B-147730, JANUARY 22, 1962, 41 COMP. GEN. 467

B-147730: Jan 22, 1962

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MAY HAVE THE APPROVAL THAT THE MEMBER WAS QUALIFIED FOR RETURNED PAY. COUPLED WITH THE INTERPRETATION IN THE HAMRICK CASE REGARDED AS A DETERMINATION THAT THE MEMBER WAS A RETIRED MEMBER IN 1946 AND IN RECEIPT OF RETIRED PAY FROM THE DATE OF RELEASE FROM ACTIVE DUTY. THE MEMBER WOULD HAVE BEEN ENTITLED TO MAKE AN ANNUITY ELECTION AS A RETIRED MEMBER BASED UPON THE ELIGIBILITY OF HIS BENEFICIARIES ON NOVEMBER 1. IS NOT THE CRITERION FOR DETERMINATION OF THE EFFECTIVE DATE OF ELIGIBILITY OF BENEFICIARIES UNDER THE MEMBER'S ANNUITY OPTION ELECTION. SUCH ELIGIBILITY IS DETERMINED ON THE BASIS OF THE STATUS IN WHICH THE ACTION OF THE REVIEW BOARD AND THE SECRETARY OF THE NAVY HAS PLACED THE MEMBER.

B-147730, JANUARY 22, 1962, 41 COMP. GEN. 467

PAY - RETIRED - ANNUITY ELECTIONS FOR DEPENDENTS - READJUSTMENT OF RETIRED PAY A NAVY RESERVE MEMBER WHO, AFTER NOTICE IN 1958 THAT THE SECRETARY OF THE NAVY HAD APPROVED DISABILITY RETIRED PAY ON THE BASIS OF A REVIEW BOARD FINDING OF PERMANENT INCAPACITY INCURRED IN LINE OF DUTY, EXECUTED AN ANNUITY OPTION ELECTION BUT WHO, AS A RESULT OF THE COURT OF CLAIMS HOLDING IN THE HAMRICK CASE, 120 CT. CL. 17, BECAME ELIGIBLE FOR DISABILITY RETIRED PAY RETROACTIVE TO THE DATE OF RELEASE TO INACTIVE DUTY (1946), MAY HAVE THE APPROVAL THAT THE MEMBER WAS QUALIFIED FOR RETURNED PAY, COUPLED WITH THE INTERPRETATION IN THE HAMRICK CASE REGARDED AS A DETERMINATION THAT THE MEMBER WAS A RETIRED MEMBER IN 1946 AND IN RECEIPT OF RETIRED PAY FROM THE DATE OF RELEASE FROM ACTIVE DUTY, SO THAT UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 10 U.S.C. 1431-1444 --- EFFECTIVE NOVEMBER 1, 1953-- THE MEMBER WOULD HAVE BEEN ENTITLED TO MAKE AN ANNUITY ELECTION AS A RETIRED MEMBER BASED UPON THE ELIGIBILITY OF HIS BENEFICIARIES ON NOVEMBER 1, 1953, AND THE DEDUCTIONS FROM HIS RETIRED PAY SHOULD BE COMPUTED ON THE BASIS OF THE BENEFICIARIES NAMED IN THE DELAYED OPTION ELECTION AS OF THEIR AGES ON THE FACT THAT NAVAL RESERVE MEMBER HAS CLAIMED AND BEEN PAID DISABILITY RETIRED PAY PRIOR TO MARCH 1, 1958, THE DATE OF THE SECRETARY'S APPROVAL OF THE REVIEW BOARD FINDINGS OF DISABILITY INCIDENT TO MILITARY SERVICE ON THE BASIS OF THE HAMRICK DECISION, 120 CT. CL. 17, IS NOT THE CRITERION FOR DETERMINATION OF THE EFFECTIVE DATE OF ELIGIBILITY OF BENEFICIARIES UNDER THE MEMBER'S ANNUITY OPTION ELECTION, RATHER, SUCH ELIGIBILITY IS DETERMINED ON THE BASIS OF THE STATUS IN WHICH THE ACTION OF THE REVIEW BOARD AND THE SECRETARY OF THE NAVY HAS PLACED THE MEMBER, AND, REGARDLESS OF HIS CLAIM FOR PAY, IF THAT ACTION RETROACTIVELY PLACES THE MEMBER IN A "RETIRED MEMBER" STATUS AS OF NOVEMBER 1, 1953--- THE EFFECTIVE DATE OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 10 U.S.C. 1431-1444 --- THE ANNUITY ELECTED MUST BE COMPUTED ON THAT BASIS.

TO LIEUTENANT COMMANDER E. L. TRAUX, DEPARTMENT OF THE NAVY, JANUARY 22, 1962:

IN YOUR LETTER OF OCTOBER 30, 1961, FORWARDED BY SECOND ENDORSEMENT DATED DECEMBER 5, 1961, OF THE COMPTROLLER OF THE NAVY, UNDER DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE SUBMISSION NO. DO-N-614, YOU REQUEST DECISION ON CERTAIN QUESTIONS IN CONNECTION WITH THE RETIRED PAY ACCOUNT OF LIEUTENANT COMMANDER JOSEPH DOMINICK DEMASI, USNR, RETIRED, 170721.

IT APPEARS THAT LIEUTENANT COMMANDER DEMASI WAS RELEASED TO INACTIVE DUTY JUNE 15, 1946, AND THAT HE WAS NOT AWARDED DISABILITY RETIRED PAY AT THAT TIME. ON NOVEMBER 7, 1956, A NAVAL RETIRING REVIEW BOARD WAS CONVENED IN HIS CASE AND THAT BOARD DECIDED THAT LIEUTENANT COMMANDER DEMASI WAS PERMANENTLY INCAPACITATED FOR ACTIVE SERVICE AND THAT SUCH INCAPACITY WAS THE RESULT OF AN INCIDENT OF THE SERVICE AND WAS INCURRED IN LINE OF DUTY WHILE IN RECEIPT OF ACTIVE DUTY PAY. ON FEBRUARY 25, 1958, THE SECRETARY OF THE NAVY APPROVED THE DECISION OF THE REVIEW BOARD AND DIRECTED PAYMENT OF RETIRED PAY IN THE RANK OF LIEUTENANT. THE SECRETARY FURTHER DETERMINED THAT THE OFFICER HAD SERVED SATISFACTORILY IN THE TEMPORARY RANK OF LIEUTENANT COMMANDER AND, THEREFORE,"EFFECTIVE MARCH 1, 1958, YOU WERE ENTITLED TO THE RETIRED PAY BASED ON THE HIGHER RANK * * *.' NOTIFICATION OF THIS DECISION WAS GIVEN BY LETTER DATED JUNE 28, 1958.

ON AUGUST 26, 1958, LIEUTENANT COMMANDER DEMASI EXECUTED AN ELECTION FORM BY WHICH HE CHOSE OPTION 3 AT ONE-FOURTH REDUCED RETIRED PAY UNDER THE TERMS OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501, 10 U.S.C. 1434. THE ELECTION WAS CONSIDERED TO HAVE BEEN TIMELY MADE AND MONTHLY DEDUCTIONS TO COVER THE COST OF THE ANNUITY WERE ESTABLISHED BEGINNING JUNE 28, 1958, THE DATE OF THE SECRETARY'S NOTICE BASED ON GROSS PAY AND AGES AS OF THAT DATE.

PURSUANT TO THE DECISION IN THE HAMRICK CASE, 120 CT. CL. 17, LIEUTENANT COMMANDER DEMASI FILED CLAIM FOR RETIRED PAY FOR THE PERIOD JUNE 16, 1946, THROUGH FEBRUARY 28, 1958, WHICH WAS PAID PURSUANT TO SETTLEMENT BY THIS OFFICE.

YOU SAY THAT AS THE RESULT OF PAYMENT OF RETIRED PAY RETROACTIVELY TO THE DATE OF RELEASE FROM ACTIVE DUTY LIEUTENANT COMMANDER DEMASI'S CASE DIFFERS FROM THOSE CONSIDERED IN B-140897, DATED DECEMBER 16, 1959, AND 38 COMP. GEN. 146, SINCE HE BECAME ENTITLED TO RETIRED PAY AS OF A DATE PRIOR TO THE DATE INDICATED BY THE SECRETARY OF THE NAVY IN HIS APPROVAL OF FEBRUARY 25, 1958, MENTIONED ABOVE. THEREFORE, YOU REQUEST DECISION ON THE FOLLOWING QUESTIONS:

(A) THE EFFECTIVE DATE OF THE ANNUITY ELECTION FOR COMPUTING AND DEDUCTING THE COST OF THE ANNUITY.

(B) THE DATE TO BE USED IN SIMILAR CASES IN DETERMINING ELIGIBILITY OF BENEFICIARIES, AND

(C) WHETHER OUR ANSWERS WOULD BE THE SAME IF THE OFFICER HAD NOT SUBMITTED A CLAIM FOR RETROACTIVE RETIRED PAY DUE PRIOR TO MARCH 1, 1958.

IT IS WELL SETTLED THAT, IF A MEMBER'S MILITARY OR NAVAL RECORDS ARE CORRECTED PURSUANT TO LAW (SEE 10 U.S.C. 1552) HE IS ENTITLED TO THE AMOUNT DETERMINED TO BE DUE UNDER THE APPLICABLE STATUTE BASED UPON THE FACTS AS REFLECTED BY THE CORRECTED RECORDS. 34 COMP. GEN. 7. IN 38 COMP. GEN. 208, WE HELD THAT, IF A MEMBER'S CORRECTED RECORD SHOWS THAT HIS NAME WAS PLACED ON A RETIRED LIST RETROACTIVELY, HIS RIGHTS ARE FOR DETERMINATION ON THE SAME BASIS AS THEY WOULD HAVE BEEN DETERMINED HAD HIS NAME IN FACT BEEN SO PLACED ON THE RETROACTIVE DATE EXCEPT WITH RESPECT TO THE MAKING OF THE SURVIVOR'S ANNUITY ELECTION UNDER THE 1953 ACT. IN THAT SITUATION, IN ORDER TO GIVE FULL EFFECT TO THE CORRECTION OF THE RECORDS, WE RECOGNIZED THAT A SURVIVOR'S ANNUITY ELECTION MAY BE MADE CONTEMPORANEOUSLY WITH THE CORRECTION OF THE RECORDS SO THAT THE MEMBER WOULD BE PLACED, AS NEARLY AS POSSIBLE, IN THE SAME POSITION HE WOULD HAVE BEEN HAD HE BEEN AWARDED RETIRED PAY AS OF THE EFFECTIVE DATE OF RETIREMENT AS SHOWN BY THE CORRECTED RECORD.

WHILE THIS CASE DOES NOT INVOLVE A CORRECTION OF RECORDS, IT DOES INVOLVE A DETERMINATION THAT LIEUTENANT COMMANDER DEMASI WAS QUALIFIED FOR RETIRED PAY INCIDENT TO HIS MILITARY SERVICE WHICH, COUPLED WITH THE INTERPRETATION OF THESE CIRCUMSTANCES UNDER THE HAMRICK DECISION, AMOUNTS TO A DETERMINATION THAT HE WAS A RETIRED MEMBER FROM JUNE 16, 1946. HE IS TO BE PLACED IN THE SAME POSITION HE WOULD HAVE BEEN HAD HE BEEN RETIRED AND IN RECEIPT OF RETIRED PAY AS OF THE DATE HE WAS RELIEVED FROM ACTIVE DUTY. UNDER THOSE CIRCUMSTANCES HE WOULD HAVE BEEN ENTITLED TO MAKE ELECTION AS A RETIRED MEMBER BASED UPON THE ELIGIBILITY OF HIS BENEFICIARIES ON NOVEMBER 1, 1953. THUS, THE DEDUCTIONS SHOULD BE COMPUTED UPON THE BASIS OF THE BENEFICIARIES NAMED IN THE DELAYED OPTION ELECTION WHO WERE ELIGIBLE AS OF THE EFFECTIVE DATE OF THE ELECTION BASED UPON THEIR AGES AT THAT TIME, IN THIS CASE, NOVEMBER 1, 1953. YOUR FIRST TWO QUESTIONS ARE ANSWERED ACCORDINGLY.

THE FACT THAT LIEUTENANT COMMANDER DEMASI HAS CLAIMED AND BEEN PAID RETIRED PAY FOR THE PERIOD PRIOR TO MARCH 1, 1958, THE DATE INDICATED IN THE SECRETARY'S APPROVAL OF THE FINDINGS OF THE REVIEW BOARD, IS NOT THE CRITERION BY WHICH THE EFFECTIVE DATE OF ELIGIBILITY OF BENEFICIARIES UNDER THE CONTINGENCY OPTION ELECTION IS TO BE DETERMINED. SUCH ELIGIBILITY IS DETERMINED ON THE BASIS OF THE STATUS IN WHICH THE ACTION OF THE REVIEW BOARD AND THE SECRETARY HAS PLACED THE MEMBER, AND, REGARDLESS OF HIS CLAIM FOR PAY, IF THAT ACTION RETROACTIVELY PLACES THE MEMBER IN A ,RETIRED MEMBER" STATUS AS OF NOVEMBER 1, 1953, THE ANNUITY ELECTED MUST BE COMPUTED ON THAT BASIS. YOUR LAST QUESTION IS ANSWERED ACCORDINGLY.