UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
MARK S. HUNTER, DOCKET NUMBER
Appellant, SF-0845-15-0711-I-1
v.
OFFICE OF PERSONNEL DATE: August 19, 2016
MANAGEMENT,
Agency.
THIS FINAL ORDER IS NONPRECEDENTIAL *
Mark S. Hunter, Atwater, California, pro se.
Karla W. Yeakle, Washington, D.C., for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
FINAL ORDER
¶1 The appellant has filed a petition for review of the initial decision, which
affirmed the reconsideration decision of the Office of Personnel Management
(OPM). Generally, we grant petitions such as this one only when: the initial
decision contains erroneous findings of material fact; the initial decision is based
*
A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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
on an erroneous interpretation of statute or regulation or the erroneous application
of the law to the facts of the case; the administrative judge’s rulings during either
the course of the appeal or the initial decision were not consistent with required
procedures or involved an abuse of discretion, and the resulting error affected the
outcome of the case; or new and material evidence or legal argument is available
that, despite the petitioner’s due diligence, was not available when the record
closed. See title 5 of the Code of Federal Regulations, section 1201.115 (5 C.F.R.
§ 1201.115). After fully considering the filings in this appeal, we conclude that
the petitioner has not established any basis under section 1201.115 for granting
the petition for review. Therefore, we DENY the petition for review and
AFFIRM the initial decision, which is now the Board’s final decision. 5 C.F.R.
§ 1201.113(b).
¶2 The appellant sustained a work-related injury while employed with the U.S.
Postal Service, making him eligible for benefits from the Office of Workers’
Compensation Programs (OWCP). Initial Appeal File (IAF), Tab 11 at 48. The
appellant took his OWCP benefit in a lump-sum payment of $100,153.62, i.e., a
schedule award. Id. at 54. The appellant also became eligible for Social Security
disability benefits commencing on November 1, 2009; however, he received a
reduced benefit because of his OWCP payment. Id. at 24. Additionally, he
became eligible for a disability retirement annuity under the Federal Employees’
Retirement System (FERS) commencing on June 10, 2009. Id. at 34. He received
both a FERS disability annuity and reduced Social Security disability benefits
until June 1, 2012.
¶3 In a reconsideration decision, OPM found that the appellant had been
overpaid $34,246 in disability retirement annuity benefits because OPM had not
reduced his FERS annuity to account for his Social Security benefits during the
period of time from June 9, 2009, to June 1, 2012. Id. at 6. In calculating the
overpayment, OPM deemed the appellant to have received the full amount of the
Social Security benefit to which he would have been entitled but for the OWCP
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payment, not the reduced Social Security benefit that he actually had received
during the period of time that he was overpaid. Id. at 34.
¶4 In his petition for appeal, the appellant contended that OPM should have
calculated the overpayment using only the amount of the Social Security
disability benefit that he actually received; that is, the benefit as reduced by his
receipt of the OWCP schedule award. IAF, Tab 3. He did not request a hearing.
Based on the written record, the administrative judge found that OPM properly
calculated the appellant’s overpayment as though he had received 100% of the
Social Security benefit to which he would have been entitled had he not received
the OWCP award. IAF, Tab 17, Initial Decision (ID) at 5-8. He also found that
the appellant failed to show that he was entitled to waiver of the overpayment.
ID at 8-10. He found that the appellant did not show that he had surrendered a
valuable right because of the overpayment or that collection would be patently
unfair because of OPM’s delay in adjusting his annuity. ID at 8-9. He found
further that the appellant presented no evidence that collection of the
overpayment in the amount of $398 per month for 86 months with a final payment
of $18 would cause him financial hardship. ID at 10; IAF, Tab 11 at 9.
DISCUSSION OF ARGUMENTS ON REVIEW
¶5 In his petition for review, the appellant repeats the arguments that he made
below, asserting that recovery would be patently unfair and that the
administrative judge erred in finding that he was not entitled to waiver. Petition
for Review File, Tab 1.
¶6 A FERS disability annuity must be reduced by the Social Security disability
amount to which the annuitant is entitled, as determined by the Social Security
Administration (SSA). 5 U.S.C. § 8452(a)(2); Maxwell v. Office of Personnel
Management, 78 M.S.P.R. 350, 355 (1998), overruled on other grounds by
Conner v. Office of Personnel Management, 120 M.S.P.R. 670 (2014); Johnston
v. Office of Personnel Management, 70 M.S.P.R. 109, 112–17, aff’d, 99 F.3d
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1160 (Fed. Cir. 1996) (Table); 5 C.F.R. § 844.302(b)(2). During the first 12
months after a FERS annuity commences, the FERS annuity is reduced by 100%
of the Social Security disability benefit to which the annuitant is entitled during
that period; thereafter, the FERS annuity is reduced by 60% of the Social Security
disability benefit to which the annuitant is entitled during that period. 5 U.S.C.
§ 8452(a)(2)(A); Maxwell, 78 M.S.P.R. at 355; 5 C.F.R. § 844.302(b)(2), (c)(2).
The Board has found that OPM is correct in determining that it is required to
reduce the appellant’s FERS annuity based on the annuitant’s entitlement, rather
than actual receipt, of Social Security benefits. See Maxwell, 78 M.S.P.R. at 355;
cf. Hicks v. Office of Personnel Management, 44 M.S.P.R. 340, 343 (1990)
(observing that there is no requirement that the appellant actually receive Social
Security benefits before his annuity will be offset under 5 U.S.C. § 8332(j)).
¶7 The Board reviewed the relevant statutory and regulatory provisions and
concluded that, notwithstanding that a disability retirement annuitant is in receipt
of a schedule award from the OWCP, OPM is correct in its determination that it is
required to reduce the appellant’s FERS annuity by the full, unreduced Social
Security disability insurance amount to which he is entitled, as determined by the
SSA, because such amount represents the assumed Social Security disability
insurance amount used in computing the appellant’s FERS annuity. See
Johnston, 70 M.S.P.R. 109, 111. The Board found that nowhere in the relevant
legislation as proposed or enacted is there any expression of Congress that a
FERS annuitant’s annuity should not be reduced by all of the Social Security
benefits to which he is entitled. Id. at 116.
¶8 The Board noted that the Social Security component is the largest
component of FERS and found that it is reasonable that any deductions required
would be from the primary component and would be taken by the SSA from the
full amount of the Social Security disability insurance benefit. The FERS
disability annuity is offset by the unreduced Social Security disability insurance
amount to avoid any duplicate payments. For example, if the SSA already offset
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the appellant’s Social Security disability insurance benefit by an OWCP schedule
award and the entire amount of such disability benefit is offset from FERS, the
appellant receives no duplicate payments—the payments from OWCP, the
payment from the SSA, and the FERS annuity contain no duplicate benefits. Id.
¶9 The U.S. Court of Appeals for the Federal Circuit affirmed the Board’s
reasoning. The court held that OPM’s interpretation of the controlling statute, as
manifested in the regulation designed to implement the statute, is not
unreasonable. See Johnston v. Office of Personnel Management, 99 F.3d 1160,
1163 (Fed. Cir. 1996) (Table). The court found that OPM’s interpretation
essentially leaves to the SSA the task of adjusting the SSA benefits in light of,
e.g., OWCP awards and schedule payments. Id. Applying the Board’s and the
court’s Johnston decisions in the overpayment context, OPM also properly uses
the full amount that the SSA calculates as an employee’s benefit entitlement in
both the adjustment of the FERS annuity and the calculation of any overpayment
caused by temporary dual payment by the SSA and FERS.
¶10 Regarding waiver, the appellant asserts that he is entitled to waiver because
OPM failed to notify him of the correct amount of the overpayment for 3 years
and only told him to set aside the amount that he was receiving from SSA, an
amount that is insufficient to pay the overpayment. The appellant contends that
OPM should have informed him of its method to calculate the overpayment as
OPM was aware that the SSA disability payment had been reduced because of his
OWCP schedule award.
¶11 The appellant bears the burden of establishing his entitlement to a waiver of
recovery of the overpayment by substantial evidence. See Knox v. Office of
Personnel Management, 107 M.S.P.R. 353, ¶ 5 (2007). To be entitled to a
waiver, the appellant must meet a two-part test. He must show by substantial
evidence that: (1) he is without fault in creating the overpayment; and
(2) recovery of the overpayment would be against equity and good
conscience. 5 U.S.C. § 8470(b); 5 C.F.R. § 845.301; see, e.g., Parker v. Office of
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Personnel Management, 75 M.S.P.R. 688, 692 (1997); Sawyer v. Office of
Personnel Management, 74 M.S.P.R. 527, 530 (1997) Here, the administrative
judge determined that it was undisputed that the appellant was without fault. ID
at 8. Recovery is against equity and good conscience when it would cause
financial hardship, the annuitant can show that he relinquished a valuable right or
changed positions for the worse, or recovery would be unconscionable under the
circumstances. Knox, 107 M.S.P.R. 353, ¶ 8; 5 C.F.R. § 845.303.
¶12 We agree with the administrative judge that, even if the appellant is without
fault, because he failed to submit evidence to show that repaying the overpayment
would cause him financial hardship, he failed to show that he is entitled to waiver
on that basis. We also agree that the appellant failed to show that the fact that he
used the overpayment in part to pay existing debts, service his roof, and pay
needed living expenses does not rise to the level necessary to show that he
changed position for the worse or surrendered a valuable right. We further agree
that, contrary to the appellant’s assertion on petition for review, OPM informed
him that it would reduce his FERS disability annuity by the amount to which SSA
determined that he was entitled as disability payments. IAF, Tab 11 at 17, 34. It
is unfortunate that the appellant did not read OPM’s notification as leading to the
calculation of his overpayment using the amount to which the SSA determined he
was entitled, prior to the reduction to account for his schedule award from the
OWCP. Nonetheless, we agree with the administrative judge that OPM’s
communications with the appellant did not render recovery unconscionable under
the circumstances. Accordingly, we affirm OPM’s decision that the appellant
must repay OPM the overpayment amount of $34,246 in monthly installments of
$398 plus one installment of $18.
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NOTICE TO THE APPELLANT REGARDING
YOUR FURTHER REVIEW RIGHTS
You have the right to request review of this final decision by the U.S.
Court of Appeals for the Federal Circuit. You must submit your request to the
court at the following address:
United States Court of Appeals
for the Federal Circuit
717 Madison Place, N.W.
Washington, DC 20439
The court must receive your request for review no later than 60 calendar days
after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec. 27,
2012). If you choose to file, be very careful to file on time. The court has held
that normally it does not have the authority to waive this statutory deadline and
that filings that do not comply with the deadline must be dismissed. See Pinat v.
Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).
If you need further information about your right to appeal this decision to
court, you should refer to the Federal law that gives you this right. It is found in
title 5 of the United States Code, section 7703 (5 U.S.C. § 7703) (as rev. eff.
Dec. 27, 2012). You may read this law as well as other sections of the United
States Code, at our website, http://www.mspb.gov/appeals/uscode.htm.
Additional information is available at the court’s
website, www.cafc.uscourts.gov. Of particular relevance is the court’s “Guide
for Pro Se Petitioners and Appellants,” which is contained within the
court’s Rules of Practice, and Forms 5, 6, and 11.
If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website
at http://www.mspb.gov/probono for information regarding pro bono
representation for Merit Systems Protection Board appellants before the Federal
Circuit. The
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Merit Systems Protection Board neither endorses the services provided by any
attorney nor warrants that any attorney will accept representation in a given case.
FOR THE BOARD: ______________________________
Jennifer Everling
Acting Clerk of the Board
Washington, D.C.
Mark S. Hunter v. Office of Personnel Management
Combined Opinion