Federal employees and their families encounter this situation, which is unfortunately not that uncommon. When planning his 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 her husband. In some cases, the spouse will consult OPM to determine their survivorship benefits after the death of their spouse. OPM can also promise you guaranteed benefits. Indeed, upon 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 is any legal right for the federal employee or his 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. action for damages incurred as a result of such dependency. This situation usually occurs during a career change, where the highly hired employee is promised a much better position, ends up moving, selling their house, etc., only to find that the new job did not materialize. Even though the employee is at will, the employee nevertheless has a cause of action against the new employer for promising impediment.
Unfortunately, with respect to federal employees and their pensions, this matter was decided against them in the US Supreme Court decision in Office of Personnel Management v. Richmond, 496 US 414 (1990), where the plaintiff sought the advice of a federal employee and received misinformation about the value of pension benefits. The plaintiff argued that the erroneous and unauthorized advice should result in an equitable impediment 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 promising legal impediment against the government, which entitled him to a monetary payment that would not otherwise be allowed by law. However, the Supreme Court reversed this decision and held that estoppel could not be applied to entitle the defendant plaintiff to benefits.
The Supreme Court relied primarily on the Appropriations Clause of the United States Constitution for its reasoning which states that “Money shall not be withdrawn from the Treasury, but in consequence of appropriations made by law.” Thus, “the payment of money from the Treasury must be authorized by law.” 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 relative works with the federal government, the best thing to do is to have a lawyer who practices in this area review your pension benefits. Don’t trust promises made to you by a government agency.