ALJDEC decisions subject to certification as final
19F-007-ARB · Arizona State Retirement System · 2019-12-30
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Shari McHugh
Appellant,
v.
Arizona State Retirement System,
Respondent.
No. 19F-007-ARB
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: November 21, 2019 at 1:30 p.m. The record was held open until December 10, 2019, for the sole purpose of receiving the court reporter’s transcript.
APPEARANCES: Gary A. Husk, Esq. appeared on behalf of Appellant Shari McHugh. Assistant Attorney General Cassie Adams appeared on behalf of Respondent Arizona State Retirement System.
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
FINDINGS OF FACT
1. In April of 2004, Appellant Shari McHugh became a contributing member of Respondent Arizona State Retirement System (ASRS) by virtue of her employment with the Arizona School for the Deaf and Blind (AZSDB).
2. In 2009, Ms. McHugh completed an Affidavit of Public Service with an ASRS Employer (Affidavit), which she submitted to ASRS.
3. In the Affidavit, Ms. McHugh attested that she had worked for AZSDB more than 20 hours per week for 20 or more weeks beginning in November 2000. However, Ms. McHugh did not complete the optional section of the Affidavit requesting purchase of prior service under the Contributions Not Withheld (CNW) provisions in Arizona Revised Statutes (A.R.S.) § 38-738.
4. Ms. McHugh did she provide any supporting employer documentation. ASRS therefore processed the Affidavit as a request for Other Public Service, Non-Participatory (OPS-NP).
5. In August 2018, Ms. McHugh contacted ASRS seeking to purchase 3.45 years of service credit for the period November 2000 through March 2004 on a CNW basis, but without any supporting employer documentation.
6. Subject to certain limitations, A.R.S. § 38-738(B) and (C) permit an ASRS member to purchase past eligible verified service that occurred “less than or equal to fifteen years before” the request, provided that the member provides ASRS with “credible evidence in writing that less than the correct amount of contributions was paid into ASRS.”
7. Because Ms. McHugh had not yet supplied any supporting employer documentation, ASRS directed her to work with AZSDB to collect that documentation to finalize her CNW request.
8. Ms. McHugh complained that she had contacted AZSDB in or around September 2017 to provide necessary documentation to ASRS. After confirming that Ms. McHugh’s account appeared to be truthful, ASRS agreed to treat September 2017 as an appropriate date for calculating what past eligible verified service, if any, had occurred “less than or equal to fifteen years before” the request. A.R.S. § 38-738(D) provides that eligible verified service that occurred more than fifteen years before” the date of the request is considered public service credit, which may be purchased under A.R.S. § 38-743. Accordingly, ASRS advised Ms. McHugh that if she were to submit the necessary employer documentation proving that she was eligible to purchase prior service, she could do so on this basis for the period September 2002 through March 2004.
9. Ms. McHugh submitted a letter from her former employer verifying that
she worked an average of at least 20 hours per week from November 2000 to March 2004. However, the letter was not signed and the employer did not verify the number of hours that Ms. Hugh actually worked each week.
10. ASRS denied Ms. McHugh’s CNW request because Ms. McHugh did not provide written evidence that she worked at least 20 hours each week. Additionallly, ASRS determined that Ms. McHugh did not request CNW for the time period of November 2000 to August 2002 within the 15 year statute of limitations.
11. At hearing, Ms. McHugh explained that from November 2000 to March 2004, she worked three eight our shifts each week. However, Ms. Hugh did not provide written evidence of the hours that she actually worked each week from November 2000 to March 2004. Ms. Hugh provided her W-2 statements for the years in dispute.
12. Ms. Hugh also contended that the 15 year statute of limitations does not apply because she submitted her first request to correct her service credits in 2009 when she met with an ASRS representative in Tuscon. Ms. McHugh stated she and another woman met with an ASRS representative in 2009 to purchase service credits. Ms. Hugh stated that the representative did not explain that she could submit a CNW request. Ms. McHugh asserted that the representative only told her about the option to request public service.
13. ASRS’s position was that Ms. McHugh failed to provided credible evidence that she worked at least 20 hours per week from November 2000 to March 2004. ASRS provided evidence from AZSDB which showed that Ms. McHugh’s hours were “as needed.”
CONCLUSIONS OF LAW
ASRS has jurisdiction over the appeal in this matter.
The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement, and the standard of proof on all issues is by a preponderance of the evidence. See Arizona Administrative Code (A.A.C.) R2-19-119.
A.R.S. § 38-711(23)(b) defines a “Member” as “all employees of an employer who are eligible for membership pursuant to § 38-727 and who are engaged to work at least twenty weeks in each fiscal year and at least twenty hours each week.”
A.R.S § 738 (C) and (D) provide:
Subsection B of this section applies to eligible verified service that occurred less than or equal to fifteen years before the date the initiator of the request for correction of salary history and service credits on the records of ASRS provides ASRS with credible evidence in writing that less than the correct amount of contributions was paid into ASRS or ASRS otherwise determines that less than the correct amount of contributions was made.
Eligible verified service that is more than fifteen years before the date the initiator of the request for correction of salary history and service credits on the records of ASRS provides ASRS with credible evidence in writing that less than the correct amount of contributions was paid into ASRS or ASRS otherwise determines that less than the correct amount of contributions was made is considered public service credit. The member may purchase this service pursuant to section 38-743.
5. Appellant failed to establish that she submitted a CNW request prior to 2017.
6. Although Appellant testified that she worked an eight hour shift three times a week from November 2000 to March 2004. However, AZSDB records showed that Appellant hours were “as needed.” Appellant failed to establish that she actually worked at last 20 hours every week from November 2000 to August 2004. Appellant failed to sustain her burden of proving that ASRS improperly denied her CNW request for November 2000 to March 2004.
RECOMMENDED DECISION
Based on the foregoing, it is recommended that the appeal in this matter be denied.
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 the certification.
Done this day, December 30, 2019.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted electronically to:
Paul Matson, Director
Arizona State Retirement System