014 with no surviving spouse, and with Petitioner being his sole surviving child at the time of his death, that the full retirement benefits of $234,035.81, to which Lt. Perez was entitled under his Investment Plan designation of beneficiary should be paid directly to Petitioner. Respondent asserts, however, that the payment of the retirement benefits to which Petitioner is entitled should be reduced by the amount of the four payments made by Respondent to Lt. Perez, which gross disbursements total $19,833.21, or net disbursements total $17,017.80, making the retirement benefits to which Petitioner is entitled to be $214,202.60 or $217,018.01, not $234,035.81. Respondent’s position is correct because the gross benefits in the amount of $19,833.21 were received by Lt. Perez when the four payments, after applicable required deductions, were deposited into his personal checking account. At hearing, no persuasive and credible evidence was presented indicating whatever happened, if anything, to the net payments of $17,017.80 deposited into Lt. Perez’s checking account. No persuasive or credible evidence was presented indicating whether any of the monies were withdrawn from the checking account before or after Lt. Perez’s death. No persuasive or credible evidence was presented indicating that Ms. Perez-Crespo used, diverted, or withdrew any of the funds from the checking account. No bank statements were offered into evidence. Petitioner, who is the personal representative of the estate, did not testify. No accounting of the assets of Lt. Perez’s estate was presented. Even if any of the $17,017.80 was used or diverted by Ms. Perez-Crespo after being deposited into Lt. Perez’s checking account, Petitioner, as personal representative of the estate of Lt. Perez, might have a remedy in another forum to recover such funds from Ms. Perez-Crespo. In any event, such a potential claim, not borne by the evidence presented in the instant proceeding, is beyond the scope of this administrative proceeding. Based on the evidence adduced at hearing and the stipulations of the parties, it is clear that $19,833.21 was received by Lt. Perez when $17,017.80 (after the required deductions) was deposited into his personal checking account. To require Respondent to pay the entire amount of $234,035.81 would result in overpayment of $19,833.21. Respondent is, therefore, entitled to a deduction in the amount of the gross disbursement of $19,833.21.4/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent, Department of Management Services, Division of Retirement, enter a Final Order requiring that that the total sum of $214,202.60 be returned by Respondent to the FRS Investment Plan for the benefit of Lt. Perez, deceased, and that pursuant to section 121.091(8)(a), Florida Statutes, that Petitioner, Aubrie-Elle Perez, as the sole surviving child of and the sole beneficiary of Lt. Perez, immediately receive the amount of $214,202.60. The undersigned reserves jurisdiction to address issues regarding Petitioner’s entitlement to, and the amount of, attorneys’ fees, costs, and interest. DONE AND ENTERED this 23rd day of January, 2017, in Tallahassee, Leon County, Florida. S DARREN A. SCHWARTZ Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January, 2017.
