A-66107, FEBRUARY 17, 1936, 15 COMP. GEN. 702

A-66107: Feb 17, 1936

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THE RETIREMENT ANNUITY IS THEREBY SUSPENDED DURING THE ENTIRE PERIOD THE EMPLOYEE RECEIVED ACTIVE SERVICE COMPENSATION IN A DE FACTO STATUS. 1936: THERE WAS RECEIVED YOUR LETTER OF SEPTEMBER 30. HAVE BEEN AUTOMATICALLY SEPARATED AT THE END OF THAT MONTH. HE WAS RETAINED ON THE ROLLS UNTIL JULY 15. SHALL BE COMPUTED AS OF THE DATE RETIREMENT WOULD HAVE OCCURRED IF THIS ACT HAD NOT BEEN ENACTED. ARE REPEALED. THE FOLLOWING RULING WAS LAID DOWN IN YOUR DECISION OF OCTOBER 16. IT WAS HELD THAT: "UNDER THE PLAIN TERMS OF THIS STATUTE THE SEPARATION FROM THE SERVICE AND THE TERMINATION OF ALL RIGHT TO SALARY. FOR THE PURPOSE OF DETERMINING THE EFFECTIVE DATE OF ANNUITY TO CONSIDER THE DATE OF SEPARATION AS THE DATE SERVICE WAS LAST RENDERED EVEN THOUGH EMPLOYEE SERVED IN A DE FACTO STATUS AT THAT TIME.

A-66107, FEBRUARY 17, 1936, 15 COMP. GEN. 702

CIVILIAN RETIREMENT ANNUITIES - RETENTION BEYOND RETIREMENT AGE THE UNLAWFUL CONTINUANCE OF AN EMPLOYEE IN THE SERVICE AFTER RETIREMENT AGE DOES NOT CHANGE THE EFFECTIVE DATE OF RETIREMENT ANNUITY FIXED BY THE ACT OF APRIL 23, 1930, 46 STAT. 253, AS THE FIRST OF THE MONTH FOLLOWING THE DATE THE EMPLOYEE REACHED RETIREMENT AGE, BUT THE RETIREMENT ANNUITY IS THEREBY SUSPENDED DURING THE ENTIRE PERIOD THE EMPLOYEE RECEIVED ACTIVE SERVICE COMPENSATION IN A DE FACTO STATUS.

COMPTROLLER GENERAL MCCARL TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, FEBRUARY 17, 1936:

THERE WAS RECEIVED YOUR LETTER OF SEPTEMBER 30, 1935, AS FOLLOWS:

THE COMMISSION HAS BEFORE IT A CASE INVOLVING THE APPLICATION OF THE ACT OF APRIL 23, 1930, COMMONLY REFERRED TO AS THE UNIFORM RETIREMENT DATE LAW.

MR. WILLIAM R. FLETCHER, BORN AUGUST 15, 1868, EMPLOYED AS LABORER IN THE INTERIOR DEPARTMENT, ATTAINED THE REGULAR RETIREMENT AGE FOR HIS GROUP, 65 YEARS, ON AUGUST 14, 1933, AT WHICH TIME HE HAD RENDERED MORE THAN 15 YEARS OF ALLOWABLE SERVICE. NO EXECUTIVE ORDER FOR CONTINUANCE IN SERVICE HAVING BEEN ISSUED IN HIS CASE, HE SHOULD, UNDER THE TERMS OF SECTION 204 OF THE ACT OF JUNE 30, 1932, HAVE BEEN AUTOMATICALLY SEPARATED AT THE END OF THAT MONTH. THROUGH ADMINISTRATIVE ERROR, HOWEVER, HE WAS RETAINED ON THE ROLLS UNTIL JULY 15, 1935, AND PAID FOR SERVICE RENDERED UP TO AND INCLUDING THAT DATE.

SECTION 13 OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930 (46 STAT. 468), PROVIDES IN ART:

"ANNUITIES GRANTED UNDER THIS ACT FOR RETIREMENT UNDER THE PROVISIONS OF SECTION 1 OF THIS ACT SHALL COMMENCE FROM THE DATE OF SEPARATION FROM THE SERVICE * * *.'

THE ACT OF APRIL 23, 1930 (46 STAT. 253), READS AS FOLLOWS:

"BE IT ENACTED BY THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES OF AMERICA IN CONGRESS ASSEMBLED, THAT HEREAFTER RETIREMENT AUTHORIZED BY LAW OF FEDERAL PERSONNEL OF WHATEVER CLASS, CIVIL, MILITARY, NAVAL, JUDICIAL, LEGISLATIVE, OR OTHERWISE, AND FOR WHATEVER CAUSE RETIRED, SHALL TAKE EFFECT ON THE 1ST DAY OF THE MONTH FOLLOWING THE MONTH IN WHICH SAID RETIREMENT WOULD OTHERWISE BE EFFECTIVE, AND SAID 1ST DAY OF THE MONTH FOR RETIREMENTS HEREAFTER MADE SHALL BE FOR ALL PURPOSES IN LIEU OF SUCH DATE FOR RETIREMENT AS MAY NOW BE AUTHORIZED; EXCEPT THAT THE RATE OF ACTIVE OR RETIRED PAY OR ALLOWANCE, SHALL BE COMPUTED AS OF THE DATE RETIREMENT WOULD HAVE OCCURRED IF THIS ACT HAD NOT BEEN ENACTED.

"SEC. 2. THIS ACT SHALL BECOME EFFECTIVE JULY 1, 1930. ALL LAWS OR PARTS OF LAWS, IN SO FAR AS IN CONFLICT HEREWITH, ARE REPEALED.

THE FOLLOWING RULING WAS LAID DOWN IN YOUR DECISION OF OCTOBER 16, 1926 (6 COMP. GEN. 263):

"DE FACTO SERVICE GIVES NO RIGHT OR BENEFIT WHATEVER UNDER THE RETIREMENT ACT EITHER IN COMPUTING LENGTH OF SERVICE FOR DETERMINING THE AMOUNT OF ANNUITIES OR IN COMPUTING THE AMOUNT OF THE REFUND TO BE MADE TO A FORMER EMPLOYEE UPON FINAL SEPARATION FROM THE SERVICE.'

IN YOUR DECISION OF APRIL 2, 1927 (6 COMP. GEN. 651), IT WAS HELD THAT:

"UNDER THE PLAIN TERMS OF THIS STATUTE THE SEPARATION FROM THE SERVICE AND THE TERMINATION OF ALL RIGHT TO SALARY, PAY, OR COMPENSATION BECOME EFFECTIVE AUTOMATICALLY ON THE ARRIVAL OF THE EMPLOYEE AT RETIREMENT AGE,

THE DE FACTO SERVICE IN THE INSTANT CASE FROM AUGUST 15, 1933, TO JULY 15, 1935, MAY NOT BE CONSIDERED IN THE COMPUTATION OF ANNUITY BENEFITS, AND CREDIT MAY BE ALLOWED ONLY UP TO AND INCLUDING AUGUST 14, 1933. HAS BEEN THE PRACTICE OF THIS COMMISSION TO CONSIDER A PERIOD OF EMPLOYMENT IN A DE FACTO STATUS WITH COMPENSATION AS AN ACTUAL PERIOD OF SERVICE, BUT FOR THE PURPOSE OF DETERMINING THE EFFECTIVE DATE OF ANNUITY TO CONSIDER THE DATE OF SEPARATION AS THE DATE SERVICE WAS LAST RENDERED EVEN THOUGH EMPLOYEE SERVED IN A DE FACTO STATUS AT THAT TIME. EMPLOYEE WHO HAS CONTINUED IN HIS POSITION BEYOND THE AGE OF RETIREMENT AS FIXED BY LAW IS REGARDED AS A DE FACTO EMPLOYEE. (SEE 3 COMP. GEN. 823; 4 ID. 43; 5 ID. 70; AND 6 ID. 263.)

IN THE CASE OF ROBERT E. L. TYLER, THE SOLICITOR OF THE VETERANS' ADMINISTRATION DECIDED ON JULY 10, 1934 THAT UNDER THE CIRCUMSTANCES OF THE CASE THE ANNUITY MIGHT COMMENCE ON THE FIRST OF THE MONTH FOLLOWING THE DE JURE SERVICE. MR. TYLER REACHED RETIREMENT AGE IN NOVEMBER 1933, AND WAS CARRIED IN ACTIVE DUTY STATUS UNTIL DECEMBER 12, 1933, BUT RECEIVED NO SALARY FOR THE 12 DAYS IN DECEMBER. IN HIS DECISION, THE SOLICITOR OF THE VETERANS' ADMINISTRATION HELD:

"MANIFESTLY, IT WOULD BE INEQUITABLE TO PERMIT ANY PERIOD BEYOND THE LAWFUL RETIREMENT DATE, DURING WHICH THE CLAIMANT SERVED WITHOUT PAY, TO DEFEAT HIS RIGHT TO RETIREMENT PAY FROM THE DATE RETIREMENT BENEFITS OTHERWISE WERE IN ORDER. * * *"

THE QUESTION FOR DETERMINATION IS WHETHER MR. FLETCHER'S RETIREMENT SHOULD BECOME EFFECTIVE ON SEPTEMBER 1, 1933, THE FIRST DAY OF THE MONTH FOLLOWING THE TERMINATION OF DE JURE SERVICE, WITH A SUSPENSION OF ANNUITY PAYMENTS DURING THE SUBSEQUENT PERIOD OF DE FACTO SERVICE FOR WHICH HE RECEIVED PAY, OR SHOULD THE PROVISIONS OF THE ACT OF APRIL 23, 1930 BE APPLIED UPON THE TERMINATION OF THE DE FACTO SERVICE AND RETIREMENT AUTHORIZED EFFECTIVE AUGUST 1, 1935. YOUR DECISION ON THIS QUESTION IS RESPECTFULLY REQUESTED.

YOU HAVE CORRECTLY STATED THE RULE TO THE EFFECT THAT AN EMPLOYEE WHO HAS CONTINUED IN HIS POSITION BEYOND THE AGE OF RETIREMENT FIXED BY LAW IS REGARDED AS A DE FACTO EMPLOYEE AND NOT ENTITLED TO BE PAID COMPENSATION FOR SERVICES RENDERED. 3 COMP. GEN. 823; UNITED STATES V. BADEAU, 130 U.S. 439. IN OTHER WORDS, THE CONTINUED SERVICE OF AN EMPLOYEE WHO HAD AT LEAST 15 YEARS OF ALLOWABLE SERVICE, AFTER HAVING REACHED RETIREMENT AGE IS UNLAWFUL AND WOULD NOT CHANGE THE EFFECTIVE DATE OF HIS RETIREMENT ANNUITY FIXED BY THE ACT OF APRIL 23, 1930, AS THE 1ST OF THE MONTH FOLLOWING THE DATE THE EMPLOYEE REACHED RETIREMENT AGE, WHICH IN THE CASE PRESENTED, WAS SEPTEMBER 1, 1933.

IT HAS BEEN HELD, HOWEVER, THAT PAYMENT OF RETIREMENT ANNUITY AND ACTIVE SERVICE COMPENSATION DURING THE SAME PERIOD OF TIME TO A DE FACTO EMPLOYEE IS NOT AUTHORIZED. 14 COMP. GEN. 43. ACCORDINGLY, PAYMENT OF THE RETIREMENT ANNUITY IN THIS CASE SHOULD BE SUSPENDED DURING THE ENTIRE PERIOD THE EMPLOYEE RECEIVED ACTIVE SERVICE COMPENSATION IN A DE FACTO STATUS, OR UNTIL JULY 15, 1935.

THIS CASE IS TO BE DISTINGUISHED FROM THE CASE OF THE POSTAL EMPLOYEES WHOSE SERVICES WERE RETAINED BY EXECUTIVE ORDER COVERING THE PERIOD JULY 1 TO JULY 10, 1932, AFTER THEY HAD REACHED RETIREMENT AGE, SECTION 204 OF THE ECONOMY ACT HAVING REQUIRED THEIR SEPARATION FROM THE SERVICE EXCEPT WHERE RETAINED BY EXECUTIVE ORDER. IN THAT CASE THE EFFECTIVE DATE OF THE RETIREMENT ANNUITY WAS HELD TO BE AUGUST 1, 1932, UNDER THE UNIFORM RETIREMENT DATE ACT, SUPRA. THE SERVICE PERFORMED DURING THE FIRST 10 DAYS OF JULY WAS NOT DE FACTO BUT DE JURE. DECISION OF JULY 18, 1932, A- 43281. THE ACT OF AUGUST 28, 1935, 49 STAT. 941, HAS AUTHORIZED THE PAYMENT OF RETIREMENT ANNUITY BEGINNING WITH THE DAY FOLLOWING THE DAY OF SEPARATION FROM ACTIVE SERVICE, INSTEAD OF AUGUST 1, 1932, IN THOSE CASES.