Federal employees and their families find themselves in this situation, which unfortunately is not that uncommon. In planning for retirement, the federal employee seeks verification of the amount of money he will receive upon retirement. In some cases, a government agent from the Office of Personnel Management (“OPM”) or other agency will notify the employee of a guaranteed amount of monthly pension benefits. There are even cases where the government will make this promise to the employee in writing. However, when the employee retires, the government argues that the promise was made in error and that, in fact, the employee is not entitled to the promised amount.
An equally frustrating situation involves members of the employee’s family, usually the employee’s spouse, who may be planning for their future after the death of their spouse. In some cases, the spouse will consult the OPM to determine her survivor benefits upon the death of her spouse. OPM can also promise your guaranteed benefits. Sure enough, after the death of the spouse, the government retracts its promise, claiming that it was made in error and that the promise actually violated a government policy or statute. Therefore, the question arises as to whether there are legal rights for the federal employee or his or her family members to enforce the ill-made promise.
In the private sector, people to whom promises have been made are protected by the legal doctrine of promissory estoppel, which means that if that person reasonably relied on the promise to their detriment and the promise was not kept, that person has a cause of action for damages suffered as a result of such reliance. This situation usually occurs during a career change, where the highly recruited employee is promised a much better position, ends up relocating, selling their house, etc., only to find that the new job didn’t materialize. Even though the employee is a volunteer, however, the employee has a cause of action against the new employer for promissory estoppel.
Unfortunately, with respect to federal employees and their pensions, this issue was decided against them in the United States Supreme Court’s decision in Office of Personnel Management v. Richmond, 496 US 414 (1990), where the claimant sought advice from a federal employee and received misinformation about the value of pension benefits. The plaintiff held that the erroneous and unauthorized advice should give rise to an equitable estoppel against the government, and that the Court should order the payment of benefits contrary to statutory terms. The United States Court of Appeals for the Federal Circuit agreed with him and applied a promissory estoppel against the government, entitling him to a monetary payment not otherwise permitted by law. However, the Supreme Court reversed this decision and held that no legal impediment could be applied to award benefits to the defendant claimant.
The Supreme Court relied primarily on the US Constitution’s Appropriations Clause for its reasoning that “Money shall not be drawn from the Treasury except by appropriations made by law.” Thus, “the payment of Treasury money must be authorized by statute.” Richmond, 496 US at 424. In short, promising impediments, a common law remedy cannot be the basis for collecting a government pension.
If you or a close family member is employed by the federal government, the best thing to do is to have your pension benefits reviewed by an attorney who practices in this area. Do not rely on promises made to you by a government agency.