B-147733, DEC. 22, 1961

B-147733: Dec 22, 1961

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WAS PROPER UNDER THE FACTS AND CIRCUMSTANCES HEREINAFTER SET FORTH. IT WAS EXTENDED EACH FISCAL YEAR THEREAFTER UNTIL JUNE 30. THE CIVIL SERVICE COMMISSION INFORMED HIM THAT "IT IS NECESSARY TO SUSPEND YOUR ANNUITY FROM MAY 1. WHILE YOU WERE CARRIED ON THE U.S. SMYTH WAS BASED UPON CERTAIN DECISIONS OF OUR OFFICE (13 COMP. 1934) WHICH ARE REFERRED TO IN YOUR ASSISTANT GENERAL MANAGER'S LETTER. THOSE DECISIONS WERE BASED UPON PROVISIONS IN THE THEN EXISTING RETIREMENT ACT TO THE EFFECT THAT WHEN A RETIRED EMPLOYEE IS REEMPLOYED HIS ANNUITY WILL BE TERMINATED AND ALSO UPON THE GENERAL PRINCIPLE THAT IN NO CASE MAY BOTH ANNUITY AND CIVILIAN COMPENSATION BE PAID TO THE SAME PERSON DURING THE SAME PERIOD OF TIME.

B-147733, DEC. 22, 1961

TO CHAIRMAN, UNITED STATES ATOMIC ENERGY COMMISSION:

ON DECEMBER 5, 1961, YOUR ASSISTANT GENERAL MANAGER SUBMITTED FOR OUR CONSIDERATION THE QUESTION WHETHER THE SUSPENSION OF THE RETIREMENT ANNUITY OF DR. HENRY E. SMYTH, FORMERLY A FULL-TIME OFFICIAL OF THE ATOMIC ENERGY COMMISSION, WAS PROPER UNDER THE FACTS AND CIRCUMSTANCES HEREINAFTER SET FORTH.

THE ASSISTANT GENERAL MANAGER SAYS THAT ON SEPTEMBER 30, 1954, DR. SYMTH RESIGNED AS A COMMISSIONER OF THE ATOMIC ENERGY COMMISSION AFTER HIS COMPLETING APPROXIMATELY 5 YEARS AND 10 MONTHS OF SERVICE CREDITABLE UNDER THE CIVIL SERVICE RETIREMENT ACT. DR. SMYTH SIGNED A CONTRACT EFFECTIVE OCTOBER 1, 1954, TO SERVE AS A CONSULTANT IN THE ATOMIC ENERGY COMMISSION ON AN INTERMITTENT BASIS WITH COMPENSATION PAYABLE AT THE RATE OF $100 PER WORKDAY. WHILE THAT CONTRACT EXPIRED ON JUNE 30, 1955, IT WAS EXTENDED EACH FISCAL YEAR THEREAFTER UNTIL JUNE 30, 1961. DURING THE ENTIRE PERIOD --- OCTOBER 1, 1954, TO JUNE 30, 1961--- DR. SMYTH WORKED A TOTAL OF 73 DAYS AND 7 1/2 HOURS.

ON MAY 1, 1960, DR. SMYTH ATTAINED THE AGE OF 62 WHEN HE BECAME ELIGIBLE UNDER THE CIVIL SERVICE RETIREMENT ACT TO FILE A CLAIM FOR A DEFERRED ANNUITY BUT HE DID NOT FILE SUCH CLAIM UNTIL JUNE 15, 1961. WITH THE TRANSMISSION OF DR. SMYTH'S FIRST ANNUITY CHECK COVERING THE PERIOD MAY 1, 1960, TO SEPTEMBER 30, 1961, THE CIVIL SERVICE COMMISSION INFORMED HIM THAT "IT IS NECESSARY TO SUSPEND YOUR ANNUITY FROM MAY 1, 1960, THROUGH JUNE 14, 1961, WHILE YOU WERE CARRIED ON THE U.S. ATOMIC ENERGY COMMISSION AS AN EMPLOYEE.'

THE ACTION OF THE CIVIL SERVICE COMMISSION IN SUSPENDING THE ANNUITY OF DR. SMYTH WAS BASED UPON CERTAIN DECISIONS OF OUR OFFICE (13 COMP. GEN. 54; 14 COMP. GEN. 285; 14 COMP. GEN. 586; 23 COMP. GEN. 664; 25 COMP. GEN. 578; AND A-48932, DATED MAY 11, 1934) WHICH ARE REFERRED TO IN YOUR ASSISTANT GENERAL MANAGER'S LETTER. THOSE DECISIONS WERE BASED UPON PROVISIONS IN THE THEN EXISTING RETIREMENT ACT TO THE EFFECT THAT WHEN A RETIRED EMPLOYEE IS REEMPLOYED HIS ANNUITY WILL BE TERMINATED AND ALSO UPON THE GENERAL PRINCIPLE THAT IN NO CASE MAY BOTH ANNUITY AND CIVILIAN COMPENSATION BE PAID TO THE SAME PERSON DURING THE SAME PERIOD OF TIME.

HOWEVER, SINCE THE DATE OF THOSE DECISIONS THERE HAS BEEN A CHANGE IN THE RETIREMENT LAWS. THE ACT OF FEBRUARY 28, 1948, AMENDED SECTION 2 (B) OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, TO PROVIDE THAT "NO DEDUCTION FOR THE RETIREMENT FUND SHALL BE WITHHELD FROM THE SALARY, PAY, OR COMPENSATION" OF AN ANNUITANT WHO IS REEMPLOYED BUT THAT "THERE SHALL BE DEDUCTED FROM HIS SALARY, PAY, OR COMPENSATION OTHERWISE PAYABLE A SUM EQUAL TO THE RETIREMENT ANNUITY ALLOWABLE TO THE PERIOD OF ACTUAL EMPLOYMENT.'

A SIMILAR PROVISION IS CONTAINED IN SECTION 13 (B) OF THE CURRENT RETIREMENT ACT (70 STAT. 757) READING IN PART AS FOLLOWS:

"IF AN ANNUITANT UNDER THIS ACT * * * HEREAFTER BECOMES EMPLOYED, OR ON THE DATE OF ENACTMENT OF THE CIVIL SERVICE RETIREMENT ACT AMENDMENTS OF 1956 IS SERVING, IN AN APPOINTIVE OR ELECTIVE POSITION, HIS SERVICE ON AND AFTER THE DATE HE WAS OR IS SO EMPLOYED SHALL BE COVERED BY THIS ACT. DEDUCTIONS FOR THE FUND SHALL BE WITHHELD FROM HIS SALARY, BUT THERE SHALL BE DEDUCTED FROM HIS SALARY * * * A SUM EQUAL TO THE ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT. * * *"

IN HOUSE REPORT NO. 2854, JULY 21, 1956, THE FOLLOWING EXPLANATION CONCERNING ANNUITANTS REEMPLOYED UPON AN INTERMITTENT BASIS APPEARS ON PAGE 38:

"* * * IT IS FREQUENTLY DESIRABLE THAT AN AGENCY REEMPLOY AN ANNUITANT IN A CONSULTING OR ADVISORY CAPACITY, IN WHICH ONLY OCCASIONAL SERVICE IS CONTEMPLATED. PRESENT LAW FACILITATES SUCH AN ARRANGEMENT--- THE ANNUITY CONTINUES WITHOUT INTERRUPTION, AND SALARY AT THE REGULAR SERVICE RATE, LESS THE ONE DAY'S ANNUITY, IS PAID BY THE AGENCY FOR EACH DAY OF SERVICE PERFORMED. * * *"

THE LEGISLATIVE POLICY CONCERNING THE CONCURRENT RECEIPT OF A RETIREMENT ANNUITY AND CIVILIAN COMPENSATION BY AN ANNUITANT REEMPLOYED AS A CONSULTANT ON A WHEN-ACTUALLY-EMPLOYED BASIS IS CLEARLY EXPRESSED IN SECTION 13 (B) OF THE CURRENT RETIREMENT ACT AND IN THE ABOVE-QUOTED EXPLANATORY STATEMENT FROM THE HOUSE REPORT.

APPARENTLY, THE ACTION OF THE CIVIL SERVICE COMMISSION IN SUSPENDING DR. SMYTH'S ANNUITY WAS BASED UPON THE FACT THAT PRIOR TO JUNE 15, 1961, WHEN HE APPLIED FOR A DEFERRED ANNUITY DR. SMYTH DID NOT COME WITHIN THE LITERAL DEFINITION OF THE TERM "ANNUITANT," AS DEFINED IN SECTION 1 (N) OF THE CIVIL SERVICE RETIREMENT ACT, 70 STAT. 744, AS FOLLOWS:

"THE TERM "ANNUITANT" SHALL MEAN ANY FORMER EMPLOYEE OR MEMBER WHO, ON THE BASIS OF HIS SERVICE, HAS MET ALL REQUIREMENTS OF THE ACT FOR TITLE TO ANNUITY AND HAS FILED CLAIM THEREFOR.'

THE DEFINITION OF THE TERM "ANNUITANT" APPEARING IN THE RETIREMENT REGULATIONS IS TO THE SAME EFFECT. SEE SECTION 29.18 APPEARING IN FEDERAL PERSONNEL MANUAL 21-346.01. THE COMMISSION CONCLUDED THAT BECAUSE DR. SMYTH DID NOT FILE CLAIM FOR ANNUITY UNTIL JUNE 15, 1961, HE DID NOT QUALIFY AS AN ANNUITANT PRIOR TO THAT DATE AND THAT, THEREFORE, HE WAS NOT COVERED BY THE PROVISIONS OF SECTION 13 (B) OF THE RETIREMENT ACT RELATING TO REEMPLOYMENT OF ANNUITANTS PRIOR TO JUNE 15. THE COMMISSION THEN APPLIED THE CITED DECISIONS OF OUR OFFICE WHICH PRECLUDE THE RECEIPT OF AN ANNUITY AND CIVILIAN COMPENSATION COVERING THE SAME PERIOD OF TIME TO DENY HIM HIS ANNUITY FOR THE ENTIRE PERIOD BETWEEN THE DATE HE BECAME AGE 62 AND THE DATE HE APPLIED FOR AN ANNUITY, NOTWITHSTANDING THAT DURING THAT PERIOD HE SAYS HIS SERVICES HAD BEEN ENGAGED FOR ONLY 2 DAYS.

UNDER THE DEFINITION OF THE TERM "ANNUITANT" APPEARING IN BOTH THE LAW AND REGULATIONS OF THE COMMISSION, A FORMER EMPLOYEE OTHERWISE ELIGIBLE FOR AN ANNUITY DOES NOT BECOME AN ANNUITANT UNTIL HE HAS FILED CLAIM FOR THE ANNUITY. HENCE, THE PROVISIONS OF 13 (B) OF THE RETIREMENT ACT DO NOT EXPRESSLY APPLY TO A FORMER EMPLOYEE, SUCH AS DR. SMYTH, WHO WAS EMPLOYED PRIOR TO THE TIME HE FILED CLAIM FOR AN ANNUITY, EVEN THOUGH AFTER CLAIM IS FILED THE ANNUITY WOULD BE PAYABLE BACK TO THE DATE HE FIRST BECAME ELIGIBLE THEREFOR--- IN DR. SMYTH'S CASE THE DAY AFTER HE ATTAINED THE AGE OF 62.

THUS, WHILE UNDER THE LITERAL LANGUAGE OF SECTION 13 (B), DR. SMYTH WOULD NOT HAVE BECOME AN ANNUITANT UNTIL AFTER HIS REEMPLOYMENT AS A CONSULTANT, WE SEE NO COMPELLING REASON WHY HE SHOULD BE PLACED IN A LESS FAVORABLE POSITION THAN THAT WHICH HE WOULD HAVE ENJOYED HAD HE FIRST APPLIED FOR HIS ANNUITY AND THEREAFTER HAD BEEN EMPLOYED. THE SPIRIT OF SECTION 13 (B) SO FAR AS THAT SECTION RELATES TO THE CONCURRENT RECEIPT OF AN ANNUITY AND CIVILIAN COMPENSATION INCIDENT TO HIS CONSULTING SERVICES RENDERED ON AN INTERMITTENT BASIS, WILL HAVE BEEN ACCOMPLISHED BY HOLDING THAT BOTH THE ANNUITY AND CIVILIAN COMPENSATION WOULD NOT BE PAYABLE FOR THE SAME DAY BUT THAT FULL ANNUITY ENTITLEMENT WOULD BE PAYABLE FOR THOSE DAYS ON WHICH NO CONSULTING SERVICES WERE PERFORMED.

THEREFORE, THE PRIOR DECISIONS OF OUR OFFICE CITED IN YOUR ASSISTANT GENERAL MANAGER'S LETTER--- ALL OF WHICH WERE RENDERED PRIOR TO ENACTMENT OF THE ACT OF FEBRUARY 28, 1948--- NEED NOT BE CONSTRUED IN THIS INSTANCE AS REQUIRING THE SUSPENSION OF DR. SMYTH'S ANNUITY EXCEPT ON THOSE DAYS WHEN HE PERFORMED CONSULTING SERVICES.