A-37616, JULY 29, 1931, 11 COMP. GEN. 38

A-37616: Jul 29, 1931

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TERMINATING ALL RIGHT TO RETIREMENT ANNUITY WHICH HAD PREVIOUSLY BEEN GRANTED HIM ON THE BASIS OF AN INVOLUNTARY SEPARATION FROM THE PANAMA CANAL SERVICE WHEN HIS POSITION WAS TRANSFERRED FROM THAT SERVICE TO THE JURISDICTION OF THE PANAMA RAILROAD CO. WHO HAD PREVIOUSLY BEEN RETIRED UNDER THE TERMS OF THE CIVIL RETIREMENT ACT ON THE BASIS OF INVOLUNTARY SEPARATION FROM THE PANAMA CANAL SERVICE WILL BE REQUIRED TO DEPOSIT TO THE CREDIT OF THE CANAL ZONE RETIREMENT FUND THE AMOUNT WHICH WAS TO HIS CREDIT IN THE CIVIL RETIREMENT FUND AT THE DATE OF HIS RETIREMENT. ALLISON WAS AN EMPLOYEE IN THE SERVICE OF THE PANAMA CANAL. WHICH WAS UNDER THE CONTROL AND SUPERVISION OF THE PANAMA CANAL. THE CONTROL AND SUPERVISION OF THE TIVOLI HOTEL AND ITS PERSONNEL WAS TRANSFERRED TO THE PANAMA RAILROAD COMPANY.

A-37616, JULY 29, 1931, 11 COMP. GEN. 38

RETIREMENT - PANAMA RAILROAD COMPANY EMPLOYEES THE ACT OF MARCH 2, 1931, 46 STAT. 1471, EFFECTIVE JULY 1, 1931, EXTENDING CIVIL RETIREMENT TO ALL EMPLOYEES OF THE PANAMA RAILROAD CO., HAD THE EFFECT OF PLACING AN EMPLOYEE OF SAID RAILROAD COMPANY IN A POSITION "IN THE GOVERNMENT SERVICE" WITHIN THE MEANING OF PARAGRAPH 3 OF SECTION 7 (C) OF THE CIVIL RETIREMENT ACT OF MAY 29, 1930, 46 STAT. 473, TERMINATING ALL RIGHT TO RETIREMENT ANNUITY WHICH HAD PREVIOUSLY BEEN GRANTED HIM ON THE BASIS OF AN INVOLUNTARY SEPARATION FROM THE PANAMA CANAL SERVICE WHEN HIS POSITION WAS TRANSFERRED FROM THAT SERVICE TO THE JURISDICTION OF THE PANAMA RAILROAD CO. IN ORDER TO INCLUDE SERVICE PRIOR TO JULY 1, 1931, TOWARD RETIREMENT UNDER THE TERMS OF THE ACT OF MARCH 2, 1931, 46 STAT. 1471, AN EMPLOYEE OF THE PANAMA RAILROAD CO. WHO HAD PREVIOUSLY BEEN RETIRED UNDER THE TERMS OF THE CIVIL RETIREMENT ACT ON THE BASIS OF INVOLUNTARY SEPARATION FROM THE PANAMA CANAL SERVICE WILL BE REQUIRED TO DEPOSIT TO THE CREDIT OF THE CANAL ZONE RETIREMENT FUND THE AMOUNT WHICH WAS TO HIS CREDIT IN THE CIVIL RETIREMENT FUND AT THE DATE OF HIS RETIREMENT, WITH INTEREST, AND ALSO 3 1/2 PERCENT OF HIS BASIC SALARY, WITH INTEREST, FOR THE PERIOD OF SERVICE WITH THE PANAMA RAILROAD CO. PRIOR TO JULY 1, 1931.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, JULY 29, 1931:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF JULY 13, 1931, AS FOLLOWS:

AT THE CLOSE OF BUSINESS ON JUNE 30, 1929, WILLIAM B. ALLISON WAS AN EMPLOYEE IN THE SERVICE OF THE PANAMA CANAL, ON THE ISTHMUS OF PANAMA,BEING ON THAT DATE, AND HAVING BEEN FOR SOME TIME PRIOR THERETO, ASSISTANT MANAGER OF THE TIVOLI HOTEL, WHICH WAS UNDER THE CONTROL AND SUPERVISION OF THE PANAMA CANAL. EFFECTIVE JULY 1, 1929, THE CONTROL AND SUPERVISION OF THE TIVOLI HOTEL AND ITS PERSONNEL WAS TRANSFERRED TO THE PANAMA RAILROAD COMPANY. BECAUSE OF HIS SERVICES FOR THE PANAMA CANAL MR. ALLISON WAS SUBJECT TO THE PROVISIONS OF THE CIVIL SERVICE RETIREMENT LAW, BUT ON HIS TRANSFER TO THE SERVICE OF THE PANAMA RAILROAD CO. HIS SERVICES AS A CIVIL EMPLOYEE OF THE UNITED STATES CEASED FOR THE REASON THAT SUCH COMPANY IS A CORPORATION, AND ALTHOUGH ALL OF ITS CAPITAL STOCK IS OWNED BY THE UNITED STATES ITS EMPLOYEES ARE NOT SUBJECT TO SUCH RETIREMENT LAW.

MR. ALLISON'S SERVICE AS AN EMPLOYEE OF THE PANAMA CANAL AGGREGATED 8 YEARS 8 MONTHS AND 12 DAYS. HIS PREVIOUS CIVIL AND MILITARY SERVICE ADDED THERETO MADE HIS TOTAL ANNUITABLE SERVICE IN EXCESS OF THIRTY YEARS. SUBSEQUENT TO HIS TRANSFER TO THE SERVICE OF THE PANAMA RAILROAD COMPANY A RULING WAS OBTAINED BY THE RETIREMENT DIVISION OF THE BUREAU OF PENSIONS FROM THE DEPARTMENT OF THE INTERIOR AS TO THE STATUS OF MR. ALLISON. WAS HELD BY ASSISTANT SECRETARY EDWARDS BY DECISION DATED AUGUST 16, 1929, THAT UPON SEPARATION FROM THE SERVICE OF THE UNITED STATES BY TRANSFER TO THE SERVICE OF THE PANAMA RAILROAD COMPANY, STATUS FOR ANNUITY BECAME EFFECTIVE UNDER SECTION 7 OF THE ACT OF JULY 3, 1926 (44 STAT. 904), WITHOUT PREJUDICE TO THE RIGHT TO CONTINUANCE OF SERVICE WITH THE PANAMA RAILROAD COMPANY.

SUBSEQUENTLY MR. ALLISON APPLIED FOR ANNUITY UNDER SECTION 7 OF THE ACT OF JULY 3, 1926. HIS APPLICATION WAS ALLOWED FEBRUARY 1, 1930, AND HE WAS GRANTED ANNUITY UNDER THAT SECTION OF THE ACT AT THE RATE OF $611.16 PER ANNUM, COMMENCING JULY 1, 1929, WHICH RATE WAS INCREASED TO $733.32 PER ANNUM, COMMENCING JULY 1, 1930, PURSUANT TO THE PROVISIONS OF THE ACT OF MAY 29, 1930. (PUBLIC, NO. 279.) THE TOTAL ANNUITY PAYMENTS MADE TO MR. ALLISON ARE $1,344.48, WHICH COVERS THE PERIOD BEGINNING JULY 1, 1929, AND ENDING JUNE 30, 1931.

THE ACT OF MARCH 2, 1931 (PUBLIC, NO. 781), PROVIDING FOR THE RETIREMENT OF EMPLOYEES OF THE PANAMA CANAL AND THE PANAMA RAILROAD COMPANY, BECAME EFFECTIVE JULY 1, 1931. MR. ALLISON HAS NOT ATTAINED AN AGE NOR HAS HIS SERVICE IN THE TROPICS BEEN OF SUCH DURATION AS WOULD PERMIT OF HIS RETIREMENT UNDER THE PROVISIONS OF THAT ACT.

PARAGRAPH 3 OF SUBDIVISION (C) OF SECTION 7 OF THE ACT OF JULY 3, 1926, AND THE SAME PARAGRAPH OF THE SAME SUBDIVISION OF THE SAME SECTION OF THE ACT OF MAY 29, 1930, PROVIDES:

"SHOULD AN ANNUITANT UNDER THE PROVISIONS OF THIS SECTION BE REEMPLOYED IN A POSITION INCLUDED IN THE PROVISIONS OF THIS ACT, OR IN ANY OTHER POSITION IN THE GOVERNMENT SERVICE, THE ANNUITY SHALL CEASE, AND ALL RIGHTS AND BENEFITS UNDER THE PROVISIONS OF THIS SECTION SHALL TERMINATE FROM AND AFTER THE DATE OF SUCH EMPLOYMENT.'

MR. ALLISON IS STILL IN THE SERVICE OF THE PANAMA RAILROAD COMPANY AS ASSISTANT MANAGER OF THE TIVOLI HOTEL. SEVERAL QUESTIONS HAVE ARISEN AS TO HIS STATUS AND RIGHTS UPON WHICH IT SEEMS DESIRABLE YOUR OPINION SHOULD BE OBTAINED. THEY ARE:

1. DO THE PROVISIONS OF THE ACT OF MARCH 2, 1931, FOR THE RETIREMENT ON ANNUITY OF THE EMPLOYEES OF THE PANAMA RAILROAD COMPANY HAVE THE EFFECT OF PLACING MR. ALLISON IN A POSITION IN THE GOVERNMENT SERVICE, WITHIN THE MEANING OF THE PART OF SECTION 7 OF THE ACT OF JULY 3, 1926, AND THE PART OF SECTION 7 OF THE ACT OF MAY 29, 1930, ABOVE QUOTED?

2. IF THE PREVIOUS QUESTION IS ANSWERED IN THE AFFIRMATIVE,

(A) SHOULD PAYMENT OF ANNUITY TO HIM BE DISCONTINUED SUBSEQUENT TO JUNE 30, 1931?

(B) SHOULD THERE BE RECOVERY OF ALL OR ANY PART OF THE ANNUITY THAT HAS BEEN PAID TO THE EMPLOYEE?

(C) SHALL THE EMPLOYEE, IN ORDER TO RECEIVE SERVICE CREDIT, BE REQUIRED TO DEPOSIT TO THE CREDIT OF THE CANAL ZONE RETIREMENT FUND THE AMOUNT WHICH WAS TO HIS CREDIT IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND AT THE DATE OF HIS RETIREMENT UNDER SECTION 7 OF THE ACT OF JULY 3, 1926, AND ACCRUED INTEREST THEREON, COMPOUNDED?

(D) SHALL THE EMPLOYEE, IN ORDER TO RECEIVE SERVICE CREDIT FOR THE PERIOD, BE REQUIRED TO DEPOSIT 3 1/2 PERCENT OF HIS BASIC SALARY, PAY, OR COMPENSATION, AND INTEREST THEREON, COMPOUNDED, FOR THE TWO YEARS OF HIS SERVICE FOR THE PANAMA RAILROAD COMPANY, NAMELY, FROM JULY 1, 1929, TO JULY 1, 1931?

3. IF QUESTION NUMBERED 1 IS ANSWERED IN THE NEGATIVE,

(A) SHALL THE EMPLOYEE CONTINUE TO RECEIVE ANNUITY, AND ALSO RECEIVE COMPENSATION FOR SERVICES RENDERED TO THE PANAMA RAILROAD COMPANY?

(B) SHALL DEDUCTIONS BE MADE FROM HIS BASIC SALARY, COMPENSATION, OR PAY, UNDER THE PROVISIONS OF SECTION 9 OF THE ACT OF MARCH 2, 1931, IN THE EVENT THAT HE CONTINUES IN THE EMPLOY OF THE PANAMA RAILROAD COMPANY?

QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE. WITHOUT QUESTIONING AT THIS TIME THE CORRECTNESS OF THE RULING OF THE ASSISTANT SECRETARY OF THE INTERIOR DATED AUGUST 16, 1929, WHICH GRANTED RETIREMENT ANNUITY ON THE BASIS OF INVOLUNTARY SEPARATION FROM THE SERVICE TO THIS EMPLOYEE IN ADDITION TO SALARY HE RECEIVED BOTH BEFORE AND AFTER RETIREMENT IN THE SAME POSITION AS ASSISTANT MANAGER OF THE TIVOLI HOTEL (10 COMP. GEN. 309), IT IS ONLY REASONABLE TO CONCLUDE THAT THE ACT OF MARCH 2, 1931, EXTENDING CIVIL RETIREMENT TO ALL EMPLOYEES OF THE PANAMA RAILROAD COMPANY HAD THE EFFECT OF PLACING MR. ALLISON IN A POSITION "IN THE GOVERNMENT SERVICE" WITHIN THE MEANING OF PARAGRAPH 3 OF SECTION 7 (C) OF THE CIVIL RETIREMENT ACT OF MAY 29, 1930, 46 STAT. 473, TERMINATING ALL RIGHT TO RETIREMENT ANNUITIES THEREUNDER BASED ON INVOLUNTARY SEPARATION FROM THE SERVICE.

QUESTION 2 (A) IS ANSWERED IN THE AFFIRMATIVE AND QUESTION 2 (B) IN THE NEGATIVE.

SECTION 8 AND THE SECOND PARAGRAPH OF SECTION 9 OF THE ACT OF MARCH 2, 1931, SUPRA, PROVIDES AS FOLLOWS:

SEC. 8. ALL EMPLOYEES COMING WITHIN THE PROVISIONS OF THIS ACT AFTER THE EFFECTIVE DATE THEREOF SHALL BE REQUIRED TO DEPOSIT WITH THE TREASURER OF THE UNITED STATES TO THE CREDIT OF THE CANAL ZONE RETIREMENT AND DISABILITY FUND REFERRED TO IN SECTION 9 HEREOF, UNDER RULES TO BE PRESCRIBED BY THE COMMISSIONER OF PENSIONS, A SUM EQUAL TO 2 1/2 PERCENTUM OF THE EMPLOYEE'S BASIC SALARY, PAY, OR COMPENSATION RECEIVED FOR SERVICES RENDERED AFTER JULY 31, 1920, AND PRIOR TO JULY 1, 1926, AND ALSO 3 1/2 PERCENTUM OF THE BASIC SALARY, PAY, OR COMPENSATION FOR SERVICES RENDERED SUBSEQUENT TO JUNE 30, 1926, TOGETHER WITH INTEREST COMPUTED AT THE RATE OF 4 PERCENTUM PER ANNUM COMPOUNDED ON THE LAST DAY OF EACH FISCAL YEAR, BUT SUCH INTEREST SHALL NOT BE INCLUDED FOR ANY PERIOD DURING WHICH THE EMPLOYEE WAS SEPARATED FROM THE SERVICE. UPON MAKING SUCH DEPOSIT THE EMPLOYEE SHALL BE ENTITLED TO CREDIT FOR THE PERIOD OR PERIODS OF SERVICE INVOLVED: PROVIDED, THAT NO SUCH DEPOSIT SHALL BE REQUIRED ON ACCOUNT OF SERVICES RENDERED FOR THE PANAMA RAILROAD COMPANY PRIOR TO JANUARY 1, 1924: PROVIDED FURTHER, THAT FAILURE TO MAKE SUCH DEPOSIT SHALL NOT DEPRIVE THE EMPLOYEE OF CREDIT FOR ANY PAST SERVICE FOR WHICH NO DEPOSIT IS REQUIRED UNDER THE PROVISIONS OF THIS SECTION.

SEC. 9.

THE COMMISSIONER OF PENSIONS IS HEREBY AUTHORIZED AND DIRECTED TO ASCERTAIN THE AMOUNT, INCLUDING ACCRUED INTEREST, DUE EMPLOYEES OF THE PANAMA CANAL COMING WITHIN THE PURVIEW OF THIS ACT FROM THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND CREATED BY THE ACT OF MAY 22, 1920, AND TO CERTIFY SAME TO THE SECRETARY OF THE TREASURY, WHO IS HEREBY AUTHORIZED AND DIRECTED TO TRANSFER SUCH AMOUNT ON THE BOOKS OF THE TREASURY DEPARTMENT TO THE CANAL ZONE RETIREMENT AND DISABILITY FUND.

UNDER THESE PROVISIONS QUESTION 2 (C) AND (D) ARE ANSWERED IN THE AFFIRMATIVE.

THE ANSWERS TO QUESTIONS 1 AND 2 RENDER IT UNNECESSARY TO ANSWER QUESTION 3.