14-002803 Kimberly A. Campbell vs. State Board Of Administration Status: Closed Recommended Order on Thursday, September 18, 2014.

Summary: A FRS rehire not reemployed by the state prior to July 1, 2010, and who had withdrawn all retirement contributions in 2008, was ineligible to reenroll in the FRS in 2013.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KIMBERLY A. CAMPBELL,

Petitioner ,

vs. Case No. 14 - 2803

STATE BOARD OF ADMINISTRATION,

Respondent.

_______________________________/

RECOMMENDED ORDER

This m atter came before D.R. Alexander, an administrative

law judge of the Division of Administrative Hearings (DOAH) , on

a stipulated record and written argument submitted by counsel.

APPEARANCES

For Petitioner : Thomas H. Bateman, III, Esquire

Mark Herron, Esquire

Messer Caparello, P.A.

2618 Centennial Place

Tallahassee, Florida 32308 - 0572

For Respondent : Brian A. Newman, Esquire

Brandice D. Dicks on, Esquire

Pennington, P.A.

Post Office Box 10095

Tallahassee, Flo rida 32302 - 2095

STATEMENT OF THE ISSUE

The issue is whether Petitioner, an elected circuit court

judge, is entitled to r enewed membership or is otherwise

entitled to participate in the Florida Retirement System (FRS).

PRELIMINARY STATEMENT

The procedural history of this case is somewhat disjointed.

On November 14, 2013, the State Board of Administration (SBA)

advised Petit ioner by letter that her request to enroll in the

FRS had been denied. Petitioner timely requested a hearing, and

her Petition for Hearing (Petition) was transmitted to DOAH and

assigned Case No. 13 - 4781. Later, she filed a Corrected First

Amended Petiti on for a Formal Administrative Hearing (Amended

Petition). On M ay 30, 2014, the parties requested that

jurisdiction in th e case be returned to the agency " to

facilitate settlement discussions . " An Order closing the file

was issued on June 2, 2014.

With out referring to the first case, o n June 17, 2014, the

original Petition was again transmitted by SBA t o DOAH and was

assigned Case No. 14 - 2803. The disposition of the first case is

not known.

After a final hearing was scheduled, the parties agreed a

hear ing was un necessary, and they would file a pre - hearing

stipulation, a stipulated record , and proposed recommended

orders.

The parties submitted Joint Exhibits 1 - 6 which are accepted

in evidence. Exhibits 1 and 2 are the depositions of Petitioner

and Danie l Beard, SBA Director of Policy, Risk Management, and

Compliance, respectively . Exhibit 3 is a copy of the Amended

Petition filed in Case No. 13 - 4781 , which according to the

parties' Joint Pre - hearing Stipulation, the y now rely upon,

rather than the origi nal Petition referred to DOAH .

The parties filed P roposed Recommended Orders , which hav e

been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

A. The FRS Plan

1. There are two classes of members in the FRS: all

officers or emplo yees, except elected officers ; and elected

officers, including circuit judges . See §§ 121.051(1)(a) and

121.052 , Fla . Stat . (2014). The second c lass is identified as

the Elected Officers' Class (EOC). See § 121.052(1), Fla. Stat.

2. Members of th e FR S may elect to participate in either

the D efined B enefit R etirement P rogram (Pension Plan) or the

Public Employee Optional Retirement Program (Investment Plan).

The Investment Plan has a one - year vesting requirement, thus

enabling a vested participant to receive a distribution of his

or her account at any time after leaving FRS - covered employment .

3 . Upon retirement, a vested Pension Plan member receives

a monthly benefit for his or her lifetime whereas a vested

Investment Plan member receives a lump - sum distribution of

accumulated benefits from his or her account. Under both plans,

a member must terminate all FRS - covered employment in order to

receive a benefit.

4 . "Retiree" is defined at least three t imes in chapter

121 , none the same . See §§ 121.021 (60), 121.35(5)(h), and

121.4501(2)(k), Fla. Stat. However , as explained in the

Conclusions of Law, all Investment Plan retirees are covered by

s ection 121.4501(2)(k) , which defines a "retiree" as "a former

member of the investment plan who has terminated employment and

taken a distribution of vested employee or employer

contributions as provided in s. 121.591 ."

5 . In 2009, the Legislature created sectio n 121.122(2),

which provides that a "retiree of a state - administered

retirement system who is initial ly reemployed on or after

July 1, 2010, is not eligible for renewed member ship . " See

Ch. 2009 - 209, § 12, Laws of Fla. By virtue of this amendment,

FRS retirees who did not become reemployed with a covered

employer by July 1, 2010, were ineligible fo r renewed membership

in the FRS.

6 . The same bill amended section 121.053 by adding a new

subsection (3)(a), which provided that on or after July 1, 2010,

a "retiree of a state - administered retirement system who is

elected or appointed for the first tim e to an elective office in

a regularly established position with a covered employer may not

reenroll in the Florida Retirement System." Id. at § 5. This

amendment makes clear that the prohibition in section 121.122(2)

applies equally to elected officials .

7 . In 2012, the Legislature amended section 121.122(2) to

provide that "[a] retiree of a state - administered retirement

system who is initially reemployed in a regularly established

position on or after July 1, 2010, may not be enrolled as a

renewed memb er." See Ch. 2012 - 222, § 7, Laws of Fla. The sole

purpose of th e amendment was to "make it clear that a retiree of

the investment plan . . . who is reemployed on or after July 1,

2010, is prohibited from being reenrolled as a renewed member of

a state - ad ministered retirement system." Fla. Govt. Oper.

Comm., CS/HB 7079 (2012) Staff Analysis, p. 5 (final May 11,

2012) (available at http//www . myfloridahouse.gov) . 1

B. Petitioner's Employment History and Retirement Option

8 . Petitioner was a member of the FR S while employed as

an Assistant State Attorney from January 2, 2001, through

September 30, 2003. When first employed, Petitioner was a

member of the Pension Plan . Shortly thereafter, the Legislature

created the Investment Plan option, and Petitioner wa s given a

deadline of August 31, 2002, to make an election between the two

plans. On August 31, 2002, she switched to the Investment Plan.

9 . On or about September 30, 2003, Petitioner left the

Office of State Attorney for private law practice. In

January 2006, she took a complete distribution from her FRS

Investment Plan in the amount of $8,154.52. By taking a lump -

sum distribution, she became a "retiree . " See § 121.4501(2)(k),

Fla. Stat. ("Retiree" means a former member of the investment

plan wh o has terminated employment and taken a distribution of

vested employee . . . contributions.") . She was not employed in

an FRS - eligible position between September 30, 2003, and

January 8, 2013.

10 . On August 14, 2012, Petitioner was elected to the

pos ition of Circuit Judge in the Sixth Judicial Circuit of

Florida.

1 1 . On January 8, 2013, Petitioner was commissioned as a

Circuit Judge for the Sixth Judicial Circuit of Florida.

C. The Proposed Agency Action

1 2 . In response to her request to enroll in the FRS, by

letter dated November 14, 2013, Daniel Beard, who is Director of

Policy, Risk Management, and Compliance for the State Board of

Administration, advised Petitioner in pertinent part as follows:

You retired from the FRS on January 23, 2006

wh en you requested a distribution of your

FRS Investment Plan account. Section

12 1 .4501( 2 )(k), Florida Statutes, defines a

"retiree" as a member of the FRS Investment

Plan who has terminated employment and has

taken a distribution as provided in Section

121 .591. There are no statutory provisions

that would allow you to cancel or void your

retirement, and there are no statutory

provisions that would allow you to repay the

distribution in order to be "unretired."

Section 121.122, Florida Statutes, states

t hat a retiree of a state - administered

retirement system who i s initially

reemployed in a regularly established

position on or after July 1, 2010 is not

eligible to enroll in renewed membership and

receive additional retirement benefits.

This change in law pertained to any retiree

of a state - administered retirement system

who had not returned to FRS employment prior

to July 1, 2010. You were hired by the

Office of State Courts on January 8, 2013.

1 3 . Petitioner timely challenged the proposed agency

actio n asserting that she is entitled to participate in the FRS

as a compulsory member of the EOC pursuant to part I , chapter

121.

CONCLUSIONS OF LAW

1 4 . Petitioner has the burden of proving that she is

e ligible to participate in the FRS. See , e.g. , Fla. De p't of

Trans p . v . J.W.C. Co., Inc. , 396 So. 2d 778, 788 (Fla. 1st DCA

1981).

1 5 . As previously found, t he stipulated facts show that

Petitioner retired from the FRS Investment Plan in 2006 by

withdrawing all funds from her Investment Plan account and th at

she failed to return to FRS - eligible employment before July 1,

2010. Given this set of facts, her request to reenter the FRS

in 2013 should be denied for the following reasons .

1 6 . Pursuant to section 121.122(2), FRS retirees must

return to FRS - eligi ble employment on or before July 1, 2010.

See Ch. 2009 - 209, § 12, Laws of Fla. Retirees returning on or

after this date are ineligible to reenroll in the FRS. This

prohibition applies equally to elected officials , including

judges, regardless of whether they are a retiree under part I or

part II of chapter 121 . See § 121.053(3)(a), Fla. Stat. ("A

retiree of a state - administered retirement system who is elected

or appointed for the first time to an elective office in a

regularly established posit ion with a covered employer may not

reenroll in the [FRS]."). G iven this clear legislative

directive , Petitioner is precluded from reenrolling in the FRS.

T he SBA is obliged to follow the se statutory requirements and

cannot deviate from them. See, e.g. , Balezen tis v. Dep't of

Mgmt. Servs. , Case No. 04 - 3263, 2005 Fla. Div. Adm. Hear. LEXIS

851 at *8 (Fla. DOAH Feb. 22, 2005), adopted , (Fla. DMS Apr. 4,

2005) ("The [SBA] is not authorized to depart from the

requirements of its organic statute when it exercises its

jurisdiction."); Smith v. Dep't of Mgmt. Servs. , Case No. 10 -

9449, 2011 Fla. Div. Adm. Hear. LEXIS 10 at *7 (Fla. DOAH Feb.

23, 2011), adopted , (Fla. DMS June 14, 2011)(section 121.122(2)

"is a legislative limitation giving no discretion to the

[SBA] ") .

1 7 . Petitioner contends , however, that she is a retiree

u nder section 121.021(60), and the prohibition in section

121.053(3)(a) does not apply because she is not currently

receiving monthly "benefit payments , " as contemplated by the

law. Subsection (60) defines a "retiree" as a former member who

"is receiving benefit payments from the system." The case of

Blaesser v. State Board of Administration , 134 So. 3d 1013 (Fla.

1st DCA 2012), rev iew denied , 110 So. 3d 440 (Fla. 2013), is

instructive on this issue and supports SBA's decision . In that

case, the employee was first hired by the Seminole County School

Board in September 2005 and enrolled in the Investment Plan.

After working for a little more than a year, he terminated

employment and in March 2007 to ok a total distribution of his

Investment Plan account. In April 2011, he began work as an

attorney with a state agency and was advised by the SBA that he

could not participate in the FRS because he was a retiree who

came back to FRS - covered employment af ter July 1, 2010. On

appeal, the court affirmed SBA's decision and held that because

Blaesser had taken a lump - sum distribution of benefits in 2007 ,

he was ineligible for renewed membership in the FRS by virtue of

the prohibition in section 121.122(2) . I t rejected Blaesser 's

argument that because he received a prior nonrecurring, lump - sum

distribution, he was not a retiree under section 121.021(60) who

"is receiving benefit payments." Id. at 1015. The court

addressed the argument in the following way:

[T]he statutory prohibition applies to "[ a ]

retiree of a state - administered retirement

system" and that "[s]ystem" is defined by

section 121.021(3) as "including . . . the

defined benefit retirement program

administered under the provisions of part I

of th is chapter and the defined contribution

retirement program known as the Public

Employees Optional Retirement Program and

administered under the provisions of part II

of this chapter." Moreover, section

121.4501(2)(k), which falls under part II of

Chapter 121, defines "[r]etiree " as "a

former participant of the optional

retirement program who has terminated

employment and has taken a distribution as

provided in s. 121.591, except for a

mandatory distribution of a de minim i s

account authorized by the state b oard ."

Reading all of these related provisions

together, the SBA asserts the prohibition of

section 121.122(2) applies to appellant

because he retired by taking a total

distribution from his Investment Plan

account and did not return to FRS - covered

employ ment until after July 1, 2010. This

court will defer to an agency's

interpretation of a statute that it is

charged with administering unless that

interpretation is contrary to the plain

meaning of the statute or is clearly

erroneous. [ citation omitted]. We defer to

the SBA's interpretation of section

122.122(2), which we conclude is not

contrary to the plain meaning of the statute

and is not clearly erroneous.

Blaesser at 1015.

18. Even so, Petitioner contends that Blaesser does not

apply here because that case involved a regular employee of FRS ,

and not an elected official. However, this is not a material

distinction as the Legislature made it clear that the

prohibition on renewed FRS membership applies equally to elected

officials. See § 121.053(3) (a), Fla. Stat.

1 9 . Petitioner also contends that she is a retiree under

part I of chapter 121 ; section 121.4501(2)(k) applies only to

retirees under part II ; and SBA's reliance on section

121.4501(2)(k) is misplaced. A s noted in Blaesser , however,

all of these related provisions must be read together

and harmonized . When doing so, SBA's application of

section 121.4501(2)(k) to an FRS retiree who is elected for the

first time to an elective office is not contrary to the plain

meaning of the statute or clearly erroneous. Moreover, to

construe the statute otherwise would be at odds with the clear

language in section 121.053(3)(a).

20. Finally, Petitioner contends that the application of

the definition of "retiree" in section 121.4501(2)(k) prevents

her from reenrolling in the FRS, and this conflicts with the

requirement in section 121.052(3) that "participation in the

[EOS] shall be compulsory for elected officers . " The

undersigned assumes, h owever, that the Legislature recognized

any purp orted "conflict s " when it enacted the reenrollment

prohibition in 2009. Moreover, when reading all of these

provisions together, the SBA's interpretation of the statutory

framework is not contrary to the plain meaning of the law and is

not clearly erroneo us. Blaesser at 1015.

2 1 . In sum mary , as stated in SBA's letter of November 14,

2013, "[a] change in Florida law would be required to grant

[ Petitioner's ] request." While this may be a harsh result,

under the existing statutory scheme, Petitioner is i neligible to

reenroll in the FRS.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the State Board of Administration enter a

final order denying Petitioner's request to re enroll in the FRS .

DONE AND ENT ERED this 1 8 th day of September, 2014, in

Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER

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 the

Division of Administrative Hearings

this 1 8 th day of September , 2014 .

ENDNOTE

1/ The undersigned has taken official recognition of the

Legislative sta ff analysis of chapter 2012 - 222, § 7, Laws of

Florida.

COPIES FURNISHED :

Thomas H. Bateman, III, Esquire

Messer Caparello, P.A.

2618 Centennial Place

Tallahassee, Florida 32308

(eServed)

Brian A. Newman, Esquire

Pennington, P.A.

Post Office Box 1 0095

Tallahassee, Florida 32302 - 2095

(eServed)

Ash Williams, Executive Director

State Board of Administration

1801 Hermitage Boulevard, Suite 100

Tallahassee, Florida 32317 - 3300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to subm it written exceptions within

1 5 days of the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

render a final order in this matter.