NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not
citable as precedent. It is a public record.
United States Court of Appeals for the Federal Circuit
05-3105
CORNELIO LAYAO,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
____________________
DECIDED: November 7, 2006
____________________
Before LOURIE, RADER, and SCHALL, Circuit Judges.
PER CURIAM.
Cornelio Layao petitions for review of the final decision of the Merit Systems
Protection Board (the “Board”) affirming the decision of the Office of Personnel
Management (“OPM”) that denied his application for an annuity under the Civil Service
Retirement System (“CSRS”). Layao v. Office of Pers. Mgmt., No. SE-0831-03-0362-I-1
(M.S.P.B. Jan. 7, 2005). Because substantial evidence supports the Board’s
determination that Layao was not entitled to the applied-for annuity, we affirm.
BACKGROUND
Layao began employment at the facilities of the U.S. Navy in Subic Bay, Republic
of the Philippines, on September 19, 1945. On October 28, 1949, his employment was
terminated through a reduction-in-force. On October 31, 1949, Layao received an
Excepted Temporary Intermittent Appointment, which was converted to an Excepted
Temporary Indefinite Appointment on October 1, 1950. Layao was employed in that
status until his resignation, effective January 12, 1965, and retirement deductions were
withheld from Layao’s pay during the period beginning November 12, 1950. On
January 15, 1965, Layao submitted an Application for Refund of Retirement Deductions.
In that application, Layao listed the beginning date for his “Period of Last Service” as
October 31, 1949 and the ending date as January 12, 1965, and on February 18, 1965,
a lump-sum refund in the amount of $1,681.90 was approved for payment.
On April 5, 2002, Layao applied to the OPM for a deferred annuity under the
CSRS. OPM denied the application on the ground that, under 5 U.S.C. § 8342(a), his
receipt of the lump-sum refund voided his rights to an annuity for the period of service
covered by the lump-sum refund. Layao requested reconsideration, and OPM issued a
reconsideration decision affirming its initial decision on the ground that Layao’s receipt
of the lump-sum refund voided all annuity rights that he had at the time of his January
12, 1965 separation.
Layao appealed OPM’s decision to the Board. In an initial decision, the
Administrative Judge (“AJ”) affirmed OPM’s decision. The AJ noted that the receipt of a
refund of retirement contributions is governed by 5 U.S.C. § 8342(a), which provides
that receipt of payment of a lump-sum credit voids all annuity rights based on the
service to which the lump-sum relates. The AJ observed that Layao did not dispute that
the refund forfeited his annuity entitlement for the period covered by the refund, but
rather that his prior service from September 19, 1945 to November 11, 1950 was not
included in the refund. The AJ noted that in his Application for Refund of Retirement
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Deductions, Layao listed his “Period of Last Service” as beginning on October 31, 1949
and ending on January 12, 1965. The AJ also observed that Layao failed to list any
other of his prior civilian service in the space provided. The AJ therefore determined
that the period of service covered by the refund was from October 31, 1949 to January
12, 1965. The AJ also rejected Layao’s claim that the period that was not covered by
the refund extended to November 11, 1950.
The AJ then decided that even if it assumed that Layao’s service from
September 19, 1945 to October 31, 1949 was not included in the refund, that service
alone was not sufficient to confer annuity rights. The AJ determined that that service
totaled about 4 years and 1 month and fell short of the 5 year minimum civilian service
required for conferring annuity rights under 5 U.S.C. § 8333(a).
The initial decision became the final decision of the Board. See 5 C.F.R. §
1201.113. Layao timely appealed to this court, and we have jurisdiction pursuant to 28
U.S.C. § 1295(a)(9).
DISCUSSION
The scope of our review in an appeal from a decision of the Board is limited. We
must affirm the Board’s decision unless it was “(1) arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law; (2) obtained without procedures
required by law, rule, or regulation having been followed; or (3) unsupported by
substantial evidence.” 5 U.S.C. § 7703(c) (2000); see Briggs v. Merit Sys. Prot. Bd.,
331 F.3d 1307, 1311 (Fed. Cir. 2003). The petitioner has the burden of proof of
demonstrating entitlement to retirement benefits. Cheeseman v. Office of Pers. Mgmt.,
791 F.2d 138, 141 (Fed. Cir. 1986).
05-3105 3
Layao argues that the Board erred in determining that the period of service for
the lump-sum refund was from October 31, 1949 to January 12, 1965. According to
Layao, the period of service was from November 12, 1950 to January 12, 1965 because
the form that authorized his refund stated that the retirement deductions began on
November 12, 1950. He thus argues, in effect, that the period from October 31, 1949 to
November 11, 1950, was not covered by his refund. Because he completed more than
five years of civilian service from September 19, 1945 to November 11, 1950, Layao
claims that he is therefore entitled to an annuity. Layao finally claims that his
employment prior to November 12, 1950 was not excluded from retirement coverage
under Executive Order 9154, which was in effect at the time of his employment.
The government responds that the Board correctly held that Layao’s application
for, and receipt of, the lump-sum refund voided all annuity rights for the service covered
by the refund, which was from October 31, 1949 to January 12, 1965. According to the
government, even if it were assumed that Layao’s prior service from September 19,
1945 to November 11, 1950 was not included in the refund, Layao still would not be
entitled to an annuity for that prior service because it was not “covered” by the CSRS.
We agree with the government that substantial evidence supports the Board’s
determination that Layao was no longer entitled to an annuity under the CSRS. Under 5
U.S.C. § 8342(a), an employee who is separated from civilian service is entitled to be
paid a lump-sum refund of his CSRS retirement deductions. The statute provides that
the “receipt of the payment of the lump-sum credit by the employee or Member voids all
annuity rights under this subchapter based on the service on which the lump-sum credit
is based, until the employee or Member is reemployed in the service subject to this
05-3105 4
subchapter.” 5 U.S.C. § 8342(a) (emphasis added). As Layao was not reemployed by
the federal government after his resignation on January 12, 1965, Layao’s receipt of his
lump-sum credit therefore voided all of his rights to an annuity for the period of service
covered by the refund.
Layao argues that the period of service covered by the lump-sum refund began
on November 12, 1950, instead of October 31, 1949. Accordingly, Layao contends that
he is still entitled to an annuity for his prior service from September 19, 1945 to
November 11, 1950. However, the Board found as a fact that the period of service
covered by the refund was from October 31, 1949 to January 12, 1965, thereby voiding
any annuity for the period beginning October 31, 1949. The Board based its finding on
Layao’s Application for Refund of Retirement Deductions, which listed the beginning
date for his period of service as October 31, 1949 and the ending date as January 12,
1965. The record thus supports the Board’s finding that the period of service covered
by the refund was from October 31, 1949 to January 12, 1965. No annuity can then be
payable for any of that period. We find no basis to disturb that finding.
The Board further concluded that even if it were assumed that Layao’s prior
service from September 19, 1945 to October 31, 1949 was not included in the refund,
that service is not sufficient to confer annuity rights because it totaled less than five
years. To be eligible for a civil service annuity, an applicant must demonstrate that he
has completed “at least 5 years of civilian service before he is eligible for an annuity
under this subchapter.” 5 U.S.C. § 8333(a). The period of service from September 19,
1945 to October 31, 1949 does not meet the minimum requirement of five years, and
thus Layao is not entitled to an annuity for that period.
05-3105 5
Because substantial evidence supports the Board’s conclusion that the lump-sum
refund voided his rights to an annuity, we affirm. In addition, because we affirm the
Board’s finding that the period of service included in the lump-sum refund was from
October 31, 1949 to January 12, 1965, we do not address Layao’s argument concerning
whether any overlapping period of service from September 19, 1945 until November 11,
1950 was “covered” under the Retirement Act in effect at that time.
05-3105 6