Federal employees and their family members find themselves in this situation, which unfortunately is not uncommon. In planning for retirement, federal employees seek to verify the amount of money they will receive after retirement. In some cases, the government agency at the Office of Personnel Management (“OPM”) or another agency will notify the employee of the guaranteed amount of the monthly pension benefit. There are even cases where the government will make this promise to employees in writing. However, when the employee retires, the government argues that the promise was made in error and that the employee was not actually entitled to the amount promised.
A similarly frustrating situation involves an employee’s family member, usually the employee’s spouse, who may be planning for her future after her husband’s death. In some cases, spouses will ask OPM questions to determine their survival benefits after the death of their husband. OPM can also promise guaranteed profits. Sure enough, after the death of his partner, the government recanted the promise, claiming it was made in error and that the promise actually violated government policy or law. Therefore, the question arises as to whether there is a legal right for a federal employee or member of his family to enforce a badly made promise.
In the private sector, a person to whom a promise has been made is protected by the legal doctrine of promissory estoppel, which means that if the person reasonably relied on the promise to harm him and the promise is not kept, the person has an excuse. action for damages arising as a result of such reliance. This situation usually occurs during a career change, where the recruited employee is promised a much better position, ends up moving, selling his house, etc., only to find that the new job does not materialize. Even though the employee is of his own volition, the employee has reasons to sue the new employer for promissory estoppel.
Unfortunately, with respect to federal employees and their pensions, this issue was decided against them in a US Supreme Court decision in Office of Personnel Management v. Richmond, 496 US 414 (1990), in which the plaintiff sought advice from a federal employee and received misinformation about the value of retirement benefits. The plaintiffs argued that the wrong and unlawful suggestion should give rise to a fair estoppel against the government, and that the Court should order the payment of alimony contrary to statutory provisions. The United States Court of Appeals for the Federal Circuit agreed with him and imposed a promissory estoppel against the government, giving him the right to payment of money that was not permitted by law. However, the Supreme Court overturned this decision and stated that the estoppel could not be applied to provide benefits to the plaintiffs.
The Supreme Court primarily relied on the Appropriations Clause of the US Constitution for its reasoning which states “No Money shall be withdrawn from the Treasury, but as a Consequence of Appropriations made by Law.” Thus, “the payment of money from the Ministry of Finance must be authorized by law.” Richmond, 496 US at 424. In short, promissory estoppels, common law remedies cannot be the basis for collecting government pensions.
If you or a close family member works with the federal government, the best thing to do is have your retirement benefits reviewed by an attorney practicing in this field. Do not rely on promises made to you by government agencies.