A recent case regarding survivor annuity benefits decided by the U.S. Court of Appeals for the Federal Circuit could impact other federal employees who may have similar claims.

In an effort to claim the survivor annuity benefits to which she believed she was entitled, Nancy Sullivan, the wife of a now-deceased federal employee, appealed a final decision by the Merit Systems Protection Board (MSPB) regarding the Office of Personnel Management’s (OPM) computations for determining survivor annuity benefits, in the U.S. Court of Appeals for the Federal Circuit.

The U.S. Court of Appeals for the Federal Circuit affirmed the MSPB’s decision in the case, Sullivan v OPM, decided Oct. 28, 2024, and affirmed that OPM did indeed provide the correct computation method.

Sullivan v. OPM

According to the Court’s decision, John Sullivan was a federal employee for more than 40 years. During his employment, Congress enacted the Federal Employees’ Retirement System Act of 1986 (FERSA), which replaced the Civil Service Retirement System (CSRS) with the Federal Employee Retirement System (FERS). John Sullivan earned CSRS retirement benefits during his first 28 years of service, then, in 1998, he voluntarily chose to switch to FERS, enabling him to earn FERS retirement benefits from 1999 through his retirement in 2012.

In an effort to claim the survivor annuity benefits to which John Sullivan believed his wife was entitled, in 2018 he contacted the OPM, which had provided the computations for his wife’s survivor annuity benefits. OPM responded that its survivor benefit calculation was correct.

Sullivan replied that OPM failed to account for the fact that his unreduced gross annuity amount consisted of both CSRS and FERS components, and as a result the survivor annuity needed to be calculated based on CSRS’ 55% multiplier and FERS’ 50% multiplier.

After further back and forth, OPM issued a decision rejecting John Sullivan’s challenge to its calculation. But not satisfied with the decision, John Sullivan’s requested OPM reconsider, which it did, but again denied John Sullivan’s position.

In 2022, John Sullivan appealed the OPM’s decision to the MSPB, but while his appeal was pending, he passed away, and his wife, Nancy Sullivan, began receiving a survivor annuity and continued with the litigation.

MSPB Reversal

In the MSPB’s initial decision, an administrative judge (AJ) found that OPM had miscalculated Nancy Sullivan’s survivor annuity. In the AJ’s view, OPM erred by determining that the survivor benefit was only 50% of the amount of John Sullivan’s retirement annuity, as this improperly reduced the CSRS component.

OPM petitioned the MSPB to review the AJ’s initial decision, and the MSPB reversed, determining that OPM’s calculation of the survivor annuity benefit was correct.

The MSPB concluded that FERS statutes relating to survivor benefits apply to individuals such as John Sullivan having a combined CSRS-FERS annuity and that OPM correctly calculated Nancy Sullivan’s survivor annuity benefit as being 50% of John Sullivan’s retirement annuity.

Nancy Sullivan then appealed to the U.S. Court of Appeals for the Federal Circuit, which had jurisdiction to review the MSPB’s final order under 5 U.S.C. § 7703(b)(1)(A) and 28 U.S.C. § 1295(a)(9).

Final Decision

In its decision, the Court stated that it must affirm the MSPB’s decision unless it was “found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence.”

Further, the court said in its decision that “[t]he burden of establishing reversible error is on the appellant.”

In addition, the sole issue in dispute is the proper calculation of that surviving spouse annuity in that the surviving spouse annuity must be calculated in the same manner that deceased’s retirement annuity was calculated: 55% for his CSRS credit years plus 50% for his FERS credit years, according to the decision. John Sullivan’s election to move from the CSRS retirement system to the FERS retirement system made him subject to FERS benefit calculation methods, according to the decision.

OPM urged the Court to adopt the MSPB’s final decision, which agreed with OPM that only the FERS formula applies, meaning that Nancy Sullivan is entitled to 50% of John Sullivan’s retirement annuity.

If you are a federal employee with a dispute with OPM, or have questions about survivor retirement annuity benefits, our team of federal employment attorneys is available to assist you today. Please call 8885294543 to schedule a consultation or schedule a consultation online.