A-14483, JUNE 11, 1926, 5 COMP. GEN. 974

A-14483: Jun 11, 1926

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CIVILIAN - INTEREST ON DELAYED DEDUCTIONS WHEN EMPLOYEES REFUND RETIREMENT DEDUCTIONS COVERING A PERIOD WHEN THEY WERE ERRONEOUSLY PAID THEIR FULL SALARY WITHOUT SUCH DEDUCTIONS. THERE IS NO REQUIREMENT THAT THEY DEPOSIT ANY INTEREST FOR THE TIME THE AMOUNT OF THE DEDUCTIONS WAS WITHHELD FROM THE GOVERNMENT. FROM WHOSE SALARIES AS CERTIFIED SUBSTITUTES RETIREMENT DEDUCTIONS WERE NOT TIMELY TAKEN THROUGH AN ADMINISTRATIVE ERROR. PITTMAN IS $56.04 AND FROM MR. ABSHER IS $123.31. FROM WHOSE SALARY RETIREMENT DEDUCTIONS WERE NOT TIMELY TAKEN. IT WAS STATED: SECTION 10 OF THE RETIREMENT ACT PROVIDES FOR COLLECTION OF INTEREST ON AMOUNTS COLLECTED FROM EMPLOYEES WHO ARE TRANSFERRED TO A CLASSIFIED STATUS OR REINSTATED THEREIN.

A-14483, JUNE 11, 1926, 5 COMP. GEN. 974

RETIREMENT, CIVILIAN - INTEREST ON DELAYED DEDUCTIONS WHEN EMPLOYEES REFUND RETIREMENT DEDUCTIONS COVERING A PERIOD WHEN THEY WERE ERRONEOUSLY PAID THEIR FULL SALARY WITHOUT SUCH DEDUCTIONS, THERE IS NO REQUIREMENT THAT THEY DEPOSIT ANY INTEREST FOR THE TIME THE AMOUNT OF THE DEDUCTIONS WAS WITHHELD FROM THE GOVERNMENT.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, JUNE 11, 1926:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF MAY 20, 1926, REQUESTING DECISION WHETHER CHARLES W. PITTMAN AND WILLIAM F. ABSHER, LETTER CARRIERS, WEST FRANKFORT, ILL., FROM WHOSE SALARIES AS CERTIFIED SUBSTITUTES RETIREMENT DEDUCTIONS WERE NOT TIMELY TAKEN THROUGH AN ADMINISTRATIVE ERROR, SHOULD BE REQUIRED TO REFUND, IN ADDITION TO THE AMOUNT OF THE RETIREMENT DEDUCTIONS, INTEREST COMPUTED THEREON AT THE RATE OF 4 PERCENT PER ANNUM. YOU STATE THE AMOUNT OF THE RETIREMENT DEDUCTIONS DUE FROM MR. PITTMAN IS $56.04 AND FROM MR. ABSHER IS $123.31.

IN DECISION OF FEBRUARY 14, 1923, 2 COMP. GEN. 507, INVOLVING THE CASE OF HOMER J. BROWN, AN EMPLOYEE UNDER THE DEPARTMENT OF LABOR, FROM WHOSE SALARY RETIREMENT DEDUCTIONS WERE NOT TIMELY TAKEN, IT WAS STATED:

SECTION 10 OF THE RETIREMENT ACT PROVIDES FOR COLLECTION OF INTEREST ON AMOUNTS COLLECTED FROM EMPLOYEES WHO ARE TRANSFERRED TO A CLASSIFIED STATUS OR REINSTATED THEREIN, AS A BASIS FOR SERVICE CREDIT IN A FORMER STATUS, BUT THERE APPEARS IN THE LAW NO PROVISION FOR COLLECTION OF INTEREST ON REFUND OF THE AMOUNT OF SALARY DEDUCTIONS OF THOSE IN A CLASSIFIED STATUS WHICH SHOULD HAVE BEEN MADE BY THE ADMINISTRATIVE OFFICE BUT WERE NOT SO MADE. THE ERROR IN NOT MAKING THE DEDUCTION IN THIS CASE, ASSUMING THAT IT WAS AN ERROR, WAS THE ERROR OF THE ADMINISTRATIVE OFFICE FOR WHICH THE EMPLOYEE IS NOT RESPONSIBLE. NO INTEREST ON THE AMOUNTS REFUNDED SHOULD BE COLLECTED IN THIS CASE AT THIS TIME. IN CASE OF CLAIM FOR REFUND OR RETIREMENT HEREAFTER, THE EMPLOYEE HAVING HAD THE MONEY NOW REFUNDED UNTIL THE TIME OF ITS DEPOSIT, INTEREST IN HIS FAVOR SHOULD BE COMPUTED ONLY FROM THE DATE OF DEPOSIT.

YOU REFER TO THE DECISION OF THE SECRETARY OF THE INTERIOR, DATED FEBRUARY 28, 1925, WHEREIN IT IS STATED THAT THE INTERIOR DEPARTMENT HAS ON SEVERAL OCCASIONS CONSIDERED THE DECISION OF THIS OFFICE, ABOVE QUOTED, BUT HAS CONSISTENTLY DECLINED TO BE GUIDED THEREBY. IT IS STATED THEREIN AS FOLLOWS:

IT IS NOT AT ALL A QUESTION OF PENALIZING THE EMPLOYEE FOR MISTAKES OF AN ADMINISTRATIVE OFFICER, AS THE COMPTROLLER GENERAL INTIMATES, BUT IS SIMPLY MEETING AN ABSOLUTE REQUIREMENT OF THE RETIREMENT LAW IN THE INTEREST OF THE RETIREMENT FUND. THE FUND IS ENTITLED TO THE DEDUCTIONS AND THE INTEREST THEREON. UNTIL THIS FUND IS SATISFIED NO ANNUITY MAY BE ALLOWED. THE EMPLOYEE HAS PROBABLY LOST NOTHING BUT POSSIBLY HAS GAINED BY THE DELAY, AS HE HAS HAD THE USE OF THE MONEY. BUT IF INJURY HAS BEEN CAUSED BY DELAY IN COLLECTING THE PRINCIPAL, FURTHER INJURY BY THE SAME TOKEN MIGHT BE IMAGINED IF FURTHER DELAY BE INDULGED IN COLLECTION OF THE INTEREST NOW DUE. IF IT IS NOT PAID NOW, IT WILL CONTINUE TO BE A CHARGE AND WILL RUN WITH INTEREST COMPOUNDED ANNUALLY.

THE DECISION OF THIS OFFICE DID NOT STATE NOR INTIMATE THAT THE BASIS OF THE CONCLUSION WAS "A QUESTION OF PENALIZING THE EMPLOYEE FOR MISTAKES OF AN ADMINISTRATIVE OFFICER.' THE BASIS FOR THE CONCLUSION THAT REFUND OF INTEREST ON RETIREMENT DEDUCTIONS NOT TIMELY TAKEN FROM THE SALARY OF EMPLOYEES IN THE CLASSIFIED CIVIL SERVICE WAS THAT THE BASIC STATUTE MADE NO SUCH REQUIREMENT NOR PROVIDED FOR SUCH A PROCEDURE. IT CAN ONLY BE REITERATED THAT SECTION 10 OF THE CIVIL RETIREMENT ACT DATED MAY 22, 1920, 41 STAT. 618, ON WHICH THE SECRETARY OF THE INTERIOR BASES HIS CONCLUSION, RELATES EXCLUSIVELY TO EMPLOYEES WHO ARE TRANSFERRED "FROM AN UNCLASSIFIED TO A CLASSIFIED STATUS, OR UPON THE REINSTATEMENT OF A FORMER EMPLOYEE.' THIS PLAIN PROVISION MAY NOT BE BROADENED BY CONSTRUCTION TO INCLUDE EMPLOYEES WHO ARE IN THE CLASSIFIED CIVIL SERVICE AND HAVE NEVER LEFT SUCH SERVICE. THE PURPOSE AND INTENT OF SECTION 10 IS TO RETURN TO THE RETIREMENT FUND THE AMOUNT OF DEDUCTIONS WITH INTEREST FOR THE PERIOD OF PAST SERVICE IN THE CLASSIFIED CIVIL SERVICE WHEN AN EMPLOYEE REENTERS THAT SERVICE AFTER HAVING BEEN IN AN UNCLASSIFIED POSITION OR OUT OF THE GOVERNMENT SERVICE ENTIRELY. 27 COMP. DEC. 623; ID. 686.

YOU ARE ADVISED THAT MESSRS. PITTMAN AND ABSHER SHOULD BE REQUIRED TO REFUND ONLY THE AMOUNT OF RETIREMENT DEDUCTIONS WHICH SHOULD HAVE BEEN TAKEN FROM THEIR SALARIES WITHOUT INTEREST.

IF THE ESTIMATES AND TRANSFERS TO THE RETIREMENT FUND FOR THE SEVERAL FISCAL YEARS INVOLVED INCLUDED THE PROPER DEDUCTIONS BASED ON THE ESTIMATED COMPENSATION PAYABLE TO THE CARRIERS IN QUESTION, THE RETIREMENT FUND HAS RECEIVED ITS FULL CREDIT, AND THE MONEY REFUNDED BY THEM SHOULD BE DEPOSITED TO THE CREDIT OF THE SEVERAL APPROPRIATIONS UNDER WHICH SAME WAS ERRONEOUSLY PAID. 26 COMP. DEC. 1059. IF THE ESTIMATES AND TRANSFERS DID NOT INCLUDE DEDUCTIONS BASED ON THE ESTIMATED COMPENSATION PAYABLE TO THESE CARRIERS, THE AMOUNT REFUNDED BY THEM SHOULD BE DEPOSITED WITH THE TREASURER OF THE UNITED STATES FOR CREDIT TO THE RETIREMENT FUND.