B-121617, APRIL 4, 1955, 34 COMP. GEN. 497

B-121617, APRIL 4, 1955, 34 COMP. GEN. 497

PAY - RETIRED - UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953 - EFFECTIVE DATE OF ELECTION WHERE THE REGULATIONS ISSUED UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953 PROVIDE THAT THE EFFECTIVE DATE OF AN ELECTION MADE AFTER NOVEMBER 1, 1953, IN CASE OF A RETIRED MEMBER, IS THE DATE THE ELECTION IS POSTMARKED, AND THAT THE EFFECTIVE DATE OF REDUCTION IN RETIRED PAY IS THE FIRST DAY OF THE MONTH IN WHICH THE ELECTION IS EFFECTIVE, A RETIRED MEMBER OF THE UNIFORMED SERVICES IN VOLUNTARILY EXERCISING AN ELECTION OPTION MAY NOT HAVE THE EFFECTIVE DATE OF SUCH ELECTION POSTPONED UNTIL A LATER DATE.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO GENERAL JAMES E. MORRISETTE, APRIL 4, 1955:

REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 21, 1954, AND MARCH 3, 1955, REQUESTING RECONSIDERATION OF SETTLEMENT DATED AUGUST 16, 1954, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $63.55, DEDUCTED FROM YOUR RETIRED PAY FOR THE MONTH OF APRIL 1954, SUCH DEDUCTION HAVING BEEN MADE PURSUANT TO YOUR ELECTION TO RECEIVE A REDUCED AMOUNT OF RETIRED PAY FOR THE PURPOSE OF PROVIDING AN ANNUITY FOR YOUR DEPENDENT UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501.

IT APPEARS THAT YOU WERE PLACED ON THE RETIRED LIST OF THE ARMY, EFFECTIVE AUGUST 31, 1946. YOU EXERCISED AN ELECTION OF OPTIONS UNDER SECTION 3 (B) OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 502, REQUESTING THAT SUCH ELECTION BE EFFECTIVE APRIL 30, 1954. YOUR ELECTION OF OPTIONS WAS POSTMARKED APRIL 28, 1954. YOUR CLAIM WAS DISALLOWED ON THE BASIS OF PARAGRAPHS 5 AND 8 OF ARMY SPECIAL REGULATIONS 35-1365-1, DECEMBER 11, 1953, PROVIDING THAT THE EFFECTIVE DATE OF AN ELECTION MADE AFTER NOVEMBER 1, 1953, IN THE CASE OF A RETIRED MEMBER, IS THE DATE THE ELECTION IS POSTMARKED, AND THAT THE EFFECTIVE DATE OF REDUCTION IN RETIRED PAY IN THE CASE OF MEMBERS WHO WERE IN A RETIRED STATUS ON NOVEMBER 1, 1953, IS THE FIRST DAY OF THE MONTH IN WHICH THE ELECTION IS EFFECTIVE. PARAGRAPH 402A OF JOINT REGULATIONS FOR THE ADMINISTRATION OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT, APPROVED BY THE SECRETARY OF DEFENSE UNDER AUTHORITY DELEGATED BY EXECUTIVE ORDER NO. 10499, ALSO PROVIDES THAT THE "EFFECTIVE DATE OF DEDUCTION IN RETIRED PAY WILL BE * * * THE FIRST DAY OF THE MONTH IN WHICH ELECTION IS EFFECTIVE IN THE CASE OF A RETIRED MEMBER.'

AS A BASIS FOR RECONSIDERATION OF THE SETTLEMENT YOU SAY THAT IN ORDER TO AVAIL YOURSELF OF THE BENEFITS OF THE STATUTE, YOUR ELECTION HAD TO BE MADE ON OR BEFORE APRIL 30, 1954, AND YOU URGE THAT THIS REQUIREMENT SHOULD NOT OPERATE TO OBLIGATE YOU TO PAY FOR THE FULL MONTH OF APRIL, PARTICULARLY AS YOUR WIDOW WOULD NOT HAVE BEEN ENTITLED TO ANY ANNUITY BENEFITS UNDER THE LAW IF YOUR DEATH HAD OCCURRED IN APRIL PRIOR TO THE DATE ON WHICH YOUR ELECTION WAS MAILED. ALSO, YOU SAY THAT THE SETTLEMENT OF AUGUST 16, 1954, IS BASED UPON ADMINISTRATIVE REGULATIONS INSTEAD OF ANY PROVISION OF THE LAW ITSELF AND EXPRESS THE VIEW THAT YOUR RETIRED PAY MAY BE REDUCED ONLY BY ACT OF CONGRESS.

THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 502 PROVIDES, IN PART, AS FOLLOWS:

( SEC. 3) (B) A RETIRED MEMBER WHO HAS HERETOFORE BEEN AWARDED RETIRED PAY BY A UNIFORMED SERVICE MAY, WITHIN ONE HUNDRED AND EIGHTY DAYS AFTER THE EFFECTIVE DATE OF THIS ACT, ELECT TO RECEIVE A REDUCED AMOUNT OF THAT RETIRED PAY IN ORDER TO PROVIDE ONE OR MORE OF THE ANNUITIES SPECIFIED IN SECTION 4, PAYABLE AFTER HIS DEATH TO HIS WIDOW, CHILD, OR CHILDREN. ELECTION SO MADE SHALL THEREAFTER BE IRREVOCABLE.

( SEC. 4) (C) THE REDUCTION TO BE MADE IN THE RETIRED PAY OF * * * (A) RETIRED MEMBER WHO HAS MADE AN ELECTION UNDER SECTION 3 SHALL BE COMPUTED BY THE UNIFORMED SERVICE CONCERNED IN EACH INDIVIDUAL CASE * * * AS OF THE DATE OF ELECTION IN THE CASE OF A RETIRED MEMBER, BY AN ACTUARIAL EQUIVALENT METHOD USING AS A BASIS APPROPRIATE ACTUARIAL TABLES SELECTED BY THE BOARD OF ACTUARIES * * *.

SEC. 8. THIS ACT SHALL BE ADMINISTERED UNDER REGULATIONS PRESCRIBED BY THE PRESIDENT, WHICH REGULATIONS SHALL BE UNIFORM INSOFAR AS PRACTICABLE FOR ALL OF THE UNIFORMED SERVICES.

SEC. 10. ALL ANNUITIES PAYABLE UNDER THIS ACT SHALL ACCRUE FROM THE FIRST DAY OF THE MONTH IN WHICH THE RETIRED MEMBER DIES * * *.

SUCH STATUTORY PROVISIONS (EFFECTIVE NOVEMBER 1, 1953), DECLARE EXPRESSLY THAT THE RETIRED PAY OF A RETIRED MEMBER WHO EXERCISES A TIMELY ELECTION OF OPTIONS UNDER THE STATUTE SHALL BE REDUCED TO PROVIDE THE SPECIFIED ANNUITIES AND THAT THE REDUCTION IN RETIRED PAY SHALL BE COMPUTED AS OF THE DATE OF ELECTION BY A SPECIFIED ACTUARIAL METHOD. CLEARLY SUCH PROVISIONS CONSTITUTE LEGAL AUTHORITY FOR MAKING DEDUCTIONS FROM THE RETIRED PAY OF THE RETIRED MEMBER CONCERNED AND THE REQUIREMENT FOR THE USE OF AN ACTUARIAL EQUIVALENT METHOD IN COMPUTING THE REDUCTION IN RETIRED PAY CONTEMPLATES THAT THE TOTAL TO BE DEDUCTED FROM THE RETIRED PAY DURING THE LIFETIME OF THE MEMBER WILL BE SUFFICIENT, ON AN ACTUARIAL BASIS, TO PAY THE COST OF THE ANNUITY WHICH MAY BE PROVIDED FOR THE DEPENDENT. THE MATTER OF THE TIME WHEN THE DEDUCTIONS FROM RETIRED PAY ARE TO BEGIN APPEARS TO BE AN ESSENTIAL PART OF THE METHOD OF COMPUTING THE DEDUCTIONS FROM RETIRED PAY AND THE OMISSION OF ANY EXPRESS STATUTORY PROVISION IN THAT REGARD INDICATES A LEGISLATIVE VIEW THAT SUCH MATTER SHOULD BE TAKEN CARE OF BY THE REGULATIONS AUTHORIZED TO BE PRESCRIBED BY SECTION 8 OF THE STATUTE. THE LEGISLATIVE PROCEDURE OF DECLARING THE POLICY AND PURPOSE OF A STATUTE AND PROVIDING THE STANDARDS, BUT CONFERRING UPON ADMINISTRATIVE AUTHORITY THE POWER TO ENACT RULES AND REGULATIONS TO PROMOTE THE PURPOSE AND SPIRIT OF THE LEGISLATION AND CARRY IT INTO EFFECT IS UNDOUBTEDLY WITHIN THE POWERS OF CONGRESS. SEE, GENERALLY, 11 AM. JUR., CONSTITUTIONAL LAW, SECTION 240, AND 42 AM. JUR., PUBLIC ADMINISTRATIVE LAW, SECTION 49.

SECTION 10 OF THE STATUTE, WHICH PROVIDES THAT THE ANNUITIES SHALL ACCRUE FROM THE FIRST DAY OF THE MONTH IN WHICH THE RETIRED MEMBER DIES, PRECLUDES ANY PRORATING OF SUCH ANNUITIES FOR FRACTIONAL PERIODS OF A MONTH AND, REASONABLY, THE DEDUCTION FROM RETIRED PAY ALSO OUGHT TO BEGIN ON THE FIRST DAY OF THE MONTH SO THAT THE DEDUCTION WILL ALWAYS BE ADEQUATE TO COVER THE FULL PERIOD FOR WHICH THE DEPENDENT WILL BE PAID IN CASE THE MEMBER DIES IMMEDIATELY, OR SOON, AFTER MAKING HIS ELECTION. CLEARLY IT IS DESIRABLE FROM AN ADMINISTRATIVE STANDPOINT TO HAVE BOTH REDUCTIONS IN RETIRED PAY AND PAYMENTS TO DEPENDENTS COMMENCE ON THE FIRST DAY OF THE MONTH AND, HAVING IN MIND THE POSSIBILITY THAT A RETIRED MEMBER MAY DIE IN THE SAME MONTH IN WHICH HIS ELECTION BECOMES EFFECTIVE, NO BASIS IS PERCEIVED FOR VIEWING THE PROVISIONS OF THE REGULATIONS (DIRECTING THAT REDUCTION IN RETIRED PAY SHALL BEGIN WITH THE FIRST DAY OF THE MONTH IN WHICH THE ELECTION IS EFFECTIVE) AS EITHER ARBITRARY, OR ILLEGAL, OR OTHERWISE SUBJECT TO OBJECTION. SEE DECISION OF OCTOBER 13, 1953, 33 COMP. GEN. 162. EVEN IF THERE HAD BEEN A PROVISION IN THE LAW OR REGULATIONS FOR POSTPONING THE EFFECTIVE DATE OF YOUR ELECTION, BEYOND THE DATE IT WAS POSTMARKED, TO APRIL 30, 1954, THE REGULATIONS ISSUED FOR THE ADMINISTRATION OF THE STATUTE, UNDER AN EXPRESS STATUTORY PROVISION, STILL WOULD REQUIRE THAT THE REDUCTION IN YOUR RETIRED PAY BE MADE EFFECTIVE APRIL 1, 1954. YOU WERE NOT REQUIRED TO MAKE THE ELECTION, BUT VOLUNTARILY MADE IT, SUBJECT TO THE CONDITIONS PRESCRIBED IN EXISTING REGULATIONS, INCLUDING THE CONDITION HERE INVOLVED THAT DEDUCTIONS FROM YOUR RETIRED PAY WOULD BEGIN THE FIRST OF THE MONTH IN WHICH THE ELECTION BECAME EFFECTIVE.

IT FOLLOWS THAT YOUR CLAIM PROPERLY WAS DISALLOWED AND THAT THE SETTLEMENT OF AUGUST 16, 1954, MUST BE SUSTAINED.