B-145943, JULY 13, 1961, 41 COMP. GEN. 28

B-145943, JULY 13, 1961, 41 COMP. GEN. 28

MILITARY PERSONNEL - RETIRED PAY - ANNUITY DEDUCTIONS - OVERPAYMENTS - WAIVER AUTHORITY THE FAILURE OF THE GOVERNMENT TO MAKE THE PROPER SURVIVOR ANNUITY DEDUCTIONS FROM THE RETIRED PAY OF A MEMBER OF THE UNIFORMED SERVICES, SO THAT LESS MONEY WAS WITHHELD FROM THE RETIRED PAY THAN WAS REQUIRED FOR THE PURCHASE OF THE ANNUITY, CAUSES A DEFICIT IN THE ANNUITY PLAN WHICH, UNDER THE LAW, IS REQUIRED TO BE SELF-SUSTAINING; ACCORDINGLY, UNLESS THE WIDOW OF THE MEMBER PAYS THE AMOUNT REQUIRED FROM HER OWN FUNDS, THE ANNUITY PAYMENTS TO HER MAY BE REDUCED IN AN AMOUNT SUFFICIENT TO COVER THE OVERPAYMENTS. THE FAILURE OF THE GOVERNMENT TO WITHHOLD FROM THE RETIRED PAY OF A MEMBER OF THE UNIFORMED SERVICES THE AMOUNTS NECESSARY TO PURCHASE A SURVIVOR ANNUITY MAY NOT BE CONSIDERED AN OVERPAYMENT OF AN ANNUITY TO A DESIGNATED BENEFICIARY UNDER 10 U.S.C. 1431-1444 SO AS TO PERMIT THE INVOCATION OF THE WAIVER AUTHORITY IN 10 U.S.C. 1442.

TO THE SECRETARY OF DEFENSE, JULY 13, 1961:

REFERENCE IS MADE TO LETTER OF MAY 19, 1961, FROM THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER), REQUESTING DECISION ON TWO QUESTIONS ARISING IN THE ADMINISTRATION OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, AS AMENDED, NOW CODIFIED IN 10 U.S.C. 1431-1444. THE QUESTIONS, WHICH ARE DISCUSSED IN COMMITTEE ACTION NO. 280 OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE, ARE AS FOLLOWS:

1. AFTER THE DEATH OF A RETIRED MEMBER, A MISTAKE IS DISCOVERED IN THE COMPUTATION OF DEDUCTIONS FROM HIS RETIRED PAY REQUIRED FOR CONTINGENCY OPTION ACT ELECTIONS CAUSED BY USING THE TABLES FOR MEMBERS RETIRED FOR NON-DISABILITY RATHER THAN AT HIGHER TABLE OF RATES APPLICABLE FOR THOSE RETIRED FOR DISABILITY IN DETERMINING THE MONTHLY REDUCED PAY. MAY THE OVERPAYMENT RESULTING FROM THIS MISTAKE BE PROPERLY WITHHELD FROM ANNUITY PAYMENTS TO THE WIDOW?

2. IF THE ANSWER TO THE FOREGOING QUESTION IS AFFIRMATIVE AND SUCH AN AMOUNT MAY BE PROPERLY WITHHELD FROM ANNUITY PAYMENTS TO THE WIDOW, MAY RECOVERY BE WAIVED UNDER THE AUTHORITY OF 10 U.S.C. 1442?

MENTIONED IN THE COMMITTEE DISCUSSION ARE THREE DECISIONS OF THIS OFFICE, 35 COMP. GEN. 12, ID. 401, AND B-139217, DATED AUGUST 12, 1960, AS HAVING SOME RELEVANCE IN DETERMINING THE ANSWERS TO THE QUESTIONS HERE INVOLVED. WE HELD IN 35 COMP. GEN. 12 THAT IN THE EVENT A RETIRED MEMBER FAILED TO PAY THE AMOUNTS REQUIRED UNDER SECTION 5 OF THE CONTINGENCY OPTION ACT (A PROVISION REQUIRING PAYMENT BY HIM OF SUCH AMOUNTS AFTER AN ELECTION OF AN ANNUITY, FOR PERIODS DURING WHICH THE MEMBER WAS NOT RECEIVING RETIRED PAY) AND COLLECTION OF ARREARS WAS NOT EFFECTED AT THE TIME OF HIS DEATH, NO REASON WAS PERCEIVED WHY THE SURVIVING WIFE OR CHILDREN SHOULD NOT BE PERMITTED TO PAY THE TOTAL AMOUNT DUE, WITH INTEREST, OR TO AUTHORIZE APPLICATION OF THE ANNUITY DUE TOWARD PAYMENTS OF SUCH AMOUNT, SINCE IT WAS OUR VIEW THAT THE ANNUITY COULD BE WITHHELD FOR THAT PURPOSE IN THE ABSENCE OF SUCH ACTION. THIS VIEW WAS PREMISED ON THE APPARENT INTENT OF THE CONGRESS THAT THE CONTINGENCY OPTION PLAN SHOULD OPERATE WITHOUT APPROPRIATION OF PUBLIC FUNDS FOR ITS SUPPORT AND THAT THE PAYMENT OF ANNUITIES FOR WHICH COMMENSURATE DEDUCTIONS FROM RETIRED PAY WERE NOT MADE WOULD ADVERSELY AFFECT THE ACTUARIAL SOUNDNESS OF THE PLAN.

THE ISSUE INVOLVED IN B-139217, DATED AUGUST 12, 1960, WAS WHETHER A GENERAL DEBT OF THE DECEASED MEMBER'S ESTATE FOR WHICH THE WIDOW WAS NOT RESPONSIBLE COULD BE COLLECTED BY WITHHOLDING A PART OF THE ANNUITY PAYMENTS DUE HIS WIDOW. OUR CONCLUSION THAT SUCH ACTION WAS IMPROPER WITHOUT HER CONSENT WAS BASED ON THE PROVISIONS OF 10 U.S.C. 1440 THAT NO ANNUITY IS SUBJECT TO ATTACHMENT, LEVY OR OTHER LEGAL PROCESS.

IN 35 COMP. GEN. 401 WE WERE ASKED TO CONCUR IN THE WAIVER OF CERTAIN ANNUITY OVERPAYMENTS PAID TO A BENEFICIARY UNDER THE CONTINGENCY OPTION ACT. CREDIT HAD BEEN GIVEN TO THE OFFICER INVOLVED FOR CERTAIN NATIONAL GUARD SERVICE WHICH WAS NOT COUNTABLE FOR PERCENTAGE MULTIPLE PURPOSES IN DETERMINING THE AMOUNT OF RETIRED PAY DUE THE MEMBER. ON THE BASIS OF THE CORRECT AMOUNT OF RETIRED PAY TO WHICH THE MEMBER WAS ENTITLED AT THE TIME OF HIS DEATH, IT WAS DETERMINED THAT THE ANNUITY PAYMENTS PROPERLY PAYABLE TO THE BENEFICIARY WERE $2.12 LESS PER MONTH THAN HAD BEEN PAID. IT WAS CONCLUDED THAT THE AMOUNTS IMPROPERLY PAID COULD BE COLLECTED FROM THE FUTURE PAYMENTS OF THE ANNUITY. THIS CASE WAS AN INSTANCE OF OVERPAYMENT OF ANNUITY TO A BENEFICIARY RESULTING FROM INCORRECT COMPUTATION OF THE RETIRED PAY ON WHICH IT WAS BASED AND WHILE IT WAS A CASE PROPERLY SUBJECT TO CONSIDERATION UNDER WAIVER PROVISIONS OF THE ACT (NOW 10 U.S.C. 1442), WE EXPRESSED THE VIEW THAT THE RECORD DID NOT JUSTIFY WAIVING RECOVERY OF THE OVERPAYMENTS.

UNLIKE THE SITUATION INVOLVED IN B-139217 WHERE PROPER DEDUCTIONS WERE MADE UNDER THE CONTINGENCY OPTION ACT, THE OVERPAYMENTS OF RETIRED PAY IN THE CASE NOW PRESENTED FOR DECISION RESULTED IN THE WITHHOLDING OF LESS MONEY THAN WAS REQUIRED FOR THE PURCHASE OF THE ANNUITY. AS INDICATED IN 35 COMP. GEN. 12, IT IS OUR VIEW THAT THE REQUIREMENT FOR PAYMENT OF THE PURCHASE PRICE OF THE ANNUITY IS IMPLICIT IN THE TERMS OF 10 U.S.C. 1431 (B). UNLESS SUCH AMOUNTS ARE WITHHELD IN ALL CASES, THE ANNUITY PLAN WILL NOT BE SELF-SUSTAINING AND THE DEFICIT WILL HAVE TO BE MADE UP BY THE GOVERNMENT OR BY THE OTHER MEMBERS WHO PARTICIPATE IN THE PLAN. ACCORDINGLY, QUESTION NO. 1 IS ANSWERED BY STATING THAT UNLESS THE WIDOW PAYS THE AMOUNT INVOLVED FROM HER OWN FUNDS, THE ANNUITY PAYMENTS TO HER MAY BE REDUCED IN AN AMOUNT SUFFICIENT TO COVER THE OVERPAYMENTS.

THE WAIVER AUTHORITY CONTAINED IN 10 U.S.C. 1442 RELATES TO OVERPAYMENTS WHICH ARE MADE "UNDER THIS CHAPTER.' THE BENEFITS WHICH ARE AUTHORIZED TO BE PAID UNDER SUCH PROVISIONS OF LAW ARE ANNUITY PAYMENTS TO DESIGNATED BENEFICIARIES. IT IS NOT BELIEVED THAT THE FAILURE TO WITHHOLD FROM A MEMBER'S RETIRED PAY THE AMOUNTS NECESSARY TO PURCHASE AN ANNUITY RESULTS IN AN OVERPAYMENT ,UNDER THIS CHAPTER.' QUESTION NO. 2 IS ANSWERED IN THE NEGATIVE.