The Issue Whether Petitioner's request for retirement credit should be approved.
Findings Of Fact Petitioner previously worked for the Sheriff's Office for DeSoto County, Florida. It is undisputed that the Sheriff's Office is a qualified Florida Retirement System ("FRS") employer and that Petitioner was, during all times relevant hereto, an FRS eligible employee. In the instant case, it is undisputed that in October 2006, Petitioner sustained a work-related injury while in the course and scope of her employment with the Sheriff's Office. Petitioner, from the time of her injury through approximately September 11, 2007, received temporary total disability workers' compensation benefits for her employment- related injuries. The precise dates when these benefits were received by Petitioner are not at issue in the instant dispute. On September 12, 2007, Petitioner returned to work at the Sheriff's Office with light-duty work limitations. Also on this date, Petitioner resumed receiving payroll wages from the Sheriff's Office. Petitioner continued to receive temporary partial disability wage payments through December 2008 and received workers' compensation medical benefits through October 2010. When Petitioner returned to work on September 12, 2007, she was still receiving medical treatment from the workers' compensation physician and attended regular sessions with the physician throughout the duration of her employment with the Sheriff's Office. The visits to the workers' compensation physician often occurred during times when the Sheriff's Office scheduled Petitioner to work, thus, resulting in her absence from work on these days. The Sheriff's Office terminated Petitioner's employment on December 12, 2007. Between the dates of September 12, 2007, and December 12, 2007, Petitioner was on the Sheriff's Office payroll and received wages as follows: For the period September 23, 2007, through October 6, 2007, she received payroll wages for 14 days; For the period October 7, 2007, through October 20, 2007, she received payroll wages for five days; and For the period October 21, 2007, through December 12, 2007, she received payroll wages for 14 days. No evidence was presented at the hearing explaining Petitioner's work schedule for the period September 13, 2007, through October 5, 2007. Between the dates of September 12, 2007, and December 12, 2007, Petitioner worked and received payroll wages from the Sheriff's Office for a total of 34 days. Although the 34 days that Petitioner worked were dispersed throughout the months of September, October, November, and December, Petitioner, nevertheless, received a paycheck from the Sheriff's Office for wages for each pay period following her return to work. There was no testimony offered at the hearing as to the total number of days that Petitioner was scheduled to work between September 12, 2007, and December 12, 2007. However, Petitioner testified that any scheduled work days that she missed during this period occurred as a result of her having to attend medical appointments with the workers' compensation physician. Respondent offered no evidence to the contrary as to this point. Given the severity of Petitioner's work-related injury, which apparently resulted in her being away from work for nearly a year, coupled with the fact that she continued to receive workers' compensation medical benefits through October 2010 (some four years after the date of her injury), the undersigned accepts as credible Petitioner's testimony that any scheduled work days that she missed between September 12, 2007, and December 12, 2007, resulted from her having to attend medical appointments with the workers' compensation physician. On April 4, 2008, Petitioner submitted correspondence to the Division and stated therein the following: Sir, I am writing this email in regards to my retirement. Under the florida [sic] retirement system, a member is entitled to retirement credit for periods of eligible workman [sic] comp[ensation]. The member must return to FRS covered employment for one month. Creditable workman [sic] comp[ensation] includes all periods that workman [sic] comp[ensation] are made. FRS employers are required by Section 121.125, Florida Statutes, and Section 60S-2012, Florida Administrative Code, to report the period covered by workman [sic] comp[ensation] on the monthly retirement report. D.C.S.O. stated I worked intermittently but where is it written in the Florida State Statutes or Administrative Code, how many days during the month you are allowed to miss and it would not be credible service or considered a break in service. [sic] Sir, I was still active [sic] employed with D.C.S.O. upon returning to work on Sept[ember] 12, 2007. The days I missed was [sic] due to medical appointmentts [sic] for my workman's [sic] comp[ensation] injury I sustained at D.C.S.O. I always provided documentation from the physician. I was not terminated until December 13, 2007 when Capt. McClure of D.C.S.O. called me at 8:21 A.M. [sic] on my scheduled day off. The three months I was allowed to work and the period on workman [sic] comp[ensation] should be credible service towards retirement. Sir, my question is when the other employees at D.C.S.O. take off more than a couple of days, during the month, for various reasons, without medical documentation[,] do[es] it count for credible service towards retirement or is it a break in service. [sic] On April 7, 2008, Doug Cherry, on behalf of the Division, responded to Petitioner's inquiry of April 4, 2008, and stated the following: Ms. Leonard, as I explained in our phone conversation, for periods of workers' compensation (temporary partial or temporary total) to be eligible for retirement credit there must be a return to active employment for one complete calendar month. The attached letter from the Sheriff of DeSoto County shows that from your scheduled date of return in September 2007, your employment was not active for the required month. This letter states you worked intermittently until your termination of employment in December 2007. To satisfy the one calendar month of active work, you needed to be consistently working through October 31, 2007. You indicated in our conversation that the information from the Sheriff was incorrect. If so, you would need to contact that office to resolve any discrepancy. I [have] also attached the appropriate Florida Statute (121.125) and the Florida Administrative Code (60S-2.012) which states [sic] this requirement. The law does not provide for exceptions or a combination of active and non-active employment during the one calendar month. Regarding your question about active members taking off days during the month, the requirements for earning service credit are different than the eligibility requirement for periods of workers' [sic] compensation. In your own account, you did earn credit for the months of September, October, November and December 2007 for the time you did work and earn salary. However, as stated above, for the period of workers' compensation to be creditable for retirement, the requirement is active employment for the full calendar month, not to earn service credit after such period. You also indicated that you were going to provide your attorney with this information. If your attorney would like to give me a call (850-488-9623), I will be glad to discuss this issue with him or her. I hope this information will help clarify this issue for you. On January 7, 2011, Respondent wrote Petitioner and informed her of the following: Dear Ms. Leonard: This will respond to your request for retirement credit for the period of time you received Workers' Compensation (WC), that was submitted to the State Board of Administration (SBA). Because this is an issue of creditable service, the SBA forwarded the request to the Division of Retirement since the Division is the proper agency to address such an issue. Information you and your agency provided indicates that you were out on WC October 2006 through September 2007 at which time your employer, the DeSoto County Sheriff's Office, sent you a letter dated September 6, 2007 requiring you to return to work within two weeks or be terminated from employment. The Division has not received any documentation from the Workers' Compensation carrier to substantiate the actual periods of WC or the date maximum medical improvement was reached. Therefore, this letter cannot address periods of possible eligibility for retirement credit but will address whether your employment from September 2007 met the return to work requirement for such eligibility. The Sherriff's [sic] office provided us with documentation of your time worked in September, October, November, and December 2007. During these months, you worked intermittently and did not have a full calendar month of active employment before your employment was terminated by your employer on December 12, 2007. * * * You did not consistently work during any of those calendar months until your employment was terminated by your employer on December 12, 2007. Therefore, starting in September 2007, you did not meet the return to actively performing service requirement of the above provision to establish eligibility for possible retirement credit. Petitioner's failure to return to active employment status was the only reason given by the agency when denying Petitioner's claim. Andy Snuggs has worked as a benefits administrator for the Division for approximately the last 20 years. The Division offered, and the undersigned accepted, Mr. Snuggs as an expert in matters related to the Act. Mr. Snuggs testified that in the exercise of the agency's discretion, the agency defines the phrase "active employment," as it relates to section 121.125, to mean that an employee must work each scheduled work day in a regularly established position for at least one calendar month following the employee's return to work and that no allowances are made for any absences, excused or otherwise. Mr. Snuggs did not offer any testimony explaining why the Division selected the particular definition that it did for the term "active."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that Respondent, Department of Management Services, Division of Retirement, enter a final order determining that Petitioner, Irene Leonard, met the return-to-work requirements necessary to receive retirement credit for workers' compensation payment periods. DONE AND ENTERED this 8th day of September, 2011, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN 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 8th day of September, 2011.
The Issue The issue is whether the retirement date for Petitioner's late husband should be back-dated from August 1, 2004, to September 6, 1999.
Findings Of Fact Petitioner's late husband, Edward Imbertson, was employed as a HVAC technician by the School District. As such, he participated in the Florida Retirement System (FRS). Respondent, the Division, is responsible for administering the FRS program for approximately 900 employers and 600,000 members. Mr. Imbertson suffered a heart attack on September 6, 1999. An order, entered by a judge of compensation claims on October 3, 2002, determined that he was entitled to workers' compensation because his condition was work-related, and that he had become totally and permanently disabled on the day of his heart attack. Mr. Imbertson's medical condition continued to deteriorate. He had a heart transplant in 2002, suffered renal failure, and became diabetic and legally blind. Mrs. Imbertson stopped working to care for her husband full time. They spent substantial time away from their home in Jupiter seeking medical care for her husband that included over 75 invasive procedures, many at Jackson Memorial Hospital in Miami. At the same time, Mrs. Imbertson was trying to get benefits for her husband, but primarily she focused on his deteriorating health. Following numerous requests for information and forms from multiple sources, Mrs. Imbertson filed an application dated July 1, 2004, for her husband to receive in-the-line-of-duty disability benefits. On the application form, she reported that the last day he actually worked was 9/3/99, his last day in pay status was 3/21/00, but she left his termination date blank. When she listed the last pay status date as March 21, 2000, Mrs. Imbertson was using the date that her husband received a check for unused leave. She believed, apparently correctly based on subsequent notice from the District, that he was still employed and that his pay status changed because he began receiving workers' compensation benefits. In a letter dated July 14, 2004, the Division requested additional information in support of the application. The information requested included an explanation of the delay in applying for disability retirement, physicians' reports attesting to total and permanent disability, proof of total and permanent disability when employment terminated or of a Social Security Disability Award notice, and workers' compensation documentation that the injury is compensable and benefits have been approved. Mrs. Imbertson provided some of the additional information. On August 6, 2004, the Division again sent a letter asking for more information, noting that it needed reports from two physicians, and proof of total and permanent disability on the termination date. Mrs. Imbertson sent the second doctor's report on August 7, 2004. Both the July 14, 2004, and August 6, 2004, letters included the following language: If you are no longer employed and your disability application was not received within thirty days of your termination date, provided you are not due to receive any salary payments or credible service after your application has been received, your effective retirement date will be the first day of the month following the date we received your application. When Mrs. Imbertson responded to those letters, she was focused on providing the additional personal and medical information for her husband, not on challenging the effective retirement date. By certified mail from the Division dated September 17, 2004, Mr. Imbertson was notified that he was approved to receive regular disability retirement benefits, but that his application for in-line-of-duty disability benefits was denied. Mr. Imbertson died on January 10, 2006. After an appeal to the State Retirement Commission, on June 6, 2006, Mr. Imbertson was found eligible for in-line-of-duty-retirement benefits from the retroactive effective retirement date of August 1, 2004. Mrs. Imbertson requested that the Division determine that her late husband's effective retirement date was September 6, 1999. On January 6, 2009, the Division denied the request, relying on Florida Administrative Code Rule 60S-4.0035, that sets the date as the first day of the month following the month in which the application was received. At the hearing, the Division also relied on essentially the same language that was included in the July 14, 2004, and August 6, 2004, letters sent to Mr. Imbertson. It also relied on a letter dated November 10, 2004, in which the District notified the Division that Mr. Imbertson's employment was terminated on September 7, 2000. Mr. Imbertson was not copied on the letter and Mrs. Imbertson did not know the official date of termination, as indicated by her having left the date blank on the application for disability retirement. Based on the lack of notice from the District of her husband's termination date, his inability to handle his personal matters, and her difficulty in getting benefits while taking care of him, Mrs. Imbertson believes she is entitled to have her husband's effective retirement date back-dated.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services enter a final order affirming the establishment of August 1, 2004, as the effective retirement date for Edward Imbertson. DONE AND ENTERED this 29th day of December, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 29th day of December, 2009. COPIES FURNISHED: Alan M. Aronson, Esquire Rosenthal & Levy, P.A. 1645 Palm Beach Lakes Boulevard, Suite 350 West Palm Beach, Florida 33401 Larry D. Scott, Esquire Department of Management Services Division of Retirement 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 John Brenneis, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Sarabeth Snuggs, Director Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
Findings Of Fact Petitioner, Timothy Green (Green), was born on April 19, 1941. Green was employed by Manatee County as a Highway Maintenance Technician on March 26, 1966. As a Highway Maintenance Technician, Green cleared ditches, brush and culverts. He also installed storm drainage pipe and operated chain saws and related tools. On September 24, 1984, Green was terminated from his job because of his inability to perform his assigned duties. Green referred to his termination as a "retirement." Having been promoted to Highway Maintenance Technician II, Green was earning $1,016.01 per month gross pay at the time he was terminated. He had accumulated 18.40 years of creditable service under the Florida Retirement System (FRS). Green is unable to read and has had no formal schooling other than the attendance of what he describes as "opportunity classes all his life." Green has not been found by any court to be incompetent to handle his personal affairs and generally paid his personal bills through money orders he purchased at convenience stores. However, Green's mental capabilities and ability to communicate are obviously quite limited, and his more complicated personal affairs were handled by his mother and sister. On September 28, 1984, Green sought out and met with Mr. A1 Chandler, Records Manager for Manatee County, at Chandler's office. Green thought that Manatee County already had "retired" him because of his disability and just wanted to get his retirement benefits. He did not understand the various optional benefits available to him as a member of the FRS. Green was able to communicate to Chandler only that he wanted to get all his money from retirement, or words to that effect. Chandler interpreted those words to mean that Green wanted to withdraw his contributions to the system. Based on his general familiarity with the FRS, Chandler discouraged Green from doing what he believed Green wanted to do (i.e.. withdraw his contributions from the system). Chandler believed intuitively that Green should not withdraw his contributions because he had accumulated 18.40 years of creditable service under the FRS. Chandler understood that Green's years of creditable service would entitle him to favorable benefits upon normal retirement at age 62. He therefore advised Green to wait and not to withdraw the contributions. Green, who never clearly understood the difference between getting his money (or benefits) out of the retirement system and withdrawing his contributions to the retirement system, decided that he did not want to wait as Chandler advised. Accordingly, Chandler gave Green a form to request a refund of his contributions to the FRS, and Green signed the form. The Request For Refund Form FRS-M81 Green signed contains the following information above his signature: TO THE DIVISION OF RETIREMENT: I hereby make application for refund of my accumulated contributions in the Florida Retirement Systems. I do hereby waive for myself, my heirs and assignees all rights, title and interest in the Florida Retirement Systems. However, Green could not read the refund language. He did not think there was any reason to ask Chandler to read it to him, and Chandler did not read it or explain it to him. Neither Chandler nor anyone else fully explained to Green what optional benefits he might be entitled to as a member of the Florida Retirement System other than to wait until normal retirement or withdraw his contributions. Specifically, neither Chandler nor anyone else explained to Green that his request for refund of his accumulated contributions would eliminate his right to apply for disability retirement benefits. In fact, on that same day, September 28, 1984, Green began completing an application for disability retirement benefits. On October 2, 1984, Green's Statement Of Disability By Employer was received by Manatee County's Personnel Office. The form was completed by Green's former immediate supervisors. On October 3, 1984, Green's Request For A Refund Form FRS-M81 was mailed to Respondent, Department of Administration, Division of Retirement (Division) by Manatee County. Sometime between October 18, 1984 and November 20, 1984, Green's completed Florida Retirement System Application For Disability Retirement, with his Statement Disability By Employer, was sent to and received by the Division. On October 29, 1984 the Division sent Green the refund of his accumulated contributions totaling $1,686.52. Until Green received the refund, he expected to receive monthly checks. When he received the refund, Green realized for the first time that he would not be receiving monthly checks and that his lump sum check would be in the amount of only $1,686.52. Green never had any actual intent to relinquish his right to apply for disability retirement benefits from the FRS.
Recommendation Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that Respondent Department of Administration, Division of Retirement: (1) enter a final order granting the Petition For Formal Proceedings in this case and determining that Petitioner, Timothy Green, has not waived his right to apply for disability retirement benefits: and (2) process the application of Petitioner, Timothy Green, for disability retirement benefits. RECOMMENDED this 4th day of October, 1985, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Office Division of Administrative Hearings 309 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 1985.
The Issue The primary issue in this case is whether Petitioner is entitled to receive an early retirement benefit pursuant to Sections 121.091(3)(b) and 121.091(7)(b), Florida Statutes, based on an effective retirement date of February 1, 1996.
Findings Of Fact Historical Facts When he passed away on January 26, 1996, at the age of 56, Roy Hoffman, Jr., was a fully vested participant in the Florida Retirement System ("FRS"), having worked as a professor at Florida Atlantic University for nearly 27 years. Professor Hoffman's named beneficiary and joint annuitant was his wife, Petitioner Jeanne Hoffman ("Hoffman"). As such, Hoffman became entitled, upon her husband's death, to receive a lifetime retirement benefit from the FRS. By letter dated March 8, 1996, Respondent Department of Management Services, Division of Retirement ("Division"), which administers the FRS, first notified Hoffman of her eligibility to receive a benefit. The letter provided in pertinent part as follows: As the designated beneficiary and joint annuitant, you are entitled to the Option 3 monthly retirement benefit. The Option 3 monthly benefit is payable for your lifetime and is estimated to be $1,812.58 effective February 1, 1996. To receive this benefit, you need to [submit an application and provide certain information.] If we may be of further assistance, please call us at (904)488-5207. After receiving this letter, Hoffman was uncertain about whether she should accept the benefit immediately or, alternatively, postpone the benefit commencement date until nearer her own retirement, so she called the Division for assistance. Following a telephone conversation with an FRS counselor, Hoffman was left with the impression that she would be better off waiting until she reached the age of 59.5 years to begin receiving the monthly benefit, for the benefit, she believed, would then be higher.1 The Division sent a second letter to Hoffman, which was dated April 26, 1996, and provided: Please refer to our letter dated March 8, 1996. Before we can finalize [your] account, we need [to receive] the following [items and information from you.] Hoffman did not respond to this letter. Four months later, the Division sent a third letter to Hoffman regarding her benefit eligibility. Dated August 28, 1996, this letter provided in relevant part as follows: We have not received a response from our letters dated March 8, 1996 and April 26, 1996. If we have not heard from you within thirty days of the date of this letter, the file will be placed on inactive status. It will then be your responsibility to contact us to apply for a monthly benefit. The benefit will be effective the first of the month following contact from you. By this "warning letter," the Division intended to communicate its decision that, unless Hoffman submitted an application for benefits on or before September 27, 1996, she would forfeit the right to receive an "early retirement-death benefit"2 based on an effective date of retirement ("EDR") closely tied to her husband's date of death and be deemed to have elected a "deferred monthly benefit"3 based on a post-mortem EDR tied to the Division's receipt of her application for benefits. (EDR is a critical date because that is when the benefit accrues. See § 121.021(41), Fla. Stat.4) The parties dispute whether, in fact, the warning letter reasonably notified Hoffman of the Division's decision; the issue will be taken up below. Hoffman did not take the warning letter to mean what the Division had intended to convey. Thus she had no idea that she was in jeopardy of forfeiting the right to an early retirement-death benefit. Further, she did not deliberately elect to forego receipt of an early retirement-death benefit in favor of a deferred monthly benefit. Rather, being unfamiliar with the details regarding benefits payable under the FRS, Hoffman believed that, without any present action on her part, the benefit to which she was entitled had begun upon her husband's death to accrue for her use and benefit and would continue to accumulate until she was ready to begin receiving the benefit in monthly installments. Consequently, Hoffman made no reply to the warning letter, and at some point after September 27, 1996, the Division placed her file on inactive status. For the next eight-and-a-half years, nothing relevant to this case occurred. Then, in January 2005, Hoffman met with a financial planner for advice concerning her retirement. She was 57 at the time and told the planner about the benefit she expected to receive in a couple of years as her late husband's joint annuitant. The financial planner recommended that she contact the Division straightaway. On January 31, 2005, Hoffman called the Division and was informed that, having failed to apply for an early retirement-death benefit by September 27, 1996, in accordance with the warning letter dated August 28, 1996, she had forfeited nine years' worth of retirement income, and that her only remaining option was to request a deferred monthly benefit based on an EDR of February 1, 2005, at the earliest. The Division followed this telephone conversation with a letter dated February 16, 2005, which made clear that the only benefit for which Hoffman could apply would commence no earlier than February 1, 2005. Being given no choice, Hoffman applied as instructed, with the result that the FRS began paying Hoffman approximately $2,011 per month, which it was continuing to do as of the final hearing. Thereafter, by letter dated March 1, 2005, Hoffman petitioned the Division to pay her a retirement benefit "retroactive" to February 1, 1996, the date which, had she applied for an early retirement-death benefit on or before September 27, 1996, would have been her husband's EDR, without controversy.5 The Division denied Hoffman's request, by letter dated March 15, 2005. Relying on Section 121.091, Florida Statutes, and Florida Administrative Code Rule 60S-4.0035, which will be examined below, the Division determined that it could not "pay benefits retroactive to 1996 because [Hoffman had] not compl[ied] with the Rule requiring that the application be filed timely." Hoffman requested a hearing on this determination, giving rise to DOAH Case No. 05-3200. Hoffman also petitioned the Division, pursuant to Section 120.542, Florida Statutes, to waive——or grant her a variance from——the provisions of Florida Administrative Code Rule 60S-4.0035(3)(c) upon which the Division intended to rely in rejecting her claim for an early retirement-death benefit. The Division denied Hoffman's petition for waiver or variance in an order dated August 15, 2005. Thereafter, Hoffman timely requested a hearing on the matter, which led to the commencement of DOAH Case No. 05-3679. Factual Analysis The parties sharply disagree about whether the Division reasonably notified Hoffman of the important decision (see paragraph 6, supra) that it made in late August 1996 respecting her eligibility to receive a benefit, which decision the Division intended to communicate to Hoffman via the warning letter. To recapitulate, the warning letter told Hoffman that if she failed to contact the Division by September 27, 1996, then (1) her file would become "inactive"; (2) it would be her responsibility to initiate further contact with the Division; and (3) her "benefit" would be "effective" starting the month after she contacted the Division. Yet, in fact, the Division had decided that if Hoffman did not contact the Division by September 27, 1996, then (1) she would forfeit the right to receive an early retirement-death benefit based on an EDR closely proximate to her husband's date of death; (2) the Division would treat her inaction as an affirmative election to receive a deferred monthly benefit; and (3) her benefit would be based on an EDR related to the Division's receipt of her application for benefits. It is striking, in reading the warning letter from the standpoint of a reasonable recipient, that no mention was made therein of the different types of benefits available to a surviving spouse, no explanation regarding the distinction between an early retirement-death benefit and a deferred monthly benefit was given, and no information concerning a beneficiary's right to elect the latter as an alternative to the former——much less why one might do so——was imparted. (The same can also be said of the two letters that preceded the warning letter.) It is striking, too, that neither the warning letter nor the two earlier ones mentioned EDR or its significance. Instead, the warning letter spoke of an effective date of "benefit," which, at least without more information than was contained in the letter, could be understood to refer to the date on which the benefit payments would commence as opposed to when benefits would start to accrue. The undersigned finds, therefore, that, as a matter of fact, the warning letter itself did not reasonably communicate that Hoffman was at risk of forfeiting the early retirement- death benefit and being deemed to have elected a deferred monthly benefit based on a future EDR to be determined. Put another way, although the warning letter clearly established a deadline (September 27, 1996) for making contact with the Division, its description of the consequences of letting the deadline pass without contacting the Division did not fairly match the consequences the Division actually had decided would follow such inaction. Of course, as the Division points out, the warning letter was not the only source of information about retirement benefits available to Hoffman. There were, in addition, the governing statutes and rules. Hoffman did not actually avail herself of these references, but, as the Division argues, she is presumed to know the contents of the applicable laws.6 Perhaps, armed with such knowledge, she would have——and hence should have——understood what the Division was trying to tell her in the warning letter. If Hoffman had consulted the relevant statutes, she would have learned that she was entitled to receive an early retirement benefit pursuant to Section 121.091(3), Florida Statutes, which provides as follows: EARLY RETIREMENT BENEFIT.--Upon retirement on his or her early retirement date, the member shall receive an immediate monthly benefit that shall begin to accrue on the first day of the month of the retirement date and be payable on the last day of that month and each month thereafter during his or her lifetime. Such benefit shall be calculated as follows: * * * (b) If the employment of a member is terminated by reason of death subsequent to the completion of 20 years of creditable service, the monthly benefit payable to the member's beneficiary shall be calculated in accordance with subsection (1), but shall be based on average monthly compensation and creditable service as of the date of death. The benefit so computed shall be reduced by five-twelfths of 1 percent for each complete month by which death precedes the normal retirement date specified above or the date on which the member would have attained 30 years of creditable service had he or she survived and continued his or her employment, whichever provides a higher benefit. There is no dispute that Hoffman was entitled to an early retirement benefit under Section 121.091(3)(b) when her husband's employment was terminated by reason of death after completing nearly 27 years of creditable service. The parties agree as well that, by the clear and unambiguous terms of the statute, the benefit would have been reduced by five percent per year for each of the approximately three years by which Professor Hoffman's death preceded the date on which he would have attained 30 years of creditable service. See also Fla. Admin. Code R. 60S-4.005(2)(c)(describing benefits payable upon early retirement brought about by death). If Hoffman had read Section 121.091(7)(b), Florida Statutes, she would have learned the following: If the employment of an active member who may or may not have applied for retirement is terminated by reason of his or her death subsequent to becoming vested and prior to his or her effective date of retirement, if established, it shall be assumed that the member retired as of the date of death in accordance with subsection (1) if eligible for normal retirement benefits, subsection (2) if eligible for benefits payable for dual normal retirement, or subsection (3) if eligible for early retirement benefits. Benefits payable to the designated beneficiary shall be as follows: 1. For a beneficiary who qualifies as a joint annuitant, the optional form of payment provided in accordance with [option 3] shall be paid for the joint annuitant's lifetime. Clearly, under the plain language of Section 121.091(7)(b), Hoffman was entitled to receive death benefits in the form of an early retirement benefit, for which latter her husband was eligible at the time of his death. As just mentioned, however, Professor Hoffman satisfied the conditions set forth in Section 121.091(3)(b) for an early retirement benefit, payable to his beneficiary, without reference to Section 121.091(7)(b). Moreover, because Professor Hoffman was, at the time of his death, closer to attaining 30 years' service than reaching age 62, Hoffman's early retirement benefit would be highest if calculated under Section 121.091(3)(b). Nevertheless, as Section 121.091(7)(b) is not inconsistent with Section 121.091(3)(b), there is no reason to treat them as mutually exclusive. Thus, bowing to the interrelatedness of these statutes——Section 121.091(3)(b)(early retirement benefits upon termination of employment by death) and Section 121.091(7)(b)(death benefits)——the undersigned has chosen to use the term "early retirement-death benefit" to refer to that benefit, available thereunder, which is based on an EDR in close proximity to the member's death. As an alternative to the early retirement-death benefit, Section 121.091(7) makes available to beneficiaries such as Hoffman another option, namely the "deferred monthly benefit." Had Hoffman studied the statute, she would have discovered that [t]he designated beneficiary who is the surviving spouse or other dependent of a member whose employment is terminated by death subsequent to becoming vested, but prior to actual retirement, may elect to receive a deferred monthly benefit as if the member had lived and had elected a deferred monthly benefit, as provided in paragraph (5)(b), calculated on the basis of the average final compensation and creditable service of the member at his or her death and the age the member would have attained on the commencement date of the deferred benefit elected by the beneficiary, paid in accordance with option 3 of paragraph (6)(a). § 121.091(7)(h); see also Fla. Admin. Code. R. 60S-4.008(2)(b). The deferred monthly benefit allows a surviving spouse to postpone the deceased member's EDR, thereby reducing or eliminating the early retirement penalty of five percent per annum for each year the EDR precedes the member's normal retirement date.7 Postponing the EDR would make sense, most obviously, when, because of the number of years between the member's date of death and his or her normal retirement date, the survivor's early retirement-death benefit would be substantially consumed by the penalty. Because Professor Hoffman met the criteria for an early retirement benefit under Section 121.091(3)(b), however, his wife's benefit was subject to a relatively light penalty. Thus, it is unlikely that Hoffman intentionally would have made an election under Section 121.091(7)(h) for a deferred monthly benefit, had she been aware of the statute. The Division has promulgated a rule that specifies how the EDR will be determined in certain circumstances. Rule 60S- 4.0035(3)(c) was available to inform Hoffman as follows: For a member who dies prior to an effective retirement date established pursuant to paragraph (a) or (b), the effective retirement date shall be the first day of the month following the month in which the member died, provided the joint annuitant makes timely application for benefits; or, for a deferred monthly benefit, the first day of the month following the month in which the Division receives the joint annuitant's application for benefits, or the first day of a later month specified by the joint annuitant. Significantly, the Division has not established by rule a method of determining whether an application is "timely" for purposes of Rule 60S-4.0035(3)(c). Rather, it determines timeliness on a case-by-case basis. Had Hoffman been aware of Rule 60S-4.0035(3)(c), she might have surmised, upon reading the warning letter, that the Division had decided that her application for benefits would be "timely," for purposes of the Rule, only if received on or before September 27, 1996. She might also have reasoned that if her application were untimely, then the applicable EDR might not be February 1, 1996 (i.e. the first day of the month following the month in which her husband had died). At that point, she might have concluded that unless her application were received by September 27, 1996, she would forfeit the early retirement- death benefit, as the Division would deem her delay an election to receive a deferred monthly benefit. Maybe Hoffman would have connected all these dots. The undersigned finds, however, as a matter of fact, that a reasonable person could not have figured out what the Division had decided and what it intended to do, even if armed with the statutes and rules, because ascertaining the true nature of the Division's determination entails more analytical, indeed legal, reasoning than an ordinary layperson should be expected to employ. In fact, it is determined, the warning letter was inadequate to put even a well-informed person, cognizant of the applicable laws, on notice of the Division's decision regarding Hoffman's potential forfeiture of the early-retirement death benefit and "deemed election" of the deferred monthly benefit. While the warning letter was deficient in that it failed reasonably to tell Hoffman what the Division actually had determined with regard to her substantial interests, it was defective in yet another consequential way: the warning letter failed to notify Hoffman of her right to request a hearing to determine the substantial interests affected by the Division's establishment of an application deadline and the consequences of noncompliance therewith. The warning letter, in other words, did not afford Hoffman a clear point of entry into an adversarial proceeding, where the Division would be required to substantiate its determination with competent substantial evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division enter a final order determining that Hoffman shall receive an early retirement-death benefit based on an EDR of February 1, 1996, and establishing the form in which Hoffman shall be paid the benefits that have accrued, but not been paid, from the EDR to the present, as well as the benefit going forward.10 In the event that one or more factual disputes arise over the amount of the unpaid accrued benefits or the method of paying them, the amount or form of the benefit going forward, or some combination of these, then Hoffman should be afforded the right to request a hearing to determine the disputed issue(s).11 DONE AND ENTERED this 17th day of January, 2006, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of January, 2006.
The Issue The issue is whether the correct retirement date was established for Petitioner.
Findings Of Fact Ms. Scurlock was employed as a secretary by the Public Defender of the 14th Judicial Circuit for 12 to 13 years, in Panama City, Florida. As such, and after becoming vested in the Florida Retirement System (FRS), she accrued certain rights under the FRS. The Division has over 900 employees and administers benefits for more than 700,000 members. The Division is charged with administering the FRS. Ms. Scurlock's performance while employed by the Public Defender deteriorated in 2004. As a result, she was discharged on October 27, 2004. She had been diagnosed as having multiple sclerosis prior to her discharge. She is currently medically unable to engage in gainful employment. Ms. Scurlock does not recall if the Public Defender provided her with information concerning retirement at the time of her discharge. Nevertheless, she was aware of the availability of disability retirement, and during February 2005 she completed Form FR-13, Application for Disability Retirement. She stated in the application that her disability was the result of multiple sclerosis, among other maladies. Ms. Scurlock was assisted in seeking disability retirement by her sister. Ms. Scurlock signed the FR-13 application, and it was sworn before a notary public on February 18, 2005. Ms. Scurlock believes her sister mailed the form. The FR-13 may have been addressed to the Florida Department of Health, but in any event, it was not received by the Division in 2005. Assisted by her sister, Ms. Scurlock telephonically contacted the Division on April 11, 2006, to inquire about her application for disability retirement. At that time, she avowed that the FR-13 had been sent in January 2005 to the Department of Health. Upon being advised that she needed to submit a new form in order to obtain benefits, she did so. An FR-13 was received by the Division on May 24, 2006. Attached to the application was a copy of the application sworn before the notary public on February 18, 2005. The Division found the FR-13 submitted on May 24, 2006, to be complete and sufficient to establish that Ms. Scurlock should be paid disability retirement benefits beginning June 1, 2006. Although Ms. Scurlock may have suffered some cognitive impairment as a result of being afflicted with multiple sclerosis, she was aided by her sister, who apparently has no cognitive impairment, when she first attempted to file in early 2005. Moreover, Ms. Scurlock adequately presented her case at the hearing, and to the extent that cognitive impairment might influence the outcome of this case, it is found that she is not so impaired that she could not timely file an application for disability retirement. For the reasons set forth below, whether she was physically or mentally able to file a FR-13, or whether the state or one of its agents failed to inform her of her rights, has no bearing on the outcome of this case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services enter a final order affirming the establishment of June 1, 2006, as the beginning date of entitlement to disability retirement pay in the case of Marilyn Scurlock. DONE AND ENTERED this 18th day of December, 2007, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER 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 COPIES FURNISHED: Marilyn Scurlock 3936 Scurlock Lane Panama City, Florida 32409 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 2007. Larry D. Scott, 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 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue Whether Petitioner, Rina Richard DeMichael (“Petitioner”), the surviving spouse of David DeMichael, is entitled to change the Florida Retirement System (“FRS”) retirement benefits payment Option 1 selected by Mr. DeMichael.
Findings Of Fact Respondent is the state agency charged under chapter 121, Florida Statutes, with administering the FRS. In 1991, Mr. DeMichael began employment with the Broward County Sheriff’s Office (“BCSO”). Mr. DeMichael was a member of the FRS pension plan based on his employment with the BCSO as a deputy sheriff. Mr. DeMichael married Petitioner on November 19, 2011. On February 11, 2013, Mr. DeMichael retired from the BCSO. At that time, he signed the Florida Retirement System Pension Plan Application for Service Retirement form (“Application for Service Retirement Form”) designating Petitioner as his primary beneficiary. On February 11, 2013, Mr. DeMichael also signed the Florida Retirement System Pension Plan Option Selection for FRS Members form (Form FRS-110)(“Option Selection Form”). On the Option Selection Form, Mr. DeMichael was required to select one of four retirement benefit payment options. The Option Selection Form provided an explanation for each of the four options. Mr. DeMichael selected to receive an Option 1 retirement benefit by checking the line next to the Option 1 benefit payment option. Option 1 provides the maximum benefit for the life of the FRS member with no continuing benefit after the member’s death. On February 11, 2013, Petitioner signed the Spousal Acknowledgement Form (Form SA-1)(“Spousal Acknowledgement Form”) acknowledging that Mr. DeMichael “selected either Option 1 or 2.” The purpose of the Spousal Acknowledgement Form is to inform the spouse that he/she will not receive a lifetime benefit following the FRS member’s death. The Spousal Acknowledgement Form does not give a spouse control over which option the FRS member selects. That option selection decision is the sole choice of the member. The Spousal Acknowledgement Form provided an explanation of the four different retirement payment options available to FRS members. At the hearing, Petitioner acknowledged she signed the Spousal Acknowledgement Form. Ms. Tiffany Pieters was a duly licensed notary with the State of Florida and an employee of BCSO on February 11, 2013. Ms. Pieters notarized the Application for Service Retirement Form and Option Selection Form signed by Mr. DeMichael, and the Spousal Acknowledgement Form signed by Petitioner. The Division received Mr. DeMichael’s Application for Service Retirement Form, Option Selection Form, and Petitioner’s Spousal Acknowledgement Form on or about February 11, 2013. On February 20, 2013, Respondent mailed Mr. DeMichael an Acknowledgement of Service Retirement Application letter acknowledging Respondent’s receipt of Mr. DeMichael’s Application for Service Retirement Form; his selection of Option 1 as the benefit payment option; his employment termination date of February 11, 2013; and retirement date of March 1, 2013. The Acknowledgement of Service Retirement Application letter expressly provides that Mr. DeMichael cannot change the option he selected once his retirement becomes final, and that retirement benefits become final when any payment is cashed or deposited. Mr. DeMichael’s Application for Service Retirement Form and Option Selection Form also expressly provide that he cannot change the option he selected once his retirement becomes final, and that retirement benefits become final when any benefit payment is cashed or deposited. On February 20, 2013, Respondent also mailed Mr. DeMichael an Estimate of Retirement Benefit letter, which provides an estimate of the payment benefit for each of the four options. The letter also acknowledges that Mr. DeMichael selected Option 1, and that his option selection cannot be changed after any payment is cashed or deposited. On April 1, 2013, Respondent mailed a request for birth date verification to Mr. DeMichael. In response, on April 30, 2013, Respondent received Mr. DeMichael’s birth certificate. Based on his selection of Option 1, Mr. DeMichael received an initial retroactive payment of $7,809.76 on May 10, 2013; an initial regular retirement payment of $3,904.88 on May 31, 2013; and a subsequent retirement payment every month in 2013 in the monthly amount of $3,904.88. Mr. DeMichael received a retirement payment every month beginning May 2013 until he died on August 25, 2015. Mr. DeMichael received a total of 29 retirement payments for a total gross benefit amount of $119,832.92. Each retirement payment was cashed or deposited into Mr. DeMichael’s bank account. Respondent was notified of Mr. DeMichael’s death in August 2015. On or about October 6, 2015, Respondent notified Petitioner that Mr. DeMichael’s benefit had ended and that there would be no continuing benefit to her based on Mr. DeMichael’s Option 1 selection. In this proceeding, Petitioner claims she is entitled to change Mr. DeMichael’s Option 1 retirement benefit selection and receive a continuing monthly spousal benefit. In support of her position, Petitioner contends Mr. DeMichael’s selection of Option 1 is invalid because he lacked the mental capacity to make a retirement option at the time his Application for Service Retirement Form and Option Selection Form was submitted to Respondent. Based on the persuasive and credible evidence adduced at hearing, Petitioner failed to establish that Mr. DeMichael lacked the mental capacity to make a retirement option at the time his Application for Service Retirement Form and Option Selection Form were submitted to Respondent. No medical evidence was presented establishing that Mr. DeMichael was mentally incapacitated at the time he executed the Application for Service Retirement Form and Option Selection Form on February 11, 2013. In fact, Mr. DeMichael was released from Sunrise Detoxification Center on February 11, 2013, following in-patient rehabilitative treatment for his alcoholism. Petitioner’s Exhibit 7 expressly states that Mr. DeMichael “was medically stable for discharge” at 8:00 a.m. that morning. Moreover, Petitioner and Mr. DeMichael ate breakfast together later that morning at the BCSO cafeteria. Subsequently, Petitioner was escorted to the BCSO Internal Affairs area where she was questioned about Mr. DeMichael’s alcoholism. After Petitioner refused to answer any questions, she was escorted to the BCSO rooftop terrace. After a while, Mr. DeMichael came to the rooftop terrace. According to Petitioner, Mr. DeMichael was smiling and they exchanged pleasantries. After February 11, 2013, Mr. DeMichael continued to manage his own financial affairs, including his bank account. On April 1, 2013, Respondent sent a request to Mr. DeMichael to provide verification regarding his date of birth. In response, Mr. DeMichael sent his birth certificate to Respondent. Finally, at no time did Petitioner ever seek a guardianship or power of attorney over Mr. DeMichael, and at no time was Mr. DeMichael adjudicated incompetent by a court. Petitioner also claims that Mr. DeMichael’s selection of Option 1 is invalid and that she is entitled to a continuing benefit because she lacked the opportunity to read the Spousal Acknowledgement Form before signing it. Based on the persuasive and credible evidence adduced at hearing, Petitioner failed to establish that she lacked the opportunity to read the Spousal Acknowledgement Form before signing it. In support of her position, Petitioner testified at one point in the hearing that she only saw the area of the form near where she signed it. However, in the area of the form near where Petitioner signed (Respondent’s Exhibit No. 6) is the express “acknowledgement that the member has selected either Option 1 or 2.” At another point in the hearing, Petitioner testified she saw the small writing below her signature at the bottom of the Spousal Acknowledgement Form, but she did not read any of the writing. The small writing below Petitioner’s signature at the bottom of the form provides an explanation of the four retirement benefit payment options. Notably, Petitioner did not testify that she asked Ms. Pieters for any explanation of the Spousal Acknowledgement Form. Further, Petitioner did not testify that she needed or asked for more time to read the Spousal Acknowledgement Form before signing it, or that Ms. Pieters refused to allow her to read the form. Petitioner could have asked Ms. Pieters for more time to read the Spousal Acknowledgement Form if she felt it was necessary, but she did not. At no time did Petitioner ever file a complaint against Ms. Pieters or complain about her handling of the Spousal Acknowledgement Form. Had Petitioner been concerned about the Spousal Acknowledgement form or Mr. DeMichael’s mental capacity on February 11, 2013, she also could have spoken to Judy Cowell, Mr. DeMichael’s supervisor at BCSO. Ms. Cowell greeted Petitioner and Mr. DeMichael at the front office when they arrived at BCSO on the morning of February 11, 2013, and Ms. Cowell escorted them to the cafeteria and rooftop terrace. At hearing, Petitioner testified that Ms. Cowell “was like a mom,” and that she had spoken to her on numerous occasions when Mr. DeMichael had problems with his employment. At hearing, the undersigned had the distinct opportunity to observe Petitioner’s testimony and her demeanor. Petitioner’s testimony regarding Mr. DeMichael’s alleged mental incapacity on February 11, 2013, and her not having the opportunity to read the Spousal Acknowledgement Form and the alleged invalidity of the Spousal Acknowledgement Form, Option Selection Form, and Application for Service Retirement Form, is not credited and is rejected as unpersuasive. In sum, Petitioner is not entitled to change Mr. DeMichael’s selection of Option 1 as his FRS retirement benefits payment option and she is not entitled to a continuing benefit.
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 change the Florida Retirement System retirement benefits payment Option 1 selected by Mr. DeMichael and receive a continuing monthly spousal benefit. DONE AND ENTERED this 14th day of April, 2020, in Tallahassee, Leon County, Florida. S DARREN A. SCHWARTZ Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 2020. COPIES FURNISHED: James C. Casey, Esquire Law Offices of Slesnick and Casey, LLP 2701 Ponce de Leon Boulevard, Suite 200 Coral Gables, Florida 33134 (eServed) Ladasiah Jackson Ford, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 (eServed) Nikita S. Parker, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 (eServed) David DiSalvo, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 (eServed) Sean Gellis, General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 (eServed)
The Issue The issue in this case is whether Petitioner’s husband’s selection of Option 1 for his pension plan benefits could be changed.
Findings Of Fact Mrs. Renaud, who is deaf, was married to Mr. Renaud for approximately 40 years. Mr. Renaud was employed by the State of Florida as a correctional officer at all times relevant hereto. He entered the State retirement program (in the pension plan) in November 1994. Mr. Renaud was in the “special risk” category of retirement class based on his position as a correctional officer. On October 24, 2013, Mr. Renaud signed and submitted a “Florida Retirement System Pension Plan Application for Service Retirement” form to the Department, indicating his intent to retire. The application was signed and notarized; it designated Mrs. Renaud as the sole beneficiary of his retirement benefits. On the same day, Mr. Renaud signed an “Option Selection” form, wherein he designated which of four payment options he wanted to utilize for payment of his retirement income. He selected Option 1, which states: A monthly benefit payable for my lifetime. Upon my death the monthly benefit will stop and my beneficiary will receive only a refund of any contributions I have paid which are in excess of the amount I have received in benefits. This option does not provide a continuing benefit to my beneficiary. The form also contains the following statement: “I understand that I must terminate all employment with FRS employers to receive a retirement benefit under Chapter 121, Florida Statutes. I also understand that I cannot add service, change options or change my type of retirement . . . once my retirement becomes final. My retirement becomes final when any benefit payment is cashed, deposited or when my Deferred Retirement Option Program (DROP) participation begins.” The option selection form was signed by Mr. Renaud and notarized by a certified notary public. Inasmuch as Mr. Renaud selected Option 1, it was necessary that he and his designated beneficiary (Mrs. Renaud) also fill out form SA-1, the “Spousal Acknowledgement” form. On the acknowledgement form, Mr. Renaud indicated that he was married. Mrs. Renaud then signed the “spousal acknowledgement” portion of the form. The acknowledgement statement included this statement: “I, Vivian Renaud, being the spouse of the above named member [Mr. Renaud], acknowledge that the member has selected either Option 1 or 2.” Option 2 provides for continued benefits during the retiring person’s lifetime. However, benefits to the person’s spouse will continue for only a 10-year period. If the retiring person dies within the first 10 years of retirement, the spouse would only receive benefits for the balance of the 10-year period starting at the retirement date. The benefits under Option 2 are, therefore, limited in nature. The state retirement system requires a person selecting Option 1 or Option 2 to have their spouse acknowledge that selection choice because those benefits have finite ending dates, whereas retirement benefits under the other options continue as long as either the retiree or his/her beneficiary is living. By letter dated October 30, 2013, the Department acknowledged receipt of Mr. Renaud’s retirement application. The letter referenced the date the application was received (October 24, 2013) and the option Mr. Renaud had selected (Option 1). The letter was mailed to Mr. Renaud’s address of record, the same address he listed in his retirement application. The letter was sent to Mr. Renaud some 30 days before the first retirement benefit check was deposited in his account. Mrs. Renaud does not remember seeing the letter, but inasmuch as it was addressed to Mr. Renaud, her recollection of its receipt is not relevant. After Mr. Renaud’s death, his family found numerous un-opened letters in his car; the acknowledgement letter from the Department could well have been in that group. Mr. Renaud retired on November 1, 2013. His first payment of retirement benefits was transferred to his bank by way of electronic fund transfer, commonly referred to as direct deposit, on November 27, 2013. The gross amount of his monthly retirement benefit was $1,987.85; the net amount was $1,937.75 after $30.09 had been deducted for taxes. At that time, Mr. Renaud had not signed form W4P, the form which showed how many dependents the retiree was claiming for tax purposes. After later filling out that form (in which he indicated he would prefer to file as “single” for tax purposes), his monthly net benefit was reduced to about $1,735. Mr. Renaud received a direct deposit of retirement benefits on December 31, 2013; on January 31, 2014; and again on February 28, 2014. Mr. Renaud passed away on March 26, 2014, only five months after commencing his retirement. In accordance with the provisions of Option 1, Mr. Renaud’s retirement benefits ceased at that time. His beneficiary was entitled to payment for the entire month that he expired, but was not to be provided any further retirement benefits. Thus, a final payment was deposited in Mr. Renaud’s account on March 31, 2014. Mrs. Renaud was provided notice of the cessation of retirement benefits due to Mr. Renaud’s death. She timely filed a protest, seeking to have the payment of benefits reinstated. The Department denied her request, resulting in the instant matter. It is clear from the evidence that Mr. Renaud selected Option 1, Mrs. Renaud acknowledged that Mr. Renaud had selected either Option 1 or Option 2, and that retirement benefits were directly deposited to Mr. Renaud’s bank account for several months. Mr. and Mrs. Renaud’s signatures were duly notarized and have a presumption of legitimacy. Mrs. Renaud disagrees as to whether Mr. Renaud’s selection of Option 1 was legitimate, legal, or proper under the circumstances as she views them. First, Mrs. Renaud contends that Mr. Renaud was not mentally well at the time he signed the option selection form. The basis for her contention is that Mr. Renaud had experienced some seizure-related behavior during the year prior to signing the form. He had driven his car north on US Highway 301 one day in July 2012, “heading to work,” but ended up in Georgia without remembering why or how he got there. He later apparently lost his driver’s license because of the seizures (although the testimony on that issue was not clear).1/ Mr. Renaud worked for approximately 15 more months after his inexplicable drive to Georgia. Mrs. Renaud also argued that Mr. Renaud’s signatures on the three different forms he signed on October 24, 2013, were not similar to each other, indicating in her mind that he was having some sort of medical or psychological difficulty at that time. Inasmuch as there could have been any number of reasons the signatures were different (whether he was in a hurry, what base existed under the paperwork, etc.), there is insufficient evidence to determine why the signatures did not match. Mrs. Renaud’s testimony regarding the signatures is not persuasive. Ed Renaud said Mr. Renaud had been forced to retire due to his medical condition, i.e., that he had lost his driver’s license due to having seizures and the Department of Corrections would not let him work if he could not drive. However, Ed Renaud also said Mr. Renaud was able to continue working even when he was “forced” to retire. Again, the testimony on these facts was not clear. Mrs. Renaud said she should have been provided an interpreter on the day she signed the acknowledgement form. She did not state whether she requested an interpreter or whether the agency employee who provided her the form was aware of her disability.2/ Again, no one from Mr. Renaud’s employer, the Department of Corrections, testified at final hearing as to what happened on the day the forms were signed. Mrs. Renaud stated that she could read and write English, so she knew what she was signing.3/ She did claim to be confused as to whether her husband had selected Option 1 or Option 2, but candidly admitted that Mr. Renaud never told her one way or the other which option he had chosen. He only told her that he would “continue to provide for her in the future.” She believed the amount which was to be deposited in their account each month under Option 2 would be approximately $1900. The first check was in that approximate amount (due to the fact that Mr. Renaud had not established the amount of taxes to be deducted from his check at that time). The next five checks were in a lesser amount, approximately $1700. There is no evidence that Mrs. Renaud questioned the amount of the later checks. However, once the first check had been deposited in Mr. Renaud’s bank account, he would not have been allowed to change his option anyway. Lastly, Mrs. Renaud said her husband’s medical and mental condition was not conducive to making the option selection in October 2013. However, there was no competent evidence to support her claim. There was no direct testimony as to Mr. Renaud’s condition on the day he signed, nor as to whether he was or was not capable of understanding what he was signing. The only statement about his condition that day was that he wanted to park the car far enough away from the building that his co-workers could not see that Mrs. Renaud had driven the car. Ed Renaud also pointed out the issue of Mr. Renaud’s three signatures that day looking different from each other, but his lay opinion is not evidence upon which a finding of fact can be made as to Mr. Renaud’s mental condition. On October 24, 2013, Mr. Renaud had not been adjudged mentally incapacitated and no guardian had been appointed. Ed Renaud said that Mr. Renaud still believed he could perform his work assignments at that time and did not want to retire. But, other than his wife, no one provided any evidence that Mr. Renaud did not understand what he was signing. Mrs. Renaud, however, could not say which option he had selected because he never told her. Her subsequent presumption that Mr. Renaud did not intend to choose Option 1 is not persuasive. It should be noted that selection of Option 1 by Mr. Renaud set his average pre-tax monthly benefit at around $1,900.00; had he chosen Option 2, the benefit would have been around $1,700. Thus, there was incentive to “roll the dice” and select Option 1, hoping that he would survive long enough to provide for his wife. In this case, sadly, that gamble did not pay off. The facts of this case are sad in that Mr. Renaud had every intention of providing for his wife financially as long as she lived. However, he either made a mistake when he selected his payment option or he attempted to tempt fate and hope for the best. In either case, once he made his selection and began receiving benefits, the die was cast. Based upon the facts as presented, there is no basis for overturning the Department’s denial of Mrs. Renaud’s requested amendment of the payment option.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Management Services denying Petitioner's request for entitlement to her husband’s retirement benefits following his untimely death. DONE AND ENTERED this 24th day of June, 2015, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 24th day of June, 2015.
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 Respondent, Department of Management Services, Division of Retirement (“Respondent”), is entitled to a deduction of the retirement benefits to be paid to Aubrie-Elle Perez, and if Respondent is entitled to a deduction, whether the deduction should be in the amount of the gross disbursements of $19,833.21 or the net payments to Edward Perez (“Lt. Perez”) in the amount of $17,017.80.
Findings Of Fact The FRS is a public retirement system as defined by Florida law. There are approximately 400,000 active members within the FRS. Respondent is charged with managing, governing, and administering the FRS. In 1997, Lt. Perez began employment with the Miami-Dade County Fire Department. For over 16 years, Lt. Perez served as a fire fighter with the Miami-Dade County Fire Department, his last position being a Lieutenant. Lt. Perez was a vested member of the FRS. Upon his initial employment and enrollment with the FRS in 1997, Lt. Perez entered the Investment Plan and made a retirement benefits election designating that if he died before his retirement and chose not to designate a beneficiary, retirement benefits would be paid in accordance with section 121.091(8), Florida Statutes. Lt. Perez chose not to designate a beneficiary. Thus, according to this statute, retirement benefits would first be paid to Lt. Perez’s spouse, and if no spouse, then to his only child, the Petitioner. Tragically, on April 7, 2013, Lt. Perez collapsed at the fire station. Subsequently, Lt. Perez was diagnosed with a grade-four malignant brain tumor known as a glioblastoma multi-forming--a very aggressive and generally terminal form of brain cancer. There is no cure and the median survival rate for adults with this form of brain cancer is 9 to 14 months. Due to his terminal brain cancer and the treatments he had undergone and was undergoing, Lt. Perez was unable to continue his duties with the Miami-Dade County Fire Department. On February 19, 2014, a two-page FRS Investment Plan Application for Disability Retirement Form PR-13 (“application for disability retirement”), and an FRS Investment Option Selection Form PR-11o (“option selection form”), were submitted to Respondent for Lt. Perez. They were sent to Respondent by mail by Lt. Perez’s sister, Alecs Perez-Crespo. The effect of the application for disability retirement and the selection of Option 1 on the option selection form would be to transfer the monies from the Investment Plan into the Pension Plan, and convert Lt. Perez’s accumulated Investment Plan retirement benefits to monthly disability retirement benefits during his lifetime. Then, upon his death, the monthly benefit payments would stop, and the beneficiary would receive only a relatively small amount, if any--a refund of contributions Lt. Perez had paid into the Investment Plan retirement account, which are in excess of the amount he received in benefits, not including the transferred Investment Plan account balance.2/ The two-page application for disability retirement was not completed by the member, Lt. Perez, and was not signed by Lt. Perez in the presence of a notary public. The option selection form was not completed by the member, Lt. Perez, and was not signed by Lt. Perez in the presence of a notary public. Affirmative medical and factual evidence establishes, and rebuts any legal presumption to the contrary, that Lt. Perez was not mentally, physically, cognitively, or legally competent to execute the option selection form or the application for disability retirement in February 2014, or to understand their legal nature and effect. Nevertheless, Respondent processed the application for disability retirement and option selection form. As a result, Lt. Perez was deemed to have retired effective April 1, 2014, and he forfeited approximately $238,000, which was transferred from the Investment Plan to the Pension Plan. Subsequently, two disability retirement benefit warrants were issued by the State of Florida, Department of Financial Services, to Lt. Perez, via the Pension Plan, in care of Alecs Perez-Crespo, POA. The dates of these warrants are April 30, 2014, and May 30, 2014. Both warrants were endorsed by Ms. Perez-Crespo, “POA For Edward Perez.” Respondent made these disability retirement gross benefit disbursements resulting in net payments to Lt. Perez on the following dates and in the following amounts: April 30, 2014: gross disbursement of $4,950.63, less deducted taxes of $413.20, for a net payment to Lt. Perez of $4,537.43; May 30, 2014: gross disbursement of $4,950.63, less taxes of $413.20 and less a medical insurance deduction of $386.00, for a net payment to Lt. Perez of $4,151.43.3/ A direct deposit authorization for electronic transfer of future retirement benefit warrants into a checking account solely in the name of Lt. Perez was signed by Alecs Perez Crespo, “POA for Edward Perez,” on May 9, 2014. Two additional disability retirement gross benefit disbursements resulting in net payments to Lt. Perez were sent to the checking account of Lt. Perez on the following dates and in the following amounts: June 30, 2014: gross disbursement of $4,950.63, less taxes of $413.20 and less a medical deduction of $386.00, for a net payment to Lt. Perez of $4,151.43; July 31, 2014: gross disbursement of $4,981.32, less taxes of $417.81 and less a medical insurance deduction of $386.00, for a net payment to Lt. Perez of $4,177.51, bringing the total sum of the gross disbursements for the four payments made to Lt. Perez $19,833.21, and the total sum of the net disbursements for the four payments made to Lt. Perez $17,017.80. The net sum of $17,017.80 issued by the Pension Plan as disability retirement benefits to Lt. Perez was deposited into Lt. Perez’s checking account. Accordingly, $19,833.21 (gross)/ $17,017.80 (net), was received by Lt. Perez. Lt. Perez died on July 16, 2014, from the cancer. At the time of Lt. Perez’s death, Petitioner was, and remains, his sole surviving child (natural or adopted). Lt. Perez was not married at the time of his death and, thus, left no surviving spouse. Because of the receipt of the four payments during his lifetime, which are applied first to the personal contributions made by Lt. Perez into the Investment Plan during his lifetime, the amount of Lt. Perez’s small contributions into the plan were exhausted by the time of his death. Therefore, if the option selection form is valid, Petitioner, as the sole beneficiary and child of Lt. Perez, would receive nothing. Respondent concedes that notwithstanding the facial appearance of the option selection form and application for disability retirement, the documents are void and invalid because they failed to comply with the statutory, rule, and manual requirements applicable to properly effectuate the Option 1 selection, in that they were not completed by the member, Lt. Perez, and not signed by Lt. Perez in the presence of a notary public. Respondent concedes that due to Lt. Perez lacking the mental, cognitive, physical, and legal capacity to understand the nature and legal effect of executing the option selection form and application for disability retirement, the purported execution by Lt. Perez of the option selection form and of the application for disability retirement are void and invalid. Respondent concedes that the option selection form is invalid and void ab initio, and Lt. Perez’s earlier selection in 1997, pursuant to section 121.091(8), should be reinstated under the FRS Investment Plan. Respondent concedes that with Lt. Perez having died in 2014 with no surviving spouse, and with Petitioner being his sole surviving child at the time of his death, that the full retirement benefits of $234,035.81, to which Lt. Perez was entitled under his Investment Plan designation of beneficiary should be paid directly to Petitioner. Respondent asserts, however, that the payment of the retirement benefits to which Petitioner is entitled should be reduced by the amount of the four payments made by Respondent to Lt. Perez, which gross disbursements total $19,833.21, or net disbursements total $17,017.80, making the retirement benefits to which Petitioner is entitled to be $214,202.60 or $217,018.01, not $234,035.81. Respondent’s position is correct because the gross benefits in the amount of $19,833.21 were received by Lt. Perez when the four payments, after applicable required deductions, were deposited into his personal checking account. At hearing, no persuasive and credible evidence was presented indicating whatever happened, if anything, to the net payments of $17,017.80 deposited into Lt. Perez’s checking account. No persuasive or credible evidence was presented indicating whether any of the monies were withdrawn from the checking account before or after Lt. Perez’s death. No persuasive or credible evidence was presented indicating that Ms. Perez-Crespo used, diverted, or withdrew any of the funds from the checking account. No bank statements were offered into evidence. Petitioner, who is the personal representative of the estate, did not testify. No accounting of the assets of Lt. Perez’s estate was presented. Even if any of the $17,017.80 was used or diverted by Ms. Perez-Crespo after being deposited into Lt. Perez’s checking account, Petitioner, as personal representative of the estate of Lt. Perez, might have a remedy in another forum to recover such funds from Ms. Perez-Crespo. In any event, such a potential claim, not borne by the evidence presented in the instant proceeding, is beyond the scope of this administrative proceeding. Based on the evidence adduced at hearing and the stipulations of the parties, it is clear that $19,833.21 was received by Lt. Perez when $17,017.80 (after the required deductions) was deposited into his personal checking account. To require Respondent to pay the entire amount of $234,035.81 would result in overpayment of $19,833.21. Respondent is, therefore, entitled to a deduction in the amount of the gross disbursement of $19,833.21.4/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent, Department of Management Services, Division of Retirement, enter a Final Order requiring that that the total sum of $214,202.60 be returned by Respondent to the FRS Investment Plan for the benefit of Lt. Perez, deceased, and that pursuant to section 121.091(8)(a), Florida Statutes, that Petitioner, Aubrie-Elle Perez, as the sole surviving child of and the sole beneficiary of Lt. Perez, immediately receive the amount of $214,202.60. The undersigned reserves jurisdiction to address issues regarding Petitioner’s entitlement to, and the amount of, attorneys’ fees, costs, and interest. DONE AND ENTERED this 23rd day of January, 2017, in Tallahassee, Leon County, Florida. S DARREN A. SCHWARTZ Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January, 2017.
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
