The Issue Whether Petitioner is entitled to purchase leave of absence retirement credit on behalf of James Gapinski, Petitioner's ex- husband and a deceased member of the Florida Retirement System.
Findings Of Fact Petitioner, Geraldine Gapinski, is the former spouse of James Gapinski, deceased. At the time of his death, Mr. Gapinski was an employee of Florida State University and a "vested" Florida Retirement Service (FRS) member. Petitioner is an employee of the Florida Department of Law Enforcement (FDLE) and an active member of FRS. Mr. Gapinski was continuously employed by Florida's Univeristy System from approximately 1970, until his death on November 20, 2000, with the exception of a period from September 10, 1976 to June 9, 1977, during which period he took an approved leave of absence. During the period September 10, 1976 to June 9, 1977, no contributions were made by Mr. Gapinski or on Mr. Gapinski's behalf to FRS toward his accruing retirement benefits and he earned no creditable service in FRS for this eight month period he was on his leave of absence. On May 4, 2000, Mr. Gapinski requested an audit and estimate of retirement benefits from Respondent. At the time of his request for an audit and estimate, Mr. Gapinski and Petitioner had begun a dissolution of marriage proceeding (divorce). At all times material, each litigant had independent legal counsel, and each lawyer was aware that Mr. Gapinski's FRS benefits were "on the table" for division of the marital estate in the course of the divorce proceedings. At all times material, Mr. Gapinski was terminally ill with cancer. On September 14, 2000, Mr. Gapinski applied for participation in the Deferred Retirement Option Program (DROP). His application (DROP Form DP11) requested a DROP "begin date" of September 1, 2000, and designated each of Mr. Gapinski's two adult daughters as 50 percent primary beneficiaries. Petitioner, who at that time was still married to Mr. Gapinski, was not even designated a secondary beneficiary. The application, which Mr. Gapinski signed, stated in pertinent part, I understand that the earliest date my participation in the DROP can begin is the first date I reach my normal retirement date as determined by law . . . I cannot add additional service, change options, or change my type of retirement after my DROP begin date (emphasis in original). The application also specified eight required acts before Mr. Gapinski could retire and become a DROP participant, including, but not limited to, 4. A check payable to FRS for any amount you owe, or a written statement that you do not wish to claim the service . . . . On September 15, 2000, Respondent provided James Gapinski with two estimates of benefits. Estimate No. 1 showed the benefit Mr. Gapinski would be entitled to if he chose to purchase the one year leave of absence for $6,820.52, providing for a DROP beginning date of September 1, 2000. This estimate further advised that 6.5 percent per annum would be posted on June 30, 2001. It also stated, Comments: The amount due is to purchase service for your leave of absence from September 10, 1976 to June 9, 1977. This amount must be paid for a DROP begin date of September 1, 2000. Mr. Gapinski was also notified of the need to purchase his leave of absence credit in a letter from Respondent dated September 15, 2001, stating, in pertinent part, as follows: The following items are pending. The amount due is to purchase service for your leave of absence from September 10, 1976 to June 9, 1977. If you do not elect to pay the above amount due and purchase the service it represents, we must have written notification of your intent. * * * Completion of the Option Selection for FRS members, . . . AFTER YOUR FIRST MONTH OF DROP PARTICIPATION YOU CANNOT ADD ADDITIONAL SERVICE, CHANGE OPTIONS, CHANGE YOUR DROP BEGIN DATE OR CHANGE YOUR TYPE OF RETIREMENT. * * * Estimate No. 2 sent to Mr. Gapinski on September 15, 2000, showed the benefit Mr. Gapinski would be entitled to if he chose not to purchase his leave of absence and waited until March 1, 2001, to participate in DROP, when he would accrue 30 years of service without counting the gap left by his 1976-1977 leave of absence. This estimate also stated: Comments: This estimate does not include the purchase of your leave of absence and is provided for comparison purposes. It is provided for DROP purposes with a March 1, 2001, DROP begin date (see the enclosed DROP brochure). If you do not elect to pay the amount due and purchase the service it represents, we must have written notice of your intent. Apparently, neither attorney ever saw any of the foregoing papers. The thrust of Petitioner's attorney's actions and advice was to obtain survivorship retirement benefits, not necessarily DROP benefits, for Petitioner. On October 23, 2000, Petitioner's attorney was told by telephone by Ms. Ferguson, a representative of Respondent, that Petitioner must make a non-party request to release Mr. Gapinski's retirement information to her. So far as this record shows, no third party request was ever made, but that day, Petitioner's attorney and Ferguson also generally discussed retirement pay-out options that Mr. Gapinski could elect, and Petitioner's attorney was generally aware that the DROP process was not complete. On October 24, 2000, Petitioner's attorney discussed by telephone, retirement, divorce, and survivorship benefit issues and life insurance payment options with Ms. Hudson, a representative of Respondent. On October 26, 2000, Petitioner's attorney discussed, by telephone, retirement options and steps to be taken, with both Ms. Ferguson and Mr. Helms, another of Respondent's representatives. Mr. Helms told her the DROP application was not complete but if the couple were still married, Option No. 3 would give the most benefit for survivorship benefits. During the October 2000, conversations, Petitioner's attorney made each of Respondent's representatives aware of the impending divorce and of Mr. Gapinski's impending death, but the attorney did not specifically inquire how soon the lapsed time payment must be made and none of Respondent's representatives volunteered information on that issue. At Mr. Gapinski's request, the divorce proceeding was bifurcated. Prior to the divorce, Petitioner's attorney had done independent research and was aware that Mr. Gapinski had to pay the $6,820.52, in order to perfect the DROP program and in order to complete 30 years of creditable service in order to be eligible for survivorship benefits on his retirement. This information was communicated to Petitioner by her attorney and whether or not Petitioner would be willing to pay half the amount was discussed. Petitioner stated she would be willing to pay half the amount owed. As a condition to her agreement to bifurcate the divorce proceeding, that is, as a condition to letting Mr. Gapinski out of the marriage but reserving jurisdiction in the Circuit Court to resolve certain disputes concerning assets and entitlements, Petitioner required that the couple enter into an "Agreement" on October 27, 2000, which provided, in pertinent part, as follows: BIFURCATION: The Husband shall be entitled to bifurcation of the dissolution action. The marriage of the parties shall be dissolved with the Court reserving on all remaining unresolved issues not addressed in this agreement. In light of the Husband's health, the Wife shall schedule and appear at an ex parte hearing to dissolve the marriage, to obtain Court-ordered approval of this agreement, and to ensure the Court's reservation of jurisdiction to hear any and all issues pertinent to support and the division of property not yet settled by the parties. * * * B. The Wife further agrees that all marital assets awarded to her in this cause (including proceeds from the Husband's retirement and life insurance in the event the Husband predeceases her), shall be placed in an inter vivos trust, from which she may draw living, personal, and medical expenses, during her life, with the parties' adult daughters named as the irrevocable beneficiaries of the remainder of such trust. C. The Husband agrees to bequeath sufficient marital assets, awarded to him in this cause, to the parties' adult daughters to aid in their comfort and support. HUSBAND'S RETIREMENT: The Husband shall elect an option on his retirement with the State of Florida that provides for survivorship benefits for the benefit of the Wife. The wife shall be entitled to all such retirement survivorship benefits which, like the other assets she receives in this bifurcated action, shall be placed in an inter vivos trust for her living, personal and medical expenses, during her life, with the adult daughters as irrevocable beneficiaries of the remainder of the trust. The Husband shall, simultaneously with the signing of the agreement, execute such documents as are necessary to create retirement survivorship benefits in accordance with this term. Should the Husband fail to execute the survivorship option on his retirement or should he ever change such option in contravention of this term, the Husband agrees that the obligation of this term is binding upon his estate, which estate shall be responsible for paying such retirement survivorship benefits to the Wife. The Agreement could have, but did not, specifically require that the leave of absence be purchased by either Mr. Gapinski or Petitioner. Petitioner's and Mr. Gapinski's Agreement does not bind the Respondent, which was in no way privy to that Agreement. Petitioner and Mr. Gapinski's marriage was dissolved on November 1, 2000. Petitioner's attorney provided Mr. Gapinski, through his counsel, with DROP forms (FST-12 and FRS-11o). On November 1, 2000, Mr. Gapinski executed Option 2 for his DROP retirement on these forms, naming Petitioner as his sole primary beneficiary and negating his prior designation of his adult daughters as beneficiaries. Option No. 2 provides for a reduced monthly benefit payable for the FRS member's (Mr. Gapinski's) lifetime. If the member dies before receiving 120 monthly payments, his designated beneficiary (Petitioner) would receive a monthly benefit in the same amount until the monthly benefit payments to both of them equaled 120 monthly payments, when payments would terminate. Option No. 2 is available for regular service retirements as well as DROP retirements. Option No. 3 is also available for regular service retirements and DROP retirements. Option No. 3 would have provided a reduced monthly benefit payable for Mr. Gapinski's lifetime, and upon his death, his joint annuitant, if living, would receive a lifetime monthly benefit payment in the same amount as Mr. Gapinski was receiving. Then, no further benefits would be payable after both he and his joint annuitant were deceased. There are exceptions to the foregoing general description, none of which matter to the case at bar. Option No. 3 would clearly provide more money to Petitioner if she were eligible. On November 2, 2000, Petitioner's attorney had three short telephone conversations with Mr. Helms, who opined that since Mr. Gapinski had signed up for DROP while the couple were still married, Petitioner could still get Option No. 3, with DROP retroactive to September 1, 2000, but that the leave of absence must be paid for. Apparently, Petitioner's attorney did not ask what would happen if the gap was not paid for before Mr. Gapinski died and no representative of Respondent volunteered that information. The thrust of Petitioner's case continued to be to persuade Mr. Gapinski to pay the whole amount due and to change his Option election to No. 3. On or about November 3, 2000, Mr. Helms sent an estimate letter based on selecting a September 1, 2000, retirement date with Option No. 1, to Mr. Gapinski. This estimate letter stated Mr. Gapinski had 30.11 years of creditable service. It did not mention DROP or any pay back. It did state that no lump sum retirement or cash value payments were available. (Second page of attachment to Exhibit P-11). On November 3, 2000, Petitioner's attorney wrote Mr. Gapinski's attorney that Mr. Gapinski was considered by Respondent to be in the DROP program as of September 1, 2000, not March 1, 2001, as supposed before the divorce, but he had not bought back his leave by paying $6,820.52, and requested that Mr. Gapinski change his Option Election Form to Option No. 3 and authorize the payment of the $6,820.52 to Respondent. On or about November 9, 2000, Petitioner's attorney sent the already-executed FST-12 (Beneficiary Designation Form) and FRS-11o (Option Selection for FRS Members) showing Option No. 2 to Respondent. Mr. Helms acknowledged receipt. On or about November 9, 2000, Mr. Helms told Petitioner's attorney that the forms were correct and anyone could pay the $6,820.52. The attorney felt Mr. Gapinski was enrolled in DROP but that the $6,820.52 was still needed. On November 15, 2000, Petitioner's attorney sent Mr. Helms a letter memorializing their conversation, in which Mr. Helms had indicated it was not necessary for Petitioner to sign below the Option No. 2 selection paragraph on FRS 11o as long as she was aware of the option Mr. Gapinski had selected. On November 20, 2000, Mr. Gapinski passed away without anyone having purchased his leave of absence credit. Mr. Gapinski was only 57 years of age when he died. DROP retirement or regular service retirement with full benefits is possible at 62 years of age or upon attaining 30 years of creditable service. Mr. Gapinski remained in regular employment until his death. Because he had not purchased the leave of absence credit, Mr. Gapinski died with only 29 years and 9 months of creditable service for purposes of retirement. In other words, he was 3 months and ten days short of the 30-year retirement mark necessary to activate DROP or regular service retirement. Petitioner never communicated directly with Respondent until after Mr. Gapinski's death. Mr. Gapinski's will provided for the effective disinheritance of Petitioner to the extent provided by law. On December 14, 2000, Petitioner's attorney spoke by telephone with Mr. Helms, who told her he thought Petitioner could still pay the leave of absence money but he would call her back. On December 15, 2000, Stanley Colvin, another of Respondent's representatives, telephoned Petitioner's attorney to say Petitioner could not pay the amount after Mr. Gapinski's death. At no time prior to Mr. Gapinski's death did any representative of Respondent affirmatively represent to anyone that Petitioner could pay the money after Mr. Gapinski's death or the conditions under which no benefits would be paid or specifically what would happen if Mr. Gapinski died before the money was paid by someone. By a December 15, 2000, letter, Respondent notified Petitioner that since Mr. Gapinski had elected not to purchase the leave of absence, he could not have reached the required 30 years of service necessary to participate in the DROP program until March 1, 2001. It further stated that since Mr. Gapinski's death occurred before completion of the required months necessary to participate in DROP, his DROP application was cancelled and his choice of Option No. 2 was nullified. Moreover, Mr. Gapinski was viewed as an active FRS member on the date of his death, and because Petitioner, though designated as his beneficiary was not also a joint annuitant, she could only receive a refund of Mr. Gapinski's retirement contributions in the amount of $4,719.19,and was not eligible to receive Option No. 3. Respondent did not send a similar letter to prior beneficiaries, the decedent, or his estate/personal representatives. Petitioner requested a review, and on February 2, 2001, Respondent issued its proposed final agency action letter, to the same effect as the December 15, 2000, letter. Respondent did not send a similar proposed final agency action letter to prior beneficiaries, the decedent, or his estate/personal representatives. However, the undersigned notes that Mr. Gapinski's adult daughters, who also were his joint personal representatives, were present in the courtroom on September 24, 2001, the first day of hearing. As of the second day of hearing on October 21, 2001, the estate had been closed and the personal representatives had been discharged. Mr. Larry Hunnicutt, Benefits Administrator for the Bureau of Retirement Calculations, Division of Retirement, testified by deposition. He indicated that Respondent Division of Retirement has no rules in place specifically addressing DROP. Therefore, in DROP cases, Respondent interprets and applies Chapter 121, Florida Statutes, and the existing rules addressing regular service retirement. In practice, Respondent gives DROP applicants a 90-day grace period from the date of application in which to finalize all the outstanding documents or other requirements for DROP eligibility, including payments of amounts due, even though there are no provisions in place authorizing a grace period for DROP applicants. If there are money amounts due, the member must pay up during this period. If the member fails to pay up during this period, the DROP application and the option selected for DROP is cancelled by a certified letter, but the designated beneficiary remains intact. Herein, because the amounts were not paid before Mr. Gapinski died, and because it would serve no purpose to notify the decedent, who could no longer complete his DROP requirements, Respondent did not send the deceased member a cancellation of his DROP application and Option No. 2 selection. Rather, it treated the DROP application and option selection as null and void and notified his ex-wife, the designated beneficiary, of what Respondent understood to be her rights. In this notification, Respondent applied the statutes as its personnel understood them to apply to a member who dies in active service prior to reaching either 62 years of age or 30 years of creditable service. Respondent would have permitted Petitioner to pay the money on Mr. Gapinski's behalf only during his lifetime. If the amount due had been paid, and Petitioner were qualified for Option No. 2, she would receive approximately $500,000 plus cost of living increases as opposed to $4,719.19. She would receive considerably more if she qualified for Option No. 3.
Recommendation Upon 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 denying Petitioner's request to purchase leave of absence credit on the account of James Gapinski. DONE AND ENTERED this 14th day of December, 2001, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of December, 2001.
The Issue Whether Petitioner may purchase retirement credit for the period of time from his suspension date to his reinstatement date as creditable service in the Florida Retirement Service.
Findings Of Fact Petitioner, Philip J. Cobb, was employed by the Pinellas County Board of County Commissioners (County) in May 1985, as a property manager. As a permanent employee of the County, Petitioner was enrolled as a member of the regular class of the Florida Retirement System (FRS). In order to vest and be eligible to receive retirement benefits under state law, Petitioner needed to complete ten years of creditable service. Petitioner continued to work for the County until he was terminated on August 1, 1992. The reason Respondent terminated Petitioner was because he allegedly failed to support his supervisor and was insubordinate. At the time Petitioner's employment with the County was terminated, he had earned approximately seven years and two months of creditable service and was thirty-four months short of vesting in the FRS. Petitioner challenged his termination by instituting legal proceedings against the County, alleging that his termination was illegally motivated by age discrimination. The lawsuit, Case No. 94-1054-CIV-T-21C, was filed in June 1994, in the U. S. District Court for the Middle District of Florida, Tampa Division, and sought Petitioner's reinstatement to his former position. At the time of his termination, Petitioner was sixty-seven years old, and at the time of this proceeding he was one day shy of being seventy-three years old. After discovery had been undertaken and prior to the case being set for trial, the Court ordered the parties into mediation. During settlement negotiations, the parties specifically discussed the importance of Petitioner purchasing credit in the FRS as necessary for vesting. In light of this consideration, before of the Agreement was finalized, counsel for Petitioner contacted Respondent regarding the cost of Petitioner's purchasing the service credit required to vest in the FRS. In a letter dated November 30, 1995, from Maurice Helms, Chief, Bureau of Retirement Calculations, to counsel for Petitioner, Mr. Helms noted that Petitioner had only 7.25 years of creditable service in the FRS, not the ten years required to vest. Nevertheless, the letter stated, "If [Petitioner] were eligible to purchase the service credit required to vest and then retire, we estimate the cost would be $30,273.69". This projected amount was considered in negotiations and was represented in the settlement amount. In January 1996, as a result of the mediation, Petitioner and the County entered into a Settlement Agreement, Release and Disclaimer (Agreement), in exchange for Petitioner's dismissing his lawsuit. Paragraph Two of the Agreement provides that the County would make a lump sum payment distribution of $64,000.00 to Petitioner. Of the total amount, $34,000.00 was designated as back pay and liquidated damages. The remaining $30,00.00 was for "fees and other costs associated with the above-captioned case." Further, the County agreed to rescind Petitioner's termination, convert the termination to a suspension without pay, and reinstate Petitioner to his former position. Finally, the Agreement included a provision that Petitioner would resign from that position on the date he was reinstated. Paragraph Three of the Agreement provides that the $64,000.00 is not a "mere recital, but is the cash consideration for this Agreement and the full and final release affected thereby." Notwithstanding the provision in the Agreement that the $34,000.00 is for back pay and liquidated damages, Paragraph Three of the Agreement expressly states that the settlement amount paid by the County and accepted by Petitioner was not to compensate Petitioner for back wages, benefits, or other forms of compensation. Rather, the settlement amount was part of the compromise to settle and compromise the matter. In this regard, Paragraph Three of the Agreement provides in pertinent part the following: ...The parties hereto recognize that substantial questions of law and of fact exist as to any possible claim or claims by Cobb for any compensation, back pay, forms of compensation, benefits or damages, liquidated/compensatory or otherwise, interest and any other claim for relief; therefore, [this settlement is being made purely on a compromise basis in order to avoid further trouble, litigation and expense, and the settlement amount is considered to be a part of the compromise, paid by Defendant and accepted by Cobb not to compensate Cobb for back wages, benefits or other forms of compensation, but to settle and compromise the matter relative to the trouble, interference, damage, and expense which would have been and would otherwise continue to be claimed and/or associated therewith]. [Emphasis supplied.] Paragraph Eleven of the Agreement addresses changes in Petitioner's employment status and delineates the method by which the County would accomplish these changes. That paragraph provides the following: The parties hereto further agree that, without any waiver of the sufficiency of the grounds and cause for Cobb's termination, and [in settlement of all claims of Cobb as set forth hereinabove, a personnel action form will be prepared changing Cobb's termination action on July 31, 1992, to a suspension without pay through the date this Agreement is signed. Additionally, a personnel action will be issued reinstating Cobb to paid status effective the date this Agreement is signed.] Cobb agrees to sign and submit the attached letter of resignation, effective the date he signs this Agreement, and further agrees to waive any pay and/or benefits to which he may be entitled from Defendant since July 31, 1992. [Emphasis supplied.] After the Agreement was executed and pursuant to the terms thereof, the County prepared and processed the required paperwork which effectively rescinded Petitioner's termination, changed the termination to a suspension without pay, and reinstated Petitioner to paid status. Petitioner did not return to work with the County, but resigned on the day he was reinstated. Petitioner's resignation was consistent not only with the terms of the Agreement, but with Petitioner's intentions at the time he was being considered for employment by the County. At or near the time Petitioner was initially employed by the County, he indicated to County officials that he was committed to remaining with the County for ten years so that he could vest in the FRS. Based on his understanding of the Agreement, Petitioner did not intend to return to work with the County after the Agreement was executed. Petitioner believed that the County's action of rescinding his termination, changing his status to suspension without pay, and reinstating him provided him with more than the thirty-four months he needed to vest in the FRS. Had Petitioner not been terminated by the County, he would have vested in the FRS in May 1995, and would have thereupon retired. Although the Agreement provided that Petitioner would resign, there is no indication that the County was opposed to Petitioner's returning to work. In fact, one of the negotiators for the County, testified that "I am not sure that Pinellas County didn't want Mr. Cobb to return to employment. We wanted to settle the lawsuit that was pending. " After the Agreement was finalized, in a letter dated February 12, 1996, Petitioner provided Respondent with a copy of the executed Agreement and "copies of personnel actions completed in accordance therewith." The letter requested that Respondent do the following: (1) reinstate Petitioner in FRS in accordance with Section 121.011(3), Florida Statutes, and Rule 60S-2.016, Florida Administrative Code; and (2) provide Petitioner "with the amount of his required contributions for retirement credit for his period of suspension up to and including the date of his vesting." Petitioner was prepared to pay into the State Retirement Fund the contribution required to receive retirement credit. On March 5, 1996, Respondent issued a letter to Petitioner denying him the right to make contributions for retirement for the period of suspension without pay, July 31, 1992, through the date of his reinstatement, January 22, 1996. The denial letter stated that the purported "reinstatement" did not occur. As rationale for its position, Respondent found that: (1) after being "reinstated", Petitioner never performed work in a regularly established position and, therefore, was not compensated for services or work performed; (2) the County never intended to reinstate Petitioner "to employment with pay, nor was there an expectation of Petitioner to be "made whole" by the County; and (3) Petitioner and the County never intended to "enter into an employer and employee relationship retroactively for the period in question." Respondent stated that the purported reinstatement of Petitioner "was more in the nature of a ruse or sham to achieve a goal other than gainful employment." Moreover, Respondent believed that "neither the member nor the employer intended to enter into a regular employer and employee relationship." Respondent thus concluded that the reinstatement was not "bona fide" and was solely for the purpose of allowing Petitioner to vest in FRS and obtain retirement benefits. Respondent also objected to the form of Petitioner's reinstatement of employment with the County, declaring that it was not a "bona fide" as signified by his failure to receive back pay for the period of suspension and his failure to enter into an employer-employee relationship with the County for the equivalent of one calendar month. Respondent acknowledged that once Petitioner's termination was changed to a suspension without pay Rule 60S-2.016, Florida Administrative Code, applies to the case. This rule is interpreted by Respondent to require that for reinstatement to occur, an individual must work in a regularly established position for at least one calendar month following the suspension. Respondent admits that the "one calendar month" requirement is not contained in either Section 121.011(3)(e), Florida Statutes (1991), or in Rule 60S-2.016, Florida Administrative Code, both of which govern retirement credit for periods of suspension without pay. Nevertheless, Respondent's interpretation of Rule 60S-2.016, Florida Administrative Code, is that a person must work thirty days after a suspension without pay to be deemed "reinstated". Respondent derives this interpretation by applying language from the rule that governs granting credit for leaves of absence. Respondent's interpretation of "reinstatement," as it relates to members who have been suspended without pay, is not evident from the language of the applicable statute or rule and may be ascertained only upon reviewing individual member files. The Florida Retirement System currently has 600,000 active members and 140,000 retirees, for a total of 740,000 files.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Division of Retirement enter a Final Order that awards Petitioner retirement credit for the period of time from his date of suspension to his date of reinstatement subject to his purchasing retirement credit for that period of time. DONE and ENTERED this 30th day of October, 1996, in Tallahassee, Florida. CARLOYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-647 Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 1996. COPIES FURNISHED: Robert F. McKee, Esquire Kelly and McKee, P.A. 1718 East Seventh Avenue, Suite 301 Tampa, Florida 33675-0638 Stanley M. Danek, Esquire Department of Management Services Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399 Paul A. Rowell General Counsel Department of Management Services Division of Retirement 4050 Esplanade Way Tallahassee, Florida 32399-0950 A. J. McMullian, III, Director Department of Management Services Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560
The Issue The issue in this case is whether Fred E. Hild (Colonel Hild), a deceased member of the Florida Retirement System, was incapacitated at the time he selected his retirement option and through the time that his first benefits check was cashed and, if so, whether his retirement option should be amended retroactively to provide benefits for Petitioner, Lois Hild, his spouse.
Findings Of Fact Colonel Fred Hild, late husband of Lois Hild, served in the Air Force for 25 years before retiring from that service. After retirement from the Air Force and after Valencia Community College opened in Orlando, Florida, Colonel Hild joined the college staff, first as a teacher and then as an administrator. At the time of his retirement from the college, he was assistant to the provost. He worked at the college from 1978 until 1996. His employment at the college was covered by the Florida Retirement System (FRS). With the exception of a year's employment in her family's business, Mrs. Hild never worked outside of her home. She and Colonel Hild were married over 50 years and had a full, active life together. Colonel Hild provided the financial support for the family and, except for routine household expenses when he was away in the Air Force, he handled all of the family's financial affairs. Colonel Hild's family and co-workers acknowledge that he was a remarkable man in many ways, physically vigorous and mentally sharp. His work was always an important aspect of his life; he was well-respected and well-known on the college campus and, because of his long tenure, was very knowledgeable about the history and functioning of the college. As he aged, Colonel Hild slowed down a bit; he had days at work when he was sleepy or grumpy. Most days, though, he was quite normal and sharp. He knew all of the regulations for the college and always went by the rules. On October 12, 1995, at the age of 81 years, Colonel Hild suffered a major cerebrovascular accident (stroke) while at home. The stroke left lasting side effects. For a time after the stroke he lost all short-term memory and could neither read nor write. He became passive and frail. He underwent rehabilitation and improved quite a bit, according to Mrs. Hild, but he was never again the same man. Colonel Hild's son, David, who lived in California, sold his car and possessions and moved in with his parents to help Mrs. Hild provide the care Colonel Hild then required. This care included driving and assistance ambulating in the home neighborhood, where he would sometimes get lost. Colonel Hild was never again able to drive, as he lost part of his peripheral vision and would forget where he was going. He was unable at times to recognize friends or family members. He slept a lot and needed supervision in showering and dressing. He never again was able to assume responsibility for the financial affairs of the family. The Hild's son, Steve, an accountant in Miami, Florida, helped Mrs. Hild with financial planning and paperwork. Before his stroke Colonel Hild had made some plans for retirement. He spoke to co-workers of investments in stocks and bonds, and when the Air Force brought in a survivor's benefit program, he took advantage of that so that his wife would have some benefits when he died. He also spoke to Mrs. Hild of their having retirement benefits from Valencia for ten years. Still, before the stroke Colonel Hild worried about having enough for retirement and his worries increased after the stroke. He insisted on returning to work at the college after his rehabilitation and some recovery. Although they were worried about how he could function, Colonel Hild's wife and sons were reluctant to oppose him when he was so insistent. Dr. Collins, his personal physician for over 20 years, provided certificates authorizing Colonel Hild to return to the college part-time on April 8, 1996, and full time on June 1, 1996. Dr. Collins believed that the duties would be light and that the family and college staff would look out for Colonel Hild. Colonel Hild's son, David, drove him to and from work and made sure Colonel Hild got in the building. The first time they made the drive, Colonel Hild directed his son to the wrong campus of the college. Already thoroughly trained in the paperwork, the secretaries picked up much of the work that Colonel Hild had been doing. For example, they listened to students' problems and tried to work them out with the department chairpersons. For final decisions, the staff referred the problems to the provost, Dr. Kinzer. Colonel Hild's duties on his return to work were light. Because Colonel Hild was very organized and knew so much about the college, he was able to function with the help of his staff. He could review documents prepared for him and would initial or sign the documents, as appropriate, sometimes changing something if it had not been prepared correctly. Some days were better than others; he slept more than he did before his stroke and would sometimes get lost on campus. Because he was so well- known, someone would always help him back to his office. One of the annual responsibilities of Colonel Hild was organizing the graduation processions, making a list of the order of the march and placing posters or signs in the corridors for guidance. He performed this function without complaint in early May 1996. He refused assistance of his staff and, except for a couple of posters on the opposite wall, he managed to get everything done. At the actual graduation night, however, Colonel's Hild's, son, David, had to help him find his way at the end of the ceremony and recessional march. Colonel Hild retired from Valencia Community College on July 31, 1996. In preparation for that retirement he had several contacts with staff in the college's human resources office. Initially, Colonel Hild signed a form on May 30, 1996, applying for retirement and leaving blank the benefit option selection since he had not yet received an estimate of the amounts he would receive under each option. Vicki Nelson, a staff person in the human resources office, had approximately 4 or 5 contacts with Colonel Hild, face-to-face or over the telephone, while preparing paperwork for his retirement. At one point she was concerned that she was having to explain things over again and she suggested to Colonel Hild and to his secretary that maybe he should bring Mrs. Hild in with him. The issue she was trying to explain had something to do with the need to obtain Mrs. Hild's birth certificate if he selected either option 3 or 4. The suggestion was never followed up and ultimately Mrs. Hild's birth certificate was unnecessary. Michael Break is assistant vice-president of human resources at Valencia Community College. In his capacity as director of human resources Dr. Break was involved in preparing Colonel Hild's retirement documents. On June 19, 1996, Dr. Break, Vicki Nelson, and Colonel Hild met to discuss the benefit options and the monthly estimates of each amount. The FRS provides four benefit options to its retirees. Option 1 yields the maximum monthly benefit, but when the retiree dies there is no survivor benefit. Option 2 yields a reduced monthly benefit for 10 years. If the retiree dies before the end of 10 years, the benefit is paid to the survivor for the balance of the 10 years. Option 3 provides a reduced benefit for the joint lifetimes of the member and beneficiary; Option 4 provides a reduced benefit for the lifetimes of the retiree and beneficiary, which benefit is reduced by 33 1/3% upon the death of either. As explained to Colonel Hild, his monthly benefit under option 1 was $2,569.64; under option 2, his benefit was $1,692.72; under option 3 the benefit was $1,546.92; and under option 4, the benefit was $1,856.41, reduced to $1,237.61 upon the death of Colonel or Mrs. Hild. In his discussion with Colonel Hild, Dr. Break pointed out the implications of the various options, including the need to consider such factors as one's health and financial arrangements for a dependent spouse. In response, Colonel Hild mentioned that he had other financial means and this was not the only retirement that he depended on. Although Dr. Break was aware that some people were concerned about Colonel Hild's effectiveness after his return to work, nothing in Colonel Hild's responses to the discussion in the meeting raised red flags to alert Dr. Break that Colonel Hild did not understand. Colonel Hild expressed his opinion that the difference between benefits under option 1 and the remaining options was excessive. In Dr. Break's experience, and as he counsels pre- retirees, sometimes the selection of option 1, with the additional purchase of an annuity or life insurance policy, inures to the greater benefit of an individual's dependents than the other reduced-benefit options under the FRS. When a retiree selects option 1 or 2, there is a section on the option selection form for the spouse to sign in acknowledgment of the option. Colonel Hild brought the form home and gave it to Mrs. Hild to sign one morning before he left for work. When she signed it the form was blank. All she knew was what he told her, that the form was something she had to sign for his retirement. She did not question her husband or even read enough of the form to know that there were 4 options. Mary Ann Swenson has been employed at Valencia Community College for thirteen years, 8 of which have been in the human resources department. Ms. Swenson notarized Colonel Hild's signature on the benefits option form on June 24, 1996, and remembers the occasion. Colonel Hild came to the human resources office to meet with Vicki Nelson, who called Ms. Swenson. At the time that Colonel Hild signed the form, Mrs. Hild's signature was already on it, but her signature did not require a notary. Likewise, option 1 had been checked on the form and, in response to a question by Colonel Hild, Vicki Nelson showed him that he marked option 1 and said, "Yes, you have marked option 1." Colonel Hild signed the form and then Ms. Swenson notarized it. On June 24, 1996, during the approximately 10 minutes that Ms. Swenson spent with Colonel Hild and Vicki Nelson, she had no reason to believe that he was not in complete control of his mental facilities or that he failed to understand and recognize what he was signing. Colonel Hild retired, as planned, the end of July 1996, and his first retirement check arrived approximately August 30, 1996. Mrs. Hild saw the check and had her husband endorse it. She then cashed the check. She understood that by doing so, she was accepting the amount of the check. She saw no problem with this because she assumed that Colonel Hild had opted for what he and she had discussed as the "ten year" provision. Mrs. Hild assumed that the check reflected the number of years he was employed and the amount of money that he was making. The Hild's son, Steve, made the same assumption, as he and Colonel Hild had discussed retirement sometime in the early 1990's and Steve understood that his father would take the 10- year plan with Valencia. Neither Steve nor Mrs. Hild had requested any information from the college or Division of Retirement about the option selected by Colonel Hild or the amount of benefits he would receive once he retired. Colonel Hild died on September 28, 1997. He had received a total of approximately $37,000, or 14 months of benefits under FRS option 1 during his lifetime. Mrs. Hild and Colonel Hild's sons learned of the option 1 selection when the checks stopped coming after Colonel Hild's death and when Mrs. Hild called the college human resources office. It is necessary to glean Colonel Hild's mental capacity and state of mind from the circumstances described by the witnesses in this case, all of whom were candid and credible. From those circumstances it is impossible to find that Colonel Hild was incompetent to make the decision to chose option 1 for his FRS benefits. That decision was entirely consistent with his concern, described by his family and staff at the college, that there be enough money coming in when he retired. Although he plainly was concerned for making financial arrangements for his spouse, he had made some arrangements already with his Air Force retirement and with other assets or investments. Described as strong-willed, disciplined and well- organized, Colonel Hild, in spite of his diminished capacity after his stroke, convinced his family, the college and his long time physician that he should return to work. And he did function in that work prior to retirement, performing by habit those tasks that he had mastered in his long tenure. No one suggests that Colonel Hild was coerced, pressured or hurried into the decision he made. The various staff who met with him on several occasions regarding his retirement believed that he was capable of making his own decision and that he exercised the very option that he intended.
Recommendation Based on the foregoing, it is hereby RECOMMENDED: THAT the Florida Division of Retirement issue its final order denying the relief sought by Petitioner, Lois Hild. DONE AND ENTERED this 4th day of March, 1999, in Tallahassee, Leon County, Florida. MARY CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of March, 1999. COPIES FURNISHED: Harold Lewis, Esquire Division of Retirement Cedars Executive Center 2639-C North Monroe Street Tallahassee, Florida 32399-1560 Julia Smith, Esquire Amundsen and Moore 502 East Park Avenue Post Office Box 1759 Tallahassee, Florida 32302 A. J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Emily Moore, Chief Legal Counsel Division of Retirement Cedars Executive Center, Building C Tallahassee, Florida 32399-1560
The Issue Whether Petitioner is entitled to a refund of retirement contributions for the period from February 1, 1960, through January 1975.
Findings Of Fact Until January 1975, the Florida Retirement System and its predecessor, the State and County Officers and Employees Retirement System (SCOERS), were contributory retirement plans, in which state employees contributed a portion of their wages toward their retirement benefits. In January 1975, FRS became a non-contributory retirement plan, in which the employer paid all contributions to the plan. On February 1, 1960, Petitioner, who was then known as Rebecca Jamis or James Lee, began her state employment at Florida State Hospital (FSH), located in Chattahoochee, Florida. During her employment, Petitioner was enrolled in the state’s retirement plan and contributed $2,188.01 to that plan. In 1980, Petitioner was convicted of a felony offense and was sentenced to prison. She began serving her sentence in state prison in June 1980. Due to her imprisonment, Petitioner’s employment at FSH terminated on July 29, 1980. At some unknown date, Respondent received form FRS-M81 requesting a refund of Petitioner's contributions to the state’s retirement plan. Pursuant to the state's document retention policy, the original form was destroyed many years ago with a microfilmed copy of the front of the form retained by DMS. The microfilmed copy of this form does not reflect the date the form was signed. Additionally, except for the agency number and various signatures, information contained in the refund request form was typed in. The date of termination of Petitioner’s employment was also typed on the form, indicating the form was completed after Petitioner was imprisoned. More importantly, the form was purportedly signed by Petitioner with the name she used at the time. However, the address on the request was not Petitioner’s residence but was the 1980 address of Florida State Hospital Credit Union. At the time, Petitioner had a loan at the credit union, although she denies having an account there. Petitioner also did not hear any more from the Credit Union about her loan and does not know what happened to it. The regularly kept records of the Division indicate that on November 4, 1980, pursuant to this request for refund, Respondent issued Warrant No. 264829 in the amount due Petitioner for a refund of her retirement contributions. The warrant was issued to Petitioner and mailed as instructed to the address of the credit union. Again due to the passage of time, a copy of this warrant is no longer available. Moreover, the credit union records are not available. However, Charlene Fansler performed a search of un- cashed state warrants for Warrant No. 264829. The warrant was not on the list of warrants that remained outstanding. Further, the warrant had not escheated to the State as abandoned property. As such, the evidence demonstrated that the warrant was paid by the State. In 1990, at the age of 60 and several years after her release from prison, Petitioner requested a refund of her retirement contributions. On May 24, 1990, Respondent denied Petitioner’s request based on the 1980 refund of those contributions. At the time, Respondent did not advise Petitioner of her chapter 120 hearing rights; and therefore, did not provide Petitioner with a clear point of entry for an administrative hearing. However, Petitioner was clearly aware that DMS claimed that she had been issued a refund of her contributions and was, therefore, not entitled to a further refund. Petitioner took no action in 1990 even though she did not personally receive the 1980 refund because and claimed to not have signed the refund request form. In 2012, 32 years after the 1980 warrant was issued and 22 years after the 1990 denial of her request for refund, Petitioner, at the age of 82, again requested a refund of her retirement contributions based on her claim that she did not sign the 1980 refund request form and the fact that she did not personally receive the refund warrant. Respondent submitted the microfilmed copy of the signed refund request form and known handwriting exemplars of Petitioner's signature to the Florida Department of Law Enforcement (FDLE) laboratory for analysis. Kesha White, a handwriting analyst with FDLE, analyzed the documents and concluded that they were more likely than not signed by the same person. Her finding was not conclusive due to the limits of analyzing signed documents preserved on microfilm. Indeed, the signatures on the refund form and the known handwriting samples of Petitioner's signature are very similar and appear to be by the same person. In this case, the better evidence demonstrates that Petitioner signed the 1980 refund request form and, due to the passage of time, has simply forgotten that she did so. By signing that form, Petitioner instructed Respondent to issue and mail the warrant to the address for the credit union listed on the form. Respondent complied with that request. Given these facts, Petitioner is not entitled to another refund of her retirement contributions.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division enter a Final Order finding that Petitioner was issued a refund of retirement contributions for the period from February 1960, through January 1975, and dismissing Petitioner's request for hearing. DONE AND ENTERED this 21st day of May, 2013, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 2013. COPIES FURNISHED: Rebecca Thomas 1929 Hamilton Street Quincy, Florida 32351 Thomas E. Wright, Esquire Department of Management Services Division of Retirement Suite 160 4050 Esplanade Way Tallahassee, Florida 32399 Dan Drake, Director Division of Retirement Department of Management Services Division of Retirement Post Office Box 9000 Tallahassee, Florida 32315-9000 Jason Dimitris, General Counsel Department of Management Services Division of Retirement Suite 160 4050 Esplanade Way Tallahassee, Florida 32399
The Issue Whether Petitioner, Kevin Mullally, PhD, is entitled to a direct entry into the State University System Optional Retirement Program (SUSORP) as of August 8, 2019, the day he began teaching at the University of Central Florida (UCF).
Findings Of Fact Based upon the oral and documentary evidence presented at hearing, the following facts are found: Parties Dr. Mullally is currently an Assistant Professor of Finance at UCF, having started in that position on August 8, 2019. Respondent is the state agency with the responsibility to administer the FRS PP and the SUSORP. See §§ 121.125 and 121.035 Fla. Stat. DOR authorizes provider companies to assist SUSORP members with investments. See § 121.035 Fla. Stat. Background Dr. Mullally graduated from UCF in December 2005. He accepted an Orange County Public Schools teaching position in January 2006. 2 Respondent’s Exhibits 8 through 10 are contained on a single compact disk (CD) containing audio files of telephone conversations between Dr. Mullally and DOR employees, other State employees, or agents. Dr. Mullally taught at Timber Creek High School in Orlando, Florida, from January 2006 to late July 2006. At some point in 2006, Dr. Mullally chose to enroll in the FRS IP.3 The Orange County Public Schools system contributed a sum equal to 3.3 percent of Dr. Mullally’s earnings to his FRS IP. Dr. Mullally testified that, at that time, he was “21, young and dumb” and did not contribute any of his own earnings to his FRS IP. Dr. Mullally left his Timber Creek High School teaching position in late July 2006. Dr. Mullally lived in Atlanta for seven years, went to graduate school, and graduated with his doctorate degree in finance. On or about February 2, 2011, FRS IP sent a letter to Dr. Mullally that provided his FRS IP benefits “may be forfeited in the near future.” The letter also provided in part: Because you were not fully vested in this portion of your account balance when you terminated FRS- covered employment, and did NOT take a distribution from your FRS Investment Plan account, the unvested portion was moved to a suspense account. According to our records, as of the date of this letter you have not returned to FRS-covered employment. If you return to work within five years from the date of termination noted above [July 27, 2006], the unvested portion of the account will be reinstated to your FRS Investment Plan account plus earnings. If you do not return to work in an FRS-covered position within five years from the date of termination noted above the unvested portion of your benefit will be forfeited. Dr. Mullally worked less than the required six years to vest in the state retirement system. In July 2011, Dr. Mullally forfeited both the seven months of FRS eligible employment service and those Orange County Public Schools contributions held in a suspense account. 3 The State Board of Administration (SBA) administers the FRS IP. Dr. Mullally worked for three years at the University of Alabama as a Finance Professor just before returning to Florida, where he began his employment at UCF in 2019. UCF Employment On August 8, 2019, Dr. Mullally started his employment with UCF as a tenure track Assistant Professor of Finance. On August 9, 2019, Dr. Mullally received TIAA confirmation that he had successfully enrolled in a retirement plan of UCF. TIAA is an approved SUSORP provider. On August 20, 2019, Dr. Mullally executed a SUSORP Retirement Plan Enrollment form (the Form). In the Form’s section III, Dr. Mullally indicated he wanted to be a SUSORP member by checking the statement: “I am a new member and wish to enroll in the SUSORP.” Dr. Mullally also provided that he had elected to use “TIAA-CREF ORP” as the provider company for his financial investments. Dr. Mullally’s employer, UCF, provided that Dr. Mullally was eligible for enrollment in SUSORP as of August 8, 2019, the day he began his employment. Dr. Mullally did not exercise the Form’s option found in section II pertaining to FRS membership when he became employed by UCF. At hearing, Dr. Mullally provided copies of his first three payroll statements dated August 16, August 30, and September 13, 2019. Each statement provided a before–tax deduction to the Optional Retirement Program (ORP), which represented the SUSORP contribution. On September 18, 2019, Respondent, not the SBA, sent a letter to UCF (with a copy to Dr. Mullally) ordering UCF to redirect Dr. Mullally’s retirement withholdings from SUSORP to the FRS IP. DOR’s letter provided the following: You reported the above member under an incorrect retirement plan on the August 2019 retirement report. Incorrect Plan: OP Correct Plan: PA This member [Dr. Mullally] is a participant in the Florida Retirement System (FRS) Investment Plan based on his previous employment with the Orange County School Board and should not be reported under the default State University System Optional Retirement Plan (SUSORP) by the University of Central Florida. There are no statutory provisions that allow a direct transfer from the Investment Plan to the SUSORP. If the member prefers to participate in the SUSORP instead of the Investment Plan, he must use his second election to return to the FRS Pension Plan and then elect to participate in the SUSORP. To initiate this process, the member must complete the 2nd Election Retirement Plan Enrollment Form (ELE-2) to return to the Pension Plan and mail the form to the FRS Plan Choice Administrator at the address listed on page 3 of the form. Once the form is approved, the Division of Retirement will determine the cost to buy back into the Pension Plan. For information on the calculation of the cost, he may want to call the division toll-free at (844)377-1888 or locally at (850) 907-6500. The member should refer to the enclosed Transfer Information Sheet for additional information on the process. The member has 90 days from his date of SUSORP eligibility to initiate the process of transferring from the Investment Plan to the Pension Plan. Future payrolls should reflect the plan correction to PA. If you have any questions, please contact the Contributions Section. Dr. Mullally completed and submitted the ELE-2 form that DOR stated “must” be completed. After waiting approximately 45 days, DOR, not SBA, advised Dr. Mullally that the cost for him to buy into the FRS PP was $19,408.00. Further, Dr. Mullally understood that once he bought into the FRS PP, all his money would not transfer to his SUSORP election. Dr. Mullally did not submit the “buy-in” amount, but instead, began additional inquiries that led to this hearing. On September 27, 2019, Dr. Mullally received his fourth payroll statement which showed the before–tax deduction for contributions to the “Florida Retirement System” in the same amount previously provided as contributions to the ORP. Additionally, the statement provided a “YTD” (year-to-date) deduction for contributions to the ORP (the SUSORP). At the hearing, a brochure titled, “WELCOME to the FLORIDA RETIREMENT SYYSTEM For State University System SUSORP-Eligible Employees” (brochure) was offered by DOR and accepted in evidence. This brochure provides information on the three retirement plans available to eligible State University System employees: SUSORP; FRS IP; and FRS PP. At hearing, DOR advanced the principle that footnote 4, found on page 5 of the brochure (below), provided the mechanism by which Dr. Mullally could move to SUSORP. 4. 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 SUSORP position). However, the footnote does not provide any statutory authority for the second election to “buy back” into the FRS PP to then transfer to SUSORP. At the hearing, Dr. Morgan was unable to identify any statutory authority for the second election to “buy back” into the FRS PP to then transfer to SUSORP. Further, DOR concedes in its PRO: “It does not appear that any statute or rule contains this requirement, only this publication by the SBA.”4 (Resp. PRO at ¶7)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED6 that the Department of Management Services, Division of Retirement, enter a final order allowing Dr. Mullally’s enrollment in SUSORP as of August 8, 2019. DONE AND ENTERED this 3rd day of August, 2020, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK 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 3rd day of August, 2020. 6 The undersigned is without the statutory authority to require the Department of Management, Division of Retirement to reimburse Petitioner “for the cost of the transcripts purchased in this matter”. COPIES FURNISHED: Gayla Grant, Esquire Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 (eServed) Kevin Andrew Mullally 1821 Carollee Lane Winter Park, Florida 32789 (eServed) 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)
The Issue The issue for consideration in this hearing is whether the decedent, Samuel Burns, was competent to elect a survivor's benefit option upon execution of retirement papers on October 4, 1990.
Findings Of Fact At all times pertinent to the matters involved herein, the Petitioner, Lori M. Burns, was the surviving spouse of Samuel A. Burns who, prior to his death, was a member of the Florida Retirement System, (FRS). Respondent, Division of Retirement, (Division), is the state agency charged with the responsibility of administering said retirement system. Prior to his retirement on December 1, 1990, Samuel A. Burns was employed by the Indian River District School Board as a high school humanities teacher, and at the time of his retirement had 26.3 years of creditable service in the FRS. In early March or April, 1990, Mr. Burns was diagnosed as having cancer of the esophagus by his attending physician, Dr. Lui. Sometime thereafter, he became the patient of Dr. Michaela Scott, an oncologist, and was later treated by Dr. Nava, a surgeon with the Roswell Park Cancer Institute, (Roswell), in Buffalo, New York. When Dr. Scott first saw Mr. Burns on April 16, 1990, her opinion was that his prognosis was poor, and she felt he would be best served by treatment at Roswell. Surgery was done there after which Mr. Burns was able to eat. Initial radiation treatment and chemotherapy was administered and Mr. Burns was returned to Vero Beach for follow-up radiation treatment and chemotherapy. According to Dr. Scott's office notes, he resumed this treatment on May 29, 1990. Though he seemed to improve somewhat for a while, his condition subsequently deteriorated and in August, 1990, Mr. Burns returned to Roswell for further evaluation. The radiation therapy and chemotherapy he had received in the prior months had reduced the size of the tumor and this now permitted surgery. On August 13, 1990, Dr. Nava at Roswell again operated on Mr. Burns to remove more of the cancerous area and the indications at that time were that it all had been excised. The doctor told him that with proper diet and exercise, he should be able to regain his strength and continue to lead a productive life. However, according to the medical records, Mr. Burns suffered a heart attack during the operation, and from that point on was required to take heart medication. Mr. Burns returned to Vero Beach after the second surgery but the surgeon's prognosis did not materialize and in the opinion of Dr. Scott, his condition was poor. During this period of presumed recovery, Mr. Burns became depressed and nervous and Dr. Scott prescribed tranquilizers for him which, in her opinion, he abused. The drugs he was taking at the time included halcyon, a sleeping pill; prozac, an anti-depressive; procardia, a beta blocker for his heart condition; tylenol #3 for pain; and xanax, an anti-anxiety medication. During this period, Mr. Burns continued to experience great difficulty in eating and was unable to regain any of the weight he had lost as a result of his inability to eat because of the cancer. Dr. Scott felt his depression was a result of a combination of his condition and the fact he was abusing some of his medications. Dr. Scott also believed that as a result of his depression, Mr. Burns was indirectly suicidal. By that she meant he would refuse some medications felt necessary for his condition. He also started drinking. She felt this was enough for her to refer him to a psychologist for help with the depression. Mr. Burns first went to see Dr. Charles J. Ahr, a clinical psychologist, upon the referral of Dr. Scott, on November 7, 1990. At that first visit, Dr. Ahr took a patient history during which Mr. Burns indicated that a doctor had told him he would not survive for more than a couple of months. Mr. Burns traced the course of his illness and treatment up to that time, indicating to Dr. Ahr that after the surgery he had been told all the cancer had been removed and he could resume a normal life if he could get his strength back. Mr. Burns claimed he came to Dr. Ahr because he could not do that, and in the doctor's opinion, he appeared preoccupied with his inability to eat. It became very clear right away to Dr. Ahr that Mr. Burns was very depressed. In fact, Burns stated to him, "I'm alive only because Lori wants me to be." This indicated to Dr. Ahr there was a deep depression, and he noted Mr. Burns was taking psycho- active medications at the same time he continued to use alcohol, an inappropriate behavior. Dr. Ahr felt Mr. Burns was an alcoholic. Dr. Ahr's clinical diagnosis at the time was that Mr. Burns was suffering an adjustment reaction with depression which was related to a severe medical condition. In his opinion, Mr. Burns consciously felt he was free of the cancer, but subconsciously knew he was in a death struggle with it. Mr. Burns was an intellectual and rationalized his situation. He was in what is psychologically known as massive denial which is the psychological process of not accepting the truth in favor of a preferred position. Dr. Ahr believed that at some level of his psyche, Mr. Burns knew he was not doing well. His weight stayed constant and he was not able to eat. His strength fluctuated and he showed continuing evidence of a terminal illness but continuously denied it. This was a distortion of the reality that the cancer of the esophagus had a very low cure rate. He had been told he was cured, but apparently no one had ever told him of the small chance that the cure was permanent. Denial and depression is a serious psychological problem. Denial is normal with a terminal illness, but the depression may lead to suicidal thoughts. Having reviewed the retirement application form and being advised of the terms of the four retirement options thereon, Dr. Ahr believes that based upon his diagnosis of denial and depression, Mr.Burns could not have knowing acted rationally and reasonably on these choices. When Dr. Ahr saw Mr. Burns, Mr. Burns was not doing well. This was in November of 1990, some one month after Mr. Burns had already signed the retirement papers indicating his selection of Option 1. Nonetheless, Dr. Ahr believes that because of the fact that Mr. Burns was not doing well, was continuing to have eating problems, and was under a great deal of stress and depression, he was not competent to make an option decision at the time he did. Simply put, Mr. Burns would, in the doctor's opinion, have chose an option predicated on his mistaken belief of long life rather than on reality. His desire to elect a member only benefit is irrational and he was a rational man. Dr. Ahr found Mr. Burns to be a man very devoted to his wife and all he cared about was her. Therefore, the election of an option which cut her out of any support or protection was, in the doctor's opinion, irrational. He contends Mr. Burns believed he would live a long time but that belief was irrational based upon denial and depression within the realm of reasonable psychological probability and certainty. On October 4, 1990, Mr. Burns signed the application for retirement which he had had his wife pick up from the school board office sometime previously. Dr. Scott saw him on that day. Her notes show he was shaky and tremulous, and felt so poorly she considered sending him back to Buffalo for additional treatment. In her opinion, his condition was so evident, even one not a medical professional could tell it. As she saw it, Mr. Burns had a difficult time initially coping with his terminal illness. The knowledge he was to die put him into a state of shock, and he thereafter went into depression which continued on a regular basis. She felt his depression was so deep as to put him into a fog bank situation in which he could comprehend very little of what was going on. Dr. Scott also reviewed the option form that Mr. Burns executed on October 4, 1990 and feels that given his state of mind and physical condition at the time, with the drugs he was taking, he would not have been capable of understanding the retirement options available to him. Though he was a bright man, she would not have wanted him to sign any legal document at that time. With the clouded emotions he was experiencing, plus the drugs he was taking, plus the anger he had, he should not have done anything so important. In fact, Dr. Scott didn't even want Mr. Burns to retire. She had discussed retirement with him but she felt continuing to work, or the potential therefor, would have helped his condition. Mr. and Mrs. Burns were married for 23 years during all of which time he was a teacher in Indian River County. Prior to developing his cancer, Mr. Burns took care of all the financial matters for the family. He and his wife executed mutual wills in 1986 which was the last time they did that. They owned all their assets jointly. Mr. Burns had life insurance of about $31,000.00 with Mrs. Burns as his beneficiary. This preexisted the inception of his illness and no change was made subsequent to his diagnosis. The parties owned no certificates of deposit, no savings accounts, no stocks, and merely a small checking account. He was a school teacher and due to the minimal salary earned, and the fact that they put three children through college, they had very little in the way of assets. They own a house in the Bahamas which was purchased with money he inherited from him family. Mrs. Burns works for the Center for Arts in Vero Beach and takes home approximately $600.00 every two weeks. The house in which she lives, owned by them, has a $500.00 plus monthly mortgage payment. When Mr. Burns returned from his second surgery, in September, 1990, he was not doing well. He was weak and could not live as he wanted to. Nonetheless, he tried to eat; he walked the dog; he took rides; and yet, with all the effort made, he did not recover as he would have desired. Mrs. Burns, who gave him his medications, would hide them because she was afraid he would commit suicide as did a friend who had a similar condition. According to Mrs. Burns, her husband approved that friend's action. Though Mr. Burns was still drinking alcohol, his inability to swallow limited his intake. Still, because of his condition, the medications tended to aggravate his depression. Prior to going to Buffalo for surgery in August, 1990, Mr. Burns contacted the school superintendent's office to arrange for a substitute for several weeks while he was gone. When he returned after surgery, and found his recuperation would take much longer than he had anticipated, he determined he would not have the stamina to resume teaching. Though the evidence indicates she did so, Mrs. Burns does not recall picking up any retirement applications from the school board office for her husband. He never discussed any retirement options with her nor did she help him fill out the forms. Only when he said he had some papers to sign at the school board did she take him there, and even then, she did not go in with him. As a result, she was not aware of what option he chose or what options were available to him. Even after he signed the retirement papers, he did not discuss what option he had chosen. Mr. Burns' official date of retirement was November 19, 1990 with his retirement effective December 1, 1990. His first check, which he received in January, 1991 was sufficient to make up any accruals, but Mrs. Burns does not know when that check arrived. In fact, when her husband passed away, she did not know that the checks would cease. It was only when she received the letter from the Division, stating that no more would come, did she find out her true situation. At no time prior to his death did Mr. Burns tell his wife he had made a mistake regarding his retirement options, but in retrospect she claims to have serious doubts that during the October/November, 1990 period Mr. Burns had the ability to handle his financial affairs. Nonetheless, she never asked him about his retirement or any other financial arrangements made for her to take effect upon his death. At some time prior to October, 1990, Mrs. Gloria Pfund, secretary to the Assistant Superintendent for Personnel at the Indian River School District, gave retirement application forms to Mrs. Burns who came in to pick them up. On that visit, they very briefly discussed Mr. Burns' condition. Mrs. Pfund gave no instructions or any additional material concerning retirement options to Mrs. Burns, nor did she have any further discussion with either one until on October 4, 1990, when Mr. Burns came to her desk, gave her the form already filled out, and signed it in front of her. During this visit, they talked briefly about his health and school and she took him in to shake hands with her boss, Dr. Teske, the Assistant Superintendent for Personnel. Though she did not shake hands with him then, she noticed that he did not appear to be trembling nor was his voice weak. Though it was not as vibrant as it would be in the classroom, it was, nonetheless, a normal conversational voice. Based solely on the conversation she had with him that day, she would not have known he was sick. However, she knew he was ill because he was enrolled in the sick leave bank. Mrs. Pfund notarized Mr. Burns' signature on his retirement application. If the individual appearing before her for that purpose does not appear to comprehend what he or she is doing, she will inquire about it. In this case, Mr. Burns did not show any uncertainty or confusion about the form. He did not ask any questions nor did he make any comments. Had he done so, she would have referred him to Dr. Teske, but here she was satisfied Mr. Burns knew what he was doing. After signing the documents and having the brief talk with Dr. Teske, Mr. Burns left the office. When Dr. Teske spoke with Mr. Burns on that day, it was the culmination of a series of events leading up to the retirement. In August, 1990, Mr. Burns called the school board after his first operation and said he would not be back and needed a substitute teacher to be hired. He followed up this contact with a letter dated August 4, 1990 in which he also noted a potential need for enrollment in the sick leave bank. Mr. Burns had first applied for sick leave bank withdrawal in May, 1990, and his second application for withdrawal was received on August 13, 1990, after his August 4 letter. It was approved the following day. When Dr. Teske notified the school principal to hire a substitute, he indicated the period would be for up to 4 weeks based on information he had received from Mr. Burns. However, on October 1, 1990, Mr. Burns wrote to the board indicating his intention to retire as of November 20, 1990, and the board subsequently accepted that retirement. When Teske met with Mr. Burns on October 4, their discussion was very general, consisting of reminiscences and discussions of other people, as well as a very general discussion regarding Mr. Burns' condition. At that time they had no discussion of possible retirement options and though it is board policy not to suggest a particular option to a potential retiree, they can, and do when necessary, point out what the options are and explain them. In this case, Dr. Teske did not feel Mr. Burns needed that explanation. He did, however, indicate to Mr. Burns he would qualify for the 15% retirement incentive, a one time payment which is a board payment not related to the state retirement fund. Dr. Teske also believes he shook hands when Mr. Burns left the office. At no time did he notice any trembling or any other type of infirmity. In fact, Mr. Burns seemed to know what was going on though he did not specifically state he had brought his retirement papers in. His comments were appropriate, and his comments and demeanor appeared normal. Though his voice was somewhat lower, it was not a whisper. In this case, on October 4, 1990, Mr. Burns selected Option 1 with an effective retirement date of December 1, 1990. Option 1 provided full retirement benefits to the retiree to the point of death with no payment to any survivor. On October 24, 1990, as is its usual procedure, the Division sent a form to Mr. Burns showing that consistent with his option selection, he had elected Option 1 and asking him, in addition, if he wanted to add to his retirement credit by purchasing time for his military service. In response, by executing a form back to the Division on November 26, 1990, Mr. Burns indicated he did not wish to purchase his military service. That same day, the Division sent Mr. Burns an estimate of his retirement benefits which reiterated a statement made to him on a prior form that once an option selection was made, it could not be changed after a retirement benefit payment made under that option selection had been cashed or deposited. The estimate form sent out on November 26, 1990 also contained a form "OPT-FRS" which contains a detailed explanation of all retirement options. After Mr. Burns retired on December 1, 1990, the Division sent him another letter advising it was placing him on the retirement payroll effective January 1, 1991, and reaffirming that he had selected Option 1. Mr. Burns died on May 1, 1991. This information was communicated to the Division by Mrs. Pfund on May 17, 1991. Thereafter, on June 10, 1991, the Division sent a letter to Mrs. Burns advising her that her husband's retirements benefits had ceased at the time of his death because the retirement checks received by him between January 1, 1991 and his death had been cashed. Under the Division's rules, this prevented any change in the option selection.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that a Final Order be entered granting Petitioner's request to have Mr. Burn's election of retirement option declared invalid. RECOMMENDED in Tallahassee, Florida this 22nd day of January, 1992. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-4652 The following constitutes my rulings, pursuant to Section 120.59(2), Florida Statutes, on all Proposed Findings of Fact submitted by the parties to this proceeding. FOR THE PETITIONER: No specific proposed Findings of Fact submitted. FOR THE RESPONDENT: 1. & 2. Accepted and incorporated herein. - 7. Accepted and incorporated herein. Accepted and incorporated herein. - 12. Accepted but more a recitation of the contents of office notes than Findings of Fact. Accepted. Accepted. Rejected. Accepted. Accepted but not dispositive of the issue. & 19. Accepted. Accepted and incorporated herein. & 22. Accepted and incorporated herein. Accepted and incorporated herein. & 25. Accepted and incorporated herein. COPIES FURNISHED: Stanley M. Danek, Esquire Department of Administration Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Ronald S. Fanaro, Esquire Post Office Box 2110 Vero Beach, Florida 32961 A. J. McMullian, III Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 John A. Pieno Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr. General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue Whether Petitioner is entitled to membership in the State University System Optional Retirement Program (SUSORP), rather than the Florida Retirement System (FRS).
Findings Of Fact 1. Petitioner, Qiu-Xing Jiang, is a faculty member in the Department of Microbiology and Cell Science at the University of Florida Institute of Food and Agricultural Science (UF IFAS). 2 Respondent, Department of Management Services, Division of Retirement, is the state agency with the responsibility to administer the FRS and the SUSORP. Petitioner was a professor at the University of Texas Southwestern Medical Center in Dallas, Texas, when he received a written offer letter from UF IFAS for his current faculty position on August 14, 2015. The offer letter was delivered to Petitioner via his personal e-mail address, which is a Yahoo account. The offer letter is five pages long, including an addendum containing conditions of employment. The two-page addendum includes the following information regarding retirement options: You are required to participate in at least one of the retirement programs offered by the State of Florida, unless you have received a pension or distribution of employer contributions, including a rollover, from a retirement program administered by the State of Florida. If you have received a distribution as described, you are not eligible to participate or renew membership in a State of Florida retirement plan. Otherwise, an employee contribution of 3% is mandatory and you may select the retirement program you wish to enroll. For more information, please attend new employee orientation or visit the UF Retirement website at http://hr.ufl.edu/benefits/retirement. Should you have any questions regarding benefits or retirement, please contact University Benefits and Retirement at (352) 392-2477. Petitioner electronically signed and accepted the offer of employment, and initialed the two-page addendum, on August 14, 2015. The website to which the offer letter to Petitioner referred contained all the information regarding the SUSORP, including eligibility, enrollment, contribution rates, forms, publications, and other resources. With respect to enrollment, the website informed new hires of the two steps for enrollment: Open an account with an investment provider. Fax completed Optional Retirement Program Enrollment Form (https://www.rol.frs.state.fl.us/forms/orp- enroll.pdf) to UF Benefits at (352) 392-5166 within 90 calendar days from hire. Prior to receiving the written offer letter, Petitioner travelled to Gainesville to enroll his children in school and complete other tasks to settle his family in a new location. Petitioner’s children began school on August 15, 2015. Petitioner’s hire date was September 1, 2015. UF has adopted an online hiring process, known as “GatorStart,” to expedite payroll enrollment of new hires. To reduce the paperwork required, the system requires new hires to create an e-signature and review and initial all the necessary forms online. The GatorStart system shows that Petitioner accessed the system on August 31, 2015, and acknowledged receipt by initialing several forms, including the W-4, Direct Deposit, the FRS Certification, and the Benefits and Retirement Information. The Benefits and Retirement Information form includes the following pertinent information: Welcome to the University of Florida! The university offers a comprehensive array of benefits to employees. This provides a brief introduction to those benefits. Specifically, please take note of the enrollment deadlines associated with insurance and retirement benefits. In addition to our website, you may refer to the New Employee Orientation Guide at http://hr.ufl.edu/working-at-uf/new- employees/employee-handbook/. Throughout your employment, you can always contact us by email as well. Benefits: benefits@ufl.edu Retirement: retirement@ufl.edu * * * Retirement Enrollment in a retirement plan is mandatory. You have 90 days from your date of hire to enroll in the SUSORP. To select the FRS Investment Plan, you must enroll by the end of the 5th month after your month of hire. If you do not actively enroll in a plan, you will default into the FRS Pension Plan. Health Science Center faculty are mandatory SUSORP participants. For more information, visit https://www.hr.ufl.edu/retirement. The form then lists the three plan choices (SUSORP, FRS Investment, and FRS Pension), as well as the voluntary plans (403(b) and 457). At hearing, Petitioner denied that he accessed and acknowledged receipt of the online hiring forms on August 31, 2015. Instead Petitioner maintained that someone in his department must have done that on his behalf. However, Petitioner admitted that he accessed the online retirement tutorial at some point prior to September 1, 2015,1/ but was unable to enroll because he was not yet “in the University system.” On or about September 17, 2015, Petitioner met with Kathy Higgs. Ms. Higgs has been employed with IFAS HR for 10 years and assists new employees with benefits enrollment. Her primary duties are with respect to enrollment in medical and supplemental insurance plans. Ms. Higgs has no expertise in state retirement options. With respect to retirement options, it is her practice to inform new employees of the enrollment deadlines and direct them to the website which lists investment providers and their local representatives. Ms. Higgs has prepared a summary chart of the three retirement options, including eligibility, vesting time, and enrollment window, which she generally provides to new employees. New employees enroll in medical and supplemental insurance plans through the People First portal. Every employee has a unique password to access the portal. Petitioner faults Ms. Higgs for misleading him into waiting to enroll in a retirement plan until after he received his People First password. Ms. Higgs denied having instructed, or otherwise advised, Petitioner to wait until he received his People First password to enroll in a retirement plan. Based on the evidence, Petitioner misunderstood certain communications from Ms. Higgs. Petitioner’s employment at UF is a blend of two different positions: 0.8 Full-Time Equivalent (FTE) for IFAS and 0.2 FTE for Sponsored Research. On September 21, 2015, Ms. Higgs e-mailed Lisa Hodges, UF HR Assistant Director of Benefits, to determine whether Petitioner needed to enroll for benefits separately in each position. On September 22, 2015, Ms. Hodges replied via e-mail that, for the state plans, Petitioner should enroll as usual in People First and that the two FTEs would be combined, but for UFSelect plans, Petitioner should enroll under the 0.8 FTE. Ms. Hodges added, “The only enrollment that he would need to enter on both is LTD since it has to factor in the salary on the .80 and .20 FTE job.” On September 22, 2015, Ms. Higgs forwarded Ms. Hodges’ e-mail explanation of benefits enrollment to Petitioner at his UF e-mail address. She included the following message by way of introduction: “Good morning, Dr. Jiang, Please read below email from University Benefits to make sure your enrollments are processed successfully.” On that same date, Petitioner responded, “Thanks for your help. I will wait for the ID/passwd. What is LTD? Best, Qiu-Xing.” Ms. Hodges was copied on that e-mail exchange between Petitioner and Ms. Higgs, and replied to Petitioner on September 30, 2015, that LTD means “Long-Term Disability” and referred Petitioner to the UF website containing a tutorial on both the state and UFSelect benefits plans. The e-mail exchanges were clearly limited to benefits enrollment, not retirement. Also on September 22, 2015, UF HR, through its Benefits office, sent Petitioner an e-mail regarding all three retirement options and instructions on how to enroll. The e- mail was sent to Petitioner’s e-mail address at Southwestern Medical Center in Dallas, Texas. Petitioner did not receive the e-mail. Petitioner faults UF HR for failing to send the e-mail to the correct address. Ms. Hodges characterized the e-mail as a “courtesy” that is sent to all new employees as a reminder of the retirement options. Respondent provided no satisfactory explanation for why the courtesy e-mail reminder was sent to Petitioner’s former university e-mail address. On October 7, 2015, Petitioner sent Ms. Higgs an e- mail in regard to hiring a scientist for his lab. Petitioner only had an Other Personal Service (OPS) position available, but the scientist was a current UF employee enrolled in the FRS. Petitioner inquired of Ms. Higgs if he could hire the scientist in the OPS position but “pay extra money to continue his FRS pension program he is currently in as he will continue to work for UF.” On October 9, 2015, Ms. Higgs sent Petitioner an e- mail wherein she included the link to the SUSORP page of the retirement benefits website. This e-mail was sent to Petitioner 39 days after his hire date. Petitioner did not make a retirement election within 90 days of his hire date and, thus, defaulted to membership in the FRS. Respondent notified Petitioner by letter dated January 11, 2016, that because he had not selected a SUSORP provider company within 90 days of his hire date, Respondent transferred his retirement contributions to the FRS Trust Fund. On or about February 19, 2016, Petitioner contacted Ms. Hodges to determine why he was not enrolled in SUSORP. Ms. Hodges explained that since Petitioner “did not make an active retirement plan election within 90 days from hire, [he was] defaulted into the Pension Plan. Ms. Hodges also forwarded Petitioner’s request to Eric Kegley, a UF HR Retirement Specialist, for review. Mr. Kegley subsequently investigated Petitioner’s allegations that he had been misled by Ms. Higgs into waiting for his People First password in order to enroll in retirement, faulting IFAS HR for failing to provide him with advice from someone who was knowledgeable in retirement benefits, and faulting UF HR for sending the courtesy reminder to an invalid address. On February 22, 2016, Petitioner completed a SUSORP enrollment form, which UF submitted on his behalf to Respondent. However, following UF HR’s investigation, UF determined that its staff were not to blame for Petitioner’s failure to make an active retirement election within 90 days of his hire date. Thus, UF did not support Petitioner’s instant request to transfer from the FRS to the SUSORP plan.
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 denying Petitioner’s request to enroll in the SUSORP. DONE AND ENTERED this 6th day of December, 2016, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK 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 6th day of December, 2016.
The Issue The sole issue in this cause is whether or not the payments received from Gadsden County by Petitioner, as set forth on pages 4 through 8 of her Amended Petition, for services rendered as Official Court Reporter pursuant to Chapter 29, Florida Statutes, constitute "compensation" within the meaning of that term in Chapter 121, Florida Statutes.
Findings Of Fact On April 27 and May 1, 1992, respectively, the Respondent and the Petitioner submitted to the Hearing Officer their Proposed Recommended Orders including proposed Findings of Fact. In the Appendix to Recommended Order, the Hearing Officer submitted recommended rulings thereon. The following constitutes the rulings in this Final Order on those proposed Findings of Fact. The Petitioner's and Respondent's proposed Findings of Fact Nos. 1, 2, 3, 4, 5, 6, and 7, are hereby accepted and adopted in that they track the stipulated facts contained in the PREHEARING STIPULATION dated and filed March 30, 1992. The Petitioner's proposed Findings of Fact Nos. 8, 9, 10, and 11, are hereby rejected in that they are conclusions of law and were not contained within the stipulated facts contained within the PREHEARING STIPULATION, and are, therefore, not based upon competent substantial evidence. The actual employment position held by the Petitioner as an employee of the judicial branch of the State of Florida is clearly identified on Florida Retirement System Form FR-11, which was executed by the Petitioner on January 24, 1990, and certified by the Chief Judge of the Second Judicial Circuit (Exhibit 6 attached to the PREHEARING STIPULATION), whereon the "Title of Position held" is stated to have been "Official Court Reporter, Second Judicial Circuit of Florida assigned to Gadsden County." The supplemental salary that was paid to the Petitioner by the County required paper work identifying her as a county employee for payroll purposes only; but, as a matter of law, she held her State position as an official court reporter solely at the pleasure of the Judges of the Second Judicial Circuit pursuant to Section 29.01, Florida Statutes. In the Conclusions of Law in this Final Order, this issue shall be fully analyzed. RULINGS ON HEARING OFFICER'S RECOMMENDED CONCLUSIONS OF LAW Recommended Conclusion of Law No. 1 is hereby accepted as a proper statement of applicable law. Recommended Conclusion of Law No. 2 is hereby accepted as a correct statement of applicable law. Recommended Conclusion of Law No. 3 is hereby rejected in that it erroneously concludes that the Petitioner's salary and fees were authorized and set by statute, when, they had to have been authorized and set pursuant to Rule 2.070, Florida Rules of Judicial Administration. The conclusion of the Hearing Officer is incorrect because under Rule 2.070, Florida Rules of Judicial Administration, the compensation of, and the fees in question to be charged by, court reporters are authorized and set by such judicial rule. Rule 2.070, Florida Rules of Judicial Administration, adopted generally by reference the annual salary for court reporters set forth in Section 29.04, Florida Statutes, for a 60-hour work month. That judicial rule then goes on to provide for overtime at the rate of $10.00 per hour. That Rule 2.070, Florida Rules of Judicial Administration, also provides that the fees in question (for transcripts and depositions) to be charged by court reporters should be set in each circuit by administrative order, and, in the absence of such order, as provided by law. Such court reporters' fees, therefore, are set pursuant to said judicial Rule 2.070, which authorizes the charging of such fees in accordance with a circuit administrative order, and, in its absence, as provided by law. The setting of such fees and the authorization to charge same arise from said judicial Rule 2.070, and not from Chapter 29, Florida Statutes. The fee schedule set forth in Chapter 29, Florida Statutes, derives its legal efficacy not from its legislative enactment alone, but from its judicial approval in said Rule 2.070 in the event that a local circuit administrative order setting such fees has not been entered. In such instance, the fees are not set by statute, but by judicial approval of a statutory fee schedule. The judicial branch has set such fees, not the legislative. Thus, any such fees were not set by statute. The citations by the Hearing Officer in recommended Conclusion of Law No. 4 of Rules 22B-1.004(4)(b)1., and 22B-6.001(49), Florida Administrative Code, are rejected as being inapplicable to the proceeding at bar inasmuch as the Petitioner as an Official Court Reporter appointed pursuant to Section 29.01, Florida Statutes, was an employee of the State of Florida and was not an employee of Gadsden County. Under said Section 29.01 all official court reporters are appointed by and serve at the pleasure of the Chief Judge and a majority of the Judges of the Court in which the reporter is serving. Provision is made in Section 29.04, Florida Statutes, for the respective counties to provide funds necessary to pay the cost of reporting in criminal cases as necessary to provide competent reporters in such proceedings, but any such monies paid to such official court reporters would be paid to state employees. The judicial branch of government in Florida is a State court system. Official Court Reporters are hired and retained by the State Judges in a Circuit, and their employment is not determined or continued to any extent whatsoever by any Board of County Commissioners. Under Section 29.04(3), Florida Statutes, provision is made for the counties to supplement the funds necessary to pay the cost of reporting in criminal cases as necessary to provide competent reporters in such proceedings. The counties are a source of funding, and are not employers of the Official Court Reporters. In the case of Matter of Compensation of Hunter, 635 P.2d 1371 (Or. App. 1981), the Court of Appeals of Oregon held that where court reporters are appointed and hold their offices at the pleasure of the Judges, and are officers of the Court subject to the direction and control of the Judges, those court reporters are employees of the State of Oregon and not of the counties. At page 1373 of 635 P.2d the Court held: "The right to control is also important from a policy standpoint. The judges of the State of Oregon benefit directly from the services of the court reporters. They not only perform reporting duties in court, but are also the judges' official secretaries. See ORS 8.330. The State benefits most directly from court reporters' services, and it should be responsible for providing their workers' compensation insurance." Recommended Conclusion of Law of No. 5 is hereby rejected as a conclusion of law in that is a recitation of the relative positions of the parties and is not of any recommended holding or ruling by the Hearing Officer. Upon the reasoning and authorities set forth in Paragraph No. (3), above, recommended Conclusion of Law No. 6 is hereby rejected in that the fees in question were not authorized or set by legislative statute but were, in fact, authorized and set pursuant to judicial Rule 2.070, Florida Rules of Judicial Administration. The first three sentences of recommended Conclusion of Law No. 7 are hereby rejected in that they misconstrue the first sentence of Section 121.021(22), Florida Statutes, that states: "`Compensation', means the monthly salary paid a member, including overtime payments paid from a salary fund, as reported by the employer on the wage and tax statement (Internal Revenue Service form W-2) or any similar form." [Emphasis supplied] A form 1099 is not a form on which an employer reports salary paid from a salary fund to an employee, but, rather is a form utilized to report payments of income to an independent contractor. The "similar form" in that statute refers to an employer's wage and tax statement, which may be a form W-2, which is not the equivalent to a form 1099. As hereinafter discussed in Conclusions of Law Nos. (11), (12), and (13) of this Final Order, Official Court Reporters are "professional persons" within the meaning of that term in Section 121.021(22), Florida Statutes. The recommended Conclusion of Law of the Hearing Officer that the transcribing of criminal proceedings do not constitute "special or particular services" does not comport with either judicial Rule 2.070, Florida Rules of Judicial Administration, or a 1957 Opinion of the Attorney General of Florida. Under said judicial Rule 2.070 the basic salary for a court reporter is set in subsection (g) together with provision for the payment of overtime for hours in excess of 60 worked per month. In subsection (e) of Rule 2.070, provision is made for fees for what would constitute special or particular services by a court reporter, and the fees that may be charged for same. In a 1957 Opinion of the Attorney General of Florida (1957 0p. Att'y. Gen. Fla. 057- 109 (April 26, 1957)), the Attorney General of Florida analyzed Section 122.02, Florida Statutes, the predecessor to Section 121.021(22), Florida Statutes, as to what constituted compensation under the State and County Officers and Employees Retirement System (SCOERS). The opinion of the Attorney General was that hourly wages plus overtime would be included within the monthly compensation. But, at the end of that opinion the Attorney General concluded: "We conclude that in the case mentioned in the question the employing authority has prescribed the formula for fixing the monthly compensation or salary. It may vary depending upon the hours employed in discharging the routine work of the employment but the formula is fixed and applicable mathematically. This is not a situation where fees are paid for special or particular services. It is a regular retainer made depending upon the actual hours engaged in performing the month by month routine duties as School Board Attorney. It has no reference to fees for handing special items such as bond validation or other litigation." Under Rule 2.070, Florida Rules of Judicial Administration, official court reporters are paid their basic salary and overtime for their court appearances in reporting the proceedings. But, if they are to furnish transcripts of proceedings or depositions, which work would be done after their regular working hours, then the fees for such special or particular services are to be set by local circuit administrative order, or in the absence of same, as provided by law. These special or particular services that the court reporters are performing for such additional fees are not performed during their regular working hours, which by said Rule 2.070, is limited to 60 hours per month. And the last sentence of Recommended Conclusion of Law No. 7 that the Petitioner was a county employee is hereby rejected upon the grounds and reasoning set forth in Paragraph No. (4) above. The Hearing Officer's Recommended Conclusion of Law No. 8 (misnumbered as "7") is hereby rejected upon the grounds and for the reasons set forth in Paragraph Nos. (3) through (7) set forth above.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that respondent enter a final order approving petitioner's request for additional retirement benefits by including in the calculation of average final compensation those fees received by petitioner between January 1973 and February 1990 as set forth on pages 4 through 8 of her amended petition. RECOMMENDED this 24th day of June, 1992, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this day of June, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-3168 Petitioner: Accepted in finding of fact 1. Accepted in finding of fact 2. 3-4. Accepted in finding of fact 3. 5-6. Accepted in finding of fact 4. 7. Accepted in finding of fact 5. 8-11. Accepted in finding of fact 3. Respondent: Accepted in finding of fact 1. Covered in preliminary statement and in finding of fact 2. 3-4. Accepted in finding of fact 3. 5-6. Accepted in finding of fact 4. 7. Accepted in finding of fact 5. COPIES FURNISHED: A. J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, FL 32399-1560 John A. Pieno, Secretary Department of Administration 435 Carlton Building Tallahassee, FL 32399-1500 Edgar Lee Elzie, Esquire P. O. Box 82 Tallahassee, FL 32302 Burton M. Michaels, Esquire Cedars Executive Center, Building C 2630 North Monroe Street Tallahassee, FL 32399-1560
The Issue Whether Petitioner is eligible to participate in the SUSORPS or whether he is a retiree for purposes of Florida's state retirement system.
Findings Of Fact The Division of Retirement (Division) is, and was at the times material to this case, the state agency charged with the responsibility of administering the Florida Retirement System (FRS) and the State University System Optional Retirement Program (SUSORP). Petitioner, Tyler Smith, was employed by the University of Central Florida (UCF) from August 8, 2003, until he resigned his employment with UCF on or about August 22, 2005. When he was initially employed by UCF, Petitioner elected to join the SUSORP and selected TIAA-CREF as his provider company. During his initial employment, Petitioner's TIAA-CREF account was entirely funded by employer contributions. Petitioner did not make any personal contributions to the account. In August 2005, Petitioner resigned his employment with UCF effective August 22, 2005. On or about August 16, 2006, Petitioner took a distribution from his SUSORP TIAA-CREF account in the approximate amount of $6,772.23. Petitioner asserts that, while he requested the total amount to be distributed to him in 2006, the entire amount was not so distributed. Petitioner maintains that there remains a balance of $2,432.66 in his TIAA-CREF account. That testimony is unrebutted and is accepted. Petitioner became reemployed by UCF on or about August 8, 2010. Petitioner was advised by UCF that he was not eligible to rejoin the SUSORP and that if he disagreed with that determination, he could inquire with Respondent. On or about August 17, 2010, Petitioner requested that Respondent review his status and provide a determination of his eligibility to participate in a state-administered program. At the time of this request, Petitioner was 36 years old. Robert Henning is a Retirement Benefits Administrator for the Division. At hearing, he explained that if an employee takes a distribution upon termination from his employment, he is treated as a retiree. If that person returned to work prior to July 1, 2010, he would be eligible to rejoin the retirement system. However, if that person became re-employed after July 1, 2010, he would not be eligible to rejoin because of a change in the law. By letter dated August 27, 2010, Petitioner was notified of Respondent's determination that, because he had terminated his employment and taken a distribution from his SUSORP TIAA-CREF account, he was deemed a retiree. The letter reads in pertinent part: This letter is in response to your request for your account to no longer reflect that you have retired under a state administered retirement plan. Under s. 121.35(5), Florida Statutes (F.S.), "retiree" means a former participant of the optional retirement program who has terminated employment and has taken a distribution as provided in this subsection. The distributions permitted under s. 121.35(5), F.S., include a lump-sum distribution to the participant. Based upon the information provided by TIAA- CREF, you have taken a distribution as noted above and are properly reflected as a retiree within the definition provided in the statutes. Therefore, we are not able to comply with your request. The August 27, 2010 letter also informed Petitioner of his right to request a hearing, which gave rise to this proceeding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Division of Retirement enter a final order denying Petitioner's request to restore his eligibility to participate in SUSORP. DONE AND ENTERED this 23rd day of February, 2011, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of February, 2011. COPIES FURNISHED: Tyler W. Smith 1349 Maywood Avenue Deltona, Florida 32725 Geoffrey M. Christian, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 Sarabeth Snuggs, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 John Brenneis, General Counsel Department of Management Services Division of Retirement 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue The issues to be resolved in this proceeding concern whether the Petitioner, as a surviving spouse, is entitled to a continuing benefit from the Florida Retirement System (FRS) based on the retirement account of her deceased husband, George S. Bohler. More specifically, it must be determined whether the forgery of the spousal acknowledgement form renders the member's election of the "Option 1" retirement benefit payment, which precludes a survivor's benefit for his spouse, invalid and void.
Findings Of Fact George Bohler, the FRS member at issue, was employed, at times pertinent, as a Professor of Economics at Florida Community College in Jacksonville. The College is an FRS employer and Mr. Bohler was a member of the FRS retirement system. The Division of Retirement is an administrative agency charged with regulation and operation of the Florida retirement system, including calculation of and determination of entitlement to retirement benefits, under various options and member circumstances. On March 22, 1999, Mr. Bohler filed a completed Florida Retirement System Application for service retirement and the Deferred Retirement Option Program (DROP). This was accomplished through his filing of "Form DP-11." The Form provides a retiree with information pertaining to four options by which his retirement benefits may be paid. One full page of that form provides an explanation of each option. Mr. Bohler selected Option 1, a retirement benefit pay-out plan which provides the highest monthly benefit. The Option 1 selection provides that this highest monthly benefit is payable for the lifetime of the retiree only. Upon his death, the benefit would stop and his beneficiary, here his spouse, the Petitioner, would receive only a refund of any contributions the member might have paid into the FRS which exceeds the amount he had received in benefits. Option 1 provides no continuing or survivor benefit to a beneficiary or surviving spouse. The DP-11 Form filed with the retirement application contained an apparent spousal acknowledgement purportedly signed by Deborah T. Bohler, the spouse of member George Bohler. It appears to acknowledge that the member had elected either Option 1 or Option 2, which provide no survivor/spouse benefit. The DP-11 Form indicated to the Division that the member was married. The parties have stipulated, however, that the Petitioner's signature on the FRS application for service retirement and the DROP program was actually forged. George Bohler, the member, was an FRS member from August 19, 1968, to March 31, 2005. He received FRS retirement benefits based upon the above-referenced application from the Division from April 1, 2000, to October 31, 2007. The Form DP-11 contained a statement to the effect that the retiree member understood that he could not add additional service, change options, or change his type of retirement once his retirement became final. Mr. Bohler began participation in the DROP program on April 1, 2000. Thereafter, his last date of employment was March 31, 2005, and he passed away on October 18, 2007. He received FRS benefits from April 1, 2000, until October 31, 2007. For 28 years, until his death on that date, Mr. Bohler was legally married to the Petitioner, Deborah Bohler, during which time they were never separated or divorced. On March 10, 1999, Mr. Bohler executed the FRS Application for Service Retirement and the DROP program. He had his signature notarized as required for that form. Joint Exhibit 1, in evidence. Mr. Bohler designated the Petitioner as his primary beneficiary on the DROP Application. He elected to begin participation in the DROP program as of April 1, 2000, and to retire from state employment effective March 31, 2005, which he did. There are four options which an FRS member may select for his or her retirement benefits to be paid to the member or to the survivors/beneficiaries. Mr. Bohler selected "Option 1" on his DROP Application form. This results in a significantly higher retirement monthly benefit than does Options 3 or 4, which have survivorship rights. The acknowledgement section on the DROP Application form requires that a member's spouse be notified and must acknowledge a member's selection of Option 1 or Option 2 by signing that DROP Application form, so that the FRS is thus informed that the spouse made a knowing, intelligent waiver of survivorship rights to benefits. The spousal acknowledgement provision or section does not require that the member's spouse's signature be notarized. The form also does not require a member to swear under oath that the spouse was notified. The parties have stipulated that the Petitioner's apparent signature shown on Mr. Bohler's retirement application form was forged. The Petitioner had no knowledge that her name had been placed on the form by some other person, nor did she have any knowledge that Mr. Bohler had selected Option 1 prior to his death. The Petitioner first learned that her husband had selected Option 1 when she contacted the Respondent, after his death, to request that his retirement benefits now be paid to her. She believed that she was entitled to survivorship benefits. Her husband never informed her that he had selected a retirement option which would not pay her survivorship benefits, nor had they discussed the matter before or since his retirement. In their marital and family relationship, the Bohlers had divided certain duties in such a way that Mr. Bohler, the FRS member at issue, handled all financial matters himself. The Petitioner, Mrs. Bohler, dealt with any tax issues or filings the couple was required to make during the years of their marriage. The Petitioner is a certified public accountant. The Petitioner was simply aware that her husband received retirement benefits, and knew the amount of them, but did not know that they represented benefits for Option 1 rather than Option 3 or 4. The Petitioner's signature on the spousal acknowledgment section of the DROP Application form is stipulated to have been forged. The fact of the forgery, and the Petitioner's un-refuted testimony, establishes that she was never notified, nor did she ever acknowledge that her husband had selected Option 1. She was not aware that an attempt to waive or extinguish her survivor's benefits had been made. She believed, during his lifetime, that she was to be accorded survivor benefits. Testimony presented by the Respondent shows that the Respondent Division will not accept a retirement application form, or process it, if a member fails to complete the spousal acknowledgement section or, alternatively, to submit a signed statement explaining why that section is left blank, or the signature of the spouse has not been obtained. The fact that the Division will not accept a retirement or DROP Application form or process the related benefits if the acknowledgement section is unsigned or blank establishes the mandatory nature of the requirement that a spouse acknowledge a member's election to receive benefits under an option which would preclude a spouse's survivorship benefits. The acknowledgement is thus not an optional requirement. In fact, the legislature clearly placed that requirement in the statute, Section 121.091(6)(a), Florida Statutes, as a mandatory requirement so a spouse would know of any such attempt to waive the spouse's survivorship rights and benefits. It is an acknowledgement that the spouse has a vested or property right in such benefits, which must be knowingly and intelligently waived. The Statute says, in fact, that the spouse of any member "shall be notified of and shall acknowledge any such election." Therefore, obtaining a spouse's signature is not the only desired result set forth by the legislature (and under the rule adopted pursuant thereto) because it requires actual notification of the spouse, not merely the obtaining of a spouse's signature, whether genuine or forged. Actual notification is what must be accomplished. The required notification and indeed the obtaining of the Petitioner's signature was not accomplished in the facts of this case. In light of these facts, the act of declaring and accomplishing retired status, and selection of the related benefit option, was never completed. The Option selection was obviously a nullity and void ab initio because the mandatory condition precedent never was accomplished by the member.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is RECOMMENDED that a final order be entered by the State of Florida, Department of Management Services, Division of Retirement, awarding the Petitioner retirement benefits based upon her status as a surviving spouse and joint annuitant, in the manner described above, adjusted to reflect re-calculation and recoupment of overpayment based upon the amount of benefits already paid from the subject retirement account pursuant to Option 1. DONE AND ENTERED this 10th day of November, 2009, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 10th day of November, 2009. COPIES FURNISHED: Elizabeth Regina Stevens, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32327 T. A. Delegal, Esquire Delegal Law Offices, P.A. 424 East Monroe Street Jacksonville, Florida 32202 Sarabeth Snuggs, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 John Brenneis, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
