George W. Schlossnagle-Post-1956 Military Service

B-270151.3 Jan 16, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights The error was not discovered until 1995 and the DOE requests our decision on whether its appropriated funds are available to remedy any portion of its error which will cause the employee to have to pay several thousand more dollars in principal and interest to obtain credit for the military service. We hold that the appropriated funds of DOE are not available for this purpose. DECISION The Department of Energy (DOE) requests a decision whether its appropriated funds are available to remedy an error it made in 1991 when it calculated the amount of a Post-1956 military service deposit of its employee. We hold that the appropriated funds of DOE are not available for this purpose. The FERS rate was used because his payroll records reflected retirement coverage under FERS. View Decision Matter of: George W. Schlossnagle-Post-1956 Military Service Deposit File: B-270151.3 Date: January 16, 1996 The Department of Energy (DOE) erroneously calculated a Post-1956 military service deposit of an employee in 1991 and erroneously informed him then that his deposit had been paid in full for the periods of time involved. The error was not discovered until 1995 and the DOE requests our decision on whether its appropriated funds are available to remedy any portion of its error which will cause the employee to have to pay several thousand more dollars in principal and interest to obtain credit for the military service. We hold that the appropriated funds of DOE are not available for this purpose. DECISION The Department of Energy (DOE) requests a decision whether its appropriated funds are available to remedy an error it made in 1991 when it calculated the amount of a Post-1956 military service deposit of its employee, Mr. George W. Schlossnagle. [1] For the following reasons, we hold that the appropriated funds of DOE are not available for this purpose. BACKGROUND On June 2, 1991, Mr. Schlossnagle, a civilian employee, transferred from the Department of the Air Force to DOE. On June 25 and August 16, 1991, he applied to DOE under the Post-1956 military service program to make a deposit to his retirement account for several prior periods of military service in order to receive credit for that service toward his civilian retirement annuity. [2] The DOE calculated Mr. Schlossnagle's deposit amount to be $7,116.32, based on his military wages for the specified periods at the 3 percent contribution rate for employees covered by the Federal Employees Retirement System (FERS). The FERS rate was used because his payroll records reflected retirement coverage under FERS. Also, under FERS no interest was due at that time. The DOE notified Mr. Schlossnagle of the deposit required, and he paid it on October 18, 1991. On October 22, 1991, the DOE issued Mr. Schlossnagle a letter stating that his deposit for Post-1956 military service had been paid in full. On May 5, 1995, Mr. Schlossnagle applied to DOE for additional credit toward his civilian retirement annuity for several other brief periods of military service. At that time the DOE discovered that Mr. Schlossnagle had actually been covered by the Civil Service Retirement System (CSRS) rather than the FERS for the military service periods involved prior to 1991. While still employed by the Air Force, Mr. Schlossnagle had elected to change his retirement plan from the CSRS to FERS on December 30, 1990. According to DOE, this information was not made available to its payroll office at the time of the 1991 calculation. Based on the new information, DOE realized that it had erroneously calculated Mr. Schlossnagle's deposit in 1991. The DOE then recomputed Mr. Schlossnagle's service deposit at the higher 7 percent contribution rate applicable to employees covered under the CSRS plus interest. On July 13, 1995, the DOE notified Mr. Schlossnagle that an additional deposit of $13,912.48 (consisting of additional principal, interest from 1985 to 1991, and additional interest from 1991 to 1995) was required in order to receive full credit for all periods of military service requested. [3] Mr. Schlossnagle appealed DOE's decision to the Office of Personnel Management (OPM). By a letter, dated August 14, 1995, OPM informed Mr. Schlossnagle that, since he is still an employee of DOE, that Department is responsible for calculating the amount of the deposit required and that he should seek any further explanation from DOE. [4] On October 13, 1995, the DOE sought a decision of our Office on whether any of its appropriated funds are available to remedy the error it made when it calculated the amount of the deposit in 1991. Mr. Schlossnagle contends that he justifiably relied on the DOE's statement in 1991 that his Post-1956 military service deposit for the periods of time involved had been "paid in full". Because of this, he questions whether he owes any additional amount.