847 F. 2d 814 - Horner v. L Benedetto

The Office of Personnel Management (OPM) appeals from the decision of the Merit Systems Protection Board (board), Benedetto v. Office of Personnel Management,1 affirming, as modified, the administrative judge's reversal of OPM's denial of the application of Joseph L. Benedetto (Benedetto) for a reduced annuity with survivor benefits. We affirm.

Whether the board erred in determining that Benedetto was entitled to receive a reduced annuity with survivor benefits for his spouse.

Benedetto held positions in various federal agencies from November 10, 1939, through June 19, 1947, with some interruption for military service. He also worked in federal service from August 1948 until October 1951 and for 2 months in 1953. Benedetto filed an application for a deferred annuity on May 16, 1981, after he reached the age of 62. He requested a reduced annuity with survivor benefits for his wife. OPM denied Benedetto's request because he had separated from federal service in 1953, prior to the date on which individuals who were eligible to receive deferred annuities could elect a survivor's annuity.

Benedetto appealed the denial to the board. Citing a Fifth Circuit case, Crawford v. United States,2 the administrative judge held that the availability of such an annuity is determined by the law in effect at the time of the employee's retirement, rather than that in effect at the time of his separation. The administrative judge held that Benedetto was entitled to elect a reduced annuity with survivor benefits.3

OPM appealed the decision of the administrative judge to the full board, which denied review. OPM then filed a petition for review of the board's decision with this court pursuant to 5 U.S.C. Sec. 7703(d) (1982). The board moved to remand the case for the issuance of a precedential opinion. That motion was granted by this court.4

On remand, the board affirmed, as modified, the decision of the administrative judge reversing OPM's denial of Benedetto's application for a reduced annuity with survivor benefits. The board expressly agreed with the Fifth Circuit's interpretation of the law in Crawford. OPM argued that Crawford was wrongly decided and that Benedetto's rights were governed by the law in effect when he separated from federal service in 1953. OPM contended that Benedetto was precluded from receiving survivor benefits because the 1956 amendments to the Civil Service Retirement Act (CSRA)5 (the 1956 Act), which first provided survivor benefits for employees eligible to receive deferred annuities, excluded those who had retired or otherwise separated from Government service prior to the effective date of that statute. The board found, as had the Fifth Circuit, that section 403, the provision in the 1956 Act which made election of the survivor's annuity prospective only, was repealed by the codification of title 5 in 19666 (the 1966 Act).

The board also found that Benedetto retired, not in 1953 when he separated from federal service, but in 1981 when he first became entitled to receive an annuity. The Fifth Circuit had reached the same finding, relying on the definition of retirement set out in Schellfeffer v. United States.7 OPM argued that the Fifth Circuit erred in relying on Schellfeffer because it dealt with the meaning of the term "retired" only in connection with a 1958 Act of Congress which increased annuities for certain retired employees.8 The board recognized, however, that the definition used by the court in Schellfeffer was the meaning the court had generally given to the term "retired," apart from the specific legislative history of the 1958 Act.

Congress first included a provision allowing retiring federal employees to elect a reduced annuity with a spouse's survivor annuity in 1948.9 This right was limited to employees retiring under specific provisions of the CSRA, and employees entitled to deferred annuities were not covered by the act.10

Congress extended the eligibility to elect the survivor's annuity to employees entitled to deferred annuities in the 1956 Act. However, section 403 of the 1956 Act expressly precluded retroactive application of the 1956 Act to those employees who retired or were separated before the effective date of the 1956 Act. Section 403 provided:

Except as otherwise provided, the amendments made by this title shall not apply in the case of employees or Members retired or otherwise separated prior to its effective date, and the rights of such persons and their survivors shall continue in the same manner and to the same extent as if this title had not been enacted.

It is clear that, under the terms of the 1956 Act, Benedetto was not entitled to elect a survivor's annuity because he separated from federal service in 1953. Therefore, OPM's position would be correct if the statute had remained unchanged. However, in 1966, Congress codified title 5. In so doing, it provided an unqualified right to a survivor's annuity for anyone who "retired" under the 1966 Act. Congress eliminated the requirement that an individual elect a survivor's annuity and made the survivor's annuity automatic unless the employee clearly indicated otherwise. Section 8341(b) of 5 U.S.C. (1966) provided:11

If an employee or Member dies after having retired under this subchapter and is survived by a spouse to whom he was married at the time of retirement, the spouse is entitled to an annuity * * * unless the employee or Member has notified the Commission in writing at the time of retirement that he does not desire his spouse to receive this annuity. The annuity of the spouse commences on the day after the retired employee or Member dies.

OPM contends that this provision does not apply to Benedetto because his rights continued to be governed by the 1956 Act's exclusion from coverage of those who separated from federal service before the effective date of the 1956 Act. According to OPM, the limitation expressed in section 403 remained in effect despite its express repeal in the 1966 Act. Section 403 was one of many statutes which were repealed when title 5 was codified in 1966. The explanation contained in the legislative history concerning the repeal of section 403 stated:

Executed. Preserved existing rights of persons retired or separated before effective date of the Act. Existing rights are preserved by technical Sec. 8 of this bill.

The laws specified in the following schedule are repealed except with respect to rights and duties that matured * * * before the effective date of this Act and except as provided by section 7 of this Act.

OPM contends that section 8(a) continued in effect the exclusion from eligibility to elect a survivor's annuity of those employees who separated from federal service prior to 1956. OPM's basic argument is that the repeal of section 403 would amount to a substantive change in the law and that the legislative history clearly indicates that Congress did not intend a substantive change in the law. OPM cited several sections of the legislative history of the 1966 Act to support its argument. Both the House and the Senate reports contained the following explanation of the purpose of the bill:12

The purpose of this bill is to restate in comprehensive form, without substantive change, the statutes in effect before July 1, 1965, that relate to Government employees, the organization and powers of Federal agencies generally, and administrative procedure, and to enact title 5 of the United States Code.

In order to restate the statutes relating to personnel in one comprehensive title, it is necessary to make changes in language. Some of the changes are necessary to attain uniformity within the title. Others are necessary to effect consolidation of related statutes and to conform to common contemporary usage. In making changes in the language, precautions have been taken against making substantive changes in any statute. [Emphasis supplied.]

Like other recent codifications undertaken as a part of the program of the Committee on the Judiciary of the House of Representatives to enact into law all 50 titles of the United States Code, there are no substantive changes made by this bill enacting title 5 into law. It is sometimes feared that mere changes in terminology and style will result in changes in substance or impair the precedent value of earlier judicial decisions and other interpretations. This fear might have some weight if this were the usual kind of amendatory legislation where it can be inferred that a change of language is intended to change substance. In a codification statute, however, the courts uphold the contrary presumption: the statute is intended to remain substantively unchanged. [Emphasis supplied.]

However, this legislative history does not support OPM's position. As the underlined portions suggest, Congress was concerned that changes in the language used in certain sections of the act as passed might be interpreted as an intent to change the substance of those sections. The legislative history quoted above makes it clear that Congress did not intend to make substantive changes in the laws replaced by the sections it enacted. That this is the correct interpretation of the legislative history is shown by section 7(a) of the 1966 Act, which states that:

The legislative purpose in enacting sections 1-6 of this Act is to restate, without substantive change, the laws replaced by those sections on the effective date of this Act. [Emphasis supplied.]

Section 403 was not replaced by any section; it was repealed. Therefore, OPM's argument must fail.

Section 8(a) repealed section 403 except as to rights that had matured before the effective date of the 1966 Act. OPM contends that Benedetto's rights matured in 1953 when he separated from federal service. We disagree. To mature is "to become due."15 Benedetto's rights did not come due until he was entitled to receive his deferred annuity. That did not occur until he retired in 1981.16

Therefore, we hold that an employee who retires, i.e., when that employee is first eligible to receive an immediate annuity, from federal service after the effective date of the 1966 Act is entitled to receive a reduced annuity with survivor benefits. Since Benedetto did not retire until 1981, when he reached the age of 62, he was entitled to the reduced annuity with survivor benefits.

The board's decision that Benedetto was entitled to receive a reduced annuity with survivor benefits for his wife is affirmed.

AFFIRMED.