17-005505 Sharon Fleita vs. State Board Of Administration Status: Closed Recommended Order on Friday, February 23, 2018.

Summary: Petitioner failed to prove she made a valid second election to transfer from the FRS Pension Plan to the Investment Plan.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SHARON FLEITA,

Petitioner,

vs. Case No. 17 - 5505

STATE BOARD OF ADMINISTRATION,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on January 9, 2018, in Tallahassee, Florida, before Suzanne

Van Wyk, Administrative Law Judge with the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Sharon Fleita, pro se

210 LaCapra Road

Monticello, Florida 32344

For Respondent: Brian A. Newman, Esquire

Pennington, P.A.

215 South Monroe Street, Suite 200

Post Office Box 10095

Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

Whether Petitioner, Sharon Fleita, made a valid Ðsecond

electionÑ to transfer from the Florida Retirement System (ÐFRSÑ)

Pension Plan to the Investment Plan, pursuant to section

121.4501, Florida Statutes (2016). 1/

PRELIMINARY STATEMENT

This case arose from PetitionerÓs attempt to transfer from

the FRS Pension Plan to the Investment Plan while she was on an

unpaid leave of absence. Petitioner submitted a Ðsecond

election formÑ requesting this transfer, which was received by

the FRS Plan Choice Administrator on March 11, 2017. After a

series of phone calls to the MyFRS Financial Guidance Line

(MyFRS hotline ) and the Division of Retirement, Petitioner

realized that her election may not have been valid. In order to

clear up this uncertainty , she submitted a request for

intervention with Respondent, State Board o f Administration

(SBA ). In a letter dated August 29, 2017, SBA informed

Petitioner that her request to elect into the FRS Investment

Plan had been denied. On September 7, 2017, Petitioner

requested a hearing before the SBA.

The petition was referred to the Division of Administrative

Hearings by the SBA on October 3, 2017 , and assigned to the

undersigned. The final hearing was originally scheduled for

December 11, 2017, but was rescheduled on a Motion for

Continuance filed by Respondent. The final hear ing was

rescheduled to, and commenced on, January 9, 2018.

At the final hearing, Petitioner testified on her own

behalf, but did not offer any witnesses. Petitioner introduced

Exhibit P1 , which was admitted into evidence without objection.

Respondent pre sented the testimony of Mini Watson, SBAÓs

Director of Compliance, Office of Defined Contributions.

Respondent introduced Exhibits R1 through R41, which were

admitted in evidence.

A one - volume Transcript of the proceedings was filed on

February 2, 2018. Respondent requested a one - day extension to

file a proposed recommended order, which was granted.

Respondent timely filed a Proposed Recommended Order on

February 13, 2018. Petitioner neither filed a proposed

recommended order nor requested an extension of the filing

deadline.

FINDING S OF FACT

1. Petitioner, Sharon Fleita, was , at all times relevant

hereto, an employee of the Jefferson County School Board

(ÐSchool BoardÑ) and enrolled as a member of the FRS Pension

Plan.

2. Respondent, SBA, is the state agency tasked with

administering the FRS Investment Plan. § 121.4501(8),

Fla. Stat.

PetitionerÓs Employment History

3. Petitioner was employed by the School Board as a full -

time teaching assistant from early 2011 through May 31, 2017.

4. The last day Petitioner performed work for the School

Board was on April 19, 2017. As of that date, Petitioner had

exhausted her allotted paid sick leave.

5. On April 21, 2017, Petitioner underwent ankle surgery.

The recovery period was about three months, during whi ch time

Petitioner was required to use a wheelchair.

6. From April 20 through May 31, 2017, Petitioner was on

unpaid ÐFamily Medical Leave Without PayÑ as designated by the

School Board on a form titled ÐApplication for Leave of

Absence,Ñ which was signed by Petitioner.

7. Realizing that her medical condition would prevent her

from returning to work, Petiti oner officially resigned on

May 31, 2017. 2/

8. At the time of her resignation, Petitioner had earned

7.27 years of FRS service credits and was a Ðvest edÑ member of

the FRS. 3/ See § 121.021(45), Fla. Stat.

9. Petitioner did not return to work after her leave of

absence, nor did she retire on disability through FRS.

10. Petitioner was found to be disabled by the Social

Security Administration with a d ate of disability of April 21,

2017, but she never applied for disability with FRS. 4 /

11. On May 31, 2017, Petitioner received a paycheck from

the School Board in the amount of $82.13, after deductions and

taxes, indicating a pay period of May 1, 2017 thr ough May 26,

2017. The paycheck was compensation for work performed prior to

May 2017.

PetitionerÓs Second Election

12. Ms . FleitaÓs employer, the School Board, did not have

a human resources director to help her through the second

election process.

13. Seeking guidance, Petitioner placed a number of calls

to the Division of Retirement and the MyFRS hotline over the

course of about five months, beginning in March 2017.

14. Before she made her second election, several

representatives informed Petitione r during these phone calls

that she needed to be actively employed, earning a salary, and

earning FRS service credits at the time the second election was

made.

15. On March 20, 2017, a representative with the MyFRS

hotline info rmed Petitioner that she co uld no t make a valid

second election while on Ðunpaid leave of absence or summer

break or anything like that.Ñ The representative also

recommended that Petitioner make her second election a month or

so before her last day of work, in order to make sure th e

election was valid.

16. On May 10, 2017, a representative with the MyFRS

hotline explained to Petitioner that a salary and FRS service

credits are distinct, and that it is possible to receive a

paycheck but no FRS service credit for a given month. The

representative also informed Petitioner that if she were to

submit a second election while not earning service credit, the

election might be processed but ultimately would not be

considered valid.

17. On May 10, 2017, while on FMLA ( Family Medical Leave

A ct ) leave, Petitioner completed a Ð2nd Election Retirement Plan

Enrollment FormÑ to switch from the FRS Pension Plan to the

Investment Plan. The Plan Choice Administrator processed the

election on May 11, 2017.

18. On July 28, 2017 , a representative with the Division

of Retirement informed Petitioner that she had earned service

credit for May 2017, the month in which she made her second

election.

19. Later that same day, a different representative

informed Petitioner that her election into the Investment Plan

had been approved. However, soon thereafter, the representative

called Petitioner back and informed her that her election was

invalid because, according to the SBA, Petitioner was not

earning service credits in May 2017.

Service Credit During FMLA L eave

20. Monthly service credit is awarded for Ðeach month

salary is paid for service performed.Ñ § 121.021(17)(b)4 . , Fla.

Stat.

21. Section 121.021(58) defines Ðleave of absenceÑ as Ða

leave of absence from employment under the Florida Retirement

Syst em, subsequent to November 30, 1970, for which retirement

credit [i.e., FRS service credit] may be received in accordance

with s. 121.121.Ñ

22. This definition is reiterated in Florida

Administrative Code Rule 60S - 6.001, which provides:

LEAVE OF ABSENCE (Authorized Leave of

Absence) Î Means a leave of absence from

employment under the Florida Retirement

System, subsequent to November 30, 1970, for

which retirement credit may be received in

accordance with Rule 60S - 2.006, F.A.C.

23. By default, FRS membe rs do not earn service credits

while on an unpaid leave of absence. Service credits may be

earned, however, if the member meets the following requirements

of r ule 60S - 2.006 :

(1) A member may receive retirement credit

for a total of two work years of cred itable

service for authorized leaves of absence

under the Florida Retirement System, subject

to the following:

(a) A leave of absence must be authorized in

writing by a memberÓs employer prior to or

during the leave of absence.

(b) The member must sati sfy the service

requirements for vesting, excluding any

periods of leave of absence, except for

military leaves of absence as provided in

subsection 60S - 2.005(1), F.A.C., prior to

receiving retirement credit for leaves of

absence.

(c) The member must ret urn to active

employment performing service with a Florida

Retirement System employer in a regularly

established position immediately upon

termination of the leave of absence and

remain on the employerÓs payroll for one

calendar month. The exceptions to t his

requirement are:

1. A member placed on a leave of absence for

medical reasons who retires on disability

while on the leave of absence shall not be

required to return to employment in order to

be eligible to receive credit for the leave

of absence; an d

2. A member whose work year is less than

12 months and whose leave of absence

terminates between school years shall be

eligible to receive credit for the leave of

absence as long as he or she returns to

covered employment at the beginning of the

next s chool year and remains on the

employerÓs payroll for one calendar month.

24. Petitioner did not return to work after her leave of

absence (or at the beginning of the following school year), or

retire on disability during her leave of absence. Petitioner

did not earn service credit dur ing her leave of absence in

May 2017. Id.

25. It appears Petitioner misunderstood the distinction

between salary and FRS service credit, believing that the

paycheck she received in May 2017 meant that she also earned FRS

service credits for that month. The delay between the date on

which her second election form was processed and the date on

which it was invalidated exacerbated this problem, and perhaps

gave Petitioner false hope that her second election was valid.

CONCLU SIONS OF LAW

26. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2017).

27. Petitioner bears the burden of proving the validity of

her election into t he FRS Investment Plan by a preponderance of

the evidence. § 120.57(1)(j), Fla. Stat.; DepÓt of Transp. v.

J.W.C., Inc. , 396 So. 2d 778 (Fla. 1st DCA 1981).

28. FRS offers two retirement plans: the Pension Plan, a

defined benefit plan; and the Investme nt Plan, a defined

contribution plan. §§ 121.051 and 121.451, Fla. Stat.

29. Members of the FRS have two opportunities to move, or

Ðelect,Ñ between plans.

30. The first election must be made within the first five

months of employment. See Fla. Admin. Code R. 19 - 11.006(2)

(2017).

31. The second election process is controlled by section

121.4501(4)(f), which provides:

After the period during which an eligible

employee had the choice to elect the pension

plan or the investment plan, or the month

followin g the receipt of the eligible

employeeÓs plan election, if sooner, the

employee shall have one opportunity, at the

employeeÓs discretion, to choose to move from

the pension plan to the investment plan or

from the investment plan to the pension plan.

Eligi ble employees may elect to move between

plans only if they are earning service credit

in an employer - employee relationship

consistent with s. 121.021(17)(b), excluding

leaves of absence without pay .

(emphasis added).

32. Second elections are further con trolled by Florida

Administrative Code Rule 19 - 11.007(2), which provides:

A member may make a valid 2nd election only

if the 2nd election is made and processed by

the Plan Choice Administrator during the

month in which the member is actively

employed and e arning salary and service

credit in an employer - employee relationship

consistent with the requirements of Section

121.021(17)(b), F.S. Members on an unpaid

leave of absence or terminated members cannot

use their 2nd election until they return to

FRS - cover ed employment . . . . In general

terms, this means that the 2nd election can

only be made and processed during the month

in which the member is actively working and

being paid for that work. It is the

responsibility of the member to assure that

the 2nd e lection is received by the Plan

Choice Administrator no later than 4:00 p.m.

(Eastern Time) on the last business day of

the month the member is actively employed and

earning salary and service credit.

(emphasis added).

33. These provisions establish thr ee requirements for an

FRS member to make a valid second election: the election must

be made while the member is (1) employed, (2) earning a salary,

and (3) earning FRS service credits. If a member is on a leave

of absence, the member must return to work before making a valid

second election.

34. While Petitioner was employed by the School Board when

she was on FMLA leave, based on the Findings of Fact herein,

Petitioner was neither earning a salary nor earning service

credit when she made her second ele ction on May 11, 2017.

35. Petitioner failed to meet her burden to demonstrate

that she made a valid election to join the FRS Investment Plan.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that Responden t, State Board of

Administration, issue a final order denying PetitionerÓs request

to transfer from the FRS Pension Plan to the Investment Plan.

DONE AND ENTERED this 2 3rd day of February , 2018 , in

Tallahassee, Leon County, Florida.

S

SUZANNE VAN WYK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of t he

Division of Administrative Hearings

this 2 3rd day of February , 2018 .

ENDNOTE S

1/ Unless otherwise noted, all statutory references are to the

2016 version of the Florida Statutes.

2/ Petitioner did not reapply for her job after her surgery

because s he did not think her application would be seriously

considered. This belief stemmed, in part, from past

interactions she had with the School Board, including

PetitionerÓs allegations that she was retaliated against after

reporting a former teacher of abus ing a student, which le d to

that teacherÓs resignation. In addition, the public school at

which she was employed at the end of the 2017 school year was

reorganized as a charter school for the 2017 - 2018 school year.

3/ Petitioner had acquired some servic e credit from employment

with other employers participating in FRS prior to her

employment with the School Board.

4 / In order to be eligible for disability retirement through

FRS, the employee must have at least eight years of service

credit. § 121.091( 4)(a), Fla. Stat.

COPIES FURNISHED:

Sharon Fleita

210 LaCapra Road

Monticello, Florida 32344

Brian A. Newman, Esquire

Pennington, P.A.

215 South Monroe Street, Suite 200

Post Office Box 10095

Tallahassee, Florida 32302

(eServed)

Brandice Davidson Di ckson, Esquire

Pennington P.A.

215 South Monroe Street, Suite 200

Post Office Box 10095

Tallahassee, Florida 32302

(eServed)

Ash Williams, Executive Director and

Chief Investment Officer

State Board of Administration

Post Office Box 13300

1801 Herm itage Boulevard, Suite 100

Tallahassee, Florida 32317 - 3300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order sh ould be filed with the agency that

will issue the Final Order in this case.