B-142650, JUNE 27, 1960, 39 COMP. GEN. 886

B-142650: Jun 27, 1960

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BECAUSE INFORMATION CONCERNING THE MEMBER'S SURVIVORSHIP ANNUITY ELECTION WAS NOT FURNISHED. DOES NOT PRECLUDE ADMINISTRATIVE ADJUSTMENT OF THE MEMBER'S ACCOUNT RETROACTIVELY TO THE BEGINNING OF THE PERIOD IN WHICH THE MEMBER'S RETIRED PAY WAS INCREASED. WHICH ADJUSTMENTS ARE SUBSEQUENTLY DETERMINED TO BE INCORRECT. THE GENERAL ACCOUNTING OFFICE WILL. UNDERTAKE TO OBTAIN A REFUND FROM THE MEMBER AND IN THE CASE OF AN UNDERPAYMENT WILL ISSUE A SUPPLEMENTAL SETTLEMENT. IN THE CASE OF A MEMBER WHOSE CLAIM FOR INCREASED RETIRED PAY WAS ALLOWED PURSUANT TO JUDGMENT OF THE COURT OF CLAIMS. WHICH WAS NOT INVOLVED IN THE SUIT BEFORE THE COURT OF CLAIMS. IS AFFECTED BY THE JUDGMENT ONLY TO THE EXTENT THAT SUCH JUDGMENT FIXED THE RATES OF THE MEMBER'S RETIRED PAY.

B-142650, JUNE 27, 1960, 39 COMP. GEN. 886

MILITARY PERSONNEL - RETIRED PAY INCREASES - ANNUITY ELECTIONS FOR DEPENDENTS - DEDUCTION ADJUSTMENTS - GENERAL ACCOUNTING OFFICE SETTLEMENTS ALTHOUGH A SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE MAY NOT BE REVISED BY A DISBURSING OFFICER, SUCH SETTLEMENT DOES NOT PRECLUDE A DISBURSING OFFICER FROM CONSIDERING MATTERS EXTRANEOUS TO THE SETTLEMENT, EVEN THOUGH SUCH CONSIDERATION INVOLVES A PART OR ALL OF THE PERIOD COVERED BY THE SETTLEMENT. A GENERAL ACCOUNTING OFFICE SETTLEMENT WHICH INCREASED THE RETIRED PAY OF A MEMBER OF THE UNIFORMED SERVICES BUT DID NOT ESTABLISH THE SEPARATE MATTER OF THE RESULTING CHANGE IN RETIRED PAY DEDUCTIONS FOR THE COSTS OF AN ANNUITY FOR THE MEMBER'S DEPENDENTS, BECAUSE INFORMATION CONCERNING THE MEMBER'S SURVIVORSHIP ANNUITY ELECTION WAS NOT FURNISHED, DOES NOT PRECLUDE ADMINISTRATIVE ADJUSTMENT OF THE MEMBER'S ACCOUNT RETROACTIVELY TO THE BEGINNING OF THE PERIOD IN WHICH THE MEMBER'S RETIRED PAY WAS INCREASED. UNDER SETTLEMENTS BY THE GENERAL ACCOUNTING OFFICE WHICH INCREASE RETROACTIVELY THE RETIRED PAY OF MEMBERS OF THE UNIFORMED SERVICES AND ALSO INCLUDE AN ADJUSTMENT OF THE DEDUCTIONS FOR THE COSTS OF ANNUITIES FOR THE MEMBERS' DEPENDENTS, WHICH ADJUSTMENTS ARE SUBSEQUENTLY DETERMINED TO BE INCORRECT, THE GENERAL ACCOUNTING OFFICE WILL, IN THE CASE OF AN OVERPAYMENT, UNDERTAKE TO OBTAIN A REFUND FROM THE MEMBER AND IN THE CASE OF AN UNDERPAYMENT WILL ISSUE A SUPPLEMENTAL SETTLEMENT, AND ADMINISTRATIVE ACTION TO CORRECT THE ANNUITY DEDUCTIONS IN SUCH CASES MAY ONLY BE MADE FROM THE DAY FOLLOWING THE PERIOD OF THE GENERAL ACCOUNTING OFFICE SETTLEMENT. IN THE CASE OF A MEMBER WHOSE CLAIM FOR INCREASED RETIRED PAY WAS ALLOWED PURSUANT TO JUDGMENT OF THE COURT OF CLAIMS, THE MATTER OF PROPER COSTS OF THE MEMBERS' UNIFORMED SERVICES CONTINGENCY OPTION ACT ELECTION, WHICH WAS NOT INVOLVED IN THE SUIT BEFORE THE COURT OF CLAIMS, IS AFFECTED BY THE JUDGMENT ONLY TO THE EXTENT THAT SUCH JUDGMENT FIXED THE RATES OF THE MEMBER'S RETIRED PAY; AND, THEREFORE, THE ANNUITY COSTS SHOULD BE ADJUSTED ADMINISTRATIVELY FROM THE EFFECTIVE DATE OF THE MEMBER'S ANNUITY OPTION ELECTION BASED UPON THE INCREASED RETIRED PAY RATE FIXED BY THE COURT. A COURT OF CLAIMS JUDGMENT FOR INCREASED RETIRED PAY, WHICH DID NOT TAKE INTO CONSIDERATION THE CHANGE IN THE COSTS OF THE MEMBER'S ANNUITY OPTION ELECTIONS, DOES NOT OPERATE TO ESTOP THE ADJUSTMENT OF THE CONTINGENCY OPTION COSTS FOR BOTH THE PERIOD COVERED BY THE JUDGMENT AND ANY PERIOD THEREAFTER BASED ON THE INCREASED RETIRED PAY RATE FIXED BY THE COURT.

TO R. A. WILSON, DEPARTMENT OF THE NAVY, JUNE 27, 1960:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 29, 1960, WITH ENCLOSURES, FORWARDED HERE UNDER SUBMISSION NO. DO-N-496 (ASSIGNED BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE), REQUESTING DECISION AS TO CERTAIN QUESTIONS ARISING IN CONNECTION WITH ELECTIONS UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501, 10 U.S.C. 1431-1444.

THE FACTS IN THE FOUR CASES INVOLVED IN THE SUBMISSION ARE STATED AS FOLLOWS:

A. HUBERT CAMPBELL, 279 O2 16, BMCC, USN ( RETIRED)

CLAIM FOR DIFFERENCE BETWEEN ONE-HALF AND ONE-THIRD FORMULAS PURSUANT TO 32 COMP. GEN. 159 FOR THE PERIOD 17 DECEMBER 1947 THROUGH 31 DECEMBER 1957, WAS SETTLED BY THE GENERAL ACCOUNTING OFFICE AND PAID 16 JULY 1958. SEE ENCLOSURE (1).

THE MONTHLY COST OF CAMPBELL'S UNIFORMED SERVICES CONTINGENCY OPTION ELECTION WAS BASED ON GROSS PAY OF $144.48, WHICH THE MEMBER WAS RECEIVING ON 6 APRIL 1954, THE DATE OF HIS UNIFORMED SERVICES CONTINGENCY OPTION ELECTION. AS A RESULT OF THE AFOREMENTIONED SETTLEMENT, THE MEMBER'S GROSS PAY AS OF 6 APRIL 1954 WAS INCREASED TO $145.86, BUT ADJUSTMENT OF UNIFORMED SERVICES CONTINGENCY OPTION COST ($4.77 VS. $4.72) FOR THE PERIOD 1 APRIL 1954 THROUGH 31 DECEMBER 1957 WAS NOT TAKEN INTO CONSIDERATION IN THE SETTLEMENT, SINCE NEITHER THE MEMBER NOR THE NAVY FINANCE CENTER INFORMED THE GENERAL ACCOUNTING OFFICE THAT UNIFORMED SERVICES CONTINGENCY OPTION COSTS WERE BEING DEDUCTED. DEDUCTIONS ARE STILL BEING MADE AT THE RATE OF $4.72 PER MONTH.

B. CHIEF WARRANT OFFICER WILLIAM EDWARD ALLEN, USN ( RETIRED), 284130

CLAIM FOR RETIRED PAY ADJUSTMENT PURSUANT TO 37 COMP. GEN. 591 FOR THE PERIOD 1 JUNE 1951 THROUGH 30 NOVEMBER 1958 WAS SETTLED BY THE GENERAL ACCOUNTING OFFICE AND PAID 12 MARCH 1959. SEE ENCLOSURE (2).

IN PARAGRAPH 4 OF ENCLOSURE (3) WE INFORMED THE GENERAL ACCOUNTING OFFICE THAT IF THE CLAIM WAS ALLOWED, THE COST OF THE MEMBER'S UNIFORMED SERVICES CONTINGENCY OPTION ELECTION OF 8 FEBRUARY 1954 WOULD BE INCREASED TO $2.38 PER MONTH (AN INCREASE OF $0.46) BASED ON GROSS PAY OF $216.22, SUCH GROSS PAY BEING THE ADJUSTED AMOUNT AS OF THE DATE OF THE MEMBER'S UNIFORMED SERVICES CONTINGENCY OPTION ELECTION. HOWEVER, IT WILL BE NOTED THAT ON ENCLOSURE (2) THE DEDUCTIONS WERE CHANGED WHEN GROSS PAY WAS CHANGED AS OF 1 APRIL 1955 AND AS OF JUNE 1958. IN VIEW OF REFERENCE (F) (33 COMP. GEN. 491), IT APPEARS THAT THE UNIFORMED SERVICES CONTINGENCY OPTION COST SHOULD HAVE BEEN ADJUSTED TO THE ONE MONTHLY RATE, $2.38, FOR ALL PERIODS ON AND AFTER 1 FEBRUARY 1954. THEREFORE, FOR THE PERIOD BEGINNING 1 DECEMBER 1958,THROUGH CURRENT DATE UNIFORMED SERVICES CONTINGENCY OPTION COSTS HAVE BEEN DEDUCTED FROM THE MEMBER'S RETIRED PAY AT THE RATE OF $2.38.

C. LIEUTENANT ERNEST A. CUSHMAN, USN ( RETIRED), 52774

CLAIM FOR RETIRED PAY ADJUSTMENT ON THE BASIS OF THE DECISION OF THE COURT OF CLAIMS IN THE CASE OF GORDON VS. UNITED STATES, 134 C.1CLS. 840, FOR THE PERIOD 2 MARCH 1949 THROUGH 31 MARCH 1959 WAS SETTLED BY THE GENERAL ACCOUNTING OFFICE AND PAID ON 19 MAY 1959. SEE ENCLOSURE (4).

IN PARAGRAPH 4 OF ENCLOSURE (5) WE INFORMED THE GENERAL ACCOUNTING OFFICE THAT, IF THE CLAIM WAS ALLOWED, THE COST OF THE MEMBER'S UNIFORMED SERVICES CONTINGENCY OPTION ELECTION OF 1 FEBRUARY 1954 WOULD BE INCREASED TO $45.66, RETROACTIVE TO 1 FEBRUARY 1954. ACCORDINGLY, ON ENCLOSURE (4) UNIFORMED SERVICES CONTINGENCY OPTION COSTS WERE ADJUSTED TO THAT RATE FOR THE PERIOD 1 FEBRUARY 1954 THROUGH 31 MARCH 1959. SUBSEQUENTLY WE DISCOVERED THAT THE RATE OF $45.66 WAS ERRONEOUS AND THAT THE CORRECT MONTHLY COST, BASED ON GROSS PAY OF $311.02, IS $45.60. THEREFORE, FOR THE PERIOD SUBSEQUENT TO 31 MARCH 1959 WE ADJUSTED THE MONTHLY UNIFORMED SERVICES CONTINGENCY OPTION COSTS TO THE RATE OF $45.60.

D. EDWARD FRANCIS COOKE, 122 49 92, BMCC, USN ( RETIRED)

CLAIM FOR INCREASED RETIRED PAY FOR THE PERIOD 1 SEPTEMBER 1949 THROUGH 30 SEPTEMBER 1955, ON THE BASIS OF THE COURT OF CLAIMS DECISION IN THE CASE OF CHRISTOPHER C. SANDERS, WAS SETTLED BY THE COURT OF CLAIMS, BASED UPON INFORMATION SUPPLIED ON 27 OCTOBER 1955 BY THE NAVY FINANCE CENTER. SEE ENCLOSURE (6).

THE MONTHLY COST OF COOKE'S UNIFORMED SERVICES CONTINGENCY OPTION ELECTION OF 28 APRIL 1954 WAS BASED ON GROSS PAY OF $137.59, WHICH THE MEMBER WAS RECEIVING ON THE DATE OF HIS UNIFORMED SERVICES CONTINGENCY OPTION ELECTION. AS A RESULT OF THE AFOREMENTIONED SETTLEMENT, THE MEMBER'S GROSS PAY AS OF 28 APRIL 1954 WAS INCREASED TO $144.14, BUT ADJUSTMENT OF THE UNIFORMED SERVICES CONTINGENCY OPTION COST ($35.27 VS. $33.67) FOR THE PERIOD 1 APRIL 1954 THROUGH 30 SEPTEMBER 1955 WAS NOT TAKEN INTO CONSIDERATION IN THE SETTLEMENT, SINCE NO DETAILS CONCERNING UNIFORMED SERVICES CONTINGENCY OPTION COSTS WERE FURNISHED THE COURT OF CLAIMS ON ENCLOSURE (6). DEDUCTIONS ARE STILL BEING MADE AT THE RATE OF $33.67 PER MONTH.

THE FOUR QUESTIONS PRESENTED FOR DECISION ARE SEPARATELY QUOTED AND DISCUSSED BELOW. THE THIRD AND FOURTH QUESTIONS HAVE BEEN RELETTERED "C" AND "D" AS A MATTER OF CONVENIENCE.

A. SINCE NO ADJUSTMENT OF UNIFORMED SERVICES CONTINGENCY OPTION COSTS WAS INCLUDED IN THE GENERAL ACCOUNTING OFFICE SETTLEMENT IN THE CASE OF HUBERT CAMPBELL, MAY WE ADJUST THE COSTS IN THIS CASE TO THE MONTHLY AMOUNT OF $4.77 RETROACTIVE TO 1 APRIL 1954, OR MAY THE ADJUSTMENT BE EFFECTED ONLY FROM 1 JANUARY 1958, THE DAY SUBSEQUENT TO THE PERIOD COVERED BY THE SETTLEMENT?

UNDER 14 COMP. GEN. 572, CITED BY YOU IN CONNECTION WITH QUESTION "B," BELOW, MATTERS DISPOSED OF BY A SETTLEMENT OF OUR OFFICE MAY NOT BE REVISED BY A DISBURSING OFFICER. HOWEVER, A SETTLEMENT BY THIS OFFICE DOES NOT BAR A DISBURSING OFFICER FROM CONSIDERATION OF MATTERS EXTRANEOUS TO THE SETTLEMENT, EVEN THOUGH INVOLVING A PART OR ALL OF THE PERIOD COVERED BY THE SETTLEMENT. FOR EXAMPLE, THE SETTLEMENT OF A CLAIM BY THE GENERAL ACCOUNTING OFFICE FOR PER DIEM ALLOWANCE--- WHETHER FAVORABLE OR UNFAVORABLE TO THE CLAIMANT--- WOULD NOT PRECLUDE SUBSEQUENT CONSIDERATION, IF OTHERWISE PROPER, BY A DISBURSING OFFICER OF A CLAIM FOR THE SAME MEMBER FOR INCREASED BASIC PAY FOR THE PERIOD OR A PART THEREOF COVERED BY OUR SETTLEMENT. IN CAMPBELL'S CASE, OUR SETTLEMENT ESTABLISHED THE PROPER GROSS RATES OF HIS RETIRED PAY UNDER APPLICABLE LAWS. IT DID NOT CONSIDER OR ESTABLISH THE SEPARATE MATTER OF THE PROPER AMOUNTS TO BE DEDUCTED FROM SUCH GROSS RATES AS THE COSTS OF AN ANNUITY FOR HIS DEPENDENTS. THE MATTER OF SUCH DEDUCTIONS MAY BE ADJUSTED ADMINISTRATIVELY.

ACCORDINGLY, QUESTION "A" IS ANSWERED BY SAYING THAT THE OPTION COSTS IN CAMPBELL'S CASE ARE PROPERLY FOR ADJUSTMENT BY THE DEPARTMENT OF THE NAVY FROM APRIL 1, 1954.

B. IN THE CASES OF CWO ALLEN AND LT CUSHMAN ERRONEOUS ADJUSTMENTS OF THE UNIFORMED SERVICES CONTINGENCY OPTION COSTS WERE INCLUDED IN THE GENERAL ACCOUNTING OFFICE SETTLEMENTS. IT APPEARS THAT, IN VIEW OF REFERENCE (C) (14 COMP. GEN. 572), WE MAY NOT ADJUST THE COSTS FOR THE PERIOD COVERED IN THE SETTLEMENTS, BUT WAS IT PROPER TO ADJUST THE UNIFORMED SERVICES CONTINGENCY OPTION COSTS IN EACH OF THESE CASES FROM THE DAY FOLLOWING THE PERIOD COVERED BY THE SETTLEMENT? WOULD THE ANSWER BE THE SAME IF THE SETTLEMENTS HAD BEEN MADE BY THE COURT OF CLAIMS?

IN OUR SETTLEMENT OF THE CLAIM OF CHIEF WARRANT OFFICER ALLEN FOR ADDITIONAL RETIRED PAY FROM JUNE 1, 1951, TO NOVEMBER 30, 1958, COSTS OF HIS ELECTION UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953 WERE CONSIDERED AND SHOULD HAVE BEEN ADJUSTED BY DEDUCTIONS AT THE RATE OF 46 CENTS PER MONTH FOR THE PERIOD FEBRUARY 1, 1954, TO NOVEMBER 30, 1958, A TOTAL OF $26.68. INSTEAD, DEDUCTIONS WERE MADE AT THE RATE OF 46 CENTS PER MONTH FROM FEBRUARY 1, 1954, TO MARCH 31, 1955, $6.44; AT THE RATE OF 41 CENTS PER MONTH FROM APRIL 1, 1955, TO MAY 31, 1958, $15.58; AND AT THE RATE OF 44 CENTS PER MONTH FROM JUNE 1, 1958, TO NOVEMBER 30, 1958, $2.64; AN AGGREGATE OF $24.66. THUS, THE OFFICER WAS OVERPAID $2.02 IN OUR SETTLEMENT. WE WILL REQUEST HIM TO REFUND THAT AMOUNT DIRECT TO US TO ADJUST HIS RETIRED PAY DEDUCTIONS.

IN OUR SETTLEMENT OF THE CLAIM OF LIEUTENANT CUSHMAN FOR ADDITIONAL RETIRED PAY FROM MARCH 2, 1949, TO MARCH 31, 1959, COSTS OF HIS ELECTION UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953 WERE CONSIDERED AND SHOULD HAVE BEEN ADJUSTED AT THE RATE OF $12.72 PER MONTH (DIFFERENCE BETWEEN $45.60 AND $32.88), FROM FEBRUARY 1, 1954, TO MARCH 31, 1959. INSTEAD, DEDUCTIONS WERE MADE AT THE RATE OF $12.78 PER MONTH FOR THAT PERIOD RESULTING IN AN UNDERPAYMENT OF $3.72 (62 MONTHS AT 6 CENTS PER MONTH). A SUPPLEMENTAL SETTLEMENT WILL ISSUE IN THE OFFICER'S FAVOR FOR $3.72.

QUESTION "B" IS ANSWERED BY SAYING THAT IT WAS PROPER IN THE CASES OF CHIEF WARRANT OFFICER ALLEN AND LIEUTENANT CUSHMAN TO ADJUST THE COSTS OF THE ANNUITY OPTIONS ELECTED BY THEM FROM THE DAY FOLLOWING THE PERIOD OF OUR SETTLEMENT IN EACH CASE. THE PORTION OF THE QUESTION WHICH REFERS TO THE COURT OF CLAIMS REQUIRES NO ANSWER SINCE CLAIMS OF THE TYPE HERE INVOLVED WILL BE SETTLED HERE RATHER THAN BY MEANS OF SUITS IN THE COURT OF CLAIMS, IT HAVING BEEN DECIDED THAT WE WILL FOLLOW THE GORDON V. UNITED STATES, 134 C.1CLS. 840, AND TATO V. UNITED STATES, 136 C.1CLS. 651, CASES. SEE 38 COMP. GEN. 348 AND 37 ID. 591.

CLAIMS OF THIS TYPE ARE NOT CONCERNED WITH CONTINGENCY OPTION ACT MATTERS AND IF A JUDGMENT WERE RENDERED IN SUCH A CASE THE COURT SHOULD NOT CONSIDER THE COST OF AN ANNUITY UNDER THAT ACT IN DETERMINING THE AMOUNT DUE THE PLAINTIFF. SEE ANSWER TO QUESTION "D" BELOW.

C. MAY WE ADJUST THE COSTS FOR COOKE'S UNIFORMED SERVICES CONTINGENCY OPTION ELECTION TO THE MONTHLY AMOUNT OF $35.27 RETROACTIVE TO 1 APRIL 1954, OR MAY THE ADJUSTMENT BE EFFECTED ONLY FROM 1 OCTOBER 1955, THE DAY FOLLOWING THE PERIOD COVERED BY THE SETTLEMENT?

D. DOES THE COURT OF CLAIMS JUDGMENT, WHICH DID NOT TAKE INTO CONSIDERATION THE CHANGE IN UNIFORMED SERVICES CONTINGENCY OPTION COSTS, OPERATE TO ESTOP THE ADJUSTMENT OF UNIFORMED SERVICES CONTINGENCY OPTION COSTS FOR BOTH THE PERIOD COVERED BY THE SETTLEMENT AND ANY PERIOD THEREAFTER?

THE QUESTION OF THE PROPER RATES OF COOKE'S RETIRED PAY FOR THE PERIOD SEPTEMBER 1, 1949, TO SEPTEMBER 30, 1955, AND THEREAFTER WAS SETTLED BY THE JUDGMENT OF THE COURT OF CLAIMS IN HIS FAVOR. SEE 36 COMP. GEN. 501, CITED IN YOUR LETTER. THE MATTER OF PROPER COSTS OF COOKE'S CONTINGENCY OPTION ACT ELECTION, HOWEVER, WAS NOT INVOLVED IN HIS CASE BEFORE THE COURT OF CLAIMS AND IS AFFECTED BY THE COURT'S JUDGMENT ONLY TO THE EXTENT THAT SUCH JUDGMENT FIXED THE RATES OF HIS RETIRED PAY.

ACCORDINGLY, QUESTION "C" IS ANSWERED BY SAYING THAT THE MATTER OF THE ANNUITY COSTS OF COOKE'S ELECTION OF OPTIONS SHOULD BE ADJUSTED BY THE DEPARTMENT OF THE NAVY FROM APRIL 1, 1954, BASED ON THE RATE OF $144.14 FIXED BY THE COURT, AND QUESTION "D" IS ANSWERED IN THE NEGATIVE.