B-244883, B-244886, Jan 14, 1992

B-244883,B-244886: Jan 14, 1992

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Mumford: This is in response to the National Park Service. Lopez was converted from an excepted service indefinite appointment to a career appointment in the civil service. should have been placed in the Civil Service Retirement Offset System (CSROS). Lopez was instead placed under the CSRS. His conversion form and leave and earnings statements clearly show that he was placed in the CSRS rather than the CSROS. He was notified in September 1988 that he had been placed in the wrong retirement system. He was advised that he should elect between the CSROS and the FERS. At that time he was also advised that the election would not change the amount of his contribution to the appropriate retirement system.

B-244883, B-244886, Jan 14, 1992

DIGEST: PRECIS-UNAVAILABLE

Eddie L. Lopez and Robert A. Mumford:

This is in response to the National Park Service,s request for review of our Claims Group's waivers /1/ under 5 U.S.C. Sec. 5584 (1988) of salary overpayments made to two Park Service employees due to incorrect deductions from the employees' pay for retirement contributions. sustain the Claims Group's waivers.

Eddie L. Lopez

On January 25, 1984, Mr. Lopez was converted from an excepted service indefinite appointment to a career appointment in the civil service. should have been placed in the Civil Service Retirement Offset System (CSROS). However, due to an administrative error, Mr. Lopez was instead placed under the CSRS. His conversion form and leave and earnings statements clearly show that he was placed in the CSRS rather than the CSROS. He was notified in September 1988 that he had been placed in the wrong retirement system, and he was advised that he should elect between the CSROS and the FERS. At that time he was also advised that the election would not change the amount of his contribution to the appropriate retirement system, and therefore his salary would not be affected by the correction. Mr. Lopez chose the CSROS. Due to administrative delay, the correction was not completed until December 1988. As a result of the original error and delay in correcting it, insufficient amounts for retirement contributions were deducted from his pay from January 25, 1984, through December 16, 1988, and therefore he received $866.27 more in pay during that period than he was entitled to receive.

Mr. Lopez states that he did not know he was placed in the wrong retirement system when he was converted to a career appointment in January 1984 or that the error was not corrected after he made the election required when he was notified in September 1988. Since at that time he was told that there would be no financial changes with the correction of his retirement system, he believes waiver of the entire amount is appropriate. On that basis, the Claims Group waived his debt.

Robert A. Mumford

On August 5, 1984, Mr. Mumford was converted to a career conditional appointment with the Park Service, which was the first time he was eligible to be covered by a retirement system for federal employees. such, he should have been placed in the Federal Employees Retirement System (FERS). However, due to an administrative error, he was instead placed under the Civil Service Retirement System (CSRS). His appointment forms and his leave and earnings statements clearly show that he was placed in the CSRS. As a result, insufficient deductions were made from Mr. Mumford's pay for retirement contributions during August 5, 1984, through January 2, 1987, when the necessary corrections were made. This resulted in him receiving $345.35 more in pay than he was entitled to during that period.

Mr. Mumford states that when he was appointed by the Park Service in August 1984, he had no understanding of the federal retirement systems because there had been no descriptive literature distributed to him by the Park Service, nor had the systems been otherwise explained. Thus, Mr. Mumford claims to be without fault in the occurrence of the administrative error of placing him in the wrong retirement system, and without fault in the failure to detect that error. The Claims Group agreed and waived his debt.

Park Service's Position

The Park Service agrees that Mr. Lopez and Mr. Mumford may not have known which retirement system they were to be placed in and they were not at fault. However, it notes that it has a statutory obligation to collect the correct retirement contributions from its employees, and questions whether the Claims Group's waiver of the debt was proper. In doing so, the Park Service refers to two of our decisions. First, it notes that in B-165979, Feb. 10, 1969, we declined to consider for waiver an excess refund of retirement contributions on the basis that there is no authority under 5 U.S.C. Sec. 5584 for waiver of such payments. The Park Service also cites to our decision in Patricia J. Engevik, B-202201, Dec. 23, 1981, in which we denied waiver of an employee's debt that resulted from an administrative error in deducting Social Security taxes instead of Civil Service Retirement contributions from the employee's salary because, under the circumstances there, we found the employee to be at fault in not questioning the erroneous payments.

Opinion

Waiver of claims for overpayments of "pay" to federal employees is authorized by 5 U.S.C. Sec. 5584. That statute provides that where collection of such a claim would be against equity and good conscience and not in the best interests of the United States the claim may be waived unless there is an indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee.

We do not agree with the agency's contention that overpayments of pay resulting from under deductions of retirement contributions from an employee's pay are not subject to waiver. The waiver statute was specifically designed to address overpayments of pay resulting from payroll errors, and we have granted waiver where an employee received overpayments of pay because his agency failed to deduct the correct retirement amounts from his salary. See James F. Magovern, B-235467, Oct. 24, 1989; Phillip C. McGuire, 66 Comp.Gen. 509 (1987); Sidelle Wertheimer, B-202983, Mar. 10, 1982. This is distinguishable from the situation in B-165979, supra, cited by the agency. That case did not involve an overpayment of "pay" subject to our waiver authority under 5 U.S.C. Sec. 5584; it involved an excess refund of retirement contributions to a former employee from the Civil Service Retirement Fund made by the Civil Service Commission, albeit based on erroneous information provided by the agency. As was stated in that decision, the Civil Service Commission was the agency with authority to consider that overpayment for waiver.

Also, Patricia J. Engevik, B-202201, supra, cited by the agency, is distinguishable from Mr. Lopez's and Mr. Mumford's cases. In that case, although we did deny waiver of erroneous salary overpayments resulting from underdeduction for retirement contributions, waiver was denied not because the overpayments resulted from erroneous retirement contributions, but rather because we found the employee partially at fault. At the time the case arose, the federal retirement system was not in flux with three different systems available, as was the situation in Mr. Lopez's and Mr. Mumford's case. Also, the employee involved had 16 years of federal employment experience and her leave and earnings statements showed no retirement deductions at all, so we found that she should have inquired about the correctness of her pay. Her failure to do so placed her in the position of being at least partially at fault in the matter, which precluded waiver.

In Mr. Lopez's and Mumford's cases the Claims Group determined and the agency concurs, the record does not indicate that the employees were aware of the overpayments or that they were at fault in the matter. Assuming that the employees are responsible for knowing generally that federal employees are covered by a retirement system, their leave and earnings statements and appointment documents gave them insufficient cause to inquire further because they clearly showed the employees to be in a retirement system. Further, the amounts of the underdedutions per pay period were small and nothing in the record indicates that either employee had any particular expertise in or knowledge of the new retirement systems introduced in the government at the time the errors were made. Thus, unlike the situation in the Engevik case, supra, we believe the employees had a reasonable basis to rely upon the correctness of the pay documents and receipt of the money, and it now would be against equity and good conscience to require repayment. See James S. Vinson, Jr., B-211345, July 21, 1983] Dr. Robert J. Davey, B-208039, Mar. 2, 1983.

Accordingly, we sustain the Claims Group's waiver of Mr. Lopez's and Mr. Mumford's debts.

/1/ Z-2904119, Apr. 12, 1991 and Z-2904897, Mar. 26, 1991.