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Pay & Leave Claim Decisions

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Office of the General Counsel

Date: February 27, 1998
Matter of: [xxx]
File Number: s9801186

Dear [xxx]:

Your letter to Senator Edward M. Kennedy has been forwarded to the Office of Personnel Management (OPM) for response. As explained in your letter to Senator Kennedy, you have filed an administrative appeal that is currently pending before an administrative judge of the Merit Systems Protection Board.

In order to respond to your letter, I have obtained figures from both the Office of Regional Counsel of the [agency] in [city] and OPM's Retirement and Insurance Service concerning the deductions that would need to be taken from your back pay award. These figures are as follows:

BACK PAY WORKSHEET

  1. Gross Back Pay (Basic + Any Premium Pay) $62,027.44
  2. Less Interim (Outside) Earnings $35,800.00
  3. Adjusted Gross Back Pay $26,227.44
  4. Less Erroneous Payments - Must be in this order:
    Erroneous Retirement Annuity payments/refunds on
    contributions [includes payment received 1/2/98] $45,551.00
    Severance pay $.00
    Lump-Sum payment $2,869.38
  5. Less Other Authorized Deductions:
    Retirement Deductions (compute on gross base pay
    in "A" excluding interest) $3,889.03
    Federal Tax (compute on $ amount in "C") $7,343.68
    OASDI/Medicare (compute on $ amount in "C") $380.30
    State/City Taxes (compute on $ amount in "C") $1,049.10
    Health Benefits Premium $2,086.20
    Total Deductions $14,748.31

NET BACKPAY $.00

Based on these figures, if you were to receive a back pay award from the [agency], it would result in your having substantial indebtednesses, including a debt to OPM as the administrator of the Civil Service Retirement and Disability Fund for that portion of the "Erroneous Retirement Annuity" benefits that would not be offset by the "Adjusted Gross Back Pay" amount, $19,323.56 [$45,551.00 less $26,227.44].

While you would be entitled to request that OPM waive repayment of this portion of the "Erroneous Retirement Annuity" benefits, a waiver would only be granted if you were able to establish that recovery would cause financial hardship or if you could establish that there had been detrimental reliance. See 5 U.S.C. 8346(b); 5 C.F.R.  831.1401; Day v. OPM, 873 F.2d 291 (Fed. Cir. 1989); Metcalf v. OPM, 73 M.S.P.R. 211 (1997); and Harris v. Department of Agriculture, 50 M.S.P.R. 686 (1991).

It cannot be emphasized too strongly that whenever an individual is entitled to back pay, the law requires that certain legitimate deductions be taken. OPM has no choice in this matter. I hope that this information will be of some assistance to you.

Sincerely yours,

Murray M. Meeker
Senior Attorney

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