In a split decision of the Federal Circuit Court of Appeals, the divorced widow of a civilian Army employee has been denied a survivor annuity that her ex had elected for her because he failed to file the proper form with OPM within two years of their divorce. (Downing v. Office of Personnel Management, C.A.F.C. No. 2010-3043 (9/20/10)) The following facts are pulled from the court’s opinion.
After some thirty-five years of marriage, Mrs. Downing filed for divorce. Before the divorce was finalized, Mr. Downing retired from the Army. He elected a survivor’s annuity for his spouse even though they were in the process of getting a divorce. The form he filled out (SF 2801) had specific information in its ten pages of instructions about the possibility of a divorce. It pointed out that the survivor annuity would stop if the marriage ends in divorce unless Downing elected within two years of the divorce to continue the reduced annuity in order to give his former spouse a survivor annuity. (Opinion, pp. 2-3, Dissent p. 5) Also, each year Mr. D. received a standard notice from OPM that explained, among other things, that a CSRS retiree must make a new survivor annuity election within two years of divorce in order to assure a survivor annuity benefit for a former spouse. (p. 3)
A few months after Mr. D.’s retirement and election of a survivor annuity, the Downings signed a separation agreement that, among other things, gave Mrs. D. one-half of Mr. D.’s retirement annuity. It made no mention of a survivor annuity. (p. 3)
The Downings’ divorce became final in October 2006. OPM was provided a copy of the decree. OPM continued to pay Mr. Downing a reduced annuity.
Mr. Downing died in March 2008, about seven months shy of the deadline for him to make the election to continue a survivor annuity for his ex wife. (pp. 3-4)
When the ex wife filed paperwork with OPM to receive her survivor annuity, the agency turned her down. The Merit Systems Protection Board sided with OPM. The Administrative Judge concluded that: Mr. Downing had not specifically provided for a survivor annuity in the divorce proceedings, evidence of his intent to provide one was not binding on OPM, Mr. Downing had been adequately notified of the requirement that he file a “reelection,” and Mr. Downing failed to file the reelection within the 2 year period following the divorce. (p. 4)
Ms. Downing took her case to the appeals court. She represented herself, arguing that while the divorce decree did not use “magic words,” it was nevertheless clear that the intent was for her to receive a survivor annuity. She also argued that Mr. Downing did not receive adequate notice of the requirement to “reelect,” because OPM continued to pay the reduced survivor annuity after the divorce. (p. 5)
The court majority backed OPM and the MSPB, holding that the entitlement to a survivor annuity “terminated” when the divorce became final. (p. 5) The court points out that the only ways around this termination of benefits are if the divorce decree expressly provides for a survivor annuity or if the annuitant makes a new election within the requisite 2-year period following the divorce. Any divorce decree must “identify the retirement system and state that the former spouse is entitled to former spouse annuity or direct the retiree to elect to provide a …survivor annuity….” (pp. 5-6)
Since the court divorce order did not meet this test (sounds pretty much like a “magic words” test, doesn’t it?), then the court majority deemed it “irrelevant” that Mr. Downing intended to give his former spouse a survivor annuity. (p. 7)
As for the second argument raised by Mrs. Downing that her ex did not receive adequate notice, the court majority disagreed. (p. 8)
Circuit Judge Newman filed a strong dissent in the case, which begins, “This is a rare case in which the intention of the divorcing employee is clear, and was clearly recorded in several official documents. … All of OPM’s requirements for a survivor annuity were met, including payment of the reduced annuity during the retiree’s life. The two-year window after the divorce…had not run when the retiree died. Nonetheless, OPM now invokes rules that are designed to protect the interests of all concerned, to deprive the survivor of the annuity that was designated by the employee…..” (Dissent, pp. 1-2)
The dissent also points to the fact that Mr. Downing died before the two-year window had expired. Put this together with the fact that OPM kept paying the reduced annuity up until Mr. Downing’s death, and you have “precisely the situation that this court has noted ‘strongly suggests the elements of an estoppel…’” (p. 3)
Judge Newman goes on to take a hard slap at OPM, “This case raises the question of the role of OPM in administering the employment laws fairly and with humanity, in service to those persons who committed their lifetime to federal employment… OPM’s obligation to Mr. Downing, and to all federal employees, is to assure that their intentions on retirement, and upon death, are conscientiously respected and carried out.” (pp. 5,7)
Judge Newman was particularly concerned that OPM timely received a copy of the Downing’s divorce decree yet did nothing to alert Mr. Downing to the requirement that he reelect the survivor annuity, other than to send the annual “boiler-plate reminder.” (p. 5)
Unfortunately for Mrs. Downing, it’s the majority that rules. The survivor annuity she and her ex husband undoubtedly relied upon for her future financial security is not going to be paid to her.
The decision does not address whether Mrs. Downing can force OPM to refund to the ex husband’s estate the difference between the full annuity and the lower amount OPM actually paid him—apparently erroneously—after the divorce and up to the date of Mr. Downing’s death.