The Issue The issue to be resolved in this proceeding concerns whether the Petitioner, Erin R. McGuire, is entitled to purchase retirement service credit for the 1980-1981 school year based upon the determination of whether she was on a properly authorized leave of absence for that school year or, conversely, had actually resigned for that year before returning as a full- time employee of the Bay County School System the following year.
Findings Of Fact The Petitioner is a regular class member of the FRS, with some 28 years of service credit. Her entire FRS career has been with the Bay County School District. On October 8, 1980, the Petitioner resigned her employment with the Bay County School System to re-locate her residence to Alabama. She wanted to be closer to her family in Alabama and at the time did not intend to return to Bay County. She changed her mind, however, and on September 9, 1981, was re-hired by the Bay County School System. She has continued her employment with Bay County schools from that time until the present. The Petitioner maintains that she spoke to her school principal after tendering her resignation in 1980, and he persuaded her to rescind her resignation and instead take a leave of absence. No school board record of such a decision or denomination of her absence from employment as a leave of absence, was produced at hearing. The Petitioner did admit that when she left her employment with Bay County in 1980, she had no intention of ever returning at that point. She did, however, return for the following school year and has been employed by Bay County Schools ever since. When a member, such as the Petitioner, seeks to purchase a leave of absence from the FRS, they, and their employer, must verify the leave of absence on the FRS form FR That form is provided by the Division and must be executed by both the employer and the employee. The leave of absence must have been approved by the employer, the school board, either prior to or during the time period of the leave of absence, according to the rule cited herein. When Ms. McGuire submitted her form FR 28 to the school board, the board completed the form indicating that she had resigned on October 8, 1980 (not a leave of absence), and was re-hired as a "new hire" on September 9, 1981. It is also the case that the school board approved amending her record to show the time period in question as a leave of absence. That amendment of her record was approved by the school board on January 14, 2004, however, long after the time period of the purported leave of absence itself.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Management Services, Division of Retirement, denying the Petitioner's request to purchase leave of absence credit for the period October 1980 through September 1981. DONE AND ENTERED this 1st day of September, 2004, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of September, 2004. COPIES FURNISHED: Sarabeth Snuggs, Director Division of Retirement Department of Management Services Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Alberto Dominguez, General Counsel Department of Management Services Division of Retirement 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399 Thomas E. Wright, Esquire Department of Management Services Division of Retirement 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399 Erin McGuire 1507 Rhode Island Avenue Lynn Haven, Florida 32444
Findings Of Fact Petitioner, EVELYN S. WRIGHT, as an employee of Metropolitan Dade County and a member of the State and County Officers and Employees Retirement System, elected to transfer into the Florida Retirement System (FRS) effective December 1, 1970. (Exhibit 3) On April 10, 1972, Petitioner terminated her employment with Metropolitan Dade County and applied for FRS disability retirement benefits pursuant to Section 121.091(4), Florida Statutes, on May 22, 1972. (Exhibit 2) Petitioner's application for FRS disability retirement benefits was initially denied by the Administrator of the Florida Retirement System on August 21, 1972. (Exhibit 4) On January 6, 1975, Petitioner inquired of the Supervisor of the Respondent's Disability Determination Unit, Mr. David Ragsdale, as to the possibility of withdrawing the accumulated contributions in her retirement account. At this time, Petitioner, was advised by Mr. Ragsdale that a withdrawal of contributions would cancel her membership rights in the Florida Retirement System. (TR - p.9) Respondent forwarded to Petitioner, by letter dated January 7, 1975, the appropriate form for making application for a refund of accumulated retirement contributions. The transmittal letter specifically advised the Petitioner that, "Should you complete and return the enclosed card, M81, you would have no further rights or service credit with the Division of Retirement." (Exhibit 5) On January 14, 1975, Petitioner executed, and her employer verified, an application for refund of accumulated retirement contributions. The application form clearly stipulated: "I hereby make application for refund of my accumulated contributions in the Florida Retirement System. I do hereby waive for myself, my heirs and assignees all rights, title and interest in the Florida Retirement System." (Exhibit 6) Petitioner's application for refund of contributions was received by the Respondent on January 17, 1975. Respondent refunded to Petitioner her accumulated contributions in the amount of $3,056.02 by Voucher No. 237738, Warrant No. 0309435, dated January 28, 1975. (Exhibit 6) The attorney for Petitioner, John H. Abramson, was advised by the undersigned hearing officer by telephone that Leave to Take Deposition was granted. By letter from the said attorney the Division was notified that Petitioner's file was being closed.
The Issue The issue in this case is whether the Petitioner, Mr. Robert P. Hatcher, is eligible to retire under the Florida Retirement System rather than under the Teachers' Retirement System.
Findings Of Fact The Petitioner was employed by the Hillsborough County School Board on August 25, 1959, and was enrolled in the Teachers' Retirement System (TRS) at that time. The Petitioner worked for the Palm Beach County School Board for 27 years, from 1966 through May 15, 1992. The Petitioner worked with no breaks in service during all years in which the Legislature provided open enrollment periods for members of the TRS to transfer to the Florida Retirement System (FRS). The Petitioner was aware of the open enrollment periods, but declined all opportunities to transfer to the FRS. In this regard, the Petitioner specifically rejected membership in the FRS for the 1974 and 1978 open enrollment periods by signed ballots dated November 27, 1974, and November 2, 1978. Petitioner voluntarily terminated his employment with the Palm Beach County School Board on May 15, 1992. Following his termination with the Palm Beach County School Board, Petitioner began seeking employment with an agency that participated in the FRS in order to become eligible to transfer from the TRS to the FRS. The Petitioner's first contact with the Okeechobee County School Board (OCSB) was approximately two years ago when Dr. Mary Gray, Petitioner's acquaintance, introduced Petitioner to Mr. Owens. The Petitioner approached Mr. Owens in an attempt to obtain employment with the OCSB. The Petitioner sought employment with the OCSB for the sole purpose of obtaining entry into the FRS. Mr. Owens recruited and interviewed the Petitioner for the position of Custodian I at the OCSB. At the time the Petitioner was recruited and interviewed, Mr. Owens knew the Petitioner wanted to work for the OCSB for the sole purpose of establishing retirement eligibility. The Petitioner requested that he be hired to work only long enough to establish retirement eligibility by working for a state employer that was a member of the Florida Retirement System. Prior to the Petitioner's request, the OCSB had never had such a request before. The OCSB hired the Petitioner with the knowledge that he had health problems and believing that he would not be able to perform the duties of custodian for more than a short period of time. By letter dated June 23, 1993, the OCSB approved the Petitioner's employment as Custodian I for the OCSB effective June 30, 1993. The Custodian I position was classified as a regular position, not a short-term position. The Petitioner reported to work at the Okeechobee High School on June 30, 1993. He answered phones for several hours, performed some inventory work, then resigned that afternoon. The OCSB acknowledged receipt of the Petitioner's resignation letter, effective June 30, 1993, by letter dated August 2, 1993. The Petitioner submitted an application for membership in the FRS to the OCSB on June 30, 1993. Prior to his employment with the OCSB, the Petitioner investigated the possibility of transferring from the TRS to the FRS. The Petitioner was neither told nor did he receive any written communication by the DOR that he could transfer to the FRS based upon employment for one day. By letter dated August 16, 1993, the Respondent notified the Petitioner that he could not obtain entry into the FRS because his employment was not bona fide, but that he could retire under the TRS. If the Petitioner were to retire under the TRS, his Option 1 monthly benefit payment would be $2,571.64; his Option 3 monthly benefit payment would be $2,396.25. Under the FRS, Petitioner's Option 1 monthly benefit payment would be $3,054.91; his Option 3 monthly benefit payment would be $2,771.20.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Division of Retirement issue a final order concluding that the Petitioner is not eligible for participation in the Florida Retirement System and denying Petitioner's application for transfer from the Teachers' Retirement System to the Florida Retirement System. DONE AND ENTERED this 6th day of January 1994 in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of January 1994. APPENDIX The following are my specific rulings on all proposed findings of fact submitted by all parties. Findings submitted by Petitioner: Paragraphs a and b: Accepted in substance. Paragraph c: Accepted in part and rejected in part; accepted that the Petitioner obtained the described employment, but rejected that the employment was bona fide. Paragraph d: Accepted in part and rejected in part. The conclusion that the one day was sufficient to qualify the Petitioner for transfer to FRS is rejected as incorrect and as not warranted by the evidence; the remainder of the facts in this paragraph are accepted. Paragraph e: Rejected as constituting a conclusion of law, rather than a proposed finding of fact; a conclusion which is, in any event, not warranted by the evidence in this case. Paragraph f: Rejected as constituting a conclusion of law, rather than a proposed finding of fact; a conclusion which is, in any event, not warranted by the evidence in this case. Findings submitted by Respondent: All of the proposed findings of fact submitted by the Respondent have been accepted in whole or in substance in the Findings of Fact made in this Recommended Order. COPIES FURNISHED: Jodi B. Jennings, Esquire Division of Retirement Building C Cedars Executive Center 2639 North Monroe Street Tallahassee, Florida 32399-1560 Allan L. Hoffman, Esquire 1610 Southern Boulevard West Palm Beach, Florida 3406 J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Sylvan Strickland, Acting General Counsel Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue Whether Petitioner, Judith Richards, is eligible for the health insurance subsidy offered to Florida Retirement System retirees.
Findings Of Fact In November 2011, Petitioner was hired by the Osceola County Sheriff’s Office to work as a crossing guard. The Osceola County Sheriff’s Office is an FRS-participating employer, and the position held by Petitioner was in the 2 It is well established that issues related to subject matter jurisdiction can be raised at any time during the pendency of a proceeding. 84 Lumber Co. v. Cooper, 656 So. 2d 1297 (Fla. 2d DCA 1994). “Regular Class” of FRS membership. In 2011, newly hired eligible employees (members) of the Osceola County Sheriff’s Office were required to participate in either the FRS pension plan or the investment plan. Petitioner elected to participate in the investment plan. Generally, the pension plan offers eligible employees a formulaic fixed monthly retirement benefit, whereas an employee’s investment plan benefits are “provided through member-directed investments.” Pursuant to section 112.363, Florida Statutes, retired members of any state-administered retirement system will receive an HIS benefit if certain eligibility requirements are satisfied. Section 112.363(1) provides that a monthly subsidy payment will be provided “to retired members of any state- administered retirement system in order to assist such retired members in paying the costs of health insurance.” Section 112.363(3)(e)2. provides that beginning July 1, 2002, each eligible member of the investment plan shall receive “a monthly retiree health insurance subsidy payment equal to the number of years of creditable service, as provided in this subparagraph, completed at the time of retirement, multiplied by $5; … [and] an eligible retiree or beneficiary may not receive a subsidy payment of more than $150 or less than $30.” On July 18, 2019, Petitioner’s employment with the Osceola County Sheriff’s Office ended, and at that time she had 7.77 years of FRS creditable service.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of Retirement, enter a final order denying the application for retiree health insurance subsidy submitted by Mrs. Richards. DONE AND ENTERED this 3rd day of March, 2021, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 2021. COPIES FURNISHED: Gayla Grant, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 David DiSalvo, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 Judith Richards 2337 Louise Street Kissimmee, Florida 34741 William Chorba, General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950
Findings Of Fact Eugene L. Borus began employment with the Department of Transportation (DOT) in February, 1962, and was enrolled in the Florida Retirement System (FRS) as a mandatory member. In April, 1976, he terminated employment and applied for retirement. He was retired effective May 1, 1976, with 12.33 years of credible service (Exhibit 2). Mr. Borus was reemployed on May 23, 1977, by DOT. During 1977 and under the provisions of the "Reemployment After Retirement" provisions of Section 121.091(9), Florida Statutes, Petitioner received both his salary and his retirement benefit up to 500 hours of employment at which point his retirement benefits ceased. Beginning January 1, 1978, and on each January 1 thereafter Petitioner was again paid his retirement benefit up to 500 hours of employment after which the retirement benefit was discontinued. In early 1984, Mr. Borus applied to the Division to have his 1976 retirement cancelled and his employment service with DOT since 1976 included in his creditable service so that at such time as he would again retire, his total creditable service would include all his employment time. If this transpired, his future retirement benefits would be greater than those currently paid. His request was denied by the Respondent by letter dated April 5, 1984 (Exhibit 1). No member of FRS who has retired and drawn retired pay, except for those excepted in Section 120.091(4)(e) and 121.091(9)(d) have ever been "unretired" and allowed to rejoin the FRS.
Findings Of Fact The petitioner Petitioner, Huey G. Manges, was employed as a fire fighter by the Port Everglades Authority (the Port) in September 1961, and over the years rose through the ranks until in 1975 or 1976 he became Chief of the department. Petitioner served as Chief until 1988 or 1989, and was then promoted to Public Safety Director. As an employee of the Port, petitioner was a member of the Florida Retirement System. The Port's deferred compensation plan In 1983, the Port adopted a deferred compensation plan for all employees. The plan provided that employees could "make contributions into the fund in an amount not to exceed 33.3 [percent] of base salary, with a maximum cap of $7500." Under the plan, the Port, as the employer, made no contribution to the plan. In September 1984, the plan was amended to create a special provision for "key management persons," as an incentive to motivate them to perform in an outstanding manner and to encourage their continued commitment to the Port. At the time, it was observed that such employees have "extensive responsibilities," and "are not compensated for the many hours they work beyond the normal '40- hour' work week." As amended, the Port matched the qualified "key management person['s]" contribution on a dollar for dollar basis, not to exceed a maximum of 5 [percent] of base salary." The combined employer/employee contribution was limited to $7,500, annually. Among the positions designated as "key management persons" was the position of Fire Chief. Subsequently, at a date not apparent from the record, but at least 5 years before petitioner's retirement, the plan was amended to its current format, and further refined the classes of participants. For employees, such as petitioner, who had attained senior management Grade 9 or higher under the Port's management pay plan, and who elected to participate in the plan by executing a participation agreement, the Port agreed to contribute, on behalf of the employee, "an annual amount equal to the lesser of (i) $7,500 or (ii) 10 [percent] of such Employee's Compensation," regardless of whether they contribute to the plan. For employees below senior management Grade 9, and who elected to participate in the plan, the Port agreed to make "a matching contribution equal to 100 [percent] of the amount of a Participant's annual Deferred Compensation, up to an annual maximum matching contribution of 5 [percent] of the Participant's Compensation." According to petitioner, he participated in the plan from its inception, and "maxed it" each year. [Transcript, page 56]. By such testimony, it is concluded that the annual contribution to his deferred compensation account was $7,500, and that the Port's contribution varied, over the years, from a "dollar for dollar" match under the September 1984 amendment, to a full $7,500 contribution during the period that included, at least, petitioner's last five years of employment with the Port. Petitioner's retirement and subsequent events In or about June 1994, petitioner applied with respondent, Division of Retirement, for retirement under the Florida Retirement System, and his request was approved effective July 1, 1994. Since that date, petitioner has duly received his monthly retirement benefits, as calculated from the Division's records at the time of his retirement. On March 8, 1995, petitioner, through counsel, wrote to the Division and requested that his retirement benefits be recalculated predicated on an error he felt was committed by the Port in its contributions to the Florida Retirement System on his behalf. Such error, petitioner contended, was the Port's failure to treat the contributions it made to his deferred compensation account as retirement creditable wages, and to make the necessary contributions to the State Retirement Account. Essentially, petitioner wanted the Division to collect the contributions from the Port, and then recalculate his average final compensation to include the $7,500 annual contribution by the Port, and adjust his pension payments accordingly. 2/ Regarding petitioner's contention, the proof demonstrates that from the inception of the plan until May 1989, the Port, unbeknownst to the Division, had included the contribution it made to an employee's deferred compensation plan in calculating an employee's retirement creditable wages and Florida Retirement System (FRS) contributions. In May 1989, Mary Meynarez, the new director of finance for the Port, wrote to the Division concerning the propriety of such treatment. That letter was in response to a conversation the Port's CPA had with the Division, wherein he was advised that employer contributions to a deferred compensation plan were not subject to FRS contributions because gross or retirement creditable wages do not include matching contributions or fringe benefits. Ms. Meynarez's letter sought written confirmation of the Division's position. By letter of May 19, 1989, the Division advised Ms. Meynarez, consistent with its long established interpretation of the retirement laws, that such was the Division's position. Thereafter, the Port made no further contributions to the FRS based on its contribution to an employee's deferred compensation plan, and it submitted and received from the Division a credit adjustment for the erroneous payments for prior periods. Given the Division's interpretation of the retirement laws, it concluded that the Port properly excluded the contributions it made to his deferred compensation account when calculating FRS contributions, and by letter of July 5, 1995, advised petitioner that his retirement benefits had been correctly calculated and no adjustment would be made. Such letter further advised petitioner of his right to a section 120.57 hearing if he disagreed with the Division's decision. Petitioner timely filed such a request, and this proceeding duly followed. Pertinent legislation and the Division's interpretation Section 121.021(24), Florida Statutes, defines "average final compensation," as that term is used in deriving a members retirement benefits under the Florida Retirement System, to mean: [T]he average of the 5 highest fiscal years of compensation for creditable service prior to retirement, termination, or death . . . The payment for . . . bonuses, whether paid as salary or otherwise, shall not be used in the calculation of the average final compensation. Prior to 1989, section 121.021(22) defined "compensation," as that term is used in the Florida Retirement System, as follows: (22) "Compensation" means the monthly salary paid a member, including overtime payments and bonuses paid from a salary fund, as reported by the employer on the wage and tax statement (Internal Revenue Service form W-2) or any similar form. When a member's compensation is derived from fees set by statute, compens- ation shall be the total cash remuneration received from such fees. Under no circum- stances shall compensation include fees paid professional persons for special or particular services. During the course of the 1989 Legislative session, proposals were made to amend the provisions of section 121.021(22). The reason for amendment was twofold. First, pursuant to subsection 121.021(22) and (24) bonuses were included in the definition of "compensation" but excluded when calculating "average final compensation." This resulted in a conflict because retirement contributions were due on bonuses, but bonuses could not be used in calculating a member's "average final compensation." Second, the definition of "compensation" was silent with regard to the treatment of salaries paid to employees who participated in a deferred compensation, salary reduction, or tax- sheltered annuity program. Consequently, although the Division had consistently interpreted the subsection to so provide, it was felt appropriate to amend the statute to clearly provide that an employee's election to defer a portion of his salary to a deferred compensation plan did not reduce his retirement creditable wages. As a consequence, pursuant to Chapter 89-126, Section 1, Laws of Florida (1989), subsection 121.021(22), effective June 26, 1989, was amended to read as follows: "Compensation" means the monthly salary paid a member by his or her employer for work per- formed arising from that employment, including overtime payments paid from a salary fund. Under no circumstances shall compensation in- clude fees paid professional persons for special or particular services or include salary payments made from a faculty practice plan operated by rule of the Board of Regents for eligible clinical faculty at the Univer- sity of Florida and the University of South Florida. [For all purposes under this chapter, the compensation or gross compensation of any member participating in any salary reduction, deferred compensation, or tax-sheltered annuity program authorized under the Internal Revenue Code shall be deemed to have been the compen- sation or gross compensation which the member would have received if he or she were not participating in such program] [Emphasis added]. Here, while recognizing that the contributions made by the Port to petitioner's deferred compensation plan may be part of a management package designed to encourage employment fidelity, the Division considers such payments fringe benefits, similar to employer paid health and life insurance, and not "compensation," as defined by subsection 121.021(22) for retirement purposes. In reaching such conclusion, the Division first points to the provision of subsection 121.021(22), as amended, which provides that "[f]or all purposes under this chapter, the compensation or gross compensation of any member participating in any salary reduction, deferred compensation, or tax- sheltered annuity program . . . shall be deemed to have been the compensation or gross compensation which the member would have received if he or she were not participating in such program." Since petitioner would not have received the $7,500 Port contribution had he not elected to participate in the Plan, the literal application of the statutory language would exclude such payments from the definition of "compensation or gross compensation" for retirement purposes. In contrast, petitioner points out that the amendment to subsection 121.021(22) relied upon by the Division was not occasioned to address the peculiarities of his situation, but was designed to clarify that the portion of the employee's salary he elected to defer would not reduce his retirement benefits. Such issue is distinct, according to petitioner, from the issue of whether employer contributions to a deferred compensation plan are "compensation" for retirement purposes. While petitioner may be correct as to the purpose of the amendment to subsection 121.021(22), such does not compel the conclusion that the Division's literal application of that subsection, as excluding employer contributions from the calculation of retirement creditable wages, was not consistent with the Legislature's intent. In concluding that the Division's interpretation is reasonable and consistent with the purpose and intent of subsection 121.021(22), it is observed that under that subsection "compensation" is defined to mean "the monthly salary paid a member by his . . . employer for work performed." "Monthly salary," as observed by the Division, is commonly understood and reasonably read to refer to the fixed compensation for services paid to the employee on a regular basis or, as in petitioner's case, his fixed monthly salary under the Port's management pay plan, and does not include fringe benefits, such as employer matching payments or contributions to a deferred compensation plan. 3/ Consequently, the Division's decision to exclude such benefits from the calculation of petitioner's retirement benefits under the Florida Retirement System was reasonable. 4/
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered dismissing petitioner's petition for formal hearing, and denying his request for additional retirement benefits. DONE AND ENTERED this 13th day of June, 1996, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of June, 1996.
Findings Of Fact The Petitioner James H. Clendenin was elected to the office of Commissioner of the Canaveral Port Authority and served as a Port Commissioner from January 1, 1967 through December 31, 1982. The Petitioner was one of five Commissioners of the Authority. The Petitioner was not enrolled in the Florida Retirement System, Chapter 121, Florida Statutes, or any prior system until January 1, 1969. Prior to that date he was enrolled from January 1, 1969 through November 30, 1970, in the State and County Officers and Employees Retirement System, Chapter 122, Florida Statutes. The Port Authority, the authorized governing body of the Canaveral Port District, is an autonomous public entity created and established by Chapter 28922, Laws of Florida, 1953. As a Commissioner, the Petitioner was paid monies for his service for calendar years 1967 and 1968 which were reported as income--to the Internal Revenue Service. Prior to January 1, 1969, the Petitioner was required to submit a voucher for expenses and was paid on a fee basis. He received $25 per day in per diem and was reimbursed through an expense account. In order to receive the $25 which was characterized as per diem pay under the special act, the approval of the other four Commissioners was required. The total per diem was paid to each Commissioner on a monthly basis. After January 1, 1969, salaries were authorized for Commissioners and the per diem system was abandoned. Thereafter, the Petitioner received a salary check without request or required attendance at the Authority's meetings. On January 1, 1969, Petitioner submitted an application for enrollment in the State Retirement System. His application was accepted and the Petitioner began to accrue retirement service credits. Upon Petitioner's retirement, he attempted to claim and purchase prior service credits for 1967-1968. However, Petitioner was denied the opportunity to pay retirement contributions for retirement service credits for those years, and monies he had paid to purchase the prior service period were refunded. Consequently, Petitioner was credited with only 13.30 total years of service instead of 15.30 years. The difference in benefits amounts to 18.78 per month.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a Final Order be entered by the Respondent permitting the Petitioner to purchase additional service as a Port Commissioner for 1967 and 1968 upon payment to the Retirement Fund of $496.68 and increase the Petitioner's retirement benefit to the amount originally calculated to be due him by the Division of Retirement, retroactive to the date the Respondent received from the Petitioner monies paid for the purchase of the additional service. DONE and ENTERED this 19th day of March, 1984, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of March, 1984. COPIES FURNISHED: Robert T. Westman, Esquire STROMIRE WESTMAN LINTZ BAUGH McKINLEY AND ANTOON, P.A. 1970 Michigan Avenue, Bldg. C Post Office Hox 1888 Cocoa, Florida 32923 Augustus D. Aikens, Esquire Division of Retirement Cedars Executive Center 2639 North Monroe Street Suite 207C Box 81 Tallahassee, Florida 32303 Nevin G. Smith, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301 =================================================================
The Issue Whether the Petitioner should be permitted to return his retirement contributions and be reinstated in the Florida Retirement System so that he can apply for disability benefits from the Florida Retirement System.
Findings Of Fact Petitioner is a thirty-four year old man, having left high school in the eleventh grade in order to get married, but later took the GED test to qualify as a high school graduate. Some years later he was informed by an Ophthalmologist that he had fallen into the bracket of being legally blind, a status which categorizes a person who has ten percent (10%) or less vision. Petitioner can and does read. He worked for a bakery which entailed work with machinery and required extensive reading, but was advised by the ophthalmologist to find a job where he would not be required to work with machinery and which did not require extensive reading. Petitioner began participating in the State and County Officers and Employees Retirement System on July 1, 1969, when he became a partner in a blind vending stand. He elected to become a member of the Florida Retirement System on December 1, 1970. Petitioner attended two (2) agency meetings at which retirement was discussed. He stated that he had changed from the State and County Officers and Employees Retirement System (Chapter 122, Florida Statutes) to the Florida Retirement System (Chapter 121, Florida Statutes), and was prompted to make the change because a senior partner in the business who had been there for many years said that it was a good idea for him and for the younger partner to sign into the new system. He stated that there probably was a discussion relative to the merits of the new retirement system but that he did not remember anything about it. He did, however, sign the card to change retirement systems. On June 1, 1971, Petitioner suffered some type of injury to his back which was subsequently diagnosed as a sprain. Petitioner received medical treatment and returned to work where he continued to work for the Bureau of Blind Services for approximately three years, resigning November 11, 1974. On March 5, 1975, Petitioner obtained a lump sum as a settlement for this disputed claim under the Florida Workmen's Compensation Act. Petitioner went on leave February 5, 1974, after supplying his supervisor, Mr. Eurgil G. Crawford, Administrative Vending Stand Section, Bureau of Blind Services, with a letter from the physician stating that Petitioner had a "nervous condition." In a letter of October 10, 1974, Mr. Crawford advised Petitioner to either return to work or to contact them if it was not possible. He also stated that the Petitioner would have sixty (60) days in which he might come back to work if he so desired, but that after that time his position would have to be filled permanently by another employee. Petitioner had had some employment problems with the other two (2) members of the three (3) man working team. The problems involved the work at the stand, cleanliness and the lifting necessary to operate the stand. He stated that he and the other two (2) members just could not get together as far as working as a team was concerned. After termination of employment, which was voluntary on the part of Petitioner, Petitioner contacted the supervisor, Mr. Crawford, and asked whether he was entitled to benefits he had contributed and was told that he was. Thereupon, Mr. Crawford sent him the necessary forms to apply for a refund. A refund was made after Petitioner had signed the proper forms and returned them to Mr. Crawford. Two (2) state warrants were issued to Petitioner, one on December 19, 1974, and a subsequent one to close out his account. Petitioner did not work after leaving the Blind Services and has not attempted to find work but receives disability benefits from Social Security based on a 15 percent permanent partial disability rating. He stated that "I have come up with a couple of not so advantageous jobs, you know, its a possibility of getting hurt and one thing and another, I haven't done anything." Subsequently, Petitioner requested information from the Respondent and, after receiving literature from them in 1976, tendered a sum of money equal to the refund he had received so he could apply for disability retirement benefits. The tender of the repayment of his contributions was denied. Petitioner applied for this administrative hearing. Petitioner contends: That he was unaware of a choice to apply for a disability rating when he signed the waiver to obtain a refund. That the supervisor owed Petitioner a special duty to inform him of the possibility of applying for disability benefits before requesting a return of his contributions. Respondent contends: That Petitioner was present at meetings at which the retirement system was discussed; he had information that caused him to transfer to the Florida Retirement System; that he knew of eligibility requirements under the Florida Retirement System and that requirements for eligibility were written in a booklet he had obtained from an employee of the retirement system and that he testified he knew of the five year eligibility requirement. That Petitioner voluntarily signed the waiver, that he had due notice and that the tender of the refund was properly denied.
Recommendation Deny the Petition. DONE and ORDERED this 18th day of April, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: David A. Townsend, Esquire Albritton, Sessums & Di Dio 100 Madison Avenue, Suite 301 Tampa, Florida 33602 Stephen S. Mathues, Esquire Assistant Division Attorney Division of Retirement Department of Administration Cedars Executive Center Tallahassee, Florida
The Issue Whether Petitioner, Rebecca Hernandez ("Hernandez"), is entitled to the $22,943.81 her late mother, Darlene Rice ("Rice" or "Mother"), paid to buy into the Florida Retirement System Pension Plan ("Pension Plan"), as well as other monies transferred from Rice's Investment Plan account to the Pension Plan account, or is Hernandez only entitled to the $2,654.17 in employee contributions that Rice paid into the Pension Plan while an active member of that plan.
Findings Of Fact Based on the evidence presented and the record as a whole, the following facts were established: Darlene Rice was a Broward county teacher and member of FRS beginning September 1, 2011. Sometime in 2016, she became interested in transferring from the FRS Investment Plan to the FRS Pension Plan and actively began to investigate that option. Petitioner, Rebecca Hernandez, is the daughter of Rice and is entitled to Rice's benefits from FRS as determined by the Order of Summary Administration entered by the Circuit Court of Broward County, Florida, on October 2, 2018. Prior to transferring from the Investment Plan and as a part of her investigation, Rice contacted the FRS guidance line, on numerous occasions to seek guidance and inquire about the process to transfer into the Pension Plan. Resp. Ex. 20. The calls were recorded.3 More precisely, on March 7, 2017, Rice called the FRS guidance line to obtain information and ask questions regarding her contemplated transfer 3 The undersigned listened to all nine audio recordings. from the Investment Plan to the Pension Plan. On this call, the representative informed Rice that if she terminated FRS employment prior to having eight years of service, she "could not really recover anything." Resp. Ex. 20. During another call to the FRS guidance line, Rice was told that if she left the Pension Plan before vesting, monies she paid to "buy in" would be lost. Rice also acknowledged during one call that if something happened to her, she understood she would lose everything.4 Ultimately, after multiple telephone consultations and discussions with the FRS guidance line, Rice made the decision to transfer plans and buy into the Pension Plan. To do so, Rice was required to complete and submit a 2nd Election Retirement Plan Enrollment Form dated March 7, 2017. Resp. Exs. 2 and 16.5 On March 9, 2017, the Department sent a letter to Rice, confirming her 2nd Election into the Pension Plan. Resp. Ex. 16. The letter included the following: You have elected to move from the FRS Investment Plan and buy into the FRS Pension Plan. The effective date of this election is April 1, 2017. This is your final Plan Choice Election under the Florida Retirement System. You must remain in the FRS 4 The undersigned reasonably infers that this comment was based on what she had been told during previous phone calls to the FRS guidance line. The extensive information and consultation provided to Rice by the FRS guidance line was commendable, useful to her, and no doubt, very well intended. The representatives were patient and thorough with Rice. Regardless, their general admonitions and advice to Rice do not carry the force of law, nor do they necessarily dictate the outcome of this case. Rather, as will be explained, the correct decision in this case is derived by identifying and interpreting the applicable FRS laws and rules to the facts. 5 The top of the form notified her that "before using your 2nd Election, be sure you understand the impact of changing from one plan to another." By signing the form, at Option 2, Rice also acknowledged language that stated "I want to use my existing Investment Plan account balance and possibly other personal resources to 'buy' into the Pension Plan." Other disclosures were also made to her on page 3 of the form. Pension Plan until your retirement from FRS- covered employment. As a member who is switching from the FRS Pension Plan using the available balance in your FRS Investment Plan account. If your account is not sufficient to cover the cost of the buy-in, you will need to submit personal funds. * * * If you terminate employment prior to vesting in the Pension Plan benefit (less than 6 or 8 years) you are only entitled to receive: A refund of your contributions paid into the Pension Plan since April 1, 2017 (the effective date of your 2nd election). * * * If you feel that this retirement Plan election was made in error, you may be able to cancel it … Failure to notify us no later than 4:00 PM EST on the last business day of the month following your election month will void your right to cancel this election. Rice's election to transfer from the Investment Plan to the Pension Plan was slated to become effective on April 1, 2017. On April 18, 2017, Rice was informed by the Department that it received her notification of her second election and the accrued liability (costs) to transfer to the Pension Plan was $58,366.00; $35,422.19 was liquidated from her investment account and transferred to the FRS Trust Fund and $22,943.81 was the out of pocket cost to her to complete the transfer. Resp. Ex. 7. On June 6, 2017, the Department sent a letter to Rice confirming receipt of her personal payment of $22,943.81, which finalized her transfer to the Pension Plan effective April 1, 2017. Resp. Ex. 8. Less than a year later, on March 17, 2018, Rice passed away unexpectedly. Her death certificate listed a pulmonary embolism as the primary cause of death. Pet. Ex. 8.6 Rice did not have at least eight years of service credit in FRS at the time of her passing. After her mother's passing, Hernandez was contacted by the FRS guidance line to discuss the process and survivor benefits related to the Pension Plan.7 Naturally, Hernandez was shocked and dismayed when the representative informed her that she was only entitled to the total contributions her mother made while she was working and in the Pension Plan. He also regrettably informed Hernandez that she was not entitled to recover the buy-in costs paid by her mother, nor was she entitled to the balance she had in the Investment Plan when the transfer was made. During this telephone discussion, Hernandez lamented that she and her mother had made the decision together to transfer her from one plan to the other. On June 28, 2018, the Department sent a formal letter to Rice's daughter, Hernandez, acknowledging her mother's death and notifying her that since her mother did not have eight years of service, the benefit available to Hernandez was limited to a refund of retirement contributions in the amount of $2,654.17. Resp. Ex. 9. At Hernandez's request, the Department manually calculated the amount Rice paid into the FRS. When Rice transferred to the Pension Plan, the Department's system, which is called the Integrative Retirement Information System ("IRIS"), only showed the accumulation of the contributions that she paid into the Pension Plan after the transfer, since her contributions in the Investment Plan had already been liquidated for the transfer. Resp. Ex. 1. 6 The cause of her death is mentioned primarily to show that her death was unexpected. The undersigned infers from the evidence, particularly the CD recordings, that Rice had no forewarning or suspicions regarding her health when she made the transfer. 7 The date of this phone call is not in the record. Kathy Gould ("Gould"), the Department's Bureau Chief of Retirement Calculations, testified that the manual calculation revealed that a total of $16,042.58 was contributed by Rice since her participation began in the FRS. Based on the calculations and figures provided, her total contributions had two components: (1) $13,388.41 while Rice was in the Investment Plan and (2) $2,654.17 while Rice was in the Pension Plan. In addition to a return of these sums, Petitioner also seeks the return or refund of the "buy in" fee--$22,943.81--Rice paid to transfer to the Pension Plan. Testimony of Kathy Gould Gould's team handles the calculation of costs involved with transfers from the Investment Plan to the Pension Plan. She testified that there are two plans under the FRS, the Pension Plan and the Investment Plan. At all times related to Rice's tenure under the FRS, the funds for the FRS retirement plans came from employer and employee contributions. Employee contributions are currently three percent of salary. In the Pension Plan a member vests after eight years of service. If a member dies before the member vests, it was her position that the beneficiary would be eligible to receive the accumulated contributions. She referred to the applicable statute, section 121.091(7), Florida Statutes. Conversely, the State Board of Administration administers the Investment plan, and is separate from Respondent. A member vests after only one year in the Investment plan. Exhibit 1 was a screenshot of Rice's profile in the IRIS. This is a computer database that contains the Department's membership information. Rice's total employee balance as reflected in Respondent's Exhibit 1 was $2,654.17. This includes only Rice's payroll contributions while a member of the Pension Plan. Rice's "personal payment" to buy into the Pension Plan was $22,943.81. Gould explained that if a member of the Investment Plan left after only five months, the member would be entitled to receive the employee's contributions only. Tr. pp. 55-56. This would not include the employer's contributions. After one year, an employee is fully vested in the Investment Plan and would be entitled to all contributions made, both employee and employer, if employment was terminated while still in the Investment Plan. The payment that Rice made to buy into the Pension Plan was in the form of a personal check, not a deduction from her payroll. Respondent's Exhibit 21 is an email Gould prepared for the Department's legal counsel. Gould analyzed Rice's reported salaries while she was a member of the Investment Plan and multiplied them by three percent to provide the total amount that Rice had paid into both plans. This totaled $16,042.58. This was the amount from Rice's first payroll through her last payroll while in the FRS. The amount was the total of both the Investment Plan and the Pension Plan. Gould admitted that there are essentially two types of contributions into the FRS, employer contributions and employee contributions. She acknowledged that the $22,943.81 Rice paid to transfer to the Pension Plan was not an employer contribution. Rice was not in the Investment Plan when she died. When she died, Rice was participating in the Pension Plan. As a result, Gould admitted that the state would pay out any benefits utilizing the statutes relating to the Pension Plan. The calculation of the buy-in amount performed by the Department in Rice's case was done on the "calculator" provided by their actuary, Milliman. Testimony of Matthew Richard Larrabee Matthew Larrabee ("Larrabee") was called by the Department. He is a pension actuary with Milliman and specializes in governmental pension plans. He discussed the Department's use of a "calculator" that is designed by Milliman. It is provided and created to allow agency staff to determine actuarial pension calculations without relying upon a certified actuary. The actuarial accrued liability ("AAL") determined by the calculator, establishes the "buy-in" or purchase price for a member that chooses to transfer from the Investment Plan to the Pension Plan. The components of the buy-in cost to transfer from the Investment Plan into the Pension Plan consist primarily of the projected monthly annuity amount, the state multiplier percentage for the employee's position, the years of service, and the member's pay level. There is also an assumption of projected pay increases and the life expectancy of the member. Age is also a factor in the formula. The funds collected and related to the transfer into the Pension Plan are deposited into a commingled, legally restricted pension trust. Respondent's Exhibits 4, 5, and 6 were prepared by the Department's staff at different date intervals using the Milliman calculator. These exhibits represent output sheets produced by the calculator, which was developed by Milliman under Larrabee's supervision. The sheets are accurate. They show different actuarial accrued liability amounts based, in part, on age.8 The final calculation in Respondent's Exhibit 6 is for a transfer date of April 2017 for Rice. The calculated actuarial accrued liability was $58,366.00. Larrabee explained that this calculation is a sound estimation or valuation of the financial present value of the total future retirement benefits for a given member--in this case, Rice. 8 Different dates are notated on the calculator sheets based on differing dates being considered for the effective transfer date by Rice when the individual sheet was run. The actuarial accrued liability calculation and resulting "buy in" amount is premised on the fact that the actuaries do not take into account a potential refund feature, such as the return of funds sought by Hernandez.9 Larrabee went on to explain that if potential refunds, such as those requested by Hernandez, were accounted for in the actuarial calculations, the cost to "buy in" would only be "modestly higher." This is because the mortality rates for people like Rice in their 50's or 60's are "quite low." As a result, the added costs to cover such an infrequent contingency, if that were an option, "would be low." Allison Olson Allison Olson ("Olson") is the Director of Policy, Risk Management and Compliance for the State Board of Administration ("SBA"). Her duties include the review and determination of compliance with contracts and policies by outside vendors for the FRS Investment Plan. She also reviews complaints that are received from Investment Plan members. The Investment Plan is a defined contribution plan, similar to a traditional 401(k). The SBA is a separate agency from the Department. A member has an option of making an election, as part of their initial choice, to be a member of the Investment Plan. Vesting for the Investment Plan occurs after one year of service. Then the member owns the contributions in their account. Under the Investment Plan, each account is funded by employer contributions as well as a mandatory three percent monthly employee contribution. Members in the FRS with questions about their accounts may consult with representatives on a financial guidance line managed by the SBA vendor.10 9 No evidence was offered to explain why this type of feature was not built into the actuarial calculation, or why it was not offered as an option to potential transferees. 10 As previously noted, Rice took advantage of this service on numerous occasions. The Department offered into evidence Respondent's Exhibit 14, an FRS Investment Plan Summary Plan Description (sometimes referred to as an "SPD"). However, this SPD was not issued until July 2018. Because it was issued after Rice passed away and there was no proof she ever received it or a prior version, it was excluded as evidence and not considered based on the objection of Petitioner.11 Garry Green Gary Green ("Green") is the Chief of Research and Education for Respondent. He handles the administrative aspects of the actuarial contract and services provided by Milliman. The liquidation of an investment plan account is the sale of all assets that the member has in the account. It includes all money, both employer and employee contributions. After applying to transfer from one plan to another, an employee has 60 days to "roll in" her "buy in" money, or to cancel the transfer. The money a member pays to buy-in to the Pension Plan, is deposited into the pension trust fund with all the other assets of the trust fund. His view was that if the member is not vested in the Pension Plan, the contributions used to "buy in" are not refundable. Respondent's Exhibit 6 calculates the actuarial accrued liability of $58,366.00. It is a calculation of the total cost to buy in to the Pension Plan. He explained that it is not a statement of the liquidated assets from Rice's Investment Plan or any funds owed to Rice. 11 It should be noted that, aside from notices she received in the enrollment forms she signed or guidance from FRS guidance line representatives, there was no proof presented by Respondent that any of the mandatory educational components required by section 121.4501(10)(a)-(g), Florida Statutes, entitled "Education Components," were complied with, or offered to Rice. This is particularly significant in this case since material "must be prepared under the assumption that the employee is an unsophisticated investor." § 121.4501(10)(e), Fla. Stat. Additional Facts Established by Discovery Petitioner's Exhibits 9-1 and 9-2 establish that Rice contributed $16,042.58 in employee contributions into the FRS. $2,654.17 was into the Pension Plan and $13,338.41 was while Rice was a member of the Investment Plan. The Department admitted that Rice paid $22,943.81 of her personal funds on or before June 6, 2017, to transfer from the Investment Plan to the Pension Plan. Request for Admission No. 19. The Department admitted that Petitioner is entitled to receive $2,654.17, the amount of contributions after Rice was in the Pension Plan. Request for Admission No. 21. The Department admitted that it received the Order of Summary Administration and Death Certificate. Requests for Admission Nos. 25 and 26. The Department admitted that Rice contributed at least $13,388.41 into the Investment Plan. Request for Admission No. 29.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of Retirement, pay to Rebecca Hernandez, Darlene Rice's daughter and beneficiary, the sums of $2,654.17, $13,388.41, and $22,943.81, totaling $38,986.39, plus the appropriate statutory rates of interest which have accrued from October 2, 2018, the date of the circuit court's Order of Summary Administration, to the date of payment. DONE AND ENTERED this 21st day of September, 2020, in Tallahassee, Leon County, Florida. S ROBERT L. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of September, 2020. COPIES FURNISHED: Gayla Grant, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 (eServed) Larry Allan Karns, Esquire Spink, Shrouder & Karns, P.A. 9700 Griffin Road Cooper City, Florida 33328 (eServed) Nikita S. Parker, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 (eServed) David DiSalvo, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 (eServed) William Chorba, General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 (eServed)
