The Petitioner, who executed a Trust-to-Trust Transfer Agreement with the MTRS and made arrangements for payment of said lump sum payment of her vocational service is entitled to purchase her vocational service at the buyback rate and, thus, qualify for RetirementPlus.
The Petitioner, M. Louise Powers, is appealing from the April 6, 2016 decision of the Respondent, Massachusetts Teachers Retirement System (MTRS), denying her request to purchase her vocational work experience at Northeast Metro Regional Vocational Technical School from (Respondent Exhibit 1 and Petitioner Exhibit 7.) The Petitioner’s timely appeal was timely filed on April 11, 2016. (Respondent Exhibit 2 and Petitioner Exhibit 8.)
I held a hearing on July 12, 2018 in the offices of the Worcester Registry of Deeds, 90 Front Street, Worcester, MA. The Petitioner testified in her own behalf. The MTRS presented no witnesses. The hearing was digitally recorded.
The parties filed pre-hearing and post-hearing memoranda of law. (Respondent-Attachment A with Exhibits 1-6 and Attachment D; Petitioner, Attachment B with Exhibits 1-11 and Attachment C.) The last of the filings was received at DALA on August 13, 2018, thereby closing the record.
FINDINGS OF FACT
- The Petitioner, M. Louise Powers, entered service as a Cosmetology Teacher at Northeast Metropolitan Regional Vocational School (Northeast) in September 1989. She worked in that capacity continuously from September 1989 through June 2016 and contributed to the MTRS throughout that period. (Respondent Exhibit 6.)
- On June 25, 2001, the MTRS received the Petitioner’s RetirementPlus Election Form. (Petitioner Exhibit 1.)
- On or about January 26, 2006, the Petitioner applied to purchase service credit relative to her time working in the cosmetology field prior to her teaching at Northeast pursuant to G. L. c. 32, § 4(1)(h ½). Said section allows a purchase of up to three (3) years of service credit for prior industry employment required for licensure as a vocational teacher. The Petitioner had vocational work experience between December 1, 1984 and November 30, 1987. (Petitioner Exhibit 1, Respondent Exhibit 3 and Petitioner Testimony.)
- In an invoice mailed on October 20, 2006, the MTRS offered to allow the Petitioner to buy back her three (3) years of creditable service at the then current 125% buyback interest rate. (Petitioner Testimony, Petitioner Exhibit 3 and Respondent Exhibit )
- The invoice included various optional payment plans, including lump-sum payments and an installment plan. The lump sum options were as follows: $20,406.47 due November 30, 2006; $20,544.44 due January 31, 2007; or $20,7558 due April 18, 2007. (Petitioner Exhibit 3 and Respondent Exhibit 4.)
- If the Petitioner chose the installment plan, her first payment would have been due on December 31, 200 (Id.)
- The invoice also stated that “in order to ever purchase this voc-exp service, the Petitioner must either: make full payment for the service purchase within 180 days of the mailing date of this invoice or by her retirement date, whichever comes first; or, sign up for the installment plan within 180 days of the mailing date of the invoice and complete her payments within the five-year period of the installment plan, or her retirement date, whichever comes first. (Id.)
- The Petitioner signed a Trust-to-Trust Transfer Acknowledgment Form on November 1, 2006 therein indicating that she intended to make the lump sum purchase in the amount of $20,406.47 that was due on November 30, 2006. (Respondent Exhibit 5.)
- The Petitioner employed the assistance of Joe Capobianco, an agent of the annuity savings account providers with whom she had previously worked. She engaged him to prepare the MTRS paperwork that was required to effectuate the transfer of funds from her 403(b) annuity retirement account with MetLife Insurance Company to MTRS in order to purchase the amount that was due for the service purchase. (Petitioner Exhibits 4-6.)
- At or around the time of the intended service purchase, the Petitioner made a transfer of funds from a prior 403(b) annuity account to her MetLife 403(b) annuity account in order to ensure that there were sufficient funds to cover a lump sum payment of the amount due to the MTRS. (Id.)
- The Petitioner was instructed to remit the paperwork to the Northeast payroll office which, in turn, would complete it for purposes of ensuring that the transfer of funds from her 403(b) annuity account to the MTRS would be effectuated. The service was intended to be purchased as via a lump sum without a penalty for early withdrawal of retirement savings or an immediate tax liability. (Id.)
- The Petitioner provided the trust-to-trust transfer paperwork required in order to transfer funds to the MTRS to Marion Wedge in the Northeast payroll office. She was told that the paperwork would be properly processed. She believed that the school would forward the paperwork to the MTRS. (Id.)
- The Petitioner observed a deduction from her paycheck for “Retirement Plus” that she interpreted to mean that, for some reason, the amount due to the MTRS for the service purchase in question would be paid through payroll deductions, as allowed by law, rather than as a lump sum transfer from her 403(b) account, as she had originally intended. (Petitioner Testimony.)
- The Petitioner did not realize that the amount due to the MTRS for her intended service purchase was not being properly paid. In a letter dated April 6, 2016 she received a notice from the MTRS that she was not eligible for Retirement Plus benefits due to not procuring credit for the three (3) years of service credit that she believed she had purchased ten (10) years earlier. At that time, the Petitioner learned that the contributions that were due for her service purchase had not been paid. (Petitioner Testimony and Petitioner Exhibit 7.)
- The Petitioner filed her timely appeal on April 11, 2016. Petitioner Exhibit 8.)
The Petitioner is entitled to prevail in this appeal. She has met her burden of proving that the failure to of the Northeast Metropolitan Regional Vocational School to submit the appropriate paperwork to the MTRS or to call upon her to do the same was no fault of hers. She is entitled to purchase her vocational service and she is eligible for RetirementPlus.
In a case that is factually analogous to the present case, Henry Bolter v. MTRS, CR-03-373 (Division of Administrative Law Appeals 10/01/2003; aff’d. Contributory Retirement Appeal Board 01/16/2004), the Petitioner expressed his intent to retire effective January 24, 2003 in writing. Accordingly, all of his retirement paperwork was due to be filed with the MTRS in 60 days, or by March 24, 2003. He left his retirement paperwork at the Payroll Office of the Brookline Public Schools in late February or early March 2003. He signed his application for superannuation retirement on February 27, 2003. The MTRS did not receive Bolter’s application until April 9, 2003. Consequently, Bolter’s retirement date was changed to April 24, 2003, 15 days following receipt. It was DALA that Bolter, who had left his retirement application with the Payroll Office of the Brookline Public Schools for processing his payroll information then filing same with the MTRS, was not a fault for the late filing of the application and that he should not be penalized with a later retirement date. The payroll office was also culpable for not notifying Bolter that, if the related documents were ready on or before the filing deadline, he should retrieve them from the town offices and hand deliver them to the board.
In the present case, the Petitioner expressed her clear intent to purchase her vocational service in a lump sum payment that was due on November 30, 2006. She signed the Trust to Trust Transfer Acknowledgement Form on November 1, 2006 and designated the financial institution, the method of payment and the specific account from which the payment would be made. She left the paperwork with the representative from Northeast for completion of the appropriate sections regarding salary. I credit her testimony that she was told that the paper work would be completed and processed. She heard nothing further.
These facts alone are in stark contrast to those in the case upon which the Respondent heavily relies, McLeod v. MTRS, CR-08-334 (Division of Administrative Law Appeals 08/26/2009; no Contributory Retirement Board Decision,) In McLeod, the Petitioner failed to make an election within the 180 days of the invoice date as to whether he would pay the vocational work experience invoice in full or enter into an installment plan. The Petitioner in the present case made her election and took steps to set up the trust-to-trust transfer. Similar to the Petitioner in Bolter, supra, once she left her paperwork with the Northeast payroll office after she had completed all of those sections which she herself was required to complete, she had no further contact with the Northeast payroll office. Like the Brookline Payroll Office in Bolter, the Northeast payroll offices failed to heed any filing deadlines. In the present case, the Northeast payroll office appears to have failed to act at all in seeing that the Petitioner’s papers were forwarded to the MTRS in order for payment to be effectuated at any time either by the first deadline or thereafter.
Under the circumstances in the present case, the Northeast Payroll Department and the MTRS must assume responsibility for failures of the system such as this. The harm must not fall on a long-time, well intentioned, non-legally trained employee.
The decision of the MTRS is hereby reversed. This matter is remanded in order for the MTRS to allow the Petitioner to purchase her vocational service at the buyback rate and acknowledge her eligibility for RetirementPlus.
Division of Administrative Law Appeals,
DATED: December 7, 2018