B-138825, JUNE 19, 1959, 38 COMP. GEN. 843

B-138825: Jun 19, 1959

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- AND WHO PERFORM ACTIVE DUTY FOR AT LEAST A YEAR AFTER RETIREMENT AND ARE RELEASED FROM ACTIVE DUTY SUBSEQUENT TO JUNE 1. IS AN EXCEPTION TO THE PROHIBITION AGAINST INCREASED RETIRED PAY IN SECTION 3 (A) AND IS FOR APPLICATION ONLY WHEN THERE IS AN INCREASE IN RETIRED PAY. EVEN THOUGH THE RETIRED MEMBER WAS SERVING ON ACTIVE DUTY ON MAY 31. THE RETIRED PAY TO WHICH HE WAS ENTITLED ON MAY 31. IS THE RETIRED PAY RATE WITHOUT REGARD TO THE GRADE IN WHICH THE MEMBER WAS SERVING ON ACTIVE DUTY. THE RETIRED PAY IS INCREASED. THEN A RECOMPUTATION UNDER THE MOST FAVORABLE METHOD IS REQUIRED. OPERATE INDEPENDENTLY FOR ACTIVE DUTY PAY AND FOR RETIRED PAY SO THAT UNDER SECTION 10 (1) A RETIRED MEMBER IS SAVED ONLY THE RETIRED PAY TO WHICH HE WAS ENTITLED ON MAY 31.

B-138825, JUNE 19, 1959, 38 COMP. GEN. 843

MILITARY PERSONNEL - RETIRED PAY - SAVED PAY, ETC., UNDER THE ACT OF MAY 20, 1958 - COMPUTATIONS THE RETIRED PAY RECOMPUTATION PROVISION IN SECTION 3 (B) OF THE MILITARY PAY INCREASE ACT OF MAY 20, 1958, FOR MEMBERS WHO BECAME ENTITLED TO RETIRED PAY PRIOR TO JUNE 1, 1958--- EFFECTIVE DATE OF THE ACT--- AND WHO PERFORM ACTIVE DUTY FOR AT LEAST A YEAR AFTER RETIREMENT AND ARE RELEASED FROM ACTIVE DUTY SUBSEQUENT TO JUNE 1, 1958, IS AN EXCEPTION TO THE PROHIBITION AGAINST INCREASED RETIRED PAY IN SECTION 3 (A) AND IS FOR APPLICATION ONLY WHEN THERE IS AN INCREASE IN RETIRED PAY; THEREFORE, EVEN THOUGH THE RETIRED MEMBER WAS SERVING ON ACTIVE DUTY ON MAY 31, 1958, THE RETIRED PAY TO WHICH HE WAS ENTITLED ON MAY 31, 1958, IS THE RETIRED PAY RATE WITHOUT REGARD TO THE GRADE IN WHICH THE MEMBER WAS SERVING ON ACTIVE DUTY; HOWEVER, IF, UNDER THE SAVED PAY PROVISIONS IN SECTION 10 (1) OF THE ACT AND UNDER 10 U.S.C. 1402 (A) FOR ACTIVE DUTY AFTER RETIREMENT, THE RETIRED PAY IS INCREASED, THEN A RECOMPUTATION UNDER THE MOST FAVORABLE METHOD IS REQUIRED. THE SAVED PAY PROVISIONS IN SECTION 10 OF THE MILITARY PAY INCREASE ACT OF MAY 20, 1958, OPERATE INDEPENDENTLY FOR ACTIVE DUTY PAY AND FOR RETIRED PAY SO THAT UNDER SECTION 10 (1) A RETIRED MEMBER IS SAVED ONLY THE RETIRED PAY TO WHICH HE WAS ENTITLED ON MAY 31, 1958--- THE DAY BEFORE THE EFFECTIVE DATE OF THE ACT. SINCE A MEMBER WHO IS ENTITLED TO RETIRED PAY ON MAY 31, 1958--- THE DAY BEFORE THE EFFECTIVE DATE OF THE MILITARY PAY INCREASE ACT OF MAY 20, 1958 --- BUT WHO IS SERVING ON ACTIVE DUTY IN THE SAME PAY GRADE AND IS SUBSEQUENTLY RELEASED AFTER ON YEAR OF ACTIVE DUTY IS ENTITLED UNDER 10 U.S.C. 1402 (A) TO HAVE RETIRED PAY COMPUTED ON THE SAVED PAY OF HIS RETIRED GRADE ON RELEASE FROM ACTIVE DUTY, BUT IS NOT ENTITLED TO HAVE THE RETIRED PAY TO WHICH ENTITLED ON MAY 31 INCREASED BY SIX PERCENT IF THERE IS INCLUDED IN THE COMPUTATION ALL ACTIVE DUTY AFTER RETIREMENT THROUGH DATE OF RELEASE IN THE MULTIPLIER FACTOR; OR UNDER 10 U.S.C. 1402 (B) TO RETIRED PAY ON THE BASIS OF THE ACTIVE DUTY PAY OF THE RETIRED GRADE ON MAY 31, MULTIPLIED BY 2 1/2 TIMES YEARS OF SERVICE THEN CREDITABLE IN THE MULTIPLIER FACTOR TIMES SIX PERCENT; OR UNDER SECTION 3 (B) OF THE 1958 ACT, IS ENTITLED TO HAVE RETIRED PAY COMPUTED ON THE ACTIVE DUTY OF THE RETIRED GRADE ON DATE OF RELEASE MULTIPLIED BY THE PRODUCT OF 2 1/2 TIMES THE YEARS OF SERVICE THEN CREDITABLE IN THE MULTIPLIER FACTOR UNDER 10 U.S.C. 1402 (A); THE METHOD MOST FAVORABLE TO THE MEMBER MAY BE USED. SINCE A MEMBER OF THE UNIFORMED SERVICES WHO WAS ELIGIBLE FOR RETIRED PAY ON MAY 31, 1958--- THE DAY BEFORE THE MILITARY PAY INCREASE ACT OF MAY 20, 1958--- AND WHO SERVED ON ACTIVE DUTY FOR LESS THAN A YEAR SUBSEQUENT TO RETIRED PAY ELIGIBILITY PRIOR TO RELEASE AFTER JUNE 1, 1958, IS ENTITLED UNDER THE SAVED PAY PROVISIONS IN SECTION 10 (1) OF THE 1958 ACT TO RETIRED PAY TO WHICH ENTITLED ON MAY 31 (INCLUDING UNDER 10 U.S.C. 1402 (A) ACTIVE DUTY THROUGH THAT DATE IN THE MULTIPLIER FACTOR) PLUS SIX PERCENT OR BY REASON OR ACTIVE SERVICE AFTER RETIREMENT, HE IS ENTITLED TO COMPUTATION OF RETIRED PAY ON THE BASIS OF THE RETIRED PAY GRADE AND RATES AS OF MAY 31, MULTIPLIED BY THE PRODUCT OF 2 1/2 TIMES THE NUMBER OF YEARS OF SERVICE CREDITABLE ON THE MULTIPLIER FACTOR; THE MOST FAVORABLE METHOD MAY BE USED.

TO THE SECRETARY OF DEFENSE, JUNE 19, 1959:

REFERENCE IS MADE TO LETTER OF FEBRUARY 24, 1959, FROM THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER), REQUESTING DECISION ON SEVERAL QUESTIONS SET FORTH AND DISCUSSED IN COMMITTEE ACTION NO. 236 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE AS TO THE CORRECT METHOD OF RECOMPUTING RETIRED PAY OF MEMBERS WHO BECOME ENTITLED TO RETIRED PAY PRIOR TO JUNE 1, 1958, AND WHO MAY (OR MAY NOT) HAVE SERVED ON ACTIVE DUTY FOR A PERIOD OF AT LEAST ONE YEAR FOLLOWING DATE OF RETIREMENT AND HAVE BEEN RELEASED FROM ACTIVE DUTY SUBSEQUENT TO JUNE 1, 1958.

SUBSECTIONS (A) AND (B) OF SECTION 3 OF THE ACT OF MAY 20, 1958, 72 STAT. 128, PROVIDE IN PERTINENT PART:

(A) NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW * * * THE CHANGES IN RATES OF BASIC PAY MADE BY THIS ACT DO NOT INCREASE THE AMOUNT OF RETIRED PAY, RETIREMENT PAY, RETAINER PAY, OR EQUIVALENT PAY TO WHICH ANY PERSON IS ENTITLED ON THE DAY BEFORE THE EFFECTIVE DATE OF THIS ACT.

(B) NOTWITHSTANDING ANY OTHER PROVISION OF LAW * * * A MEMBER OF A UNIFORMED SERVICE WHO BECAME ENTITLED TO RETIRED, RETIREMENT, OR RETAINER PAY BEFORE THE EFFECTIVE DATE OF THIS ACT, AND WHO PERFORMED A PERIOD OF CONTINUOUS ACTIVE DUTY OF AT LEAST ONE YEAR AFTER BECOMING ENTITLED TO THAT PAY, IS ENTITLED, UPON RELEASE FROM THAT ACTIVE DUTY ON OR AFTER THE EFFECTIVE DATE OF THIS ACT, TO RECOMPUTE THAT PAY BASED ON THE RATES OF PAY SET FORTH IN THE CAREER COMPENSATION ACT OF 1949, AS AMENDED BY THIS ACT.

SUBSECTION 4 (A) OF THAT ACT, AS AMENDED, PROVIDES:

* * * MEMBERS AND FORMER MEMBERS OF THE UNIFORMED SERVICES WHO ARE ENTITLED TO RETIRED PAY, RETIREMENT PAY, RETAINER PAY, OR EQUIVALENT PAY, ON THE DAY BEFORE THE EFFECTIVE DATE OF THIS ACT, SHALL BE ENTITLED TO AN INCREASE OF 6 PERCENTUM OF THAT PAY TO WHICH THEY WERE ENTITLED ON THAT DATE. SECTION 10 (1) OF THE ACT, 72 STAT. 130, PROVIDES:

THE ENACTMENT OF THIS ACT SHALL NOT OPERATE TO REDUCE---

(1) THE BASIC PAY OR RETIRED PAY TO WHICH A MEMBER OR FORMER MEMBER OF A UNIFORMED SERVICE WAS ENTITLED ON THE DATE BEFORE THE EFFECTIVE DATE OF THIS ACT; * * *

10 U.S.C. 1402 (A), IN PERTINENT PART, PROVIDES THAT A MEMBER OF AN ARMED FORCE WHO HAS BEEN RETIRED OR HAS BECOME ENTITLED TO RETAINER PAY, AND WHO THEREAFTER SERVES ON ACTIVE DUTY, IS ENTITLED, UPON RELEASE FROM THAT DUTY, TO RECOMPUTE HIS RETIRED OR RETAINER PAY AS FOLLOWS: MONTHLY BASIC PAY OR BASE AND LONGEVITY PAY, AS THE CASE MAY BE, OF THE GRADE IN WHICH HE WOULD BE ELIGIBLE TO RETIRE IF HE WERE RETIRING UPON THAT RELEASE FROM ACTIVE DUTY X 2 1/2 PERCENT OF THE SUM OF (1) THE YEARS OF SERVICE THAT MAY BE CREDITED TO HIM IN COMPUTING RETIRED OR RETAINER PAY, AND (2) HIS YEARS OF ACTIVE SERVICE AFTER RETIREMENT OF BECOMING ENTITLED TO RETAINER PAY.

THE FIRST QUESTION IS AS FOLLOWS:

1. WHICH OF THE FOLLOWING IS THE CORRECT METHOD FOR COMPUTATION OF RETIRED OR RETAINER PAY FOR A MEMBER WHO BECAME ENTITLED TO SUCH PAY PRIOR TO 1 JUNE 1958 AND WHO HAS SERVED ON ACTIVE DUTY FOR A PERIOD OF AT LEAST ONE YEAR SINCE DATE OF ENTITLEMENT TO RETIRED OR RETAINER PAY AND HAS BEEN RELEASED FROM ACTIVE DUTY SUBSEQUENT TO 1 JUNE 1958, WHILE RECEIVING ACTIVE DUTY PAY BASED ON THE RATES PROVIDED BY P.L. 422:

(A) (BASIC PAY OF GRADE AT TIME OF RELEASE) X 2 1/2 PERCENT X (YEARS OF ACTIVE SERVICE THROUGH DATE OF RELEASE).

(B) (BASIC PAY OF GRADE ON 31 MAY 1958) X 2 1/2 PERCENT X (YEARS OF ACTIVE SERVICE THROUGH DATE OF RELEASE).

(C) WHICHEVER METHOD IS TO THE MEMBER'S ADVANTAGE.

IN ENACTING THE 1958 ACT, 37 U.S.C. 232, IT WAS THE INTENT OF THE CONGRESS THAT A MEMBER RETIRED BEFORE THE EFFECTIVE DATE OF THAT ACT SHOULD HAVE HIS RETIRED PAY COMPUTED ON THE BASIS OF THE PAY RATES IN EFFECT ON MAY 31, 1958, UNLESS THAT ACT SPECIFICALLY PROVIDES THAT THE MEMBER IS ENTITLED TO RETIRED PAY BASED ON THE NEW PAY RATES ESTABLISHED BY THAT ACT. SEE PAGE 10 OF SENATE REPORT NO. 1472, 85TH CONGRESS, AND ITEM 4 ON PAGE 15 OF H.R. REPORT 1701, 85TH CONGRESS. SECTION 4 (A) OF THE ACT PROVIDES A SIX PERCENT INCREASE IN RETIRED PAY FOR PERSONS ON THE RETIRED LIST AS OF MAY 31, 1958, AND SECTION 3 (B) PROVIDES THAT A MEMBER MUST (1) SERVE ON ACTIVE DUTY FOR A PERIOD OF NOT LESS THAN ONE YEAR AND (2) BE RETURNED TO A RETIRED STATUS ON OR AFTER THE EFFECTIVE DATE OF THE ACT IN ORDER TO BE ELIGIBLE TO COMPUTE HIS RETIRED PAY ON THE BASIS OF THE RATES ESTABLISHED BY THAT ACT. SECTION 10 (1) OF THE ACT PROVIDES THAT THE ENACTMENT OF THAT ACT SHALL NOT OPERATE TO REDUCE THE BASIC PAY OR RETIRED PAY TO WHICH A MEMBER OR FORMER MEMBER WAS "ENTITLED" ON MAY 31, 1958.

PRIMARILY IT WAS THE INTENT OF THE CONGRESS UNDER SECTIONS 3 AND 4 OF THE ACT TO RESTRICT RETIRED PAY BENEFITS OF PREVIOUSLY RETIRED MEMBERS TO THE RATES OF PAY IN EFFECT ON MAY 31, 1958, RATHER THAN TO FREEZE THE RETIRED GRADE HELD ON MAY 31, 1958, OR THE RATE OF RETIRED PAY RECEIVED ON MAY 31, 1958, PLUS THE SIX PERCENT INCREASE IN RETIRED PAY. THERE IS NO INDICATION IN THE LANGUAGE OF THE STATUTE OR ITS LEGISLATIVE HISTORY THAT OTHER PROVISIONS OF LAW RELATING TO THE GRADE UPON WHICH RETIRED PAY IS TO BE COMPUTED SHOULD BE AFFECTED BY ITS PROVISIONS. ON THE CONTRARY, SPECIFIC PROVISION IS MADE IN SECTION 3 (C) OF THE ACT FOR ADJUSTMENT OF RETIRED PAY BASED ON A GRADE DIFFERENT THAN THAT HELD ON MAY 31, 1958, IN THE CASE OF MEMBERS ADVANCED ON THE RETIRED LIST TO, OR TRANSFERRED TO A RETIRED LIST IN, A HIGHER GRADE. SEE ALSO SECTION 6 (5), 10 U.S.C. 6483 (C). IT SEEMS CLEAR THAT NOTHING IN THE ACT DEPRIVES A MEMBER OF THE BENEFITS RESPECTING GRADE THAT ARE CONTAINED IN 10 U.S.C. 1402 (A), WHICH, LIKE SECTION 516 OF THE CAREER COMPENSATION ACT OF 1949, 37 U.S.C. 316, FROM WHICH IT WAS DERIVED, PROVIDES THAT A MEMBER SERVING ON ACTIVE DUTY AFTER RETIREMENT "IS ENTITLED" TO COMPUTE HIS RETIRED PAY ON THE PAY "OF THE GRADE IN WHICH HE WOULD BE ELIGIBLE TO RETIRE IF HE WERE RETIRING UPON THAT RELEASE FROM ACTIVE DUTY.'

THERE IS NOT APPARENT ANYTHING IN THAT PROVISION OF LAW WHICH IN ITSELF WOULD HAVE THE EFFECT OF MAKING THE ACTIVE DUTY PAY GRADE HELD ON MAY 31, 1958, MATERIAL IN DETERMINING THE GRADE UPON WHICH RETIRED PAY IS TO BE COMPUTED. THE RETIRED PAY GRADE IS DETERMINED BY REFERENCE TO THE APPLICABLE PROVISION OF LAW WITHOUT REGARD TO THE GRADE IN WHICH THE MEMBER MAY HAVE SERVED ON ACTIVE DUTY ON MAY 31, 1958, OR ON THE DATE OF RELEASE FROM ACTIVE DUTY AFTER THAT DATE, UNLESS UNDER THAT APPLICABLE PROVISION OF LAW SUCH DATE IS MATERIAL.

IN OUR DECISION B-136872, SEPTEMBER 12, 1958, CITED IN THE DISCUSSION OF YOUR SUBMISSION, WE SAID, CONSISTENTLY WITH THE DECISION IN 31 COMP. GEN. 547 AND 33 COMP. GEN. 17, 19, THAT---

* * * UNLESS THE COMPUTATION OF RETIRED OR RETAINER PAY IN ACCORDANCE WITH THE METHOD PRESCRIBED IN SECTION 516 RESULTS IN AN INCREASE IN AN AMOUNT OF RETIRED OR RETAINER PAY THAT WAS BEING RECEIVED PRIOR TO THE IMMEDIATELY PRECEDING PERIOD OF ACTIVE DUTY, THE PROVISIONS OF SECTION 516 ARE INOPERATIVE AND DO NOT REQUIRE THE PAYMENT OF A LESSER AMOUNT OF RETIRED OR RETAINER PAY THAN THAT THERETOFORE RECEIVED, AND THAT THE SAME REASONING WOULD APPLY TO A CASE WHERE THE APPLICATION OF THE PROVISIONS OF SECTION 516 WOULD PREVENT A MEMBER FROM RECEIVING A HIGHER RATE OF RETIRED PAY TO WHICH HE WOULD HAVE BEEN ENTITLED HAD HE NOT SERVED ON ACTIVE DUTY SUBSEQUENT TO HIS TRANSFER TO THE FLEET RESERVE, EVEN THOUGH HE WAS NOT ENTITLED TO RECEIVE SUCH RETIRED PAY AT THE TIME HE WAS CALLED TO ACTIVE DUTY.

WE HELD THAT SECTION 516 IS APPLICABLE ONLY IN THOSE CASES WHERE IT WOULD RESULT IN AN INCREASE" IN RETIRED PAY. THAT REASONING IS EQUALLY APPLICABLE TO THE SUPERSEDING PROVISIONS OF 10 U.S.C. 1402 (A).

WHILE SECTION 3 (A) OF THE 1958 ACT STATES THAT THE CHANGES IN RATES OF BASIC PAY "MADE BY THIS ACT DO NOT INCREASE THE AMOUNT OF RETIRED PAY * * * TO WHICH ANY PERSON IS ENTITLED ON THE DAY BEFORE THE EFFECTIVE DATE OF THIS ACT," THE LANGUAGE CONTAINED IN SECTION 3 (B) PROVIDES FOR A RECOMPUTATION OF RETIRED PAY AS AN EXPRESS EXCEPTION TO THE PROHIBITION AGAINST INCREASED RETIRED PAY SET FORTH IN SUBSECTION (A) AND, CONSIDERING THE SAVINGS PROVISION IN SECTION 10 (1), REASONABLY MAY BE VIEWED AS BEING INTENDED FOR APPLICATION ONLY TO INCREASE RETIRED PAY. IN VIEW OF THESE PROVISIONS WE MAY NOT IMPUTE TO THE CONGRESS AN INTENT TO REQUIRE A RECOMPUTATION UNDER SECTION 3 (B) UNLESS SUCH RECOMPUTATION RESULTS IN AN INCREASE IN THE RETIRED PAY TO WHICH THE MEMBER WAS ENTITLED ON MAY 31, 1958.

IN DECISION OF JULY 22, 1958, 38 COMP. GEN. 50, WE SAID, IN EFFECT, THAT THE BASIC PAY TO WHICH A MEMBER WAS "ENTITLED" ON MAY 31, 1958, UNDER THE PROVISIONS OF SECTION 10 (1) OF THE 1958 ACT, WAS THE BASIC PAY WHICH HE WOULD HAVE BEEN ELIGIBLE TO RECEIVE IF ALL THE CONDITIONS REQUISITE TO ITS RECEIPT EXISTED AS OF THAT DATE AND, HENCE, THAT AN ACTIVE RESERVIST NOT THEN ON ACTIVE DUTY WAS "ENTITLED" TO THE BASIC PAY APPLICABLE TO HIS GRADE AND LENGTH OF SERVICE ON THAT DATE WITHIN THE MEANING OF THAT SECTION. WHAT WAS THERE SAID WITH RESPECT TO BASIC PAY IS EQUALLY APPLICABLE TO RETIRED PAY EVEN THOUGH THE MEMBER WAS NOT ACTUALLY IN RECEIPT OF RETIRED PAY ON THAT DATE BECAUSE OF SERVICE ON ACTIVE DUTY. FOLLOWS THAT THE RETIRED PAY TO WHICH SUCH A MEMBER WAS ,ENTITLED" ON MAY 31, 1958, IS THAT RETIRED PAY WHICH HE WOULD HAVE BEEN ELIGIBLE TO RECEIVE EXCEPT FOR THE FACT THAT HE WAS ON ACTIVE DUTY ON THAT DATE. DETERMINING THE AMOUNT OF THAT RETIRED PAY, OF COURSE, CONSIDERATION SHOULD BE GIVEN TO THE APPLICABLE STATUTES WITH RESPECT TO THE GRADE AND THE FORMULA FOR COMPUTING RETIRED PAY.

QUESTION 1 IS ANSWERED BY SAYING THAT THE RETIRED PAY OF THE MEMBER CONCERNED THEREIN IS COMPUTED ON THE BASIS OF THE PAY OF THE APPLICABLE RETIRED GRADE AT THE TIME OF RELEASE FROM ACTIVE DUTY, THAT IS, THE RATES PRESCRIBED IN THE ACT OF MAY 20, 1958, MULTIPLIED BY THE PRODUCT OF 2 1/2 TIMES THE NUMBER OF YEARS OF SERVICE CREDITABLE UNDER APPLICABLE LAW AS OF THE DATE OF RELEASE FROM ACTIVE DUTY. AS SO UNDERSTOOD, THE CORRECT METHOD OF COMPUTING THE RETIRED PAY OF A MEMBER CONCERNED IN QUESTION 1 IS FORMULA (A).

SINCE UNDER APPLICABLE LAW THE MEMBER MAY NOT BE ENTITLED TO RETIRED PAY COMPUTED ON THE ACTIVE DUTY PAY GRADE HELD ON MAY 31, 1958, WHEN RELEASED FROM ACTIVE DUTY, WE CANNOT SAY THAT HE MAY COMPUTE HIS RETIRED PAY BY METHOD (B). HOWEVER, UNDER THE PROVISIONS OF SECTION 10 (1) OF THE ACT, THE RETIRED PAY TO WHICH THE MEMBER WAS ENTITLED ON MAY 31, 1958, WAS SAVED TO HIM AND BY VIRTUE OF THE PROVISIONS OF 10 U.S.C. 1402 (A), HE IS THEREAFTER ENTITLED TO INCREASE THAT RETIRED PAY BY SERVICE ON ACTIVE DUTY. HENCE, IN GENERAL, THE MEMBER MAY ALSO COMPUTE HIS RETIRED PAY UPON RELEASE FROM ACTIVE DUTY BY MULTIPLYING THE BASIC PAY OF THE GRADE ON WHICH HIS RETIRED PAY WOULD BE COMPUTED AS OF MAY 31, 1958, BY THE PRODUCT OF 2 1/2 TIMES THE YEARS OF SERVICE CREDITABLE THROUGH DATE OF RELEASE FROM ACTIVE DUTY. IF A MEMBER IS ENTITLED TO COMPUTE HIS RETIRED PAY UNDER BOTH METHODS STATED IN QUESTION 1, HE IS ENTITLED TO COMPUTE HIS RETIRED PAY UNDER WHICHEVER METHOD IS TO HIS ADVANTAGE. QUESTION 1 IS ANSWERED ACCORDINGLY.

THE SECOND QUESTION IS AS FOLLOWS:

2. WHICH THE FOLLOWING IS THE CORRECT METHOD FOR COMPUTATION IF ABOVE MEMBER IS IN RECEIPT OF ,SAVED PAY" UNTIL THE TIME OF HIS RELEASE FROM ACTIVE DUTY:

(A) (RATE OF BASIC PAY ENTITLED TO ON 31 MAY 1958) X 2 1/2 PERCENT X (YEARS OF ACTIVE SERVICE THROUGH DATE OF RELEASE).

(B) (RATE OF BASIC PAY ENTITLED TO ON 31 MAY 1958) X 2 1/2 PERCENT X YEARS OF ACTIVE SERVICE THROUGH 31 MAY 1958) PLUS 6 PERCENT.

(C) (BASIC PAY OF GRADE AT TIME OF RELEASE, P.L. 85-422) X 2 1/2 PERCENT X (YEARS OF ACTIVE SERVICE THROUGH DATE OF RELEASE).

(D) WHICHEVER METHOD IS TO THE MEMBER'S ADVANTAGE.

IN 38 COMP. GEN. 281, AT 287, IN ANSWER TO QUESTION SIX CONCERNING THE EFFECT OF THE SAVINGS PROVISIONS OF SECTION 10 (1) OF THE ACT WE SAID:

SUCH PROVISIONS BY THEIR OWN TERMS GO NO FURTHER THAN TO SAVE TO THE MEMBERS CONCERNED THE BASIC PAY OR RETIRED PAY TO WHICH THEY WERE ENTITLED ON THE DAY BEFORE THE EFFECTIVE DATE OF THE ACT OF MAY 20, 1958. THE METHOD OF COMPUTING A MEMBER'S RETIRED PAY IS PRESCRIBED BY OTHER PROVISIONS OF LAW. IN THOSE INSTANCES WHERE, UNDER THE APPLICABLE FORMULA FOR COMPUTING RETIRED PAY, A MEMBER IS ENTITLED TO RETIRED PAY ON THE BASIS OF THE GRADE OR RANK IN WHICH HE IS SERVING AT DATE OF RETIREMENT AND HE IS IN A SAVED PAY STATUS AT THAT TIME, HIS RETIRED PAY SHOULD BE COMPUTED ON THE SAVED PAY OF SUCH GRADE OR RANK. * * *

SECTION 10 (1) DID NOT HAVE THE EFFECT OF CONFERRING ON A RETIRED MEMBER A RIGHT TO HAVE HIS RETIRED PAY COMPUTED ON THE BASIS OF THE ACTIVE DUTY PAY RECEIVED ON MAY 31, 1958. IT OPERATES INDEPENDENTLY WITH RESPECT TO ACTIVE DUTY PAY AND RETIRED PAY. IT SAVED TO A RETIRED MEMBER THE RETIRED PAY TO WHICH HE WAS "ENTITLED" ON MAY 31, 1958, AND NOTHING MORE. IT IS POSSIBLE THAT UNDER THE APPLICABLE PROVISION OF LAW GOVERNING HIS RETIRED PAY GRADE A MEMBER MAY NOT BE ENTITLED TO BE RETIRED IN, OR RECEIVE THE RETIRED PAY OF, THE GRADE IN WHICH HE WAS SERVING ON ACTIVE DUTY ON MAY 31, 1958, OR ON THE DATE OF HIS RELEASE FROM ACTIVE DUTY. QUESTION 2 WILL BE ANSWERED ON THE ASSUMPTION THAT THERE IS NO DIFFERENCE WITH RESPECT TO THE GRADE ON WHICH RETIRED PAY IS COMPUTED AND THE GRADE IN WHICH THE MEMBER SERVED ON ACTIVE DUTY ON MAY 31, 1958, OR ON THE DATE OF RELEASE FROM ACTIVE DUTY, AS APPROPRIATE. IF AN ANSWER IS DESIRED WITH RESPECT TO A PARTICULAR CASE OR CASES IN WHICH THERE IS A DIFFERENCE IN PAY GRADE, SUCH CASE MAY BE SUBMITTED HERE FOR ADVANCE DECISION. IN VIEW OF THE VARIOUS PROVISIONS OF LAW THAT MAY BE APPLICABLE WHERE THERE IS A DIFFERENCE IN GRADE INVOLVED, NO GENERAL REPLY WILL BE ATTEMPTED HERE.

UNDER THE PROVISIONS OF 10 U.S.C. 1402 (A), THE MEMBER CONCERNED IN QUESTION 2 IS ENTITLED TO HAVE HIS RETIRED PAY COMPUTED UNDER METHOD (A). UNDER SECTION 1402 (A) HE IS ENTITLED TO HAVE HIS RETIRED PAY COMPUTED ON THE BASIS OF THE PAY (IN THIS CASE SAVED PAY) OF HIS RETIRED GRADE ON DATE OF RELEASE FROM ACTIVE DUTY. HE IS NOT ENTITLED TO HAVE THE RETIRED PAY TO WHICH HE WAS ENTITLED ON MAY 31, 1958, INCREASED BY SIX PERCENT IF THERE IS INCLUDED IN THE COMPUTATION OF HIS RETIRED PAY ALL OF HIS ACTIVE SERVICE AFTER RETIREMENT THROUGH DATE OF RELEASE FROM ACTIVE DUTY IN THE MULTIPLIER FACTOR.

WITH RESPECT TO METHOD (B), THE RETIRED MEMBER CONCERNED WAS ENTITLED ON MAY 31, 1958, TO COMPUTE HIS RETIRED PAY ON THE BASIS OF THE ACTIVE DUTY PAY OF HIS RETIRED GRADE ON MAY 31, 1958, MULTIPLIED BY THE PRODUCT OF 2 1/2 TIMES THE YEARS OF SERVICE THEN CREDITABLE IN THE MULTIPLIER FACTOR. UNDER THE PROVISIONS OF SECTION 4 (A) OF THE 1958 ACT, HE IS ENTITLED TO AN INCREASE OF SIX PERCENT OF THAT RETIRED PAY. HENCE, HE IS ALSO ENTITLED TO COMPUTE HIS RETIRED PAY UNDER METHOD (B).

UNDER THE PROVISIONS OF SECTION 3 (B) OF THE 1958 ACT, THE MEMBER IS ENTITLED TO COMPUTE HIS RETIRED PAY ON THE BASIS OF THE ACTIVE DUTY PAY OF HIS RETIRED GRADE IN EVENT ON THE DATE OF HIS RELEASE FROM ACTIVE DUTY MULTIPLIED BY THE PRODUCT OF 2 1/2 TIMES THE YEARS OF SERVICE THEN CREDITABLE TO HIM IN THE MULTIPLIER FACTOR UNDER 10 U.S.C. 1402 (A). INDICATED ABOVE, IT IS ASSUMED FOR THE PURPOSE OF THIS QUESTION THAT THE RETIRED GRADE UPON WHICH RETIRED PAY IS TO BE COMPUTED IS THE SAME AS THE GRADE IN WHICH SERVING ON DATE OF RELEASE FROM ACTIVE DUTY. THE MEMBER IS, THEREFORE, ENTITLED TO COMPUTE HIS RETIRED PAY UNDER METHOD (C).

SINCE THE MEMBER CONCURRENTLY IS ENTITLED TO COMPUTE HIS RETIRED PAY UNDER METHODS (A), (B), AND (C), HE MAY COMPUTE THAT PAY BY WHICHEVER METHOD IS TO HIS ADVANTAGE. ACCORDINGLY, HE MAY COMPUTE HIS RETIRED PAY BY METHOD (D).

QUESTION 3 IS AS FOLLOWS:

3. WHICH OF THE FOLLOWING IS THE CORRECT METHOD OF COMPUTATION IF THE ABOVE MEMBER HAS HAD A PERIOD OF ACTIVE SERVICE OF LESS THAN ONE YEAR AT THE TIME HE IS RELEASED FROM ACTIVE DUTY AND IS RETURNED TO THE RETIRED LIST SUBSEQUENT TO 1 JUNE 1958:

(A) (SAVED BASIC PAY) TIMES 2 1/2 PERCENT TIMES (YEARS OF ACTIVE SERVICE THROUGH 31 MAY 1958) PLUS 6 PERCENT.

(B) (SAVED BASIC PAY) TIMES 2 1/2 PERCENT TIMES (YEARS OF ACTIVE SERVICE THROUGH DATE OF RELEASE).

(C) WHICHEVER METHOD IS TO THE MEMBER'S ADVANTAGE.

AS INDICATED ABOVE, SAVED BASIC PAY IS NOT NECESSARILY A FACTOR IN DETERMINING RETIRED PAY. UNDER THE PROVISIONS OF SECTION 10 (1) OF THE 1958 ACT, THE MEMBER CONCERNED IN QUESTION 3 IS ENTITLED TO THE RETIRED PAY TO WHICH HE WAS ENTITLED AS OF MAY 31, 1958 (WHICH INCLUDES BY VIRTUE OF 10 U.S.C. 1402 (A) THE ACTIVE SERVICE CREDITABLE THROUGH THAT DATE IN THE MULTIPLIER FACTOR (PLUS SIX PERCENT BY VIRTUE OF SECTION 4 (A) OF THE 1958 ACT). AS THUS UNDERSTOOD, HE IS ENTITLED TO COMPUTE HIS RETIRED PAY UNDER METHOD (A).

HE IS ALSO ENTITLED TO CREDIT IN THE MULTIPLIER FACTOR, BY VIRTUE OF 10 U.S.C. 1402 (A), FOR ACTIVE SERVICE AFTER MAY 31, 1958. HENCE, HE IS ENTITLED TO COMPUTE HIS RETIRED PAY ON THE BASIS OF HIS RETIRED PAY GRADE AND PAY RATES APPLICABLE THERETO AS OF MAY 31, 1958, MULTIPLIED BY THE PRODUCT OF 2 1/2 TIMES THE NUMBER OF YEARS OF SERVICE CREDITABLE IN THE MULTIPLIER FACTOR. SINCE HE MAY COMPUTE HIS RETIRED PAY UNDER BOTH METHODS, HIS RETIRED PAY MAY BE COMPUTED BY WHICHEVER METHOD IS TO HIS ADVANTAGE. QUESTION 3 IS ANSWERED ACCORDINGLY.