B-149092, JUL. 17, 1962

B-149092: Jul 17, 1962

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RETIRED: REFERENCE IS MADE TO YOUR LETTER OF MAY 24. TO HAVE YOUR RETIREMENT PAY ADJUSTED AS PROVIDED IN THAT SECTION. (2) FOR THE REASON THAT THERE IS NO SHOWING OF ANY CHANGE IN YOUR STATUS WHICH WOULD ENTITLE YOU TO MAKE SUCH AN ELECTION AFTER THE EXPIRATION OF THE 5-YEAR PERIOD. WERE CORRECTED TO SHOW THAT A TIMELY ELECTION WAS MADE TO RECEIVE RETIRED PAY IN THE HIGHER RESERVE GRADE BASED ON YEARS OF SERVICE IS ENTITLED TO RECEIVE AN ADJUSTMENT OF DISABILITY RETIRED PAY BASED ON YEARS OF SERVICE IN THE HIGHER GRADE. BEING TO GIVE THE MEMBERS A FURTHER ELECTION TO HAVE THEIR RETIRED PAY COMPUTED ON EITHER YEARS OF SERVICE OR ON A PERCENTAGE OF DISABILITY AS PROVIDED IN SECTION 402 (D) OF THE ACT.'.

B-149092, JUL. 17, 1962

TO LIEUTENANT COMMANDER JOHN R. DAKIN, HC, USN, RETIRED:

REFERENCE IS MADE TO YOUR LETTER OF MAY 24, 1962, REQUESTING REVIEW OF SETTLEMENT OF MARCH 2, 1962, WHICH DISALLOWED YOUR CLAIM FOR ADJUSTMENT OF YOUR DISABILITY RETIREMENT PAY FROM OCTOBER 1, 1949, (1) FOR THE REASON THAT YOU MADE NO ELECTION UNDER THE PROVISIONS OF SECTION 411 OF THE CAREER COMPENSATION ACT OF 1949, CH. 681, 63 STAT. 823, WITHIN THE 5-YEAR PERIOD THERE SPECIFIED, TO HAVE YOUR RETIREMENT PAY ADJUSTED AS PROVIDED IN THAT SECTION, AND (2) FOR THE REASON THAT THERE IS NO SHOWING OF ANY CHANGE IN YOUR STATUS WHICH WOULD ENTITLE YOU TO MAKE SUCH AN ELECTION AFTER THE EXPIRATION OF THE 5-YEAR PERIOD.

YOU REQUEST THAT YOUR CLAIM BE FURTHER CONSIDERED ON THE BASIS OF DIGEST NO. 151 OF OUR DECISION OF OCTOBER 23, 1961, B-147050, 41 COMP. GEN. 262, WHICH READS AS FOLLOWS:

"A MEMBER OF THE UNIFORMED SERVICES WHOSE MILITARY RECORDS SHOWING RETIREMENT FOR DISABILITY PRIOR TO OCTOBER 1, 1949--- THE EFFECTIVE DATE OF THE CAREER COMPENSATION ACT OF 1949--- IN AN ACTIVE DUTY GRADE LESS THAN THE MEMBER'S PERMANENT RESERVE GRADE AND AN ELECTION UNDER SECTION 411 OF THE ACT TO RECEIVE RETIRED PAY ON THE BASIS OF THE LAWS IN EFFECT PRIOR TO OCTOBER 1, 1949, WERE CORRECTED TO SHOW THAT A TIMELY ELECTION WAS MADE TO RECEIVE RETIRED PAY IN THE HIGHER RESERVE GRADE BASED ON YEARS OF SERVICE IS ENTITLED TO RECEIVE AN ADJUSTMENT OF DISABILITY RETIRED PAY BASED ON YEARS OF SERVICE IN THE HIGHER GRADE, THE EFFECT OF SECTION 411 OF THE ACT, WHICH GIVES MEMBERS RETIRED FOR DISABILITY PRIOR TO OCTOBER 1, 1949, THE RIGHT TO ELECT TO QUALIFY FOR DISABILITY RETIREMENT UNDER TITLE IV OF THE ACT, BEING TO GIVE THE MEMBERS A FURTHER ELECTION TO HAVE THEIR RETIRED PAY COMPUTED ON EITHER YEARS OF SERVICE OR ON A PERCENTAGE OF DISABILITY AS PROVIDED IN SECTION 402 (D) OF THE ACT.'

THE RECORDS SHOW THAT YOU WERE RETIRED FOR DISABILITY EFFECTIVE DECEMBER 31, 1946, AFTER COMPLETING 28 YEARS OF ACTIVE SERVICE IN THE U.S. NAVY, AND THAT THE HIGHEST RANK HELD BY YOU FOR PAY PURPOSES WAS THAT OF LIEUTENANT COMMANDER. THE U.S. NAVY FINANCE CENTER HAS REPORTED THAT UNDER SECTION 411 OF THE ACT, YOUR PERCENTAGE OF DISABILITY WAS RATED AT 30 PERCENT, AND THAT IN JUNE 1950 YOU WERE FURNISHED THE PROPER ELECTION FORMS FOR AN ELECTION UNDER THAT SECTION. IT IS STATED THAT SUCH FORMS INDICATED THAT YOU WOULD CONTINUE TO RECEIVE GROSS MONTHLY PAY OF $348.91 (SAVED PAY) COMPUTED UNDER LAWS IN EFFECT PRIOR TO OCTOBER 1, 1949, UNLESS YOU ELECTED TO RECEIVE PAY UNDER "METHOD A" (PAY BASED ON YOUR PERCENTAGE OF DISABILITY) OR "METHOD B" (PAY BASED ON YOUR YEARS OF ACTIVE SERVICE); THAT ALTHOUGH PAY COMPUTED UNDER "METHOD B" AFFORDED YOU A HIGHER RATE OF PAY ($359.10) FROM OCTOBER 1, 1949, THAN THE SAVED PAY BEING PAID TO YOU, NO ELECTION TO RECEIVE SUCH PAY WAS RECEIVED FROM YOU; AND THAT THERE IS NO INDICATION IN THE RECORDS OF THE U.S. NAVY FINANCE CENTER TO SHOW THAT THE ELECTION FORMS WERE MAILED TO AN INCORRECT ADDRESS OR THAT THEY WERE RETURNED AS UNDELIVERABLE.

YOU, OF COURSE, WERE AWARE THAT YOUR SAVED PAY WAS NOT SUBJECT TO INCOME TAX AND IT IS ASSUMED THAT YOU WERE ADVISED THAT ONLY THAT PART OF THE RETIRED PAY PAYABLE UNDER METHOD (B) WHICH WAS EQUAL TO THAT PAYABLE UNDER METHOD (A) WAS EXEMPT FROM PAYMENT OF INCOME TAX. SEE SECTION 402 (H) OF THE 1949 ACT. PRESUMABLY, YOUR INCOME TAX SITUATION WAS THE FACTOR WHICH LED YOU TO BELIEVE THAT IT WAS TO YOUR ADVANTAGE TO CONTINUE TO RECEIVE SAVED PAY AND THUS INDUCED YOU TO REFRAIN FROM MAKING AN ELECTION UNDER SECTION 411.

SECTION 411 OF TITLE IV OF THE ACT BECAME EFFECTIVE OCTOBER 1, 1949, AND IT PROVIDED THAT MEMBERS OF THE UNIFORMED SERVICES THERETOFORE RETIRED BY REASON OF PHYSICAL DISABILITY "MAY ELECT WITHIN THE FIVE-YEAR PERIOD FOLLOWING THE EFFECTIVE DATE OF THIS TITLE" TO QUALIFY FOR RETIRED PAY UNDER EITHER OF THE TWO OPTIONS, (A) OR (B), THERE PRESCRIBED. THE RECORDS DO NOT SHOW THAT YOU MADE AN ELECTION, WITHIN THE 5-YEAR PERIOD WHICH ENDED OCTOBER 1, 1954, TO RECEIVE RETIREMENT PAY UNDER ONE OF THOSE OPTIONS AND IT IS NOW TOO LATE FOR YOU TO DO SO.

YOUR REASONS FOR CITING OUR DECISION B-147050, OCTOBER 23, 1961, ARE NOT UNDERSTOOD. IN THAT CASE THE RETIRED MEMBER'S RECORD AS IT EXISTED DURING THE PERIOD OCTOBER 1, 1949, TO OCTOBER 1, 1954, WAS CORRECTED AND CHANGED UNDER 10 U.S.C. 1552 TO SHOW A DIFFERENT SET OF FACTS, INCLUDING A TIMELY ELECTION PRIOR TO OCTOBER 1, 1954. WHILE WE HAVE HELD THAT A MEMBER WHOSE RECORD HAS BEEN CORRECTED UNDER SUCH STATUTORY PROVISIONS MAY MAKE AN ELECTION NOT MORE THAN SIX MONTHS AFTER RECEIVING NOTICE OF THE CORRECTION OF HIS RECORD (36 COMP. GEN. 552), NO CORRECTION HAS BEEN MADE IN YOUR RECORD BY THE SECRETARY OF THE NAVY UNDER AUTHORITY OF 10 U.S.C. 1552. HENCE, THE DECISION OF OCTOBER 23, 1961, FURNISHES NO BASIS FOR THE PAYMENT OF YOUR CLAIM.