Bobby Swain v. Office of Personnel Management ( 2016 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
BOBBY SWAIN, DOCKET NUMBER
Appellant, AT-831M-15-0544-I-1
v.
OFFICE OF PERSONNEL DATE: March 21, 2016
MANAGEMENT,
Agency.
THIS ORDER IS NONPRECEDENTIAL 1
Bobby Swain, Covington, Georgia, pro se.
Roxann Johnson, Washington, D.C., for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
REMAND ORDER
¶1 The Office of Personnel Management (OPM) has filed a petition for review
of the initial decision, which found that it failed to establish the existence of a
Civil Service Retirement System (CSRS) annuity overpayment. For the reasons
discussed below, we GRANT OPM’s petition for review, VACATE the initial
1
A nonprecedential order is one that the Board has determined does not add
significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
but such orders have no precedential value; the Board and administrative judges are not
required to follow or distinguish them in any future decisions. In contrast, a
precedential decision issued as an Opinion and Order has been identified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
2
decision, and REMAND the case to the regional office for further adjudication in
accordance with this Order.
BACKGROUND
¶2 The appellant retired from Federal service effective June 4, 2004, under the
CSRS Offset system. Initial Appeal File (IAF), Tab 5 at 37-41. The appellant
separately applied for disability benefits with the Social Security Administration
(SSA), which approved his application and began paying him those benefits in
December 2004. IAF, Tab 1 at 8. OPM issued the appellant notice in
August 2014, that his CSRS annuity would be offset by $291 each month based
on his eligibility for Social Security old-age insurance benefits, and it informed
him that he had received an overpayment of $12,444 because this offset should
have begun when he turned 62 years old in April 2011. Id. at 70-74. OPM
subsequently rescinded its overpayment notice and issued the appellant an
amended notice explaining that the offset should have begun in May 2011, the
month after he turned 62, and that he was overpaid by $12,153. Id. at 25. The
appellant requested reconsideration from OPM, which issued a final decision
affirming its finding of an overpayment of $12,153. Id. at 5-10. In its final
decision, OPM explained that, although the appellant was not at fault for causing
the overpayment, recovery of the overpayment would not be against equity and
good conscience, and it imposed a 36-month repayment schedule. Id.¶3 The appellant timely filed an appeal challenging OPM’s determination that
he had received an overpayment, and arguing in the alternative that the
overpayment should be waived. IAF, Tab 1. Following a hearing, the
administrative judge issued an initial decision finding that OPM had not
established the existence of an overpayment. IAF, Tab 14, Initial Decision (ID).
He found that only Social Security old-age insurance benefits could offset a
CSRS annuity under 5 U.S.C. § 8349, and thus he concluded that OPM failed to
prove that the appellant received such benefits beginning in May 2011. ID at 3-5.
3
Rather, the administrative judge found it undisputed that the appellant received
Social Security disability insurance benefits beginning in December 2004, and
that he would continue to receive such benefits until he became eligible for
old-age insurance benefits upon turning 66. ID at 4 (citing 20 C.F.R.
§ 404.321(c)(1)) (explaining that disability benefits terminate the month before
the appellant attains full retirement age), section 404.409(a)). The administrative
judge thus reversed OPM’s reconsideration decision without addressing whether
the overpayment should be waived, or whether there should be an adjustment to
the repayment schedule. ID at 5.
¶4 OPM has filed a petition for review of the initial decision, and the appellant
has filed an opposition. Petition for Review (PFR) File, Tabs 1, 4.
DISCUSSION
¶5 CSRS Offset generally covers employees who were hired after
December 31, 1983, and were required to make Old Age, Survivor, and Disability
Insurance payments into the Social Security system. See Wible v. Department of
the Army, 120 M.S.P.R. 333, ¶ 6 (2013). When an employee in CSRS Offset
retires, OPM calculates the retirement annuity using the same method as a CSRS
employee, but, when the individual becomes eligible to draw Social Security
payments, the CSRS annuity payment is reduced by the amount of Social Security
benefit attributed to the covered Government service. Id. This basic principle of
CSRS Offset is codified at 5 U.S.C. § 8349, which provides in relevant part that
“if an individual under [5 U.S.C. § 8402(b)(2)] is entitled, or would on proper
application be entitled, to old-age insurance benefits under title II of the Social
Security Act, the annuity otherwise payable to such individual shall be reduced
under this section.” 5 U.S.C. § 8349(a)(1). The criteria used to calculate an
annuity under CSRS Offset is located at 5 U.S.C. § 8349(a)(2)-(5). See also
5 C.F.R. part 831, subpart J.
4
¶6 In his initial decision, the administrative judge found that only Social
Security old-age insurance benefit payments can offset a CSRS annuity under
section 8349. ID at 3-5. He further explained that an individual cannot
simultaneously receive both old-age insurance benefits and disability insurance
benefits under the Social Security Act, and that disability insurance benefits
automatically convert to old-age insurance benefits once an individual reaches
full retirement age. ID at 4. The administrative judge thus concluded that the
appellant could not have been receiving old-age insurance benefits while he was
receiving disability insurance benefits and that OPM therefore failed to establish
that the benefits he received were benefits that would have subjected his CSRS
annuity to an offset under section 8349. ID at 4-5. We disagree with the
administrative judge that the record was sufficiently developed to make
this conclusion.
¶7 For purposes of determining the appellant’s annuity offset under 5 U.S.C.
§ 8349, we find that the record is unclear as to whether the appellant was entitled
to old-age insurance benefits upon turning 62 years old. Specifically, the
appellant submitted a decision letter on appeal from SSA informing him that he
was entitled to Social Security disability benefits retroactive to June 2004. IAF,
Tab 1. However, in March 2011, SSA provided notice to OPM that the appellant
was entitled to old-age benefits effective in May 2011. IAF, Tab 5 at 35. In
computing the appellant’s annuity, OPM must rely on SSA’s certification of an
annuitant’s eligibility for old-age insurance benefits. See 5 U.S.C. § 8347(m)(3).
Accordingly, we remand this appeal for further factual findings regarding the
appellant’s entitlement to old-age insurance benefits upon turning 62 years old,
including soliciting information from SSA regarding his entitlement. 2
2
The appellant has filed a motion to submit additional evidence in the form of a letter
from SSA, which he states shows when his disability benefits were converted to old-age
insurance benefits. PFR File, Tab 7. The agency also has submitted additional
evidence on review. PFR File, Tab 1. We need not rule on the appellant’s motion or
consider the agency’s evidence at this time, but such evidence may be relevant to the
5
¶8 Additionally, upon our review of the record, it appears that OPM reduced
the appellant’s monthly CSRS annuity in May 2011. IAF, Tab 5 at 32.
Specifically, OPM’s retirement calculations reflect that the appellant received
$2,427 per month between December 1, 2008, and April 30, 2011, and that,
effective May 1, 2011, his monthly annuity was reduced by over $500, to $1,925.
Id. The appellant submitted corroborating evidence showing a reduction in the
net annuity payment he received. Id. at 13-15. This reduction coincides with the
appellant turning 62 years of age. Id. at 37 (reflecting the appellant’s date of
birth). There are several possible explanations for this reduction 3; the record,
however, contains no such explanation. See Sansom v. Office of Personnel
Management, 62 M.S.P.R. 560, 563 (1994). Accordingly, on remand, the
administrative judge also must determine the reason, or reasons, for the $502
reduction in the appellant’s CSRS annuity payment beginning in May 2011. If
the administrative judge determines that OPM indeed has proven the existence
and amount of the overpayment, then he should determine whether the appellant
has established an entitlement to a waiver of the overpayment or an adjustment in
the repayment schedule imposed by OPM. See Fearon v. Office of Personnel
Management, 107 M.S.P.R. 122, ¶¶ 7, 14 (2007), modified on other grounds by
Alexander v. Office of Personnel Management, 114 M.S.P.R. 122 (2010).
determination on remand. Therefore, on remand, the administrative judge should afford
the parties an opportunity to submit their evidence on remand, and he should consider it
in determining the appellant’s entitlement to old-age benefits.
3
OPM’s reconsideration decision, for example, alludes to a mistaken calculation
concerning the appellant’s post-1956 military service credit. IAF, Tab 5 at 10.
6
ORDER
¶9 For the reasons discussed above, we remand this case to the regional office
for further adjudication in accordance with this Remand Order.
FOR THE BOARD: ______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.