B-157753, SEP 3, 1971

B-157753, SEP 3, 1971

CIVILIAN EMPLOYEE - SEVERANCE PAY - CIVIL SERVICE COMMISSION POLICY DECISION THAT BECAUSE MRS. EUNICE WALKER WAS ENTITLED TO AN IMMEDIATE ANNUITY UPON RETIREMENT, SHE WAS NOT, THEREFORE, ENTITLED TO SEVERANCE PAY PURSUANT TO 5 U.S.C. 5595. DUE TO THE POLICY OF THE CIVIL SERVICE COMMISSION IN DETERMINING AN INDIVIDUAL'S AGE FOR THE PURPOSE OF RETIREMENT (EG., AGE 62 IS REACHED THE DAY BEFORE A PERSON'S 62ND BIRTHDAY), CLAIMANT WAS ENTITLED TO AN ANNUITY IMMEDIATELY UPON RETIREMENT. ALTHOUGH CLAIMANT WAS NOT, THEREFORE, ENTITLED TO SEVERANCE PAY, THE COMP. GEN. WILL WAIVE COLLECTION OF THE $2,283.04 ALREADY PAID BECAUSE THE RECEIPT OF THE SEVERANCE PAY WAS WITHOUT FRAUD, MISREPRESENTATION, FAULT, OR A LACK OF GOOD FAITH ON THE EMPLOYEE'S PART.

TO MR. SANFORD MENTER:

WE REFER FURTHER TO YOUR LETTER OF JUNE 9, 1971, CONCERNING THE ELIGIBILITY OF MRS. EUNICE WALKER TO SEVERANCE PAY.

YOU STATE THAT MRS. WALKER PURSUANT TO A REDUCTION IN FORCE RESIGNED HER POSITION WITH YOUR AGENCY, EFFECTIVE THE CLOSE OF BUSINESS JUNE 16, 1970, ONE DAY PRIOR TO HER 62ND BIRTHDAY; ALSO, THAT THIS RESIGNATION DATE WAS CHOSEN UPON THE INFORMAL ADVICE OF THE CIVIL SERVICE COMMISSION SO AS TO PRESERVE HER RIGHT TO SEVERANCE PAY. SUBSEQUENTLY, AFTER MRS. WALKER HAD RECEIVED A NUMBER OF REGULAR SEVERANCE PAYMENTS, YOU WERE NOTIFIED BY THE COMMISSION'S BUREAU OF RETIREMENT, INSURANCE, AND OCCUPATIONAL HEALTH THAT SINCE IT HAD APPROVED AN IMMEDIATE ANNUITY FOR MRS. WALKER SHE WAS NOT ENTITLED TO SEVERANCE PAY ARISING OUT OF THE SEPARATION IMMEDIATELY PRECEDING THE COMMENCING DATE OF HER ANNUITY. APPARENTLY, ENTITLEMENT TO THE ANNUITY BEGAN ON JUNE 17, 1970. UNDER THE SEVERANCE PAY LAW (5 U.S.C. 5595), AN EMPLOYEE IS PRECLUDED FROM RECEIVING COMPENSATION THEREUNDER IF AT THE TIME OF SEPARATION HE HAS FULFILLED THE REQUIREMENTS FOR AN IMMEDIATE ANNUITY UNDER THE CIVIL SERVICE RETIREMENT PROVISIONS OF LAW.

YOU STATE THE COMMISSION HAS ADVISED YOU THAT IT IS ITS POLICY, IN DETERMINING AN INDIVIDUAL'S AGE FOR THE PURPOSE OF CIVIL SERVICE RETIREMENT, TO APPLY THE RULE ESTABLISHED FOR DETERMINING THE AGE OF MAJORITY; THAT IS, MAJORITY IS ATTAINED ON THE DAY PRECEDING THE 21ST BIRTHDAY. THUS, ACCORDING TO THE COMMISSION, MRS. WALKER SATISFIED THE REQUIREMENTS FOR AN IMMEDIATE ANNUITY ON THE DAY OF HER SEPARATION.

YOU URGE THAT, SINCE MRS. WALKER HAD NOT ATTAINED THE AGE OF 62 WHEN HER RESIGNATION BECAME EFFECTIVE, IT WOULD APPEAR THAT SHE WAS ELIGIBLE FOR A DEFERRED ANNUITY UNDER THE PROVISIONS OF 5 U.S.C. 8338 RATHER THAN AN IMMEDIATE ANNUITY UNDER SECTION 8336. YOU REQUEST IN THE EVENT MRS. WALKER WAS INELIGIBLE TO RECEIVE SEVERANCE PAY DURING THE PERIOD THAT WE WAIVE REPAYMENT OF SUCH PAYMENTS UNDER AUTHORITY OF 5 U.S.C. 5584. HAVE DISCUSSED THE CASE WITH THE COMMISSION WHICH ADVISES:

"FOLLOWING IS THE INFORMATION ON THIS WHICH I HAVE RECEIVED FROM THE OFFICE CONCERNED:

"UNDER 5 U.S.C. 5595 AN EMPLOYEE WHO, 'AT THE TIME OF SEPARATION FROM THE SERVICE, HAS FULFILLED THE REQUIREMENTS FOR IMMEDIATE ANNUITY' IS NOT ENTITLED TO SEVERANCE PAY. NEITHER THE SEVERANCE PAY LAW NOR THE COMMISSION'S SEVERANCE PAY REGULATIONS DEFINE 'IMMEDIATE ANNUITY' FOR THIS PURPOSE. HOWEVER, PARAGRAPH S14-10 OF FPM SUPPLEMENT 831 (THE SUPPLEMENT CONTAINING GENERAL RETIREMENT INSTRUCTIONS) PROVIDES THAT:

"AN IMMEDIATE RETIREMENT ANNUITY OF ANY TYPE BEGINS ON THE DAY FOLLOWING THE EMPLOYEE'S SEPARATION, OR ON THE DATE AFTER THE EMPLOYEE'S PAY CEASES AND HE MEETS THE SERVICE AND AGE (OR DISABILITY) REQUIREMENTS. A DEFERRED ANNUITY BEGINS ON THE DAY AFTER THE SEPARATED EMPLOYEE ATTAINS AGE 62.

"ALTHOUGH, AS NOTED ABOVE, OUR SEVERANCE PAY INSTRUCTIONS DO NOT INTERPRET THE STATUTORY EXCLUSION APPLYING TO AN EMPLOYEE ENTITLED TO AN IMMEDIATE ANNUITY AT THE TIME OF SEPARATION, WE HAVE ALWAYS CONSIDERED THE EXCLUSION TO MEAN THAT IF AN EMPLOYEE IS RECEIVING AN ANNUITY AT THE TIME OF SEPARATION, OR IS ENTITLED TO RECEIVE AN ANNUITY THE DAY IMMEDIATELY FOLLOWING SEPARATION, HE IS NOT ENTITLED TO SEVERANCE PAY.

"INASMUCH AS MRS. WALKER WAS SEPARATED OVER ONE YEAR AGO, WE CANNOT BE CERTAIN WHAT ADVICE SHE AND HER AGENCY ACTUALLY RECEIVED IN THIS MATTER. (ON THE AVERAGE WE RECEIVE 2 OR 3 CALLS A DAY ON SEVERANCE PAY.) UNDOUBTEDLY ADVICE WAS GIVEN THAT ENTITLEMENT TO AN ANNUITY AFTER SEPARATION HAS NO EFFECT ON SEVERANCE PAY (CITING 47 COMP. GEN. 27), BUT THAT ENTITLEMENT TO AN ANNUITY AT THE TIME OF SEPARATION IS A BAR TO SEVERANCE PAY WHETHER THE EMPLOYEE ELECTS TO RECEIVE THE ANNUITY OR NOT. GENERALLY WE REFER QUESTIONS ON ENTITLEMENT TO AN ANNUITY TO BRIOH; HOWEVER, APPARENTLY WE ATTEMPTED TO INTERPRET BRIOH'S INSTRUCTIONS GOVERNING THE EFFECTIVE DATE OF A DEFERRED ANNUITY (I.E., THE DAY AFTER THE EMPLOYEE ATTAINS AGE 62); AND APPARENTLY WE ADVISED THAT THE ANNUITY WOULD BEGIN THE DAY AFTER HER BIRTHDAY. ON THE FACE OF IT THIS IS NOT AN UNREASONABLE INTERPRETATION, BUT IT IS NOT THE INTERPRETATION THAT BRIOH GIVES THIS INSTRUCTION.

"FROM THE FOREGOING, IT APPEARS TO BE TRUE THAT MRS. WALKER WAS MISLED INTO DELAYING HER RESIGNATION A DAY TOO LATE TO QUALIFY FOR SEVERANCE PAY, BECAUSE OF MISTAKEN INFORMATION FROM THE COMMISSION."

WE SEE NO BASIS FOR QUESTIONING THE DETERMINATION THAT MRS. WALKER BECAME 62 YEARS OF AGE ON JUNE 16, 1970, SO AS TO BE ENTITLED TO AN IMMEDIATE RETIREMENT ANNUITY BEGINNING THE NEXT DAY. IN THAT CONNECTION WE NOTE THAT 5 U.S.C. 8338 STATES UNDER THE HEAD OF "DEFERRED RETIREMENT" AN EMPLOYEE HAVING COMPLETED 5 YEARS OF SERVICE IS ENTITLED TO AN ANNUITY BEGINNING AT THE AGE OF 62 YEARS. EVEN UNDER THAT PROVISION, MRS. WALKER WAS ENTITLED TO AN ANNUITY BEGINNING JUNE 17, 1970.

BECAUSE OF THE ENTITLEMENT OF MRS. WALKER TO A RETIREMENT ANNUITY BEGINNING JUNE 17, 1970, WE MUST AGREE THAT SHE WAS NOT ENTITLED TO SEVERANCE PAY. COMPARE 47 COMP. GEN. 72 (1967). WE DO FIND, HOWEVER, HER RECEIPT OF SEVERANCE PAY ALTHOUGH ERRONEOUS WAS WITHOUT FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON HER PART. UNDERSTAND THE SEVERANCE PAY SHE RECEIVED AMOUNTED TO $2,283.04. THEREFORE, UNDER THE PROVISIONS OF 5 U.S.C. 5584, WE HEREBY WAIVE COLLECTION OF SUCH AMOUNT.