B-10764, JUNE 21, 1940, 19 COMP. GEN. 1013

B-10764: Jun 21, 1940

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

RETIREMENT FUND DEDUCTIONS - DECEASED EMPLOYEE - BENEFICIARY DESIGNATION DESTROYED BY WILL WHERE A DECEDENT. BY HIS LAST WILL. THERE IS NO OBJECTION TO PAYMENT OF SAID SUM AS THOUGH NO BENEFICIARY HAD BEEN DESIGNATED. 1940: I HAVE YOUR LETTER OF JUNE 10. GEN. 15) THE ACTING COMPTROLLER GENERAL HELD: "UNDER THE PROVISIONS OF THE STATUTE IT IS CLEAR. THAT THE HIGHEST RIGHT TO RECEIVE PAYMENT OF ACCRUED ANNUITY OF A DECEASED EMPLOYEE OF THE GOVERNMENT IS VESTED IN THE BENEFICIARY DESIGNATED IN WRITING BY HIM. THE STATEMENT IN THE DESIGNATION OF THE PURPOSES FOR WHICH THE EMPLOYEE DESIRED HIS BENEFICIARY TO USE THE FUND WAS. IS. SURPLUSAGE INSOFAR AS THE UNITED STATES IS CONCERNED. - WAS SO RECOGNIZED BY THE EMPLOYEE IN THIS CASE AT THE TIME THE BENEFICIARY WAS DESIGNATED IN WRITING TO RECEIVE THE PAYMENT.

B-10764, JUNE 21, 1940, 19 COMP. GEN. 1013

RETIREMENT FUND DEDUCTIONS - DECEASED EMPLOYEE - BENEFICIARY DESIGNATION DESTROYED BY WILL WHERE A DECEDENT, BY HIS LAST WILL, DESTROYED THE TRUST REPOSED IN A BANK UNDER HIS PRIOR DESIGNATION OF THE BANK AS BENEFICIARY OF THE SUM TO HIS CREDIT IN THE CIVIL SERVICE RETIREMENT FUND, AND THE TRUSTEE BANK DISCLAIMS ANY INTEREST IN THE FUND, THERE IS NO OBJECTION TO PAYMENT OF SAID SUM AS THOUGH NO BENEFICIARY HAD BEEN DESIGNATED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, JUNE 21, 1940:

I HAVE YOUR LETTER OF JUNE 10, 1940, AS FOLLOWS:

THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, AS AMENDED, PROVIDES THAT UPON THE DEATH OF AN EMPLOYEE THE SUM TO HIS CREDIT IN THE RETIREMENT FUND SHALL BE PAID TO (1) THE BENEFICIARY OR BENEFICIARIES NAMED BY HIM, (2) THE EXECUTOR OR ADMINISTRATOR OF HIS ESTATE, OR (3) TO THE PERSON OR PERSONS, IN THE OPINION OF THE COMMISSION, LEGALLY ENTITLED THERETO, IN THE ORDER OF PRECEDENCE INDICATED, AND SUCH PAYMENT SHALL BE A BAR TO RECOVERY BY ANY OTHER PERSON.

IN DECISION DATED JULY 10, 1937 (17 COMP. GEN. 15) THE ACTING COMPTROLLER GENERAL HELD:

"UNDER THE PROVISIONS OF THE STATUTE IT IS CLEAR, THEREFORE, THAT THE HIGHEST RIGHT TO RECEIVE PAYMENT OF ACCRUED ANNUITY OF A DECEASED EMPLOYEE OF THE GOVERNMENT IS VESTED IN THE BENEFICIARY DESIGNATED IN WRITING BY HIM. THE STATEMENT IN THE DESIGNATION OF THE PURPOSES FOR WHICH THE EMPLOYEE DESIRED HIS BENEFICIARY TO USE THE FUND WAS, AND IS, SURPLUSAGE INSOFAR AS THE UNITED STATES IS CONCERNED, AND--- AS SUMMARIZED IN THE ABOVE-QUOTED LETTER--- WAS SO RECOGNIZED BY THE EMPLOYEE IN THIS CASE AT THE TIME THE BENEFICIARY WAS DESIGNATED IN WRITING TO RECEIVE THE PAYMENT. THERE IS NO LEGAL AUTHORITY FOR THE UNITED STATES TO DISREGARD THAT DESIGNATION OF BENEFICIARY.'

THE COMMISSION NOW HAS BEFORE IT THE CASE OF AN EMPLOYEE WHO DESIGNATED AS HIS BENEFICIARY " FIRST NATIONAL BANK, TRUSTEE, MONTGOMERY, ALABAMA.' FOLLOWING THE EMPLOYEE'S DEATH AND IN RESPONSE TO COMMUNICATION FROM THIS OFFICE, THE BANK ADVISED THAT IT HAD NO INTEREST IN THE CASE AND DID NOT DESIRE TO MAKE CLAIM FOR THE AMOUNT DUE. THE REASON GIVEN WAS THAT A LITTLE OVER A MONTH PRIOR TO HIS DEATH THE EMPLOYEE, BY MAKING A NEW WILL, DESTROYED THE TRUST THERETOFORE EXISTING UNDER WHICH THE BANK HAD BEEN NAMED AS TRUSTEE. THE OFFICIALS OF THE BANK ADVISED THE EMPLOYEE AT THE TIME TO EXECUTE AND FILE A NEW DESIGNATION OF BENEFICIARY COVERING HIS RETIREMENT ACCOUNT, BUT THE EMPLOYEE FAILED TO TAKE SUCH ACTION.

YOUR DECISION AS TO WHETHER THE COMMISSION WOULD BE LEGALLY AUTHORIZED TO DISREGARD THE DESIGNATION AND MAKE PAYMENT TO THE DULY APPOINTED ADMINISTRATOR OF THE DECEASED EMPLOYEE'S ESTATE IS RESPECTFULLY REQUESTED.

THE REGULATIONS OF THE CIVIL SERVICE COMMISSION GOVERNING THE DESIGNATION AND CHANGE OF BENEFICIARY UNDER THE RETIREMENT ACT PROVIDE AS FOLLOWS (QUOTING FROM THE REVERSE SIDE OF FORM NO. 2806-1 ENTITLED " DESIGNATION OF BENEFICIARY"):

3. A REVOCATION OR CHANGE OF BENEFICIARY MAY BE MADE AT ANY TIME AND WITHOUT THE KNOWLEDGE OR CONSENT OF THE PREVIOUS BENEFICIARY, EXCEPT THAT NO CHANGE OF BENEFICIARY WILL BE RECOGNIZED UNLESS MADE IN WRITING ON THE FORM 2806-1, ENTITLED " DESIGNATION OF BENEFICIARY," AND FILED WITH THE CIVIL SERVICE COMMISSION, IN DUPLICATE, PRIOR TO THE DEATH OF THE ANNUITANT OR EMPLOYEE. THE DUPLICATE COPY OF PRIOR DESIGNATION SHOULD ACCOMPANY THE CHANGE OF BENEFICIARY. A PURPORTED CHANGE OF BENEFICIARY IN A DULY PROBATED LAST WILL AND TESTAMENT OF AN ANNUITANT OR EMPLOYEE SHALL NOT BE RECOGNIZED AS A VALID CHANGE OF BENEFICIARY, BUT SHALL BE CONSTRUED AS CANCELING AND REMOVING ANY BENEFICIARY RECORDED BEFORE THE DATE OF THE EXECUTION OF THE SAID WILL, AND PAYMENT SHALL BE MADE AS THOUGH NO BENEFICIARY HAD BEEN DESIGNATED.

SEE, ALSO, DECISION OF JUNE 8, 1939, 18 COMP. GEN. 910, HOLDING AS FOLLOWS (QUOTING FROM THE SYLLABUS):

WHERE THE CIVIL SERVICE COMMISSION HAS FOUND THAT THE SIGNATURE OF AN EMPLOYEE ON AN INSTRUMENT PURPORTING TO BE A CHANGE OF BENEFICIARY TO AMOUNTS TO HIS CREDIT IN THE CIVIL SERVICE RETIREMENT FUND WAS NOT PROPERLY WITNESSED AS REQUIRED BY REGULATIONS ISSUED PURSUANT TO GENERAL STATUTORY AUTHORITY GIVEN IN THE ACT OF JUNE 22, 1934, 48 STAT. 1201, AND, THEREFORE, THAT THE INSTRUMENT CANNOT BE REGARDED AS EFFECTIVE IN THAT REGARD, OBJECTION IS NOT REQUIRED BY THIS OFFICE SHOULD THE INSTRUMENT BE GIVEN THE EFFECT OF CANCELING OR REVOKING THE PREVIOUS DESIGNATION AND PAYMENT OF THE AMOUNT BE MADE TO THE ESTATE OF THE EMPLOYEE IN ACCORDANCE WITH THE ORDER OF PREFERENCE STATED IN THE SAID ACT, PROVIDED THE COMMISSION FINDS THAT THE EMPLOYEE--- WHILE LEGALLY COMPETENT TO DO SO--- SIGNED THE INSTRUMENT IN QUESTION. 5 COMP. GEN. 249, DISTINGUISHED.

ACCORDINGLY, IF IT BE ESTABLISHED TO THE SATISFACTION OF THE COMMISSION THAT THE DECEDENT DESTROYED THE TRUST BY HIS LAST WILL AND TESTAMENT AND THAT SAID DOCUMENT HAD THE EFFECT OF CANCELING HIS DESIGNATION OF THE FIRST NATIONAL BANK, TRUSTEE, AS BENEFICIARY, AND HAVING IN MIND THAT THE BANK DISCLAIMS ANY INTEREST IN THE CASE AND DOES NOT DESIRE TO MAKE CLAIM FOR THE AMOUNT DUE, THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO PAYMENT OF THE AMOUNT TO THE CREDIT OF THE DECEASED EMPLOYEE IN THE RETIREMENT FUND AS THOUGH NO BENEFICIARY HAD BEEN DESIGNATED.