The Issue Whether Petitioner is entitled to participate in the Deferred Retirement Option Program (DROP) of the Florida Retirement System (FRS), for the period September 1, 1998, through and including September 30, 1999.
Findings Of Fact Petitioner is a former employee of the School Board of Miami-Dade County (School Board) and is a retired member of FRS. In September 1998, Petitioner became eligible to participate in DROP by virtue of reaching 30 years of service with the School Board. In September 1998, Petitioner asked Respondent for an estimate of her retirement benefits. In January 1999, the estimate of Petitioner's retirement benefits was prepared by Respondent and mailed to Petitioner. During the 1998-99 school year, Petitioner had difficulties in her dealings with a new school principal. 1/ Petitioner testified that she delayed applying for DROP because she believed that her relationship with her employer would improve and she could continue to work as a teacher. Petitioner also testified that School Board administrators gave her erroneous information and misled her as to their intention to permit her to continue to teach. Petitioner argues that she would have elected to participate in DROP beginning September 1, 1998, had her employer told her the truth about her employment status. In this proceeding, Petitioner argues that she be permitted to participate in DROP effective September 1, 1998, on equitable grounds, without specifying the equitable principles upon which she relies. On October 27, 1999, Petitioner completed her application to participate in DROP and filed the application with the School Board's personnel office. Respondent received the completed application via facsimile on November 3, 1999. The first application sent in by Petitioner requested that her DROP participation start retroactive to September 1, 1998. Respondent, through its staff, denied that request and informed Petitioner that she would have to submit a second application, referred to by staff as a corrected application, requesting a start date of October 1, 1999. Pursuant to those instructions, Petitioner submitted a second application requesting that her start date be October 1, 1999. Petitioner's challenge to Respondent's denial of her request to accept her participation in DROP retroactive to September 1, 1998, was timely. Petitioner was later terminated from her position with the School Board. 2/ Respondent has been paid her drop benefits for the period beginning October 1, 1999, and ending when the School Board terminated her employment. Petitioner has not been employed by a FRS employer since the School Board terminated her employment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order denying Petitioner's request for benefits under DROP for the period September 1, 1998 to September 30, 1999. DONE AND ENTERED this 10th day of August, 2001, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 August, 2001
The Issue The central issue is whether the Petitioner is entitled to modify her deceased husband's retirement benefit option.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I make the following findings of fact. Petitioner is the surviving spouse of Lamar W. Whaley, Jr., deceased. From 1972 to 1990, Mr. Whaley was employed by the Hillsborough County Board of County Commissioners (Board) and as such was a member of the Florida Retirement System. Mr. Whaley retired from his position as a minibus driver with the Board on June 29, 1990. In anticipation of his retirement, Mr. Whaley filed an FR-9 Form with the Division of Retirement (Division). The FR-9 Form, entitled "Request for Audit," was signed by Mr. Whaley and dated November 6, 1989. The FR-9 Form is used by members of the Florida Retirement System who want estimates of the monthly payments which they will receive after they retire. The FR-9 Form provided a space where Mr. Whaley could list the name and birthdate of a joint annuitant. On the FR-9 Form, Mr. Whaley named the Petitioner and the Petitioner's birthdate in these spaces. On the line immediately after the spaces provided for name and birthdate of the joint annuitant, the FR-9 expressly states that "This is not an official beneficiary designation." By listing a joint annuitant and that individual's birthday on the FR-9 Form, the Division is able to calculate the monthly benefits that would be payable to a member under each of the four retirement options available. In response to Mr. Whaley's audit request, the Division calculated the amount of the monthly payments he and/or his survivor would receive under the four retirement options available. On or about November 22, 1989, the Division sent Mr. Whaley information which reflected an estimate of the monthly benefits he and/or his survivor would receive under each of the four retirement options from which he was eligible to select. Included with the estimate of retirement benefits sent to Mr. Whaley, was a document entitled, "What Retirement Option Should I Choose?". This information sheet listed sent to Mr. Whaley listed and described the four different options. In 1990, members of the Retirement System contemplating retirement were provided a Division Form FR-11, Florida Retirement System Application for Service Retirement (Application). The application listed the four different options and provided a brief description of each. Next to Option 1 was the following: "Benefit for the Member Only." A further notation on the application read, "SEE THE REVERSE SIDE FOR AN EXPLANATION OF THESE OPTIONS." The Application adequately described the consequences of the election of each option. The explanation read as follows: Option 1: A monthly benefit payable to you for your lifetime. This option does not provide continuing benefit to a beneficiary. Upon your death, the monthly benefit will stop and you beneficiary will receive only a refund of any contributions you paid which are in excess of the amount you received in benefits. If you wish to provide a beneficiary with a continued monthly benefit after your death, you should consider selecting one of the other three options. The option 1 benefit is the maximum form of lifetime payment and all other optional payments are derived by applying actuarial factors to the option 1 benefit. Option 2: A reduced monthly benefit payable to you for your lifetime. If you die before receiving 120 monthly benefit payments, your designated beneficiary will receive a monthly benefit payment in the same amount as you were receiving until the total monthly benefit payments to both you and your beneficiary equal 120 monthly payments. No further benefits are then payable. Option 3: A reduced monthly benefit payable to you for your lifetime. Upon your death, your joint annuitant (spouse or financial dependent), if living, will receive a lifetime monthly benefit payment in the same amount as you were receiving. No further benefits are payable after both you and your joint annuitant are deceased. Option 4: An adjusted monthly benefit payable to you while both you and your joint annuitant (spouse or financial dependent) are living. Upon the death of either you or your joint annuitant, the monthly benefit payable to the survivor is reduced to two- thirds of the monthly benefit you were receiving when both were living. No further benefits are payable after both you and your joint annuitant are deceased. (Emphasis in original text.) On January 12, 1990, Mr. Whaley executed an Application. The Application listed the Petitioner as beneficiary and indicated that the retirement option selected was Option 1. In selecting Option 1, Mr. Whaley rejected all other options. The fact that Petitioner was listed on the application as a beneficiary is of no consequence given that Mr. Whaley chose Option 1. An explanation on the back of the retirement application expressly states, "This option does not provide continuing benefit to a beneficiary." Because Mr. Whaley chose Option 1, Petitioner, as his beneficiary, would have been entitled only to a refund of Mr. Whaley's contributions in the event that Mr. Whaley's contribution exceeded the amount of monthly benefits paid to him before prior to his death. Petitioner did not assert, nor did the evidence establish that the refund provision in Option 1 applies in the instant case. Petitioner stated that Mr. Whaley could read and was not mentally impaired at the time he completed the retirement application, yet Petitioner testified that the agency did not explain to Mr. Whaley the benefits of the plan which he selected. According to the testimony of Stanley Colvin, administrator and supervisor of the Division's Survivor Benefits Section, staff members are available to provide counseling to members who come in or call with questions relative to their retirement. There is no record that Mr. Whaley ever contacted the Division with questions regarding the various options. The pastor of the church which Petitioner is a member testified that Mr. Whaley may have needed help to understand the ramifications of legal documents. Mr. Whaley's daughter also testified that her father may not have understood the retirement option he chose. Both the pastor and Mr. Whaley's daughter testified further that in conversations with Mr. Whaley, he had indicated to them that he had taken care of the legal work necessary to ensure that his was family was taken care of in the event of his death. Notwithstanding the testimony of Petitioner and others, there is no evidence that at the time Mr. Whaley selected Option 1 he did not fully understand the nature and effect of his selection. Neither does the evidence support the claim that the selection of Option 1 by Mr. Whaley was inconsistent with his desire or intention at the time the choice was made. At the time of Mr. Whaley's retirement, he was in good health. Given this fact it is not unusual that he selected the option that would provide him with the maximum monthly benefit. Statements by Mr. Whaley that he had taken care of matters and that "things were in order" do not provide substantial evidence that the selection of Option 1 by Mr. Whaley was made only because he did not fully understand the consequences of his choice. The testimony revealed that upon Mr. Whaley's death, the Petitioner was the beneficiary of his life insurance policy and also the recipient of benefits under his social security. Under these circumstances, Mr. Whaley's selection of Option 1 was not necessarily inconsistent with his statement that things "were in order" or his listing Petitioner as beneficiary on the Application. On several documents provided to and/or completed by Mr. Whaley, it was clearly stated that once a member begins to receive his benefit, the option selection cannot be changed. The information sheet, "What Retirement Option Should You Choose?," mailed to Mr. Whaley on or about November 22, 1989, contained the following provision: Option Choice Cannot Be Changed Once you begin to receive your benefit your option selection cannot be changed. Therefore, it is important to carefully study your personal circumstances before making your decision . . . . The Application submitted to the Division by Mr. Whaley on or about January 25, 1990, contained a statement that "[o]nce you retire, you cannot add additional service nor change options." Finally, the Acknowledgment of Retirement Application sent to Mr. Whaley by the Division on or about February 8, 1990, provided in relevant part the following: ONCE YOU RETIRE, YOU CANNOT ADD ADDITIONAL SERVICE OR CHANGE OPTIONS. RETIREMENT BECOMES FINAL WHEN ANY BENEFIT CHECK IS CASHED OR DEPOSITED! Mr. Whaley received his first retirement check on or about the last working day in July 1990. Petitioner testified that Mr. Whaley cashed this check in July or August of that same year. By cashing that check, Mr. Whaley was precluded from thereafter changing his retirement option. By selecting Option 1, Mr. Whaley received the maximum benefits payable to him during his lifetime. However, under the provisions of retirement Option 1, upon Mr. Whaley's death, his beneficiary, the Petitioner is not entitled to receive any benefits.
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 Petitioner to modify the retirement benefits elected by Mr. Whaley, the deceased husband of Petitioner. RECOMMENDED this 1st day of August, 1995, in Tallahassee, Florida. CAROLYN S. HOLIFIELD Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of August, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-0059 To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1a-1c. Rejected as not being supported by competent and substantial evidence. Respondent's Proposed Findings of Fact. 1-6. Accepted and incorporated herein. 7-8. Accepted. 9-11. Accepted and incorporated herein. COPIES FURNISHED: Gladys Whaley 3807 East Norfolk Street Tampa, Florida 33604 Robert B.Button, Esquire Division of Retirement Legal Office Cedars Executive Center-Building C 2639 North Monroe Street Tallahassee Florida 32399-1560 A. J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Paul A. Rowell, Esquire General Counsel Department of Management Services 4050 Esplanade Way, Suite 265 Tallahassee, Florida 32399-0950
The Issue Whether Petitioner can transfer service from the State University Optional Retirement Program to the Florida Retirement System Pension Plan.
Findings Of Fact Petitioner is currently employed as a professor of philosophy and religion at Florida Agricultural and Mechanical University (FAMU). He was first employed as an Assistant Professor at FAMU in 1971. During Petitioner's employment with FAMU, he became an associate professor and was given years toward tenure in 1980, after filing an action with the Office of Civil Rights.2/ Petitioner has published a dozen books, has been awarded the Teacher Incentive Program Award and the Professorial Excellence Program Award, and has been a National Endowment for the Humanities Scholar at Boston University, New York University, and the University of Chicago. By stipulation, the parties agreed that Petitioner accrued retirement benefits under FRS and the Division of Retirement has credited Petitioner's service as a participant in FRS during the academic years 1971-72, 1972-73, 1974-75, 1975- 76, 1978-79, 1980-81, 1981-82, 1982-83, and 1983-84. Note that this stipulation is silent as to the academic years 1973-74, 1976-77, 1977-78, and 1979-80. During the period from August 1984 through the present, Petitioner has been considered by the Division of Retirement to be a participant in ORP, and ORP has been credited with employer contributions for Petitioner's service at FAMU accordingly. The Division of Retirement stipulated that if Petitioner had not undertaken acts which, in its opinion, constituted an election to participate in ORP, Petitioner's service, which has been credited in ORP, would have qualified for the continued accrual of benefits under FRS. In 1984, Petitioner became aware that he could make an election to join ORP, a retirement option created that year by the legislature, and that he must make his election to join that program by June 1, 1984, or he would be forever barred from utilizing ORP. The effective date of salary contributions was July 1, 1984. In 1984, it was necessary for a state employee to work 10 years in a FRS position in order for his or her retirement to vest. Effective July 1, 2001, the requirement changed to six years of creditable service for those members actively employed on that date.3/ Other Personal Services (OPS) is a category of temporary employee which does not accrue creditable time toward FRS retirement benefits. Petitioner's pre-1980 employment contracts with FAMU had not indicated whether he was in FRS, as opposed to being an OPS employee, but there is no evidence to suggest this information was provided on anyone else's contract, either. There is no direct evidence whether Petitioner's FAMU salary warrants and/or pay-stubs, throughout all the years, indicated withholding for social security, although that is probable (See Finding of Fact 52). If they did, it would go to show that Petitioner always had monthly or bi-weekly notice of whether or not he was a regular employee. It is also probable that his FAMU warrants throughout all the years, as they do now, showed a fund code, a class code, and his type of retirement contributions. At all times material, Petitioner at least knew he had been in FRS his first two years at FAMU. This would seem to be academic years 1971-72 and 1972-73. Petitioner was "laid off" for the 1973-74 academic year. Petitioner was refunded all his FRS accruals up to that date. This meant that those FRS accruals would have to be paid back to FRS in order for Petitioner to be able to count those academic years toward retirement in FRS, but it is not clear when Petitioner knew this was the result of his withdrawal of the accruals. The record is unclear as to whether he has paid back these accruals.4/ Under FRS, he would have had the option to pay them back anytime before retirement. When Petitioner applied for promotion at FAMU in 1978, he had been told by FAMU officials that he could not be promoted because he was in the OPS category. However, after settling his civil rights action in 1980, he knew he was put in a permanent position, as associate professor with the promotion he had been denied, and had been given years towards tenure since 1978. Apparently, he did not comprehend that this adjustment also resulted in his receiving FRS credit for all those years. In 1984, Petitioner somehow believed that he had only been credited with FRS membership for 1980 through 1984. In June 1984, Petitioner already had a tenured contract for the following year, which, per the parties' stipulation, would have been his tenth year in FRS, with vesting. Cf. the collective endnotes. Petitioner found out about the option to join ORP in the spring of 1984. Petitioner testified that he had not wanted to elect ORP in 1984 unless he could find out how many years of credited service he had in FRS. This was because he understood the illustrations provided with the ORP election literature to indicate that if an employee had only one, two, or three years of credit in FRS, making the election to participate in ORP might be advisable, whereas the election should not be made by one who had eight or nine years of FRS credit. The ORP election literature itself was not offered in evidence. Petitioner first testified that he had sought clarification of his number of years in FRS from both the FAMU Personnel Office and the Division of Retirement prior to the June 1, 1984, deadline for making an ORP election. However, the attempts he related amounted to filling out a form in the payroll section of the FAMU Personnel Office requesting his work history, which form he thought would be forwarded to the Division of Retirement; and filling out a form to make an appointment with a FAMU Personnel Officer to discuss his situation. His testimony is confused and contradictory as to whether he personally made direct contact with the Division of Retirement during this period, and upon the evidence as a whole, it is concluded that he did not. Nonetheless, Petitioner completed a Division of Retirement Ballot/Enrollment Form, also known as an ORP-16 Form, to participate in ORP. The instructions attached to the form read, in pertinent part: As an employee eligible to participate in the ORP you have the option to reject or elect membership in the ORP. If you reject the ORP, you will be a member of the FRS. If you choose not to participate, so indicate in the space provided for rejecting the ORP and include the date. If you reject the ORP, it will not be necessary to complete the remainder of the Enrollment Form. If you elect to participate, please complete the following: Percent of salary to be contributed by your employer to each plan (the total must equal 6%). Percent of salary to be deducted from your salary as an employee contribution (the total cannot exceed 6%) and to which plan(s). Name of company or companies you have selected. Read the three statements carefully, sign and date the Enrollment Form. The form contains an admonition that ORP election is irrevocable. Also on this Ballot/Enrollment Form, under "I elect to become a member of the ORP and have signed necessary contracts as follows," Petitioner filled in the investment provider name of TIAA-CREF, the State employer's contribution percentage, and the date of May 15, 1984. He did not fill in an employee contribution percentage. He did not sign in either the "elect to participate" or the "elect not to participate" portion of the form. FAMU certified this form as described infra. Petitioner also completed an ORP Enrollment/Change Form, selecting, as his investment provider, TIAA-CREF. This form provided, "If you have elected participation in TIAA-CREF under the Florida Optional Retirement Program (ORP), please complete this form when enrolling in or making a change to TIAA- CREF noncashable Retirement Annuity or cashable Supplemental Retirement Annuity (SRA) contracts. This form applies only to TIAA-CREF contributions under the ORP." Petitioner checked "enrollment" under "Reason for submitting form." He filled out all parts of the form concerning the State's contributions, including inserting the effective date of "7/1/84." He signed the form and dated it "5/15/84." Petitioner also signed a contract with TIAA-CREF as his investment provider, dated "May 17, 1984." This document bears a certification by FAMU that his passport proved Petitioner's identity on that day. Petitioner left the foregoing three 1984 forms with a FAMU Personnel Office employee. Petitioner testified that he had an agreement with the unnamed FAMU Personnel Office employee to the effect that only if Petitioner came in and signed the unsigned documents was he electing ORP, and that if Petitioner did not come in to sign by June 1, 1984, the forms should be destroyed. However, this testimony is only Petitioner's understanding of the agreement. No one from the FAMU Personnel Office testified, and there is no evidence that there was ever a meeting of the minds on this "understanding." On May 17, 1984, a FAMU official dated and certified Petitioner's unsigned Ballot/Election form (see P-4 and Findings of Fact 18-20) and forwarded it to the Division of Retirement. The FAMU certification on this document was to the effect that Petitioner had executed a contract with a provider, which, in fact, Petitioner had. (See R-4 and Finding of Fact 22.) The FAMU certification read, in whole part, "I certify that this employee has signed a contract(s) with the ORP carrier(s) as shown above and is filling a fulltime position." The certifier checked the box for "enrollment." FAMU then forwarded the unsigned but certified Ballot/Enrollment Form to the Division of Retirement. The Enrollment/Change Form, signed by Petitioner, may or may not have gone to the Division, but the contract between Petitioner and TIAA-CREF was forwarded by FAMU to TIAA-CREF. In 1984, as now, if anyone in the Division of Retirement had noticed that Petitioner had not signed the Ballot/Election Form, it was Division policy to write the employee and ask him to completely fill out a new form and sign it. Then the Division would honor the employee's election of ORP, even if the correctly completed form were received after the election deadline or the first payroll deduction. Apparently, in 1984, due to the necessity of processing a huge quantity of ORP Ballot/Election forms between the June 1, 1984 election deadline and the dates of the electing employees' first July bi-weekly or monthly paycheck(s), no one in the Division of Retirement noticed the absence of Petitioner's signature on the Ballot/Election Form, and no letter was written to him. Instead, based upon the certified unsigned Ballot/Election Form, and probably the Enrollment/Change Form, the Division of Retirement treated Petitioner as enrolled in ORP as of the June 1, 1984 deadline. However, Both Ms. Smith, Administrator of the Enrollment Section of the Bureau of Enrollment and Contributions, and Mr. Henning, Administrator of the Optional Retirement Program and Optional Annuity Program Section, of the Division of Retirement, testified that if they had seen Petitioner's certified but unsigned Ballot/Enrollment Form in 1984 or today, they would have assumed the Petitioner had elected to be enrolled in ORP, because all the required information was there, including the certified information that he had signed a binding contract with the carrier/provider TIAA- CREF. In August 1984, the employer began paying the maximum allowable State contributions to TIAA-CREF for Petitioner's ORP retirement benefits. In August 1984, Petitioner received, from TIAA-CREF, a copy of the contract he had signed with that ORP provider. Although Petitioner claimed that he only asked to get out of ORP in 2002 when his number of years in FRS was finally revealed to him by a social security account calculation,5/ he simultaneously and inconsistently maintained that he went to the FAMU personnel office in August 1984 and orally complained that he did not want to be in ORP. However, Petitioner was consistent throughout his testimony that a FAMU personnel office employee told him in August 1984 that the FAMU employee had telephoned the Division of Retirement and that the Division of Retirement had "said" that Petitioner's decision to join ORP was irrevocable. Sometime in 1984, after being advised by FAMU's Personnel Office that his prior election to go into ORP was irrevocable, Petitioner sought the advice of an attorney, but he ultimately chose not to formally contest his membership in ORP. Petitioner testified that, based on his prior civil rights action, he was not anxious to jump into an expensive lawsuit without knowing what his damages were and that his damages depended upon the number of years of accrued service he had in FRS as of June 1, 1984, which accrued service he believed he had lost by the election of ORP. Then, as now, state employees frequently presented issues contesting their appropriate retirement fund or account to the Division of Retirement by phone or letter. Once an oral request for review of the account is presented in written form to the Division, it is reviewed and a decision made. The decision is reduced to a letter, which constitutes the (proposed) final agency action. Petitioner's testimony that he repeatedly from 1984 until 2003 tried to obtain his FRS history from FAMU strains credulity, but his claim that between 1984 and 1989 he had twice tried, without success, to secure information from the FAMU Personnel Office about how many years in FRS he had lost is credible. He claimed to have sent certified letters concerning his years of service, apparently to FAMU, but there is no documentation at the Division of Retirement that anyone telephoned or wrote the Division of Retirement at any time prior to 2002 with any information that could be linked to Petitioner by social security number or his personnel file. From 1984 to 1989, the employer's maximum contribution to TIAA-CREF was transmitted as requested by Petitioner's 1984 Ballot/Election and Ballot/Change Forms. A member of ORP is allowed to make supplemental employee contributions. 39. In 1989, 1993, 1998, and 1999, Petitioner made employee contributions to his ORP provider company TIAA-CREF, utilizing Division of Retirement Ballot/Enrollment forms, also known as ORP-16 forms. After the 1984 enrollment period, ORP-16 forms have been used for employees already in ORP to change their contribution amounts, as the respective maximum amounts the State and the employee were permitted to contribute were raised by statutory amendments. ORP-16 forms could also be used to request divisions of the maximum percentages of the employer's and the employee's contributions between several ORP investment providers or to change from one ORP investment provider to another. Changing providers or adding providers would require that the employee also execute a new contract with the new provider. After June 1, 1984, ORP-16 forms could not be used by anyone employed and eligible on that date to initially elect to be in ORP because their deadline to elect ORP had been June 1, 1984. However, other persons becoming employed later had later election deadlines for ORP membership and could use the same ORP-16 forms to meet their later election deadlines. Employer certifications to the Division that valid provider contracts had been executed to cover all funds transmitted were still required. On his 1989 ORP-16 Form, Petitioner signed under the words, "I elect not to participate in ORP," and inserted the date "1/9/89". He also signed under the words, "I elect to become a member of ORP and have signed necessary contracts…" He inserted "11%" for his employee contributions, the TIAA-CREF name, and the same date in this portion of the form. He did not indicate the new 11% employer contribution on this ORP-16 Form, because that percentage was statutorily defined. This ORP-16 Form was certified by FAMU to the Division of Retirement on 1/11/89, in the language set out above in Finding of Fact 24. The certifier could have checked the boxes for "enrollment" or "plan change," but he or she checked the box for "other". The Division of Retirement transmitted the employer's maximum contribution and Petitioner's requested employee contribution to TIAA-CREF as requested by Petitioner's 1989 ORP-16 Form until 1993. Ms. Smith and Mr. Henning testified that they would not have understood Petitioner's 1989 ORP-16 Form as a request to get out of ORP, because an employee could not change ORP contribution percentages unless he or she was already in ORP; because an employee in Petitioner's class could not elect for or against ORP after June 1, 1984; and because the form was certified by the employer. On September 18, 1989, Petitioner signed an Application for TIAA-CREF Supplemental Retirement Annuity (SRA) and an Enrollment Memo for an ORP and Tax Deferred Annuity Program (TDA). On this latter item, Petitioner marked "already participating" beside the printed words, "ORP employer contributions"; checked the box for "voluntary ORP employee contributions"; and checked the box for "new contract" under "Supplemental retirement annuity (SRA) contracts." These forms were sent to TIAA-CREF. On October 1, 1989, TIAA-CREF issued Petitioner his SRA and TDA. On the 1993 ORP-16 Form, Petitioner did not sign a new portion added to the form which allowed a certain class of employee to state, "In lieu of participating in the ORP, I elect to participate in FRS." Petitioner did not fall in this classification of employee, anyway. He did, however, increase his employee's contribution to ORP via TIAA-CREF, and signed and dated the ORP-16 Form "September 27, 1993," in the section under, "I elect to become a member of the ORP and have signed necessary contracts. . ." This ORP-16 Form also was certified by FAMU to the Division of Retirement in the usual language, and the box for "contributions change" was checked. The Division of Retirement transmitted the employer's maximum contribution and Petitioner's employee contribution to TIAA-CREF as requested by Petitioner's 1993 ORP-16 Form until 1998. On November 3, 1996, Petitioner signed a Request for a TIAA Traditional Transfer Payout Annuity to TIAA Real Estate and/or CREF. This document was sent to TIAA-CREF. On the 1998 ORP-16 Form, Petitioner again did not sign the portion which allowed a different class of employee to state, "In lieu of participating in the ORP, I elect to participate in FRS." He did, however, again increase his employee's contribution to ORP via TIAA-CREF, and signed and dated the ORP-16 Form, "Nov. 30, 1998," in the section under, "I elect to become a member of the ORP and have signed necessary contracts. . ." This ORP-16 Form also was certified by FAMU to the Division of Retirement, in the usual language, and the box for "contributions change" was checked. The Division of Retirement transmitted the employer's maximum contribution and Petitioner's employee contribution to TIAA-CREF as requested by Petitioner's 1998 ORP-16 Form until 1999. The 1999 ORP-16 Form states at one point that the employer's contribution must equal 10.14% of salary and the employee's contribution cannot exceed 10.14%, and then also states that if the employee chooses to have up to 11.57% of his adjusted gross taxable salary deducted, other issues including other investment funds must be considered. (See Finding of Fact 50.) On the 1999 ORP-16 Form, Petitioner did not sign the new portion which allowed a different class of employee to state, "In lieu of participating in the ORP, I elect to participate in FRS." He did, however, decrease his employee's contribution to ORP via TIAA-CREF, and signed and dated this ORP-16 Form "6/11/99" in the section under, "I elect to become a member of the ORP and have signed necessary contracts. . ." This ORP-16 Form also was certified by FAMU to the Division of Retirement in the usual language, and the box for "contributions change" was checked. Since that date, The Division of Retirement has continued transmitting the employer's maximum contribution and Petitioner's employee contribution to TIAA-CREF as requested by Petitioner's 1999 ORP-16 Form. Petitioner testified that he used the 1989-1999 ORP-16 forms and the TIAA-CREF contracts to set up supplemental accounts while protesting against being in ORP at all. The reason Petitioner gave for executing the four changes in contribution to ORP itself was that he had unilaterally concluded that he could not use any investment companies used in conjunction with FRS supplemental accounts. In fact, Petitioner could not purchase his TIAA-CREF ORP-SRA and ORP-TDA without already being in ORP. Therefore, logically, his execution of the SRA and TDA documents described at Finding of Fact 43, further signify or ratify Petitioner's earlier election of ORP. Also, Mr. Henning testified that at no time was there any impediment via ORP to Petitioner's setting up a regular 403b tax shelter annuity or a 457 tax-deferred compensation account outside ORP. Petitioner also could have set up such plans if he had remained in FRS, but if he had remained in FRS, he would not have been able to run these plans through the ORP process. Mr. Henning's testimony is competent, expert, and unrefuted. Moreover, information concerning a 457 plan is included on each ORP-16 Form, immediately above the signature line for the "I elect to become a member of the ORP and have signed necessary contracts. . ." portion, by way of cautioning the employee that it is the employee's responsibility to be sure that in listing/changing any amount to be deducted for ORP, the employee must take into consideration that all payroll deductions, including credit unions, the 457 plan, or other supplemental accounts are fully funded. From 1984 through the present, Petitioner has received quarterly statements from TIAA-CREF, reflecting his earnings in ORP. In 2002, Petitioner received a calculation from the Federal Social Security Administration, which showed that he had been employed and that some employer(s) (not necessarily FAMU) had paid deductions in every year from 1971 to the present, with the exception of 1977. Petitioner then interpreted this to mean that he was in OPS with FAMU that year and was in FRS every other year between 1971 and 1984.6/ Only in 2002 did he contact the Division of Retirement. Petitioner's calculations show that if he had stayed in FRS, he could expect approximately three times the annual retirement benefit that he can now expect via TIAA-CREF.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of Retirement, enter a final order, which determines Petitioner to have been a valid member of ORP since June 1, 1984, denies his request to retroactively transfer into FRS, and dismisses his Petition. DONE AND ENTERED this 6th day of October, 2003, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS 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 6th day of October 2003.
The Issue Whether Petitioner, Harry Marcus (“Petitioner”), timely claimed creditable service for retirement benefits pursuant to section 121.085, Florida Statutes, and whether the adult education teacher position Petitioner held, for which he seeks creditable service for retirement benefits, was a temporary position.
Findings Of Fact The Florida Retirement System (“FRS”) is a public retirement system as defined by Florida law. Respondent is charged with managing, governing, and administering the FRS. On February 12, 1979, Petitioner began employment with the Florida Department of Labor & Employment Security (“FDLES”), an FRS-participating employer. By reason of this employment, Petitioner was enrolled in the FRS, and FDLES made contributions to the FRS on his behalf. On January 4, 1991, Petitioner voluntarily resigned his employment with FDLES. At that time, Petitioner had 11 years and 11 months creditable service with FRS based on his employment with FDLES. On January 23, 1991, Petitioner submitted a Florida Retirement System Application for Service Retirement to the State of Florida, Department of Administration, Division of Retirement (“DOA Division of Retirement”).3/ On February 28, 1991, Petitioner submitted a request to the DOA Division of Retirement, that his application for service retirement be withdrawn. On March 12, 1991, the DOA Division of Retirement canceled Petitioner’s application for service retirement. At that time, the DOA Division of Retirement advised Petitioner that: Your retirement date will be the first of the month following your termination date if your retirement application is received by us within 30 days after your termination date. If the application is received after the 30 days, your retirement date will be the first of the month following the month we receive it. On September 27, 1993, Petitioner began employment with the Broward County, Florida, School Board (“School Board”) as a part-time, temporary, adult vocational education instructor at “Whispering Pines.” Whispering Pines is an “off-campus” adult education program. The School Board is an FRS-participating employer. Petitioner was employed by the School Board from September 27, 1993, until April 2009, when he voluntarily resigned his employment with the School Board. Throughout Petitioner’s entire employment with the School Board, he was compensated on an hourly basis and held the same position, that of a part-time, temporary, adult vocational education instructor. Each school year throughout his employment with the School Board, Petitioner signed an Agreement for Part-Time Instruction in Vocational, Adult and Community Education. By signing the agreement, Petitioner acknowledged that his employment was part-time, temporary, and subject to School Board Policy 6Gx6-4107. Each of the agreements for part-time instruction that Petitioner signed, provided that: THE ADMINISTRATOR MAY TERMINATE THIS AGREEMENT UPON NOTICE. This appointment is contingent upon sufficient enrollment and attendance in the course assigned or the class will be cancelled and this agreement shall be null and void. The instructor’s signature below indicates acceptance of the appointment subject to all terms and conditions of Board Policy 6Gx6- 4107 which is printed on the reverse side of this agreement. * * * THE SCHOOL BOARD OF BROWARD COUNTY, FLORIDA 6Gx6-4107 6Gx6-4107 PART-TIME, TEMPORARY INSTRUCTIONAL PERSONNEL IN VOCATIONAL, ADULT, AND COMMUNITY EDUCATION PROGRAMS EMPLOYMENT OF PART-TIME, TEMPORARY INSTRUCTIONAL PERSONNEL IN VOCATIONAL, ADULT, AND COMMUNITY EDUCATION PROGRAMS SHALL BE APPROVED, ASSIGNED AND PAID IN ACCORDANCE WITH THE RULES. AUTHORITY: F.S. 230.22(1)(2) Policy Adopted: 5/3/84 Rules The conditions of employment listed herein apply only to those instructional personnel employed on a part-time, temporary basis to teach courses on a course by course basis or to provide part-time instructional support to programs in post-secondary adult vocational education, adult general education, Community Instructional Services, and education for personal improvement. Part-time, temporary teachers shall have no guarantee or expectation of continued employment and may be terminated upon written notice by the location administrator. A part-time, temporary employee must meet the same employment criteria as full-time employees with the exception that full-time or part-time teaching certificates may be accepted. Community Instructional Services and Education for Personal Improvement teachers need not be certified. The superintendent is authorized to appoint personnel to positions covered by this policy pending action by the School Board at its next regular or special Board meeting. The principal (or administrative designee) shall recommend for employment only persons who have completed all requirements for the recommended position. Instructors appointed to teach courses requiring certification who are approved on an “applied for” status must file a valid Florida Teacher’s Certificate not later than ninety (90) days from the date of employment. Failure to provide such certificate within the specified time may result in [rescission] of the appointment. Part-time, temporary teachers shall be paid an hourly salary based upon the Salary Schedule adopted for part-time temporary employees. Part-time teaching experience cannot be used toward experience credit on the full- time Teacher Salary Schedule. Part-time, temporary teachers shall not be eligible for a continuing contract or for a Professional Service Contract and are not entitled to fringe benefits. As a part-time, temporary employee, Petitioner did not hold a regularly-established position with the School Board. Petitioner’s employment with the School Board was term-to-term, and he had no expectation of continued employment. Because Petitioner held a temporary position, he is not eligible for service credit in the FRS based on his employment with the School Board. Even though Petitioner is not entitled to eligible service credit in the FRS based on his employment with the School Board, he is eligible to participate in the FICA Alternative Plan, which is separate and distinct from the FRS. The FICA Alternative Plan is designed for individuals, such as Petitioner, who held temporary positions and, therefore, are ineligible for service credit in the FRS. Petitioner participated in the FICA Alternative Plan through his employment with the School Board. As a participant in the FICA Alternative Plan, Petitioner contributed to the plan, the School Board did not contribute to the plan, and Petitioner was prohibited from participating in the FRS. In 2008, Petitioner requested that Respondent review his service with the School Board to determine if he is eligible for coverage under the FRS based on his employment with the School Board. On June 23, 2008, Respondent informed Petitioner that he is not eligible for creditable service based on the fact that he was employed by the School Board as a part-time, temporary employee. No clear point-of-entry was provided by Respondent at that time for Petitioner to institute formal proceedings to challenge the decision. On March 9, 2009, Petitioner submitted a Florida Retirement System Pension Plan Application for Service Retirement to Respondent. On March 11, 2009, Respondent wrote to Petitioner acknowledging the receipt of his service retirement application, and an effective retirement date of April 1, 2009. Respondent also provided Petitioner with an estimate of retirement benefits, which is based on an employment termination date of January 4, 1991, and Petitioner’s 11.91 years of service with FDLES. Subsequently, Petitioner was added to the retirement payroll effective April 2009, and he has received monthly retirement benefits based on his 11 years and 11 months of service with FDLES. The evidence adduced at the final hearing established that Petitioner timely claimed creditable service for retirement benefits pursuant to section 121.085. Petitioner first sought creditable service for retirement benefits in 2008, based on his employment with the School Board. However, Petitioner did not retire from the School Board until 2009. Nevertheless, Petitioner is not eligible for creditable service for his years of employment with the School Board because his employment with the School Board was in the part-time, temporary position of an adult vocational education instructor.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Management Services, Division of Retirement, concluding that Petitioner is not eligible for creditable service for his employment with the School Board. DONE AND ENTERED this 28th day of August, 2014, 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 28th day of August, 2014.
The Issue Whether Petitioner is entitled to a refund of retirement contributions for the period from February 1, 1960, through January 1975.
Findings Of Fact Until January 1975, the Florida Retirement System and its predecessor, the State and County Officers and Employees Retirement System (SCOERS), were contributory retirement plans, in which state employees contributed a portion of their wages toward their retirement benefits. In January 1975, FRS became a non-contributory retirement plan, in which the employer paid all contributions to the plan. On February 1, 1960, Petitioner, who was then known as Rebecca Jamis or James Lee, began her state employment at Florida State Hospital (FSH), located in Chattahoochee, Florida. During her employment, Petitioner was enrolled in the state’s retirement plan and contributed $2,188.01 to that plan. In 1980, Petitioner was convicted of a felony offense and was sentenced to prison. She began serving her sentence in state prison in June 1980. Due to her imprisonment, Petitioner’s employment at FSH terminated on July 29, 1980. At some unknown date, Respondent received form FRS-M81 requesting a refund of Petitioner's contributions to the state’s retirement plan. Pursuant to the state's document retention policy, the original form was destroyed many years ago with a microfilmed copy of the front of the form retained by DMS. The microfilmed copy of this form does not reflect the date the form was signed. Additionally, except for the agency number and various signatures, information contained in the refund request form was typed in. The date of termination of Petitioner’s employment was also typed on the form, indicating the form was completed after Petitioner was imprisoned. More importantly, the form was purportedly signed by Petitioner with the name she used at the time. However, the address on the request was not Petitioner’s residence but was the 1980 address of Florida State Hospital Credit Union. At the time, Petitioner had a loan at the credit union, although she denies having an account there. Petitioner also did not hear any more from the Credit Union about her loan and does not know what happened to it. The regularly kept records of the Division indicate that on November 4, 1980, pursuant to this request for refund, Respondent issued Warrant No. 264829 in the amount due Petitioner for a refund of her retirement contributions. The warrant was issued to Petitioner and mailed as instructed to the address of the credit union. Again due to the passage of time, a copy of this warrant is no longer available. Moreover, the credit union records are not available. However, Charlene Fansler performed a search of un- cashed state warrants for Warrant No. 264829. The warrant was not on the list of warrants that remained outstanding. Further, the warrant had not escheated to the State as abandoned property. As such, the evidence demonstrated that the warrant was paid by the State. In 1990, at the age of 60 and several years after her release from prison, Petitioner requested a refund of her retirement contributions. On May 24, 1990, Respondent denied Petitioner’s request based on the 1980 refund of those contributions. At the time, Respondent did not advise Petitioner of her chapter 120 hearing rights; and therefore, did not provide Petitioner with a clear point of entry for an administrative hearing. However, Petitioner was clearly aware that DMS claimed that she had been issued a refund of her contributions and was, therefore, not entitled to a further refund. Petitioner took no action in 1990 even though she did not personally receive the 1980 refund because and claimed to not have signed the refund request form. In 2012, 32 years after the 1980 warrant was issued and 22 years after the 1990 denial of her request for refund, Petitioner, at the age of 82, again requested a refund of her retirement contributions based on her claim that she did not sign the 1980 refund request form and the fact that she did not personally receive the refund warrant. Respondent submitted the microfilmed copy of the signed refund request form and known handwriting exemplars of Petitioner's signature to the Florida Department of Law Enforcement (FDLE) laboratory for analysis. Kesha White, a handwriting analyst with FDLE, analyzed the documents and concluded that they were more likely than not signed by the same person. Her finding was not conclusive due to the limits of analyzing signed documents preserved on microfilm. Indeed, the signatures on the refund form and the known handwriting samples of Petitioner's signature are very similar and appear to be by the same person. In this case, the better evidence demonstrates that Petitioner signed the 1980 refund request form and, due to the passage of time, has simply forgotten that she did so. By signing that form, Petitioner instructed Respondent to issue and mail the warrant to the address for the credit union listed on the form. Respondent complied with that request. Given these facts, Petitioner is not entitled to another refund of her retirement contributions.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division enter a Final Order finding that Petitioner was issued a refund of retirement contributions for the period from February 1960, through January 1975, and dismissing Petitioner's request for hearing. DONE AND ENTERED this 21st day of May, 2013, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER 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 21st day of May, 2013. COPIES FURNISHED: Rebecca Thomas 1929 Hamilton Street Quincy, Florida 32351 Thomas E. Wright, Esquire Department of Management Services Division of Retirement Suite 160 4050 Esplanade Way Tallahassee, Florida 32399 Dan Drake, Director Division of Retirement Department of Management Services Division of Retirement Post Office Box 9000 Tallahassee, Florida 32315-9000 Jason Dimitris, General Counsel Department of Management Services Division of Retirement Suite 160 4050 Esplanade Way Tallahassee, Florida 32399
Findings Of Fact Petitioner, EVELYN S. WRIGHT, as an employee of Metropolitan Dade County and a member of the State and County Officers and Employees Retirement System, elected to transfer into the Florida Retirement System (FRS) effective December 1, 1970. (Exhibit 3) On April 10, 1972, Petitioner terminated her employment with Metropolitan Dade County and applied for FRS disability retirement benefits pursuant to Section 121.091(4), Florida Statutes, on May 22, 1972. (Exhibit 2) Petitioner's application for FRS disability retirement benefits was initially denied by the Administrator of the Florida Retirement System on August 21, 1972. (Exhibit 4) On January 6, 1975, Petitioner inquired of the Supervisor of the Respondent's Disability Determination Unit, Mr. David Ragsdale, as to the possibility of withdrawing the accumulated contributions in her retirement account. At this time, Petitioner, was advised by Mr. Ragsdale that a withdrawal of contributions would cancel her membership rights in the Florida Retirement System. (TR - p.9) Respondent forwarded to Petitioner, by letter dated January 7, 1975, the appropriate form for making application for a refund of accumulated retirement contributions. The transmittal letter specifically advised the Petitioner that, "Should you complete and return the enclosed card, M81, you would have no further rights or service credit with the Division of Retirement." (Exhibit 5) On January 14, 1975, Petitioner executed, and her employer verified, an application for refund of accumulated retirement contributions. The application form clearly stipulated: "I hereby make application for refund of my accumulated contributions in the Florida Retirement System. I do hereby waive for myself, my heirs and assignees all rights, title and interest in the Florida Retirement System." (Exhibit 6) Petitioner's application for refund of contributions was received by the Respondent on January 17, 1975. Respondent refunded to Petitioner her accumulated contributions in the amount of $3,056.02 by Voucher No. 237738, Warrant No. 0309435, dated January 28, 1975. (Exhibit 6) The attorney for Petitioner, John H. Abramson, was advised by the undersigned hearing officer by telephone that Leave to Take Deposition was granted. By letter from the said attorney the Division was notified that Petitioner's file was being closed.
Findings Of Fact Petitioner, John F. Morack, is a member of the Teachers Retirement System (TRS). The TRS is administered by respondent, Department of Administration, Division of Retirement (Division). On April 18, 1988, petitioner began working for a new employer and concurrently filled out an application form to enroll in the Florida Retirement System (FRS), a plan also administered by the Division. By letter dated June 27, 1988, the Division, through its chief of bureau of enrollment and contributions, Tom F. Wooten, denied the request on the ground Morack failed to qualify for such a transfer. Dissatisfied with the agency's decision, Morack initiated this proceeding. Petitioner first enrolled in the TRS on September 18, 1970, when he began employment as a dean at Broward Community College. At that time, he had no option to enroll in any retirement program except the TRS. Under the TRS, an employee did not have to make contributions to social security and earned "points" for calculating retirement benefits at a rate of 2% for each year of creditable service. In contrast, under the FRS, which was established in late 1970, members earned benefits at a rate of only 1.6% per year but were participants in the social security program. Finally, a TRS member could not purchase credit for wartime military service unless he was an employee at the time he entered the military service and was merely on a leave of absence. On the other hand, an FRS member could purchase credit for military service after ten years of creditable service as long as such military service occurred during wartime. When the FRS was established in late 1970, members of the TRS were given the option of transferring to the newly created FRS or remaining on TRS. Morack executed a ballot on October 15, 1970 expressing his desire to remain on the TRS. In November 1974, the Division offered all TRS members an open enrollment period to change from TRS to FRS. Morack elected again to remain on the TRS. In the latter part of 1978, the Division offered TRS members a second open enrollment period to switch retirement systems. On November 21, 1978, Morack declined to accept this offer. On January 1, 1979 Morack accepted employment with the Department of Education (DOE) in Tallahassee but continued his membership in the TRS. He remained with the DOE until July 1981 when he accepted a position in the State of Texas. However, because Morack intended to eventually return to Florida, he left his contributions in the fund. Approximately two years later, petitioner returned to Florida and accepted a position at Florida Atlantic University (FAU) in Boca Raton as assistant vice president effective July 11, 1983. About the same time, he prepared the following letter on a FAU letterhead. To Whom it May Concern: This is to indicate that I elect remaining in TRS rather than FRS. (Signature) John F. Morack The letter was received by the Division on July 19, 1983, and the enrollment form was processed on November 2, 1983. Although Morack stated that he was told by an FAU official that he could not transfer plans at that time, there is no competent evidence of record to support this claim since the testimony is hearsay in nature. On November 18, 1985, Morack requested the Division to audit his account for the purpose of determining how much it would cost to purchase his Korean War military service. On January 24, 1986, the Division advised Morack by memorandum that because he had "no membership time prior to (his) military service, that service is not creditable under the provisions of the Teachers' Retirement System." During the next two years Morack requested two audits on his account to determine retirement benefits assuming a termination of employment on July 31, 1987 and June 30, 1988, respectively. On April 14, 1988, Morack ended his employment with FAU and began working on April 18, 1988, or four days later, at Palm Beach Junior College (PBJC) as construction manager for the performing arts center. When he began working at PBJC he executed Division Form M10 and reflected his desire to be enrolled in the FRS. As noted earlier, this request was denied, and Morack remains in the TRS. The denial was based on a Division rule that requires at least a thirty day break in service with the state in order to change retirement plans after returning to state employment. Because Morack's break in service was only four days, he did not meet the requirement of the rule. At hearing and on deposition, Morack acknowledged he had several earlier opportunities to transfer to the FRS but declined since he never had the benefits of the FRS explained by school personnel. As retirement age crept closer, petitioner began investigating the differences between the TRS and FRS and learned that the latter plan was more beneficial to him. This was because the FRS would allow him to purchase almost four years of military service, a higher base salary would be used to compute benefits, he could participate in social security, and there would be no social security offset against his retirement benefits. Also, petitioner complained that school personnel were not well versed in retirement plans and either were unaware of alternative options or failed to adequately explain them. As an example, Morack points out that when he returned from Texas in 1983 he was not told by FAU personnel about the change in the law now codified as subsection 121.051(1)(c). Finally he thinks it unfair that the Division counts four days employment in a month as a full month's creditable service for computing benefits but will not count his four days break in service in April 1988 as a full month for computing the time between jobs.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that petitioner's request to change retirement plans be DENIED. DONE AND ENTERED this 7th day of November, 1988, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4183 Respondent: 1. Covered in finding of fact 6. 2-4. Covered in finding of fact 7. 5. Covered in finding of fact 10. 6-7. Covered in finding of fact 11. Covered in findings of fact 8 and 11. Covered in findings of fact 1 and 10. COPIES FURNISHED: Mr. John F. Morack 10474 Green Trail Drive Boynton Beach, Florida 33436 Stanley M. Danek, Esquire 440 Carlton Building Tallahassee, Florida 32399-1550 Andrew J. McMullian, III State Retirement Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Adis Maria Vila Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr., Esquire general Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue The basic issue in this case is whether the Petitioner, Mr. Joseph M. Lesko, violated the provisions of Section 238.181(2)(a), Florida Statutes, by being reemployed within twelve (12) months of retirement by an agency participating in the Florida Retirement System, and, if so, whether his retirement benefits were overpaid and need to be refunded to the Florida Retirement System.
Findings Of Fact Mr. Joseph M. Lesko was employed as an instructor with the Palm Beach Community College (hereinafter "the College") and retired under the provisions of the Teachers' Retirement System (hereinafter "TRS"), Chapter 238, Florida Statutes, on July 1, 1986. In October of 1986 a science instructor at the College suffered a stroke and was unable to continue working. Dr. Paul Dasher, then the Chairman of the College's Science Department, called Mr. Lesko and asked him to be a substitute instructor for some of the classes of the instructor who had suffered the stroke. Mr. Lesko, a former Senior instructor in Chemistry, was the only qualified candidate who was known to be available on short notice. Although Mr. Lesko had not intended to teach at that point in his retirement, he agreed to teach for the balance of the semester to help the College during the incapacity of the stricken instructor. When the stricken instructor was unable to return during the next semester, Mr. Lesko also agreed to substitute in Chemistry for the following semester. The incapacitated instructor died in March of 1987, and Mr. Lesko finished substitute teaching for the balance of the semester. At the time Mr. Lesko was reemployed as described above, the College's Director of Human Resources, Mr. Schneider, was not aware that Mr. Lesko had retired under the TRS, because the vast majority of the College's instructors retire under the Florida Retirement System. Mr. Schneider believed that Mr. Lesko was covered by certain amendments to the Florida Retirement System that became effective in July of 1986. Those amendments allowed retired instructors who retired under the Florida Retirement System to be reemployed by community colleges on a noncontractual and part time basis after one month of retirement without loss of retirement benefits. Mr. Schneider was under the erroneous impression that those amendments applied to all retired instructors, because he did not recall receiving any information from the Division of Retirement indicating that retirees under TRS were to be treated differently from retirees under the Florida Retirement System for purposes of eligibility for reemployment. Three other instructors who retired at the same time as Mr. Lesko, and who were rehired during the same time period as Mr. Lesko, have not been required to repay any retirement benefits because they all retired under the Florida Retirement System. Neither Mr. Schneider nor Mr. Lesko were aware that Mr. Lesko's retirement benefit would be jeopardized by his returning to work for the College in October of 1986. Both believe that the information regarding TRS retirees provided by the Division of Retirement is at least unclear, if not misleading. Mr. Lesko would not have returned to teach at the College during the first year of his retirement if he had been aware that doing so would require him to lose his retirement benefits during that period. During the period from October 1986 through May 1987, Mr. Lesko earned $4,460.60 for the services he provided to the College. During that same period he received retirement benefits of $6,506.72.
Recommendation On the basis of the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a final order be issued in this case requiring Mr. Lesko to repay retirement benefits to the Division of Retirement in the amount of $6,506.72. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2 day of April, 1990. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division Administrative Hearings this 2 day of April, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-5717 The following are my specific rulings on all proposed findings of fact submitted by all parties. Findings submitted by Petitioner: First page, First unnumbered paragraph: All covered in the Preliminary statement portion of this Recommended Order. First Page, Second unnumbered paragraph: Accepted in substance. Second Page, Paragraph No. 1: Accepted in substance. Second Page, Paragraph No. 2: Accepted in substance. Second Page, Paragraph No. 3: Accepted in part and rejected in part; rejected portion is portion following the comma. The rejected portion is contrary to the greater weight of the evidence. Second Page, paragraph No. 4: Accepted in substance. Third Page, Paragraph No. 5: Rejected as irrelevant to the disposition of this case. Third Page, Paragraph No. 6: Rejected as constituting subordinate and unnecessary details. Third Page, Paragraph No. 7: First sentence accepted in substance. Second sentence rejected as constituting argument, rather than findings of fact. Third Page, Last paragraph of Findings: Rejected as constituting commentary about the proceedings, rather than proposed findings of fact. Findings proposed by Respondent: Paragraph 1: Accepted. Paragraph 2: Accepted in substance, with certain unnecessary details omitted. Paragraphs 3 and 4: Rejected as subordinate and unnecessary procedural details. Paragraphs 5 and 6: Accepted in substance. Paragraph 7: Rejected as subordinate and unnecessary details. COPIES FURNISHED: Mr. Joseph M. Lesko 184 Meadows Drive Boynton Beach, Florida 33462 Stanley M. Danek, Esquire Division Attorney Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Aletta Shutes, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
Findings Of Fact Eugene L. Borus began employment with the Department of Transportation (DOT) in February, 1962, and was enrolled in the Florida Retirement System (FRS) as a mandatory member. In April, 1976, he terminated employment and applied for retirement. He was retired effective May 1, 1976, with 12.33 years of credible service (Exhibit 2). Mr. Borus was reemployed on May 23, 1977, by DOT. During 1977 and under the provisions of the "Reemployment After Retirement" provisions of Section 121.091(9), Florida Statutes, Petitioner received both his salary and his retirement benefit up to 500 hours of employment at which point his retirement benefits ceased. Beginning January 1, 1978, and on each January 1 thereafter Petitioner was again paid his retirement benefit up to 500 hours of employment after which the retirement benefit was discontinued. In early 1984, Mr. Borus applied to the Division to have his 1976 retirement cancelled and his employment service with DOT since 1976 included in his creditable service so that at such time as he would again retire, his total creditable service would include all his employment time. If this transpired, his future retirement benefits would be greater than those currently paid. His request was denied by the Respondent by letter dated April 5, 1984 (Exhibit 1). No member of FRS who has retired and drawn retired pay, except for those excepted in Section 120.091(4)(e) and 121.091(9)(d) have ever been "unretired" and allowed to rejoin the FRS.
The Issue Whether Petitioner is entitled to an award of attorney’s fees pursuant to Section 57.105(5), Florida Statutes, and, if so, what amount?
Findings Of Fact The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. § 57.105(5), Fla. Stat.; and Order and Mandate in Case No. 1D04-4167, First District Court of Appeal. Section 57.105(5), Florida Statutes, reads as follows: (5) In administrative proceedings under chapter 120, an administrative law judge shall award a reasonable attorney's fee and damages to be paid to the prevailing party in equal amounts by the losing party and a losing party's attorney or qualified representative in the same manner and upon the same basis as provided in subsections (1)-(4). Such award shall be a final order subject to judicial review pursuant to s. 120.68. If the losing party is an agency as defined in s. 120.52(1), the award to the prevailing party shall be against and paid by the agency. A voluntary dismissal by a nonprevailing party does not divest the administrative law judge of jurisdiction to make the award described in this subsection. Subsection (5) of Section 57.105, Florida Statutes, directs the undersigned to the preceding subsections which set forth standards to be applied in the analysis of entitlement to attorney’s fees. Subsection (1) provides that reasonable attorney’s fees shall be awarded to the prevailing party to be paid by the losing party where the losing party or the losing party’s attorney knew or should have known that a claim or defense, when initially presented to the administrative tribunal or at any time before the administrative hearing, “[w]as not supported by the material facts necessary to establish the claim or defense or [w]ould not be supported by the application of then-existing law to those material facts.” The standards set forth in Subsection (1) and incorporated by reference in Subsection (5) were the result of an amendment to Section 57.105, Florida Statutes, in 1999. s. 4, Ch. 99-225, Laws of Florida. Prior to that amendment, the statute provided for the award of attorney’s fees when “there was a complete absence of justiciable issue of either law or fact raised by the complaint or defense of the losing party.” These new standards became applicable to administrative hearings in 2003 by s. 9, Ch. 2003-94, Laws of Florida, with an effective date of June 4, 2003. Petitioner filed his Petition for Administrative Hearing in September 2003. Accordingly, the newer standards of Section 57.105, Florida Statutes, apply to this case. In the case of Wendy’s v. Vandergriff, 865 So. 2d 520, (Fla. 1st DCA 2003), the court discussed the legislative changes to Section 57.105: [T]his statute was amended in 1999 as part of the 1999 Tort Reform Act in an effort to reduce frivolous litigation and thereby to decrease the cost imposed on the civil justice system by broadening the remedies that were previously available. See Ch. 99- 225, s. 4, Laws of Florida. Unlike its predecessor, the 1999 version of the statute no longer requires a party to show a complete absence of a justiciable issue of fact or law, but instead allows recovery of fees for any claims or defenses that are unsupported. (Citations omitted) However, this Court cautioned that section 57.105 must be applied carefully to ensure that it serves the purpose for which it was intended, which was to deter frivolous pleadings. (Citations omitted) In determining whether a party is entitled to statutory attorney's fees under section 57.105, Florida Statutes, frivolousness is determined when the claim or defense was initially filed; if the claim or defense is not initially frivolous, the court must then determine whether the claim or defense became frivolous after the suit was filed. (Citation omitted) In so doing, the court determines if the party or its counsel knew or should have known that the claim or defense asserted was not supported by the facts or an application of existing law.(Citation omitted) An award of fees is not always appropriate under section 57.105, even when the party seeking fees was successful in obtaining the dismissal of the action or summary judgment in an action. (Citation omitted) Wendy's v. Vandergriff, 865 So. 2d 520, 523. The court in Wendy’s recognized that the new standard is difficult to define and must be applied on a case-by-case basis: While the revised statute incorporates the ‘not supported by the material facts or would not be supported by application of then-existing law to those material facts’ standard instead of the ‘frivolous’ standard of the earlier statute, an all encompassing definition of the new standard defies us. It is clear that the bar for imposition of sanctions has been lowered, but just how far it has been lowered is an open question requiring a case by case analysis. Wendy’s v. Vandergriff, 865 So. 2d 520, 524 citing Mullins v. Kennelly, 847 So. 2d at 1155, n.4. (Fla. 5th DCA 2003). More recently, the First District Court of Appeal further described the legislative change: The 1999 version lowered the bar a party must overcome before becoming entitled to attorney’s fees pursuant to section 57.105, Florida Statutes . . . Significantly, the 1999 version of 57.105 ‘applies to any claim or defense, and does not require that the entire action be frivolous.’ Albritton v. Ferrera, 913 So. 2d 5, 6 (Fla. 1st DCA 2005), quoting Mullins v. Kennelly, supra. The Florida Supreme Court has noted that the 1999 amendments to Section 57.105, Florida Statutes, “greatly expand the statute’s potential use.” Boca Burger, Inc. v. Richard Forum, 912 So. 2d 561, 570, (Fla. 2005). The phrase “supported by the material facts” found in Section 57.105(1)(a), Florida Statutes, was defined by the court in Albritton to mean that the “party possesses admissible evidence sufficient to establish the fact if accepted by the finder of fact.” Albritton, 913 So. 2d 5, at 7, n.1. Therefore, the first question is whether FAMU or its attorneys knew or should have known that its defense of Dr. Jain’s claim was not supported by the material facts necessary to establish the defense when the case was initially filed or at any time before trial. That is, did FAMU possess admissible evidence sufficient to establish its defense. The parties filed a Pretrial Stipulation the day before the hearing. The Pretrial Stipulation characterized FAMU’s position as follows: It is the position of the University that Dr. Babu Jain retired at the close of business on May 30, 2003, pursuant to the provision of the DROP retirement program. Dr. Jain did not have the right, nor the authority, to unilaterally rescind his resignation and retirement date. In a letter dated May 5, 2003, the Division of Retirement informed Dr. Jain that it was providing him with the “DROP VOID” form that had to be signed by himself and the University, for his participation in DROP to be rescinded. No University official signed that form nor agreed to rescind his retirement. On May 30, 2003, Dr. Babu Jain knew that his retirement through DROP had not been voided and that he had in-fact retired. The University included the position that Dr. Jain occupied in its vacancy announcement in the ‘Chronicle of Higher Education.’ The University, through Dr. Larry Robinson notified Dr. Jain that his retirement rescission was not accepted. Dr. Jain did not work past May 30, 2003. Finally, there was never a ‘meeting of the minds’, nor any other agreement between the University and Dr. Jain to void his retirement commitment. It [is] the University’s position that Dr. Babu Jain retired from Florida Agricultural and Mechanical University effective at the close of business on May 30, 2003. Pretrial Stipulation at 14-15. (emphasis in original) The material facts known by FAMU necessary to establish its defense against Petitioner's claim at the time the case was filed included: Petitioner’s initial Notice of Election to Participate in DROP and Resignation of Employment in which Dr. Jain resigned effective the date he terminated from DROP (designated as May 30, 2003); Dr. Robinson’s letter dated May 27, 2003, which asserted that the University was not in agreement with Dr. Jain's decision and that the decision to terminate from DROP is a mutual one; Dr. Robinson's letter of May 30, 2003, which informed Dr. Jain that the two summer semester employment contracts were issued to him in error and informing Dr. Jain that he would be paid through May 30, 2003, his designated DROP date; the refusal of anyone from FAMU to sign the DROP-VOID form provided to Dr. Jain by the Division of Retirement; the reassignment of another instructor to take over Dr. Jain’s classes the first Monday following the designated DROP termination date; and the Refund of Overpayment of Salary Form and resulting salary deduction from Dr. Jain’s sick leave payout. It is difficult to determine what, if any, additional facts FAMU learned through discovery. That is, whether deposition testimony of FAMU officials enlightened FAMU or its attorneys as to material facts not known at the time the case was filed by Dr. Jain, is not readily apparent. However, a review of the pre-trial depositions reveals material facts which supported FAMU’s defense that the summer contracts were issued in error and that there was no meeting of the minds between the parties regarding voiding Dr. Jain’s DROP participation. In particular, Dr. Robinson, Provost and Vice- President for Academic Affairs, testified in deposition that when he signed Dr. Jain’s summer employment contracts on May 20, 2003, he had no knowledge of Dr. Jain’s participation in the DROP program; that he first became aware that Dr. Jain was in DROP with a DROP termination date of May 30, 2003, upon receiving a May 21, 2003, memorandum from Nellie Woodruff, Director of the FAMU Personnel Office; and that Dean Larry Rivers did not have the authority to issue work assignments for any of his faculty beyond their DROP dates. Additionally, Dr. Henry Williams, Assistant Dean for Science and Technology, testified in deposition that when he signed the Recommendation for Summer Employment on May 5, 2003, which recommended Dr. Jain for teaching summer courses beginning May 12, 2003, he was unaware that there was a 30-day window during which a DROP participant could not be employed. Obviously, when the undersigned weighed all of the evidence, including evidence presented at hearing which is not part of this analysis, it was determined that the preponderance of the evidence was in favor of Dr. Jain’s position. However, that is not the standard to be applied here. The undersigned concludes that at the time the case was filed and prior to the commencement of the hearing, FAMU possessed admissible evidence sufficient to establish the fact that it did not give written agreement to his decision to abandon DROP and resume employment if accepted by the finder of fact. While the finder of fact ultimately did not agree with FAMU, FAMU possessed the material facts necessary to establish the defense, i.e., admissible evidence sufficient to establish the fact if accepted by the trier of fact, when the case was filed and prior to the final hearing. The second question is whether FAMU’s defense would not be supported by the application of then existing law to those material facts, when the case was initially filed or at any time before the final hearing. In the Pretrial Stipulation, the parties referenced Sections 121.091(13) and 121.021(39), Florida Statutes, as provisions of law relevant to the determination of the issues in the case.2/ These statutory provisions were also referenced by the undersigned in the Recommended Order as “two competing statutory provisions.” Recommended Order at 15. Subsection 121.091(13), Florida Statutes, establishing the DROP program, was created by s. 8, Ch. 97-180, Laws of Florida, with an effective date of January 1, 1999.3/ Section 121.091(13), Florida Statutes (2003), read as follows: DEFERRED RETIREMENT OPTION PROGRAM.--In general, and subject to the provisions of this section, the Deferred Retirement Option Program, hereinafter referred to as the DROP, is a program under which an eligible member of the Florida Retirement System may elect to participate, deferring receipt of retirement benefits while continuing employment with his or her Florida Retirement System employer. The deferred monthly benefits shall accrue in the System Trust Fund on behalf of the participant, plus interest compounded monthly, for the specified period of the DROP participation, as provided in paragraph (c). Upon termination of employment, the participant shall receive the total DROP benefits and begin to receive the previously determined normal retirement benefits. Participation in the DROP does not guarantee employment for the specified period of DROP. Participation in the DROP by an eligible member beyond the initial 60-month period as authorized in this subsection shall be on an annual contractual basis for all participants. Section 121.021(39)(b), Florida Statutes (2003), read as follows: 'Termination' for a member electing to participate under the Deferred Retirement Option Program occurs when the Deferred Retirement Option Program participant ceases all employment relationships with employers under this system in accordance with s. 121.091(13), but in the event the Deferred Retirement Option Program participant should be employed by any such employer within the next calendar month, termination will be deemed not to have occurred, except as provided in s. 121.091(13)(b)4.c. A leave of absence shall constitute a continuation of the employment relationship. Unlike the situation in Albritton, supra, the DROP program was relatively new and the statutes creating the same were not well established provisions of law. Dr. Jain was in the first “class” of DROP for FAMU. FAMU and its lawyers did not have the benefit of established case law that discussed DROP and its provisions when this case was filed or at any time before the hearing. While general contract law also came into play, it had to be considered in the context of the DROP program, which had no precedent of case law. FAMU argues in its Response to the Motion for Attorney's Fees that it interpreted the provision in Section 121.091(13), Florida Statutes, that requires written approval of the employer to be either the DROP VOID form provided by the Division of Retirement or a written document, executed by the designated University official, specifically approving Petitioner's decision. "The University did not believe the employment contracts that were issued to Petitioner in error, would constitute written approval." FAMU's Response at 5. This argument is consistent with the position FAMU took in the Pretrial Statement quoted above, that there was never a meeting of the minds "or any other agreement" that Dr. Jain's retirement rescission was accepted. A critical conclusion in the Recommended Order is found in paragraph 38: "Moreover, while the FAMU administration did not sign the DROP-VOID form, the contracts issued to Dr. Jain constitute written approval of Dr. Jain's employer regarding modification of his termination date." FAMU also took the position in the Pretrial Stipulation that Dr. Jain did not work past May 30, 2003, based upon the material facts recited above. Under that reading of the facts, Dr. Jain did not work during the next calendar month after DROP, and, therefore terminated employment consistent with the definition of "termination" in Section 121.021(39)(b), Florida Statutes. Again, while the undersigned did not agree with FAMU's application of the material facts to the then-existing law, FAMU's interpretation was not completely without merit. See Mullins v. Kennerly, 847 So. 2d 1151, 1155. (Case completely without merit in law and cannot be supported by reasonable argument for extension, modification or reversal of existing law is a guideline for determining if an action is frivolous.) Accordingly, the undersigned concludes that at the time the case was filed and prior to the commencement of the hearing, FAMU did not know and could not be expected to know that its defense would not be supported by the application of then-existing law to the material facts necessary to establish the defense. Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is ORDERED: Petitioner’s Motion for Attorney’s Fees is denied. DONE AND ORDERED this 1st day of March, 2006, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of March, 2006.
