B-126893, JUN. 4, 1956

B-126893: Jun 4, 1956

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NAVY FINANCE CENTER: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 18. THE FACTS IN COMMANDER HERNDON'S CASE ARE STATED TO BE AS FOLLOWS: "1. WAS PLACED ON THE RETIRED LIST ON 29 JUNE 1948 IN ACCORDANCE WITH THE PROVISIONS OF (TITLE III OF) PUBLIC LAW 810. HIS RETIRED PAY ACCOUNT WAS SUSPENDED. IS IN RECEIPT OF AN ANNUITY AT THE ANNUAL RATE OF $1. 645.00 PER ANNUM) IS REDUCED BY THE AMOUNT OF THE ANNUITY. NO RETIREMENT DEDUCTIONS ARE MADE AND SUCH SERVICE DOES NOT ENHANCE THE ANNUITY UPON TERMINATION OF EMPLOYMENT. IT IS FURTHER STATED THAT COMMANDER HERNDON'S RETIRED PAY HAS BEEN RESUMED. THE QUESTION WHICH YOU SUBMIT IS WHETHER THE GROSS AMOUNT OF COMMANDER HERNDON'S CIVILIAN FEDERAL SALARY ($8.

B-126893, JUN. 4, 1956

TO LIEUTENANT T. P. CONDON, U.S. NAVY, DISBURSING OFFICER, NAVY FINANCE CENTER:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 18, 1955, AND ENDORSEMENTS, FORWARDED HERE WITH TRANSMITTAL LETTER DATED FEBRUARY 1, 1956, BY THE ACTING JUDGE ADVOCATE GENERAL OF THE NAVY, REQUESTING DECISION AS TO THE CORRECT AMOUNT OF RETIRED PAY PAYABLE, EFFECTIVE FROM AUGUST 4, 1955, TO COMMANDER RAYMOND F. HERNDON, UNITED STATES NAVAL RESERVE, RETIRED. THE QUESTION PRESENTED ARISES AS A RESULT OF THE AMENDMENT OF SECTION 212 OF THE ECONOMY ACT OF 1932 (RAISING THE LIMITATION THEREIN CONTAINED FROM $3,000 TO $10,000 PER ANNUM) ENACTED BY SECTION 2, PUBLIC LAW 239, 84TH CONGRESS, APPROVED AUGUST 4, 1955, 69 STAT. 498. SEE 5 U.S.C. 59A.

THE FACTS IN COMMANDER HERNDON'S CASE ARE STATED TO BE AS FOLLOWS:

"1. COMMANDER RAYMOND F. HERNDON, UNITED STATES NAVAL RESERVE (RETIRED), 38769, WAS PLACED ON THE RETIRED LIST ON 29 JUNE 1948 IN ACCORDANCE WITH THE PROVISIONS OF (TITLE III OF) PUBLIC LAW 810, APPROVED 29 JUNE 1948. EFFECTIVE 11 OCTOBER 1954, HE ACCEPTED A POSITION WITH THE VETERANS ADMINISTRATION, REGIONAL OFFICE, HOUSTON, TEXAS, AT A SALARY IN EXCESS OF $3,000.00 PER ANNUM. THEREFORE, HIS RETIRED PAY ACCOUNT WAS SUSPENDED, EFFECTIVE 11 OCTOBER 1954, IN ACCORDANCE WITH SECTION 212 OF THE ECONOMY ACT, AS AMENDED.

"2. INFORMATION HAS BEEN RECEIVED THAT COMMANDER HERNDON, AS A REEMPLOYED CIVIL SERVICE ANNUITANT OVER 60 YEARS OF AGE, IS IN RECEIPT OF AN ANNUITY AT THE ANNUAL RATE OF $1,860.00. HOWEVER, THE ANNUAL BASE SALARY OF HIS FEDERAL POSITION ($8,645.00 PER ANNUM) IS REDUCED BY THE AMOUNT OF THE ANNUITY. NO RETIREMENT DEDUCTIONS ARE MADE AND SUCH SERVICE DOES NOT ENHANCE THE ANNUITY UPON TERMINATION OF EMPLOYMENT. COMMANDER HERNDON'S GROSS RETIRED PAY, AS OF 4 AUGUST 1955, THE EFFECTIVE DATE OF REFERENCE (B), WOULD BE $164.01 PER MONTH, OR $1,968.12 PER ANNUM.'

IT IS FURTHER STATED THAT COMMANDER HERNDON'S RETIRED PAY HAS BEEN RESUMED, EFFECTIVE AS OF AUGUST 4, 1955, AT THE RATE OF $1,355 PER ANNUM. THIS SUM ($1,355) REPRESENTS THE $10,000 PER ANNUM LIMITATION NOW PRESCRIBED IN SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, LESS $8,645, THE GROSS SALARY OF HIS CIVILIAN FEDERAL POSITION. THE QUESTION WHICH YOU SUBMIT IS WHETHER THE GROSS AMOUNT OF COMMANDER HERNDON'S CIVILIAN FEDERAL SALARY ($8,645 PER ANNUM) SHOULD BE CONSIDERED IN DETERMINING THE AMOUNT OF RETIRED PAY PAYABLE TO HIM EFFECTIVE FROM AUGUST 4, 1955, WITHIN THE $10,000 PER ANNUM LIMITATION PRESCRIBED IN SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, OR WHETHER HIS RETIRED PAY MAY BE COMPUTED ON THE BASIS OF THE NET AMOUNT OF HIS CIVILIAN SALARY, $6,785 PER ANNUM, WHICH LATTER SUM REPRESENTS HIS GROSS CIVILIAN PAY OF $8,645 PER ANNUM, LESS THE AMOUNT OF HIS CIVIL SERVICE ANNUITY, $1,860 PER ANNUM, WHICH IS REQUIRED TO BE WITHHELD UNDER 5 U.S.C. 715/B).

A FURTHER QUESTION IS PRESENTED BY THE COMPTROLLER OF THE NAVY (IN SECOND ENDORSEMENT DATED DECEMBER 2, 1955) AND ALSO BY THE ACTING JUDGE ADVOCATE GENERAL OF THE NAVY IN TRANSMITTAL LETTER OF FEBRUARY 1, 1956, REGARDING THE EFFECT, IF ANY, IN THE MATTER OF THE COURT OF CLAIMS' DECISION OF NOVEMBER 2, 1954, IN THE CASE OF TANNER V. UNITED STATES, 129 C.CLS. 792.

THE COURT HELD IN THE TANNER CASE THAT THE PLAINTIFFS THEREIN CONCERNED WERE ENTITLED TO RECEIVE RETIRED PAY UNDER AUTHORITY OF TITLE III OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT OF 1948, 62 STAT. 1087-1091, DURING THE SAME PERIOD THAT THEY WERE EMPLOYED BY THE UNITED STATES GOVERNMENT AS CIVILIANS AT SALARIES IN EXCESS OF $3,000 A YEAR. THIS CONCLUSION WAS BASED ON THE VIEW THAT DURING THE PERIODS COVERED BY THEIR CLAIMS THE PLAINTIFFS HAD THE REQUISITE RESERVE MEMBERSHIP AND, THEREFORE, THAT THE PROVISIONS OF SECTION 1/B) OF THE ACT OF JULY 1, 1947, 61 STAT. 239, RELATING TO "ANY MEMBER OF THE OFFICERS' RESERVE CORPS" EXEMPTED THEM FROM THE DUAL COMPENSATION PROVISIONS, AS THEN IN EFFECT, OF SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A.

SECTION 1/B) OF THE ACT OF JULY 1, 1947, WAS AMENDED EFFECTIVE JANUARY 1, 1953, BY SECTION 804 OF THE ARMED FORCES RESERVE ACT OF 1952, 66 STAT. 506, AND ITS FIELD OF OPERATION WAS EXTENDED TO INCLUDE MEMBERS OF ALL "RESERVE COMPONENTS OF THE ARMED FORCES" INCLUDING MEMBERS OF THE NAVAL RESERVE AND MARINE CORPS RESERVE. UNDER THE PROVISIONS OF SECTION 2 OF THE ACT OF AUGUST 4, 1955, 69 STAT. 498, THE $3,000 PER ANNUM LIMITATION CONTAINED IN SECTION 212 OF THE ECONOMY ACT OF 1932, WAS RAISED TO $10,000.

THE SECRETARY OF DEFENSE WAS ADVISED IN OUR DECISION OF MARCH 2, 1956, B- 123382, (COPY ENCLOSED), THAT:

"WE WILL ACCEPT AND FOLLOW THE COURT'S DECISION IN THE TANNER CASE AS A PRECEDENT FOR RETROACTIVE AND PROSPECTIVE PAYMENT OF MILITARY RETIRED PAY (IN ADDITION TO CIVILIAN COMPENSATION) IN THOSE CASES, WHERE THE CLAIMANT, BEING OTHERWISE ENTITLED, HAS BEEN, OR MAY BE, GRANTED RETIRED PAY UNDER TITLE III OF THE ACT OF JUNE 29, 1948, AND HAS BEEN DURING THE PERIOD COVERED BY THE PAYMENT, A DE JURE MEMBER OF A RESERVE COMPONENT OF THE ARMED FORCES, PROVIDED THAT FOR ANY PERIOD PRIOR TO JANUARY 1, 1953, PAYMENT WILL BE APPROVED ONLY IF THE CLAIMANT WAS A DE JURE MEMBER OF THE OFFICERS' RESERVE CORPS OR THE NATIONAL GUARD DURING THE PERIOD INVOLVED, SINCE MEMBERS OF OTHER RESERVE COMPONENTS WERE NOT BROUGHT WITHIN THE PROVISIONS OF THE 1947 ACT UNTIL THAT DATE.'

ASSUMING THAT COMMANDER HERNDON'S COMMISSION IN THE U.S. NAVAL RESERVE HAS NOT BEEN TERMINATED AND THAT HE, THEREFORE, IS A DE JURE MEMBER OF THE NAVAL RESERVE (ON THE RETIRED LIST), THE QUOTED CONCLUSION REACHED IN THE DECISION OF MARCH 2, 1956, APPEARS TO BE APPLICABLE IN HIS CASE. IN OTHER WORDS, BASED ON THE ASSUMPTION JUST STATED, IT APPEARS THAT COMMANDER HERNDON IS ENTITLED TO RECEIVE RETIRED PAY UNDER THE PROVISIONS OF TITLE III OF PUBLIC LAW 810 EFFECTIVE FROM JANUARY 1, 1953, WITHOUT REGARD TO THE LIMITATION PRESCRIBED IN SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED.

IN VIEW OF THE CONCLUSION REACHED WITH RESPECT TO THE QUESTION PRESENTED CONCERNING THE EFFECT OF THE TANNER DECISION, NO REPLY IS DEEMED NECESSARY TO THE BASIC QUESTION PRESENTED IN YOUR LETTER OF NOVEMBER 18, 1955.