Entitlement to Retroactive Adjustment of Separation Date

The Internal Revenue Service (IRS) requested a decision as to whether the separation date of one of its employees may be retroactively adjusted for the purposes of seeking a discontinued service retirement. IRS abolished the employee's position effective December 7, 1979, while he was on extended sick leave and detailed him to a nonexistent position. However, IRS did not notify the employee of these personnel actions and of his eligibility to elect a discontinued service retirement until February 1980. The Office of Personnel Management (OPM) denied the employee's application on the ground that an employee cannot retire from a nonexistent position. Regulations require an agency to notify an employee, in a specific manner, of the impending involuntary separation. In this case, there was no record of the employee having received such a notice. Thus, the IRS failure to give the employee notice had the effect of depriving him of his right to elect a discontinued service retirement. Correspondence between the employee and IRS clearly indicated that he would have elected discontinued service retirement as of December 7, 1979. Accordingly, it was held that IRS may retroactively separate the employee as of December 7, 1979.