Retirement Annuities: A Time Limit is Really A Time Limit

By on October 7, 2005 in Current Events, Retirement with 0 Comments

In a non-precedential decision, the U.S. Court of Appeals for the Federal Circuit sided with OPM and the MSPB in its decision to deny a widow of a federal employee a survivor annuity. (Parson v. Office of Personnel Management, CAFC, No. 05-3144, October 5, 2005)

No Survivor Annuity Election

Gloria Parson and her husband were not yet married when he retired from the federal service in 1993. Therefore, he did not elect a survivor annuity at the time. They married about three months later. When he died several years later, he still had not elected a survivor annuity and continued to collect his full pension. Gloria Parson applied to OPM for a survivor annuity. Because the record did not contain an election by Mr. Parson, OPM denied her petition. (Opinion, p. 2)

MSPB agreed with OPM’s decision. Following a hearing, the AJ pointed out that Ms. Parson had the burden to establish that she was entitled to survivor benefits by a preponderance of the evidence.

While 5. U.S.C. 8339(k)(2)(A) permits a retiree who later marries within two years of that marriage to elect a reduction in the current annuity in order to provide a new spouse with a survivor annuity, it was “undisputed” that Mr. Parson did not make such an election within two years of his marriage. Ms. Parson argued that she was nevertheless entitled to an annuity because her husband had wanted her to have one.

Where’s the Proof?

She claimed he had filled out two forms (SF-2808 Designation of Beneficiary, and Designation of Beneficiary, Federal Employees’ Group Life Insurance Program) that she “believed her husband had been told” by his former agency would provide for the survivor’s annuity. But the AJ pointed out there was no proof of this; further these two forms do not relate to providing a survivor’s annuity. (Opinion, pp. 3-4.) The initial MSPB decision is found at Parson v. Office of Pers. Mgmt., No. DC-0831-03-0680-I-1, 10/31/03. The final decision is at Parson v. Office of Pers. Mgmt., No. DC-0831-03-0680-I-1, 2/2/05.)

Limited Review

The scope of the appeals court review in cases challenging decisions of the MSPB is limited. Unless it finds the Board’s decision to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; obtained without procedures required by law, rule, or regulation having been followed; or unsupported by substantial evidence,” then the court must affirm. (Opinion, p. 4)

As to Ms. Parson’s contention that her husband tried to elect the survivor annuity, but was given the wrong forms, the court was unpersuaded. These two forms did not relate to this subject, and, besides, even if true that the agency erred, “that misinformation would not estop OPM from enforcing the two-year statutory limit.”

And, while “sympathetic to Ms. Parson in view of the circumstances in which she finds herself,” the court points out in its decision that it cannot ignore the two-year time limit in the law. (Opinion, p. 5)

Moral of the Story

The moral of this story is that you can’t have your cake and eat it too. Mr. Parson kept the higher annuity option and presumably they both enjoyed the higher retirement income. His widow cannot now come in and get a survivor annuity on top of that by arguing that this is what he intended all along. The government is arguably generous in allowing newly married annuitants a full two years to make the election to reduce their annuity to benefit the new spouse. A time limit is a time limit.

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

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.