B-115505, DEC 21, 1972

B-115505, DEC 21, 1972

JUDGMENTS - ACCRUED INTEREST ON AWARDED ANNUITIES - INTEREST CHARGEABLE TO RETIREMENT FUND AN AFFIRMANCE OF A PRIOR DECISION WHICH HELD THAT INTEREST PAYMENTS ORDERED BY THE DISTRICT COURT IN HISS V. HAMPTON, 338 F. SUPP. 1141, TO BE PAID TO ALGER HISS AND RICHARD STRASBURGER SHOULD BE MADE FROM THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND RATHER THAN FROM THE PERMANENT INDEFINITE APPROPRIATION FOR JUDGMENTS CONTAINED IN 31 U.S.C. 724A. SINCE THE CIVIL SERVICE COMMISSION AGREES THAT ANNUITIES AWARDED THE PLAINTIFFS SHOULD BE PAID FROM THE RETIREMENT FUND UNDER 5 U.S.C. 8331(8)(C), THE COMP. GEN. IS OF THE OPINION THAT THE INTEREST ON THE ACCRUED ANNUITIES SHOULD ALSO BE PAID FROM THE RETIREMENT FUND BECAUSE THE INTEREST, AS SPECIFIED IN PLAINTIFF'S JUDGMENT, CONSTITUTES AN EXPENSE DIRECTLY RELATED TO THE OPERATION OF THE FUND AND THIS SHOULD BE REFLECTED IN THE BOOKS THEREOF. FURTHER, THE PAYMENT OF INTEREST IS EQUITABLE SINCE THE RETIREMENT FUND EARNED INTEREST ON THE WITHHELD ANNUITIES. THUS, THE DECISION OF OCTOBER 4, 1972, CHARGING THE RETIREMENT FUND WITH PAYMENT OF ANNUITIES OF THE PLAINTIFFS ALSO INCLUDES THE INTEREST ACCRUED ON THE ANNUITIES.

TO MR. ROBERT E. HAMPTON:

YOUR LETTER OF OCTOBER 13, 1972, REQUESTS RECONSIDERATION OF OUR DECISION TO YOU OF OCTOBER 4, 1972, B-115505, 52 COMP. GEN. , WHICH HELD THAT INTEREST PAYMENTS ORDERED BY THE UNITED STATES DISTRICT COURT IN HISS V. HAMPTON, 338 F. SUPP. 1141 (D.D.C. 1972), TO BE PAID TO MESSRS. ALGER HISS AND RICHARD STRASBURGER SHOULD BE MADE FROM THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND (RETIREMENT FUND) RATHER THAN FROM THE PERMANENT INDEFINITE APPROPRIATION FOR JUDGMENTS CONTAINED IN 31 U.S.C. 724A.

THE COURT IN THE ABOVE-CITED CASE HELD THAT THE SO-CALLED HISS ACT, AS AMENDED, 5 U.S.C. 8311 ET SEQ., WAS AN EX POST FACTO LAW IN THAT IT PUNISHED THE PLAINTIFFS IN THAT CASE, MESSRS. HISS AND STRASBURGER, FOR CONDUCT WHICH TOOK PLACE PRIOR TO SEPTEMBER 1, 1954, THE DATE OF ENACTMENT OF THAT LAW. THE COURT THEREFORE DETERMINED THAT THE HISS ACT COULD NOT BE USED TO DENY THESE PLAINTIFFS THEIR CIVIL SERVICE ANNUITIES AND IT ORDERED THE CIVIL SERVICE COMMISSION TO PAY THEM THEIR ANNUITIES AS COMPUTED FROM THE DATES WHEN HISS AND STRASBURGER BECAME ELIGIBLE THEREFOR. THE COURT FURTHER ORDERED THE COMMISSION TO PAY INTEREST ON THOSE PORTIONS OF THE ANNUITIES WHICH WERE THEN PAST DUE.

THE COMMISSION IS OF THE VIEW THAT WHILE THE ACCRUED BUT UNPAID ANNUITIES PROPERLY SHOULD BE PAID FROM THE RETIREMENT FUND, THERE IS NO AUTHORITY TO EXPEND MONEY FROM THE RETIREMENT FUND TO PAY INTEREST ON ANNUITIES. THE COMMISSION FEELS THAT THE RETIREMENT FUND IS APPROPRIATED SOLELY FOR THE PAYMENT OF BENEFITS PROVIDED BY SUBCHAPTER III OF CHAPTER 83, TITLE 5, U.S.C. BY VIRTUE OF 5 U.S.C. 8348(A)(1)(A). THE BENEFITS PROVIDED BY THAT SUBCHAPTER INCLUDE ANNUITIES AND LUMP-SUM BENEFITS WHICH MAY INCLUDE INTEREST UNDER CERTAIN CIRCUMSTANCES LISTED IN 5 U.S.C. 8331(8)(C). THUS, THE COMMISSION BELIEVES THAT IN THE ABSENCE OF A STATUTE SO PROVIDING, INTEREST IS NOT A BENEFIT PROVIDED BY SAID SUBCHAPTER AND, HENCE, THE RETIREMENT FUND IS NOT AVAILABLE FOR THE PAYMENT OF INTEREST ON ANNUITIES.

YOU STATE THAT AS THE COMMISSION VIEWS OUR DECISION DATED OCTOBER 4, 1972, THIS OFFICE DETERMINED THAT PAYMENT OF INTEREST TO THESE PLAINTIFFS SHOULD BE FROM THE RETIREMENT FUND SINCE:

"(1) THE FUND IS AVAILABLE FOR THE PAYMENT OF JUDICIALLY-IMPOSED ANNUITIES AND THEREFORE SHOULD BE AVAILABLE TO PAY INTEREST ON SUCH ANNUITIES WHEN WRONGFULLY WITHHELD BY THE COMMISSION; AND

"(2) THE PAYMENT OF INTEREST FROM THE FUND IS MORE EQUITABLE SINCE THE FUND HAS ALREADY EARNED INTEREST ON THE ACCRUED BUT UNPAID ANNUITIES DUE HISS AND STRASBURGER."

YOU STATE THAT WHILE THE COMMISSION AGREES THAT IT MAY BE MORE EQUITABLE TO PAY THE INTEREST FROM THE FUND IN CASES SUCH AS THIS, THERE IS NO LEGAL AUTHORITY TO DO SO. YOU POINT OUT IN THIS REGARD THAT IN THE ABSENCE OF A CONTRACTUAL OR STATUTORY REQUIREMENT, THE UNITED STATES IS NOT LIABLE FOR THE PAYMENT OF INTEREST AND THAT SINCE THE CIVIL SERVICE RETIREMENT LAW DOES NOT AUTHORIZE PAYMENT OF INTEREST ON ACCRUED BUT UNPAID ANNUITIES AND THERE IS NO CONTRACTUAL OBLIGATION TO PAY SUCH INTEREST, THE RETIREMENT FUND IS NOT LIABLE FOR THE PAYMENT OF SUCH INTEREST. IT IS SUGGESTED THAT THE PAYMENT OF INTEREST IS MORE PROPERLY PAYABLE OUT OF THE JUDGMENT FUND OF 31 U.S.C. 724A WHICH IS AVAILABLE TO PAY JUDGMENTS (INCLUDING INTEREST) WHICH ARE "NOT OTHERWISE PROVIDED FOR."

IT IS EVIDENT THAT THE RETIREMENT FUND IS INTENDED TO BE, INSOFAR AS POSSIBLE, A SELF-SUSTAINING FUND WHICH, IN GENERAL, IS CREDITED ON THE ONE HAND WITH CONTRIBUTIONS MADE BY EMPLOYEES AND THEIR EMPLOYER - THE GOVERNMENT - AND LIABLE ON THE OTHER HAND FOR THE PAYMENTS OF ANNUITIES AND ALL EXPENSES RELATED THERETO. SINCE THE INTEREST HERE INVOLVED IS, IN EFFECT, AN INTEGRAL PART OF THE ANNUITIES AWARDED THE PLAINTIFFS WE CANNOT AGREE THAT IT PROPERLY MAY NOT BE PAID FROM THE RETIREMENT FUND. IT IS OUR VIEW THAT SUCH INTEREST, WHEN SPECIFIED IN THE JUDGMENT, CONSTITUTES AN EXPENSE DIRECTLY RELATED TO THE OPERATION OF THE RETIREMENT FUND AND PROPERLY SHOULD BE REFLECTED AS A COST ON THE BOOKS THEREOF. FURTHERMORE, AS POINTED OUT IN OUR EARLIER DECISION AND AGREED TO BY THE COMMISSION, THIS DISPOSITION REPRESENTS AN EQUITABLE RESOLUTION OF THE PROBLEM SINCE THE RETIREMENT FUND EVIDENTLY EARNED INTEREST THROUGH INVESTMENTS UNDER 5 U.S.C. 8348(C) ON THE WITHHELD ANNUITIES.

MOREOVER, IT MAY BE NOTED THAT THE APPROPRIATION PROVIDED BY 31 U.S.C. 724A IS AVAILABLE FOR THE PAYMENT OF JUDGMENTS NOT OTHERWISE PROVIDED FOR "TOGETHER WITH SUCH INTEREST *** AS MAY BE SPECIFIED IN SUCH JUDGMENTS ***." IN VIEW OF THIS LANGUAGE IT SEEMS EVIDENT THAT THE INTEREST REFERRED TO THEREIN IS THE INTEREST SPECIFIED ONLY IN JUDGMENTS THAT ARE PROPERLY PAYABLE FROM THAT APPROPRIATION. CONSEQUENTLY, AND HAVING AGREED THAT THE RETIREMENT FUND PROPERLY WAS CHARGEABLE WITH THE PAYMENT OF THE ANNUITIES AWARDED TO THE PLAINTIFFS IN THIS CASE, IT MUST BE HELD THAT THE APPROPRIATION PROVIDED BY 31 U.S.C. 724A IS NOT AVAILABLE FOR THE PAYMENT OF INTEREST ORDERED BY THE COURT IN THAT THE PAYMENT OF THE JUDGMENT HERE INVOLVED IS OTHERWISE PROVIDED FOR.

ACCORDINGLY, OUR EARLIER DECISION REGARDING THIS MATTER IS HEREBY AFFIRMED.