[Claims for Interest and Attorney Fees]

B-208523: Apr 13, 1983

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Claims for reimbursement of interest costs and attorneys fees, which were incurred by several Massachusetts National Guard technicians when the claimants were mistakenly placed under the Federal Civil Service retirement system without authority, were submitted to GAO with recommendations for payment because of the mistake. The claimants were participating in State retirement programs when the National Guard Technicians Act authorized them to either elect to remain under the State retirement system or to switch to the Civil Service retirement system. The claimants elected the former option. However, they were informed that they would be converted to the Civil Service retirement system if, after separating from employment, they were rehired. Separation and rehiring did take place, and the claimants withdrew their contributions from the State retirement system and converted to Civil Service retirement coverage. However, they were then advised that the election to remain in the State retirement system had been final, and their contributions were transferred from the Civil Service retirement system back to the State retirement system. The claimants believed that they should be allowed to transfer their contributions and that they should be reimbursed for other costs which arose from their re-entry into the State retirement system, including interest and attorney fees for presenting the claims to be paid. GAO found that the corrective action taken to return the claimants to the State retirement system, with concurrent transfer of funds, was all the action that the law allows to correct such an error. GAO was aware of no authority under which it could authorize the payments of claims for interest and attorney fees. However, GAO stated that the Office of Personnel Management may be willing to consider further the question of appropriate interest payments with respect to the amounts erroneously paid into and held in the Civil Service Retirement Fund. Accordingly, the payment of the claims was not authorized.