A-92380, FEBRUARY 15, 1938, 17 COMP. GEN. 644

A-92380: Feb 15, 1938

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IS AS FOLLOWS: THE COMMISSION HAS BEEN GIVING ATTENTION TO THE INTERPRETATION OF SECTION 6 OF THE RETIREMENT ACT WITH RESPECT TO THE QUESTION OF REFUNDS OF EMPLOYEES' CONTRIBUTIONS AFTER THEY HAVE ELECTED TO RECEIVE COMPENSATION IN GREATER AMOUNT FROM THE EMPLOYEES' COMPENSATION COMMISSION IN LIEU OF THE SMALL DISABILITY ANNUITY TO WHICH THEY OTHERWISE WOULD BE ALSO ENTITLED. THE ESSENTIAL FACTS ARE AS FOLLOWS: 1. ANDERSON WAS PLACED ON LEAVE WITHOUT PAY. 2. THE DEPARTMENT SEPARATED HER FROM THE SERVICE BECAUSE SHE WAS FOUND TO BE TOTALLY DISABLED AND ELIGIBLE FOR DISABILITY RETIREMENT. 4. HER CLAIM FOR ANNUITY WAS ALLOWED. WHICH WAS SEPTEMBER 12. THE CERTIFICATE OF ALLOWANCE WAS ISSUED AND TRANSMITTED TO HER WITH A CHECK FOR THE FIRST THREE MONTHS' ANNUITY. 6.

A-92380, FEBRUARY 15, 1938, 17 COMP. GEN. 644

RETIREMENT - CIVILIAN EMPLOYEES - ELECTION TO RECEIVE DISABILITY COMPENSATION IN LIEU OF ANNUITY - REFUND OF RETIREMENT DEDUCTIONS SECTION 6 OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, PROHIBITING CONCURRENT PAYMENTS OF RETIREMENT ANNUITY UNDER THE ACT AND DISABILITY COMPENSATION UNDER THE EMPLOYEES' COMPENSATION ACT, GRANTS AN ELECTION TO RECEIVE EITHER BENEFIT, WHICH MAY BE EXERCISED AT ANY TIME FOR ANY PORTION OF THE DISABILITY, AND IF THE FORMER EMPLOYEE ELECTS TO RECEIVE THE DISABILITY COMPENSATION, EITHER BEFORE OR AFTER THE RETIREMENT ANNUITY HAS BEGUN, REFUND OF THE BALANCE TO HIS CREDIT IN THE RETIREMENT FUND MAY BE MADE UPON PROPER APPLICATION THEREFOR, BUT IN THE EVENT OF SUCH REFUND, HIS RIGHT TO ANNUITY UNDER THE RETIREMENT ACT WOULD BE TERMINATED AND NO REFUND COULD BE ACCEPTED FROM HIM FOR PURPOSES OF ELECTION TO RECEIVE RETIREMENT ANNUITY COVERING A LATER PERIOD UNLESS REEMPLOYED IN A POSITION WITHIN THE PURVIEW OF THE ACT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, FEBRUARY 15, 1938:

YOUR LETTER OF FEBRUARY 3, 1938, IS AS FOLLOWS:

THE COMMISSION HAS BEEN GIVING ATTENTION TO THE INTERPRETATION OF SECTION 6 OF THE RETIREMENT ACT WITH RESPECT TO THE QUESTION OF REFUNDS OF EMPLOYEES' CONTRIBUTIONS AFTER THEY HAVE ELECTED TO RECEIVE COMPENSATION IN GREATER AMOUNT FROM THE EMPLOYEES' COMPENSATION COMMISSION IN LIEU OF THE SMALL DISABILITY ANNUITY TO WHICH THEY OTHERWISE WOULD BE ALSO ENTITLED.

THE CONSIDERATION OF THIS MATTER ARISES OUT OF THE CASE OF MRS. MORFYDD ANDERSON. THE ESSENTIAL FACTS ARE AS FOLLOWS:

1. BEGINNING SEPTEMBER 13, 1936, MRS. ANDERSON WAS PLACED ON LEAVE WITHOUT PAY.

2. ON SEPTEMBER 23, 1936, SHE FILED A CLAIM FOR DISABILITY ANNUITY.

3. ON NOVEMBER 10, 1936, THE DEPARTMENT SEPARATED HER FROM THE SERVICE BECAUSE SHE WAS FOUND TO BE TOTALLY DISABLED AND ELIGIBLE FOR DISABILITY RETIREMENT.

4. ON DECEMBER 23, 1936, HER CLAIM FOR ANNUITY WAS ALLOWED, BEGINNING OCTOBER 1, 1936, UNDER UNIFORM RETIREMENT DATE LAW, IT BEING FOUND THAT SHE BECAME ELIGIBLE FOR DISABILITY ANNUITY FOLLOWING THE LAST DAY OF SERVICE IN A PAY STATUS, WHICH WAS SEPTEMBER 12, 1936.

5. THE CERTIFICATE OF ALLOWANCE WAS ISSUED AND TRANSMITTED TO HER WITH A CHECK FOR THE FIRST THREE MONTHS' ANNUITY.

6. ON JANUARY 13, 1937, SHE RETURNED THE CERTIFICATE AND CHECK TO THE COMMISSION, REQUESTING A REFUND OF HER CONTRIBUTIONS TO THE RETIREMENT FUND IN LIEU OF ANNUITY, SHE HAVING ELECTED TO ACCEPT COMPENSATION UNDER THE EMPLOYEES' COMPENSATION ACT (WHICH CANNOT UNDER THE RETIREMENT LAW RUN CONCURRENTLY WITH ANNUITY PAYMENTS).

WHERE AN EMPLOYEE, LIKE MRS. ANDERSON, IS ENTITLED TO COMPENSATION FROM THE EMPLOYEES' COMPENSATION COMMISSION AND ALSO TO DISABILITY ANNUITY UNDER SECTION 6 OF THE RETIREMENT ACT, THE STATUTE PRECLUDES THE PAYMENT OF DUAL BENEFITS, AS FOLLOWS:

"NO PERSON SHALL BE ENTITLED TO RECEIVE AN ANNUITY UNDER THE PROVISIONS OF THIS ACT, AND COMPENSATION UNDER THE PROVISIONS OF THE ACT OF SEPTEMBER 7, 1916, ENTITLED,"AN ACT TO PROVIDE COMPENSATION FOR EMPLOYEES OF THE UNITED STATES SUFFERING INJURIES WHILE IN THE PERFORMANCE OF THEIR DUTIES, AND FOR OTHER PURPOSES," COVERING THE SAME PERIOD OF TIME; BUT THIS PROVISION SHALL NOT BE SO CONSTRUED AS TO BAR THE RIGHT OF ANY CLAIMANT TO THE GREATER BENEFIT CONFERRED BY EITHER ACT FOR ANY PART OF THE SAME PERIOD OF TIME.'

ACCORDINGLY, WHEN AN EMPLOYEE WHO IS ENTITLED TO DISABILITY ANNUITY ELECTS TO RECEIVE EMPLOYEES' COMPENSATION INSTEAD, THE COMMISSION STOPS THE PAYMENT OF THE ANNUITY.

THE QUESTION THEN ARISES WHETHER THIS STOPPAGE OF ANNUITY PAYMENTS GIVES RISE TO A RIGHT ON THE PART OF THE EMPLOYEE TO RECEIVE A REFUND OF THE REMAINING PORTION OF THE AMOUNT CREDITED TO HIS INDIVIDUAL ACCOUNT IN THE RETIREMENT FUND. IN OTHER WORDS, DOES THE STOPPAGE OF ANNUITY PAYMENTS BECAUSE OF THE ELECTION TO RECEIVE EMPLOYEES' COMPENSATION, FALL UNDER THE CLAUSE "IN ALL CASES WHERE THE ANNUITY IS DISCONTINUED UNDER THE PROVISIONS OF THIS SECTION," AS USED IN THE FOLLOWING PARAGRAPH OF SECTION 6 OF THE RETIREMENT ACT:

"IN ALL CASES WHERE THE ANNUITY IS DISCONTINUED UNDER THE PROVISIONS OF THIS SECTION BEFORE THE ANNUITANT HAS RECEIVED A SUM EQUAL TO THE AMOUNT CREDITED TO HIS INDIVIDUAL ACCOUNT AS PROVIDED IN SECTION 12 (A) HEREOF, TOGETHER WITH INTEREST AT 4 PERCENTUM PER ANNUM COMPOUNDED ON JUNE 30 OF EACH YEAR, THE DIFFERENCE, UNLESS HE SHALL BECOME REEMPLOYED IN A POSITION WITHIN THE PURVIEW OF THIS ACT SHALL BE PAID TO THE RETIRED EMPLOYEE, AS PROVIDED IN SECTION 12 (B) HEREOF, UPON APPLICATION THEREFOR IN SUCH FORM AND MANNER AS THE COMMISSIONER OF PENSIONS MAY DIRECT. IN CASE OF REEMPLOYMENT IN A POSITION WITHIN THE PURVIEW OF THIS ACT THE AMOUNT SO REFUNDED SHALL BE REDEPOSITED AS PROVIDED IN SECTION 12 (B) HEREOF.'

IT MAY BE STATED THAT SINCE THE PASSAGE OF THE ORIGINAL RETIREMENT ACT IN 1920 IT HAS BEEN THE PRACTICE TO PERMIT REFUNDS OF RETIREMENT DEDUCTION OR UNEXPENDED BALANCES IN CASES INVOLVING DISABILITY ANNUITANTS ONLY WHERE THERE HAS BEEN A PERMANENT DISCONTINUANCE OF ANY RIGHTS TO FUTURE ANNUITY PAYMENTS BY REASON OF RECOVERY. THE CORRECTNESS OF THIS PRACTICE, HOWEVER, HAS BEEN QUESTIONED IN CASES INVOLVING PERSONS HAVING THE RIGHT TO ELECT BETWEEN COMPENSATION UNDER THE PROVISIONS OF THE EMPLOYEES' COMPENSATION ACT APPROVED SEPTEMBER 7, 1916, AND ANNUITY UNDER THE RETIREMENT ACT.

SECTION 6 OF THE RETIREMENT ACT OF MAY 29, 1930, 46 STAT. 472-474, CONTAINS THE PROVISIONS CONTROLLING RETIREMENT FOR DISABILITY. BOTH OF THE PARAGRAPHS OF THE STATUTE QUOTED IN YOUR LETTER APPEAR IN THIS SECTION. THE NEXT TO THE LAST PARAGRAPH THEREOF QUOTED FIRST IN YOUR LETTER PROHIBITS CONCURRENT PAYMENTS OF RETIREMENT ANNUITY UNDER THE ACT AND DISABILITY COMPENSATION UNDER THE EMPLOYEES' COMPENSATION ACT AND GRANTS AN ELECTION TO EMPLOYEES TO RECEIVE EITHER BENEFIT IF THE DISABILITY IS SUCH AS TO AUTHORIZE PAYMENT UNDER EITHER LAW. IT IS EVIDENTLY INTENDED THAT THIS RIGHT OF ELECTION MAY BE EXERCISED AT ANY TIME FOR ANY PORTION OF THE DISABILITY. IF THE EMPLOYEE ELECTS TO RECEIVE DISABILITY COMPENSATION UNDER THE EMPLOYEES' COMPENSATION ACT, DISABILITY ANNUITY UNDER THE RETIREMENT ACT IS NOT PAYABLE, OR IF THE RETIREMENT ANNUITY HAS BEEN RUNNING AT THE TIME OF ELECTION TO RECEIVE DISABILITY COMPENSATION UNDER THE EMPLOYEES' COMPENSATION ACT, THE RETIREMENT ANNUITY MUST BE DISCONTINUED. WHETHER OR NOT PAYMENT OF RETIREMENT ANNUITY HAS BEGUN TO AN EMPLOYEE WHO HAS BEEN SEPARATED FROM THE SERVICE AS IN THE CASE OF MRS. ANDERSON, AT TIME OF ELECTION TO RECEIVE DISABILITY COMPENSATION UNDER THE EMPLOYEES' COMPENSATION ACT, THERE HAS BEEN A DISCONTINUANCE OF THE ANNUITY WITHIN THE MEANING OF THE OTHER PARAGRAPH OF SECTION 6 QUOTED LAST IN YOUR LETTER, WHICH PROVIDES THAT "IN ALL CASES WHERE THE ANNUITY IS DISCONTINUED UNDER THE PROVISIONS OF THIS ACT" THE EMPLOYEE HAS A RIGHT TO REFUND OF THE BALANCE TO HIS CREDIT IN THE RETIREMENT FUND UPON THE FILING OF AN APPLICATION IN PROPER FORM EXCEPT WHERE HE HAS BECOME REEMPLOYED IN A POSITION WITHIN THE PURVIEW OF THE ACT. THE STATUTE DOES NOT LIMIT THE RIGHT TO SUCH REFUND TO CASES "WHERE THERE HAS BEEN A PERMANENT DISCONTINUANCE OF ANY RIGHT TO FUTURE ANNUITY PAYMENTS BY REASON OF RECOVERY" (QUOTING FROM YOUR LETTER), WHICH APPARENTLY HAS BEEN THE VIEW OF THE COMMISSIONER OF PENSIONS AND THE CIVIL SERVICE COMMISSION, BUT THE RIGHT EXISTS WHENEVER AN ANNUITY IS DISCONTINUED FOR ANY REASON REQUIRED UNDER THE SECTION. WHILE IT MIGHT BE UNWISE FOR AN ANNUITANT TO INSIST ON REFUND IF THERE WERE A POSSIBILITY OF RENEWING ANNUITY PAYMENTS THEREAFTER, NEVERTHELESS, THE STATUTE GRANTS THAT RIGHT, WHICH MAY NOT BE DENIED ON THE BASIS OF A POSSIBILITY THAT ANNUITANTS MAY LATER DESIRE TO ELECT TO RECEIVE ANNUITY PAYMENTS OR FOR ANY OTHER REASON OTHER THAN REEMPLOYMENT IN A POSITION WITHIN THE PURVIEW OF THE ACT PRIOR TO THE TIME REFUND IS MADE. OF COURSE, A REFUND OF THE BALANCE TO THE CREDIT OF THE ANNUITANT IN THE RETIREMENT FUND WOULD TERMINATE ALL RIGHT TO AN ANNUITY UNDER THE RETIREMENT ACT AND THERE COULD BE NO REFUND ACCEPTED FROM THE ANNUITANT FOR PURPOSES OF ELECTION TO RECEIVE RETIREMENT ANNUITY COVERING A LATER PERIOD UNLESS REEMPLOYED IN A POSITION WITHIN THE PURVIEW OF THE ACT.

ACCORDINGLY, ON THE BASIS OF AN APPLICATION IN PROPER FORM REFUND OF THE AMOUNT TO THE CREDIT OF MRS. ANDERSON IN THE RETIREMENT FUND IS AUTHORIZED AND THE ANNUITY CHECK SHOULD BE CANCELED.