A-70883, FEBRUARY 24, 1936, 15 COMP. GEN. 720

A-70883: Feb 24, 1936

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WHO ELECTS TO RECEIVE RETIRED PAY COMPUTED ON THE BASIS OF 4 PERCENTUM OF ACTIVE DUTY PAY FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE WILL BE ENTITLED TO RETIRED PAY COMPUTED ON HIS ACTIVE PAY BEFORE HIS RETIREMENT IN ADVANCED RANK. YOUR ADVANCE DECISION IS REQUESTED ON A QUESTION HEREINAFTER STATED GROWING OUT OF THE ADMINISTRATION OF THE ACT OF JULY 31. IT WILL BE NOTED THAT SECTION 5 THEREOF AUTHORIZES THE PRESIDENT TO RETIRE OFFICERS. WHO HAVE RENDERED SERVICE WITHIN CERTAIN MINIMUM AND MAXIMUM LIMITS WITH RETIRED PAY COMPUTED AT THE RATE OF 2 1/2 PERCENT PER YEAR FOR EACH YEAR OF SERVICE OF THE CHARACTER NOW OR HEREAFTER COUNTED FOR PURPOSES OF ACTIVE DUTY PAY. WITH A PROVISO TO THE EFFECT THAT CAPTAINS FALLING WITHIN CERTAIN CATEGORIES AS TO SERVICE WILL BE ENTITLED.

A-70883, FEBRUARY 24, 1936, 15 COMP. GEN. 720

PAY - OFFICERS RETIRED - ACT OF JULY 31, 1935 A REGULAR ARMY OFFICER RETIRED UNDER THE PROVISIONS OF SECTION 5 OF THE ACT OF JULY 31, 1935, 49 STAT. 507, WHO ELECTS TO RECEIVE RETIRED PAY COMPUTED ON THE BASIS OF 4 PERCENTUM OF ACTIVE DUTY PAY FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE WILL BE ENTITLED TO RETIRED PAY COMPUTED ON HIS ACTIVE PAY BEFORE HIS RETIREMENT IN ADVANCED RANK. CREDIT FOR CONSTRUCTIVE SERVICE AND RETIRED PAY BASED ON ADVANCED RANK ACCORDED ON RETIREMENT APPLIES TO OFFICERS WHO DO NOT ELECT TO RECEIVE RETIRED PAY AS PROVIDED IN THE FOURTH PROVISO OF SAID SECTION.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, FEBRUARY 24, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF FEBRUARY 6, 1936, AS FOLLOWS:

UNDER AUTHORITY OF SECTION 8 OF THE ACT OF JULY 31, 1894 (28 STAT. 208), YOUR ADVANCE DECISION IS REQUESTED ON A QUESTION HEREINAFTER STATED GROWING OUT OF THE ADMINISTRATION OF THE ACT OF JULY 31, 1935 (49 STAT. 507), WHICH ACT DEALS GENERALLY WITH PROMOTION AND RETIREMENT OF COMMISSIONED OFFICERS OF THE REGULAR ARMY.

BY REFERENCE TO THE SAID ACT OF JULY 31, 1935, IT WILL BE NOTED THAT SECTION 5 THEREOF AUTHORIZES THE PRESIDENT TO RETIRE OFFICERS, UPON THEIR OWN APPLICATION, WHO HAVE RENDERED SERVICE WITHIN CERTAIN MINIMUM AND MAXIMUM LIMITS WITH RETIRED PAY COMPUTED AT THE RATE OF 2 1/2 PERCENT PER YEAR FOR EACH YEAR OF SERVICE OF THE CHARACTER NOW OR HEREAFTER COUNTED FOR PURPOSES OF ACTIVE DUTY PAY, ANY FRACTION OF A YEAR IN EXCESS OF SIX MONTHS TO BE COUNTED AS A COMPLETE YEAR, WITH A PROVISO TO THE EFFECT THAT CAPTAINS FALLING WITHIN CERTAIN CATEGORIES AS TO SERVICE WILL BE ENTITLED, UPON SUCH RETIREMENT, TO THE PAY OF A MAJOR OF THE SAME LENGTH OF SERVICE, AND A FURTHER PROVISO AUTHORIZING OFFICERS WHO WERE ORIGINALLY APPOINTED IN THE REGULAR ARMY AS OF JULY 1, 1920, AT AN AGE GREATER THAN 45 YEARS, TO ELECT TO TAKE INSTEAD OF THE RETIREMENT PAY PROVIDED GENERALLY IN SAID SECTION, RETIRED PAY AT THE RATE OF 4 PERCENT PER YEAR FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE ONLY.

YOUR DECISION IS REQUESTED OF A QUESTION GROWING OUT OF FACTS WHICH MAY BE STATED AS FOLLOWS: LET IT BE ASSUMED THAT AN OFFICER HOLDING THE PRESENT GRADE OF CAPTAIN, WHO SERVED AS A COMMISSIONED OFFICER IN THE ARMY PRIOR TO NOVEMBER 12, 1918, AND WHO WAS APPOINTED AS OF JULY 1, 1920, IN THE REGULAR ARMY, AT AN AGE GREATER THAN 45 YEARS, HAS APPLIED FOR RETIREMENT UNDER THE PROVISIONS OF THE SAID ACT OF JULY 31, 1935, AND ON THE DATE OF HIS PROPOSED RETIREMENT WILL HAVE COMPLETED 16 YEARS, 7 MONTHS, AND 15 DAYS, ALL COMMISSIONED SERVICE. UNDER THE PROVISIONS OF THE SAID ACT OF JULY 31, 1935, THIS OFFICER UPON RETIREMENT THEREUNDER IS ENTITLED TO THE PAY OF A MAJOR OF THE SAME LENGTH OF SERVICE AND HE IS ALSO ENTITLED TO ELECT TO TAKE 4 PERCENT PER YEAR FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE. THERE WOULD APPEAR TO BE NO DOUBT THAT THIS PARTICULAR OFFICER IS ENTITLED TO HAVE HIS RETIRED PAY FIGURED ON THE BASIS OF THE FOURTH PAY PERIOD; SINCE A MAJOR, TO WHOSE PAY THIS OFFICER IS ENTITLED TO HAVE HIS RETIRED PAY ASSIMILATED UNDER THE ACT CITED PASSES INTO THE FOURTH PAY PERIOD AFTER FOURTEEN YEARS' SERVICE, AND THE OFFICER IN THE CASE INSTANCED HAS, AS ABOVE STATED, MORE THAN 16 YEARS' SERVICE. HOWEVER, THE QUESTION DOES ARISE AS TO WHICH THE WAR DEPARTMENT IS IN DOUBT AND DESIRES YOUR DECISION AS TO WHETHER THE RETIRED PAY OF THIS OFFICER AS OF THE FOURTH PAY PERIOD SHALL BE COMPUTED AS OF 17 FULL YEARS OF SERVICE (17 TIMES 4 PERCENT) UNDER THE FIRST CLAUSE OF SECTION 5 OF THE ACT OF JULY 31, 1935, OR AS OF 16 YEARS' SERVICE ONLY, UNDER THE LAST PROVISO OF THE SAME SECTION, THE OFFICER HAVING SERVED ONLY 16 FULL YEARS OF SERVICE.

SECTION 5 OF THE ACT OF JULY 31, 1935, 49 STAT. 507, PROVIDES:

SEC. 5. THAT ANY OFFICER ON THE ACTIVE LIST OF THE REGULAR ARMY OR PHILIPPINE SCOUTS WHO, ON THE EFFECTIVE DATE OF THIS ACT OR AT ANY TIME THEREAFTER, SHALL HAVE COMPLETED NOT LESS THAN FIFTEEN NOR MORE THAN TWENTY-NINE YEARS' SERVICE MAY UPON HIS OWN APPLICATION BE RETIRED, IN THE DISCRETION OF THE PRESIDENT WITH ANNUAL PAY EQUAL TO THE PRODUCT OF 2 1/2 PERCENTUM OF HIS ACTIVE DUTY ANNUAL PAY AT THE TIME OF HIS RETIREMENT, MULTIPLIED BY A NUMBER EQUAL TO THE YEARS OF HIS ACTIVE SERVICE NOT IN EXCESS OF TWENTY-NINE YEARS: PROVIDED, THAT THE NUMBER OF YEARS OF SERVICE TO BE CREDITED IN COMPUTING THE RIGHT TO RETIREMENT AND RETIREMENT PAY UNDER THIS SECTION SHALL INCLUDE ALL SERVICE NOW OR HEREAFTER CREDITED FOR ACTIVE DUTY PAY PURPOSES ANY FRACTIONAL PART OF A YEAR AMOUNTING TO SIX MONTHS OR MORE TO BE COUNTED AS A COMPLETE YEAR: AND PROVIDED FURTHER, THAT ANY OFFICER OF THE REGULAR ARMY OR PHILIPPINE SCOUTS BELOW THE GRADE OF MAJOR WHO SERVED AS A COMMISSIONED OFFICER IN THE ARMY OF THE UNITED STATES PRIOR TO NOVEMBER 12, 1918, AND WHOSE APPLICATION FOR RETIREMENT UNDER THE PROVISIONS OF THIS SECTION HAS BEEN APPROVED BY THE PRESIDENT SHALL BE RETIRED IN THE GRADE OF MAJOR WITH RETIRED PAY COMPUTED AS HEREINBEFORE PROVIDED AS FOR A MAJOR WITH THE SAME LENGTH OF SERVICE: AND PROVIDED FURTHER, THAT NOTHING IN THIS ACT SHALL OPERATE TO DEPRIVE ANY OFFICER OF THE RETIRED RANK TO WHICH HE IS NOW ENTITLED UNDER THE PROVISIONS OF LAW: AND PROVIDED FURTHER, THAT ANY OFFICER ORIGINALLY APPOINTED AS OF JULY 1, 1920, AT AN AGE GREATER THAN FORTY FIVE YEARS, MAY IF HE SO ELECTS, IN LIEU OF RETIRED PAY AT THE RATE HEREINBEFORE PROVIDED, RECEIVE RETIRED PAY AT THE RATE OF 4 PERCENTUM OF ACTIVE DUTY PAY FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE IN THE UNITED STATES ARMY, THE TOTAL TO BE NOT MORE THAN 75 PERCENTUM: AND PROVIDED FURTHER, THAT ALL OFFICERS RETIRED UNDER THE PROVISIONS OF THIS SECTION SHALL BE PLACED ON THE UNLIMITED RETIRED LIST.

AS THE PROVISO GIVING AN ELECTION TO RECEIVE RETIRED PAY AT THE RATE OF 4 PERCENTUM OF ACTIVE DUTY PAY FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE IN THE UNITED STATES ARMY FOLLOWS THE PROVISION FOR 2 1/2 PERCENTUM OF ACTIVE DUTY ANNUAL PAY COMPUTED ON CONSTRUCTIVE SERVICE AS THEREIN AUTHORIZED (A-69003, JAN. 15, 1936, TO MAJOR MORTON, 15 COMP. GEN. 610), IT IS OBVIOUS COMPLETE YEARS OF ACTUAL COMMISSIONED SERVICE WERE INTENDED, EXCLUDING CONSTRUCTIVE SERVICE THAT COULD BE COUNTED WHEN THE COMPUTATION IS ON THE BASIS OF 2 1/2 PERCENTUM OF THE ACTIVE DUTY ANNUAL PAY. UNITED STATES V. LENSON, 278 U.S. 60. NOR DOES THE CONCLUSION SEEM TO BE SOUND THAT THE OFFICER IS ENTITLED TO HAVE HIS RETIRED PAY COMPUTED ON THE BASIS OF FOURTH PERIOD PAY. IT SHOULD BE OBSERVED THAT THE LANGUAGE FIXING THE RATE OF 4 PERCENTUM FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE IS ALMOST IDENTICALLY THE SAME AS THAT CONTAINED IN SECTION 24 OF THE NATIONAL DEFENSE ACT, AS AMENDED JUNE 4, 1920 (41 STAT. 771), AS FOLLOWS, THE PORTION CARRIED INTO THE FOURTH PROVISO OF SECTION 5 OF THE ACT OF JULY 31, 1935, BEING INDICATED BY UNDERSCORING AND THE CHANGE BY THE WORD IN BRACKETS:

* * * ANY PERSON ORIGINALLY APPOINTED UNDER THE PROVISIONS OF THIS ACT AT AN AGE GREATER THAN FORTY-FIVE YEARS SHALL, WHEN RETIRED, RECEIVE RETIRED PAY AT THE RATE OF 4 PERCENTUM OF ACTIVE (DUTY) PAY FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE IN THE UNITED STATES ARMY, THE TOTAL TO BE NOT MORE THAN 75 PERCENTUM. * * *

IN THE ILLUSTRATION YOU HAVE USED, THE OFFICER HAS COMPLETED 16 YEARS, 7 MONTHS, AND 15 DAYS' COMMISSIONED SERVICE, INCLUDING SERVICE BOTH BEFORE AND AFTER NOVEMBER 12, 1918; HIS ACTIVE DUTY PAY AS A CAPTAIN IS THE BASE PAY OF THE THIRD PERIOD, $2,400, INCREASED BY 25 PERCENTUM FOR OVER 15 AND LESS THAN 18 YEARS' SERVICE, TOTAL $3,000. IF HE ELECTS THE BENEFITS OF SECTION 5 OF THE ACT OF JULY 31, 1935, HE, OR ANOTHER OFFICER RETIRED UNDER THAT SECTION WITH THE SAME RANK AND LENGTH OF SERVICE, WHO WAS ORIGINALLY APPOINTED AT AN AGE LESS THAN 45 YEARS, WOULD BE ENTITLED TO RETIRED PAY BASED ON THE BASE PAY OF THE FOURTH PERIOD, $3,000, INCREASED BY 25 PERCENTUM FOR LONGEVITY, $3,750, AND THE RATE OF RETIRED PAY WOULD BE 17 TIMES 2 1/2 PERCENT, OR 42 1/2 PERCENT, OR AN ANNUAL RETIRED PAY OF $1,593.75. WERE HE TO BE PAID THE RETIRED PAY PROVIDED IN SECTION 24 OF THE NATIONAL DEFENSE ACT, AS AMENDED BY THE ACT OF JUNE 4, 1920, HE WOULD BE ENTITLED TO 64 PERCENT (16 TIMES 4) OF HIS ACTIVE PAY AS A CAPTAIN OF $3,000, OR $1,920. IF HE WERE ENTITLED TO 64 PERCENT OF FOURTH PERIOD PAY ($3,000 INCREASED BY $750 FOR LONGEVITY) IT WOULD GIVE HIM RETIRED PAY OF $2,400 PER ANNUM. SO THAT OF TWO OFFICERS, BOTH APPOINTED AS OF JULY 1, 1920, ONE AT AN AGE OF 44 YEARS AND THE OTHER AT THE AGE OF 45 1/2 YEARS, BOTH RETIRED UNDER THE PROVISIONS OF SECTION 5 OF THE ACT OF JULY 31, 1935, TO ADOPT THE VIEW AS TO WHICH YOU SUGGEST "THERE WOULD APPEAR TO BE NO DOUBT," THE OFFICER ORIGINALLY APPOINTED AT 45 1/2 YEARS OF AGE WOULD RECEIVE RETIRED PAY OF $2,400 PER ANNUM AND AN OFFICER ORIGINALLY APPOINTED AT THE AGE OF 44 YEARS AND OF THE SAME RANK AND LENGTH OF SERVICE WOULD RECEIVE RETIRED PAY OF $1,593.75, A DIFFERENCE OF $806.25. THE OFFICER OVER 45 YEARS OLD WOULD RECEIVE MORE THAN 50 PERCENT GREATER RETIRED PAY THAN HIS JUNIOR IN AGE BY 18 MONTHS, THEIR SERVICE BEING OTHERWISE IDENTICAL. AS THE OFFICERS WHO WERE OVER 45 YEARS OF AGE WHEN ORIGINALLY APPOINTED ARE NOW APPROXIMATELY 60 YEARS OF AGE OR MORE, IT WOULD SEEM TOO PLAIN FOR ARGUMENT THAT THE CONGRESS WAS NOT AUTHORIZING SUCH A PREMIUM IN THE WAY OF RETIRED PAY TO SECURE THE EARLY RETIREMENT OF THE OFFICERS ORIGINALLY APPOINTED AT AN AGE GREATER THAN 45 YEARS AND WHO WOULD REACH IN THE COURSE OF 1, 2, 3, OR 4 YEARS AFTER THE ENACTMENT OF SAID SECTION 5, ACT JULY 31, 1935, THE NORMAL AGE OF RETIREMENT, 64 YEARS.

IT IS TO BE OBSERVED THAT THE PROVISIONS OF SECTION 1274, REVISED STATUTES, THAT AN OFFICER RETIRED FROM ACTIVE SERVICE SHALL RECEIVE 75 PERCENTUM OF THE PAY OF THE RANK UPON WHICH HE IS RETIRED, IS NOT APPLICABLE HERE, THE STATUTE HAVING PROVIDED A DIFFERENT BASIS FOR RETIRED PAY. S. 1404, 74TH CONGRESS, AS ORIGINALLY INTRODUCED BY SENATOR SHEPPARD, ON PAGE 6, LINES 15 TO 21, CONTAINED WHAT WAS ENACTED AS THE FOURTH PROVISO OF SECTION 5 OF THE ACT OF JULY 31, 1935, AND IN THE HEARINGS THEREON BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON MILITARY AFFAIRS OF THE UNITED STATES SENATE, THE FOLLOWING IS FOUND, PAGE 20:

SENATOR CAREY. NOW, THIS LAST PARAGRAPH, LINE 15, GENERAL. THAT IS TO GET RID OF THE OLDER MEN?

GENERAL MACARTHUR. THIS IS IN THE LAW NOW, SENATOR.

SENATOR CAREY. IT IS IN THE PRESENT LAW?

GENERAL MACARTHUR. YES, SIR; THAT IS TO TAKE CARE OF MEN WHO WERE MORE THAN 45 YEARS OF AGE WHEN THEY ENTERED THE SERVICE.

SENATOR CAREY. DOES THIS GIVE MORE PAY TO THE OTHER CLASS OF OFFICERS?

GENERAL MACARTHUR. NO. VERY FEW MEN CAME IN AFTER THEY WERE 45.

SENATOR CAREY. IS THERE ANYTHING THAT YOU WANT TO EXPLAIN ABOUT THAT?

GENERAL MACARTHUR. NO.

SENATOR CAREY. I THINK THAT I UNDERSTAND IT.

SENATOR COOLIDGE. YOU MEAN FROM LINE 15?

SENATOR CAREY. SECTION 5. I THINK I UNDERSTAND IT ALL RIGHT.

IN THE SENATE REPORT ON THE BILL, NO. 115, SEVENTY-FOURTH CONGRESS, FIRST SESSION, PAGE 9, IT WAS STATED WITH RESPECT TO THIS PROVISION:

THE PROPOSED LAW PERMITS AN OFFICER ORIGINALLY APPOINTED AT AN AGE GREATER THAN 45 YEARS TO RETIRE UPON COMPLETION OF NOT LESS THAN 15 NOR MORE THAN 29 YEARS' COMMISSIONED SERVICE, WITH THE SAME PERCENT OF ACTIVE PAY FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE AS NOW PROVIDED BY LAW.

IN THE HOUSE OF REPRESENTATIVES REPORT NO. 1323, SEVENTY-FOURTH CONGRESS, FIRST SESSION, PAGE 10, THE FOLLOWING STATEMENT IS FOUND WITH RESPECT TO THIS PROVISO:

THE PROPOSED LAW PERMITS AN OFFICER ORIGINALLY APPOINTED AT AN AGE GREATER THAN 45 YEARS TO RETIRE UPON COMPLETION OF NOT LESS THAN 15 NOR MORE THAN 29 YEARS' COMMISSIONED SERVICE, WITH THE SAME PERCENT OF ACTIVE PAY FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE AS NOW PROVIDED BY LAW.

BOTH THE LANGUAGE OF THE ACT AND THE REPORTS OF THE COMMITTEES INDICATE THAT THE LANGUAGE CONTAINED IN THE FOURTH PROVISO OF SECTION 5 OF THE ACT OF JULY 31, 1935, WAS TO PRESERVE TO OFFICERS WHO WERE OF AN AGE GREATER THAN 45 YEARS WHEN ORIGINALLY APPOINTED, THEIR RIGHT TO 4 PERCENTUM OF THEIR ACTIVE PAY "WHEN RETIRED," IF THE PROVISIONS CONTAINED IN SECTION 5 WERE NOT MORE BENEFICIAL. IT WAS NOT INTENDED TO CREATE THE DISPARITY INDICATED ABOVE BETWEEN AN OFFICER JUST UNDER AND JUST OVER THE AGE OF 45 YEARS WHEN ORIGINALLY APPOINTED, NOR TO PLACE A PREMIUM ON APPOINTMENT AT AN ADVANCED AGE IN 1920 IN THE WAY OF RETIRED PAY OF MORE THAN 50 PERCENT COMPARED WITH OFFICERS APPOINTED AT THE SAME TIME AT AN AGE LESS THAN 45 YEARS.

YOU ARE ACCORDINGLY INFORMED THAT AN OFFICER ELECTING TO RECEIVE RETIRED PAY COMPUTED ON THE BASIS OF 4 PERCENTUM OF ACTIVE-DUTY PAY FOR EACH COMPLETE YEAR OF COMMISSIONED SERVICE WILL BE ENTITLED TO RETIRED PAY COMPUTED ON HIS ACTIVE PAY BEFORE HIS RETIREMENT IN ADVANCED RANK. CREDIT FOR CONSTRUCTIVE SERVICE AND RETIRED PAY BASED ON THE ADVANCED RANK ACCORDED ON RETIREMENT AS PROVIDED IN SECTION 5 APPLY TO OFFICERS WHO DO NOT ELECT TO RECEIVE RETIRED PAY AS PROVIDED IN THE FOURTH PROVISO OF THIS SECTION.