ALJDEC decisions subject to certification as final

20F-002-ADM · Department of Administration · 2020-10-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

ROBERT KUPEC

ARIZONA DEPARTMENT OF ADMINISTRATION

No. 20F-002-ADM

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: September 30, 2020

APPEARANCES: Appellant Robert Kupec appeared on his own behalf. Assistant Attorney General Pamela Peiser represented Respondent Arizona Department of Administration. Witness Tracey Cappuccio testified.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Appellant Robert Kupec (“Appellant”) appealed Respondent Arizona Department of Administration’s (“DOA”) determination that he is not eligible to participate in the Retiree Accumulated Sick Leave (“RASL”) program.

A hearing was held on September 30, 2020. DOA submitted its exhibits collectively marked with Bates numbers 001-060 and presented the testimony of Tracey Cappuccio, Statewide Payroll Manager. Appellant testified on his own behalf.

Hearing Evidence

DOA’s General Accounting Office’s State of Arizona Accounting Manual (“SAAM”) sets forth the policies and procedures for RASL. See Department’s Exhibit 025-034.

SAAM states that “[a] State employee who is eligible to participate in an authorized State Retirement System may be eligible to receive partial payment for his accumulated sick leave balance of five hundred (500) or more hours, if he fulfills the terms and conditions set forth in this section of SAAM.” Id. at 025.

SAAM further sets forth the eligibility requirements for RASL as follows:

2. Eligibility

. . . .

2.2 Eligible State employees having at least five hundred (500) accumulated sick leave hours that have been accumulated in accordance with the State-approved personnel policies are eligible under this Program. The accumulated sick leave hours must be available for use at the time of separation from employment.

. . . .

2.4 In order to be eligible for this Program, a retiree must have an effective retirement date on file with an Authorized State Retirement System that is at least one (1) calendar day after the retiree’s separation from State employment and is not later than thirty-one (31) calendar days following the date of his separation from State employment.

2.5. A completed Form GAO-SL-50 must be filed with the GAO within one hundred eighty (180) calendar days following his effective retirement date; failure to do so shall constitute abandonment and forfeiture of the retiree’s right to the Program benefit.

Id. at 026. (Emphasis in original.)

SAAM further sets forth a retiree’s responsibilities for RASL as follows:

10. Retiree’s Responsibilities

. . . .

10.2. The retiree must have an effective retirement date that is not later than thirty-one (31) calendar days after their separation from employment.

. . . .

10.3.4. Failure to file a completed Form GAO-SL-50 with the GAO within one hundred eighty (180) calendar days following his effective retirement date shall constitute abandonment and forfeiture of the retiree’s right to the Program benefit.

10.3.5. The completed Form GAO-SL-50 may be submitted by either the retiree or his agency, but the responsibility for claiming this benefit rests exclusively with the retiree (or his beneficiary).

Id. at 030-031. (Emphasis in original.)

Appellant was employed with the Arizona Attorney General’s Office (“AGO”). As a result of such employment, Appellant is a member of the Arizona State Retirement System (“ASRS”).

The parties stipulated to the following facts:

Appellant’s effective date of ASRS retirement is September 8, 2007;

Appellant is a “Return to Work Retiree,” effective January 2008;

Appellant’s separation date is January 10, 2020;

At the time of Appellant’s separation, his sick leave balance was 766.35 hours.

Appellant’s RASL application is dated on or about January 20, 2020.

Ms. Cappuccio testified that after leaving State employment, a State employee’s sick leave remains on payroll records for two years. Consequently, if a State employee retires and subsequently returns to work, their sick leave is restored to them.

Ms. Cappuccio further testified that in accordance with A.R.S. § 12-821.01, DOA requires that an application for the RASL program be received within 180 days from an employee’s retirement date. An employee’s retirement date is established between the employee and the employee’s retirement plan, not DOA. RASL confirms such retirement date with the retirement plan. In this case, RASL confirmed Appellant’s retirement date with ASRS, his retirement plan.

Ms. Cappuccio explained that retirees who return to State service must abide by the retirement rules. Return to Work Retirees have the option of working less than a specified numbers of hours per week, or suspending their retirement, work and continue contributions into ASRS, and then reactivate their retirement with a new effective retirement date. It is even feasible for an individual to return to work and draw two pensions with two separate retirement systems/plans.

In this case, Appellant completed an Application and Certification Form for the RASL program (“Application”). Id. at 001. Appellant did not date the Application. Id. However, the portion of the Application that is required to be completed by the retiree’s employer, in this case, AGO, was completed on January 20, 2020. Id.

The Application contains a “Retiree Certifications” section with eight certifications that must be initialed by the retiree. Id. The third certification states the following:

I understand I have a maximum of 180 CALENDAR DAYS following my effective retirement date to ensure that this form is received by the GAO. If I apply any later, I will not be eligible for RASL.

Id. (Emphasis in original.)

Appellant initialed the box next to this certification signifying that he read and understood the information. Id.

DOA received the Application on February 6, 2020. Id. at 002.

On February 6, 2020, DOA confirmed with the State payroll system Appellant’s separation date of January 10, 2020. Id. at 005 and 006.

Also on February 6, 2020, DOA confirmed Appellant’s hourly rate of pay at the time of separation for the benefit calculation. Id. at 007 and 008.

On February 6, 2020, DOA confirmed Appellant’s accumulated sick leave hours of 766.35. Id. at 011 and 012.

On February 20, 2020, DOA confirmed Appellant’s retirement date. Id. at 013. ASRS responded with a code that indicates, “[v]erified through the employer” with a retirement date of September 8, 2007. Id.

Appellant’s date of separation was January 10, 2020, and his retirement date, as determined by ASRS, was September 8, 2007. Therefore, Appellant’s retirement date was prior to his Application date. The requirement for the submittal of a RASL Application is within 180 calendar days of the effective retirement date.

On March 26, 2020, DOA issued a denial letter to Appellant informing him that upon review of his request for payment, it had determined that he is not eligible to participate in the RASL program. Id. at 014. The denial letter explained that Appellant is ineligible for the RASL program for the following reason:

The basis for this decision is the State of Arizona Accounting Manual, 5575-2.5, which requires that RASL applications be submitted to the General Accounting Office (GAO) within one hundred eighty (180) calendar days following the applicant’s effective retirement date. The 180-calendar day deadline was certified by you with your initials on Form GAO-SL-50: “I understand I have a maximum of 180 calendar days following my effective retirement to ensure that this form is received by the GAO. If I apply any later, I will not be eligible for RASL.” The 180-day deadline is also provided on the RASL website at: http://gao.az.gov/payroll/rasl under program eligibility.

The Arizona State Retirement System (ASRS) has confirmed that your effective retirement from that system was 9/8/2007. Therefore, the last day you could have applied for RASL to meet the 180 day rule was 3/6/2008. Consequently, you are not eligible to participate in the RASL Program.

Id. (Emphasis in original.)

On April 2, 2020, Appellant filed a letter of disagreement with DOA’s determination. Id. at 015-017. In that letter, Appellant argues: i) his most recent date of separation is January 10, 2020; ii) his effective retirement date is September 8, 2007, which was within 31 days of his initial separation of employment; and iii) he met the minimum accumulated sick leave requirement on his secondary separation date of January 10, 2020. Id. Appellant, in his letter, straddles two separate date calculations.

On April 23, 2020, DOA issued a letter to Appellant advising that it had reviewed Appellant’s April 2, 2020 letter and determined that the “additional information provided is not sufficient to change the prior determination.” Id. at 018. The letter further advised of the following:

A.R.S. § 12-821.01A states, “Persons who have claims against a public entity...shall file the claims with the person or persons authorized to accept service for the public entity...as set forth in the Arizona rules of civil procedure within one hundred eighty days after the cause of action accrues...” This statute is the basis for the rule in the State of Arizona Accounting Manual, 5575-2.5, which requires that Retiree Accumulated Sick Leave (RASL) applications be submitted to the GAO within one hundred eighty (180) calendar days following the applicant’s effective retirement date.

The 180 day rule is included in the FAQs under “Procedure for Applying For RASL Benefits.” In addition, the 180-calendar day deadline was certified by you with your initials on Form GAO-SL-50: “I understand I have a maximum of 180 calendar days following my effective retirement to ensure that this form is received by the GAO. If I apply any later. I will not be eligible for RASL.”

The Arizona State Retirement System (ASRS) has confirmed that your effective retirement from that system was 9/8/2007. For this reason you are not eligible to participate in the RASL.

This determination is final. The Arizona Department of Administration must administer the RASL Program in accordance with the legal requirements governing eligibility. You may appeal this final agency determination, and request a hearing through the Office of Administrative Hearings . . .

Id. (Emphasis in original.)

On May 15, 2020, Appellant filed a Notice of Appeal and Request for Hearing. Id. at 019-024.

Ms. Cappuccio testified that when Appellant returned to work in January 2008, he could have timely applied for the RASL program assuming he had at least 500 hours of accumulated sick leave. Ms. Cappuccio clarified that in order for Appellant to have qualified for the RASL program in 2020, he would have needed a new retirement date within 31 days of his separation date. The return to work parameters are set forth in A.R.S. § 38-766.

Appellant testified regarding his employment history with the State. Appellant testified that when he retired he was not advised of the RASL program. Appellant was advised as to the limitations on the number of hours he could work as a return to work retiree, and the consequences for exceeding those hours. Appellant explained that he did not re-enroll in a retirement plan because he only expected to work for a short period of time.

Appellant argued that the 180 day deadline should have been suspended or tolled for the time period he returned to work. However, Appellant did not cite to any legal authority to support his argument. Appellant acknowledged that his return to work was within the 180 day timeframe, however, at the time he returned to work in 2008, he had not accumulated at least 500 hours of sick leave, and therefore, would have been ineligible for the RASL program.

CONCLUSIONS OF LAW

Appellant bears the burden of proof to show that DOA erred when it denied his Application for the RASL program. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Arizona Administrative Code R2-19-119.

A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.” Black’s Law Dictionary 1373 (10th ed. 2014).

The primary goal when construing statutes is to fulfill the intent of the legislature. Backus v. State of Arizona, 220 Ariz. 101, 203 P.3d 499 (2009).

An agency’s authority is limited to that which is found in its enabling legislation. Arizona State Board of Regents v. Arizona State Personnel Board, 195 Ariz. 173, 985 P.2d 1032 (1999).

The tribunal may not expand or extend a statute to include that which is not within its provisions. State ex rel. Morrison v. Anway, 87 Ariz. 206, 349 P.2d 774 (1960).

A.R.S. § 38-615 delineates the requirements for the RASL program in pertinent part as follows:

An officer or employee of this state, subject to legislative appropriation, or an officer or employee of a county, subject to authorization by the board of supervisors, is eligible, on retirement, to receive benefits as follows:

1. An officer or employee who has at least five hundred but less than seven hundred fifty hours of sick leave is entitled to receive payments equal to twenty-five per cent of the officer's or employee's salary at the officer's or employee's current hourly rate for each hour of accumulated sick leave.

2. An officer or employee who has at least seven hundred fifty but less than one thousand hours of sick leave is entitled to receive payments equal to thirty-three per cent of the officer's or employee's salary at the officer's or employee's current hourly rate for each hour of accumulated sick leave.

3. An officer or employee who has at least one thousand hours of sick leave is entitled to receive payments equal to fifty per cent of the officer's or employee's salary at the officer's or employee's current hourly rate for each hour of accumulated sick leave not to exceed one thousand five hundred hours of accumulated sick leave.

In order to be eligible to receive payments pursuant to subsection A of this section:

1. An officer or employee must establish a retirement date not later than thirty-one days after termination of employment by qualifying with an authorized retirement system or plan of this state.

2. The retirement date must be effective not later than thirty-one days after termination of employment.

3. An officer or employee shall elect retirement benefits that are defined not later than thirty-one days after termination of employment.

7. Pursuant to A.R.S. § 12-821.01(A), “[p]ersons who have claims against a public entity, public school or a public employee shall file claims with the person or persons authorized to accept service for the public entity, public school or public employee as set forth in the Arizona rules of civil procedure within one hundred eighty days after the cause of action accrues.”

8. Appellant has not shown that DOA erred in denying his Application.

9. Appellant did not meet the requirement of having at least 500 hours of accumulated sick leave at the time of his retirement on September 8, 2007. Consequently, when Appellant returned to work in January 2008, within the 180 day timeframe in which to apply for the RASL program, he would have been ineligible for the program due to insufficient sick leave. Appellant did not establish a new retirement date after separating from State employment in January 2020. Appellant’s retirement date with ASRS remained September 8, 2007. Therefore, Appellant’s Application was not filed within 180 days of his retirement date. Consequently, Appellant does not qualify for the RASL benefit.

10. Appellant did not provide any legal authority establishing that the 180 day deadline does not or should not apply to his Application. Appellant failed to establish that DOA violated, or failed to comply with any applicable statutes or rules.

11. Consequently, Appellant’s appeal should be dismissed.

RECOMMENDED ORDER

Based on the foregoing, it is ordered dismissing Appellant’s appeal.

In the event of certification of the Administrative Law Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be the date of that certification.

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-137160-45720000Done this day, October 15, 2020.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Andy Tobin,

Department of Administration

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