OPM determined that an award of a FERS retiree’s annuity benefits to a former spouse applies automatically to the supplement. Image: Lane V. Erickson/Shutterstock.com
A federal appeals court has rejected a challenge to a 2016 change in how the “special retirement supplement”—also called simply the “annuity supplement”—feature of FERS annuities is handled in a divorce.
OPM at that time determined that a divorce court order awarding a portion of a FERS retiree’s annuity benefits to a former spouse applies automatically to the supplement, if the retiree is eligible for one, as well as to the basic annuity. That reversed a long-standing policy that divorce awards did not reduce the supplement unless they specifically referenced dividing that benefit.
The supplement, which approximates the value of a Social Security benefit earned during years covered by Social Security as a federal employee, is paid to those who retire before age 62 until they reach that age, when regular Social Security benefits begin. Among those most commonly receiving it are law enforcement officers and others under special provisions that generally mandate earlier retirement.
In its suit, the Federal Law Enforcement Officers Association argued among other things that the policy change was invalid because it was the result only of an internal OPM review and did not go through a notice-and-comment rule-making process.
A federal district court held that while disputes over federal benefits must go through the MSPB and then to the Federal Circuit U.S. appeals court, the case fell within an exception allowing district courts to review agency rules before they are enforced. The judge however then ruled in favor of OPM, saying a formal rule-making process was not needed for that change.
The federal appeals court for the District of Columbia circuit has now ruled that the district court had no jurisdiction to even consider the case. It said the Civil Service Reform Act requires that any challenges to calculation of retirement benefits must go through the MSPB-Federal Circuit process.
The ruling is the latest testing the limits of provisions in that law generally requiring federal employment-related disputes to go through the administrative process and not directly into federal court. That was an issue in a dispute over Trump administration executive orders on union and disciplinary matters where the same circuit court similarly overturned a district court’s decision to accept the case.
Similar issues also are involved in a suit against the Biden administration’s Coronavirus vaccination mandate for federal employees, which remains pending before a separate federal appeals court. That court has yet to issue a decision even though it held oral arguments six months ago.
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