                          UNITED STATES OF AMERICA
                       MERIT SYSTEMS PROTECTION BOARD
                                      2014 MSPB 72

                            Docket No. CH-0841-13-0334-R-1

                                  Andrew C. Eller, Jr.,
                                        Appellant,
                                             v.
                           Office of Personnel Management,
                                         Agency.
                                     September 5, 2014

           Paula N. Dinerstein, Washington, D.C., for the appellant.

           Earl A. Sanders, Esquire, and Karla W. Yeakle, Washington, D.C., for the
             agency.

                                         BEFORE

                             Susan Tsui Grundmann, Chairman
                             Anne M. Wagner, Vice Chairman
                                Mark A. Robbins, Member



                                 OPINION AND ORDER

¶1         Pursuant to 5 U.S.C. § 7703(d), the Director of the Office of Personnel
     Management (OPM) has filed a petition for reconsideration of our prior decision
     finding that the appellant is entitled to receive a discontinued service retirement
     (DSR) annuity under 5 U.S.C. § 8414(b)(1)(A). See Eller v. Office of Personnel
     Management, 121 M.S.P.R. 17, ¶ 10 (2014); Reconsideration File (RF), Tab 1.
     For the reasons that follow, OPM’s petition for reconsideration is DENIED and
     our prior Opinion and Order is AFFIRMED as MODIFIED.
                                                                                      2

                                      BACKGROUND
¶2         The Board’s prior decision contains a comprehensive recitation of the facts
     informing the instant dispute. See Eller, 121 M.S.P.R. 17, ¶¶ 2-5. OPM does not
     dispute the underlying facts as found by the Board in its prior decision. See RF,
     Tab 4 at 11. For clarity, we provide the following brief synopsis. The appellant
     held a position with the Department of the Interior until his employing agency
     removed him for unacceptable performance.           Eller, 121 M.S.P.R. 17, ¶ 2.
     Following an appeal to the Board, the Department of the Interior and the
     appellant entered into a settlement agreement providing, inter alia, that the
     appellant would be converted to a 4-year term appointment as a Biologist with the
     Department of the Interior. Id. 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.” Id.
¶3         As envisioned by the settlement agreement, the appellant served as a
     Biologist with the agency for 4 years, at the end of which the agency extended his
     appointment for 1 additional year.     Id., ¶ 3.   The Department of the Interior
     subsequently separated the appellant at the end of this additional year, citing the
     expiration of his term appointment, and he applied for an immediate DSR annuity
     with OPM.     Id.   At the time of his final separation from employment, the
     appellant had over 23 years of federal service and was 51 years of age. Id.
¶4         OPM, however, denied the appellant’s application for an 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. Id., ¶¶ 4-5. The administrative judge
     reversed OPM’s final decision denying the appellant’s annuity application, id.,
     ¶ 5, and we affirmed the administrative judge’s initial decision, holding that,
     because the appellant was returned to actual federal service and objectively met
                                                                                      3

     the statutory eligibility requirements for a DSR annuity, OPM was without the
     authority to deny his application, id., ¶¶ 8-9. In so holding, we found the Board’s
     prior decision in Parker v. Office of Personnel Management, 93 M.S.P.R. 529,
     ¶¶ 18, 20 (2003), aff’d, 91 F. App’x 660 (Fed. Cir. 2004), distinguishable because
     the parties in that case entered into a settlement agreement which only created the
     impression that the appellant was qualified for a DSR annuity on paper.        See
     Eller, 121 M.S.P.R. 17, ¶¶ 8-9. Differing from Parker, we concluded that, when
     an employee is assigned to a position of employment in the federal service and
     actually serves in that position, OPM has no discretion to deviate from the
     computation formulas, and it cannot deny the employee an annuity based on its
     subjective determination that the employee’s federal service fails to qualify him
     for an annuity when he otherwise objectively satisfies the statutory annuity
     formula. Id., ¶ 9.
¶5         The appellant had over 20 years of service and was more than 50 years of
     age at the time of the expiration of his term appointment with the Department of
     the Interior. The Board further concluded that his separation was involuntary,
     and, accordingly, we found that the appellant was entitled to receive an
     immediate DSR annuity under 5 U.S.C. § 8414(b)(1)(A). Eller, 121 M.S.P.R. 17,
     ¶¶ 3, 9-13.
¶6         The Director of OPM has filed a petition for reconsideration arguing that,
     contrary to the import of our prior decision, OPM has a statutory obligation to
     determine whether a separation from service is involuntary for the purposes
     of 5 U.S.C. § 8414(b)(1)(A) and that the appellant’s entire period of additional
     federal service with the Department of the Interior—5 years in total—should not
     be counted toward his DSR annuity eligibility because a term position may last
     no more than 4 years.       RF, Tab 4 at 14-17, 20-21.        In her petition for
     reconsideration, the Director also asserts that the Board misinterpreted its
     decision in Parker, “making it narrower than it actually was” and further
     maintains that the Federal Circuit’s decision in Eldredge v. Department of the
                                                                                        4

     Interior, 451 F.3d 1337 (Fed. Cir. 2006), precludes neither OPM, nor the Board,
     from finding the appellant ineligible to receive a DSR annuity.         RF, Tab 4
     at 21-22, 25.     Lastly, the Director argues that, if the Board’s prior decision
     remains unchanged, agencies and employees will have an incentive to enter into
     similar settlement arrangements in the future, thus impermissibly shifting
     employment and litigation costs to the retirement fund and inequitably rewarding
     employees whose performance is alleged to be unacceptable.         Id. at 30.    The
     appellant has filed a response to the petition for reconsideration. RF, Tab 5.

                                         ANALYSIS
¶7         The Director of OPM may file a petition for reconsideration of a final
     Board decision if the Director determines that: (1) the Board erred in interpreting
     a civil service law, rule, or regulation affecting personnel management; and
     (2) the Board’s decision will have a substantial impact on a civil service law,
     rule, or regulation, or policy directive. 5 U.S.C. § 7703(d); Whittacre v. Office of
     Personnel Management, 120 M.S.P.R. 114, ¶ 7 (2013); 5 C.F.R. § 1201.119(a).
     The Board will consider de novo the arguments raised by OPM on petition for
     reconsideration, even in cases where OPM was a party to the proceedings before
     the Board.      Scott v. Office of Personnel Management, 117 M.S.P.R. 467, ¶ 9
     (2012).
     The Board’s prior decision does not improperly restrict OPM’s authority to
     administer federal employee retirement benefits.
¶8         First, we have considered OPM’s arguments suggesting that the Board’s
     prior decision improperly confines OPM’s role in administering federal employee
     retirement benefits and asserting that it has an independent statutory obligation to
     determine whether an employee’s separation is involuntary for the purposes of a
     DSR annuity under 5 U.S.C. § 8414(b)(1)(A). See RF, Tab 4 at 14-16. OPM’s
     authority to administer federal employee retirement benefits is not in dispute.
     See, e.g., Jordan v. Office of Personnel Management, 77 M.S.P.R. 610, 614
     (1998) (Congress authorized OPM to administer the federal retirement system and
                                                                                       5

     gave it the power to perform acts and prescribe regulations it deems necessary to
     carry out that authority), recons. denied, 86 M.S.P.R. 144 (2000), overruled in
     part on other grounds by Parker, 93 M.S.P.R. 529, ¶ 18; Hymon v. Department of
     the Navy, 39 M.S.P.R. 106, 108 (1988) (OPM is the agency responsible for
     administering federal employee retirement programs and the retirement fund).
     The Board, however, has jurisdiction over an “administrative action or order
     affecting the rights or interests of an individual or of the United States under the
     [Federal   Employees’      Retirement     System     (FERS)]     administered    by
     [OPM].” 5 U.S.C. § 8461(e)(1); see also 5 U.S.C. § 8347(d)(1) (establishing the
     Board’s jurisdiction over similar actions involving the Civil Service Retirement
     System (CSRS)). Thus, while OPM must make certain determinations about an
     applicant’s eligibility for benefits in the course of administering the several
     federal employee retirement programs, those determinations which affect the
     rights or interests of an individual or the United States are appealable to the
     Board. 5 U.S.C. § 8461(e)(1); 5 U.S.C. § 8347(d)(1). We find no support for
     OPM’s argument that our prior decision unnecessarily limits its authority to
     administer federal retirement benefits.
     The length of the appellant’s term position does not negate his eligibility for a
     DSR annuity.
¶9         OPM argues for the first time on reconsideration that the appellant’s
     federal service following his return to work pursuant to the settlement agreement
     with the Department of the Interior should not be counted toward his eligibility
     for a DSR annuity because it lasted for 5 years and, that without approval from
     OPM, a term position may last no longer than 4 years.          RF, Tab 4 at 20-21.
     Although the appellant argues in response that this is a new argument raised for
     the first time in OPM’s petition for reconsideration, which the Board should not
     consider, RF, Tab 5 at 9, the Board will review all of OPM’s arguments raised in
     a petition for reconsideration de novo, even if not asserted below, see
     Scott, 117 M.S.P.R. 467, ¶ 9. We agree with the appellant’s alternative argument,
                                                                                            6

      however, that OPM’s reliance on the length of his service following his return to
      work does not preclude him from qualifying for a DSR annuity.                RF, Tab 5
      at 9-10.
¶10          Pursuant to 5 C.F.R. § 316.301(a), “[a]n agency may make a term
      appointment for a period of more than 1 year but not more than 4 years to
      positions where the need for an employee’s services is not permanent.”
      Agencies, moreover, “may extend appointments made for more than 1 year but
      less than 4 years up to the 4-year limit in increments determined by the agency.”
      Id. OPM “may authorize exceptions beyond the 4-year limit when the extension
      is    clearly    justified   and    is    consistent     with   applicable     statutory
      provisions.”     5 C.F.R. § 316.301(b).    Here, however, OPM contends that the
      Department of the Interior never requested permission to extend the appellant’s
      term position beyond the 4-year regulatory limit, and it asserts that his service in
      a 5-year term position is ultra vires and thus voids his entire period of service for
      the purposes of determining his eligibility for a DSR annuity. RF, Tab 4 at 20-
      21.
¶11          We agree with the appellant, however, that OPM has cited to no authority
      for this proposition, see RF, Tab 5 at 10, and we decline to adopt such a rule
      under the facts of this case. The Board looks to the totality of the circumstances
      to determine the nature of an employee’s appointment. Edwards v. Department of
      the Air Force, 120 M.S.P.R. 307, ¶ 7 (2013). The Federal Circuit, moreover,
      recently opined that the “regulatory and statutory scheme requires that the nature
      [of an employee’s] appointment be judged at the outset, without regard to service
      ultimately completed.” Mitchell v. Merit Systems Protection Board, 741 F.3d 81,
      87 (Fed. Cir. 2014) (emphasis added).
¶12          Based upon the settlement agreement returning the appellant to federal
      service, we find that the appellant was appointed to a term position. The parties’
      settlement      agreement    expressly   stated   that    the   appellant    would   be
      “convert[ed] . . . to a four (4) year term appointment (GS 11/8) as a Biologist.”
                                                                                              7

      Initial Appeal File (IAF), Tab 6 at 24. Although the record developed below does
      not contain a copy of the Standard Form (SF) 50 effecting the appellant’s
      appointment to this position, the SF-50 effecting his subsequent removal reflects
      that he was removed based upon the expiration of a term appointment. See id.
      at 44. Despite the fact that this document was issued by the agency at the time of
      the appellant’s removal, and not at the outset of his appointment, we find that the
      information contained therein is relevant insofar as it reflects the nature of the
      appellant’s appointment at the time of its making, and it supports the conclusion
      that he was placed into a term position upon his return to federal service. See,
      e.g., Hamilton v. Department of Defense, 80 M.S.P.R. 636, ¶ 8 (1999) (an SF-50
      may be considered as relevant evidence, but is not dispositive).
¶13         We note, moreover, that even if we were to accept OPM’s argument that
      the appellant’s service in a term position for more than 4 years without OPM’s
      approval is ultra vires, we could not countenance the position advanced by OPM
      that his entire period of service is therefore void ab initio. 1 RF, Tab 4 at 21.
      Under OPM’s regulations, “[t]he employment of a term employee ends
      automatically on the expiration of his term appointment unless he has been
      separated earlier . . . .” 5 C.F.R. § 316.303(b). Under the terms of the settlement
      agreement, the appellant began serving in his term position effective January 12,
      2005, and he would have served in that position through and including
      January 11, 2009. At that time, the appellant would have had over 22 years of
      federal service and would have been 50 years old.           IAF, Tab 6 at 44.      To be

      1
        In making this argument, OPM does not address what type of appointment the
      appellant held but only asserts that it should not be classified as a term appointment.
      RF, Tab 4 at 20-21. If accepted, we believe OPM’s argument would raise the
      possibility that the appellant’s removal is an adverse action subject to the provisions of
      chapter 75. We decline, however, to engage in such speculation, and we find no basis
      to accept OPM’s argument that the appellant’s service in a term position for more than
      4 years transformed his appointment into something other than a term appointment. Cf.
      Mitchell, 741 F.3d at 87.
                                                                                      8

      entitled to a DSR annuity, he needed to have completed 20 years of service and
      have been 50 years old.      5 U.S.C. § 8414(b)(1)(A); cf. Resnick v. Office of
      Personnel Management, 120 M.S.P.R. 356, ¶ 7 (2013) (finding that an applicant
      for an annuity under CSRS pursuant to 5 U.S.C. § 8336(e) must meet both the
      length of service and age requirements at the time of his separation). Thus, even
      if we were to discount the final year of the appellant’s service with the
      Department of the Interior, which we do not, we would still conclude that he was
      appointed to a term position, by the expiration of which he had qualified for a
      DSR annuity.
      The Board’s decision in Parker does not provide OPM with a basis to deny the
      appellant’s application for an immediate DSR annuity.
¶14           In its petition for reconsideration, OPM also argues that the Board
      misinterpreted its prior decision in Parker by narrowing the scope of authority it
      previously extended to OPM to determine whether any separation date established
      by a settlement agreement to which OPM is not a party is an artifice designed to
      evade    the statutory requirements    for   entitlement to an annuity.       See
      Parker, 93 M.S.P.R. 529, ¶ 18; RF, Tab 4 at 25-26.       As explained below, we
      reaffirm our prior decision distinguishing Parker, and, rather than narrowing
      Parker’s holding, we find that accepting OPM’s application of Parker to the facts
      of this case would constitute a considerable expansion of that precedent, which
      we cannot endorse. See Eller, 121 M.S.P.R. 17, ¶¶ 8-9.
¶15           Prior to the Board’s decision in Parker, the Board had held that, when an
      employee resigns pursuant to a settlement agreement, the date of resignation
      under the agreement is controlling for determining retirement entitlements. See,
      e.g., Jordan, 77 M.S.P.R. at 614. In reaching this conclusion, the Board cited not
      only the policy considerations favoring the resolution of disputes through
      settlement but also the fact that a settlement entered into the record before the
      Board was equivalent to a final order and thus was entitled to the same effect as
      any other final Board order. Id. at 615, 617. In Parker, however, the Board
                                                                                          9

      overruled Jordan insofar as it held that OPM is conclusively bound by the terms
      of a settlement agreement to which it was not a party. 93 M.S.P.R. 529, ¶ 18.
      Noting that factual admissions in a settlement agreement have been held not to be
      binding on a person who was not a party to the agreement and who did not have
      an opportunity to contest the alleged facts before the agreement was approved,
      id., ¶ 17 (citing In re Warmus, 276 B.R. 688, 691, 694-95 (S.D. Fla. 2002)), the
      Board held that OPM has the authority to determine whether any separation date
      established by the agreement is an artifice designed to evade the statutory
      requirements for entitlement to an annuity, id., ¶ 18. The Board further explained
      that OPM’s authority to question a personnel action taken as a result of a
      settlement applies whether the statutory provisions at issue implicate filing
      deadlines or substantive criteria for entitlement to a retirement benefit. Id.
¶16            As we explained in our prior order, however, the factual circumstances
      leading to the Board’s decision in Parker differ significantly from the facts of
      this case. See Eller, 121 M.S.P.R. 17, ¶¶ 8-9; Parker, 93 M.S.P.R. 529, ¶¶ 18,
      20-21.      In Parker, the appellant and the agency entered into a settlement
      agreement designed “for no other purpose than to give the appearance that the
      appellant     had   the   service   necessary   for   him   to   receive   a     CSRS
      annuity,” 93 M.S.P.R. 529, ¶ 20 (emphasis added), and it is undisputed that the
      appellant in that case never served any portion of the time that the parties’
      settlement agreement stipulated he had served, id., ¶¶ 19-21. The Board found
      that OPM could look behind the stipulations within a settlement agreement in an
      effort to determine whether the agreement contained an artifice designed to evade
      the statutory requirements for an employee’s entitlement to an annuity. Id., ¶¶
      17-18.
¶17            Nowhere in the Board’s decision in Parker, however, was there a
      suggestion that this authority extends beyond reviewing factual admissions or
      stipulations contained in settlement agreements.        See id., ¶ 17 (discussing
      admissions and stipulations of fact in settlement agreements). It is undisputed,
                                                                                    10

      moreover, that the instant settlement agreement did not stipulate that the
      appellant served in a term position in which he did not serve but rather provided
      the appellant with the right to serve in a term position, in which he actually
      served. 2    See IAF, Tab 6 at 24-25.    Accordingly, the motivating concern in
      Parker—that records could be revised or manipulated to reflect that something
      had occurred, which in reality had not—is not present in this case. Rather, the
      agreement at issue provided the appellant with the right to have something
      happen—his assignment to a term position for a period of years—which actually
      took place, and we again find no authority for OPM’s position that it has the
      authority to look behind a federal employee’s actual federal service to determine
      whether he has earned the right to receive a retirement annuity.             See
      Eller, 121 M.S.P.R. 17, ¶ 9 & n.5.
¶18            Additionally, as suggested above, adopting OPM’s proposed application of
      Parker would involve a substantial expansion of that decision.       Parker was
      focused on a stipulation of fact in a settlement and OPM’s ability to ensure that
      such a stipulation was not intended to create title to a right which would not
      otherwise exist. See 93 M.S.P.R. 529, ¶¶ 17-18. OPM’s proposed subjective
      review of an applicant’s actual federal service, and the motivation for such
      service, not only exceeds the scope of Parker but also runs counter to
      long-established Board precedent holding that OPM is constrained by law to
      follow the annuity computation formulas passed by Congress. See Thompson v.
      Office of Personnel Management, 81 M.S.P.R. 677, ¶ 6 (1999), aff’d in part,
      vacated in part, and remanded, 230 F.3d 1381 (Fed. Cir. 2000) (Table).       We
      decline to read Parker beyond the facts presented in that case, and we reaffirm
      our prior finding that OPM may not reject an application for a DSR annuity either
      because it believes that the employee’s federal service should not be counted


      2
          See infra ¶¶ 25-27.
                                                                                         11

      toward his DSR annuity eligibility or because it disagrees with the motivation for
      returning the employee to actual federal service. See Eller, 121 M.S.P.R. 17, ¶ 9
      & n.5 (finding that the parties’ intent for returning an employee to actual federal
      service does not vitiate the employee’s objective satisfaction of the federal
      service longevity requirement for a DSR annuity).
      OPM’s Handbook does not compel a different result in this case.
¶19         Lastly, OPM contends that the Board overlooked the general principle
      contained within its Handbook that “[a] separation is not qualifying for a [DSR
      annuity]   if   the   employee   voluntarily   leaves   regular   long-term   (career)
      employment to accept a short-term appointment with full knowledge of its early
      termination,” see Civil Service Retirement System and Federal Employees’
      Retirement System Handbook for Personnel and Payroll Offices (Handbook),
      § 44A2.1-8A, and that the Board also failed to consider an “exception to the
      exception” provision which provides that, if “short-term employment was
      arranged solely to create title to an annuity, the separation is not considered
      qualifying for [a DSR annuity],” id., § 44A2.1-8B. See RF, Tab 4 at 21-25. OPM
      further challenges the Board’s assertion that the appellant was immediately
      placed in a term position following his removal under chapter 43 and that he
      actually served 5 full years in the term position. RF, Tab 4 at 19. As explained
      below, we MODIFY our prior Opinion and Order on this latter factual issue. Our
      modification, however, does not change our analysis.
¶20         At the outset, as we explained in our previous decision, we cannot agree
      with OPM that the appellant’s original separation from employment with the
      Department of the Interior triggered the application of OPM’s “general rule” that
      a separation from employment does not qualify an applicant for a DSR annuity
      when he voluntarily leaves regular long-term employment to accept a short-term
      appointment. See Eller, 121 M.S.P.R. 17, ¶ 11. The hallmark of a voluntary
      separation from employment is the employee’s initiation of the action. Id. (citing
      Miller v. Department of Homeland Security, 111 M.S.P.R. 325, ¶ 10 (2009), aff’d,
                                                                                        12

      361 F. App’x 134 (Fed. Cir. 2010)).      The appellant’s original separation from
      employment from the Department of the Interior, however, was taken pursuant to
      chapter 43 of Title 5, a performance-based action which OPM itself considers to
      be involuntary for the purposes of a DSR annuity. See Eller, 121 M.S.P.R. 17,
      ¶ 13; Handbook, § 44A1.1-2A.          Thus, this case is dissimilar from those
      envisioned by the rule established in OPM’s Handbook where an employee
      voluntarily leaves long-term employment and accepts a short-term position. For
      these same reasons, OPM’s argument that the appellant was voluntarily converted
      from a career position to a term position pursuant to the settlement agreement is
      also unpersuasive.    See PFR File, Tab 3 at 18-19.       Although the appellant’s
      conversion to a term appointment was the result of the settlement agreement, the
      impetus for that agreement was the agency’s performance-based action under
      chapter 43. Here, where the appellant did not initiate his conversion to a term
      position, we find OPM’s general rule inapplicable. See Eller, 121 M.S.P.R. 17,
      ¶ 13.
¶21           We also find OPM’s argument that the appellant had a break in service
      between his career and term appointments unavailing. See PFR File, Tab 3 at 19.
      Pursuant to OPM’s Handbook, a separation is qualifying for DSR purposes if,
      among other requirements, the employee moved to a time-limited appointment
      without a break in service exceeding 3 days. Handbook, § 44A2.1-8B. In her
      request for reconsideration, the Director argues that more than 3 days elapsed
      between the appellant’s original removal from service with the Department of the
      Interior and the effective date of the settlement agreement rescinding his removal
      and converting him to a term appointment. Id. (citing Handbook, § 44A2.1-8B).
      Under the terms of the settlement agreement, however, the appellant was restored
      to employment without a break in service. IAF, Tab 6 at 24. In the absence of an
      actual break in service, we find that the manner in which the appellant was
      returned to duty does not invalidate his actual federal service, the vast majority of
      which he actually served. See Eller, 121 M.S.P.R. 17, ¶ 9 & n.5. Moreover,
                                                                                       13

      because we find that OPM’s Handbook is entitled to little deference in this case,
      see infra ¶ 23, we also are unpersuaded that OPM’s 3-day break in service rule
      should preclude the entirety of the appellant’s service in his term position from
      being counted toward his DSR annuity eligibility.
¶22         We further find this case dissimilar from those in which the Board has held
      that an employee’s resignation or retirement is deemed voluntary when effected
      pursuant to the terms of a settlement agreement and precludes the appellant from
      relitigating whether his separation was voluntary for the purposes of an appeal
      under chapter 75 or a retirement annuity. See, e.g., Jordan v. Office of Personnel
      Management, 108 M.S.P.R. 119, ¶¶ 11-12 (2008). Here, the Department of the
      Interior agreed to cancel the appellant’s original involuntary removal under
      chapter 43 and to assign him to a term appointment. IAF, Tab 6 at 24. We thus
      find no support for OPM’s argument that the appellant voluntarily initiated his
      departure from a career position with the Department of the Interior in order to
      accept a term position by voluntarily entering into a settlement with the
      Department of the Interior. See Eller, 121 M.S.P.R. 17, ¶¶ 11-12.
¶23         As the appellant argues in response to OPM’s petition, moreover, the OPM
      Handbook’s “general rule” that a separation is not qualifying for a DSR annuity if
      the employee voluntarily leaves long-term employment to accept a short-term
      appointment with full knowledge of its early termination has been strongly
      criticized by the Federal Circuit, and we accord little deference to its application
      to the facts of this case. See Eldredge, 451 F.3d at 1341-43 (“[n]either [OPM’s]
      advisory opinion nor the Handbook cites any authority for the proposed
      awareness    interpretation   of   ‘involuntary   separation’”   under   5   U.S.C.
      § 8414(b)(1)(A), which is contained in Handbook § 44A2.1-8A); see also Warren
      v. Department of Transportation, 116 M.S.P.R. 554, ¶ 7 n.2 (2011) (OPM’s
      Handbook is only entitled to deference in proportion to its “power to persuade”),
      aff’d, 493 F. App’x 105 (Fed. Cir. 2013). Upon reading OPM’s general rule, and
      its exceptions, we believe OPM’s rule is designed to discourage an employee
                                                                                        14

      who, because of some desire to secure a term position, chooses to leave career
      employment in order to be eligible for a term appointment and then applies for a
      DSR annuity      upon the expiration of that         appointment.      Under   these
      circumstances, OPM’s rule would appear to prohibit the employee from being
      eligible for a DSR annuity. 3 See Handbook, § 44A2.1-8A. Those facts, however,
      are not the facts of this case.
¶24         Next, we find OPM’s argument that the Board overlooked the “exception to
      the exception” clause, unavailing.     See RF, Tab 4 at 12, 18-19; Handbook,
      § 44A.2.1-8B (“[I]f the short-term employment was arranged solely to create title
      to an annuity, the separation is not considered qualifying for discontinued service
      retirement.”). Although not specifically addressed in our prior decision, we find
      that this provision of OPM’s Handbook essentially incorporates the rule which
      OPM petitions us to endorse in our decision in this matter.         For the reasons
      discussed here, and in our prior decision, we decline to recognize that either
      OPM, or the Board, should undertake a merits-based review of why an agency
      may have appointed an employee to a term position after the employee serves in
      that position and objectively qualifies for a DSR annuity under 5 U.S.C.
      § 8414(b)(1)(A). See Eller, 121 M.S.P.R. 17, ¶ 9 & n.5.
¶25         Upon consideration of OPM’s petition for reconsideration, however, we
      acknowledge that, although we stated in our prior decision that the appellant’s
      service in his term position immediately followed his separation from
      employment under chapter 43, see Eller, 121 M.S.P.R. 17, ¶¶ 2, 13, OPM is
      correct that the settlement agreement, which was signed in June 2005,
      retroactively placed the appellant in his term position effective January 11, 2005,



      3
        We express no further opinion whether this interpretation of OPM’s general rule, if
      correct, would be entitled to any degree of deference or whether such an applicant
      would be entitled to a DSR annuity under such facts.
                                                                                        15

      see RF, Tab 4 at 18-19; IAF, Tab 6 at 24-25, 32-36. As explained below, we find
      that this clarification does not change the outcome of this matter.
¶26         First, under the facts of this case, where the appellant actually served
      almost the entire duration of his term position, we cannot conclude that the
      appellant’s entitlement to a DSR annuity is called into question. The difference
      between the facts of this case and Parker reinforces our finding.          Here, the
      appellant and the Department of the Interior entered into a settlement which
      returned the appellant to actual employment with the agency for over 4 and a half
      years, at the end of which the appellant objectively satisfied the statutory criteria
      for a DSR annuity. Eller, 121 M.S.P.R. 17, ¶ 3. In doing so, we recognize that
      5 months of the appellant’s term position were not actually served, and that this
      quantum of federal service only exists on paper.        By contrast, however, the
      parties in Parker entered into a settlement agreement stipulating that the
      appellant was appointed to a civilian position for no other purpose than to give
      the appearance that he had the civilian service necessary for him to receive a
      CSRS annuity. 93 M.S.P.R. 529, ¶ 20. Thus, we believe that the totality of the
      settlement in this case was not an artifice designed to evade the statutory
      requirements of a DSR annuity akin to the agreement in Parker.
¶27         Second, in making this finding, we do not endeavor to decide how much
      time an employee must actually serve in a term position in order to qualify for a
      DSR annuity under similar facts.          See Eller, 121 M.S.P.R. 17, ¶¶ 8-9;
      Parker, 93 M.S.P.R. 529, ¶¶ 18, 20-21. We only decide that, under these facts,
      where the appellant actually served over 4 and a half years in the term position,
      he is entitled to receive the DSR annuity which he was originally denied. Even if
      the brief period of time the appellant did not actually serve in the term
      appointment was deducted from his overall length of service, cf. Parker, 93
      M.S.P.R. 529, ¶¶ 20-21, he would still objectively qualify for a DSR annuity
      under 5 U.S.C. § 8414(b)(1)(A) based on his length of service and age at the time
      of the expiration of his appointment in February 2010, see IAF, Tab 6 at 44. We
                                                                                             16

      find, however, that our factual clarification does not compel a different result in
      this case, and we accordingly MODIFY our prior decision to reflect that the
      appellant actually served in the term position for almost the entire period of time
      he was placed therein. 4 See Eller, 121 M.S.P.R. 17, ¶¶ 3, 13.
¶28         Finally, we have considered OPM’s policy arguments that the Board’s
      decision, if allowed to stand, would not only incentivize agencies to use similar
      settlement agreements in the future, but also would give “a pass [to employees
      whose performance is judged unacceptable] on having to meet the criteria for
      entitlement to an annuity under CSRS or FERS.”                RF, Tab 4 at 30.        We
      respectfully disagree with the pernicious effects OPM believes our prior decision
      will bear.   At bottom, we believe OPM’s focus on the reasoning behind an
      agency’s decision to reemploy an employee or to enter into a settlement
      agreement providing for a specific type of employment arrangement is misplaced
      in the retirement annuity arena. As the Board originally recognized in Jordan,
      the settlement of disputes brought before the Board promotes both public and
      explicit congressional policy, and we believe that OPM’s position in this matter,
      if adopted, could cause agencies and employees to avoid settlements which return
      employees to duty for fear that years later OPM might deny an employee’s
      application for retirement benefits because OPM believes that the employee
      should not have been returned to federal service. 5          See Jordan, 77 M.S.P.R.

      4
        This issue was not raised until the Director filed her petition for reconsideration, see
      RF, Tab 4 at 19, and we had no occasion to specifically examine the period of time
      between the appellant’s removal and the effective date of the settlement agreement
      returning him to duty in our prior decision, see generally, Petition for Review File,
      Tab 1.
      5
        Such a scenario, moreover, could lead an employee to file a petition for enforcement
      with the Board on the theory that he has not received the full benefit of the agreement
      into which he entered, thus leading to the possibility of additional Board proceedings.
      See, e.g., Vance v. Department of the Interior, 114 M.S.P.R. 679, ¶ 16 (2010) (outlining
      the possibilities if there is a material breach of a settlement agreement, including
      reinstating the appeal).
                                                                                    17

      at 615-16. OPM, moreover, provides no guidance as to how it would proceed to
      implement its suggested authority to retroactively evaluate the substance of an
      employee’s federal service for the purpose of determining an applicant’s
      eligibility to receive a DSR annuity, and we believe OPM’s current processes and
      protocols are ill-designed to handle such adjudication. See Eller, 121 M.S.P.R.
      17, ¶ 9 & n.4 (citing and discussing Nebblett v. Office of Personnel
      Management, 237 F.3d 1353, 1358 (Fed. Cir. 2001), in which the Federal Circuit
      agreed with OPM that OPM does not have the protocols in place to determine
      whether an employee’s retirement was coerced by unlawful agency action and
      thus was involuntary for the purposes of a DSR annuity under the CSRS).
¶29         We similarly believe that our prior decision does not reward employees
      whose performance has been found unacceptable under chapter 43. As we have
      explained, under the facts of this case, where the appellant actually served in a
      position of employment with the agency and otherwise objectively satisfies the
      statutory criteria for receiving a DSR annuity, the employee, by statute, has
      earned an entitlement to a DSR annuity.       Eller, 121 M.S.P.R. 17, ¶ 9 n.5;
      see 5 U.S.C. § 8414(b)(1)(A).   Although OPM may disagree with an agency’s
      decision to reemploy a specific employee, the agency as an employer is vested
      with the authority to make that decision, and OPM should not collaterally
      undermine that decision through its administration of the federal employee
      retirement system.

                                          ORDER
¶30         The Board’s prior decision finding the appellant is entitled to receive a
      DSR annuity under 5 U.S.C. § 8414(b)(1)(A) is accordingly AFFIRMED AS
      MODIFIED. This, combined with our prior decision, Eller v. Office of Personnel
      Management, 121 M.S.P.R. 17 (2014), constitutes the final decision of the Merit
      Systems Protection Board in this appeal.      Title 5 of the Code of Federal
      Regulations, section 1201.113(c) (5 C.F.R. § 1201.113(c)).
                                                                                 18

                       NOTICE TO THE APPELLANT
                   REGARDING YOUR RIGHT TO REQUEST
                       ATTORNEY FEES AND COSTS
      You may be entitled to be paid by the agency for your reasonable attorney
fees and costs. To be paid, you must meet the requirements set out at Title 5 of
the United States Code (U.S.C.), sections 7701(g), 1221(g), 1214(g) or 3330c(b);
or 38 U.S.C. § 4324(c)(4).       The regulations may be found at 5 C.F.R.
§§ 1201.201, 1201.202, and 1201.203.           If you believe you meet these
requirements, you must file a motion for attorney fees WITHIN 60 CALENDAR
DAYS OF THE DATE OF THIS DECISION. You must file your attorney fees
motion with the office that issued the initial decision on your appeal.

                 NOTICE TO THE APPELLANT REGARDING
                    YOUR FURTHER REVIEW RIGHTS
      You have the right to request review of this final decision by the United
States Court of Appeals for the Federal Circuit. You must submit your request to
the court at the following address:
                          United States Court of Appeals
                              for the Federal Circuit
                            717 Madison Place, N.W.
                             Washington, DC 20439

      The court must receive your request for review no later than 60 calendar
days after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec.
27, 2012). If you choose to file, be very careful to file on time. The court has
held that normally it does not have the authority to waive this statutory deadline
and that filings that do not comply with the deadline must be dismissed. See
Pinat v. Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).
      If you need further information about your right to appeal this decision to
court, you should refer to the federal law that gives you this right. It is found in
Title 5 of the United States Code, section 7703 (5 U.S.C. § 7703) (as rev. eff.
Dec. 27, 2012). You may read this law as well as other sections of the United
                                                                               19

States     Code,   at   our   website,   http://www.mspb.gov/appeals/uscode/htm.
Additional information is available at the court's website, www.cafc.uscourts.gov.
Of particular relevance is the court's "Guide for Pro Se Petitioners and
Appellants," which is contained within the court's Rules of Practice, and Forms 5,
6, and 11.
         If you are interested in securing pro bono representation for your court
appeal, you may visit our website at http://www.mspb.gov/probono for a list of
attorneys who have expressed interest in providing pro bono representation for
Merit Systems Protection Board appellants before the court. The Merit Systems
Protection Board neither endorses the services provided by any attorney nor
warrants that any attorney will accept representation in a given case.



FOR THE BOARD:


______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.
