Matter of Cynthia Lurry-Carter v New York State and Local Retirement System et al.
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Attorneys and Parties
Brief Summary
Public employee retirement benefits and postretirement beneficiary option elections.
The Comptroller upheld a Hearing Officer's determination that decedent's second retirement option form, which sought to change from a single life allowance to a joint allowance full option naming petitioner as beneficiary, was untimely because it was filed after the statutory deadline and because any discretionary extension could run only to April 20, 2021.
The Appellate Division annulled the Comptroller's determination denying petitioner's application to change the decedent's retirement option.
The Comptroller irrationally treated Retirement and Social Security Law § 90 (bb) (1) [gives the Comptroller, for reasonable cause, power to extend the time for the election of an option for periods expiring not later than 60 days immediately after the effective date of retirement] and Retirement and Social Security Law § 610 (d) (1) [identical discretionary extension provision for option elections] as imposing a hard 60-day outer limit, even though controlling Third Department precedent held that the 60-day language is discretionary and does not expressly bar the Comptroller from acting later. The matter had to be remitted for the Comptroller to decide whether reasonable cause existed for an extension under the circumstances.
Background
James Carter, a member of the New York State and Local Retirement System, initially marked the joint allowance full option on his retirement option selection form, then crossed it out as a mistake and selected the single life allowance option, which pays benefits only during the member's lifetime and provides no postretirement death benefit. That form was filed on January 19, 2021. His service retirement application was filed on February 18, 2021, making his retirement effective February 19, 2021, with first payment due March 1, 2021. A few days later, he executed and notarized a second option form changing his election back to the joint allowance full option and naming petitioner, his wife, as beneficiary, but he did not submit it before he unexpectedly died from COVID pneumonia on February 27, 2021. Petitioner later submitted that second form, which was filed on June 3, 2021, after the Retirement System had already processed the retirement under the single life allowance option.
Lower Court Decision
In the administrative proceeding under CPLR article 78, the Hearing Officer and then the Comptroller concluded that the second form was untimely under Retirement and Social Security Law § 610 (f) [requires that a change in retirement option be filed no later than 30 days following the date of payability of the retirement allowance]. They further reasoned that, even if the Comptroller exercised discretionary authority to extend the deadline under Retirement and Social Security Law § 90 (bb) (1), the extension could reach only April 20, 2021, which still made the June 3, 2021 filing untimely.
Appellate Division Reversal
The Appellate Division held that the Comptroller's interpretation of the extension statutes as imposing an absolute 60-day cap was irrational in light of Matter of Estate of Clifford v New York State Employees' Retirement System, which had already approved an interpretation treating that 60-day period as discretionary rather than mandatory. Because the Comptroller relied on an erroneous legal premise, the court annulled the determination, granted the petition, and remitted the matter so the Comptroller could decide whether reasonable cause existed to allow a late filing of the second option form.
Legal Significance
This decision reinforces that, in New York public retirement cases, the Comptroller's discretion under Retirement and Social Security Law §§ 90 (bb) (1) and 610 (d) (1) is not automatically cut off after 60 days from the effective retirement date. Although a member generally must change an option within 30 days after the first payable date, the Comptroller may, for reasonable cause, consider a later election, and an agency interpretation contrary to binding precedent will not receive deference.
A retirement option change filed after the normal statutory deadline is not necessarily barred if the Comptroller has discretionary authority to extend the time for reasonable cause; the Comptroller cannot treat the 60-day language in the extension statutes as a fixed jurisdictional cutoff where precedent says otherwise.