The Foreign Service Journal, December 2005

6 AFSA NEWS • DECEMBER 2005 O ver the past three years AFSA’s State labor management staff have represented a number of retiredmembers in annuity disputes with the StateDepartment. While the specifics of each case are different, a broad pattern has emerged. Early in the spring of 2003 the department began to discover accounting errors by its retirement and payroll offices that resulted in a large number of annuitants being overpaid over a significant period of time (15 years or more). The department then contacted the affected annuitants with a demand for immediate payment of thousands or tens of thousands of dollars. If they did not pay, their monthly payments would be reduced by hundreds or thousands of dol- lars. AFSA learned that annuitants could request a waiver of this debt and the labor management staff assisted some annuitants with this process. After the department denied these requests, AFSA helped members file appeals to the Foreign Service Grievance Board. Some of these cases are ongoing, more have been settled, and one was recently decided by the Foreign Service Grievance Board. The board’s decision offers a cautionary tale for annuitants, as well as a broader message tomembers of AFSA. InFSGBCaseNo. 2004-018, the annu- itant was seeking awaiver of themore than $50,000 owed. ( Note: Due to confiden- tiality rules, Grievance Board decisions are not available for public reviewuntil all con- fidential information has been excised by the FSGB. Information on the availabil- ity of FSGB decisions can be obtained at www.fsgb.gov.) Ac cording to the Foreign Service Act and department regulations, overpayments shall be waived when the annuitant proves that he/she was “with- out fault” and recovery would be “against equity and good conscience.” See Section 807(d) of the Foreign Service Act of 1980 (22 USC 4047(d), as amended), 22 CFR Part 17. Based on these regulations, AFSA argued that the overpayment resulted from a department error, and in light of the scant and often contradictory infor- mation provided by the department, it would have been impossible for the annu- itant to detect the department’s error (and thereby avoid the overpayment). With regard to “equity and good conscience,” AFSA argued that it would be inequitable to punish the individual for the depart- ment’s 15-year-oldmistake. In addition, we stated that the annuitant had relied to his detriment on the department’s erro- neous payments in irrevocable legal and financial arrangements and therefore, as provided by regulation, recovery would be against equity and good conscience. The department dismissed AFSA’s arguments as baseless. The department stated that the annuitant received suffi- cient information to determine that the overpayment was occurring, and called into question the individual’s credibility. The department rejected the argument that the annuitant relied to his detriment and, primarily due to the annuitant’s rel- atively stable financial position, argued that recovery would not be against equi- ty and good conscience. The Grievance Board unanimously held that the individual was not entitled to a waiver. Despite the undisputed fact that the individual did not know of the department’s error, the Grievance Board concluded that the individual was not without fault because he/she could have determined that overpayments were occurring. The board stated, “Casual reading of Annuity Adjustment Notices and an unquestioning confidence in the accuracy of the department’s accounting system are not acceptable excuses.” (FSGB Case 2004-018). This decision reinforces two unofficial axioms of Foreign Service life: 1) the indi- vidual is presumed to know the govern- ing rules, regulations and standards, no matter how arcane; and 2) the individ- ual Foreign Service officer, specialist, career candidate or retiree can always be held responsible, even in the event of a department mistake. So what’s the lesson? From compe- tent retirement planning and manage- ment to storing your HHE, the Grievance Board thinks that you can take care of yourself. So, whether it is your first time overseas or you have retired after 30 con- secutive years abroad — never assume you “know the rules” or that the depart- ment will “take care of you.” If you don’t know the rules, ask. And if you do know the rules, ask anyway. Remember, igno- rance is no excuse. o EYE ON GRIEVANCES The Overpayment Cases: A Warning to All BY JOE SLOTNICK, AFSA GRIEVANCE ATTORNEY JOSH The individual can always be held responsible, even in the event of a department mistake.