ALJDEC decisions subject to certification as final

11F-018-ARB · Arizona State Retirement System · 2011-09-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

CONSOLIDATED HEARING: July 17, 2011 and September 8, 2011 APPEARANCES: William McGonigle and Dan Davis appeared personally and were represented by their attorney, Thomas T. Griffin, Esq. The Arizona State Retirement System was represented by Assistant Attorney General Jothi Beljan. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Orders in these consolidated matters: FINDINGS OF FACT 1. Appellant William McGonigle timely appealed the determination by the Arizona State Retirement System (“ASRS”) in Case No. 11F-018-ARB that he is ineligible for ASRS membership benefits. 2. Appellant Don Davis timely appealed the determination by ASRS in Case No. 11F-019-ARB that he is ineligible for ASRS membership benefits. 3. ASRS forwarded Case Nos. 11F-018-ARB and 11F-019-ARB to the Office of Administrative Hearings, an independent agency, for evidentiary hearings. At the request of Appellants, the cases were consolidated for hearing. 4. Pursuant to the Notices of Hearing issued by ASRS, the grounds for the ASRS decisions are as follows: 1. A.R.S. § 38-727(1) states that ASRS membership eligibility requires that an employee’s position be included for coverage in the participating ASRS employer’s Social Security Section 218 Agreement i.e. federal old age and survivors insurance. 2. The City of Glendale’s Section 218 Agreement, effective April 1, 1951, states: This application and agreement includes all services performed by each of the eligible employees of the [the City of Glendale] for whom coverage is requested, except the following: (a) Any service performed by an employee in a position, which, on the effective date of this agreement, is covered by a retirement system. 3. In 1951, fire personnel positions were excluded from coverage because they were “covered by a retirement system.” The Firemen’s Relief and Pension Fund was created by Laws 1929, Chapter 86 and covered any person having served as a regular paid member of a fire department of an Arizona town or city. 4. Fire personnel positions, including Fire Battalion Chief positions, are exempted from City of Glendale voluntary Social Security coverage and thus, ineligible for ASRS participation. 5. Mr. McGonigle [and Mr. Davis] occup[y] or occupied a Fire Battalion Chief position at the City of Glendale. 6. The City of Glendale incorrectly remitted contributions to the ASRS on behalf of Mr. McGonigle [and Mr. Davis]. 7. ASRS returned the contributions to City of Glendale and corrected the error as required by A.R.S. § 38-765.

5. Appellant McGonigle began working as a fire fighter for the City of Glendale in 1976. Several years ago he was promoted to Battalion Chief. 6. Appellant Davis retired from the City of Phoenix Fire Department in 2006. He was then hired as a Battalion Chief for the City of Glendale Fire Department. 7. ASRS educates employers about ASRS membership benefits and eligibility requirements, such as by conducting employer conferences. City of Glendale employees attended several ASRS employer conferences.

8. ASRS relies upon an employer’s determination of an employee’s eligibility for ASRS membership. However, ASRS is required by A.R.S. § 38-765 to correct any errors in ASRS membership. 9. Employers are not agents of ASRS. 10. There is no credible evidence that ASRS negligently misrepresented to either the City of Glendale or Appellants that Appellants were eligible for ASRS membership benefits. 11. Appellants are not eligible for ASRS membership benefits for the reasons stated by ASRS in Finding of Fact No. 4 above. 12. Appellants admit that they are not eligible for ASRS membership benefits. However, they seek damages for alleged negligent misrepresentation by ASRS. The relief sought by Appellants must be adjudicated in a civil court of competent jurisdiction rather than in these administrative proceedings. CONCLUSIONS OF LAW 1. Pursuant to A.A.C. R2-19-119(B), Appellants have the burden of proof in these consolidated matters. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 2. A.R.S. § 38-727 requires that Appellants’ positions be included in the City of Glendale’s Section 218 Agreement effective April 1, 1951. However, fire personnel positions were excluded from coverage because those positions were then covered by the Firemen’s Relief and Pension Fund. Therefore, Appellants are not eligible for ASRS membership benefits. 3. ASRS corrected Appellants’ status when ASRS discovered that they were ineligible for membership benefits, as required by A.R.S. § 38-765.

RECOMMENDED ORDERS 11F-018-ARB IT IS ORDERED that Appellant McGonigle’s appeal in Case No. 11F-018- ARB be dismissed. IT IS FURTHER ORDERED that the decision by ASRS that Appellant McGonigle is ineligible for ASRS membership benefits be upheld and affirmed. 11F-019-ARB IT IS ORDERED that Appellant Davis’ appeal in Case No. 11F-019-ARB be dismissed. IT IS FURTHER ORDERED that the decision by ASRS that Appellant Davis is ineligible for ASRS membership benefits be upheld and affirmed. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the order will be five (5) days from the date of that certification.

Done this day, September 27, 2011.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

Anthony Guarino, Deputy Director Arizona State Retirement System -----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826