B-125484, MAY 4, 1956, 35 COMP. GEN. 612

B-125484: May 4, 1956

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AN ENLISTED MEMBER OF THE NAVY WHO WAS TRANSFERRED TO THE FLEET RESERVE. 6 MONTHS AND 29 DAYS OF SERVICE IS CONSIDERED TO HAVE COMPLETED 26 YEARS OF ACTIVE SERVICE FOR PERCENTAGE MULTIPLE PURPOSES AND "OVER 26" YEARS OF SERVICE FOR BASIC PAY PURPOSES IN VIEW OF THE SIXTH PROVISO IN SECTION 204. HE IS NOT ENTITLED TO RETIRED PAY BASED ON ACTIVE-DUTY PAY OF HIS GRADE WITH "OVER 22" YEARS OF SERVICE. 1956: REFERENCE IS MADE TO LETTER OF SEPTEMBER 8. DECISION IS REQUESTED ON THE QUESTION WHETHER A MEMBER OF THE NAVY RELEASED TO INACTIVE DUTY ON MAY 31. WITH EXACTLY 22 YEARS OF SERVICE AND PLACED ON THE RETIRED LIST ON THE FOLLOWING DAY IS ENTITLED TO HAVE HIS RETIRED PAY COMPUTED ON THE BASIS OF " OVER" 22 YEARS OF SERVICE OR ON THE BASIS OF " OVER" 18 YEARS OF SERVICE FOR BASIC PAY PURPOSES.

B-125484, MAY 4, 1956, 35 COMP. GEN. 612

PAY - RETIRED - TRANSFER TO THE FLEET RESERVE - SERVICE COMPUTATION BASIS IN THE COMPUTATION OF RETAINER PAY, AN ENLISTED MEMBER OF THE NAVY WHO WAS TRANSFERRED TO THE FLEET RESERVE, PURSUANT TO SECTION 204 OF THE NAVAL RESERVE ACT OF 1938, AND WHO HAS COMPLETED 25 YEARS, 6 MONTHS AND 29 DAYS OF SERVICE IS CONSIDERED TO HAVE COMPLETED 26 YEARS OF ACTIVE SERVICE FOR PERCENTAGE MULTIPLE PURPOSES AND "OVER 26" YEARS OF SERVICE FOR BASIC PAY PURPOSES IN VIEW OF THE SIXTH PROVISO IN SECTION 204, WHICH REQUIRES A FRACTIONAL YEAR OF SIX MONTHS OR MORE TO BE CONSIDERED AS A FULL YEAR. UNDER A STATUTE WHICH REQUIRES THAT RETIRED PAY FOR MEMBERS OF THE UNIFORMED SERVICES BE COMPUTED ON THE BASIS OF THE MEMBER'S ACTIVE-DUTY PAY "AT THE TIME OF HIS RETIREMENT," AND THE MEMBER COMPLETES EXACTLY 22 YEARS OF SERVICE ON THE DAY PRECEDING THE EFFECTIVE DATE OF HIS RETIREMENT, HE IS NOT ENTITLED TO RETIRED PAY BASED ON ACTIVE-DUTY PAY OF HIS GRADE WITH "OVER 22" YEARS OF SERVICE, THE RULE IN THE CASE OF LAMBERT V. UNITED STATES, 121 COURT OF CLAIMS 333, BEING APPLICABLE IN SUCH A CASE. CASES INVOLVING SECTION 204 OF THE NAVAL RESERVE ACT OF 1938, DISTINGUISHED.

TO THE SECRETARY OF THE NAVY, MAY 4, 1956:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 8, 1955, FROM THE ASSISTANT SECRETARY OF THE NAVY ( PERSONNEL AND RESERVE FORCES) FORWARDING A LETTER DATED JULY 7, 1955, FROM THE DISBURSING OFFICER, SPECIAL PAYMENTS DIVISION, NAVY FINANCE CENTER, REQUESTING DECISION AS TO THE PROPER BASIS UPON WHICH TO COMPUTE THE RETAINER PAY OF JOHN W. WALDRON, CHIEF COMMUNICATIONS TECHNICIAN, U.S. FLEET RESERVE. ALSO, DECISION IS REQUESTED ON THE QUESTION WHETHER A MEMBER OF THE NAVY RELEASED TO INACTIVE DUTY ON MAY 31, 1955, WITH EXACTLY 22 YEARS OF SERVICE AND PLACED ON THE RETIRED LIST ON THE FOLLOWING DAY IS ENTITLED TO HAVE HIS RETIRED PAY COMPUTED ON THE BASIS OF " OVER" 22 YEARS OF SERVICE OR ON THE BASIS OF " OVER" 18 YEARS OF SERVICE FOR BASIC PAY PURPOSES.

IT APPEARS THAT WHEN JOHN W. WALDRON WAS TRANSFERRED TO THE FLEET RESERVE, CLASS F-6, AND RELEASED TO INACTIVE DUTY ON FEBRUARY 1, 1955, HE HAD A TOTAL OF 25 YEARS, 6 MONTHS, 29 DAYS OF CREDITABLE ACTIVE FEDERAL SERVICE. IT IS STATED THAT HE ELECTED TO HAVE HIS RETAINER PAY COMPUTED ,UNDER THE 2 1/2 PERCENT FORMULA" IN SECTION 204 OF THE NAVAL RESERVE ACT OF 1938, 34 U.S.C. 854C, AS AMENDED BY SECTION 2 OF THE ACT OF AUGUST 10, 1946, 60 STAT. 993, 34 U.S.C. 854C, AND THAT HIS RETAINER PAY HAS BEEN CREDITED AT THE RATE OF 65 PERCENTUM OF THE BASIC PAY OF AN ENLISTED MAN IN PAY GRADE F-7, WITH OVER 26 YEARS OF SERVICE. DOUBT IS EXPRESSED AS TO WHETHER HE SHOULD BE CREDITED WITH RETAINER PAY AS A MEMBER WITH OVER 22 YEARS OF SERVICE, OR WITH OVER 26 YEARS OF SERVICE.

THE COMPTROLLER OF THE NAVY STATES IN THE THIRD PARAGRAPH OF HIS INDORSEMENT OF AUGUST 5, 1955, ALSO ENCLOSED, THAT SUCH PROCEDURE OF GIVING CREDIT FOR A FRACTIONAL YEAR OF SIX MONTHS OR MORE AS A FULL YEAR FOR LONGEVITY PAY OR BASIC PAY PURPOSES HAS BEEN FOLLOWED SINCE 1947, WITH RESPECT TO THOSE MEMBERS OF THE NAVY WHO WERE INITIALLY TRANSFERRED TO THE FLEET RESERVE UNDER SECTION 203 OR SECTION 204 OF THE NAVAL RESERVE ACT OF 1938, 34 U.S.C. 339, AS AMENDED, ON OR AFTER AUGUST 10, 1946, AND WHO ELECTED TO RECEIVE RETAINER PAY COMPUTED UNDER THE LAWS IN EFFECT FROM AND AFTER AUGUST 10, 1946. IT IS FURTHER STATED THAT IN THE ADJUSTMENTS OF RETAINER AND RETIRED PAY ACCOUNTS PURSUANT TO SECTION 208 OF THE NAVAL RESERVE ACT OF 1938, AS ADDED BY SECTION 3 OF THE ACT OF AUGUST 10, 1946, 60 STAT. 994, ON THE BASIS OF THE SANDERS DECISION OF JANUARY 9, 1951, 120 C.1CLS. 501, A FRACTIONAL PART OF A YEAR OF SIX MONTHS OR MORE HAS BEEN CREDITED AS A FULL YEAR FOR LONGEVITY PAY PURPOSES.

IT APPEARS THAT WALDRON WAS TRANSFERRED TO THE FLEET RESERVE, CLASS F-6, UNDER THE AUTHORITY OF SECTION 204 OF THE 1938 ACT, AS AMENDED BY SECTION 2 OF THE ACT OF AUGUST 10, 1946. SECTION 204, AS AMENDED, IN PART PROVIDES (QUOTING FROM 34 U.S.C. 854C)

MEMBERS OF THE NAVY WHO FIRST ENLISTED IN THE NAVY AFTER JULY 1, 1925, OR WHO REENLISTED THEREIN AFTER JULY 1, 1925, HAVING BEEN OUT OF THE REGULAR NAVY FOR MORE THAN THREE MONTHS, MAY UPON THEIR OWN REQUEST BE TRANSFERRED TO THE FLEET RESERVE UPON THE COMPLETION OF AT LEAST TWENTY YEARS' ACTIVE FEDERAL SERVICE. AFTER SUCH TRANSFER, EXCEPT WHEN ON ACTIVE DUTY, THEY SHALL BE PAID AT THE ANNUAL RATE OF 2 1/2 PERCENTUM OF THE ANNUAL BASE AND LONGEVITY PAY THEY ARE RECEIVING AT THE TIME OF TRANSFER MULTIPLIED BY THE NUMBER OF YEARS OF ACTIVE FEDERAL SERVICE * * * PROVIDED FURTHER, THAT THE PAY AUTHORIZED IN THIS SECTION SHALL NOT EXCEED 75 PERCENTUM OF THE ACTIVE -DUTY BASE AND LONGEVITY PAY THEY WERE RECEIVING AT THE TIME OF TRANSFER *

THE SIXTH PROVISO IN SECTION 204, AS AMENDED, PROVIDES " THAT A FRACTIONAL YEAR OF SIX MONTHS OR MORE SHALL BE CONSIDERED A FULL YEAR FOR PURPOSES OF THIS SECTION AND SECTION 854B OF THIS TITLE (SECTION 203 OF THE 1938 ACT) IN COMPUTING YEARS OF ACTIVE FEDERAL SERVICE AND BASE LONGEVITY PAY.'

IN VIEW OF THE EXPRESS TERMS OF THE SIXTH PROVISO IN SECTION 204, AS AMENDED, THE 25 YEARS, 6 MONTHS, 29 DAYS OF WALDRON'S ACTIVE FEDERAL SERVICE IS REQUIRED TO BE CONSIDERED, IN COMPUTING HIS RETAINER PAY UNDER THAT SECTION, AS 26 FULL YEARS FOR THE PURPOSE OF DETERMINING THE NUMBER OF YEARS OF HIS ACTIVE FEDERAL SERVICE AND IN THE DETERMINATION OF HIS BASIC PAY. HENCE, UNDER THE PROVISIONS OF SECTION 204, AS AMENDED, HE MAY NOT BE CONSIDERED AS HAVING COMPLETED LESS THAN 26 FULL YEARS OF ACTIVE FEDERAL SERVICE.

SECTION 202 (A) OF THE CAREER COMPENSATION ACT OF 1949, 63 STAT. 807, 37 U.S.C. 233 (A) ENUMERATES THE SERVICE WHICH IS CREDITABLE IN COMPUTING THE CUMULATIVE YEARS OF SERVICE "TO BE COUNTED BY MEMBERS OF THE UNIFORMED SERVICES FOR DETERMINING THE AMOUNT OF BASIC PAY THEY ARE ENTITLED TO RECEIVE UPON COMPLETION OF SUCH YEARS OF SERVICE.' ( ITALICS ADDED.) UNDER THAT SECTION A MEMBER OF THE UNIFORMED SERVICES DOES NOT BECOME ENTITLED TO THE NEXT HIGHER RATE OF MONTHLY BASIC PAY AS PRESCRIBED IN SECTION 201 (A) OF THE CAREER COMPENSATION ACT OF 1949, 63 STAT. 805, 37 U.S.C. 232 (A), FOR HIS PAY GRADE, UNTIL THE ACTUAL "COMPLETION OF SUCH YEARS OF SERVICE.' HOWEVER, WHERE SUCH A MEMBER COMPLETES 26 CUMULATIVE YEARS OF SERVICE ON A CERTAIN DATE, HIS RIGHT TO RECEIVE MONTHLY BASIC PAY AT THE NEXT HIGHER RATE PRESCRIBED FOR HIS PAY GRADE, THAT IS, AS FOR , OVER 26" CUMULATIVE YEARS OF SERVICE, BECOMES EFFECTIVE ON THE FOLLOWING DAY. AS ABOVE STATED, WALDRON, BY VIRTUE OF THE SIXTH PROVISO IN SECTION 204 OF THE 1938 ACT, AS AMENDED, IS REQUIRED TO BE CONSIDERED AS HAVING COMPLETED 26 FULL YEARS OF ACTIVE FEDERAL SERVICE "IN COMPUTING (HIS) YEARS OF ACTIVE FEDERAL SERVICE AND BASE AND LONGEVITY PAY" FOR THE "PURPOSES" OF THAT SECTION. THEREFORE, SUBJECT TO THE 75 PERCENTUM LIMITATION PRESCRIBED IN SECTION 204, AS AMENDED, IT IS PROPER TO COMPUTE HIS RETAINER PAY ON THE BASIS OF THE MONTHLY BASIC PAY PRESCRIBED FOR AN ENLISTED MAN IN PAY GRADE E-7, WITH " OVER 26" CUMULATIVE YEARS OF SERVICE, THAT IS, AT THE RATE OF 65 PERCENTUM OF THE BASIC PAY OF AN ENLISTED MAN IN PAY GRADE 4-7, WITH OVER 26 CUMULATIVE YEARS OF CREDITABLE ACTIVE FEDERAL SERVICE.

THE OTHER QUESTION PRESENTED CONCERNS THE COMPUTATION OF RETIRED PAY IN THE CASE OF A MEMBER WHO COMPLETED EXACTLY 22 YEARS OF SERVICE FOR BASIC PAY PURPOSES ON MAY 31, 1955, DATE OF RELEASE TO INACTIVE DUTY AND THE DATE PRECEDING THE EFFECTIVE DATE OF HIS RETIREMENT. THE STATEMENTS MADE ARE VIEWED AS MEANING THAT THE MEMBER CONCERNED COMPLETED 22 YEARS OF SERVICE AT MIDNIGHT ON MAY 31, 1955. IN VIEW OF THE PROVISIONS OF SECTION 202 (A) OF THE CAREER COMPENSATION ACT OF 1949, ABOVE REFERRED TO, RELATING TO A MEMBER'S RIGHT TO THE NEXT HIGHER RATE OF MONTHLY BASIC PAY AS PRESCRIBED IN SECTION 201 (A) OF THAT ACT, AND BEARING IN MIND ALSO THE PROVISIONS OF THE UNIFORM RETIREMENT DATE ACT OF APRIL 23, 1930, 46 STAT. 253, 5 U.S.C. 47A, IT WILL BE SEEN THAT THE MEMBER DID NOT BECOME ENTITLED TO THE NEXT HIGHER RATE OF MONTHLY BASIC PAY (AS FOR " OVER 22" CUMULATIVE YEARS OF SERVICE) FOR ANY PERIOD PRIOR TO THE EFFECTIVE DATE OF HIS RETIREMENT. THUS, ASSUMING THAT THE STATUTE GOVERNING THE COMPUTATION OF THE RETIRED PAY OF THE MEMBER PROVIDES FOR COMPUTING IT ON HIS ACTIVE-DUTY PAY "AT THE TIME OF HIS RETIREMENT," THE COMPUTATION OF HIS RETIRED PAY WOULD FALL SQUARELY WITHIN AND BE CONTROLLED BY THE RULE STATED BY THE COURT OF CLAIMS IN ITS DECISION OF JANUARY 8, 1952, IN THE CASE OF JOSEPH I. LAMBERT V. UNITED STATES, 121 C.1CLS 333, WHERE IT WAS HELD THAT AN OFFICER WHO HAD COMPLETED EXACTLY 30 YEARS OF SERVICE ON JULY 31, 1947, WHEN HE WAS RETIRED, WAS NOT ENTITLED TO RETIRED PAY BASED ON THE ACTIVE- DUTY PAY OF HIS GRADE "WITH OVER 30 YEARS OF SERVICE.'

IT SEEMS PERTINENT TO ADD, HOWEVER, THAT THE RULE OF THE LAMBERT DECISION, WHICH IS FOR APPLICATION IN THE COMPUTATION OF RETIRED PAY GENERALLY AND IN MOST CASES, DOES NOT HAVE THE EFFECT OF PRECLUDING AN INDIVIDUAL WHO IS OTHERWISE ENTITLED THERETO FROM RECEIVING THE BENEFITS OF THE SIXTH PROVISO IN SECTION 204 OF THE NAVAL RESERVE ACT OF 1938, AS AMENDED. THUS, FOR EXAMPLE, AN ENLISTED PERSON COMPLETING EXACTLY 22 YEARS OF SERVICE AS OF MIDNIGHT ON MAY 31, 1955, THE EFFECTIVE DATE OF HIS TRANSFER TO THE FLEET RESERVE, WOULD BE ENTITLED BY VIRTUE OF THE SIXTH PROVISO IN SECTION 204 TO COMPUTE HIS RETAINER PAY (OR HIS RETIRED PAY IN CASE THE INDIVIDUAL CONCERNED WAS ALSO TRANSFERRED ON THE SAME DATE TO THE RETIRED LIST OF THE NAVY UNDER THE PROVISIONS OF SECTION 206 OF THE 1938 ACT, AS AMENDED, 34 U.S.C. 854E), EFFECTIVE FROM JUNE 1, 1955, ON THE BASIS OF 22 FULL "YEARS OF ACTIVE FEDERAL SERVICE" FOR PERCENTAGE MULTIPLE PURPOSES AND AS HAVING COMPLETED " OVER 22" YEARS OF CUMULATIVE SERVICE FOR THE PURPOSE OF ESTABLISHING THE APPLICABLE RATE OF "BASE AND LONGEVITY PAY" OR BASIC PAY TO BE USED IN THE COMPUTATION OF THE RETAINER PAY OR RETIRED PAY. OTHERWISE THE EXPRESS INCLUSION IN THE SIXTH PROVISO OF "BASE AND LONGEVITY PAY" WOULD BE MEANINGLESS AND NUGATORY.