B-125329, NOV. 15, 1955

B-125329, NOV. 15, 1955

TO HONORABLE SECRETARY OF STATE:

THE DEPUTY UNDER SECRETARY FOR ADMINISTRATION BY LETTER OF AUGUST 23, 1955, REQUESTS OUR DECISION CONCERNING THE PROPER COMPUTATION OF ANNUITY PAYMENTS TO A RETIRED FOREIGN SERVICE OFFICER UNDER THE PROVISIONS OF THE FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM, TITLE VIII OF THE FOREIGN SERVICE ACT OF 1946, 60 STAT. 999 (22 U.S.C. 1061, ET SEQ.).

THE FACTS AS RELATED IN THE UNDER SECRETARY'S LETTER ARE AS FOLLOWS:

"MERWIN L. BOHAN, FOREIGN SERVICE OFFICER, WAS RETIRED FEBRUARY 28, 1949, IN ACCORDANCE WITH SECTION 636 OF THE ACT. THE ANNUITY TO MR. BOHAN WAS COMPUTED ON THE BASIS OF 23 YEARS AND 6 MONTHS OF SERVICE AT AN AVERAGE SALARY OF $10,400 FOR THE FIVE YEARS NEXT PRECEDING THE DATE OF RETIREMENT.

"UNDER THE PROVISIONS OF SECTION 520 (B) OF THE ACT, MR. BOHAN WAS RECALLED TO ACTIVE DUTY AUGUST 13, 1950, AND SERVED UNTIL JANUARY 31, 1955 AT A BASIC RATE IN EXCESS OF $13,500, THE MAXIMUM SALARY WHICH MAY BE CONSIDERED AS BASIC SALARY FOR RETIREMENT PURPOSES AS PRESCRIBED IN SECTION 821 (B) OF THE ACT. DURING THIS PERIOD MR. BOHAN WAS REQUIRED TO MAKE CONTRIBUTIONS TO THE RETIREMENT FUND IN ACCORDANCE WITH SECTIONS 811 AND 871 OF THE ACT.

"UPON COMPLETION OF THE PERIOD OF TEMPORARY SERVICE, MR. BOHAN WAS RESTORED TO THE ANNUITY ROLL FOR RETIRED FOREIGN SERVICE OFFICERS AND THEIR BENEFICIARIES, EFFECTIVE FEBRUARY 1, 1955, AT AN ANNUITY RECOMPUTED TO INCLUDE CREDIT FOR THE ADDITIONAL SERVICE FROM AUGUST 13, 1950 THROUGH JANUARY 31, 1955. HOWEVER, IN THE RECOMPUTATION OF THE ANNUITY CONSIDERATION WAS NOT GIVEN TO THE INCREASE IN BASIC SALARY DURING THE PERIOD OF REEMPLOYMENT. * * *"

SECTION 871 OF THE ACT READS AS FOLLOWS:

"A FOREIGN SERVICE OFFICER, REINSTATED IN THE SERVICE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 520 (B) SHALL, WHILE SO SERVING, BE ENTITLED IN LIEU OF HIS RETIREMENT ALLOWANCE TO THE FULL PAY OF THE CLASS IN WHICH HE IS TEMPORARILY SERVING. DURING SUCH SERVICE, HE SHALL MAKE CONTRIBUTIONS TO THE FUND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 811. IF THE ANNUITY HE WAS RECEIVING PRIOR TO HIS REINSTATEMENT IN THE SERVICE WAS BASED ON LESS THAN THIRTY YEARS OF SERVICE CREDIT, THE AMOUNT OF HIS ANNUITY WHEN HE REVERTS TO THE RETIRED LIST SHALL BE RECOMPUTED ON THE BASIS OF HIS TOTAL SERVICE CREDIT.'

THE UNDER SECRETARY STATES THAT THE DEPARTMENT, RELYING ON THE LANGUAGE OF THE LAST SENTENCE OF THE ABOVE-QUOTED SECTION, AND ON OTHER SECTIONS OF THE STATUTE, CONCLUDED THAT RECOMPUTATION OF AN ANNUITY ON A BASIS WHICH WOULD GIVE CONSIDERATION TO THE INCREASE IN BASIC SALARY AS WELL AS TO THE ADDITIONAL SERVICE IS NOT AUTHORIZED. THE ANNUITANT CONTENDS THAT CONSIDERATION SHOULD BE GIVEN NOT ONLY TO THE ADDITIONAL SERVICE BUT ALSO TO THE INCREASED SALARY RECEIVED DURING THE PERIOD OF REINSTATEMENT UPON WHICH HE WAS REQUIRED BY SECTION 871 TO MAKE CONTRIBUTIONS TO THE RETIREMENT FUND IN ACCORDANCE WITH SECTION 811 OF THE ACT. BOTH PARTIES RECOGNIZE THAT THE CONTRIBUTIONS REQUIRED BY SECTION 871 ARE TO BE BASED UPON THE SALARY RATE RECEIVED DURING THE PERIOD OF REINSTATEMENT.

IT IS NOT CLEAR FROM THE LANGUAGE OF THE LAST SENTENCE OF SECTION 871, READ ALONE, WHETHER IT WAS THE INTENT OF THE CONGRESS ONLY TO PROVIDE POSITIVE AUTHORITY FOR ALLOWING CREDIT FOR THE ADDITIONAL SERVICE IN RECOMPUTATION OF THE ANNUITY OR WHETHER ITS PURPOSE WAS TO EXCLUDE OTHER ELEMENTS, SUCH AS INCREASED BASIC SALARY, FROM SUCH COMPUTATION. THE LEGISLATIVE HISTORY OF THE ACT IS SILENT AS TO THE INTENT OF THE CONGRESS IN THAT REGARD. HOWEVER, AS THE REINSTATED FOREIGN SERVICE OFFICER IS REQUIRED TO MAKE CONTRIBUTIONS TO THE RETIREMENT FUND ON THE BASIS OF THE PAY OF THE CLASS IN WHICH HE IS SERVING, WE FEEL THAT THE OFFICER'S ANNUITY, UPON REVERSION TO THE STATUS OF AN ANNUITANT, SHOULD AGAIN BE COMPUTED IN ACCORDANCE WITH SECTION 821 (A) OF THE ACT. ACCORDINGLY, THE RECOMPUTATION OF ANNUITIES, IN CASES SUCH AS MR. BOHAN-S, IS TO INCLUDE BENEFITS FLOWING FROM CONTRIBUTIONS MADE ON A HIGHER SALARY RATE.