19-005499 Deloris Williams vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Wednesday, March 4, 2020.

Summary: Petitioner, a beneficiary, did not prove that she was entitled to change the FRS retirement benefits payment option that had been selected by her husband, an FRS member, when he retired.

payment option selected by her now - deceased spouse, a member of the

Florida Retirement System .

P RELIM INARY S TATEMENT

On July 17, 2019, Respondent sent Petitioner a certified letter, notifying

her that the Florida Retirement System option that had been selected by her

husband, a member of the F lorida R etirement S ystem , at the time of his

retirement in 2002 , was not able to be changed. The letter constituted

proposed agency action, and Petitioner was provided notice of her right to

request an administrative he aring challenging that action. O n August 6,

2019, Petitioner filed a request for an administrative h earing, and the matter

was referred to the Division of Administrative Hearings ("DOAH") for

assignment of an administrative law judge ("ALJ") to conduct a hearing

pursuant to sections 120.569 and 120.57(1).

The final hearing initially was scheduled for De cember 9, 2019, but was

continued due to the unavailability of one of Respondent's witnesses . The

final hearing was held on January 6, 2020.

Petitioner testified on her own behalf and presented the testimony of her

daughter, DeVonnia G. Jones, who appeare d by telephone. Petitioner did not

tender any exhibits for admission into evidence. Respondent presented the

testimony of David Heidel, and Respondent's Exhibits 1 through 13 were

admitted into evidence over objection . Following the final hearing, Petition er

sent ex parte communication s to the undersigned , consisting of a January 21,

2020, letter, and a January 27, 2020, let ter with attachments . These ex parte

communications were placed on the record, pursuant to sections 120.66 and 120.57(1)(f).

The one - volume Transcript was filed on February 3, 2020 . The parties

were given until February 13, 2020, to file proposed recommended orders.

Petitioner's letter dated January 27, 2020, without the attachments, was

treated as Petitioner's Proposed Recommended Ord er. Respondent's Proposed

Recommended Order was filed on February 14, 2020. Both proposed

recommended orders were duly considered in preparing this Recommended

Order.

F INDINGS OF F ACT

1. Respondent, Department of Management Services, Division of

Retiremen t, is the state agency charged under chapter 121, Florida Statutes

(2002) , 2 with administering the Florida Retirement System ("FRS").

2 . Petitioner is the spouse of James L. Williams, now deceased, who was

employed by the School District of Palm Beach ("D istrict ) for 38 years, and

was a member of the FRS .

3 . Williams r etired from his employment with the District on August 23,

2002. At that time, he executed the Florida Retirement System Appli cation

for Service Retirement Form , F orm FR - 11. O n Form FR - 11, h e designated

Petitioner as his primary beneficiary and Jones as his contingent beneficiary.

Williams signed this form, and his signature was notarized.

4 . Also on August 23, 2002, Williams executed the Florida Retirement

System Option Selection for FRS Mem bers F orm, Form FRS - 11o. On that

form, he selected FRS retirement benefits payment Option 2, and designated

that choice by writing an "X" on the line next to Option 2 . Option 2 was

described on Form FRS - 11o as:

A reduced monthly payment for my lifetime. I f I die

before receiving 120 monthly payments, my

designated beneficiary will receive a monthly

benefit in the same amount as I was receiving until the monthly benefit payments to both of us equal 120 monthly payments. No further benefits are

then payable.

2 All references to chapter 121 are to the 2002 version of the Florida Statutes, which was in

effect at the time that the retirement benefits application and option selection forms that

have given rise to this proceeding were execu ted.

5 . Form FRS - 11o contained a section , immediately below the description

of Option 2, that was required t o be completed by the s pouse of a married

FRS member who had selected Option 1 or Option 2. On August 23, 2002,

Petitioner completed , signed, and dat ed that section, confirming that she was

the legal spouse of Williams and acknowledg ing that she was informed that

Williams had selected either Option 1 or Option 2.

6 . The purpose of that section on Form FRS - 11o is to inform the spouse of

the FRS membe r that , by the member's selection of either Option 1 or Option

2, the surviving spouse is not entitled to receive a continuing benefit for the

rest of his or her life.

7 . The last sentence on Form FRS - 11o, immediately above the space for

the FRS member's signature, state s in pertinent part: " [m]y retirement

becomes final when any payment is cashed . . . [or] deposited ."

8 . DeVonnia Jones was present with Williams at the time he was given

Form FR - 11 and Form FRS - 11o to execute . Jones testified that when

W illiams arrived at the District office on August 23, 2002, Form FR - 11 and

Form FRS - 11o already had been filled out by District staff , and were

presented to him by his supervisor, who informed him that he needed to

retire or he would be terminated.

9 . Acc ording to Jones, Williams did not wish to retire at that time. Jones

asked District staff how much more Williams' monthly benefits would be if he

did not retire for another year or two, and was told that Williams' benefits

would be between $25 and $30 more per month. According to Jones, "my dad

basically shed a couple tears. He was not comfortable, but he went ahead and

signed it because I told him to, because they made it seem like he wasn't

going to be eligible to get what he was supposed to get."

10 . Wi lliams signed and dated Form FRS - 11o on August 23, 2002, and his

signature was notarized.

1 1 . On August 28, 2002, Respondent sent Williams a document titled

"Acknowledgement of Service Retirement Application." This document stated,

among other things, tha t Williams had selected FRS Option 2, and that his

retirement was effective September 2002. At the bottom of this document was

a standalone paragraph , in bold face type, that read: " ONCE YOU RETIRE,

YOU CANNOT ADD ADDIT IONAL SERVICE OR CHA NGE OPTIONS.

RETI REMENT BECOMES FINAL WHEN ANY BENEFIT PAY MENT

IS CASHED OR DEPOSIT ED! "

12 . Also o n August 28, 2002, Respondent sent Williams a document titled

"Florida Division of Retirement Estimate of Retirement Benefit (Estimate

only, subject to final verification of all factors)." This document provided

information regarding the amount of the monthly benefits Williams would

receive for the four options offered under the FRS . A statement in bold face

type at the bottom of the document read: " Comments : You have chosen

Option 2. Your option selection cannot be changed after you cash or

deposit any benefit payment. "

1 3 . Had Williams wished to change his retirement benefits payment

option, he could have done so up to the time he cashed or deposited a

retirement benefits p ayment.

1 4 . Williams began receiving his monthly FRS retirement benefits

payments from Respondent on October 4, 2002. He cashed or deposited the

first FRS benefits warrant ( Warrant #0618275 ) that he received .

1 5 . Thereafter, Williams received monthly F RS retirement benefits

payments until his death on April 26, 2010 . Williams received a total of 92

monthly benefits payments before his death. All of the FRS retirement

benefits payment warrants issued to Williams were deposited or cashed .

1 6 . On May 17, 2010, Respondent contacted Petitioner to inform her that

she needed to complete a Florida Retirement System Pension Plan

Application for Beneficiary of Monthly Retirement Benefits Form, Form FST -

11b, in order for her to receive monthly FRS retirement bene fits payments as

Williams' beneficiary. In the contact letter, Respondent informed Petitioner

that "you will receive the same gross monthly benefits to which the member

was entitled through August 31, 2012." Petitioner completed Form FST - 11b

on June 25, 20 10 , and began receiving FRS monthly benefits payments on

June 30, 2010.

1 7 . Petitioner received a total of 28 FRS retirement monthly benefits

payments. The last warrant iss ued to Petitioner ( Warrant #0375196 ) was

issued on August 31, 2012 . All of the warr ants issued to Petitioner were

cashed or deposited .

1 8 . I n sum, Williams and Petitioner collectively received a total of 120

FRS retirement monthly benefits payments, pursuant to Option 2. All of the

warrants issued to Williams, and then to Petitioner, as his beneficiary, were

deposited or cashed .

19 . Petitioner testified that beginning in 20 03, she made numerous

attempts, over a period of years, to contact the District and Respondent

regarding changing the FRS retirement benefits payment option that

Wil liams had selected on August 23, 2002. During this time, Williams and

Petitioner continued to cash or deposit the benefits payment warrants they

received from Respondent .

2 0 . In this proceeding, Petitioner does not claim that Williams

accidentally selecte d Option 2 , or that he intended to select another option ,

when he signed Form FR S - 11 o on A ugust 23, 2002. R ather, she asserts that

at the time Williams retired, he suffered from confusion and memory loss

such that he d id not understand the option he chose — effectively, that he

lacked the mental capacity to have chose n Option 2 as his retirement benefits

payment option . Alternatively, Petitioner contends that because Williams

was forced to retire under threat of termination from his employment, he was

under d uress when he chose Option 2 on Form FR S - 11 o . On these grounds ,

Petitioner asserts that she should be permitted to change Williams' choice of

retirement benefits payment option. 3

3 Here, Petitioner, has requested that she be allowed to "change" Williams' choice of Option 2

on the FRS retirement option selection forms. She did not identify, or present evidence,

2 1 . Petitioner's impassioned testimony at the final hearing shows that she

f ervently believes her husband was wrongly treated by the District when it

required him to retire in 2002, against his desire to continue to work. 4

However, as was explained to Petitioner at the final hearing, the purpose of

this proceeding was not to deter mine whether the District wrongly forced

Williams out of his employment ; r ather, it is to determine whether there is

any factual or legal basis for changing the retirement benefits option that

Williams selected when he executed Form FR S - 11 o nearly 1 8 years ago.

2 2 . The evidence does not support Petitioner's argument that Williams

lacked the mental capacity to adequately understand the option that he chose

on Form FR S - 11 o . Although Petitioner testified that Williams had been

treated by a neurologist, no dir ect medical evidence was presented

establishing that Williams was mentally incapacitated at the time he

executed Form FR S - 11 o . Additionally, at the time Williams signed the form,

he was accompanied by his daughter, who, after speaking to District staff

reg arding his options, advised him to sign the form. Petitioner herself also

was present at the District office and signed Form FRS - 11o, expressly

acknowledging that she understood Williams had chosen Option 2 . Thus, to

the extent that Williams may not , on hi s own, have fully appreciated his

choice of options on Form FR S - 1 1 o — and there is no competent direct

evidence showing that to be the case — both his daughter and wife were

present with him when he executed Form FRS - 11o, his daughter told him to

sign the form , and his wife expressly acknowledged that she understood his

choice of Option 2. These circumstances do not s upport a finding that

Williams lacked the mental capacity to understand, or did not adequately

regarding which specific option she would choose , if permitted to c hange Williams' selected

FRS benefits option.

4 The evidence indicates that the District required Williams to retire because he began

having difficulty with his job as a mail carrier. According to Petitioner, Williams had an

accident in a District vehicl e and did not report the accident to the District, and that when he

was transferred to the mail room, he had difficulty remembering to do certain required tasks.

understand , the consequence of choosing Option 2 wh en he executed Form

FRS - 11o.

2 3 . The evidence also does not support a finding that Williams' choice of

Option 2 should be changed , due to duress. There is no direct evidence

establishing that Williams was under duress when he chose Option 2.

Although Jon es testified , credibly, that her father was upset about being

forced to retire when he wanted to continue working , her testimony that he

was under duress was based on her subjective conclusion . Further more , even

if Williams was emotionally distressed when he signed the FRS benefits

options forms, there is no evidence showing that as result of such distress , he

chose Option 2 instead of a different option.

2 4 . It also is noted that Form FR - 11 and Form FR S - 11o both expressly

informed Williams that once his retirement became final — which would occur

when any benefit payment was cashed or deposited — his retirement benefits

option selection would become f inal and could not be changed. Further ,

Williams received two more pieces of correspondence from Respondent — bo th

containing statements in bold face type — expressly informing him that once

any FRS retirement benefits payment s were cashed or deposited, his

retirement benefits option choice could not be changed.

2 5 . As noted above, Williams could have changed his FRS benefits option

at any time before he cashed or deposited a benefits payment; however, he

did not do so. T hus, pursuant to the express terms of Form FR - 11 and Form

FRS - 11o, when Williams cashed or deposited the first benefits payment, his

selection of Option 2 became final and could not be changed.

2 6 . In sum, the evidence does not establish any factual basis for

permitting Petitioner to change Williams' selection of Option 2 as his FRS

retirement benefits payment option .

C ONCLUSIONS OF L AW

2 7 . DOAH has jurisdiction over the parties to, and the subject matter of,

this proceeding, pursuant to sections 120.659 and 120.57(1).

2 8 . Here, Petitioner contends that she should be permitted to change

Williams' FRS retirement benefits option from Option 2 to a d ifferent option.

Because Petitioner is asserting the affirmative of the issue in this proceeding,

she bears the ultimate burden to establish, by a prepo nderance of the

evidence, that she should be permitted to change Williams' selected FRS

benefits option to a different option. Balino v. Dep't of HRS , 348 So. 2d. 349,

350 (Fla. 1st DCA 1977) (unless otherwise established by statute, the burden

of proof is on the party asserting the affirmative of an issue before an

administrative tribunal) ; s ee Wilson v. Dep 't of Admin., Div. of Retirement ,

538 So. 2d 139, 142 (Fla. 4th DCA 1989)(burden is on beneficiary seeking to

establish his or her right to retirement benefits under chapter 121).

29 . Section 121.021(12) defines an FRS " m ember , " in pertinent part , as

" any . . . employee who is covered or who becomes covered under this system

in accordance with this chapter ."

3 0 . Section 121.021(46) defines "beneficiary," in pertinent part, as the

"joint annuitant or any other person . . . designated by the member to receive

a retirement benefit, if any, which may be payable upon the member's death."

3 1 . Section 121.021 (28) defines " j oint annuitant , " in pertinent part, to

mean " any person designated by the member to receive a retirement benefit

upon the member's death who is: (a) [t] he spouse of the member [.]"

3 2 . Section 121.091(6) governs the types of FRS retirement benefits, the

process for selecting an option for receipt of FRS retirement benefits

payments after termination of employment, and the payment of FRS

retirement benefits to the member and beneficiaries. The statute states, in

pertinent part:

( 6) OPTIONAL FORMS OF RETIREMENT

BENEFITS AND DISABILITY RETIREMENT

BENEFITS. —

(a) Prior to the receipt of the first monthly

retirement payment, a member shall elect to rece ive the retirement benefits to which he or she is

entitled under subsection (1), subsection (2),

subsection (3), or subsection (4) in accordance with one of the following options:

1. The maximum retirement benefit payable to the

member during his or her lifetime.

2. A decreased retirement benefit payable to the

member during his or her lifetime and, in the event

of his or her death within a period of 10 years after

retirement, the same monthly amount payable for

the balance of such 10 - year period to his or her

beneficiary or, in case the beneficiary is deceased, in

accordance with subsection (8) as though no beneficiary had been named.

* * *

The spouse of any member who elects to receive the benefit provided under subparagraph 1. or subparagra ph 2. shall be notified of and shall

acknowledge any such election.

* * *

(b) The benefit payable under any option stated

above shall be the actuarial equivalent, based on tables adopted by the administrator for this purpose, of the amount to wh ich the member was

otherwise entitled.

(c) A member who elects the option in

subparagraph (a)2. shall, in accordance with

subsection (8), designate one or more persons to receive the benefits payable in the event of his or

her death. Such persons shall b e the beneficiaries

of the member. The member may also designate

one or more contingent beneficiaries to receive any benefits remaining upon the death of the primary beneficiary.

* * *

(h) The option selected or determined for payment of

benefit s as provided in this section shall be final

and irrevocable at the time a benefit payment is

cashed or deposited .

§ 121.091(6), Fla. Stat. (emphasis added).

3 3 . Pursuant to the plain terms of section 121.091(6)(h), Williams' election

of Option 2 on Fo rm FR S - 11 o cannot be changed.

3 4 . As discussed above, Williams cashed or deposited his FRS retirement

benefits payment warrant s . Pursuant to section 121.091(6)(h), when he

cashed or deposited a warrant, his selection of Option 2 became final and

irrevoca ble. The statute does not provide any exceptions to this finality and

irrevocability.

3 5 . Additionally, under any circumstances, only Williams himself , as a n

FRS member , would have the ri ght to change his retirements benefits

payment option — and then only within the time period before finality and

irrevocability attached, as provided in section 121.091(6)(h). See

§ 121.011(3)(d)(declaring the rights of FRS members to be of a contractual

nature, entered into by the member and the state); Boiler v. Dep't of Mgmt.

Servs. , Case No. 10 - 0001 (Fla. DMS Jan. 19, 2010)(concluding that only an

FRS member can select an option under which he or she will receive

benefits ) .

3 6 . Case law routinely has held that a member's retirement benefits

option selection cannot be posthumously changed. For example, i n Maddox v.

Department of Management Services , the ALJ determined, and the agency

affirmed in its final order, that a spouse was not permitted to change a

member's retirement benefit payment option after th at member's de ath, on

the basis of her belief that the member had chosen, or intended to choose, a

different option . The ALJ reasoned that the member had negotiated his

retirement benefits prior to his death, and the benefits, which were paid to

him pursuant to his sele cted option, were deposited in his bank account ,

thereby r endering his benefits option choice irrevocable under the statute.

Maddox v. Dep't of Mgmt. Servs. , Case No. 17 - 1424 (Fla. DOAH Aug. 25,

2017; Fla. DMS, Jan. 5, 2018). Similarly, in Carpenter v. Dep artment of

Management Services , a spouse challenged the denial of her request to

change the selection of Option 1 by her husband, an FRS member, on the

basis that she had not consented to the selection of that option. The ALJ

concluded , and the agency affi rmed in its final order, that "the statutes do not

require the spouse to agree with the member's option selection ." Because the

member had cashed or deposited retirement benefits payments, his selection

of Option 1 was final and irrevocable, and the spouse did not have any right

to change the member's selection of that option. Carpenter v. Dept. of Mgmt.

Servs. , Case No. 01 - 1618 (Fla. DOAH Jul. 12, 2001; Fla. DMS Aug. 22, 2001).

See Jones v. Dep't of Mgmt. Servs. , Case No. 16 - 0429 (Fla. DOAH Oct. 25,

2016; Fla. DMS Jan. 3, 2018) (the evidence did not support a posthumous

change to a retirements benefits selection requested by the beneficiary) .

37 . Based on the evidence presented at the final hearing , and section

121.091(6) and interpretive case law, it is c oncluded that Petitioner is not

legally authorized to change the retirement benefits payment option that her

husband, an FRS member, selected when he retired.

38 . T he undersigned is extremely sympathetic to Petitioner's situation .

H owever, she is required to uphold the applicable law, which dictates the

result that has been reached in this case.

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

R ECOMMENDED that Respondent, Department of Management Services, enter

a final order denying Petitioner 's request to change the FRS retirement

benefits payment option selected by her husband, an FRS member, when he

retired.

D ONE A ND E NTERED this 4th day of March, 2020 , in Tallahassee, Leon

County, Florida.

C ATHY M. S ELLERS

Adm inistrative 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 Hear ings

this 4th day of March, 2020 .

C OPIES F URNISHED :

Ladasiah Jackson Ford, Esquire

Department of Management Services

4050 Esplanade Way , Suite 160

Tallahassee, Florida 32399 - 0950

(eServed)

Deloris Williams

1219 West Ninth Street

Riviera Beach, Florida 33404

(eServed)

Nikita S. Parker, Esquire

Department of Man a gement Services

4050 Esplanade Way , Suite 160

Tallahassee, Florida 32399 - 0950

(eServed)

David DiSalvo, Director

Division of Retirement

Department of Mangement Services

Post Office Box 9000

Tallahassee, Florida 32315 - 9000

(eServed)

Sean Gellis, General Counsel

Office of the General Counsel

Department of Mangement Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

(eServed)

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

All part ies 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.