Disputes over money can create tension in families. In some cases, the dispute occurs after the death of a family member.
A civil service annuity can represent a great deal of money. Who gets the money, if anyone, when a federal employee with a CSRS annuity dies?
Here is one case.
When Joseph Butler died, his former wife filed an appeal with the Merit Systems Protection Board (MSPB). She contended that she was entitled to a survivors’ annuity as a result of the divorce settlement from her former husband. But, if the appeal were to be granted, the money paid to Joseph Butler’s children as a result of a CSRS lump-sum payment would be affected under the circumstances of this case.
The Butler children were notified of their right to intervene in the proceedings but they did not do so.
The Administrative Judge for MSPB ruled that the former Mrs. Butler was entitled to an annuity. Shortly after the decision, the Butler children were told they had to pay back money previously given to them as the lump-sum payment they had received.
That notice obviously got their attention. At that point, the children of Joseph Butler decided they needed to get involved in the case that would dictate the distribution of their father’s annuity.
The Butler children apparently had discussed the case with the Office of Personnel Management and contended that OPM assured them the initial decision to deny the payment of a survivor annuity to Mrs. Butler was the correct one. The AJ concluded they had been properly notified of the appeal filed by Mrs. Butler and their attempt to now intervene in the case was untimely.
The administrative judge concluded OPM had not adequately protected its interests in the case by paying the lump sum annuity payment to the children before knowing a timely appeal would not be filed. The Butler children did not adequately protect their interests by intervening in the case when they knew the proceeding was moving forward. Finally, Mrs. Butler did protect her interest by filing a timely appeal and that requiring her to relitigate the case under these circumstances was not a proper approach.
The MSPB upheld the ruling of the administrative judge. (Butler v. OPM, NY-0831-03-0079-I-1, June 14, 2005) The case can still go to the Federal Circuit Court of Appeals but the big winner so far is the former wife of the deceased federal employee.