Springer v. Adkins , 525 F.3d 1363 ( 2008 )

United States Court of Appeals for the Federal Circuit
2007-3180
LINDA M. SPRINGER, Director, Office of Personnel Management,
Petitioner,
v.
JAMES R. ADKINS,
Respondent,
and
MERIT SYSTEMS PROTECTION BOARD,
Respondent.
Dawn S. Conrad, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for petitioner. With
her on the brief were Jeanne E. Davidson, Director, and Todd M. Hughes, Deputy
Director. Of counsel on the brief was Earl A. Sanders, Special Counsel, Office of
General Counsel, Office of Personnel Management.
Emily Johnson Henn, Covington & Burling, LLP, of Washington, DC, argued for
respondent, James R. Adkins. With her on the brief was Robert A. Long, Jr.
Calvin M. Morrow, Attorney, Office of the General Counsel, Merit Systems
Protection Board, of Washington, DC, argued for respondent, Merit Systems Protection
Board. With him on the brief were B. Chad Bungard, General Counsel, and Rosa M.
Koppel, Deputy General Counsel.
Appealed from: Merit Systems Protection Board
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
2007-3180
LINDA M. SPRINGER, Director, Office of Personnel Management,
Petitioner,
v.
JAMES R. ADKINS,
Respondent,
and
MERIT SYSTEMS PROTECTION BOARD,
Respondent.
Petition for review of the Merit Systems Protection Board, in DE0842050280-R-1.
______________________
DECIDED: May 14, 2008
_______________________
Before NEWMAN, MAYER and LOURIE, Circuit Judges.
MAYER, Circuit Judge.
The Office of Personnel Management (“OPM”) appeals the final decision of the
Merit Systems Protection Board in Docket No. DE-0842-05-0280-R-1 granting James R.
Adkins an increased annuity payment under the Federal Employees’ Retirement
System (“FERS”). Because the board correctly interpreted the statutes governing
FERS in light of Pitsker v. Office of Pers. Mgmt., 234 F.3d 1378 (Fed. Cir. 2000), we
affirm.
BACKGROUND
Adkins served as a firefighter in the United States Air Force from October 8, 1976
until October 7, 1980. He then served as a civilian federal firefighter for 22 years
spanning December 21, 1981 until December 13, 2003, when disability forced him to
retire at 45 years of age. As a civilian firefighter, a portion of his wages was deposited
into a Civil Service Retirement System (“CSRS”) account until January 3, 1999, after
which his account was converted to a FERS account, and a portion of his wages was
deposited there. Under FERS, firefighters are considered a special employee class
having “duties requiring young and physically able employees” and therefore are
entitled to earlier retirement and an enhanced annuity. S. Rep. No. 99-166, at 6-7
(1985), as reprinted in 1986 U.S.C.C.A.N. 1405, 1411. Therefore FERS required him to
deposit one-half percent more of his wages than he would have if he had been a regular
employee. See 5 U.S.C. § 8422. Upon retiring on disability, Adkins began receiving
retirement benefits in December of 2003.
In June of 2004, he requested OPM to provide him a comparison of his benefits
as calculated under the disability annuity versus his benefits as they would have been
calculated if he had been well enough to serve as a firefighter until normal retirement.
In a July 26, 2004 letter, OPM responded, “[F]ormer agency records reveal that you had
sufficient creditable Federal service for entitlement to a [non-disability] FERS firefighter
annuity benefit.” On August 10, 2004, Adkins requested that OPM recalculate his
retirement annuity, but in an initial decision dated February 9, 2005, it denied his
request. OPM again noted that had he “retired under the firefighters retirement
provisions (and all of [his] civilian service qualified as firefighter service),” his annuity
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would have been higher than the disability annuity he was receiving. In this way, OPM
stated that Adkins was receiving the same benefits that federal employees in non-
hazardous positions were receiving when they retired under disability. Adkins filed a
timely request for reconsideration on March 7, 2005, again requesting recalculation of
his annuity. In a final decision dated March 24, 2005, OPM denied his request, stating
that he lacked the requisite age and years of service for normal, “Immediate Retirement”
under FERS’ “special Law enforcement/Firefighter provision,” 5 U.S.C. § 8412(d). 1
Under OPM’s interpretation, section 8412(d) requires the annuitant to have 25 years of
creditable law enforcement or firefighter service, or at least 20 years of creditable
service when the annuitant reaches age 50. OPM did not count Adkins’ 4 years of
military service to reach the 25 year cutoff leaving him ineligible under section
8412(d)(1). Even though he had 20 years of service at retirement, because he was only
45 years of age, OPM found him ineligible under section 8412(d)(2) as well.
Adkins, acting pro se, then appealed this final decision to the Merit Systems
Protection Board. In an initial decision of the board, an administrative judge affirmed
OPM’s ruling, after which Adkins timely filed a petition for review to the full board. On
May 30, 2006, the board denied the petition, but simultaneously reopened the case on
1
5 U.S.C. § 8412(d) (Immediate retirement) provides in pertinent part:
An employee who is separated from the service . . . --
(1) after completing 25 years of service as a law enforcement officer, member of the
Capitol Police or Supreme Court Police, firefighter, or nuclear materials courier,
or any combination of such service totaling at least 25 years, or
(2) after becoming 50 years of age and completing 20 years of service as a law
enforcement officer, member of the Capitol Police or Supreme Court Police,
firefighter, or nuclear materials courier, or any combination of such service
totaling at least 20 years,
is entitled to an annuity.
2007-3180 3
its own motion to consider whether his disability annuity was originally computed
correctly. The board found that OPM had miscalculated Adkins’ retirement annuity.
Adopting the Pitsker reasoning as it applied to the CSRS retirement program, the board
held that when a firefighter retires under disability, FERS, too, requires computing the
annuity under the enhanced calculus of 5 U.S.C. § 8415(d) without incorporating the
age and time of service requirements of immediate retirement under section 8412(d).
The board then ordered OPM to recalculate Adkins’ annuity using the formula in section
8415(d), retroactive to when he became an annuitant. OPM sought reconsideration,
arguing that the board erred in extending Pitsker to FERS and, specifically, that it
misinterpreted 5 U.S.C. §§ 8415(d) and 8452(d)(1). The board denied the motion, and
OPM appealed to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).
DISCUSSION
This court must affirm a decision of the Merit Systems Protection Board unless it
is (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law; (2) obtained without procedures required by law, rule, or regulation having been
followed; or (3) unsupported by substantial evidence. 5 U.S.C. § 7703(c). OPM’s
challenge to the board’s statutory interpretation presents a question of law which this
court reviews de novo. Lachance v. White, 174 F.3d 1378, 1380 (Fed. Cir. 1999).
“Statutory construction must begin with the language employed by Congress and the
assumption that the ordinary meaning of that language accurately expresses the
legislative purpose.” Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S.
246, 252 (2004) (quoting Park ‘N Fly, Inc. v Dollar Park & Fly, Inc., 469 U.S. 189, 194
(1985)).
2007-3180 4
The question presented in this case is analogous to that which was presented in
Pitsker, 234 F.3d 1378: whether a federal firefighter who retires on disability before
reaching 50 years of age and 20 years of service is entitled to receive an enhanced
annuity computed under 5 U.S.C. § 8415(d) 2 as opposed to 5 U.S.C. § 8452(a) 3 .
Whereas Pitsker concerned a federal law enforcement officer enrolled in the Civil
Service Retirement System (“CSRS”) and forced to retire under disability before fulfilling
the age and time-of-service requirement, the present case concerns a federal firefighter
enrolled in the FERS program and forced to retire under disability before fulfilling the
age and time-of-service requirement. Specifically, as in Pitsker, we review whether the
phrase “computed under section 8415” also requires disability annuitants to satisfy the
immediate retirement age and years of service requirement of the statutes cross-
referenced by 5 U.S.C. § 8415.
2
5 U.S.C. § 8415(d) (Computation of basic annuity) provides:
The annuity of an employee retiring under subsection (d) or (e) of section 8412 or under
subsection (a), (b), or (c) of section 8425 is--
(1) 1 7/10 percent of that individual’s average pay multiplied by so much of such
individual’s total service as does not exceed 20 years; plus
(2) 1 percent of that individual’s average pay multiplied by so much of such individual’s
total service as exceeds 20 years.
3
5 U.S.C. § 8452 (Computation of disability annuity) provides in pertinent part:
(a)(1)(A) Except as provided in . . . subsection (b), (c), or (d), the annuity of an annuitant
under this subchapter --
(i) for the period beginning on the date on which such annuity commences . . . and
ending at the end of the twelfth month beginning on or after such date, shall be equal to
60 percent of the annuitant’s average pay; and
(ii) after the end of the period referred to in clause (i), shall be equal to 40 percent of the
annuitant’s average pay.
***
(d)(1) The annuity to which an annuitant is entitled under this section ([after reducing by
the amount of social security disability insurance benefits received]) shall not be less
than the amount of an annuity computed under section 8415 (excluding subsection (g)
of such section).
2007-3180 5
Computation of an annuity for a disabled annuitant under FERS requires leap-
frogging among many complex and related provisions. Like its predecessor CSRS,
FERS has three eligibility criteria: immediate retirement, mandatory retirement, and
disability retirement. Those employees that reach a certain age and years of service in
specified positions (including firefighters) enter mandatory retirement under 5 U.S.C.
§ 8425, while those employees that have 18 months of creditable service but are unable
to continue their employment due to disability enter disability retirement under section
8451. All others may only retire when they reach the age and years of service criteria of
immediate retirement under section 8412. Section 8451 (disability retirement) provides
that “[a]n employee who completes at least 18 months of [creditable service] and has
become disabled shall be retired on the employee’s own application or on application by
the employee’s agency” if the employee is adjudged disabled by OPM. It continues, “(c)
[a]n employee . . . retiring under this section is entitled to an annuity computed under
section 8452.” Section 8452 (computation of disability annuity) then provides that
subject to a reduction for Social Security disability insurance benefits, the annuity is
generally 60 percent of the annuitant’s average pay for the first year followed by 40
percent thereafter, but that “(d)(1) [t]he annuity to which an annuitant is entitled under
this section . . . shall not be less than the amount of an annuity computed under section
8415.” Section 8415 presents the method of computing a basic annuity, computing an
annuity schedule for normal employees under one formula, while computing the annuity
schedule for certain enumerated employees, including firefighters, under different
formulas.
2007-3180 6
The statutory structure for determining an annuity under FERS is analogous to
that of CSRS discussed in Pitsker. This is not accidental, because FERS was designed
to improve upon CSRS, with the disability section in particular having minimal
differences to CSRS. See, e.g., S. Rep. 99-166, at 21 (1985), as reprinted in 1986
U.S.C.C.A.N. 1405, 1426 (“To minimize differences from the CSRS, the majority of
standards and procedures applicable to [FERS] are identical to those of the CSRS.”).
CSRS has three eligibility sections which FERS mirrors, immediate retirement under
5 U.S.C. § 8336, mandatory separation under 5 U.S.C. § 8335, and disability retirement
under 5 U.S.C. § 8337. CSRS is the source of FERS’ enhanced treatment of
firefighters and other occupations requiring youthful employees, and both allows them
the same earlier retirement at 50 years of age and 20 years of service, see section
8336(c), and requires them to retire at 57 years of age and 20 years of service, see
section 8335(b). Beginning in 1975, CSRS, like FERS, requires firefighters to deposit a
half-percent larger portion of their salaries into their retirement accounts. See 5 U.S.C.
§ 8334(c). Calculation for disability retirement occurs pursuant to 5 U.S.C. § 8337(a),
which includes a cross-reference to a standard calculation method in 5 U.S.C.
§ 8339(g), but allows the annuity to be “computed under” other enumerated sections
should they result in a higher annuity, such as 5 U.S.C. § 8339(d) which was at issue in
Pitsker. Section 8339(d) provides a formula for calculating annuities generally for
employees “retiring under” sections 8335(b) (mandatory separation) and 8336(c)
(immediate retirement). This is perfectly analogous to FERS section 8415(d), which
provides a formula for calculating annuities generally for annuitants “retiring under”
sections 8412(d) and (e) (immediate retirement) and 8425(a), (b), and (c) (mandatory
2007-3180 7
retirement). In Pitsker, we held that when calculating an annuity under disability
retirement in section 8339(d) pursuant to the rule in section 8337(a), CSRS disallows
incorporating age and years of service requirements of immediate retirement from
cross-referenced section 8336(c). See Pitsker, 234 F.3d at 1383-84. We reached this
conclusion because of the plain language of the statutes and their legislative intent.
See id. at 1382-84.
The issue here is that the portion of FERS section 8415 concerning firefighters’
annuities, subsection (d), cross references section 8412(d) (immediate retirement). Just
as in Pitsker, we find that the plain language of the statutes in view of the legislative
intent disallows incorporation of the age and years of service requirements of 8412(d).
At first blush, it may seem appropriate to jump to section 8412(d) and note its age and
years of service requirements which seem to render section 8415(d) inapplicable.
However, there are at least three reasons why incorporating the age and years of
service requirements of section 8412(d) into the calculation of section 8415 violates the
plain language of section 8452.
The primary reason is that section 8415 begins by stating its general use is in
computing “the annuity of an employee retiring under this subchapter.” “This
subchapter” refers to Chapter 84, Subchapter II, Basic Annuity, which includes section
8412 (immediate retirement), but not section 8451 (disability retirement). An annuitant
retiring under disability retirement is not retiring under immediate retirement. Because
disability retirement includes its own eligibility criteria based entirely on whether an
employee is fit to perform his duties, it is clear therefore that in referencing section 8415
in section 8452(d), Congress did not intend to incorporate the age and years of service
2007-3180 8
requirements of immediate retirement under section 8412, but instead intended only to
incorporate the formulas detailed in section 8415. This is analogous to our reasoning in
Pitsker, where we said “[t]he phrase ‘computed under’ in section 8337(a) [disability
retirement in CSRS] requires section 8339(d) [annuity computation] to be used for
calculation only, without regard to section 8339(d)’s cross-references to other eligibility
sections.” Pitsker, 234 F.3d at 1382. Indeed, the argument is stronger in the case of
FERS because Congress removed the reference to eligibility in FERS section 8452(d)
which was in dispute in Pitsker. Compare 5 U.S.C. § 8452(d) (“The annuity . . . shall not
be less than the amount of an annuity computed under section 8415”) with 5 U.S.C.
§8337(a) (“An annuity authorized by this section is computed under section 8339(g) of
this title, unless the employee or Member is eligible for a higher annuity computed under
section 8339(a) through (e), (n), (q), (r), or (s).”) (emphasis added); see also Pitsker,
234 F.3d at 1383.
Secondly, where Congress intended to incorporate an eligibility requirement, it
said so explicitly, as it did in section 8452(c) which reads:
Except as provided in subsection (d), the annuity of an annuitant under
this subchapter [Disability Benefits] shall be computed under section 8415
if--
(1) such annuity commences, or is restored [after the annuitant reaches
62 years of age]; or
(2) as of the day on which such an annuity commences, or is restored, the
annuitant satisfies the age and service requirements for entitlement to an
annuity under section 8412 (other than subsection (g) of such section).
5 U.S.C. § 8452(c) (emphasis added). In both prongs of section 8452(c), the age or
years of service requirement is written directly into the statute. Section 8452(d) has no
such explicit requirement. “Where Congress includes particular language in one section
of a statute but omits it in another section of the same Act, it is generally presumed that
2007-3180 9
Congress acts intentionally and purposely in the disparate inclusion or exclusion.”
Russello v. United States, 464 U.S. 16, 23 (1983) (citations omitted).
Finally, incorporating the age and years of service requirements into this
calculation would produce an absurd result, which is to be avoided if at all possible.
See Pitsker, 234 F.3d at 1383 (citing Haggar Co. v. Helvering, 308 U.S. 389, 394
(1940)). Under an interpretation where the borrowed section 8415 incorporates the
requirements of the cross-referenced section 8412, no firefighter retiring due to disability
under section 8451 would be able to receive the enhanced annuity despite having paid
a higher deduction into the system for which he cannot receive a refund unless he were
simultaneously eligible to immediately retire under the non-disability section 8412.
Indeed, there is no situation in which any portion of section 8415 could apply when
borrowed by section 8452(d) unless the employee is also eligible to retire under section
8412, because each of section 8415’s subsections states that the employee is retiring
under a subchapter or section having the age and service requirements of section 8412.
For example, section 8415(a) states that it applies to “an employee retiring under this
subchapter,” Subchapter II, Basic Annuity, which includes section 8412, and section
8415(d) states that it applies to “an employee retiring under subsection (d) or (e) of
section 8412 or under subsection (a), (b), or (c) of section 8425,” the latter of which
itself requires meeting section 8412 eligibility. A reading requiring the incorporation of
the age and service requirements of 8412 would therefore render section 8452(d) a
nullity. Therefore, we hold that retirement under section 8451 does not incorporate the
age and years of service requirements of section 8412 except where explicitly stated.
2007-3180 10
OPM argues that interpreting section 8452(d) in this way renders section 8452(c)
superfluous because there is no reason a disabled firefighter annuitant meeting its
requirements would need to use that section if he is already entitled to receive
enhanced annuity benefits under sections 8452(d)(1) and 8415(d). This argument is
flawed. Section 8452(c), like section 8452(d), is not limited to firefighters, but applies to
any disabled employee. Unlike section 8452(d), which guarantees the annuity will be at
least as large as one computed under section 8415, section 8452(c) requires calculating
a disabled employee’s annuity under section 8415 if the annuity commences or is
restored when the employee is 62 years of age or is otherwise eligible for immediate
retirement under section 8412. Thus, an employee meeting these 8452(c) criteria will
not have an annuity calculated under the formula of section 8452(a). Section 8452(d),
however, leaves this possibility available if calculating the annuity under section 8452(a)
results in a greater annuity than if calculated under the appropriate subsection of
section 8415.
OPM also argues that calculating a disabled firefighter’s annuity in this way will
grant him an unfair windfall. In support, it notes that section 8452(b) requires
recalculation of an annuitant’s benefits at age 62 to convert disability annuitants to
voluntary retirement benefits, while section 8425 would require a working firefighter to
retire at age 57. 4 In that final span of 5 years, a disabled firefighter may use his time on
4
5 U.S.C. § 8425 provides in relevant part:
(b)(1) A law enforcement officer, firefighter, or nuclear materials courier who is
otherwise eligible for immediate retirement under section 8412(d) shall be separated
from the service on the last day of the month in which that law enforcement officer,
firefighter, or nuclear materials courier, as the case may be, becomes 57 years of age
or completes 20 years of service if then over that age.
2007-3180 11
disability retirement as creditable service for use in calculating final benefits under
section 8452(b). Therefore, a disabled firefighter would receive higher benefits than
one who continued working. However, as Adkins rightly argues, a firefighter that was
able to continue working until he was forced to retire at 57, would also have received
periodic step increases in pay on top of cost-of-living adjustments for his service, as well
as any promotions. The disability-retired firefighter in the same span would only receive
cost-of-living adjustments pursuant to section 8452(d)(2). We see no windfall for the
disability-retired firefighter to provide a reason to disregard the plain language of section
8452(d). 5
Finally, OPM argues that the board erred by extending Pitsker to FERS. While
we disagree, we believe FERS supports the conclusion we reach here on its own, with
or without Pitsker. FERS has the same statutory structure that led us to reason that
“computing under” a formula mentioned in a different section does not incorporate any
eligibility requirements that different section may cross-reference. OPM is correct that
the FERS and CSRS statutes are clearly different in the formulas by which they
calculate annuities, but the actual FERS formulas, which were designed to coordinate
with Social Security, are not at issue in this case. OPM fails to identify any relevant
differences in structure that would prevent us from applying the same reasoning to
FERS as we did with CSRS. Even the operative language we focused on in Pitsker,
5
We cannot help but observe that, while OPM is concerned about a hypothetical
windfall to a disabled federal firefighter in comparison to an able-bodied firefighter, it is
apparently less concerned that a federal firefighter so injured in the course of his duties
that he is forced to retire is being denied the benefits for which he paid extra each
month.
2007-3180 12
“computed under” in CSRS section 8337(a), is identical and serves the same purpose in
FERS section 8452(d).
CONCLUSION
For the foregoing reasons, we conclude that under the plain language of the
statute, the FERS disability annuity provisions require that a firefighter annuitant’s
benefits be the greater of that which is computed under 5 U.S.C. §§ 8452(a) and
8415(d) without incorporating the age and time of service requirements of section 8412.
Accordingly, the decision of the board is affirmed.
AFFIRMED.
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