B-124801, NOVEMBER 25, 1955, 35 COMP. GEN. 293

B-124801: Nov 25, 1955

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AGAINST PAYMENT OF ANNUITIES TO PERSONS CONVICTED OF CERTAIN OFFENSES SEVERANCE PAY AUTHORIZED UNDER SECTION 402 OF THE CAREER COMPENSATION ACT OF 1949 TO MEMBERS OF THE UNIFORMED SERVICES UPON SEPARATION IS A LUMP-SUM PAYMENT. (5 U.S.C. 740C) WHICH PROHIBITS ANNUITY PAYMENTS TO MEMBERS OR FORMER MEMBERS WHO ARE. OR HAVE BEEN. 1955: REFERENCE IS MADE TO LETTER DATED JULY 21. IS TO BE CONSIDERED "RETIRED PAY" WITHIN THE MEANING OF THE ACT OF SEPTEMBER 1. THAT ACT PROHIBITS PAYMENT OF ANNUITIES OR RETIRED PAY TO OFFICERS AND EMPLOYEES OF THE UNITED STATES WHO ARE. OR HAVE BEEN. OR HAVE MADE. OR HAVE REFUSED TO GIVE TESTIMONY ON CERTAIN SUBJECTS UNDER THE CIRCUMSTANCES CONTEMPLATED BY THE ACT.

B-124801, NOVEMBER 25, 1955, 35 COMP. GEN. 293

UNIFORMED SERVICES - SEVERANCE PAY - PROHIBITION IN ACT OF SEPTEMBER 1, 1954, AGAINST PAYMENT OF ANNUITIES TO PERSONS CONVICTED OF CERTAIN OFFENSES SEVERANCE PAY AUTHORIZED UNDER SECTION 402 OF THE CAREER COMPENSATION ACT OF 1949 TO MEMBERS OF THE UNIFORMED SERVICES UPON SEPARATION IS A LUMP-SUM PAYMENT, AS DISTINGUISHED FROM "RETIRED," ,RETIREMENT," "RETAINER," OR "EQUIVALENT PAY" WHICH REFER TO PAYMENTS OF A CONTINUING NATURE, AND THEREFORE, THE TERM "EQUIVALENT PAY" AS USED IN ACT OF SEPTEMBER 1, 1954, (5 U.S.C. 740C) WHICH PROHIBITS ANNUITY PAYMENTS TO MEMBERS OR FORMER MEMBERS WHO ARE, OR HAVE BEEN, CONVICTED OF CERTAIN OFFENSES, DOES NOT PRECLUDE PAYMENT OF SEVERANCE PAY.

TO THE SECRETARY OF DEFENSE, NOVEMBER 25, 1955:

REFERENCE IS MADE TO LETTER DATED JULY 21, 1955, FROM THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER), REQUESTING A DECISION "AS TO WHETHER SEVERANCE PAY, SUCH AS THAT AUTHORIZED UNDER SECTION 402 OF THE CAREER COMPENSATION ACT AND OTHER STATUTES, IS TO BE CONSIDERED "RETIRED PAY" WITHIN THE MEANING OF THE ACT OF SEPTEMBER 1, 1954.' THAT ACT PROHIBITS PAYMENT OF ANNUITIES OR RETIRED PAY TO OFFICERS AND EMPLOYEES OF THE UNITED STATES WHO ARE, OR HAVE BEEN, CONVICTED OF CERTAIN OFFENSES; WHO MAKE, OR HAVE MADE, FALSE STATEMENTS UNDER SPECIFIED CIRCUMSTANCES RESPECTING MATTERS DESCRIBED IN THE ACT; OR WHO REFUSE, OR HAVE REFUSED TO GIVE TESTIMONY ON CERTAIN SUBJECTS UNDER THE CIRCUMSTANCES CONTEMPLATED BY THE ACT. A DISCUSSION PERTAINING TO THE QUESTION UPON WHICH THE DECISION IS DESIRED IS SET FORTH IN COMMITTEE ACTION NO. 124, MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, A COPY OF WHICH WAS TRANSMITTED WITH SUCH LETTER.

SECTIONS 1 AND 6, PUBLIC LAW 769, 83RD CONGRESS, APPROVED SEPTEMBER 1, 1954, 68 STAT. 1142, 5 U.S.C. 740B, 740C, RESPECTIVELY, PROVIDE, IN PART, AS FOLLOWS:

( SEC. 1) THAT THERE SHALL NOT BE PAID TO ANY PERSON CONVICTED PRIOR TO, ON, OR AFTER THE DATE OF ENACTMENT OF THIS ACT OF ANY OF THE FOLLOWING OFFENSES DESCRIBED IN THIS SECTION, OR TO THE SURVIVOR OR BENEFICIARY OF SUCH PERSON SO CONVICTED, FOR ANY PERIOD SUBSEQUENT TO THE DATE OF SUCH CONVICTION OR THE DATE OF ENACTMENT OF THIS ACT, WHICHEVER IS LATER, ANY ANNUITY OR RETIRED PAY ON THE BASIS OF THE SERVICE OF SUCH PERSON AS AN OFFICER OR EMPLOYEE OF THE GOVERNMENT:

SEC. 6. AS USED THIS ACT---

(1) THE TERM "OFFICER OR EMPLOYEE OF THE GOVERNMENT" INCLUDES * * * A MEMBER OR FORMER MEMBER OF THE ARMED FORCES OF THE UNITED STATES, INCLUDING THE REGULAR AND RESERVE COMPONENTS THEREOF, THE FLEET RESERVE, THE FLEET MARINE CORPS RESERVE, THE COAST AND GEODETIC SURVEY, AND THE PUBLIC HEALTH SERVICE.

(3) THE TERM "RETIRED PAY" MEANS RETIRED PAY, RETIREMENT PAY, RETAINER PAY, OR EQUIVALENT PAY (OTHER THAN ANY BENEFIT PROVIDED UNDER LAWS ADMINISTERED BY THE VETERANS' ADMINISTRATION), PAYABLE UNDER ANY LAW OF THE UNITED STATES TO MEMBERS OR FORMER MEMBERS OF THE ARMED FORCES OF THE UNITED STATES, INCLUDING THE REGULAR AND RESERVE COMPONENTS THEREOF AND THE FLEET RESERVE AND THE FLEET MARINE CORPS RESERVE, THE COAST AND GEODETIC SURVEY, AND THE PUBLIC HEALTH SERVICE. THE TERM ,RETIRED PAY" DOES NOT INCLUDE THE RETIRED PAY, RETIREMENT PAY, RETAINER PAY, OR EQUIVALENT PAY OF ANY PERSON TO WHOM ANY SUCH PAY HAS BEEN AWARDED OR GRANTED PRIOR TO THE DATE OF ENACTMENT OF THIS ACT INSOFAR AS CONCERNS THE CONVICTION OF SUCH PERSON, PRIOR TO SUCH DATE, OF ANY OFFENSE SPECIFIED IN THE FIRST SECTION OF THIS ACT, OR THE COMMISSION BY SUCH PERSON, PRIOR TO SUCH DATE, OF ANY VIOLATION OF SECTION 2 OF THIS ACT.

THE QUESTION, AS STATED IN COMMITTEE ACTION NO. 124, IS AS FOLLOWS:

QUESTION:

IS PAYMENT OF SEVERANCE PAY, SUCH AS THAT AUTHORIZED UNDER SECTION 402, CAREER COMPENSATION ACT OF 1949 (63 STAT 802), AS AMENDED; SECTION 106B, ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT, 1948 (62 STAT 1082); OFFICER PERSONNEL ACT OF 1947 (61 STAT 795); AND SECTION 16, WARRANT OFFICER ACT OF 1954 (68 STAT 164), PROHIBITED BY THE ACT OF SEPTEMBER 1, 1954 (68 STAT 1142) TO THE SAME EXTENT AS THEREIN PROVIDED FOR "RETIRED PAY?

SECTION 402 OF THE CAREER COMPENSATION ACT OF 1949, 63 STAT. 816, 37 U.S.C. 272, PRESCRIBES THE CONDITIONS UNDER WHICH MEMBERS OF THE REGULAR AND RESERVE COMPONENTS OF THE UNIFORM SERVICES MAY BE RETIRED FOR PHYSICAL DISABILITY. SUBSECTIONS (A), (B), AND (C) OF THAT SECTION EACH CONTAINS A PROVISO AS FOLLOWS:

* * * PROVIDED FURTHER, THAT IF CONDITION (3) ABOVE IS NOT MET BECAUSE THE DISABILITY IS DETERMINED TO BE LESS THAN 30 PERCENTUM, THE MEMBER CONCERNED SHALL NOT BE ELIGIBLE FOR ANY DISABILITY RETIREMENT PROVIDED IN THIS SECTION, BUT MAY BE SEPARATED FOR PHYSICAL DISABILITY FROM THE SERVICE CONCERNED AND UPON SEPARATION SHALL BE ENTITLED TO RECEIVE DISABILITY AND SEVERANCE PAY AS PRESCRIBED IN SECTION 403 OF THIS TITLE.

SUBSECTION (B) CONTAINS A FURTHER PROVISO, AS TO MEMBERS COVERED BY SUCH SUBSECTION, AS FOLLOWS:

* * * AND PROVIDED FURTHER, THAT REGARDLESS OF THE PERCENTAGE OF DISABILITY DETERMINED TO HAVE BEEN INCURRED, IF CONDITION (4) ABOVE IS NOT MET BECAUSE THE MEMBER CONCERNED HAS COMPLETED LESS THAN EIGHT YEARS OF ACTIVE SERVICE AS DEFINED IN SECTION 412 OF THIS TITLE AT THE TIME HE WOULD OTHERWISE HAVE BEEN RETIRED PURSUANT TO THIS SUBSECTION, THE MEMBER CONCERNED SHALL NOT BE ELIGIBLE FOR ANY DISABILITY RETIREMENT PROVIDED IN THIS SECTION, BUT MAY BE SEPARATED FOR PHYSICAL DISABILITY FROM THE SERVICE CONCERNED AND UPON SEPARATION SHALL BE ENTITLED TO RECEIVE DISABILITY SEVERANCE PAY AS PRESCRIBED IN SECTION 403 OF THIS TITLE.

SECTION 403 OF THE 1949 ACT, 37 U.S.C. 273, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

A MEMBER OF THE UNIFORMED SERVICES SEPARATED FOR PHYSICAL DISABILITY PURSUANT TO THE PROVISIONS OF SECTION 402 OF THIS TITLE SHALL BE ENTITLED TO RECEIVE DISABILITY SEVERANCE PAY COMPUTED AS FOLLOWS: AN AMOUNT EQUAL TO TWO MONTHS' BASIC PAY OF THE RANK, GRADE, OR RATING HELD BY SUCH MEMBER AT THE TIME OF THE PLACEMENT OF HIS NAME ON THE TEMPORARY DISABILITY RETIRED LIST OR AT THE TIME OF HIS SEPARATION, WHICHEVER IS EARLIER, AND WHICH SUCH MEMBER WOULD BE ENTITLED TO RECEIVE AT THE TIME OF SEPARATION IF SERVING ON ACTIVE DUTY IN SUCH RANK, GRADE, OR RATING, MULTIPLIED BY A NUMBER EQUAL TO THE NUMBER OF YEARS OF ACTIVE SERVICE TO WHICH SUCH MEMBER IS ENTITLED UNDER THE PROVISIONS OF SECTION 412 OF THIS TITLE BUT NOT TO EXCEED A TOTAL OF TWO YEARS' BASIC PAY * * *.

OTHER PROVISIONS FOR PAYMENT OF SEVERANCE PAY, RELATING TO FORCED SEPARATIONS FROM THE SERVICE FOR REASONS OTHER THAN PHYSICAL DISABILITY, APPEAR IN SECTIONS 112 (G), 212 (G), 312 (H) AND 514E (3) OF THE OFFICER PERSONNEL ACT OF 1947, 61 STAT. 809, 827, 860, 34 U.S.C. 410F (G), 410H (G), 410J (H); SECTION 106 (B) OF THE ACT OF JUNE 29, 1948, 62 STAT. 1082, 10 U.S.C. 585 (B); AND SECTION 16 (A) OF THE WARRANT OFFICER ACT OF 1954, 68 STAT. 164, 10 U.S.C. 600N (A), 34 U.S.C. 430B (A).

SEVERANCE PAY IS A LUMP-SUM PAYMENT WHICH IS PAYABLE, AS ITS NAME IMPLIES, UPON SEPARATION FROM THE SERVICE. THE TERMS "RETIRED PAY," "RETIREMENT PAY" AND "RETAINER PAY" REFER TO PAYMENTS WHICH ARE OF A CONTINUING NATURE AND ARE PAYABLE AT FIXED INTERVALS. IN DECISION OF OCTOBER 27, 1948, 28 COMP. GEN. 263, 265, IT WAS STATED THAT THE LUMP SUM PAYMENT MADE TO AN OFFICER WHO IS "WHOLLY RETIRED" IS NOT "RETIRED PAY.' HENCE, UNLESS SEVERANCE PAY IS INCLUDED IN THE TERM "EQUIVALENT PAY" AS USED IN THE 1954 ACT, IT WOULD SEEM THAT A NEGATIVE ANSWER MUST BE GIVEN TO THE QUESTION PRESENTED.

INSOFAR AS WE ARE AWARE, THE TERM "EQUIVALENT PAY" AS IT RELATES TO MEMBERS OF THE UNIFORMED SERVICES WAS FIRST USED IN CONJUNCTION WITH "RETIRED PAY" IN SECTION 17 OF THE ACT OF JUNE 10, 1922, WHICH SECTION, AS AMENDED, 37 U.S.C. (1940 USED.) 26, PROVIDED:

THAT ON AND AFTER JULY 1, 1922, RETIRED OFFICERS AND WARRANT OFFICERS SHALL HAVE THEIR RETIRED PAY, OR EQUIVALENT PAY, COMPUTED AS NOW AUTHORIZED BY LAW ON THE BASIS OF PAY PROVIDED IN THIS ACT, WHICH PAY SHALL INCLUDE INCREASES FOR ALL ACTIVE DUTY PERFORMED SINCE RETIREMENT IN THE COMPUTATION OF THE LONGEVITY PAY AND PAY PERIODS; PROVIDED, THAT NOTHING CONTAINED IN THIS ACT SHALL OPERATE TO REDUCE THE PRESENT PAY OF OFFICERS, WARRANT OFFICERS, AND ENLISTED MEN NOW ON THE RETIRED LIST OR OFFICERS OR WARRANT OFFICERS IN AN EQUIVALENT STATUS OF ANY OF THE SERVICES MENTIONED IN THE TITLE OF THIS ACT: * * * ( ITALICS SUPPLIED)

IT SEEMS CLEAR THAT, UNDER SUCH PROVISIONS OF LAW,"EQUIVALENT PAY" COULD ACCRUE ONLY TO PERSONS WHO WERE IN A STATUS EQUIVALENT TO THAT OF OFFICERS ON THE RETIRED LIST OF ONE OF THE SERVICES MENTIONED, THAT IS, THOSE WHO WERE PAID ON A CONTINUING BASIS AT FIXED INTERVALS. THE 1922 ACT WAS THE FIRST GENERAL PAY LAW WHICH CONTAINED PERMANENT PROVISIONS RELATING TO THE DIFFERENT UNIFORMED SERVICES, INCLUDING THE PUBLIC HEALTH SERVICE. THAT TIME THERE WERE NO PROVISIONS OF LAW IN EFFECT COVERING THE RETIREMENT OF COMMISSIONED OFFICERS OF THE PUBLIC HEALTH SERVICE AND PLACEMENT OF THEIR NAMES ON A RETIRED LIST. PROVISION WAS MADE IN APPLICABLE REGULATIONS OF THE PUBLIC HEALTH SERVICE, HOWEVER, FOR PLACING SUCH OFFICERS ON "WAITING ORDERS" FOR A PERIOD OF MORE THAN TWO MONTHS AND AN OFFICER SO PLACED WAS PAID 75 PERCENT OF THE PAY HE WAS RECEIVING ON THE DATE HE WAS PLACED IN A "WAITING ORDERS" STATUS. THOSE REGULATIONS WERE GIVEN LEGISLATIVE SANCTION IN THE ACT OF JULY 1, 1902, 32 STAT. 712, AND THE ACT OF AUGUST 14, 1912, 37 STAT. 309. SEE 9 COMP. DEC. 633, AND 19 ID. 510. PUBLIC HEALTH SERVICE OFFICERS WHO WERE PLACED ON "WAITING ORDERS" UNDER SUCH REGULATIONS WERE IN A STATUS EQUIVALENT TO THE STATUS OF OFFICERS ON ONE OF THE RETIRED LISTS OF THE ARMED SERVICES AND IT IS BELIEVED THAT THEIR "WAITING ORDERS" PAY WAS THE "EQUIVALENT PAY" TO WHICH SECTION 17 OF THE 1922 ACT REFERRED. 26 COMP. GEN. 254. EXPRESS PROVISION WAS MADE IN THE PUBLIC HEALTH SERVICE ACT OF APRIL 9, 1930, 46 STAT. 150, FOR THE PAYMENT OF "WAITING ORDERS" PAY.

SECTION 15 OF THE PAY READJUSTMENT ACT OF 1942, 56 STAT. 367 PROVIDED THAT RETIRED OFFICERS AND PERSONNEL OF OTHER CLASSES, AS DESIGNATED,"SHALL HAVE THEIR RETIRED PAY, RETAINER PAY, OR EQUIVALENT PAY" COMPUTED ON THE BASIS OF THE PAY PROVIDED IN THE ACT AND THAT NOTHING CONTAINED IN THE ACT SHOULD OPERATE TO REDUCE THE THEN PRESENT PAY OF SUCH PERSONNEL "NOW ON THE RETIRED LIST AND DRAWING RETAINER PAY, OR PERSONNEL IN AN EQUIVALENT STATUS OF ANY OF THE SERVICES MENTIONED IN THE TITLE OF THIS ACT.' HERE AGAIN, THE "EQUIVALENT PAY" APPEARS TO HAVE BEEN A CONTINUING PAY WHICH WAS PAYABLE TO PERSONNEL HAVING A STATUS EQUIVALENT TO PERSONS ON A RETIRED LIST. APPARENTLY THE 1942 PROVISION FOR COMPUTATION OF "EQUIVALENT PAY" WAS INTENDED TO COVER THE SAME KIND OF PAY AS THAT COVERED BY THE 1922 ACT, THAT IS,"WAITING ORDERS" PAY.

WHILE THE ACT OF APRIL 9, 1930, WAS REPEALED BY SECTION 611 OF THE PUBLIC HEALTH SERVICE ACT, APPROVED JULY 1, 1944, 58 STAT. 714, 719, 42 U.S.C. 291A, AND PROVISION WAS MADE IN THE LATTER ACT FOR RETIREMENT AND PAYMENT OF RETIRED PAY TO COMMISSIONED OFFICERS OF THE PUBLIC HEALTH SERVICE, IT IS ASSUMED THAT OFFICERS THERETOFORE PLACED ON "WAITING ORDERS" CONTINUED TO DRAW PAY IN THAT STATUS UNDER SECTIONS 601 AND 602 OF THE 1944 ACT, 42 U.S.C. 291. SECTION 511 OF THE CAREER COMPENSATION ACT OF 1949, 63 STAT. 829, 37 U.S.C. 311, PROVIDES THAT "MEMBERS OF THE UNIFORMED SERVICES HERETOFORE RETIRED FOR REASONS OTHER THAN PHYSICAL DISABILITY * * * SHALL BE ENTITLED TO RECEIVE RETIRED PAY, RETIREMENT PAY, RETAINER PAY, OR EQUIVALENT PAY" COMPUTED ON A ,MONTHLY" BASIS BY ONE OF THE TWO METHODS THERE PRESCRIBED. AGAIN, THE "EQUIVALENT PAY" OBVIOUSLY IS A CONTINUING, NOT A LUMP-SUM, PAYMENT.

IN VIEW OF THE MEANING GIVEN TO THE TERM "EQUIVALENT PAY" IN PRIOR LEGISLATION, IT APPEARS QUITE DOUBTFUL THAT THE CONGRESS INTENDED TO USE IT IN A DIFFERENT SENSE IN THE 1954 ACT, AS INCLUDING LUMP-SUM SEVERANCE PAY, AND IN VIEW OF THE PENAL NATURE OF THE 1954 ACT AND THE RULE OF STATUTORY CONSTRUCTION REQUIRING A STRICT CONSTRUCTION OF STATUTES PRESCRIBING PENALTIES AND FORFEITURES--- TO WHICH RULE THE MILITARY PAY AND ALLOWANCE COMMITTEE DISCUSSION REFERS--- WE FIND NO BASIS FOR GIVING THE TERM "EQUIVALENT PAY" AS USED IN THE 1954 ACT A SUBSTANTIALLY BROADER MEANING THAN IT APPEARS TO HAVE CONVEYED IN PAY LEGISLATION ENACTED FROM TIME TO TIME DURING A PERIOD OF MORE THAN 30 YEARS.

IT IS RECOGNIZED THAT UNDER THE VIEW EXPRESSED ABOVE, OFFICERS WHO FAIL TO QUALIFY FOR DISABILITY RETIREMENT PAY UNDER SECTION 402 OF THE CAREER COMPENSATION ACT, 37 U.S.C. 272, DUE TO THE FACT THAT THEIR PERCENTAGE OF PHYSICAL DISABILITY IS LESS THAN 30 PERCENT OR THAT THEY HAVE COMPLETED LESS THAN EIGHT YEARS OF ACTIVE SERVICE, BUT WHO ARE ENTITLED TO DISABILITY SEVERANCE PAY, ARE IN A BETTER POSITION, INSOFAR AS THE 1954 ACT IS CONCERNED, THAN OFFICERS WHO HAVE GREATER DISABILITY OR LONGER SERVICE, OR BOTH, AND WHO, EXCEPT FOR THE PROVISIONS OF THE 1954 ACT, WOULD BE ENTITLED TO RECEIVE PHYSICAL DISABILITY RETIREMENT PAY. HOWEVER, THAT IS A MATTER FOR THE CONSIDERATION OF THE CONGRESS. IT FURNISHES NO PROPER BASIS FOR CONCLUDING THAT SEVERANCE PAY IS INCLUDED IN THE TERM "EQUIVALENT PAY.'