A-42958, JULY 22, 1932, 12 COMP. GEN. 101

A-42958: Jul 22, 1932

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CONSTITUTES "RETIRED PAY" AND IS SUBJECT TO THE PERCENTAGE REDUCTIONS REQUIRED BY SECTION 106 OF THE ACT OF JUNE 30. THE CIVILIAN COMPENSATION IS SUBJECT TO REDUCTION BY REASON OF THE LEGISLATIVE FURLOUGH. THE RETIRED PAY ALSO IS SUBJECT TO THE PERCENTAGE REDUCTION WHICH MUST BE IMPOUNDED. TO THE EXTENT THAT RETIRED PAY AS REDUCED IS APPLICABLE FOR THAT PURPOSE. WHEREIN IT WAS HELD (QUOTING FROM THE SYLLABUS): THE BALANCE OF RETIRED PAY DUE A RETIRED EMERGENCY OFFICER AT THE TIME OF HIS DEATH IS FOR DISPOSITION. WAS BEFORE THIS OFFICE WHEN THE QUESTION WAS UNDER CONSIDERATION. THE DECISIONS OF THIS OFFICE HAVE NOT HELD THAT PAYMENTS UNDER THE EMERGENCY OFFICERS' RETIREMENT ACT CONSTITUTE WAR-RISK DISABILITY COMPENSATION AND FOR DISPOSITION AS SUCH.

A-42958, JULY 22, 1932, 12 COMP. GEN. 101

ECONOMY ACT - RETIRED EMERGENCY OFFICERS IN CIVILIAN POSITIONS PAYMENT TO EMERGENCY OFFICERS RETIRED UNDER THE TERMS OF THE ACT OF MAY 24, 1928, 45 STAT. 735, CONSTITUTES "RETIRED PAY" AND IS SUBJECT TO THE PERCENTAGE REDUCTIONS REQUIRED BY SECTION 106 OF THE ACT OF JUNE 30, 1932, 47 STAT. 401. WHERE A RETIRED EMERGENCY OFFICER WHOSE RETIRED PAY EXCEEDS THE RATE OF $1,000 PER ANNUM HOLDS A CIVILIAN POSITION WITH COMPENSATION EXCEEDING THE RATE OF $1,000 PER ANNUM, THE COMBINED COMPENSATION AND RETIRED PAY EXCEEDING THE RATE OF $3,000 PER ANNUM, THE CIVILIAN COMPENSATION IS SUBJECT TO REDUCTION BY REASON OF THE LEGISLATIVE FURLOUGH, 5-DAY WEEK, OR PERCENTAGE REDUCTION IN COMPENSATION WHICH MUST BE IMPOUNDED, AND THE RETIRED PAY ALSO IS SUBJECT TO THE PERCENTAGE REDUCTION WHICH MUST BE IMPOUNDED. HOWEVER, THE LOSS SUSTAINED BY THE EMPLOYEE IN HIS CIVILIAN POSITION BY OPERATION OF THE ECONOMY ACT MAY BE MADE UP BY PAYMENT OF RETIRED PAY, NOT TO EXCEED THE RATE OF $3,000 PER ANNUM, TO THE EXTENT THAT RETIRED PAY AS REDUCED IS APPLICABLE FOR THAT PURPOSE.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, JULY 22, 1932:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 15, 1932, REFERRING TO DECISION OF THIS OFFICE DATED JULY 2, 1932, RELATIVE TO PROPOSED PAYMENT OF ACCRUED RETIRED PAY DUE AT THE TIME OF DEATH OF CAPT. HARRY DIAZ WHITTINGTON UNDER THE EMERGENCY OFFICERS' RETIREMENT ACT OF MAY 24, 1928, 45 STAT. 735, WHEREIN IT WAS HELD (QUOTING FROM THE SYLLABUS):

THE BALANCE OF RETIRED PAY DUE A RETIRED EMERGENCY OFFICER AT THE TIME OF HIS DEATH IS FOR DISPOSITION, NOT AS WAR-RISK DISABILITY COMPENSATION UNDER THE TERMS OF SECTION 26 OF THE WORLD WAR VETERANS' ACT, AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 792, BUT AS RETIRED PAY UNDER THE TERMS OF THE ACT OF JUNE 30, 1906, 34 STAT. 750.

AS YOU MENTION, THE OPINION OF THE FORMER GENERAL COUNSEL OF THE VETERANS' BUREAU IN THE CASE OF FRANK SHERMAN JUDSON, XC-905302, WAS BEFORE THIS OFFICE WHEN THE QUESTION WAS UNDER CONSIDERATION. THE REASONING AND THE CONCLUSION OF THE DECISION OF THIS OFFICE DO NOT AGREE WITH THE REASONING AND CONCLUSION OF SAID GENERAL COUNSEL'S OPINION. THE DECISIONS OF THIS OFFICE HAVE NOT HELD THAT PAYMENTS UNDER THE EMERGENCY OFFICERS' RETIREMENT ACT CONSTITUTE WAR-RISK DISABILITY COMPENSATION AND FOR DISPOSITION AS SUCH. ON THE CONTRARY, AS YOU STATE, AND AS STATED IN THE DECISION OF FEBRUARY 11, 1929, 8 COMP. GEN. 423, 425, QUOTED IN THE DECISION OF JULY 2, 1932, THE EMERGENCY OFFICERS' RETIREMENT ACT OPERATES TO GIVE THE OFFICER A QUASI-MILITARY STATUS AND THE PAYMENTS TO HIM UNQUESTIONABLY CONSTITUTE RETIRED PAY FOR DISPOSITION AS SUCH UPON HIS DEATH.

YOU PRESENT FOR CONSIDERATION THE FOLLOWING QUESTIONS ARISING UNDER THE ECONOMY ACT OF JUNE 30, 1932, PUBLIC, NO. 212, 47 STAT. 382:

THE RULING IN THE WHITTINGTON CASE PRECIPITATES THE QUESTION WHETHER RETIRED EMERGENCY OFFICERS ARE WITHIN THE PROVISIONS OF PUBLIC, 212, 72D CONGRESS, SECTION 106, REDUCING THE RETIRED PAY OF ALL COMMISSIONED PERSONNEL OF THE ARMY, NAVY, AND MARINE CORPS 8 1/3 PERCENTUM PER ANNUM, DURING THE FISCAL YEAR 1933. IF THE EMERGENCY OFFICERS' RETIREMENT ACT GIVES THE EX-OFFICERS RETIRED THEREUNDER A MILITARY OR QUASI-MILITARY STATUS, AND THE "RETIRED PAY" IS SUCH PAY AS WOULD BRING THEM WITHIN THE PURVIEW OF THE ACT OF 1906, DEALING WITH THE SETTLEMENT OF ACCOUNTS OF "DECEASED OFFICERS OR ENLISTED MEN OF THE ARMY," IT WOULD SEEM THAT THE ANSWER MUST BE IN THE AFFIRMATIVE.

MAY I PROPOUND THE FOLLOWING QUESTIONS:

(1) WILL EMERGENCY OFFICERS IN RECEIPT OF RETIREMENT PAY BE REQUIRED TO ACCEPT AN 8 1/3 PERCENTUM REDUCTION IRRESPECTIVE OF ANY ACTION WHICH MAY BE NECESSARY BY VIRTUE OF THE PROVISIONS OF SECTION 212 OF THE SAME STATUTE?

(2) IF SO, WHAT WILL BE THE RATE OF REDUCTION IN CASES WHICH ARE ADJUSTED UNDER SECTION 212 SO THAT THE COMBINED CIVIL AND RETIRED PAY WILL NOT EXCEED A TOTAL RATE OF $3,000 PER ANNUM?

SECTION 106 OF THE ECONOMY ACT PROVIDES:

DURING THE FISCAL YEAR ENDING JUNE 30, 1933, THE RETIRED PAY OF ALL JUDGES (EXCEPT JUDGES WHOSE COMPENSATION MAY NOT, UNDER THE CONSTITUTION, BE DIMINISHED DURING THEIR CONTINUANCE IN OFFICE) AND THE RETIRED PAY OF ALL COMMISSIONED AND OTHER PERSONNEL (EXCEPT ENLISTED) OF THE ARMY, NAVY, MARINE CORPS, COAST GUARD, COAST AND GEODETIC SURVEY, LIGHTHOUSE SERVICE, AND THE PUBLIC HEALTH SERVICE SHALL BE REDUCED AS FOLLOWS: IF MORE THAN $1,000 PER ANNUM BUT LESS THAN $10,000 PER ANNUM, 8 1/3 PERCENTUM; IF $10,000 PER ANNUM OR MORE, BUT LESS THAN $12,000, 10 PERCENTUM; IF $12,000 PER ANNUM OR MORE, BUT LESS THAN $15,000 PER ANNUM, 12 PERCENTUM; IF $15,000 PER ANNUM OR MORE, BUT LESS THAN $20,000, 15 PERCENTUM; IF $20,000 PER ANNUM OR MORE, 20 PERCENTUM. THIS SECTION SHALL NOT OPERATE SO AS TO REDUCE ANY RATE OF RETIRED PAY TO LESS THAN $1,000 PER ANNUM.

THE RETIRED PAY OF AN OFFICER RETIRED UNDER THE EMERGENCY OFFICERS' RETIREMENT ACT OF MAY 24, 1928, 45 STAT. 735, IS "RETIRED PAY" WITHIN THE MEANING OF THIS SECTION OF THE ECONOMY ACT, AND SUBJECT TO THE PERCENTAGE REDUCTIONS THEREIN REQUIRED.

IN DECISION OF JULY 14, 1932, TO THE SECRETARY OF WAR, A-43204, 12 COMP. GEN. 37, QUESTION AND ANSWER 14, IT WAS STATED:

"14. IN APPLYING THE PROVISIONS OF SECTION 212, IF A RETIRED OFFICER WITH RETIRED PAY OF $2,900 PER ANNUM IS EMPLOYED IN A CIVIL OFFICE OR POSITION WITH SALARY OF $2,800 PER ANNUM, WILL HE BE ENTITLED TO A NET AMOUNT OF $3,000 OR MUST A DEDUCTION BE MADE FROM THE $3,000?

14. THE PURPOSE OF SECTION 212 IS TO LIMIT THE COMBINED RATE OF COMPENSATION IN A CIVILIAN OFFICE OR POSITION AND RETIRED PAY FOR OR ON ACCOUNT OF COMMISSIONED SERVICE TO $3,000 PER ANNUM. IN THE ILLUSTRATION GIVEN, THERE WOULD BE PAYABLE A NET RATE OF $3,000 PER ANNUM. SINCE THE LIMITATION ON THE COMBINED RATE IS EFFECTIVE "ONLY AFTER THE DATE OF ENACTMENT OF THIS ACT," THE LOSS SUSTAINED IN THE CIVILIAN OFFICE OR POSITION BY OPERATION OF THE 5-DAY WEEK, LEGISLATIVE FURLOUGH, OR PERCENTAGE REDUCTION MAY BE MADE UP BY PAYMENT OF RETIRED PAY, NOT IN EXCESS OF THE COMBINED RATE OF $3,000 PER ANNUM, TO THE EXTENT THAT RETIRED PAY, AS REDUCED BY SECTION 106 OF THE STATUTE, IS AVAILABLE FOR THAT PURPOSE.

APPLYING THIS PRINCIPLE TO A RETIRED EMERGENCY OFFICER WHOSE RETIRED PAY EXCEEDS THE RATE OF $1,000 PER ANNUM, HOLDING A CIVILIAN POSITION WITH COMPENSATION EXCEEDING THE RATE OF $1,000 PER ANNUM, THE COMBINED COMPENSATION AND RETIRED PAY EXCEEDING THE RATE OF $3,000 PER ANNUM, THE CIVILIAN COMPENSATION IS SUBJECT TO REDUCTION BY REASON OF THE LEGISLATIVE FURLOUGH, 5-DAY WEEK, OR PERCENTAGE REDUCTION IN COMPENSATION WHICH MUST BE IMPOUNDED, AND, LIKEWISE, THE RETIRED PAY IS SUBJECT TO THE PERCENTAGE REDUCTION WHICH MUST BE IMPOUNDED. BUT THE LOSS SUSTAINED BY THE EMPLOYEE IN HIS CIVILIAN POSITION BY REASON OF THE LEGISLATIVE FURLOUGH, 5-DAY WEEK, OR PERCENTAGE REDUCTION MAY BE MADE UP BY PAYMENT OF RETIRED PAY, NOT TO EXCEED THE RATE OF $3,000 PER ANNUM, TO THE EXTENT THAT RETIRED PAY AS REDUCED BY SECTION 106 OF THE STATUTE IS AVAILABLE FOR THAT PURPOSE.