No Christmas Gift for This Former Fed

By on December 29, 2004 in Current Events, Retirement with 0 Comments

If the Office of Personnel Management decides to grant a retirement annuity to a federal employee, and then decides that he should not have such an annuity, what happens to the money already paid to the employee?

Does the employee have to pay the money back or can he keep it? Does it make a difference if the decision comes out Christmas week?

This issue arose in a recent case involving an employee of the Rhode Island National Guard. The decision of the court was issued on December 22nd.

After having paid $18,190.30 to David Moravec, OPM concluded the decision to grant him an annuity was in error. The agency cut off his annuity and asked him to pay back the $18,000 already given to him.

Probably to no one’s surprise, he didn’t want to pay it back. He contended he was entitled to an annuity and, in any event, should not have to pay the money back.

The case eventually went to the Federal Circuit Court of Appeals.

Moravec argued the money should be waived because the erroneous annuity payments were not his fault. He also argued fairness and good conscience would justify waiving his debt. He also contended paying back the money would cause him undue hardship.

Moravec had a shot at getting this part of his appeal granted by the court. Section 8346(b) of Title 5 of the United States Code states:

“Recovery of payments under this subchapter may not be

made from an individual when, in the judgment of the Office

of Personnel Management, the individual is without fault and

recovery would be against equity and good conscience.”

The court considered whether this applied to his case.

The court concluded that Moravec was not caused undue hardship by having to pay back the money. In effect, it ruled he had plenty of money and paying it back would not cause him undue hardship.

No Christmas gift from the court in this case though. It also denied his request to be given a full federal retirement pension under the Civil Service Retirement System. Moravec v. OPM, Court of Appeals for the Federal Circuit, Case No. 04-3061 (December 22, 2004)

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.