A federal annuitant tried to change the survivor annuity for his former wife based on an amended state court ruling, but OPM refuses to process the change. The appeals court has upheld OPM’s ruling. (Carter v. Office of Personnel Management (CAFC No. 2015-3137 (9/15/15 nonprecedential))
Mr. Carter divorced his wife of seven years (Karen) before he actually retired from his federal job. Incorporating the parties’ signed settlement agreement, the state court issued a divorce order that called for Karen to receive the “maximum possible former spouse survivor annuity under the Civil Service Retirement System” just as if they were still married on Alan’s retirement once he actually did retire. (Opinion p. 3)
OPM acknowledged receipt of the state order and told both parties that if Karen survived Alan after his retirement she would get one hundred percent of the surviving spouse benefit payable under CSRS.
Many years later Mr. Carter retired. When he got word from OPM that his annuity would be about $400 per month less in order to cover Karen’s survivor annuity benefit, he went back to the state court. With Karen’s agreement, that court amended its previous order by reducing Karen’s survivor’s annuity from “maximum possible” to a “prorate share.” (p. 3) Alan sent this new order to OPM about two and a half years after the effective date of his retirement, arguing they had got it wrong when they computed his annuity less survivor benefit.
Sorry, said OPM, but under its regulations one cannot submit a modification such as this after the effective date of his retirement. (p. 4)
Alan, supported by Karen, appealed to the Merit Systems Protection Board (MSPB), arguing that the first court order was “ambiguous” and did not properly include the actual agreement reached between Alan and Karen. Therefore it was necessary to accept the amended state court order to give effect to their intent. Initially the Administrative Judge reversed OPM’s determination since he disagreed with its interpretation of the applicable OPM regulation. The AJ ruled that 5 CFR 838.806(b) allows OPM to process an amended court order that is submitted before the employee’s death. (p. 4)
The full Board, however, sided with OPM’s interpretation of its own regulation and reversed its judge’s decision.
Mr. Carter took his case to the appeals court and recently learned that the court was not about to overrule OPM’s determination. The court found the first state court order was plain in its meaning, used the OPM model language for such agreements, was determinative, and “OPM was barred by statute and regulation from processing Alan’s change…”after Alan had already retired. (pp. 5-6) In the court’s words, “The statute clearly states that a modification issued after the federal employee’s retirement is ineffective to the extent it involves a former spouse survivor annuity like the one at issue here.” (p. 6)
What the Carters may have intended pretty much makes no difference given the facts since OPM has to go with the actual language of the original order.
In short, Mr. Carter will continue to receive the reduced annuity and if Karen survives him she will get the maximum.