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JOEY BAUTISTA vs STATE BOARD OF ADMINISTRATION, 19-004819 (2019)
Division of Administrative Hearings, Florida Filed:Lauderdale Lakes, Florida Sep. 12, 2019 Number: 19-004819 Latest Update: Dec. 28, 2024

The Issue The issue in this proceeding is whether Petitioner was convicted of specified criminal offenses, requiring the forfeiture of all his rights and benefits under the Florida Retirement System, except for the return of accumulated contributions.

Findings Of Fact From 1999 until 2017, Bautista was an employee of the Miami-Dade County Public Schools (“MDPS”). On August 24, 2017, Bautista resigned from his position as principal of the Miami Jackson Adult Education Center, an office he had held since 2011. Bautista departed shortly after being arrested on charges of organized fraud, official misconduct, and grand theft. In the criminal Information leading to Bautista’s arrest, the State Attorney of the Eleventh Judicial Circuit alleged, in summary, that Bautista had used his position as principal to misappropriate between $20,000.00 and $50,000.00 of MDPS’s funds for personal expenses, and had destroyed official payroll records to cover his tracks. On or about July 10, 2019, Bautista pleaded nolo contendere in the Eleventh Judicial Circuit Court to one count of official misconduct, a felony of the third degree pursuant to section 838.022, Florida Statutes, and to one count of grand theft under section 812.014, Florida Statutes, also a third- degree felony. The court withheld adjudication of guilt and placed Bautista on community control, to be followed by probation. In addition, Bautista was ordered to pay restitution to MDPS in the amount of $41,798.22. SBA is an agency of the state of Florida whose jurisdiction includes the administration of the Florida Retirement System Investment Plan (the “Plan”). By letter dated August 14, 2019, SBA notified Bautista that his rights and benefits under the Plan are forfeit as a result of his pleas of no contest to the aforementioned criminal charges, which had arisen from acts allegedly committed by Bautista as an MDPS employee. SBA offered Bautista an opportunity to request a formal administrative proceeding to contest the determination, and Bautista timely requested a hearing. As grounds for opposing the forfeiture, Bautista claims that his former employer, MDPS, failed to provide him due process of law during the run-up to his forced resignation. He complains, as well, that “procedural irregularities” in the criminal prosecution likewise deprived him of due process. Next, Bautista notes that he never admitted guilt and insists that he is, in fact, innocent of the charges to which he pleaded no contest. Finally, Bautista argues that he was not “convicted” for purposes of forfeiture of retirement benefits, because the court withheld adjudication of guilt on the criminal charges against him. To be sure, if Bautista was not afforded due process or was otherwise victimized by prosecutorial abuse or inadequate legal representation, as he alleges, then Bautista might have suffered an injury for which the law affords redress. But this proceeding is not the vehicle, and DOAH is not the forum, for hearing such disputes. It does not minimize the seriousness of Bautista’s allegations to recognize that, even if true, none of them changes the undisputed facts that he pleaded nolo contendere to the crimes of official misconduct and grand theft, each of which is a “specified offense” under section 112.3173(2)(e), Florida Statutes. Conviction of a specified offense results in the forfeiture of retirement benefits pursuant to the plain language of section 112.3173(3).1 Thus, the MDPS investigation and any “irregularities” in the criminal prosecution are irrelevant to the issues at hand, and the undersigned declines to make findings of fact concerning Bautista’s allegations in this regard.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the State Board of Administration enter a final order determining that Joey Bautista forfeited all his rights and benefits under the Plan, except for the return of any accumulated contributions, when he pleaded nolo contendere to “specified offenses” committed prior to his retirement from public service. DONE AND ENTERED this 7th day of December, 2020, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of December, 2020. COPIES FURNISHED: Soeurette Michel, Esquire The Michel Law Firm, LLC Post Office Box 245131 Pembroke Pines, Florida 33024 (eServed) Rex D. Ware, Esquire Moffa, Sutton & Donnini, P.A. 3500 Financial Plaza, Suite 330 Tallahassee, Florida 32312 (eServed) Jonathon W. Taylor, Esquire Moffa, Sutton & Donnini, P.A. Trade Center South, Suite 930 100 West Cypress Creek Road Fort Lauderdale, Florida 33309 (eServed) Ash Williams, Executive Director and Chief Investment Officer State Board of Administration 1801 Hermitage Boulevard, Suite 100 Post Office Box 13300 Tallahassee, Florida 32317-3300

Florida Laws (9) 112.3173120.52120.569120.57120.68812.014838.022838.15838.16 DOAH Case (1) 19-4819
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JAMES H. CLENDENIN vs. DIVISION OF RETIREMENT, 83-002138 (1983)
Division of Administrative Hearings, Florida Number: 83-002138 Latest Update: May 01, 1990

Findings Of Fact The Petitioner James H. Clendenin was elected to the office of Commissioner of the Canaveral Port Authority and served as a Port Commissioner from January 1, 1967 through December 31, 1982. The Petitioner was one of five Commissioners of the Authority. The Petitioner was not enrolled in the Florida Retirement System, Chapter 121, Florida Statutes, or any prior system until January 1, 1969. Prior to that date he was enrolled from January 1, 1969 through November 30, 1970, in the State and County Officers and Employees Retirement System, Chapter 122, Florida Statutes. The Port Authority, the authorized governing body of the Canaveral Port District, is an autonomous public entity created and established by Chapter 28922, Laws of Florida, 1953. As a Commissioner, the Petitioner was paid monies for his service for calendar years 1967 and 1968 which were reported as income--to the Internal Revenue Service. Prior to January 1, 1969, the Petitioner was required to submit a voucher for expenses and was paid on a fee basis. He received $25 per day in per diem and was reimbursed through an expense account. In order to receive the $25 which was characterized as per diem pay under the special act, the approval of the other four Commissioners was required. The total per diem was paid to each Commissioner on a monthly basis. After January 1, 1969, salaries were authorized for Commissioners and the per diem system was abandoned. Thereafter, the Petitioner received a salary check without request or required attendance at the Authority's meetings. On January 1, 1969, Petitioner submitted an application for enrollment in the State Retirement System. His application was accepted and the Petitioner began to accrue retirement service credits. Upon Petitioner's retirement, he attempted to claim and purchase prior service credits for 1967-1968. However, Petitioner was denied the opportunity to pay retirement contributions for retirement service credits for those years, and monies he had paid to purchase the prior service period were refunded. Consequently, Petitioner was credited with only 13.30 total years of service instead of 15.30 years. The difference in benefits amounts to 18.78 per month.

Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a Final Order be entered by the Respondent permitting the Petitioner to purchase additional service as a Port Commissioner for 1967 and 1968 upon payment to the Retirement Fund of $496.68 and increase the Petitioner's retirement benefit to the amount originally calculated to be due him by the Division of Retirement, retroactive to the date the Respondent received from the Petitioner monies paid for the purchase of the additional service. DONE and ENTERED this 19th day of March, 1984, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of March, 1984. COPIES FURNISHED: Robert T. Westman, Esquire STROMIRE WESTMAN LINTZ BAUGH McKINLEY AND ANTOON, P.A. 1970 Michigan Avenue, Bldg. C Post Office Hox 1888 Cocoa, Florida 32923 Augustus D. Aikens, Esquire Division of Retirement Cedars Executive Center 2639 North Monroe Street Suite 207C Box 81 Tallahassee, Florida 32303 Nevin G. Smith, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301 =================================================================

Florida Laws (3) 1.04120.57121.021
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EUGENE R. MCREDMOND vs DIVISION OF RETIREMENT, 90-007104 (1990)
Division of Administrative Hearings, Florida Filed:Sarasota, Florida Nov. 07, 1990 Number: 90-007104 Latest Update: Aug. 30, 1991

The Issue The issue for consideration in this matter is whether Peter McRedmond, the deceased, should have been permitted to change the beneficiary on his state retirement plan to elect an annuity for the benefit of his estate and the Intervenor, Martin Horton.

Findings Of Fact At all times pertinent to the issues herein, the Respondent, Division of Retirement, was the state agency responsible for the control, operation and monitoring of the State Retirement System. Petitioner, Eugene McRedmond, is the surviving brother of Peter McRedmond, deceased, a former member of the Florida Retirement System. Intervenor, Martin V. Horton, is the former live-in friend and companion to Peter McRedmond and the individual who claims an interest in Peter's retirements benefits. For some period prior to 1988, Peter McRedmond was employed at Manatee Community College as a psychology professor and as such was a member of the Florida Retirement System, (FRS). He was so employed until he retired for disability in early 1990. Before that time, however, in August or September, 1988, he was diagnosed as having AIDS by Dr. Warren D. Kuippers, a physician with the Community Migrant Health Center. Tests taken at or around that time indicated he was suffering from toxoplasmosis, a disease of the brain in which significant portions of that organ are eaten by parasites, resulting in intermittent periods of impaired judgement and reasoning ability. He also suffered numerous other medical problems including weight loss, a wasting syndrome, general weakness and fatigue. Notwithstanding the seriousness of his illness, because Mr. McRedmond wanted to qualify for retirement under the FRS system, he continued to work for another year to meet the minimum requirements for retirement. On April 27, 1990, he made application for disability retirement to be effective July 1, 1990. As a part of that application, Mr. McRedmond selected Option 1 under the FRS as the method under which he desired his benefits be paid and named the Intervenor, Mr. Horton, as his designated beneficiary to receive any benefits legally due after his death. Mr. McRedmond could have elected to receive benefits under either Option 1 or Option 2 of the plan. Option 3 was not available to him because of his marital status. Under Option 1, he would receive payments of $639.33 per month for the remainder of his life, regardless of how long he lived. Under Option 2, he would have been paid a slightly lesser monthly sum, $587.51, for the rest of his life, but not less than 10 calendar years, and if he were to die before 10 years were up, the payments would go to his designated beneficiary. In May, 1990, consistent with the procedure then in effect within the Division, Mr. McRedmond was sent a second Option selection form to give him as much information as was possib1e and to make sure he understood what he was doing as it related to his option selection. Mr. McRedmond again selected Option 1, had his signature notarized, and returned the executed form to the Division. The individual who performed the notary service did not recall the transaction but indicated her routine practice was not to notarize a document for anyone who did not appear to know what he was doing. Peter McRedmond died on August 23, 1990 from the disease with which he was afflicted. Several months before his death, in mid June, 1990, Mr. McRedmond and Mr. Horton discussed finances and what Horton could expect after McRedmond's death. It is clear that Mr. McRedmond wanted to make arrangements for Mr. Horton to finish his education without having to work while doing so. At that time, McRedmond's life insurance policy, in the face amount of $60,000.00, had Horton as the beneficiary. Shortly before his death, however, upon the prompting of his brother, Eugene, Petitioner herein, Peter McRedmond directed the policy be changed to make his estate the beneficiary. This was done by Eugene through a power of attorney. There was also some discussion of an additional $500.00 per month which was to go to Mr. Horton, but no one, other than Mr. Horton, recalls this. Also shortly before his death, Mr. McRedmond and Mr. Horton travelled to the family home in Connecticut for several weeks. During that time, Mr. McRedmond had at least one major seizure and family members noticed that while he was sometimes forgetful, for the most part his thinking was rational and normal. There can be little doubt that Mr. McRedmond had deep feelings for Mr. Horton and wanted the latter to be provided for after his death. Friends of both relate the numerous comments McRedmond made to that effect and are convinced that at the time he made the contested election, Mr. McRedmond was not of sound mind sufficient to knowingly make the choice he made. To be sure, the ravages of his disease had taken its toll and there were numerous occasions on which he was not lucid or competent to determine issues such as here. On the other hand, the benefits administrator with whom McRedmond talked at the time he selected his retirement plan option was totally satisfied that at that time, he fully understood the nature and effect of the option he selected and was choosing that which was consistent with his desires at the time. By the same token, the notary, whose testimony was noted previously herein, also was satisfied he knew what he was doing at the time of the second election. In its final configuration, Mr. McRedmond's estate includes all his assets, including the proceeds of the insurance policy previously designated to go to Mr. Horton, for a total of approximately $120,000.00. According to the terms of the will, the estate is to be put into a trust from which Mr. Norton is to receive $1,000.00 per month for his lifetime, as well as all his medical expenses. Since Mr. Horton has tested HIV positive, these can be expected to be extensive. Eugene McRedmond is the executor of the estate. Petitioner and Mr. Horton claim that since the trust contains all of Peter's assets existing at his death, the only other source of the additional $500.00 per month would be the benefits from the FRS. Both cite this as evidence of Mr. McRedmond's intent that the option selection providing for payment after death was his intention. This does not necessarily follow, however. Notwithstanding what Petitioner and Intervenor state were his intentions, Mr. McRedomnd took no action to make the change in option selection which would have effectuated them. Instead, he went out of town to visit family for several weeks, and even after receipt of the first retirement check, received on July 31, 1990, still took no action to make the change. During this period, after the return from Connecticut, Mr. McRedmond's condition deteriorated to the point he was often bedridden and was periodically unaware. However, there is ample evidence to indicate that he was often lucid during this period and still took no action to change his retirement option. During this time, Mr. Horton conducted come of Mr. McRedmond's business affairs for him pursuant to specific instructions. These included making bank deposits and as a part of one of these deposits, when Horton was to deposit two checks as requested by McRedmond, he also deposited the first retirement check. Horton and Eugene McRedmond both claim that at no time did Peter McRedmond ask or authorize him to do so. In a visit that Petitioner made to his brother in early August, 1990, just weeks prior to Peter's death, according to Petitioner his brother explained he had selected the wrong retirement option and requested that Eugene attempt to change the election. Peter gave Eugene a Power of Attorney with which he was to do this as well as to change the beneficiary on the life insurance policy. Consistent with those instructions, Eugene wrote a letter to the Division explaining the situation and that the check had been deposited by mistake. On August 13, 1990, Eugene telephonically contacted the Division where he spoke with Melanie White. During this conversation, in which he again spelled out the circumstances which he believed constituted the mistaken election, he was told to file a power of attorney. When he did this, the Division would not honor it claiming that since it had been executed in May, 1990, some three months earlier, it was not current. Subsequent to the death of Peter McRedmond and the filing of the claim against the Division, Eugene McRedmond and Martin Horton have entered into an agreement whereby any sums recovered from the Division will be split with 25% going to Mr. Horton and 75% going to the Trust. Upon the death of Mr. Horton, any sums remaining in the trust will be split by Eugene McRedmond and another brother.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner's and Intervenor's claims for retirement benefits under Option 2 of the Florida Retirement System retirement plan, on behalf of Peter McRedmond, be denied. RECOMMENDED in Tallahassee, Florida this 29th day of July, 1991. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Buildi5g 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clark of the Division of Administrative Hearings this 29th day of July, 1991 APPENDIX TO RECOMMENDED ORDER IN CASE NUMBER 90-7104 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER AND INTERVENOR: Accepted and incorporated herein. Accepted and incorporated herein. First two sentences accepted and incorporated herein. Third sentence not proven. & 5. Accepted and incorporated herein. Accepted and incorporated herein. Accepted that Peter McRedmond had numerous conversations with friends about providing for Mr. Horton, but it was not established that he mentioned using his retirement benefits for that purpose. & 9. Accepted and incorporated herein. Accepted and incorporated herein. Rejected as not necessarily following from the facts. Rejected as speculation not supported by fact, except that Petitioner claims Peter desired to change the option selection. First sentence accepted. Second sentence accepted in so far as it asserts Peter told Horton he would receive a monthly sum of $1,000.00. Balance rejected. Accepted and incorporated herein. Rejected as speculation and conclusion except for first sentence and first clause of second sentence. Accepted and incorporated herein. 17.-20. Accepted and incorporated herein. 21. First and second and last sentences accepted. 22.-24. Accepted. Accepted and incorporated herein. Accepted. & 28. Accepted. 29. Irrelevant. FOR THE RESPONDENT: 1-4. Accepted and incorporated herein. Accepted and incorporated herein. & 7. Accepted and incorporated herein. 8.-10. Accepted. Ultimate finding accepted. On the date he filed his application, Peter McRedmond was capable of understanding what he was doing and the implications thereof. & 13. Rejected as comments of the evidence and not Findings of Fact. First four sentences accepted. Remainder rejected except that McRedmond wanted Horton to get at least $1,000.00 per month for life, and more if possible. & 16. Accepted except for last two sentences of 16. Accepted except for last sentence which is a comment on the evidence and not a Finding of Fact. Accepted. & 20. Accepted and incorporated herein. Accepted. & 23. Accepted and incorporated herein. 24. Accepted and incorporated herein. COPIES FURNISHED: Edward S. Stafman, Esquire Stafman & Saunders 318 North Calhoun Street Tallahassee, Florida 32301 Stanley M. Danek, Esquire Department of Administration Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 A. J. McMullian, III Director Division of Retirement Cedars Executive Center, Bldg. C 1639 North Monroe Street Tallahassee, Florida 32399-1560 John A. Pieno Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Linda Stalvey Acting General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550

Florida Laws (2) 120.57121.091
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GASPARE B. TAMBURELLO vs DIVISION OF RETIREMENT, 92-007366 (1992)
Division of Administrative Hearings, Florida Filed:Pensacola, Florida Dec. 10, 1992 Number: 92-007366 Latest Update: Aug. 18, 1995

The Issue Whether petitioner must forfeit retirement benefits in the amount of $7,889.26 on account of work he performed for Pensacola Junior College from August 1, 1987, through June 30, 1988?

Findings Of Fact After retiring from the United States Navy as a Captain, petitioner Gaspare B. Tamburello, 72 years of age at the time of the hearing, began working for Pensacola Junior College on August 2, 1969. He spent two years as the College's Director of Veteran Affairs, then became its Director of Administrative Services. By July 1, 1987, when he retired from the College, he had become Assistant to the President. As Assistant to the President, Dr. Tamburello's duties, although many and varied, did not include fund raising or any participation in efforts to create new educational programs. He reported to the President and performed duties the President assigned, including: Serv[ing] as the college's community liaison representative to develop and maintain opt- imum relationships between the college and the community. [by] Represent[ing] the President, in his absence, at community events, councils, and committees. Coordinat[ing] for the college special community and civic events held on campus. Prepar[ing] special briefings and presen- tations. Arrang[ing] tours for representatives of all segments of the community. Serv[ing] as the President's campus ombudsman. [Taking r]esponsib[ility] for special pro- jects and reports on a variety of subjects as assigned by the President. Coordinat[ing] special events and activities for formal ceremonies. Prepar[ing] corres- pondence for the President's signature. Act[ing] as liaison for President at his direction. Supervis[ing] the College Public Relations function. Perform[ing] related duties as required or deemed appropriate to the accomplishment of the responsibilities and functions of the position. Respondent's Exhibit No. 5. While Assistant to the President, he met mornings with Horace E. Hartsell, the College's president, to lay out plans for the day. The College provided petitioner an office next to President Hartsell's, secretarial services, and all his supplies. Until July 1, 1987, the College paid petitioner from its payroll account, withholding a portion of his wages to pay federal income taxes and Social Security taxes. Petitioner received all the fringe benefits the College gave its other employees, including health and hospitalization insurance, life insurance, paid holidays, sick leave, annual leave, contributions on his behalf to the Florida Retirement System, and workers' compensation coverage. When he learned petitioner intended to retire, President Hartsell asked him to consider working as a consultant to the College after his retirement. Dr. Tamburello prepared the following memorandum, dated May 21, 1987: PENSACOLA JUNIOR COLLEGE MEMORANDUM TO: Dr. Hartsell FROM: G. B. Tamburello You asked that I identify areas in which I can serve under the proposed consulting con- tract. The following activities could be assigned under the contract as needed. Community Relations Assist Dr. Crosby in obtaining community support for PJC Future Fund. Assist in developing Community Needs Assessment Project. Develop contacts for expansion of the USA Achievement Program. As directed by you for special purposes. NAVY Relations Lobby for Gulf Region Homeporting Ships Educational Programs. Help develop local homeporting education liaison programs. Arrange courtesy calls with new Commanding Officers. Attend special military functions as requested. PJC Seniors Club Continue to act as advisor to the club. Attend monthly and executive committee meetings. Coordinate Seniors Club campus facili- ties and logistical needs. Develop special programs of interest to PJC Seniors Club members. Veterans Affairs a. Discuss with Reserve Units Reserve GI Bill opportunities. Continuing Education Develop PJC Pre-Retirement Program. Develop Pre-Retirement Program for community businesses and commercial establishments. Develop special life-long learning educational programs. Develop new non-credit PJC Seniors Academy program. International Education a. Assist in the development of recruiting program to attract the international student to PJC campuses. Special Studies and Projects as requested Dr. Hernandez, Jay Mooney, and Betty Dexter approached me about the possibility of being of assistance to them under the contract. I have also discussed the Continuing Education functions with Dr. Betsy Smith who is very pleased with the assistance I might render. Respondent's Exhibit No. 9. The parties later executed a written agreement under which petitioner performed consulting services for the College from August 1, 1987, to June 30, 1988, in exchange for six thousand dollars ($6,000). When Dr. Tamburello retired, the College was paying him at an annual rate of approximately $31,500. Some two weeks after Dr. Tamburello's retirement, David Armstrong became Assistant to the President, filling the regularly established position Dr. Tamburello had vacated and succeeding to his duties. The job description remained unchanged. The consulting contract specified that petitioner would act as an independent contractor while performing services under the contract, and that he would not be an employee of the College. Petitioner reported the income he received under the consulting contract to the Internal Revenue Service on Schedule C. Petitioner's Exhibit No. 10. He filled no position at the college. For his services under the consulting contract, the College paid him from its accounts payable account, and withheld no funds to pay federal income taxes or Social Security taxes. The College did not provide petitioner with an office, assign a secretary, or give him materials and supplies, and petitioner received none of the fringe benefits enjoyed by employees of the College. The College did not reimburse petitioner for expenses he incurred while performing services as a consultant. Although the College contracted directly with Dr. Tamburello and all parties evidently contemplated his personal services, he was not prohibited from hiring others to assist him in performing services under the consulting contract, according to unrebutted testimony from College officials. In 1987 Nova University paid petitioner $6,000 and in 1988 $9,000.00 for services he performed for that school. Petitioner had formed E&T Management Service Co. prior to 1987, and offered his services as a consultant to the general public. Only after August 1, 1987, when Dr. Tamburello's consulting contract became effective, did he begin working with Elizabeth Smith, then Dean of Continuing Education, in an effort to establish an elder hostel program at the College, as part of a "life long learning center" with "seniors teaching seniors." He also conceived and organized the College's "Lex flex" program: classes for members of the crew of the U.S.S. Lexington were scheduled to coincide with the ship's stays in Pensacola, its home port. While working under the consulting contract, he solicited contributions for the College's "Future Fund," and facilitated one donation to the college that amounted to approximately a quarter of a million dollars. He conducted "pre-retirement seminars" at which bankers, lawyers, social security officials and others addressed older members of the community. The Pensacola Junior College Seniors Club, which he started, now has 1500 members. In performing services under the consulting contract, petitioner set his own hours and determined the type and sequence of the work he performed. While not subject to their control, he reported to the President and the Dean of Continuing Education, as ideas or plans unfolded. The pre-retirement seminars took place on campus and he occasionally met with Dean Smith or President Hartsell in their offices, but, as a consultant, for the most part, he worked off campus; he had an office at his home. Petitioner kept track of the various tasks he performed. At varying intervals, he reported how many hours he had worked to Dean Smith, and was paid accordingly, in keeping with the consulting contract. Thirteen of a total of 101 entries reflected that he had done something at President Hartsell's request, typically attend a change of command ceremony as a representative of the College. The President forwarded notices of such events to him, but did not actually request that he attend; sometimes he attended, sometimes he did not. Ten entries reflected time petitioner spent introducing Dr. Armstrong to community leaders. At least nine entries pertained to the "PJC Senior Club." Respondent's Exhibit No. 10. He wrote a single three-minute introduction President Hartsell delivered, but did no other speech writing. Petitioner's experience as a naval officer, his study of the educational needs of the elderly, as evidenced by his doctoral thesis on the educational needs of the elderly, entitled "Project ESP: Education Support Plan for the Aged, and his civic activities all prepared him for the work he performed as a consultant. Before entering into the consulting contract with the College, petitioner had been active in a wide range of community affairs. By June of 1985, petitioner's interest in his retirement benefits had fully vested. Taking into account the twenty factors utilized by respondent as guidelines to determine whether an individual is an employee or an independent contractor, petitioner's status was that of an independent contractor. Some time after 1988, respondent audited the College's records, but did not advise the College that petitioner should be deemed an employee rather than an independent contractor under the terms of the 1987-88 contract. Only later, after an audit performed by the Auditor General's office, did respondent inform him of its contention that he must forfeit $7,889.26 in retirement benefits previously paid to him. The first notice petitioner received from respondent to that effect was dated September 9, 1992.

Recommendation It is, accordingly, RECOMMENDED: That the Department of Management Services, Division of Retirement, enter a final order formally abandoning any claim to the retirement payments it made to petitioner during the period from August 1, 1987 through June 30, 1988. DONE AND ENTERED this 13th day of August, 1993, in Tallahassee, Florida. ROBERT T. BENTON 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 13th day of August, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-7366 Petitioner's proposed findings of fact Nos. 1 through 21 and 25 have been adopted, in substance, insofar as material. Petitioner's proposed findings of fact Nos. 22, 23, 24 and 26 are properly proposed conclusions of law. Respondent's proposed findings of fact Nos. 6, 7, 8 and 14 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 1, Dr. Tamburello supervised public relations and computer operations when he worked as Director of Administrative Services. With respect to respondent's proposed finding of fact No. 2, while his schedule as Assistant to the President varied from day to day, he met with the President every morning. With respect to respondent's proposed finding of fact No. 3, the contract was dated July 21, 1987. Respondent's proposed finding of fact No. 4 pertains to subordinate and immaterial matters. With respect to respondent's proposed finding of fact No. 5, Dr. Hartsell did not want to retain Dr. Tamburello as Assistant to the President. With respect to respondent's proposed finding of fact No. 9, the 1991-1992 contract was between the College and E&T Management Service. With respect to respondent's proposed finding of fact No. 10, there was some overlap. With respect to respondent's proposed finding of fact No. 11, making introductions is not necessarily the function of an employee. With respect to respondent's proposed finding of fact No. 12, Dr. Tamburello did not meet with Dr. Smith on a continuous basis. With respect to respondent's proposed finding of fact No. 13, the name of the company was E&T Management Service. COPIES FURNISHED: Susan B. Kirkland, General Counsel Department of Management Services 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of Management Services 2737 Centerview Drive Tallahassee, Florida 32399-0950 M. J. Menge, Esquire Shell, Fleming, Davis & Menge Post Office Box 1831 226 Palafox Place Pensacola, Florida 32501 Stanley M. Danek, Esquire Division of Retirement Cedars Executive Center-Building C 2639 North Monroe Street Tallahassee, Florida 32399

Florida Laws (7) 120.57120.68121.021121.0515121.091121.2395.11 Florida Administrative Code (1) 60S-6.001
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REX C. BISHOP, JESSIE N. KARP, ET AL. vs. DIVISION OF RETIREMENT, 80-001297 (1980)
Division of Administrative Hearings, Florida Number: 80-001297 Latest Update: Jun. 08, 1981

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.

Florida Laws (4) 238.07238.09422.07768.28
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HELLEN GUTTINGER vs DIVISION OF RETIREMENT, 96-005112 (1996)
Division of Administrative Hearings, Florida Filed:Tallahassee, Florida Oct. 31, 1996 Number: 96-005112 Latest Update: Aug. 21, 1997

The Issue The issues are: (1) whether Petitioner may retire and begin receiving retirement benefits at age 60 instead of age 62; (2) whether Petitioner may claim maternity leave in the 1962-1963 and 1965-1966 school years as creditable service; (3) whether Petitioner is entitled to a refund of her retirement contributions for the 1967-1968 and 1968-1969 school years; and (4) whether Petitioner may transfer her membership from the Teachers’ Retirement System (TRS) to the Florida Retirement System (FRS).

Findings Of Fact Petitioner became a member of TRS when the Dade County School Board employed her for the 1960-1961 school year. In 1961, Petitioner began teaching in the public schools of Hillsborough County. Petitioner taught school in Hillsborough County until she took a maternity leave of absence in 1963. Her son was born on April 12, 1963. On September 4, 1963, Petitioner requested and subsequently received a return of her retirement contributions from TRS. From 1964 through 1966, Petitioner was employed by the Pinellas County School Board, the St. John’s County School Board, and the Duval County School Board. She was a member of TRS during this period of time. On October 28, 1966, Petitioner left her full-time position with the Duval County School Board to begin a maternity leave of absence. Her daughter was born on February 9, 1967. On January 20, 1967, Petitioner requested and subsequently received a return of her retirement contributions from TRS. On March 1, 1968, the University of Florida employed Petitioner. She again became a member of TRS. The University of Florida granted Petitioner a nine- month sabbatical to teach and study as a visiting scholar at Stanford University from September 9, 1979, until June 13, 1980. Petitioner took a professional educational leave of absence from August 10, 1984, through June 6, 1985. She took another professional educational leave of absence from August 9, 1985, through June 6, 1986. On December 5, 1985, Petitioner repaid the personal retirement contributions that she had withdrawn in 1963 and 1967. (See paragraphs three and six above.) She repaid these funds with interest as calculated by TRS. The amount repaid is currently on deposit with TRS. The University of Florida employed Petitioner continuously from 1968 through 1987. During this time, Petitioner was the major wage earner in her family. She had three young children who were eligible for greater benefits under TRS than FRS. Therefore, Petitioner elected not to transfer her membership to FRS on any of the six occasions that the Florida Legislature made available for such a transfer. Petitioner moved to Georgia when her husband took a job in Atlanta. She worked 9.87 years as a public school administrator in Georgia. During this period, Petitioner was a member of the Georgia Teachers’ Retirement System (GTRS). Respondent sent Petitioner a letter dated April 17, 1995, advising her that the first date she would be eligible for monthly retirement benefits from TRS would be March 1, 1993. Petitioner became 55 years old in March of 1993. The letter was incorrect because Petitioner’s normal retirement age is age 62. However, there is no evidence that Petitioner relied on the incorrect information contained in the letter to her detriment. Petitioner sent Respondent a letter dated March 18, 1996, requesting that the agency transfer her membership in TRS to FRS. Respondent denied Petitioner’s request in a letter dated that same day. On June 1, 1996, Petitioner purchased 3.33 years of service in GTRS for the following years of service with TRS in Florida: School Year Transferred Service 1969-1961 1 year 1961-1962 1 year 1962-1963 .556 year (9/62-1/63) 1963-1964 .333 year (3/64-5/64) 1965-1966 .222 year (4/66-5/66) 1966-1967 .222 year (9/66-10/66) On June 6, 1996, Respondent received an application for service retirement, Form TRS-11, from Petitioner. Petitioner selected Option 3 on that form. On July 1, 1996, Petitioner requested Respondent not to process her retirement application until she could have an administrative hearing. Petitioner made this request over the telephone. Respondent sent Petitioner a letter dated July 9, 1996, in which Respondent made the following decisions: (a) Respondent denied Petitioner’s requests to use age 60 instead of age 62 as her normal retirement age; (b) Respondent rejected Petitioner’s request to claim maternity leave in the 1962-1963 and 1965-1966 school years as credible service; (c) Respondent refused to refund Petitioner’s retirement contributions for the 1967-1968 and 1968-1969 school years so that she could claim an additional 1.55 years of service in Georgia. Petitioner filed a written request for formal hearing by letter dated July 26, 1996. Petitioner testified that her decision to maintain her membership in TRS over the years was due to her reliance on information contained in handbooks published by Respondent in 1982 and 1993. Specifically, Petitioner claims to have relied on statements contained within these handbooks relating to normal retirement ages and the purchase of credible service after withdrawal of retirement contributions or a leave of absence. Portions of these manuals were accepted into evidence. The 1982 brochure clearly states: This brochure contains basic information on the Teachers’ Retirement System, established by Chapter 238, Florida Statutes. It is not intended to be a comprehensive review of the Teachers’ Retirement System and should not be used in place of the law on questions of interpretation and application. Any questions which are not answered by this brochure may be addressed to the Division of Retirement, Room 530, Carlton Building, Tallahassee, Florida, 32301. Petitioner could not have relied on information contained in either of the handbooks when she made the decisions to take maternity leave in 1963 and 1966 or to withdraw her retirement contributions in 1963 and 1967. Petitioner made these critical decisions before Respondent published the handbooks in 1982 and 1993. Petitioner presented no evidence that she contacted Respondent’s office before she made any decision that is material to this proceeding. Petitioner does not assert that she filed an application with Respondent to continue her TRS membership after she was granted either of her maternity leaves and before her next retirement contribution was due.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that Respondent enter an order denying the following: (a) Petitioner’s request to establish age 60 as her normal retirement age; (b) Petitioner’s request to purchase creditable service for maternity leave taken during the 1962-1963 and 1965-1966 school years; (c) Petitioner’s request for a refund of retirement contribution during the 1967-1968 school years; and (d) Petitioner’s request to transfer her membership in TRS to FRS. DONE AND ENTERED this 18th day of July, 1997, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Hellen Guttinger 2650 Westchester Parkway Conyers, Georgia 30208 SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1997. Robert B. Button, Esquire Department of Management Services Division of Retirement 2639 North Monroe Street, Building C 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 Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950

Florida Laws (7) 120.57121.011121.051238.01238.05238.07238.09
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GERALD CONRAD vs. DIVISION OF RETIREMENT, 77-001752 (1977)
Division of Administrative Hearings, Florida Number: 77-001752 Latest Update: Feb. 20, 1978

Findings Of Fact Upon consideration of the joint stipulation of facts submitted by the parties, the following relevant facts are found: The petitioner was elected to the office of tax assessor, Bay County, for successive regular terms in 1952, 1956, 1960, 1964, 1968, and 1972. He was commissioned for that office on January 6, 1953, January 8, 1957, January 3, 1961, January 5, 1965, January 7, 1969, and January 2, 1973. As tax assessor, petitioner was a member of the retirement system now known as the State and County Officers and Employees Retirement System, Chapter 122, Florida Statutes. By two written ballots, petitioner rejected membership in the Florida Retirement System, Chapter 121, Florida Statutes, to be effective December 1, 1970, and January 1, 1975. The constitutional office of tax assessor was abolished and the constitutional office of property appraiser was created in its stead by amendment to Article 8, Section (1)(d) in 1974. The petitioner was elected to the office of property appraiser in 1976, and commissioned on January 4, 1977. The petitioner's duties as property appraiser were and are the same as they were when he was the tax assessor. Petitioner has been in office continually since January 6, 1953, either as tax assessor or property appraiser. He has not terminated his employment and received a refund of contributions; has not had a non-creditable leave of absence; nor was he off the payroll for at least one calendar month.

Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that petitioner's demand for admittance into the Florida Retirement System as of January 4, 1977, be denied. DONE and ENTERED this 20th of December, 1977, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: William A. Cooper, Jr., Esquire Davenport, Johnston, Harris, Gerde and Harrison 406 Magnolia Avenue Robert L. Kennedy, Jr. Panama City, Florida 32401 State Retirement Director Division of Retirement Cedars Executive Center 2639 North Monroe Street Tallahassee, Florida 32303 Stephen S. Mathues, Esquire Assistant Division Attorney Cedars Executive Center 2639 North Monroe Street Suite 207-C, Box 81 Tallahassee, Florida 32303

Florida Laws (4) 1.04112.0515120.57121.051
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LEE HAYES BYRON vs DEPARTMENT OF MANAGEMENT SERVICES, DIVISION OF RETIREMENT, 19-006581 (2019)
Division of Administrative Hearings, Florida Filed:Tallahassee, Florida Dec. 11, 2019 Number: 19-006581 Latest Update: Dec. 28, 2024

The Issue Whether Respondent is estopped from denying Petitioner's request to rescind her choice to change retirement plans (2nd Election) and requiring her to remain in the Florida Retirement System (FRS) Pension Plan; and, if so, what are Petitioner's options? Because of the complicated nature of FRS and Petitioner's unique circumstances, the issues and parties' positions are summarized herein. After being hired by the University of Florida, Petitioner had three retirement plan options: (1) State University System Optional Retirement Program (SUSORP), (2) FRS Investment Plan (Investment Plan), or (3) FRS Pension Plan (Pension Plan). Petitioner had been an FRS member in a previous job and switched from the Investment Plan to the Pension Plan solely because she was told she could only participate in SUSORP if she first became a Pension Plan member. The Division now admits there is no authority for this requirement, but argues it is not responsible for Petitioner's decision to switch from the Investment Plan to the Pension Plan. Rather, it blames another state agency and non-government agents for her belief that she could not participate in SUSORP unless she first bought into the Pension Plan. Ultimately, the issues in this proceeding are: (1) whether Petitioner was required to switch from the Investment Plan to the Pension Plan to participate in SUSORP; (2) whether the Division is responsible for Petitioner's belief that this was a requirement; and (3) if so, whether Petitioner's funds used to buy into the Pension Plan can be returned to the Investment Plan or transferred to her SUSORP account. PROCEDURAL HISTORY On May 30, 2018, Petitioner, Lee Hayes Byron, elected to switch her FRS plan from the Investment Plan to the Pension Plan. On November 1, 2019, Respondent, Department of Management Services, Division of Retirement (the Division), issued a letter to Petitioner denying her request to essentially rescind this election and/or have her "cost associated with buying into the FRS Pension Plan from the FRS Investment Plan transferred to SUSORP." On November 25, 2019, Ms. Byron submitted a request for an administrative hearing to the Division. Respondent forwarded Petitioner's request to DOAH on December 11, 2019. The matter was originally scheduled for hearing for February 5, 2020, but was continued three times: once at the Division's request and twice due to the state of emergency related to the COVID-19 health crisis. A final hearing was held on April 29, 2020, by Zoom. Petitioner testified on her own behalf and Petitioner's Exhibits P1 through P7 were admitted into evidence without objection.1 The Division offered the testimony of Joyce Morgan (Division Bureau Chief of Contributions), and Respondent's Exhibits R1 through R8 were admitted into evidence without objection. The final hearing was recorded by a court reporter, but neither party ordered a transcript. Petitioner requested 30 days to submit her proposed recommended order, and the Division had no objections to Petitioner's request. By requesting and agreeing to the extension of time, the parties waived the requirements in section 120.57(3)(e), Florida Statutes (2019), for the rendering of a recommended order within 30 days of the hearing. See Fla. Admin. Code. R. 28-106.216(2).2 1 Exhibit P7 is a disk with numerous audio files of telephone conversations between Petitioner and Division employees, other State employees, representatives, and agents. 2 All references to statutes and administrative rules are to the 2019 versions of the Florida Statutes and Florida Administrative Code unless otherwise noted. Accordingly, the proposed recommended orders were due no later than May 29, 2020. Both parties submitted timely Proposed Recommended Orders (PROs), which have been considered in the preparation of this Recommended Order.

Findings Of Fact Petitioner, Lee Hayes Byron, is currently employed by the University of Florida and eligible to participate in the Investment Plan, Pension Plan, or SUSORP. She is in an optional (not a mandatory) SUSORP position. Respondent, the Division, is a part of the Department of Management Services (DMS). The Division, as part of DMS, is the state entity responsible for oversight and administration of the Pension Plan and SUSORP. See §§ 121.125 and 121.035, Fla. Stat. The Division authorizes provider companies to assist SUSORP members with investments. See § 121.035, Fla. Stat.; Fla. Admin. Code R. 60U-1.011(4). The State Board of Administration of Florida (SBA) is the state agency responsible for oversight and administration of the Investment Plan.3 SBA is not a party to this proceeding. In coordination with DMS, SBA is responsible for dissemination of information regarding the FRS plans. See § 121.4501(10), Fla. Stat. SUSORP is a defined contribution plan authorized by section 121.35, Florida Statutes. The plan is an optional retirement plan in which 3 There was evidence that prior to attempting to undo her election with the Division, Petitioner requested an agency hearing with SBA, which was held on May 21, 2019. The SBA Hearing Officer recommended that SBA grant Petitioner relief by allowing her to rescind the 2nd election. On September 17, 2019, SBA issued a Final Order rejecting the SBA Hearing Officer’s recommendation. Petitioner has appealed the SBA’s Final Order, which is now pending at the Second District Court of Appeal in the matter of Lee Hayes Byron v. State Board of Administration, Case No. 2D19-3930. "eligible employees" of the State University System can elect to participate in lieu of the Pension Plan or Investment Plan. One of the benefits SUSORP offers over the FRS plans is the employer contribution rate is greater. SUSORP and the Investment Plan require an employee to contribute a minimum pretax contribution and allow additional funds to be contributed. Both the Investment Plan and SUSORP allow the employee to allocate the money in the plan account among approved investment funds.4 The ultimate benefit from the Investment Plan and SUSORP received by the employee upon retirement depends on both the amount contributed and the financial markets. The employee is responsible for managing his or her SUSORP or Investment Plan account through approved providers. In comparison, the Pension Plan requires a fixed pretax contribution by an employee. The Pension Plan is responsible for investing the contributions and accumulated funds in the member's pension account. Upon retirement, the employee receives a lifetime monthly benefit using a formula based on his or her length of service and salary. The employee has no control over how the money in the pension account is invested but is guaranteed a fixed, predictable benefit. PETITIONER'S FRS HISTORY Ms. Byron originally enrolled in FRS as an employee of Sarasota County on July 11, 2005. At that time she had the option to participate in either the Investment Plan or Pension Plan. On December 28, 2005, Ms. Byron made a timely election to participate in the FRS Investment Plan, effective January 1, 2006. As part of the FRS system, she had one more chance to switch to the Pension Plan. The subsequent decision to change FRS plans is referred to as the "2nd Election." On April 20, 2018, Petitioner began employment with the University of Florida in a SUSORP-eligible position. At this point, as explained in the 4 SBA recommends acceptable SUSORP investment products to the DMS; the DMS has final approval of such products. See § 121.035(6)(c), Fla. Stat. Conclusions of Law, Petitioner would begin participation in SUSORP unless she opted to remain in the FRS System (in either the Investment Plan or Pension Plan) or failed to enroll in a SUSORP-approved investment fund. See § 121.35(3), Fla. Stat. INFORMATION AND COMMUNICATIONS A handout distributed by the Division titled, "Florida Retirement System (FRS) Investment Plan • Members With a Remaining FRS Election Inquiring About State University System Optional Retirement Program (SUSORP) Membership" (SUSORP Handout) provides information for an Investment Plan member who wants to participate in SUSORP. The SUSORP handout states in relevant part: You will need to use your 2nd (and last) election to transfer from the Investment Plan to the Pension Plan before you will be eligible to elect participation in the SUSORP. * * * There is a cost associated with using your 2nd election to transfer to the Pension Plan. * * * The estimated transfer cost is calculated using your salary, service credit, membership class, and other actuarial assumptions used in the annual FRS actuarial valuation. The payment for the amount of the transfer cost is required to complete the transfer to establish your Pension Plan membership. The amount of money liquidated from your Investment Plan account to pay for your transfer cost will not transfer to the SUSORP. If the value of your Investment Plan account is less than the transfer cost, you may use personal resources including a direct transfer from a qualified plan … to make up the difference. Any personal resources paid will not transfer to the SUSORP. * * * Your membership in SUSORP will not begin until you have completed the transfer process and will be entirely funded by future (after the transfer) employer and employee contributions submitted on your behalf. * * * Your SUSORP account will begin with a zero balance and will be funded by future employer and employee contributions. The Division's witness, Ms. Morgan, confirmed the SUSORP Handout is a Division document. Ms. Morgan further stated that although this version of the SUSORP Handout was not provided to Petitioner, it was the Division's position at the time she was eligible for participation in SUSORP. Ms. Morgan also conceded that there is no statutory authority for the requirement that an employee would need to use his or her 2nd Election to transfer from the Investment Plan to the Pension Plan before becoming eligible to elect participation in SUSORP. As explained in the Conclusions of Law, this is an unpromulgated requirement that has no statutory authority, and therefore cannot be applied to determine Petitioner's substantial interests. The Division approves provider companies to provide information and investment products to SUSORP members. See Fla. Admin. Code R. 60U- 1.012(1)(a). AXA Advisors (AXA) is one of the provider companies listed on the SUSORP Enrollment Form. See Form ORP-ENROLL-1, available at https://www.flrules.org/Gateway/reference.asp?No=Ref-06117. On April 24, 2018, Petitioner received an email from Patrick Ashe with AXA. Mr. Ashe described AXA as a resource to help Petitioner select the best retirement plan: Pension, Investment, or SUSORP. Mr. Ashe eventually spoke to Ms. Byron on the phone and sent her FRS information. He also provided her with contact information for the Division and an FRS general phone number. On May 3, 2018, Mr. Ashe provided Petitioner with a document titled, "Welcome to the Florida Retirement System for State University System SUSORP-Eligible Employees" (Comparison Brochure), dated January 2018. The Division alleges the Comparison Brochure is published by SBA, not the Division. Although SBA is responsible for providing educational information about retirement options to eligible employees, it must do so in coordination with DMS. See § 121.4501(10)(a) and (10)(c)7., Fla. Stat. Regardless of who published the Comparison Brochure, it is clear that it is an official document used to advise SUSORP members, and AXA was authorized to advise Ms. Byron regarding her FRS retirement options and SUSORP. The Comparison Brochure explains the differences between SUSORP, the Investment Plan, and the Pension Plan. The Comparison Brochure also provides deadlines for the election to participate in each plan. According to the Comparison Brochure, from the date of hire, a SUSORP-eligible employee has 90 days to choose to participate in SUSORP. If he or she does not elect to participate in SUSORP, the employee has until 4:00 p.m. (E.S.T.) on the last business day of the eighth month after the month of hire to choose between the Investment Plan and the Pension Plan. If the employee does not make an election, FRS automatically enrolls the employee in the Investment Plan. As explained in the Conclusions of Law, this is contrary to the SUSORP statute. Regarding changes made after an initial election, the Comparison Brochure provides: SUSORP Plan Investment Plan Pension Plan Can I change plans after I make my initial election? No. If you elect the SUSORP, you will remain in this plan for as long as you remain at this employer in a SUSORP-eligible position. You have a one-time 2nd Election that you can use during your FRS career to change to the other FRS retirement plan, provided you are actively employed by an FRS-participating employer at the time your 2nd Election is received.4 (Footnote in original, see ¶20 below). The Comparison Brochure explains that once an employee chooses to participate in SUSORP, the employee cannot change to a different plan, and will remain in SUSORP as long as the employee is in a SUSORP eligible position. Once an employee elects to participate in the Investment Plan or the Pension Plan, he or she has only one opportunity (the 2nd Election) during his or her entire FRS career to change between the Investment and Pension Plans. Regarding changing to SUSORP from the Investment Plan or Pension Plan, footnote 4 in the Comparison Brochure explains: If you are enrolled in the Investment Plan and move to a SUSORP-eligible position, you must use your 2nd Election (if available) to buy back into the Pension Plan in order to enroll in the SUSORP. You are not permitted to make a direct transfer from the Investment Plan to the SUSORP (unless in a mandatory SUSPORP position). Again, during the hearing, Ms. Morgan admitted there was no statutory authority for the requirement that Petitioner use her 2nd Election to buy into the Pension Plan before she could enroll in SUSORP. On May 4, 2018, Mr. Ashe sent Ms. Byron a follow-up email that explained the procedure to switch from the Investment Plan to the Pension Plan so she could enroll in SUSORP: It sounds like you are currently in the Investment Plan so if you decide to stay in that plan just verify with [FRS] that you want to make sure you automatically are re-enrolled in that plan. If you elect to switch to either the Pension or the SUSORP plan then we would just fill out the 1 page 2nd election form and fax that to FRS to utilize the switch. That would put you in the Pension Plan. From there if you would like to enroll in the SUSORP plan then I will get those forms to you and we will get that set up. … The main factor on whether the switch would be in your best interest would be based on the differential between the Pension and Investment Plans at your current number of years in the FRS system. * * * In the Investment Plan the university is contributing 3.3% to match your mandatory 3% contribution and in the SUSORP plan they would contribute 5.14% in addition to your 3% contribution. The differential involved in switching to the Pension Plan so that you could then enroll in the SUSORP plan would be the major factor in whether picking up the extra employer contribution would be beneficial in the long run. (emphasis added). Mr. Ashe's email erroneously indicated Ms. Byron must use her 2nd Election to go into the Pension Plan before she could enroll in SUSORP. He also acknowledged she should weigh whether the cost to buy into the Pension Plan was worth the extra contributions available if she ultimately decided to go into SUSORP. In this email, Mr. Ashe reiterated he had the authority to provide the SUSORP paperwork and "get that set up." Ms. Byron testified she believed Mr. Ashe was authorized by the Division to advise and enroll her into SUSORP. Although the Division argues other people who spoke with Ms. Byron were not Division employees, it does make this same assertion regarding Mr. Ashe. See Resp. PRO, ¶¶ 44-47 (claiming Ernst and Young's employee was an SBA agent, not a Division agent). Given that AXA was a approved by the Division as a provider company, the undersigned finds that AXA and Mr. Ashe were authorized by the Division to provide Ms. Byron with information about SUSORP and administer her SUSORP account. See § 121.35(6), Fla. Stat. On May 29, 2018, Ms. Byron called the FRS Financial Guidance Line and was put in contact with "Mike with Ernst & Young." During the call, Ms. Byron explained to Mike that she was in the Investment Plan, but wanted to "move to the SUSORP." Specifically, she called because she understood she would "have to maybe pay a fee to get into the pension plan and then move to the SUSORP." She had been told that she should call the FRS Financial Guidance Line to figure out what that fee might be. Mike confirmed Petitioner would need to be a member of the Pension Plan before getting into SUSORP. Again, this information is not accurate and contrary to the SUSORP statute and Division rules. He also stated there is a 90-day window for her to move to SUSORP. During the call, Mike could not give Petitioner a quote for the buy in cost of switching from the Investment Plan to the Pension Plan and indicated it could take up to six weeks to get that information. He also informed her it could take a full month to process the paperwork and payment amount to become a Pension Plan member. He urged her to submit the 2nd Election form to switch from the Investment Plan to the Pension Plan before the end of the month (May 31, 2018), and then not to pay the cost if she concluded it is was too much or did not want to go forward with the switch. Ms. Byron: Okay. So, what is the risk of submitting the [2nd Election] form? I know I only get one chance to make the change. If I submit the form and change my mind, does that count as my chance? Mr. Mike: I mean, you have the full month following to rescind. * * * Ms. Byron: And if I don't submit the form, then nothing happens. If I do submit the form, and I don't want to pay it, I have to not pay it and nothing happens … [i]f it automatically happens and I still don't want to do it, I have a month. Mr. Mike: Yeah. Based on the information she received from Mr. Ashe and her conversation with Mike, Ms. Byron understood she had 90 days, or until July 19, 2018, to buy into the Pension Plan and then elect to participate in SUSORP. Because she had been led to believe only Pension Plan participants could elect to participate in SUSORP, she reasonably concluded she would need to use her 2nd Election to change from the Investment Plan to the Pension Plan before she could participate in SUSORP. On May 31, 2018, Ms. Byron submitted a "2nd Election Retirement Plan Enrollment Form" (2nd Election form) by facsimile to the number designated on that form. Ms. Byron selected the following option: Option 1: Change from the FRS Investment Plan or Hybrid Option to the FRS Pension Plan. I want to transfer from the Investment Plan to the Pension Plan and use my existing Investment Plan account balance and possibly other personal resources to 'buy' into the Pension Plan. The 2nd Election form does not make any reference to SUSORP. On May 31, 2018, Petitioner called the FRS Financial Guidance Line to confirm that the 2nd Election form was received by FRS. During this call, Ms. Byron was transferred to Misty, who identified herself as an Investment Plan administrator. Ms. Byron indicated she wants to make sure the 2nd Election form had been received, but Misty could not confirm this. Misty explains it may take a few hours to show up "in her system." Ms. Byron was concerned she may not be talking to the right person. Ms. Byron: Okay. Now, am I –are you sure I'm with the right person? Because I'm switching from investment to the pension with the intention of eventually switching to SUSORP. Ms. Misty: You're switching from investment plan to pension with the intention of switching to the [sic] something entirely outside of the pension? Ms. Byron: To SUSORP. Ms. Misty: Okay. I don't know what that is, I apologize. Let's go ahead and get you over to pension just to be sure since they are a separate department. * * * Ms. Byron: Who's in charge of switching from the investment to the pension? Ms. Misty: We [SBA and the Division] would both be involved in it. (emphasis added). She then instructed Ms. Byron to press Option 4 for the Pension department when she returned back to the automated system. From this conversation and the other conversations Ms. Byron had with people on the FRS Financial Guidance Line, the undersigned finds both the Division (as the agency administering the Pension Plan) and SBA (as the agency administering the Investment Plan) were responsible for processing Ms. Byron's 2nd Election form. On June 4, 2018, FRS sent Ms. Byron a "Confirmation of 2nd Election – Pension Plan" (Confirmation). It indicated that her election to move from the Investment Plan to the Pension Plan was effective as of June 1, 2018, but that it was not finalized. The Confirmation informed Petitioner "you will need to buy into the FRS Pension Plan using the available balance in your FRS Investment Plan account. If your account is not sufficient to cover the cost of the buy in, you will need to submit personal funds." Although the Confirmation did not state whether it was sent from SBA or the Division, the second page indicated: If you feel this retirement Plan election was made in error, you may be able to cancel it. Please call the MyFRS Financial Guidance Line at 1-866-446- 937, Option 2. Failure to notify us no later than 4:00 PM EST on the last business day of the month following your election month will void your right to cancel this election. The Confirmation directed members to contact the Division (not SBA) at the same number, Option 3, for specific questions. Based on the date of the submittal of her 2nd Election form (May 31, 2018), Ms. Byron had until June 29, 2018, to rescind her 2nd Election form, and thereby reverse her decision to go from the Investment Plan to the Pension Plan. At this point, however, even though she had executed the 2nd Election form, Petitioner's election transfer from the Investment Plan to the Pension Plan was not final because she had not submitted the buy in payment. The Confirmation did not address what would happen if the buy in amount was not submitted, or if it was, what would happen if an employee canceled the 2nd Election and did not remain in the Pension Plan. The Confirmation did not make any reference to SUSORP. On June 18, 2018, Ms. Byron spoke with Leah at the Division. In this call, Ms. Byron explained she received the Confirmation, but she had not received a bill for the buy in amount. Leah replied that a letter with the amount was generated on June 14, 2018, but has not been mailed out. Ms. Byron was concerned about the last day she has to rescind the election. Ms. Byron: So what is my deadline for canceling? I'm just panicking about if it's – if it's not what I want to do because I don't have the bill yet, when can I cancel the second election? Ms. Leah: Typically they give you a 60-day period. Let me double check. One moment. Okay. So you'll have until no later than the last business day of the month following the election. During the call, Ms. Byron pressed Leah on the letter with the buy in figure, and questioned her as to why the Confirmation was sent if the election was not final. Leah determined the letter was issued by the Investment Plan (SBA), not by the Pension Plan (the Division), and transferred Ms. Byron to Rick with the Investment Plan. It is apparent from the audio recording that Ms. Byron was exasperated (justifiably), but remained patient. Once transferred to Rick, Ms. Byron was informed that any questions regarding the buy in had to go through the Pension Plan. Rick offered to transfer her back to the "pension department." On June 21, 2018, before the deadline to rescind her 2nd Election, Mr. Ashe sent Ms. Byron two documents: (1) a SUSORP enrollment form, and a risk tolerance questionnaire to identify Ms. Byron's investment strategy for SUSORP. There was no discussion of the buy in payment to transfer into the Pension Plan. On July 3, 2018, Ms. Byron called the FRS Financial Guidance Line and was transferred to Durriya with Ernst & Young. During this call, Ms. Byron explained she received an invoice for the buy in amount to switch to the Pension Plan and needed a "letter of acceptance" for the financial firm handling her Investment Plan to release the funds. Durriya said could not help her and offered to transfer Ms. Byron to someone else. Durriya transferred Ms. Byron to Phyllis at the Division who was able to help her. Phyllis stated she would request for the letter and it would be mailed to Ms. Byron as soon as possible. Ms. Byron expressed concern that the letter might not get to her by July 19, 2018, the date she needed to elect to participate in SUSORP. Ms. Byron: So help me with the deadline. I was hired April 20th. I have made my intention known to go into the SUSORP, but I can't physically do that with the money until all of this happens. And I'm worried it won't happen by July 20th, July 19th, which is my deadline for selection. Am I going to be okay? Ms. Phyllis: Let's see. Okay. So you have until August 16th for us [the Division], but you need it by July 19th? Ms. Byron: That's when my selection of the – which plan I want to be in has to be in. And I submitted my, I want to be in SUSORP [ ], but I can't physically be in … SUSORP until all the money's there [Pension Plan]. Does that matter? * * * Ms. Phyllis: Okay. So, basically you are switching from investment to pension and then to SUSORP, right? Ms. Byron: Yeah. (emphasis added). Phyllis did not advise Petitioner she could start participation in SUSORP without first switching from the Investment Plan to the Pension Plan or buying into the Pension Plan. At this point, Petitioner's 2nd Election was not finalized because she had not submitted the buy in funds. Had she been informed that she did not have to be in the Pension Plan first, Petitioner could have simply not submitted the buy in funds, kept her existing funds in the Investment Plan, and started in SUSORP. Rather, Phyllis advised she would place a notation in the system that Ms. Byron was attempting to make an election to participate in SUSORP, and "asked them to rush it." Ms. Byron then asked Phyllis about the deadline for her to get into SUSORP. Phyllis could not help her, but offered to transfer her to the Optional Retirement Program department. What is clear from the call is that Ms. Byron is very concerned about getting the buy in funds to the Division to participate in the Pension Plan because she believed she had to be a Pension Plan member before the SUSORP election deadline. On August 3, 2018 (after both the deadline to rescind her 2nd Election form and the deadline to enroll in SUSORP had passed), Ms. Byron contacted the Division and spoke to Leah. At the outset of the call, Ms. Byron informed Leah that called to see if her 2nd Election status was final because she had submitted the funds to buy into the Pension Plan. Although it is unclear from the record how much Petitioner paid to buy into the Pension Plan, she used her entire savings from her Investment Plan plus additional monies. The Investment Plan was valued at approximately $138,000. Leah confirmed the switch from the Investment Plan to the Pension Plan had gone through, and advised Ms. Byron that she had 13 years of service under the Pension Plan. Ms. Byron was audibly upset and stated, "Well, I actually didn't want to end up in the pension, I wanted to end up in the SUSORP, so how do I make sure that that choice is recorded? We had to do the pension first and transfer it to SUSORP." From the audio recording, it is clear Leah was confused. Leah then placed Ms. Byron on hold and had a separate call with another Division employee, Phyllis. Leah relayed the conversation with Ms. Byron to Phyllis and Phyllis suggested Leah call another extension. Leah then checked back in with Ms. Byron to let her know she was still looking for someone who can help her. Ms. Byron agreed to stay on hold. On a separate line (which Ms. Byron could not hear), Leah received an automated recording announcing that she had reached the "Florida Division of Retirement Optional Program O-R-P unit." Leah then spoke with Jim at the Division. Leah explained to Jim that Ms. Byron did not want to remain in the Pension Plan, but rather wanted to transfer to SUSORP. Leah remained confused. [Mr. Jim]: You don't transfer to SUSORP. You're either in it or you're not in it. There is no way to buy into it … there's no way to get from investment by going through pension to get to SUSORP. You take a job that's eligible for SUSORP and you make the choice to be in it or not. * * * Ms. Leah: Well, she had questions about the forms that she would need to submit, but doesn't look like she's going to be – Mr. Jim: Just put up the wall. She's not going to be able to do it. What Jim told Leah is consistent with the SUSORP statute: it does not matter whether one is in the Investment Plan or Pension Plan; one is in SUSORP when he or she is eligible. Jim seemed to be telling Leah that what Ms. Byron wanted (to have her retirement funds in SUSORP) was not possible, but that Leah should not do anything about it. Jim agreed to speak with Ms. Bryon but joked with Leah that it was Friday, and he had one hour left on his shift. He also sarcastically told Leah she may want to stay on the line as it might be "entertaining or educational." Again, Ms. Byron did not hear this conversation between Leah and Jim. Leah then patched Ms. Bryon through to Jim. At this point, Ms. Byron, Jim, and Leah were all on the call. Ms. Byron: I submitted my second election form to go from investment to pension with the intention of going into SUSORP and I need to check if you have all my forms necessary to make that happen. Jim: So, you've just taken a job with one of the universities?Ms. Byron: Yes. Mr. Jim: Okay. It looks like everything's in place. Jim informed Ms. Byron a letter of acceptance to SUSORP was mailed to her on July 5, 2018, and that she could call back to make sure everything had been processed in a few days. He did not tell Ms. Byron what he had explained to Leah: "You don't transfer to SUSORP. You're either in it or you're not in it." After Ms. Byron ended the call, Jim and Leah continued to discuss Ms. Byron's situation. Mr. Jim: Great. Understand now, Ms. Byron just spent a whole bunch of money. That money's gone except that it purchased her some years of pension service. Ms. Leah: Right. Mr. Jim: Okay. Her new SUSORP account starts at zero. Oh, did I hear a great intake of breath? Ms. Leah: Are you serious? Mr. Jim: Absolutely serious. At no point during the conversation between Ms. Byron and Leah or Jim was Ms. Byron informed she did not have to use her 2nd Election and buy into the Pension Plan before she could participate in SUSORP. In fact, at no time during these numerous emails and telephone conversations did anyone affiliated with DMS, the Division, AXA, Ernst & Young, or SBA tell Ms. Byron that she was essentially enrolled in SUSORP (unless she choose to go with an FRS plan or failed to pick a provider) when she started the position at the University of Florida. No one told her that she did not need to exercise her 2nd Election or buy into the Pension Plan to participate in SUSORP.

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 rescinding Petitioner's 2nd Election and either: (1) return the buy in monies to the Investment Plan, (2) transfer the buy in monies from her Pension Plan to SUSORP, or (3) refund these monies to Petitioner. DONE AND ENTERED this 26th day of June, 2020, in Tallahassee, Leon County, Florida. S HETAL DESAI 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 26th day of June, 2020. COPIES FURNISHED: Lee Hayes Byron 2414 River Ridge Drive Sarasota, Florida 34239 Thomas E. Wright, Esquire Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 (eServed) William Chorba, General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 (eServed) David DiSalvo, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 (eServed)

USC (1) 26 U.S.C 402 Florida Laws (8) 110.205120.569120.57121.025121.051121.125121.35121.4501 DOAH Case (1) 19-6581
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KIMBERLY A. CAMPBELL vs STATE BOARD OF ADMINISTRATION, 14-002803 (2014)
Division of Administrative Hearings, Florida Filed:Tallahassee, Florida Jun. 17, 2014 Number: 14-002803 Latest Update: Dec. 29, 2014

The Issue The issue is whether Petitioner, an elected circuit court judge, is entitled to renewed membership or is otherwise entitled to participate in the Florida Retirement System (FRS).

Findings Of Fact The FRS Plan There are two classes of members in the FRS: all officers or employees, except elected officers; and elected officers, including circuit judges. See §§ 121.051(1)(a) and 121.052, Fla. Stat. (2014). The second class is identified as the Elected Officers' Class (EOC). See § 121.052(1), Fla. Stat. Members of the FRS may elect to participate in either the Defined Benefit Retirement Program (Pension Plan) or the Public Employee Optional Retirement Program (Investment Plan). The Investment Plan has a one-year vesting requirement, thus enabling a vested participant to receive a distribution of his or her account at any time after leaving FRS-covered employment. Upon retirement, a vested Pension Plan member receives a monthly benefit for his or her lifetime whereas a vested Investment Plan member receives a lump-sum distribution of accumulated benefits from his or her account. Under both plans, a member must terminate all FRS-covered employment in order to receive a benefit. "Retiree" is defined at least three times in chapter 121, none the same. See §§ 121.021(60), 121.35(5)(h), and 121.4501(2)(k), Fla. Stat. However, as explained in the Conclusions of Law, all Investment Plan retirees are covered by section 121.4501(2)(k), which defines a "retiree" as "a former member of the investment plan who has terminated employment and taken a distribution of vested employee or employer contributions as provided in s. 121.591." In 2009, the Legislature created section 121.122(2), which provides that a "retiree of a state-administered retirement system who is initially reemployed on or after July 1, 2010, is not eligible for renewed membership." See Ch. 2009-209, § 12, Laws of Fla. By virtue of this amendment, FRS retirees who did not become reemployed with a covered employer by July 1, 2010, were ineligible for renewed membership in the FRS. The same bill amended section 121.053 by adding a new subsection (3)(a), which provided that on or after July 1, 2010, a "retiree of a state-administered retirement system who is elected or appointed for the first time to an elective office in a regularly established position with a covered employer may not reenroll in the Florida Retirement System." Id. at § 5. This amendment makes clear that the prohibition in section 121.122(2) applies equally to elected officials. In 2012, the Legislature amended section 121.122(2) to provide that "[a] retiree of a state-administered retirement system who is initially reemployed in a regularly established position on or after July 1, 2010, may not be enrolled as a renewed member." See Ch. 2012-222, § 7, Laws of Fla. The sole purpose of the amendment was to "make it clear that a retiree of the investment plan . . . who is reemployed on or after July 1, 2010, is prohibited from being reenrolled as a renewed member of a state-administered retirement system." Fla. Govt. Oper. Comm., CS/HB 7079 (2012) Staff Analysis, p. 5 (final May 11, 2012)(available at http//www.myfloridahouse.gov).1 Petitioner's Employment History and Retirement Option Petitioner was a member of the FRS while employed as an Assistant State Attorney from January 2, 2001, through September 30, 2003. When first employed, Petitioner was a member of the Pension Plan. Shortly thereafter, the Legislature created the Investment Plan option, and Petitioner was given a deadline of August 31, 2002, to make an election between the two plans. On August 31, 2002, she switched to the Investment Plan. On or about September 30, 2003, Petitioner left the Office of State Attorney for private law practice. In January 2006, she took a complete distribution from her FRS Investment Plan in the amount of $8,154.52. By taking a lump- sum distribution, she became a "retiree." See § 121.4501(2)(k), Fla. Stat. ("Retiree" means a former member of the investment plan who has terminated employment and taken a distribution of vested employee . . . contributions."). She was not employed in an FRS-eligible position between September 30, 2003, and January 8, 2013. On August 14, 2012, Petitioner was elected to the position of Circuit Judge in the Sixth Judicial Circuit of Florida. On January 8, 2013, Petitioner was commissioned as a Circuit Judge for the Sixth Judicial Circuit of Florida. The Proposed Agency Action In response to her request to enroll in the FRS, by letter dated November 14, 2013, Daniel Beard, who is Director of Policy, Risk Management, and Compliance for the State Board of Administration, advised Petitioner in pertinent part as follows: You retired from the FRS on January 23, 2006 when you requested a distribution of your FRS Investment Plan account. Section 121.4501(2)(k), Florida Statutes, defines a "retiree" as a member of the FRS Investment Plan who has terminated employment and has taken a distribution as provided in Section 121.591. There are no statutory provisions that would allow you to cancel or void your retirement, and there are no statutory provisions that would allow you to repay the distribution in order to be "unretired." Section 121.122, Florida Statutes, states that a retiree of a state-administered retirement system who is initially reemployed in a regularly established position on or after July 1, 2010 is not eligible to enroll in renewed membership and receive additional retirement benefits. This change in law pertained to any retiree of a state-administered retirement system who had not returned to FRS employment prior to July 1, 2010. You were hired by the Office of State Courts on January 8, 2013. Petitioner timely challenged the proposed agency action asserting that she is entitled to participate in the FRS as a compulsory member of the EOC pursuant to part I, chapter 121.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the State Board of Administration enter a final order denying Petitioner's request to reenroll in the FRS. DONE AND ENTERED this 18th day of September, 2014, in Tallahassee, Leon County, Florida. S R. ALEXANDER 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 18th day of September, 2014.

Florida Laws (19) 120.52120.569120.57120.68121.011121.012121.021121.051121.052121.053121.091121.122121.35121.40121.4501121.591121.5911121.70121.78
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TOWN OF MIAMI LAKES, FLORIDA vs DEPARTMENT OF MANAGEMENT SERVICES, DIVISION OF RETIREMENT, 20-004937 (2020)
Division of Administrative Hearings, Florida Filed:Miami, Florida Nov. 09, 2020 Number: 20-004937 Latest Update: Dec. 28, 2024

The Issue The issues to be determined are whether Dawn Jenkins (“Jenkins”) failed to meet the Deferred Retirement Option Program (“DROP”) termination requirements set forth in chapter 121, Florida Statutes; and, if so, whether Petitioner, Town of Miami Lakes (“Miami Lakes,” the “Town,” or “Petitioner”), is required to reimburse Respondent, Department of Management Services (“DMS”), Division of Retirement (“DOR” or “Respondent”), for the overpayment of retirement benefits paid to Jenkins.

Findings Of Fact DMS is the state agency delegated to administer FRS. The Florida Legislature created DOR to manage the retirement plans and programs under FRS within DMS. FRS is a retirement program for state and local government employees administered pursuant to chapter 121. All state agencies participate in FRS. Local governments have the option of joining the plan if they meet certain requirements set out in statute and rule. Participating employers agree to follow chapter 121 and Florida Administrative Code Chapter 60S when they join FRS. Petitioner is the Town, a State of Florida municipal government located within Miami-Dade County and duly charted on December 5, 2000. In January 2004, the Town joined FRS as a participating employer. Jenkins was a member of FRS through her employment with Miami- Dade County Public Schools. Jenkins entered DROP and received two one- year extensions (totaling seven years) until her retirement, effective June 8, 2018. Before entering DROP, Jenkins signed a DP-Term form on May 7, 2018. The DROP termination notification form specified that Jenkins had to “terminate all employment relationships with all participating FRS employers for the first 6 calendar months after [her] DROP termination date.” Clary Garcia Ramos (“Clary”) is a Town employee. In her regularly established position, Clary teaches yoga part time at a community center for the Town and is paid $25.00 per hour per class. She has worked for Miami Lakes for approximately 15 years and is covered under the FRS. In the fall of 2018, Clary was having bilateral knee replacement surgery and asked her longtime friend Jenkins to help her out and cover her yoga classes with the Town while she was out after her surgery. Clary and Jenkins have known each other for approximately 15 years and obtained their yoga education together. Jenkins, a certified yoga instructor, agreed to help Clary out with her classes for September and October 2018. Miami Lakes did not post a position opening nor conduct interviews for a back-up, part-time yoga instructor. Before Jenkins started filling in for Clary, Jenkins was instructed to fill out paperwork to start the position. She first filled out an employment application dated August 22, 2015, and then a second one with the corrected date of August 22, 2018, for the position of yoga instructor. On the completed application, Jenkins informed the Town that she had retired from Miami-Dade County Public Schools with “40 years of service” on June 8, 2018. The last detachable page of the application allowed the Town to perform Jenkins’ required background screening since she would be teaching yoga with seniors, a vulnerable population. Only the last page of the application pertains to a background check. On or about August 31, 2018, Jenkins received an offer of employment letter signed by Town Manager Alex Rey (“Rey”) regarding the position she was filling in for Clary. The letter stated: SUBJECT: EMPLOYMENT LETTER Dear Ms. Jenkins: On behalf of the Town of Miami Lakes, I would like to offer you the position of Back up-Part-Time Instructor, Yoga. Instructors work under the supervision of the Leisure Services Manager and are required to select, plan, and teach cultural classes for youth and adults. Your supervisor will determine your schedule for yoga classes. This position start date is September [12], 2018 and the rate of pay will be $26.00 per hour. Each time you are scheduled to work, you will be required to submit a time sheet to your supervisor. This position qualifies for participation under the Florida Retirement System (FRS), and 3% employee contribution is mandatory. This employment offer is contingent upon satisfactory results of the following pre-employment requirements: Criminal Background check and Drug Screening Proof of required education, certifications and/or licenses This is an exciting step for the Town of Miami Lakes, and we look forward to you joining our team. Should this offer be considered acceptable, please sign below and return [i]t to the attention of Cynthia Alejo, Human Resources Specialist, to complete your pre-employment process. Jenkins signed the employment offer letter and accepted the FRS position from Miami Lakes on September 4, 2018. Rey was the town manager for Miami Lakes during all times material to this case. He was the chief executive of the Town and oversaw human resources. Cynthia Alejo (“Alejo”) was the Town’s part-time human resources specialist, who served as the assistant to Rey in the Human Resources Department. Alejo used Clary’s offer letter as a template when she drafted the employment offer letter that Jenkins signed. Ismael Diaz (“Diaz”), the Town’s comptroller and chief financial officer, was off work during October 2018 on vacation. While Clary was out recuperating, Jenkins performed yoga instruction to the seniors for the Town in her place. Jenkins was paid a rate of pay of $26.00 per hour per class. However, while in Clary’s position, Jenkins did not receive the benefits available for employees or receive orientation or training for new employees. Jenkins taught 16 one-hour yoga classes to senior citizens from September 13, 2018, until October 11, 2018. Jenkins was paid and received, as agreed in the terms of her employment offer letter, a total of $442.00 for the yoga classes she taught for the Town. The Town erroneously reported Jenkins to FRS. The Town’s monthly reports specifically included Jenkins under a preretirement code, which alerted DOR internally that a person who had retired was being reported within the first 12 months after retirement. Each month that Jenkins worked, the Town reported her wages to DOR and made retirement contributions to DOR with the payroll reports. During the period when the Town reported Jenkins to DOR as an employee for three consecutive months on its retirement reports, the wrong codes registered errors. DOR notified the Town that Jenkins should not be reported in that way. The Town could have corrected the errors. However, the Town never provided a correction report to change Jenkins’ status. Instead, by the Town continuously reporting Jenkins as an employee, a DOR review of Jenkins’ retirement status was triggered. Eventually, Jenkins found out that she was being reported as an employee to DOR by the Town and her DROP retirement funds were in jeopardy. On or about December 3, 2018, Jenkins complained to DMS, Office of Inspector General, regarding her potential violation of FRS rules. Jenkins was informed in writing that her complaint was being referred to DOR for review. Jenkins also telephoned DMS several times, including December 3, 10, and 11, 2018, and February 8, 2019, requesting a review of her reemployment status and possible voiding of DROP. Jenkins requested to speak with an FRS specialist regarding her FRS retirement issue by email on December 10, 2018. At one point, Jenkins spoke to Kathy Gould, DOR bureau chief of calculations, and informed her that the reporting of her as an employee was a mistake and she was just covering for a friend who was out after having surgery. Because of the variety of Jenkins’ requests to review her retirement issue, which included the inspector general complaint and the multiple payroll report errors reported for Jenkins, DOR investigated Jenkins’ retirement status. June Moore (“Moore”), from the retirement calculations section at DOR, handled Jenkins’ review for DOR. On or about December 13, 2018, Moore started looking into the Jenkins’ retirement issue and contacted the Town’s comptroller, Diaz, by email requesting Jenkins’ personnel action form when she was hired and informing the Town that Jenkins was reemployed with Miami Lakes and “in violation of [her] termination date.” That same day, Diaz emailed Alejo, copying Moore, to update Alejo that he had spoken with Moore and told her the Town had also issued Jenkins an offer letter. In the email, Diaz asked Alejo to provide Moore’s requested information and suggested that the situation be mitigated so that Jenkins did not suffer any financial loss. Diaz also suggested that Jenkins could perhaps return the $400.00 earned. Moore responded 30 minutes later by email, “We are still reviewing this account. Once we receive the documents from your agency we will let you know what the outcome is.” The next day, Alejo sent Moore Jenkins’ two personnel action forms dated September 25, 2018, and October 12, 2018, and the August 31, 2018, offer letter that had been executed by Jenkins. Alejo stated in the email that: [Jenkins] was also under the impression that as a temporary employee, this would not affect her retirement. As Mr. Diaz mentions, Ms. Jenkins is willing to return all funds back to the Town and instead be considered a volunteer. While we don’t know if that’s a possibility, we are willing to help in any way so that Ms. Jenkins does not suffer a financial loss. Both personnel action forms dated September 25, 2018, and October 12, 2018, listed Jenkins as a temporary part-time, hourly wage, non- exempt employee. Each form had FRS checked under the benefits section. Additionally, the September form had “temporary coverage for Clary” written on it and the October form had checked resigned with notice and “temp position” written on it. Jenkins also received an Internal Revenue Service W-2 wage and tax statement from Miami Lakes for her services of working as a yoga instructor at the Town in Clary’s place. On or about February 12, 2019, Alejo sent a memorandum to Diaz that was contrary to all the previous employment records the Town had regarding Jenkins’ employment. The memorandum changed Jenkins’ status to a volunteer and referenced her $26 per hour payments as a stipend. The memorandum stated: After a review of our records, it has come to my attention that Ms. Dawn Jenkins, who assisted the Town of Miami Lakes (the “Town”) as a senior fitness class volunteer during September 19, 2018 thru October 11, 2018 and was inadvertently classified as a Town of Miami Lakes employee. Additionally, a review of our records reveals that Ms. Jenkins did not receive a salary for her services. The only monetary contribution from the Town was in the form of a $26.00 daily stipend. Ms. Jenkins became a volunteer following her friend’s knee incident which required surgery. The Town required Ms. Jenkins to complete an application and consent to a criminal background search, which is standard policy for any volunteer that engages with vulnerable children or adults. Upon receipt of Ms. Jenkins application, the Town in error, reported Ms. Jenkins wages to the Florida Retirement System (“FRS”). The error was discovered within a month or so, and by that time, Ms. Jenkins had already stopped volunteering and was thereby removed from our payroll system. As a follow-up, the Town will need the assistance of the FRS administration to correct the error reported. FRS is under the impression that Ms. Jenkins abused the system by seeking re- employment after retirement. As detailed in this memorandum, this is not the case. Ms. Jenkins, at no time during the period of September 19 thru October 11, 2018 served the Town as a salaried employee. Should you have any questions, please do not hesitate to contact us. On February 19, 2019, DOR issued a final agency action letter, notifying Jenkins that she was “subject to the termination requirement found in [section] 121.021(39)(b), Florida Statutes,” and that she was required to “repay all retirement benefits previously paid to [her], as provided in Rule 60S-4.012, Florida Administrative Code,” in the amount of $445,013.04. Jenkins petitioned for, and received, a section 120.57(1), Florida Statutes, hearing in response to the notice of intended agency action that would have required her to repay her DROP payout and the retirement benefits she had received. The DOAH case number assigned to that proceeding is 19-1692. Case No. 19-1692 was litigated through the final hearing. At that final hearing, the parties presented evidence and testimony of the same witnesses in this proceeding. After the administrative hearing on December 20, 2019, DMS and Jenkins entered into a Settlement Agreement to resolve the issues related to her termination of DROP and retirement benefits. As part of the Settlement Agreement, Jenkins’ benefit amount was recalculated based on the additional service credit she earned for the years she participated in DROP. The Settlement Agreement also deducted $464.86 monthly from Jenkins’ retirement benefits for a lifetime to repay $445,013.04, the overpayment amount in DROP benefits. In addition, a part of the Settlement Agreement obligated DMS to seek reimbursement for the entire debt, $445,013.04, from Miami Lakes. After settling the case with DMS, Jenkins voluntarily dismissed Case No. 19-1692 with prejudice. On October 2, 2020, DMS then issued its Notice of Intended Agency Action against the Town, informing Miami Lakes that due to hiring Jenkins on September 12, 2018, her FRS termination requirement of ceasing all employment with an FRS employer for six calendar months was never satisfied and, as a result, whenever a participating employer employs a retired FRS member in violation of the termination requirements, both the employee and the participating employer are liable for repayment of the money to the FRS Trust Fund in accordance with section 121.091(9)(c)3. The notice included an invoice demanding payment from the Town of the full amount of the “overpayment of benefits” to Jenkins. The Town timely filed a Petition for Formal Hearing contesting the agency action letter. Ultimate Findings of Fact Upon careful consideration of the entire record, it is determined that DMS has demonstrated by the preponderance of the evidence that Jenkins was an employee of Miami Lakes instructing yoga from September 2018 to October 2018, while Clary was out recuperating. It is interesting to note that, even though Jenkins testified at hearing, she did not believe providing services to the Town to help a friend who was having knee surgery was violating the DROP agreement, and she did not realize that Miami Lakes was a participating employer with FRS when she substituted for Clary while she was out recuperating. Jenkins did admit that she understood the DP-Term form she signed, which specified that she could not work for any FRS entities. Jenkins was also honest and forthright and admitted at hearing that she did not read the September 4, 2018, employment offer letter that she signed when she accepted the FRS position. Had she read the employment letter, she would have been put on notice that the position she was taking was “under the Florida Retirement System, and 3% employee contribution is mandatory.” At hearing, Alejo testified that it was her first time processing an employee covering for another employee. Notwithstanding her lack of experience, the evidence establishes Jenkins was employed with Miami Lakes. In this matter, Miami Lakes was notified of Jenkins’ retirement on June 8, 2018, from Miami-Dade County Public Schools on her employment application before she started the position. Also, the Town offered Jenkins employment through Rey, the Town’s human resources chief executive. The employment offer letter informed Jenkins who her supervisor was and specified participation in FRS, which both Rey and Jenkins signed. Additionally, the Town checked FRS twice under Jenkins’ benefit sections on both her personnel action forms. Likewise, the September personnel action form had “temporary coverage for Clary” written on it and the other form had “temp position” written on it. The evidence also demonstrates that the Town reported Jenkins’ wages as an employee three months in a row and made retirement contributions to DOR on three consecutive payroll reports. At hearing, Dr. Joyce Morgan credibly testified that even after DOR notified Miami Lakes that there was an error in reporting Jenkins, they continued to report her in November and December 2018, and the Town never attempted to correct the error or contact DOR to get help in correcting any errors.1 In addition, the Town properly issued Jenkins a W-2 tax statement as an employee for instructing yoga for Miami Lakes not a 1099 statement. At hearing, the record not only shows Miami Lakes hired Jenkins as an employee, but was fully aware of her employee status with the Town. The evidence demonstrates that Diaz, the comptroller, confirmed by his December 13, 2018, email that Jenkins’ status was a Town employee when he informed Moore that Jenkins had executed an employment offer letter and Diaz attempted to assist mitigate Jenkins’ financial loss with DOR by suggesting her pay be returned to the Town. Additionally, Alejo further established Miami Lakes’ full knowledge of Jenkins’ status as an employee with the Town in her email of December 14, 2018, when she admitted she did not know if it were possible, but offered to help Jenkins not suffer a financial loss by suggesting to Moore to change Jenkins’ title so Jenkins could be considered a volunteer and return the money paid. The record also demonstrates that it was not until almost two months later in February 2019, that the Town’s Human Resource Department actually reclassified Jenkins’ title to a senior fitness volunteer and renamed her “rate of pay” that had formally been $26.00 per hour in the employment offer letter to a “$26.00 daily stipend” in an internal memorandum2 that Alejo sent to Diaz. 1 The undersigned is not persuaded that the Town’s reporting error was caused because Comptroller Diaz was out on vacation during October 2018, because the errors were not corrected after Diaz returned and have not been corrected as of the date of the hearing. Additionally, the Town’s errors are not determinative of Jenkins’ employment status. Any contention that correcting the error in the payroll report would have an impact on changing Jenkins’ employee status is misplaced. To that end, the payroll report does not determine Jenkins’ employment status. 2 The undersigned rejects the memorandum as reliable evidence to help determine Jenkins’ employment status since the record demonstrates that Alejo had been working on Jenkins’ behalf to help her from receiving a financial loss for approximately two months. An internal title change by the Town did not change Jenkins’ status as a temporary yoga employee for Miami Lakes. Additionally, the record shows that the Town did not process Jenkins as it did for other volunteers. At hearing, Rey testified that there were categories of volunteers: resident volunteers that served on different committees and volunteers through agreements. Rey explained that volunteers with the Town are non- paid persons and the Town only reimburses volunteers for supplies by providing the funds or obtaining a receipt for reimbursement, neither of which occurred with Jenkins. Rey also testified that upon learning there was an issue with Jenkins’ employment, he explained to Jenkins that she had been hired by Miami Lakes as a “temporary employee to cover for a limited period of time.” Rey also testified that Jenkins was never considered a volunteer for the Town. Therefore, the greater weight of the evidence in this cause establishes that Miami Lakes employed Jenkins as a temporary yoga instructor. Hence, Jenkins was reemployed by an FRS employer, Miami Lakes.

Conclusions For Petitioner: Onier Llopiz, Esquire Joan Carlos Wizel, Esquire Lydecker Diaz 1221 Brickell Avenue, 19th Floor Miami, Florida 33131 For Respondent: Thomas E. Wright, Esquire Gayla Grant, Esquire Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950

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 that: Finds that Jenkins’ reemployment with Miami Lakes, an FRS municipality, failed to meet the DROP termination requirements; Upholds DMS’s October 2, 2020, notice of intended agency action that the Town of Miami Lakes is jointly and severally liable for repayment; Requires the Town of Miami Lakes to pay back the total overpayment of Jenkins’ benefits in the amount of $445.013.04; and Allows the Town of Miami Lakes to repay the overpayment in installments over a three- to five-year period. DONE AND ENTERED this 20th day of December, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: S JUNE C. MCKINNEY Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 2021. Thomas E. Wright, Esquire Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 Gayla Grant, Esquire Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 Onier Llopiz, Esquire Lydecker LLP 1221 Brickell Avenue, 19th Floor Miami, Florida 33131 Joan Carlos Wizel, Esquire Lydecker LLP 1221 Brickell Avenue, 19th Floor Miami, Florida 33131 Kristen Larson, Interim General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 David DiSalvo, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 Trey D. Evans, Esquire Lydecker LLP 1221 Brickell Avenue, 19th Floor Miami, Florida 33131

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