During the Second World War the government warned its citizens that “a slip of the lip can sink a ship.” Well, as it so happens, it can also sink a court case. In 2004, a retiree filed a case with the Merit Systems Protection Board asking that a decision by OPM to reduce his annuity because he failed to make a deposit for prior military service be overturned and that be given an opportunity to make that deposit. The administrative judge hearing the appeal upheld OPM’s decision and denied the request. So the retiree went to the full Board and asked it review the case.
In 2005 the Board issued a final decision upholding the AJ’s decision. That’s when the retiree filed his case with the United States Court of Appeals for the Federal District – and, in August 2006, he won. How come?
Let’s take a step back and review the facts in the case. One, the CSRS employee preparing to retire filed out an application for retirement and a military deposit election form. He understood that if he failed to make a deposit for that period of service and became eligible for a Social Security benefit at age 62, those years would be eliminated and his annuity be recomputed downward—commonly called “catch-62.”
Two, when he asked how much the deposit would be, an OPM employee told him “a lot.” Three, when his annuity was recomputed at age 62, the reduction amounted to $398 a month. Four, the actual deposit required was $560, plus interest. That is, for the want of making a deposit on the order of probably less than $1,000, his benefit was to be docked by around $400 a month for life.
While the AJ and MSPB found merit in OPM’s decision not to grant a waiver and allow the retiree to make a deposit for that period of military service, the court of appeals did not. It found the government guilty of providing a misleading response and that OPM’s decision not to grant a waiver was arbitrary and not supported by the evidence. So it reversed the Board’s decision and ordered it to set a time limit under which the retiree may make the military deposit. It also awarded costs to the appellant.
