B-138055, MARCH 2, 1959, 38 COMP. GEN. 579

B-138055: Mar 2, 1959

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WHO DID NOT MAKE A TIMELY ELECTION TO HAVE RETIRED PAY COMPUTED UNDER EITHER THE 1946 ACT OR UNDER THE LAW IN EFFECT PRIOR THERETO ARE NOT PRECLUDED BY DELAY IN DETERMINATION OF THE EFFECT OF THE ACT OR BY OPERATION OF THE TEN-YEAR STATUTE OF LIMITATIONS. IT WAS HELD THAT ELECTIONS MADE PRIOR TO JANUARY 1. THAT DATE SHOULD NOT BE CONSIDERED CONTROLLING WHERE THROUGH ADMINISTRATIVE ERROR OR CONFUSION THE ELECTION WAS RECEIVED SUBSEQUENT TO JANUARY 1. RETIRED PAY ADJUSTMENTS MAY BE MADE ON THE BASIS OF ELECTIONS RECEIVED IN THE ADMINISTRATIVE OFFICE WITHIN A REASONABLE TIME AFTER THE MEMBER IS FURNISHED ADEQUATE ELECTION INFORMATION. REQUESTING A DECISION (STATED TO HAVE BEEN CLEARED THROUGH DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE AND ASSIGNED SUBMISSION NO.

B-138055, MARCH 2, 1959, 38 COMP. GEN. 579

MILITARY PERSONNEL - PAY - RETIRED - FLEET RESERVISTS - ELECTION OF BENEFITS NAVY ENLISTED MEMBERS TRANSFERRED TO THE FLEET RESERVE WHO QUALIFY FOR INCREASED RETIRED OR RETAINER PAY UNDER THE NAVL RESERVE ACT OF 1938, AS AMENDED BY THE ACT OF AUGUST 10, 1946, BUT WHO DID NOT MAKE A TIMELY ELECTION TO HAVE RETIRED PAY COMPUTED UNDER EITHER THE 1946 ACT OR UNDER THE LAW IN EFFECT PRIOR THERETO ARE NOT PRECLUDED BY DELAY IN DETERMINATION OF THE EFFECT OF THE ACT OR BY OPERATION OF THE TEN-YEAR STATUTE OF LIMITATIONS, 31 U.S.C. 71A, FROM HAVING RETAINER OR RETIRED PAY ADJUSTED AT THIS TIME, RETROACTIVE TO THE DATE OF THE ACT, WITH APPROPRIATE INCREASES INCLUDING THE COUNTING OF SERVICE AS PROVIDED IN SIXTH PROVISO OF SECTION 204 OF THE 1946 ACT. ALTHOUGH IN CONSTRUING THE REQUIREMENT FOR TIMELY RETIRED PAY ELECTIONS BY FLEET RESERVISTS UNDER SECTION 9 OF THE ACT OF AUGUST 10, 1946, IT WAS HELD THAT ELECTIONS MADE PRIOR TO JANUARY 1, 1948, WOULD BE CONSIDERED TIMELY, THAT DATE SHOULD NOT BE CONSIDERED CONTROLLING WHERE THROUGH ADMINISTRATIVE ERROR OR CONFUSION THE ELECTION WAS RECEIVED SUBSEQUENT TO JANUARY 1, 1948, AND RETIRED PAY ADJUSTMENTS MAY BE MADE ON THE BASIS OF ELECTIONS RECEIVED IN THE ADMINISTRATIVE OFFICE WITHIN A REASONABLE TIME AFTER THE MEMBER IS FURNISHED ADEQUATE ELECTION INFORMATION.

TO COMMANDER R. A. WILSON, DEPARTMENT OF THE NAVY, MARCH 2, 1959:

BY SECOND ENDORSEMENT DATED NOVEMBER 28, 1958, THE OFFICE OF THE COMPTROLLER OF THE NAVY FORWARDED YOUR LETTER OF OCTOBER 20, 1958, WITH ENCLOSURES, REQUESTING A DECISION (STATED TO HAVE BEEN CLEARED THROUGH DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE AND ASSIGNED SUBMISSION NO. DO-N-380) ON SEVERAL QUESTIONS CONCERNING ELECTIONS UNDER THE PROVISIONS OF THE NAVAL RESERVE ACT OF 1938, AS AMENDED BY THE ACT OF AUGUST 10, 1946, 60 STAT. 993, 34 U.S.C. 854C, FOR THE PURPOSE OF COMPUTING RETAINER OR RETIRED PAY IN THE FOLLOWING TWO CASES, AND IN SIMILAR CASES.

IN THE CASE OF CHIEF MACHINIST GEORGE F. SCHAD, USN (RETIRED), 188 155, IT IS REPORTED THAT THE MEMBER TRANSFERRED TO THE FLEET RESERVE, CLASS F-4 -C, ON MARCH 17, 1932, IN THE RATING OF CHIEF MACHINIST'S MATE (PERMANENT APPOINTMENT); THAT HE COMPLETED EXACTLY 16 YEARS OF SERVICE FOR TRANSFER PURPOSES AND 14 YEARS, 11 MONTHS AND 28 DAYS OF SERVICE FOR LONGEVITY PAY PURPOSES; AND THAT HE WAS NOT CITED FOR EXTRAORDINARY HEROISM ON DATE OF TRANSFER. MR. SCHAD AGAIN SERVED ON ACTIVE DUTY FROM JULY 10, 1940, TO FEBRUARY 8, 1946, A PERIOD OF 5 YEARS, 6 MONTHS, AND 29 DAYS. ON APRIL 1, 1946, HE WAS PLACED ON THE RETIRED LIST BY REASON OF COMPLETION OF 30 YEARS OF ACTIVE AND INACTIVE SERVICE AND ADVANCED TO THE RATE OF CHIEF MACHINIST. ON JULY 24, 1945, THE SECRETARY OF THE NAVY APPROVED THE AWARD OF THE NAVY AND MARINE CORPS MEDAL FOR EXTRAORDINARY HEROISM. IT IS STATED THAT UNDER THE ONE-HALF FORMULA, WITH 35 PERCENT LONGEVITY CREDIT FOR 21 YEARS OF SERVICE AND ADDITIONAL CREDIT OF 10 PERCENT FOR EXTRAORDINARY HEROISM, CHIEF MACHINIST SCHAD'S PAY WOULD BE COMPUTED AS FOLLOWS:

GROSS MONTHLY GROSS MONTHLY

PERIOD PAY PERIOD PAY 2/9/46 -- 3/31/46--------$129.03

5/1/52--- 3/31/55-----$204.204/1/46--- 6/30/46-------- 163.63 4/1/55--- 5/31/58----- 216.45 7/1/46--- 4/30/52-------- 196.35 6/1/58--- TO DATE---- - 229.44

IT IS STATED THAT IN NOVEMBER 1957 MR. SCHAD SUBMITTED A CLAIM FOR THE DIFFERENCE IN PAY BETWEEN THE ABOVE RATES AND PAY RECEIVED FROM FEBRUARY 9, 1946, AND THAT SUCH CLAIM WAS FORWARDED TO OUR CLAIMS DIVISION AS DOUBTFUL, SINCE THERE WAS NO RECORD IN THE NAVY FINANCE CENTER OF AN ELECTION MADE BY THE CLAIMANT UNDER SECTION 9 OF THE 1946 ACT, 34 U.S.C. 854C NOTE. BY SETTLEMENT DATED JUNE 24, 1958, OUR CLAIMS DIVISION ALLOWED THAT PORTION OF THE CLAIM COVERING THE PERIOD NOVEMBER 14, 1947, TO JUNE 30, 1955, BUT DISALLOWED THAT PART OF THE CLAIM PRIOR TO NOVEMBER 14, 1947, BECAUSE OF THE ACT OF OCTOBER 9, 1940, 54 STAT. 1061, 31 U.S.C. 71A. YOU SAY THAT ADJUSTMENT OF SCHAD'S PAY FROM JULY 1, 1955, IS BEING HELD IN ABEYANCE PENDING RECEIPT OF OUR DECISION.

YOU REFER TO OUR DECISION IN 32 COMP. GEN. 159 AND 36 COMP. GEN. 579, AND YOU ASK WHETHER OR NOT MEMBERS, LIKE MR. SCHAD, WHO DID NOT MAKE AN ELECTION UNDER SECTION 9 OF THE ACT OF AUGUST 10, 1946, BUT WHO OTHERWISE QUALIFY, ARE ENTITLED TO HAVE THEIR RETIRED PAY SO COMPUTED, INCLUDING INCREASES IN CONSEQUENCE OF ADVANCES IN RATING, EXTRAORDINARY HEROISM, AND THE COUNTING OF A FRACTIONAL YEAR OF SIX MONTHS OR MORE AS A FULL YEAR. YOU ALSO REFER TO THE CASE OF HULSE V. UNITED STATES, 133 C.1CLS. 848, AND YOU EXPRESS THE VIEW THAT, SINCE THERE IS NO RECORD IN THE NAVY FINANCE CENTER OF LIEUTENANT HULSE'S ELECTION, HIS CLAIM MAY HAVE BEEN CONSIDERED HIS ELECTION.

THE NAVAL RESERVE ACT OF 1938, AS AMENDED BY THE ACT OF AUGUST 10, 1946, 60 STAT. 993-997, PROVIDES IN SECTION 9 THAT PERSONNEL THERE MENTIONED,"SHALL RECEIVE AN OPPORTUNITY TO ELECT" TO RECEIVE RETAINER AND RETIRED PAY UNDER THAT ACT OR TO RECEIVE SUCH PAY UNDER THE LAW IN EFFECT IMMEDIATELY PRIOR TO THE DATE OF THAT ACT. NO REASON IS GIVEN WHY CHIEF MACHINIST SCHAD, OR MEMBERS IN LIKE CIRCUMSTANCES, DID NOT MAKE AN ELECTION OR WHETHER THEY WERE EVER GIVEN THE OPPORTUNITY TO MAKE AN ELECTION. IN THAT CONNECTION, IN RESPONSE TO A REQUEST FROM OUR CLAIMS DIVISION IN THE CASE OF CHIEF GUNNER RUSSELL A. ALDRICH ( CLAIMS FILE Z1- 849-747), 322 298, USN (RETIRED), THE NAVY FINANCE CENTER, BY LETTER DATED OCTOBER 2, 1957, FILE XRI:6:16, REPORTED THAT--

IN DECEMBER OF 1947, ELECTION FORMS AND PERTINENT LITERATURE WERE FORWARDED TO PERSONNEL ON A MECHANICAL BASIS, DUE TO THE MAGNITUDE OF THE PROJECT INVOLVED. NO INDIVIDUAL RECORDINGS WERE MADE, IN CONNECTION WITH THIS MASS TRANSMITTAL AND THERE IS, THEREFORE, NO CONCLUSIVE EVIDENCE IN MR. ALDRICH'S FILE TO ENABLE US TO STATE WHEN OR IF HE WAS FURNISHED SUCH ELECTION FORM.

WE UNDERSTAND THAT THE NAVY IS NOW MAILING DD FORM 827 TO THE INDIVIDUALS CONCERNED APPRISING THEM OF THEIR RIGHTS TO RECEIVE THE DIFFERENCE BETWEEN THE ONE-THIRD AND ONE-HALF BASIS UNDER THE SANDERS DECISION AND 32 COMP. GEN. 159.

IN OUR DECISION OF OCTOBER 3, 1952, 32 COMP. GEN. 159, TO THE SECRETARY OF THE NAVY, WE SAID THAT, EXCEPT FOR ANY INCREASE IN PAY FOR GOOD CONDUCT, WE WOULD FOLLOW THE DECISION OF THE COURT OF CLAIMS IN THE CASE OF SANDERS V. UNITED STATES, 120 C.1CLS. 501. IN DECISION OF FEBRUARY 6, 1957, 36 COMP. GEN. 579, IN WHICH WE OVERRULED A PORTION OF OUR DECISION OF APRIL 24, 1947, 26 COMP. GEN. 804, 809, WE SAID THAT WE WOULD FOLLOW THE COURT'S DECISION IN ABAD V. UNITED STATES, 136 C.1CLS. 404. THAT DECISION HELD THAT A MEMBER WHO TRANSFERRED TO THE FLEET RESERVE WITH EXACTLY 16 YEARS NAVAL SERVICE HAD SUFFICIENT SERVICE FOR TRANSFER PURPOSES AND MET THE REQUIREMENTS OF SECTION 208 OF THE NAVAL RESERVE ACT OF 1938, ADDED BY SECTION 3 OF THE 1946 ACT, 34 U.S.C. 854G.

WHILE A SUBSTANTIAL COMPLIANCE WITH THE 1946 ACT WOULD REQUIRE THAT A TIMELY ELECTION BE MADE TO OBTAIN ITS BENEFITS, IT WOULD BE UNREASONABLE TO CONCLUDE THAT A MEMBER IS REQUIRED TO ELECT BEFORE IT IS DETERMINED THAT HE WAS ENTITLED TO A BENEFIT UNDER THAT ACT. HOWEVER, ANY RIGHT TO PAY GRANTED BY THE 1946 ACT ACCRUED AS OF THE DATE OF THAT ACT AND DELAY IN DETERMINING THE EFFECT OF THE ACT OR DELAY IN MAKING THE REQUIRED ELECTION MAY NOT BE CONSIDERED AS AFFECTING THE OPERATION OF THE ACT OF OCTOBER 9, 1940, MENTIONED ABOVE. HENCE MR. SCHAD AND MEMBERS IN LIKE CIRCUMSTANCES, WHO DID NOT MAKE AN ELECTION UNDER THE 1946 ACT BUT WHO ARE OTHERWISE QUALIFIED, ARE NOW ENTITLED TO HAVE THEIR RETAINER OR RETIRED PAY ADJUSTED, WITH APPROPRIATE INCREASES, INCLUDING THE COUNTING OF A FRACTIONAL YEAR OF SIX MONTHS OR MORE AS A FULL YEAR IN COMPUTING BASE AND LONGEVITY PAY AS PROVIDED IN THE 6TH PROVISO OF SECTION 204 OF THE 1946 ACT. SEE THE ANSWERS TO THE FIRST AND THIRD QUESTIONS IN 32 COMP. GEN. 159. OUR CLAIMS DIVISION SETTLEMENT IN MR. SCHAD'S CASE WAS PROPER AND YOU ARE NOW AUTHORIZED TO MAKE AN ADJUSTMENT IN HIS RETIRED PAY FROM JULY 1, 1955.

IT IS REPORTED THAT CHIEF CARPENTER MARTIN F. FITZGERALD, USN (RETIRED), 202524, WAS TRANSFERRED TO THE FLEET RESERVE, CLASS F-4-D, IN THE RATING OF CHIEF SHIPFITTER (PERMANENT APPOINTMENT) ON OCTOBER 16, 1933, AND RELEASED TO INACTIVE DUTY WITH 19 YEARS, 11 MONTHS, AND 24 DAYS OF SERVICE. HE WAS RECALLED TO ACTIVE DUTY ON JULY 16, 1941, AND RELEASED ON APRIL 21, 1945, THEREBY COMPLETING AN ADDITIONAL PERIOD OF 3 YEARS, 9 MONTHS, AND 6 DAYS OF ACTIVE SERVICE, OR TOTAL SERVICE OF 23 YEARS AND 9 MONTHS. IT IS FURTHER REPORTED THAT EFFECTIVE OCTOBER 1, 1943, HE WAS PLACED ON THE RETIRED LIST BY REASON OF COMPLETION OF 30 YEARS OF ACTIVE AND INACTIVE SERVICE, AND THAT HE WAS ADVANCED TO THE RANK OF CHIEF CARPENTER ON APRIL 22, 1945. IT IS STATED THAT FITZGERALD'S ELECTION UNDER SECTION 9 OF THE 1946 ACT WAS RECEIVED IN THE NAVY FINANCE CENTER ON OCTOBER 25, 1948, SUBSEQUENT TO THE DEADLINE SPECIFIED IN DECISION OF MAY 27, 1947, B-64196. YOU STATE THAT IN NOVEMBER 1948 HIS RETIRED PAY WAS INADVERTENTLY ADJUSTED, RETROACTIVE TO APRIL 22, 1945, TO INCLUDE CREDIT FOR 24 YEARS OF SERVICE FOR LONGEVITY PAY PURPOSES, AND THAT HE RECEIVED RETIRED PAY BASED ON SUCH SERVICE FOR THE PERIOD APRIL 22, 1945, TO MAY 31, 1958, AS FOLLOWS:

GROSS GROSS

MONTHLY MONTHLY

PERIOD PAY PERIOD PAY 4/II/45 6/30/46---------$173.25

5/1/52-3/31/55-----------$216.22 7/1/46-4/30/52---------- 207.90 4/1/55- 5/31/58----------- 229.19

YOU SAY THAT ON OR ABOUT JUNE 11, 1947, LETTERS OF INSTRUCTION, WITH ELECTION FORMS, WERE MAILED TO ALL FLEET RESERVISTS FOR USE IN MAKING ELECTION UNDER SECTION 9 OF THE 1946 ACT. IT IS INDICATED, HOWEVER, THAT OUR DECISION OF OCTOBER 24, 1947, 27 COMP. GEN. 238, NECESSITATED THE MODIFICATION OF PREVIOUS INSTRUCTIONS AND, THEREFORE, NEW INSTRUCTIONS WERE MAILED ON OR ABOUT NOVEMBER 21, 1947. YOU POINT OUT THAT THE FIRST LETTER OF INSTRUCTIONS REQUESTED THAT THE ELECTION FORMS BE RETURNED BY SEPTEMBER 10, 1947, WHEREAS THE SECOND INSTRUCTIONS DID NOT FIX A DEFINITE DATE FOR THE RETURN OF THE ELECTIONS.

IN B-64196, MAY 27, 1947, WE SAID THAT THE PROVISIONS IN SECTION 9 OF THE 1946 ACT CONTEMPLATE THAT A REASONABLE TIME AFTER PASSAGE OF THE ACT BE ALLOWED WITHIN WHICH THE ELECTIONS IN QUESTION MAY BE MADE, AND THE SECRETARY OF THE NAVY WAS ADVISED THAT OUR OFFICE WOULD NOT BE REQUIRED TO OBJECT TO OTHERWISE PROPER ELECTIONS MADE PRIOR TO JANUARY 1, 1948, IN THE CASE OF ANY PERSON WHO TRANSFERRED TO THE FLEET RESERVE OR WHO TRANSFERRED TO THE RETIRED LIST PRIOR TO THAT DATE. SUCH DECISION WAS INTENDED TO APPLY ONLY TO THOSE PERSONS WHO RECEIVED AN OPPORTUNITY TO MAKE AN ELECTION PRIOR TO JANUARY 1, 1948, BUT WHO, BY FAILURE TO DO SO, TACITLY INDICATED THEIR DESIRE TO CONTINUE TO RECEIVE THEIR RETAINER OR RETIRED PAY UNDER THE LAWS IN EFFECT PRIOR TO AUGUST 10, 1946.

ASSUMING CHIEF CARPENTER FITZGERALD RECEIVED THE FIRST SET OF INSTRUCTIONS AND WAS GIVEN AN OPPORTUNITY TO MAKE AN ELECTION PRIOR TO JANUARY 1, 1948, FAILED TO DO SO, THE SECOND SET OF INSTRUCTIONS, WHICH APPARENTLY WAS RECEIVED BY HIM AND WHICH DID NOT FIX A DATE FOR THE RETURN OF THE ELECTION, CERTAINLY ADDED TO THE UNCERTAINTY AND CONFUSION AS TO HIS RIGHTS AND CONTRIBUTED TO THE LATE FILING. IT IS OUR VIEW THAT THE DATE FIXED IN THE DECISION OF MAY 27, 1947, B-64196, NAMELY, DECEMBER 31, 1947, IS NOT FOR APPLICATION WHERE, DUE TO ADMINISTRATIVE ERROR OR CONFUSION, THE MEMBER'S ELECTION WAS RECEIVED IN THE ADMINISTRATIVE OFFICE SUBSEQUENT TO JANUARY 1, 1948. HENCE, FITZGERALD'S ELECTION, WHICH WAS RECEIVED IN THE NAVY FINANCE CENTER ON OCTOBER 25, 1948, MAY BE ACCEPTED AS CONSTITUTING A VALID AND TIMELY ELECTION UNDER THE 1946 ACT. OTHERWISE PROPER PAYMENTS MADE IN SIMILAR CASES ON THE BASIS OF ELECTIONS RECEIVED WITHIN A REASONABLE TIME AFTER THE MEMBER IS FURNISHED ADEQUATE INFORMATION FOR THAT PURPOSE, WILL NOT BE QUESTIONED. THE QUESTION IN PARAGRAPH 4 OF YOUR LETTER IS ANSWERED ACCORDINGLY.