A recent federal court ruling underscores the importance of careful handling of any withdrawal of federal retirement contributions, upholding OPM in a dispute with a federal retiree.
The Court of Appeals for the Federal Circuit recounted after working for the government for about 20 years, the employee accepted a buyout offer and meanwhile requested a refund of her contributions into the retirement fund. Years later—after the waiting period for returning to the government after a buyout had ended—she returned.
In that situation a returning employee may recapture credit for the prior service time by repaying the withdrawal with interest, but she apparently did not, retiring from the second job after about another 10 years. When OPM started paying interim benefits pending a final calculation, it based on 30 years rather than 10, but the final determination was based on just the lower number. OPM then moved to collect more than $10,000 in interim payments that it deemed to have been overpaid.
The retiree appealed, arguing that she never had received the refund after leaving the first position and that she thus should receive credit for the full 30 years. She said she did not remember requesting a refund and that even if she did, she never received one.
However, the court pointed to the refund request signed by her, her husband and an attorney and the retirement refund check issued by the Treasury. It said there was sufficient evidence to uphold the Merit Systems Protection Board’s decisions that she “actively sought” the refund; that the paperwork she signed put her on notice that she would lose credit for those years if she did not return to the government and repay it; and that since she had formally applied for the refund, if she had not received it she would have contacted OPM to inquire about its status.
reFurther, while the Treasury check is somewhat blurry, it is not illegible and the endorsement signature appears to match that on the refund application, it said.
ask.FEDweek.com: Redeposits for Service Credit CSRS and FERS