A NOVEL REMOVAL SETTLEMENT OPTION

FEDSMILL.com exists to spread good ideas among union leaders throughout government no matter who thought of it.  The more each of us knows, the more powerful we are.  We ran across a real good one today that we had never heard of before while reading through the newest MSPB decisions.  An agency removed an employee for unacceptable performance.  He was 46 at the time and had 18 years of service. He filed an appeal with the MSPB and after the hearing, he and the agency settled the case by …

converting his permanent appointment to a four year term appointment.  Here is the critically important part.  The parties’ agreement made clear that “[t]he intent of this provision is to provide the Appellant adequate time under current [OPM] regulations . . . to achieve a sufficient age and sufficient years of federal service to permit him to receive a discontinued service annuity should his federal service discontinue at the end of the term specified herein.”  At the end of the four year term the agency extended his term appointment another year, at which point the employee applied for a Discontinued Service Retirement (DSR) annuity at the age of 51 with 23 years of federal service.

When OPM reviewed his application, it denied him the immediate DSR annuity “on the grounds that the settlement agreement returning him to work with the Department of the Interior was an artifice designed to evade the statutory requirements for receiving a DSR annuity.”  When the employee appealed that decision to MSPB, the Board promptly overturned OPM’s rejection and ordered it to start paying the annuity. (See Eller, 2014 MSPB 72)

There are about a half-dozen technical issues that parties have to deal with when settling cases using this creative approach.  We will leave it to you to make sure each condition is met.  Our sole purpose here was to make you aware that not only can this be done legally, but that MSPB will uphold the deal if necessary.

About AdminUN

FEDSMILL staff has over 40 years of federal sector labor relations experience on the union as well as management side of the table and even some time as a neutral.
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