19-004954 Adrian Wagner vs. State Board Of Administration Status: Closed Recommended Order on Wednesday, January 8, 2020.

Summary: The evidence failed to establish that Petitioner completed her election to move her retirement account from the Pension Plan to the Investment Plan prior to ending her employment.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ADRIAN WAGNER ,

Petitioner ,

vs. Case No. 19 - 4954

STATE BOARD OF ADMINISTRATION ,

Respondent .

/

RECOMMENDED ORDER

Pursuant to notice, a final hearin g was conducted in this

case on November 18, 2019, via video teleconference from sites in

Tallahassee and Gainesville, Florida, before Lawrence P.

Stevenson, a duly - designated Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: N. Albert Bacharach, Jr., Esquire

N. Albert Bacharach, Jr., P.A.

4128 Northwest 13 th Street

Gainesville, Florida 32609 - 1807

For Respondent: Ruth E. Valek, Esquire

Ausley & McMull en, P.A.

123 South Calhoun Street

P ost O ffice Box 391

Tallahassee, Florida 32302

STATEMENT OF THE ISSUE S

The issue s are whether Petitioner effectively elected to

move her retirement account from the Florida Retirement System

(“FRS”) Pension Plan to the FR S Investment Plan prior to her

retirement from state employment or, if not, whether Respondent ,

that Petitioner did not successfully elect to move her retirement

account into the FRS Investmen t Plan.

PRELIMINARY STATEMENT

By issuance of a letter dated May 30, 2019, the SBA advised

Petitioner , Adrian Wagner , that it was denying her Request for

Intervention to move her retirement from the FRS Pension Plan

(“Pension Plan”) to the FRS Investment Pl an (“Investment Plan”).

Ms. Wagner timely filed a “Florida Retirement System Investment

Plan Petition for Hearing.” On September 16, 2019, the SBA

referred the matter to the Division of Administrative Hearings

("DOAH") for the assignment of an Administra tive Law Judge to

conduct a formal administrative hearing.

The final hearing was scheduled for November 18, 2019, on

which date it was convened and completed. Prior to the hearing,

the parties submitted a Pre - hearing Stipulation, which has been

accepted a nd incorporated into the Findings of Fact in this

Recommended Order.

At the hearing, Petitioner testified on her own behalf and

presented the testimony of Philip Schwartz, an expert computer

consultant. Petitioner offered no exhibits. Respondent

presente d the testimony of Allison Olson, SBA’s Director of

Policy, Risk Management, and Compliance in the Office of Defined

Contribution Programs. Respondent’s Exhibits 5 through 7 were

admitted into evidence without objection.

The one - volume Transcript of the final hearing was filed

with DOAH on December 10, 2019. Both parties timely filed

Proposed Recommended Orders, which have been duly considered in

the writing of this Recommended Order.

Except where otherwise indicated, all references to the

Florida St atutes in this Recommended Order are to the 2019

edition.

FINDING S OF FACT

Based on the evidence adduced at hearing, and the record as

a whole, the following F indings of F act are made:

1. Petitioner , Adrian Wagner began her state employment on

April 22, 1 994, with the Department of Health and Rehabilitative

Services, which was renamed the Department of Children and Family

Services after a 1996 reorganization. Since 2012, the agency has

been named the Department of Children and Families .

2. Upon her hirin g, Ms. Wagner was enrolled in the Pension

Plan, which was the only retirement program available for

eligible employees in 1994.

3. In 2002, the Investment Plan was made available for

employees participating in the FRS. Ms. Wagner was provided a

three mon th window, from December 1, 2002, through February 28,

2003, to switch to the Investment Plan. The Plan Choice

Administrator did not receive an election from Ms. Wagner during

the three month period. Therefore, Ms. Wagner remained in the

Pension Plan by statutory default. See § 121.4501(4)(a), Fla.

Stat.

4. Ms. Wagner changed employers but remained in the FRS

system until her last day of employment on April 3, 2019. At the

time of her retirement from FRS - eligible employment, Ms. Wagner

was working for the Alachua County Sheriff’s Office.

5. On March 4, 2019, Ms. Wagner logged onto the FRS

website, MyFRS.com, from her home computer. Her intention was to

use the second election opportunity afforded by section

121.4501(4)(f), Florida Statutes, to move f rom the Pension Plan

to the Investment Plan.

6. Ms. Wagner recalled clicking a green button to change

her plan, which took her to a page that read, “ready to make a

decision” to change from the Pension Plan to the Investment Plan.

It set out the steps ne eded to make the change. Ms. Wagner

testified that she clicked on a green arrow that said, “change

your plan,” which took her to a page that set forth the amount of

money she would have in the Investment Plan. She continued to a

page showing the differen t plans available to participants in the

Investment Plan. The website advised her to contact an Ernst and

Young (“EY”) financial planner to discuss her plan options.

7. Ms. Wagner testified that a few minutes later she used

the phone number provided by the MyFRS.com website to contact the

EY financial planners. She testified that the EY planner with

whom she spoke was named “Josh.”

8. The EY call summary log for Ms. Wagner was entered into

evidence. The log is a record of every phone call between EY and

Ms. Wagner. It includes the date and time of the call, the name

of the EY employee who spoke to Ms. Wagner, and a brief summary

of their discussion. The EY call summary log identified the EY

planner who spoke with Ms. Wagner at 12:10 p.m. , on March 4,

2019, as Joshua Kantrowitz.

9. Ms. Wagner testified that Mr. Kantrowitz told her that

he could not see in his computer that she had made the switch to

the Investment Plan. While Mr. Kantrowitz waited, Ms. Wagner

clicked several “back” buttons on the M yFRS.com website. She

then went through the same page progression she had done

previously to make her plan selection.

10. Ms. Wagner recalled finalizing her decision by clicking

11. Ms. Wagner tes tified that Mr. Kantrowitz told her that

he could now see that she had elected to change her retirement

from the Pension Plan to the Investment Plan. They discussed

fund options, tax questions , and penalties for taking funds out

of the Investment Plan. M r. Kantrowitz verified Ms. Wagner’s

email address so that he could send her an FRS Investment

Beneficiary Form. Ms. Wagner understood Mr. Kantrowitz to say

that she would not be able to see that she had changed to the

Investment Plan on the website for ab out a month.

12. The conversation was interrupted when the phone

connection was lost. Ms. Wagner testified that it was her

understanding that she had successfully changed her retirement

from the Pension Plan to the Investment Plan, and that this

change h ad been confirmed by Mr. Kantrowitz.

13. A transcript of the conversation between Ms. Wagner and

Mr. Kantrowitz was entered into evidence. The transcript does

not confirm every aspect of Ms. Wagner’s recollection.

14. The transcript r ecords that Ms. W agner told

Mr. Kantrowitz that she “just switched over from the FRS Pension

Plan to the Investment Plan.” Mr. Kantrowitz asked when she made

the switch. Ms. Wagner responded, “I just hit it today. Did it

today.” She added that she made the election “ab out ten minutes

ago.”

15. The transcript clarifies that Mr. Kantrowitz accepted,

but did not confirm, Ms. Wagner’s statement that she made the

switch to the Investment Plan. After Ms. Wagner told him that

she made the switch only 10 minutes ago, Mr. Kant rowitz stated:

Okay. And you did it by -- basically, you

know, if you do -- you know, it’s still being

processed at the moment. Basically, you

know, in the next month, it’s going to make

that conversion. In order to, you know,

switch and make that choice, y ou know, the

types of investments you’re putting into.

Okay. So I do want to keep you aware of that

if you did fill it out today, okay.

16. Mr. Kantrowitz never confirmed that the second election

had been completed nor did he state whether he could or could not

see the change on his computer. Mr. Kantrowitz simply accepted

Ms. Wagner’s word and went on to tell her what would happen next

if she indeed made the change.

17. Mr. Kantrowitz did state that the conversion would be

made in the next month , confirming in part Ms. Wagner’s

recollection that she was told that it would be a month before

she could see the switch to the Investment Plan on the website.

Again, however, this statement was contingent: if Ms. Wagner

made the change, the conversion would take about a month.

18. The EY call summary log entry for the March 4, 2019,

conversation, presumably completed by Mr. Kantrowitz, records

Ms.

IP. [D]oesn’t plan to work in the FRS anymore. ” The log records

the “Resolution” with a series of four bullet points:

talked about IP. taxation, timelines, HIS.

says she spoke with admin and they said

she would hit NRA at April 1 for 25 YOS

SR.

s he did the 2 nd election online and was

defaulted into the FRS RDF.

needs to set up beneficiaries

sending out beneficiary form

19. It could be argued that the second bullet point

confirms that Ms. Wagner successfully completed the second

election into the Investment Plan. However, when read in tandem

wit h the transcript, Mr. Kantrowitz’s notes clearly set forth his

summary of the conversation as it occurred, not his independent

conclusion that Ms. Wagner had completed the second election.

20. After the call with Mr. Kantrowitz was dropped,

Ms. Wagner ca lled back to inquire as to her exact retirement

date. She spoke briefly with another EY planner, Zach Brown, who

told her that the Division of Retirement keeps the record of

official years of service for employees. Mr. Brown transferred

the call to the D ivision of Retirement. The transcript indicates

that Ms. Wagner remained on hold for some time , then hung up

before speaking with a Division of Retirement representative.

21. Ms. Wagner testified that on March 18, 2019, she again

contacted the EY financi al planners. She spoke for roughly a

half - hour with a woman whose name she did not recall. The woman

verified Ms. Wagner’s personal account information. After being

verified, Ms. Wagner asked tax and health care subsidy questions

and stated that she pla nned eventually to move her Investment

Plan account from EY to an outside investment firm. Ms. Wagner

testified that the EY planner never stated that she was not

enrolled in the Investment Plan.

22. The EY call summary log does not show a phone call

fr om Ms. Wagner on March 18, 2019.

23. Ms. Wagner testified that on March 19, 2019, she met

with Shawn Powers, the human resources manager for the Alachua

County Sheriff’s Office, to discuss Ms. Wagner’s impending

retirement. As Ms. Powers filled out a ret iree insurance data

sheet, Ms. Wagner told her that she had enrolled in the

Investment Plan. Ms. Powers cautioned her about the risks

involved in the Investment Plan. Ms. Wagner assured her that

she understood the risks. Ms. Powers checked the “Investme nt

Plan” box on the insurance form. Ms. Wagner signed the form,

attesting to her understanding that she had made the election to

move from the Pension Plan to the Investment Plan.

24. Ms. Wagner testified that, after the March 4, 2019,

conversation with Mr. Kantrowitz, she received several emails

from EY financial planners. She understood these emails as

indirect confirmation that she had successfully elected to move

to the Investment Plan. During cross - examination, Ms. Wagner

conceded that none of thes e communications affirmatively stated

that she was now in the Investment Plan.

25. The third - party Plan Choice Administrator for the

Investment Plan is Alight Solutions.

26. FRS members who wish to utilize their second election

have multiple options: th ey may complete and mail in a hard

copy form; they may submit a second election form on the

MyFRS.com website; or they may log into their account on the

MyFRS.com website and go through the process of submitting and

confirming their second election online. Fla. Admin. Code R.

19 - 11.007(3).

27. If an FRS member successfully utilizes the online

MyFRS.com process for submitting a second election, an “election

confirmation” page appears that informs the member that the

election has been received by Alight Sol utions.

28. Ms. Wagner had no specific recollection of receiving

an electronic confirmation that her election to move to the

Investment Plan had been successfully submitted or that it had

been received by Alight Solutions.

29. If an FRS member successful ly submits an election form

to Alight Solutions, a hard copy letter is mailed to the member

confirming receipt. Ms. Wagner had no specific recollection of

receiving any type of correspondence confirming receipt of her

Investment Plan election via conventi onal mail.

30. Ms. Wagner retired from the Alachua County Sheriff’s

Office on April 3, 2019. The parties stipulated that the SBA

has no record of receiving a second election from Ms. Wagner

during her term of employment with an FRS - participating

employ er.

31. On April 8, 2019, Ms. Wagner logged onto the MyFRS.com

website and saw that she was still enrolled in the Pension Plan.

Ms. Wagner immediately phoned the number for the EY financial

planners and was transferred to a “solutions person” named

Nicho le. Ms. Wagner explained to Nichole that on March 4, 2019,

she had elected to move her retirement account from the Pension

Plan to the Investment Plan via the MyFRS.com website. She

provided Nichole with the chronology of events from March 2019

as she re membered them. Nichole told Ms. Wagner that she would

research the matter and get back to her within two weeks.

32. Ms. Wagner testified that on or about April 22, 2019,

Nichole phoned her to say that she could find no record of

anything Ms. Wagner claim ed to have done on the MyFRS.com

website. Nicole told Ms. Wagner that she would need more time,

possibly another two weeks, to do further research on the

matter.

33. Ms. Wagner told Nichole how upset she was. Nichole

assured Ms. Wagner that she would do her best to find out what

happened. Nichole also stated that she would send Ms. Wagner a

form to request that the SBA intervene.

34. Ms. Wagner subsequently filed a Request for

Intervention, which was received by the SBA on May 17, 2019.

35. Ms. Wagner testified that after she filed her Request

for Intervention , but before the SBA responded, she attempted to

contact Nichole. Her call was answered by an unnamed EY planner

who stated that he would remain on the line while putting her

through to a solutio ns person. Ms. Wagner began speaking with

the solutions person but was interrupted by the EY financial

planner, who stated that he had found notes by Mr. Kantrowitz

indicating that she had changed from the Pension Plan to the

Investment Plan.

36. It is h ighly likely that the unnamed EY financial

planner was referencing the EY call summary log notes quoted at

Finding of Fact 18. As found above, Mr. Kantrowitz’s

contemporary notes reflected what he was told by Ms. Wagner.

The notes do not constitute an in dependent confirmation that

Ms. Wagner successfully completed her second election.

37. The SBA submitted into evidence a spreadsheet titled

“Participant Web Activity Detail.” SBA witness Allison Olson

testified that this document was produced by Alight S olutions in

response to her request for all records of Ms. Wagner’s March 4,

2019, activity on the MyFRS.com website.

38. Ms. Olson is the Director of Policy, Risk Management,

and Compliance in the Office of Defined Contribution Programs.

She credibly te stified that she is familiar with reading the

Alight Solutions spreadsheets and that she saw nothing on

Ms. Wagner’s page indicating that Alight Solutions received her

Investment Plan election.

39. Petitioner’s information technology expert, Philip

Sc hwartz, testified that the document provided by Alight

Solutions was a “program log,” a high level program that runs to

handle a particular task such as an accounting function.

Mr. Schwartz testified that he suggested to his client that she

request the “s erver log” for the relevant date. The server log

captures every keystroke and c lick made by a user such as

Ms. Wagner, even in situations in which the server is too busy

to complete the requested function.

40. Mr. Schwartz believed the program log was insufficient

because it showed only which page of the website Ms. Wagner was

on at a given moment, not which buttons she clicked or whether

she had hit the “send” button. Mr. Schwartz’s suggestion was

that Ms. Wagner might have done everything necessary t o complete

the second election but that the MyFRS.com server may not have

recorded her election. The server log would have provided a

more accurate representation of Ms. Wagner’s intentions.

41. Ms. Olson testified that, after an informal hearing

attempt ing to resolve the case, she requested a server log from

Alight Solutions. The company responded that it did not have

the server log. Ms. Olson testified that the program log would

indicate the second electi on had it been completed by

Ms. Wagner. Ms. Ol son stated that FRS members are always

advised to follow through and make sure their election has been

received.

42. Mr. Schwartz testified that there is no industry

standard as to the length of time a program log should be kept.

He has known companies to hold them for as long as a year, but

has also known companies to k eep them for only 90 days.

Mr. Schwartz testified that there is no legal requirement for a

company such as Alight Solutions to maintain a program log at

all.

43. Mr. Schwartz testifie d that he did not have enough

knowledge of Alight Solutions’ terminology to state whether the

program log indicated that Ms. Wagner’s election had been

received. Thus, there is no evidence to contradict Ms. Olson’s

credible testimony that the Alight Solut ions program log did not

indicate receipt of Ms. Wagner’s Investment Plan election.

44. The preponderance of the evidence establishes tha t

Ms. Wagner intended to make her second election on March 4,

2019, and to move her retirement account from the Pensio n Plan

to the Investment Plan.

45. The preponderance of the evidence also establishes

that Ms. Wagner failed to complete her second election and that

Alight Solutions, the Plan Choice Administrator for the

Investment Plan, did not receive her election. 1/

46. The evidence was insufficient to show that the SBA or

any entity or person acting on its behalf or as its agent made

any representation to Ms. Wagner that her second election had

been received by the Plan Choice Administrator.

CONCLUSIONS OF LAW

47. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto pursuant to sections 120.569

and 120.57(1), Florida Statutes.

48. Ms. Wagner argues that she should be deemed to have

enrolled in the Investment Plan either becau se she made a valid

second election via the MyFRS.com website, or because the SBA is

estopped from taking the position that her attempted Investment

Plan election was never received by the Plan Choice

Administrator.

49. Section 121.4501(4)(f), Florida Sta tutes, provides, in

relevant part:

After the period during which an eligible

employee had the choice to elect the pension

plan or the investment plan, or the month

following the receipt of the eligible

employee’s plan election, if sooner, the

employee shal l have one opportunity, at the

employee’s discretion, to choose to move

from the pension plan to the investment plan

or from the investment plan to the pension

plan . Eligible employees may elect to move

between plans only if they are earning

service credi t in an employer - employee

relationship consistent with

s. 121.021(17)(b), excluding leaves of

absence without pay. Effective July 1,

2005, such elections are effective on the

first day of the month following the receipt

of the election by the third - party

administrator and are not subject to the

requirements regarding an employer - employee

relationship or receipt of contributions for

the eligible employee in the effective

month, except when the election is received

by the third - party administrator . . . .

( e mphasis added) .

50. Though the evidence supports Ms. Wagner’s contention

that she intended to make the election offered by section

121.4501(4)(f), the statute’s language makes clear that the

relevant inquiry is not the employee’s intent but whether her

e lection was received by the third - party administrator. There is

no evidence that Alight Solutions, the Plan Choice Administrator, received a second election by Ms. Wagner while

she was still employed in an eligible position.

51. Rule 19 - 11.007 is title d “Second Election Enrollment

Procedures for the Florida Retirement System Retirement

Programs.” Subsection (2) of the rule provides, in relevant

part:

(2) 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 earning 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 absenc e or

terminated members cannot use their 2nd

election until they return to FRS - covered

employment. Employees of an educational

institution on summer break cannot use their

2nd election during the full calendar months

of their summer break. For example, i f the

last day of the school term is May 21st and

the first day of the new school term is

August 17th, the employee may not file a 2nd

election in the calendar months of June or

July. The beginning of the school term is

determined by the employer. In gen eral

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 election is received by the Pl an

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.

(e mphasis added) .

52. The rule reiterates the statute’s admonition that the

seco nd election must be received by the Plan Choice

Administrator to be effective. It also places a duty on the

employee to assure that the Plan Choice Administrator has

received the second election before the employee leaves active

employment, which renders nugatory Mr. Schwartz’s suggestion

that the MyFRS.com server may have been at fault. Even if the

server malfunctioned, Ms. Wagner still had a responsibility to

follow up once she failed to receive a confirmation statement

from the Plan Choice Administrato r.

53. Eligible employees may choose to move between plans

“only if they are earning service credit in an employer -

employee relationship consistent with s. 121.021(17)(b).”

§ 121.4501(4)(f), Fla. Stat. Because Ms. Wagner terminated

her FRS - qualifying em ployment on April 3, 2019, and is no

longer earning service credit, she may no longer move between

plans.

54. Having failed to establish that she completed her

second election, Ms. Wagner must resort to her second

argument, that the SBA is estopped from c laiming that her

second election failed. To establish equitable estoppel, the

following elements must be shown: 1) a representation as to a

material fact that is contrary to a later - asserted position;

2) reliance on that representation; and 3) a change i n

position detrimental to the party claiming estoppel, caused by

the representation and reliance thereon. Dep’t of Rev. v.

Anderson , 403 So. 2d 397, 400 (Fla. 1981). “As a general

rule, equitable estoppel will be applied against the state

only in rare in stances and under exceptional circumstances.”

Id .

55. There was insufficient evidence to establish that

the SBA’s representatives, agents, or vendors made any

statements that affirma tively confirmed receipt of

Ms. Wagner’s election to switch to the Inves tment Plan. At

most, Mr. Kantrowitz accepted at face value Ms. Wagner’s

statement that she had made the change and then went on to

advise her regarding Investment Plan options.

56. Ms. Wagner testified that she relied on the receipt

of emails from EY pla nners to confirm her understanding that

she had successfully enrolled in the Investment Plan, but was

forced to acknowledge that those emails did not expressly

confirm her enrollment. The emails themselves were not

offered into evidence.

57. In summary, Ms. Wagner failed to establish either that

she effectively elected to move her retirement account from the

Pension Plan to the Investment Plan prior to her retirement from

state employment or that the SBA was estopped from claiming that

she did not success fully elect to move her retirement account

into the Investment Plan.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is hereby RECOMMENDED that the State Board of

Administration enter a final order dismissing Petition er’s

Florida Retirement System Investment Plan Petition for Hearing.

DONE AND ENTERED this 8th day of January , 2020 , in

Tallahassee, Leon County, Florida.

LAWRENCE P. STEVENSON

Administrative Law Judge

Division of Adm inistrative 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 8th day of January , 2020 .

ENDNOTE

1/ There was the bare possibility, raised by Mr. Schwartz, that

Ms. Wagner did everything necessary to make the second election

and that the fault was with the MyFRS.com server. Even if this

was the case, however, Ms. Wagner remained responsibl e for

knowing that she should have received a confirmation of her

election and for inquiring in a timely fashion as to why she had

not received it.

The EY call summary log indicates that Ms. Wagner had made

several telephonic inquiries prior to March 4, 2019, regarding

switching to the Investment Plan. She “went over the 2 nd

election process and projections” with EY planner Matt Mitola on

September 19, 2017. She discussed the second election process

again on November 17, 2017, with EY planner Jeffre y Egberongbe.

In his notes from a call with Ms. Wagner on September 26, 2018,

EY planner David Scholten wrote that she was “changing from PP to

IP” and that she wished to make the change “because she’s

receiving a high benefit from the US military.” On N ovember 30,

2018, Ms. Wagner spoke to EY planner Gladys Gonzalez about how to

make the second election online. The second election obviously

had been on Ms. Wagner’s mind for quite some time prior to

March 4, 2019. There appears no reason why she should not have

understood how to complete the second election process.

COPIES FURNISHED:

N. Albert Bacharach, Jr., Esquire

N. Albert Bacharach, Jr., P.A.

4128 Northwest 13th Street

Gainesville, Florida 32609 - 1807

(eServed)

Ruth E. Vafek, Esquire

Ausley & McMullen , P.A.

123 South Calhoun Street

Post Office Box 391

Tallahassee, Florida 3230 2

(eServed)

Ash Williams, Executive Director and Chief

Investment Officer

State Board of Administration

1801 Hermitage Boulevard, Suite 100

Post Office Box 13300

Talla hassee, 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 should be filed with the agency th at

will issue the Final Order in this case.