00-000817 Juan Scornik vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Monday, July 31, 2000.

Summary: Gap in State service created by the allocation of salary funds from the federal Veterans Administration was correctible for State retirement purposes by purchase of that year of federal service for credit in the Florida Retirement System.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JUAN SCORNIK, )

)

Petitioner, )

)

vs. ) Case No. 00-0817

)

DEPARTMENT OF MANAGEMENT SERVICES, )

DIVISION OF RETIREMENT, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

This cause came on for a disputed-fact hearing on June 5,

2000, in Gainesville, Florida, before Ella Jane P. Davis, a duly-

assigned Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Esteban F. Scornik, Esquire

McDonough & Wieland, P.A.

Post Office Drawer 1991

Orlando, Florida 32802

For Respondent: Thomas E. Wright, Esquire

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUE

May Petitioner be excluded from participating in the Florida

Retirement System for the academic/fiscal year 1978-1979?

PRELIMINARY STATEMENT

In response to Petitione r's request for an audit of his

account to determine his years of eligible service in the Florida

Retirement System, Respondent Division of Retirement determined

Petitioner was eligible for retirement service credit from his

first date of employment in 1975 at the University of Florida

until the present, with the exception of the 1978-1979

academic/fiscal year.

Petitioner timely requested a disputed-fact hearing.

At the hearing, Respondent's Requests for Admission 1

through 8 to Petitioner were deemed admitted. Petitioner and

Respondent entered additional stipulated facts into the record.

Petitioner's Exhibits 1-16 were admitted in evidence. Official

recognition was taken of Chapter 121, Florida Statutes, and Rules

60S-1.004 and 60S-2.019, Florida Administrative Code.

A transcript was not provided. The parties' respective

Proposed Recommended Orders were timely-filed within the last

period to which they agreed.

FINDINGS OF FACT

1. Petitioner was hired by the University of Florida in

1975 and has been employed with the University of Florida from

1976 to the present.

2. Petitioner believed himself to be a member of the

Florida Retirement System from 1976 to the present. There is no

dispute that he is entitled to Florida Retirement System benefits

from 1976 to 1978 and from 1979 to the present, during which

years Petitioner was paid from State salaries allocations and

worked in a regularly established State position.

3. Petitioner was paid during the years 1976-1980 with a

combination of funds from several sources: the State salary

budget, the federal Veterans Administration (VA), and a

University of Florida practice funding account. The allocation

of these funds in the year 1978-1979 created the current problem.

4. During the years 1976-1980, Petitioner performed work

for both the University of Florida (State of Florida) and the VA.

5. The Federal Retirement System was a defined plan from

1976 to 1980.

6. Petitioner was an employee of the VA from 1976 to 1980.

Petitioner was a participant in the Federal Retirement System as

an employee of the VA from 1976 to 1980. Petitioner received

retirement credits in the Federal Retirement System as an

employee of the VA from 1976 to 1980.

7. Petitioner's employment during the State fiscal year

1978-1979 included job duties and work performed as an employee

of the University of Florida (State of Florida) and did not

change from previous years.

8. Petitioner's salary during the State fiscal year 1978-

1979 should have included an allocation from State funds.

9. Due to an administrative error, Petitioner's entire

salary was paid only with federal VA funds for the State fiscal

year 1978-1979. State funds did not contribute to Petitioner's

salary during the State fiscal year 1978-1979 solely due to the

administrative error in the allocation of funds for Petitioner's

salary, and even though the State presumably benefited from his

labor.

10. For the 1978-1979 fiscal year, Petitioner received

retirement credits in the Federal Retirement System and none have

been taken away. Contributions were made to the Federal

Retirement System on Petitioner's behalf as an employee of the VA

from 1976 to 1980, and Petitioner received retirement credits in

the Federal Retirement System as a VA employee for that period.

11. Petitioner earned $2,072.50, in federal retirement

contributions in 1977; $2,256.52, in federal retirement

contributions in 1978; and $1,931.56, in federal retirement

contributions in 1979.

12. When Petitioner discontinued work for the VA in 1980,

his federal contributions were paid to him in a lump sum by the

federal government. Petitioner placed this money in a private

retirement account.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this cause,

pursuant to Subsection 120.57(1), Florida Statutes.

14. The Florida Retirement System is codified in Chapter

121, Florida Statutes. Section 121.051, Florida Statutes (1999),

provides for compulsory participation in the Florida Retirement

System for all employees hired after December 1, 1970, with

certain exceptions not relevant to this proceeding.

15. Section 121.021(11), Florida Statutes (1999), defines

"employee" as any person receiving salary payments for work

performed in a regularly established position.

16. Section 121.021(52)(a), Florida Statutes, defines

"regularly established position" as:

. . . a position which is authorized and

established pursuant to law and is

compensated from a salaries appropriation

pursuant to s. 216.011(1)(z)1. and 2., . . .

17. Rule 60S-1.004(4)(a), Florida Administrative Code,

provides in pertinent part:

A regularly established position in a state

agency is a position which is authorized

pursuant to Section 216.262(1)(a) and (b),

F.S., and is compensated from either a

salaries appropriation as provided for in

Section 216.011(1)(z)1. and 2., F.S., or a

salaries account as provided for in 3A-

10.031, F.A.C.

18. Rule 60S-2.019, Florida Administrative Code, provides

in pertinent part:

Retirement credit for service that was

performed after December 1, 1970, under the

Florida Retirement System and, due to error,

was never reported to the Division as

required in Section 60S-3.011 may be claimed

by a member of the Florida Retirement System

provided:

(1) The unreported service was performed by

an employee filling a regularly established

position based on the definition in effect at

the time of the service as follows:

(a) A regularly established position during

the period from December 1, 1970 through June

30, 1979, was any position authorized in an

employer's approved budget for which salary

funds were specifically appropriated to pay

the salary of the position. Included within

this definition were temporary, part-time,

full-time, probationary, and seasonal

employment positions. Not included within

this definition was any position the salary

for which was derived from a fund for Other

Personal Services or form any account or sub-

account other than the regular salary account

which was the source of funds for the

salaries of those positions which were

regularly established and reported to the

Division.

19. Petitioner was not paid from regularly appropriated

State salary funds as required by the above statute and rules

during the academic/fiscal year in question, 1978-1979.

20. During 1978-1979, Petitioner was paid a higher

percentage of federal salary money, and he has since received a

refund of the contributions made on his behalf to the Federal

Retirement System.

21. During 1978-1979, Petitioner did not receive "salary

payments" from the State of Florida and no monetary contributions

to the Florida Retirement System were made in relation to the

salary payments made to Petitioner from federal funds.

22. Therefore, Respondent Division of Retirement was

correct in determining that Petitioner was not a state employee

during the academic/fiscal year of 1978-1979.

23. That determination, however, does not preclude

Petitioner's participation in the Florida Retirement System for

that period of time if, prior to his retirement date with the

State of Florida, Petitioner avails himself of the provisions of

Rule 60S-2.007(3), Florida Administrative Code, by purchasing the

1978-1979 year of federal employment by the "payback system"

established in Rule 60S-3.008(3), Florida Administrative Code.

24. Those Rules read, in pertinent part, as follows:

Rule 60S-2.007 Credit for Out-of-State and

In-State Service -

(3) A member of the Florida Retirement

System may purchase credit for up to 5 years

of . . . employment with the federal

government (which may include military

service not claimed under (60S-2.005) . . .

as follows:

(a) Such service must have been service

covered by a retirement or pension plan

provided by the employer, and performed prior

to a period of membership in the Florida

Retirement System.

(b) The member must not have received, or be

eligible, now or in the future, to receive a

benefit from any other retirement or pension

plan based on the service being claimed.

(c) To receive credit for such service, the

member must have completed at least 10 years

of creditable service in the Florida

Retirement System, which can include service

in an existing system, and which excludes any

service purchased under this subsection.

(d) Prior to completing 10 years of

creditable service in Florida Retirement

System, a member may purchase credit for one

year of service under this subsection after

the completion of one year of creditable

service; with the purchase of additional

years of service being allowed on a year to

year basis, up to the five-year maximum.

However, such service will not be creditable

until after the completion of 10 years of

creditable service under the Florida

Retirement System.

(e) A member who wishes to claim such

service shall obtain the following from the

out-of-state or in-state employer's

retirement or pension plan on Form FR-30,

Verification for Out-of-State Service Credit,

adopted in 60S-9.001:

1. A statement verifying that the

member was a member of a retirement or

pension plan provided by the employer and to

which the employer paid contributions, and

that he has not been, is not, and will not be

eligible to receive either a lump sum

distribution, or other than a refund of

member contributions, or a continuing benefit

from that plan based on that service.

2. Certification of years and partial

years of service by fiscal year, and length

of work year.

(f) The service shall be claimed and

credited as Regular Class service.

(g) A member shall be eligible to receive

credit for such service performed after

leaving the Florida Retirement System only

upon return to membership and completion of

at least 1 year of creditable service

following the out-of-state or in-state

service.

(h) The required contributions shall be paid

by the member or his employer as provided in

60S-3.008(3).

60S-3.008 Retirement Contribution for Out-of-

State and In-State Service Credit -

(3) The required contributions for a member

who is eligible to claim credit for out-of-

state public employment, federal employment

including military service or in-state non-

FRS employment, as provided in 60S-2.007(3),

shall be 20 percent multiplied by the

member's salary for the first full work year

of creditable service the member earned under

the Florida Retirement System, or $12,000,

whichever is greater; plus interest at 6.5

percent compounded annually from the date of

the first year of creditable service. The

employer may pay all or a portion of the cost

of this service credit.

25. Since the Division has acknowledged Petitioner's

federal retirement eligibility in this case, it should not even

be necessary for Petitioner to submit a verification of federal

service in order to proceed.

RECOMMENDATION

Upon the foregoing findings of fact and conclusions of law,

it is

RECOMMENDED that the Division of Retirement enter a final

order which:

(1) Finds Petitioner was a federal employee during the

1978-1979 academic/fiscal year and at this time is not entitled

to credit therefor in the Florida Retirement System;

(2) Provides for his participation in the Florida

Retirement System for the 1978-1979 academic/fiscal year if he

elects to participate pursuant to Rule 60S-2.007(3) Florida

Administrative Code; and

(3) Establishes, pursuant to the formula provided in Rule

60S-3.008(3), Florida Administrative Code, the amount by which

Petitioner may "buy back" that year of State service, if he

elects to do so.

DONE AND ENTERED this 31st day of July, 2000, in

Tallahassee, Leon County, Florida.

___________________________________

ELLA JANE P. DAVIS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 31st day of July, 2000.

COPIES FURNISHED:

Esteban F. Scornik, Esquire

McDonough & Wieland, P.A.

Post Office Drawer 1991

Orlando, Florida 32802

Thomas E. Wright, Esquire

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

Ron Poppell, Interim Director

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

Emily Moore, Chief Legal Counsel

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

Bruce Hoffman, General Counsel

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-0950

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 should be filed with the agency that will

issue the Final Order in this case.