A-56583, AUGUST 14, 1934, 14 COMP. GEN. 123

A-56583: Aug 14, 1934

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RETIREMENT - PANAMA CANAL RETIREMENT ACT RETIREMENT UNDER THE PANAMA CANAL RETIREMENT ACT IS LIMITED TO THOSE WHO. ARE EMPLOYEES OF THE PANAMA CANAL OR THE PANAMA RAILROAD COMPANY ON THE ISTHMUS OF PANAMA AND SUCH RIGHT IS NOT SAVED TO EMPLOYEES AFTER THEIR TRANSFER TO ANY FEDERAL SERVICE AT ANOTHER PLACE. PROVIDED THAT AT DATE OF ELIGIBILITY FOR RETIREMENT SERVICE IS ON THE ISTHMUS OF PANAMA. HEADS OF DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS WERE ADVISED BY THIS OFFICE THAT A STATUS ACQUIRED UNDER THE CIVIL SERVICE RETIREMENT ACT BY AN EMPLOYEE IN THE CLASSIFIED CIVIL SERVICE OF THE UNITED STATES IS RETAINED UPON TRANSFER OR APPOINTMENT WITHOUT BREAK IN CONTINUITY TO A POSITION IN A GOVERNMENT- OWNED CORPORATION.

A-56583, AUGUST 14, 1934, 14 COMP. GEN. 123

RETIREMENT - PANAMA CANAL RETIREMENT ACT RETIREMENT UNDER THE PANAMA CANAL RETIREMENT ACT IS LIMITED TO THOSE WHO, AT THE TIME OF RETIREMENT, ARE EMPLOYEES OF THE PANAMA CANAL OR THE PANAMA RAILROAD COMPANY ON THE ISTHMUS OF PANAMA AND SUCH RIGHT IS NOT SAVED TO EMPLOYEES AFTER THEIR TRANSFER TO ANY FEDERAL SERVICE AT ANOTHER PLACE. THERE MAY BE INCLUDED IN COMPUTING LONGEVITY UNDER THE PANAMA CANAL RETIREMENT ACT ALL PRIOR CLASSIFIED AND UNCLASSIFIED CIVIL SERVICE REGARDLESS OF THE PLACE OF SERVICE, INCLUDING SERVICE WITH FEDERAL CORPORATIONS, PROVIDED THAT AT DATE OF ELIGIBILITY FOR RETIREMENT SERVICE IS ON THE ISTHMUS OF PANAMA, AND THE PROPER AMOUNT OF DEDUCTIONS FROM COMPENSATION COVERING SUCH PRIOR SERVICE HAS BEEN DEPOSITED.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, AUGUST 14, 1934:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 11, 1934, AS FOLLOWS:

BY CIRCULAR LETTER DATED NOVEMBER 10, 1933, HEADS OF DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS WERE ADVISED BY THIS OFFICE THAT A STATUS ACQUIRED UNDER THE CIVIL SERVICE RETIREMENT ACT BY AN EMPLOYEE IN THE CLASSIFIED CIVIL SERVICE OF THE UNITED STATES IS RETAINED UPON TRANSFER OR APPOINTMENT WITHOUT BREAK IN CONTINUITY TO A POSITION IN A GOVERNMENT- OWNED CORPORATION. REFERENCE WAS MADE TO THE FACT THAT SERVICE PERFORMED FOR GOVERNMENT-OWNED CORPORATION IS, FOR THE PURPOSES OF RETIREMENT LAW, REGARDED AS SERVICE FOR THE UNITED STATES, AND MAY BE CONSIDERED AS UNCLASSIFIED CIVIL SERVICE. IT WAS POINTED OUT THAT THE RULES LAID DOWN IN THE OPINIONS OF THE ATTORNEY GENERAL RELATING TO UNCLASSIFIED EMPLOYEES TRANSFERRED FROM CLASSIFIED POSITIONS WERE APPLICABLE TO EMPLOYEES TRANSFERRED TO GOVERNMENT-OWNED CORPORATIONS. IT WAS FURTHER POINTED OUT THAT THE OPINIONS OF THE ATTORNEY GENERAL (34 OPS.ATTY.GEN. 198 ID. 336; 35 OPS.ATTY.GEN. 413 ID. 473) WERE TO THE EFFECT THAT A PERSON WHO HAS ACQUIRED A COMPETITIVE STATUS IN THE CLASSIFIED CIVIL SERVICE OF THE UNITED STATES RETAINS THAT STATUS SO LONG AS HE REMAIN CONTINUOUSLY IN THE EXECUTIVE CIVIL SERVICE, AND THAT PRESERVATION OF THE COMPETITIVE STATUS EFFECTED BY THE TRANSFER TO AN UNCLASSIFIED POSITION CARRIED WITH IT THE BENEFITS AND OBLIGATIONS OF THE RETIREMENT ACT.

THE ASSISTANT ADMINISTRATOR IN CHARGE OF FINANCE AND INSURANCE UNDER WHOSE JURISDICTION COMES ADMINISTRATION OF THE CIVIL SERVICE RETIREMENT LAWS HAS RECEIVED A COMMUNICATION FROM THE CHIEF OF OFFICE, THE PANAMA CANAL, WHEREIN INQUIRY IS MADE AS FOLLOWS:

"THE CIRCULAR LETTER OF NOVEMBER 10, 1933, OF THE ADMINISTRATOR OF VETERANS' AFFAIRS DOES NOT MENTION THE CANAL ZONE RETIREMENT ACT. THEREFORE, IT SHOULD BE ASCERTAINED AS TO WHETHER OR NOT THE DECISION IS ALSO APPLICABLE TO EMPLOYEES COMING WITHIN THE PURVIEW OF THE CANAL ZONE RETIREMENT ACT; I.E., THOSE OCCUPYING PERMANENT CLASSIFIED AND EXCEPTED POSITIONS IN THE SERVICE OF THE PANAMA CANAL AND THE PANAMA RAILROAD COMPANY ON THE ISTHMUS OF PANAMA WHO MAY TRANSFER TO THE PANAMA RAILROAD AWAY FROM THE ISTHMUS OR TO OTHER GOVERNMENT-OWNED CORPORATIONS.

"UNDER SECTION 7 OF THE CANAL ZONE RETIREMENT ACT, NO PROVISION IS MADE FOR ALLOWING CREDIT FOR SERVICE WITH THE PANAMA RAILROAD COMPANY OTHER THAN THAT ON THE ISTHMUS OF PANAMA. SEVERAL OF OUR EMPLOYEES HAVE HAD SERVICE WITH THE PANAMA RAILROAD COMPANY IN THE UNITED STATES AND INFORMATION IS NOW DESIRED AS TO WHETHER OR NOT SUCH SERVICE AS WELL AS SERVICE WITH OTHER GOVERNMENT-OWNED CORPORATIONS IS TO BE GIVEN CREDIT IN CONNECTION WITH RETIREMENT UNDER THE CANAL ZONE RETIREMENT ACT.'

WHILE THE PANAMA CANAL ZONE RETIREMENT ACT OF MARCH 2, 1931 (46 STAT. 1471), APPLIED TO "ALL EMPLOYEES OF THE PANAMA CANAL ON THE ISTHMUS OF PANAMA, AND ALL EMPLOYEES OF THE PANAMA RAILROAD COMPANY ON THE ISTHMUS OF PANAMA * * *" SERVICE RENDERED AT A PLACE OTHER THAN ON THE ISTHMUS HAS BEEN HELD TO BE INCLUDED FOR RETIREMENT PURPOSES UNDER THE STATUTE. (DECISION COMP. GEN. APRIL 13, 1934, A-37616.)

IT WILL BE NOTED THAT UNDER SECTION 7 OF THE CANAL ZONE RETIREMENT ACT IT IS SPECIFICALLY PROVIDED THAT CREDIT FOR SERVICE WITH THE PANAMA RAILROAD COMPANY "ON THE ISTHMUS OF PANAMA" IS INCLUDED FOR PURPOSES OF THAT STATUTE. THE CHIEF OF OFFICE, THE PANAMA CANAL, REFERRING TO SUCH FACT DESIRES TO BE INFORMED IF THAT CIRCUMSTANCE INTERFERES WITH THE ALLOWANCE OF CREDIT, FOR THE PURPOSES OF THE PANAMA CANAL ZONE RETIREMENT ACT, FOR SERVICES WITH THE PANAMA RAILROAD COMPANY OUTSIDE THE CANAL ZONE, THE PANAMA RAILROAD BEING A GOVERNMENT-OWNED CORPORATION WITHIN THE PURVIEW OF SUCH TERM AS USED IN THE CIRCULAR LETTER OF THIS OFFICE REFERRED TO HEREINABOVE. YOUR DECISION RESPECTING SUCH INQUIRY WILL BE APPRECIATED. FURTHER THE COMMUNICATION FROM THE CHIEF OF OFFICE, THE PANAMA CANAL, RAISES ANOTHER QUESTION OF EQUAL IF NOT GREATER IMPORTANCE. INASMUCH AS THE ENACTMENT CLAUSE OF THE CANAL ZONE RETIREMENT ACT SPECIFICALLY STATES "ALL EMPLOYEES OF THE PANAMA CANAL ON THE ISTHMUS OF PANAMA AND ALL EMPLOYEES OF THE PANAMA RAILROAD COMPANY ON THE ISTHMUS OF PANAMA * * * COME WITHIN THE PROVISIONS OF THIS ACT" IS RETIREMENT UNDER THAT STATUTE LIMITED TO THOSE WHO AT THE TIME OF RETIREMENT ARE EMPLOYEES OF THE PANAMA CANAL OR THE PANAMA RAILROAD COMPANY "ON THE ISTHMUS OF PANAMA" OR HAVING GAINED THE STATUS BY SERVICE FOR EITHER AGENCY ON THE ISTHMUS OF PANAMA MAY RETIREMENT RIGHTS UNDER THAT STATUTE BE RETAINED BY AN EMPLOYEE WHO LEAVES THE SERVICE ON THE ISTHMUS OF PANAMA FOR SERVICE NOT ON THE ISTHMUS OF PANAMA?

SECTION 1 OF THE PANAMA CANAL RETIREMENT ACT OF MARCH 2, 1931, 46 STAT. 1471, PROVIDES AS FOLLOWS:

THAT ALL EMPLOYEES OF THE PANAMA CANAL ON THE ISTHMUS OF PANAMA, AND ALL EMPLOYEES OF THE PANAMA RAILROAD COMPANY, ON THE ISTHMUS OF PANAMA, WHO ARE CITIZENS OF THE UNITED STATES AND WHOSE TENURE OF EMPLOYMENT IS NOT INTERMITTENT NOR OF UNCERTAIN DURATION, SHALL COME WITHIN THE PROVISIONS OF THIS ACT.

UNDER THE PLAIN TERMS OF THIS SECTION, THE BENEFITS OF THE PANAMA CANAL RETIREMENT ACT ARE LIMITED TO EMPLOYEES OF THE PANAMA CANAL AND THE PANAMA RAILROAD CO. WHO ARE SERVING ON THE ISTHMUS OF PANAMA WHEN THEY BECOME ELIGIBLE FOR RETIREMENT.

IN DECISION OF APRIL 23, 1931, 10 COMP. GEN. 491, 492, IT WAS STATED:

THE PROVISION IN SECTION 3 (D) OF THE CIVIL RETIREMENT ACT, AS AMENDED BY THE ACT OF MAY 29, 1930, 46 STAT. 471, INCLUDING WITHIN THE PURVIEW OF THE ACT "UNCLASSIFIED EMPLOYEES TRANSFERRED FROM CLASSIFIED POSITIONS," IS IDENTICAL WITH A PROVISION IN SECTION 3 (D) IN THE EARLIER ACT OF JULY 3, 1926, 44 STAT. 906. THE INTENT OF THIS PROVISION WAS TO GIVE STATUTORY APPROVAL TO THE PRIOR OPINIONS OF THE ATTORNEY GENERAL AND THE DECISIONS OF THE COMPTROLLER GENERAL THAT RETIREMENT BENEFITS WERE PRESERVED TO ALL EMPLOYEES UNDER THE FEDERAL GOVERNMENT SERVING IN POSITIONS NOT WITHIN THE PURVIEW OF THE CIVIL RETIREMENT ACT, IF SUCH SERVICE IS CONTINUOUS WITH PRIOR SERVICE IN POSITIONS WITHIN THE PURVIEW OF THE CIVIL RETIREMENT ACT. 34 OP.ATTY.GEN. 192; ID. 334; ID. 515; 5 COMP. GEN. 254; 6 ID. 69; ID. 118; ID. 572; 7 ID. 150; ID. 246; 9 ID. 69. OF COURSE, THIS RULE WOULD NOT APPLY WHERE THE SUBSEQUENT SERVICE IS IN A POSITION UNDER THE GOVERNMENT SUBJECT TO A FEDERAL RETIREMENT SYSTEM OTHER THAN THAT PRESCRIBED BY THE CIVIL RETIREMENT ACT, SUCH AS THAT APPLICABLE TO THE MILITARY AND NAVAL SERVICE, THE FOREIGN SERVICE, THE LIGHTHOUSE SERVICE, POLICEMEN AND FIREMEN, DISTRICT OF COLUMBIA, SCHOOL TEACHERS, DISTRICT OF COLUMBIA, AND PANAMA CANAL SERVICE AFTER JULY 1, 1931 (SEE ACT OF MARCH 2, 1931, 46 STAT. 1471).

THERE IS NO PROVISION IN THE PANAMA CANAL RETIREMENT ACT IDENTICAL WITH THE PROVISION QUOTED FROM SECTION 3 (D) OF THE CIVIL RETIREMENT ACT EXTENDING RETIREMENT BENEFITS TO "UNCLASSIFIED EMPLOYEES TRANSFERRED FROM CLASSIFIED POSITIONS.'

HOWEVER, SECTIONS 7 AND 8 OF THE PANAMA CANAL RETIREMENT ACT PROVIDE, IN PART, AS FOLLOWS:

SUBJECT TO THE PROVISIONS OF SECTION 8 HEREOF, THE SERVICE WHICH SHALL FORM THE BASIS FOR CALCULATING THE AMOUNT OF ANY BENEFIT PROVIDED IN THIS ACT SHALL BE COMPUTED FROM THE DATE OF ORIGINAL EMPLOYMENT, WHETHER AS A CLASSIFIED OR AN UNCLASSIFIED EMPLOYEE, IN THE CIVIL SERVICE OF THE UNITED STATES OR UNDER THE MUNICIPAL GOVERNMENT OF THE DISTRICT OF COLUMBIA, INCLUDING PERIODS OF SERVICE AT DIFFERENT TIMES AND IN ONE OR MORE DEPARTMENTS, BRANCHES, OR INDEPENDENT OFFICES OF THE GOVERNMENT, AND SERVICE ON THE ISTHMUS OF PANAMA WITH THE ISTHMIAN CANAL COMMISSION, THE PANAMA CANAL, OR THE PANAMA RAILROAD COMPANY; ALSO PERIODS OF SERVICE PERFORMED OVERSEAS UNDER AUTHORITY OF THE UNITED STATES AND PERIODS OF HONORABLE SERVICE IN THE ARMY, NAVY, MARINE CORPS, OR COAST GUARD OF THE UNITED STATES. * * *

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.

THESE SECTIONS ARE SIMILAR TO SECTIONS 5 AND 9 OF THE CIVIL RETIREMENT ACT OF MAY 29, 1930, 46 STAT. 472, 475.

IT IS APPARENTLY THE INTENT OF THESE SECTIONS THAT WHEN AN EMPLOYEE ONCE ACQUIRES A RETIREMENT STATUS BY OCCUPYING A CLASSIFIED POSITION WITHIN THE PURVIEW OF THE CIVIL RETIREMENT ACT OR THE PANAMA CANAL RETIREMENT ACT, RESPECTIVELY, HE MAY COUNT TOWARD RETIREMENT, ALL PRIOR FEDERAL CIVIL SERVICE WHETHER CLASSIFIED OR UNCLASSIFIED, AND, BASED ON YOUR CIRCULAR LETTER OF NOVEMBER 10, 1933, INCLUDING SERVICE WITH A GOVERNMENT CORPORATION, UPON PAYMENT OF THE PROPER AMOUNT OF DEDUCTIONS FROM COMPENSATION COVERING SUCH PRIOR SERVICE AS FIXED BY THE STATUTE. UNDER THE PANAMA CANAL RETIREMENT ACT, SUCH PRIOR CLASSIFIED OR UNCLASSIFIED SERVICE MAY HAVE BEEN AT ANY PLACE PROVIDED THAT AT DATE OF ELIGIBILITY FOR RETIREMENT, SERVICE IS ON THE ISTHMUS.

THEREFORE, THE QUESTION IN THE FIRST PARAGRAPH OF THE QUOTED COMMUNICATION FROM THE CHIEF OF OFFICE OF THE PANAMA CANAL, IS ANSWERED IN THE NEGATIVE, AND THE QUESTION IN THE SECOND PARAGRAPH IN THE AFFIRMATIVE PROVIDED THE PROPER AMOUNT OF DEDUCTIONS FROM COMPENSATION COVERING THE PRIOR SERVICE IS DEPOSITED. REFERRING TO THE QUESTION CONTAINED IN THE CONCLUDING PARAGRAPH OF YOUR LETTER, YOU ARE ADVISED THAT RETIREMENT UNDER THE PANAMA CANAL RETIREMENT ACT IS LIMITED TO THOSE WHO AT THE TIME OF RETIREMENT ARE EMPLOYEES OF THE PANAMA CANAL OR THE PANAMA RAILROAD CO.'ON THE ISTHMUS OF PANAMA" AND SUCH RIGHT IS NOT SAVED TO THEM AFTER TRANSFER TO ANY FEDERAL SERVICE AT ANOTHER PLACE.