Board: OPM’s actions did not entitle IRS employee to waiver of annuity repayments after drawn out appeal. Image: Nata-Lia/Shutterstock.com
By: FEDweek StaffAn MSPB decision has clarified the standards for OPM to recoup overpayments of retirement benefits, finding that while the individual in the case was not at fault, OPM’s actions did not entitle him to a waiver.
Case No. 2024 MSPB 9 involved an IRS employee who retired rather than face potential firing and began collecting his annuity while still contesting the disciplinary action before the MSPB.
That challenge ultimately was resolved with a settlement agreement calling for a period of unpaid suspension and then leave without pay totaling nearly a year before returning to duty. When he returned to work, the agency notified OPM, which later stopped the annuity.
Three years later, OPM notified him that he had to repay nearly $57,000 in annuity benefits he had received. He requested a waiver, which OPM denied another 18 months later, leading to another appeal to the MSPB.
The merit board said that waivers of repayment are allowed when “the individual is without fault and recovery would be against equity and good conscience.” The MSPB found that the employee was without fault, saying he did not make any incorrect statements, did not fail to disclose material information, and did not accept a payment that he knew or should have known to be erroneous.
It added that recovery is “against equity and good conscience when any of the following three factors are present: (1) recovery would cause financial hardship; (2) the recipient of the overpayment can show that, due to the notice that such payment would be made, the recipient relinquished a valuable right or changed positions for the worse; or (3) recovery would be unconscionable under the circumstances.”
It said the first of those standards was not at issue, and that the employee’s argument that he already had paid taxes on the annuity amount did not meet the second because OPM did not mislead him. The third factor “requires a determination that OPM’s handling of a case was so offensive—so monstrously harsh and shocking to the conscience—that one’s sense of equity forbids recovery,” it said.
“Although OPM notified the appellant of the overpayment approximately 3 years after the IRS notified OPM that the appellant had been returned to duty, and OPM responded to his request for reconsideration approximately 18 months after he made that request, there is no indication that these delays deprived the appellant of the opportunity to pursue and receive other benefits he likely would have received during that period,” it said.
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See also,
How Do Age and Years of Service Impact My Federal Retirement
The Best Ages for Federal Employees to Retire
