B-152049, SEP. 10, 1963, 43 COMP. GEN. 245

B-152049: Sep 10, 1963

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IS SUBJECT TO REDUCTION FOR AN OPTION 3 ANNUITY ELECTION. REPRESENTING REFUND OF THE AMOUNTS BY WHICH HIS RETIRED PAY WAS REDUCED FOR THE PERIOD FROM JUNE 1. THE RECORDS SHOW THAT MAJOR GILMAN WAS BORN ON MAY 8. WHICH WAS THE EFFECTIVE DATE OF THE CONTINGENCY OPTION ACT. HE WAS HOLDING A RESERVE COMMISSION IN THE ARMY. TO HAVE AN ANNUITY PAID UNDER THAT ACT TO HIS DEPENDENTS UPON HIS DEATH. A REQUEST FOR REVOCATION OF SUCH ELECTION WAS MADE ON DA FORM 1041 DATED MAY 27. IT IS SHOWN THAT UNDER THE PROVISIONS OF 10 U.S.C. 1552 THE UNDER SECRETARY OF THE ARMY ON JUNE 25. THAT HE WAS CREDITED WITH SUFFICIENT POINTS DURING THE PERIOD FROM 1 JULY 1949 TO 15 FEBRUARY 1950 TO REFLECT COMPLETION OF 20 YEARS OF SATISFACTORY SERVICE FOR RETIREMENT PURPOSES WITHIN THE MEANING OF TITLE III.

B-152049, SEP. 10, 1963, 43 COMP. GEN. 245

MILITARY PERSONNEL - RECORD CORRECTION - RETIRED PAY - ANNUITY ELECTION DEDUCTIONS THE RETROACTIVE ADJUSTMENT OF RETIRED PAY REQUIRED BY THE CORRECTION OF THE MILITARY RECORDS OF AN OFFICER IN A RESERVE COMPONENT OF THE ARMY, EFFECTED UNDER 10 U.S.C. 1552, TO SHOW HIS ENTITLEMENT TO RETIREMENT UNDER TITLE III, PUBLIC LAW 810, 80TH CONGRESS (NOW 10 U.S.C. 1331) AS OF JUNE 1, 1956, IS SUBJECT TO REDUCTION FOR AN OPTION 3 ANNUITY ELECTION, DATED OCTOBER 11, 1954, UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, AS AMENDED, 10 U.S.C. 1431 1444, THE ELECTION BECOMING OPERATIVE JUNE 1, 1956 WHEN THE OFFICER RETROACTIVELY BECAME ENTITLED TO TITLE III RETIREMENT PAY AND HIS MAY 27, 1960 REVOCATION OF THE ELECTION BEING INEFFECTIVE, NOT HAVING BEEN MADE AT LEAST 5 YEARS PRIOR TO RETIREMENT AS REQUIRED BEFORE ENACTMENT OF PUBLIC LAW 87-831, DATED OCTOBER 4, 1961; THEREFORE, THE OFFICER'S NAME HAVING BEEN PLACED ON THE RETIRED LIST AS OF JUNE 1, 1956, UNDER A RECORD CORRECTION THE REDUCTION IN HIS RETIRED PAY DOES NOT CONSTITUTE AN ADMINISTRATIVE ERROR REFUNDABLE UNDER 10 U.S.C. 1445, NOR DOES THE OFFICER'S PROTEST TO THE DEDUCTION GIVE RISE TO A CONCURRENT CLAIM.

TO LIEUTENANT COLONEL J. L. CLANCY, DEPARTMENT OF THE ARMY, SEPTEMBER 10, 1963:

YOUR LETTER OF MAY 23, 1963, FORWARDED HERE BY FIRST INDORSEMENT OF JULY 15, 1963, FROM THE OFFICE OF THE CHIEF OF FINANCE, UNDER D.O. NO. A 716 ALLOCATED BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE, REQUESTS A DECISION ON THE PROPRIETY OF PAYING THE ACCOMPANYING VOUCHER STATED IN FAVOR OF MAJOR HAROLD D. GILMAN, O192655, ARMY OF THE UNITED STATES, RETIRED, FOR $1,704.03, REPRESENTING REFUND OF THE AMOUNTS BY WHICH HIS RETIRED PAY WAS REDUCED FOR THE PERIOD FROM JUNE 1, 1956, THROUGH DECEMBER 31, 1962, TO PROVIDE AN ANNUITY FOR HIS DEPENDENTS UNDER THE PROVISIONS OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, CH. 393, 67 STAT. 501, 10 U.S.C. 1431-1444.

THE RECORDS SHOW THAT MAJOR GILMAN WAS BORN ON MAY 8, 1896. HE THEREFORE ATTAINED THE AGE OF 60 YEARS ON MAY 8, 1956. YOU STATE THAT HE ACCEPTED AN INDEFINITE APPOINTMENT IN A RESERVE COMPONENT OF THE ARMY EFFECTIVE DECEMBER 22, 1922, AND THAT ON NOVEMBER 1, 1953, WHICH WAS THE EFFECTIVE DATE OF THE CONTINGENCY OPTION ACT, HE WAS HOLDING A RESERVE COMMISSION IN THE ARMY. HE ELECTED OPTION 3 ON DA FORM 1041 DATED OCTOBER 11, 1954, TO HAVE AN ANNUITY PAID UNDER THAT ACT TO HIS DEPENDENTS UPON HIS DEATH, AT THE RATE OF ONE-HALF OF HIS REDUCED RETIRED PAY. A REQUEST FOR REVOCATION OF SUCH ELECTION WAS MADE ON DA FORM 1041 DATED MAY 27, 1960.

IT IS SHOWN THAT UNDER THE PROVISIONS OF 10 U.S.C. 1552 THE UNDER SECRETARY OF THE ARMY ON JUNE 25, 1962, APPROVED THE FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS OF THE ARMY BOARD FOR CORRECTION OF MILITARY RECORDS, AND DIRECTED THAT ALL OF THE DEPARTMENT OF THE ARMY RECORDS OF MAJOR GILMAN BE CORRECTED TO SHOW:

A. THAT HE WAS CREDITED WITH SUFFICIENT POINTS DURING THE PERIOD FROM 1 JULY 1949 TO 15 FEBRUARY 1950 TO REFLECT COMPLETION OF 20 YEARS OF SATISFACTORY SERVICE FOR RETIREMENT PURPOSES WITHIN THE MEANING OF TITLE III, PUBLIC LAW 810, 80TH CONGRESS (NOW 10 U.S.C. 1331); AND

B. THAT HE WAS PLACED ON THE ARMY OF THE UNITED STATES RETIRED LIST IN THE GRADE OF MAJOR ON 1 JUNE 1956, WITH ENTITLEMENT TO RETIREMENT PAY FROM THAT DATE UNDER THE PROVISIONS OF TITLE III, PUBLIC LAW 810, 80TH CONGRESS (NOW 10 U.S.C. 1331).

IT IS STATED THAT AS A RESULT OF THE CORRECTION, AND UNDER 38 COMP. GEN. 146 AND 38 COMP. GEN. 246, MAJOR GILMAN WAS FOUND TO BE ENTITLED TO GROSS RETROACTIVE RETIRED PAY OF $5,662.16 FOR THE PERIOD FROM JUNE 1, 1956, THROUGH OCTOBER 31, 1962, LESS A REDUCTION OF $1,660.89 FOR HIS CONTINGENCY OPTION ACT ELECTION FOR SUCH PERIOD, AND THAT CONTINUING ENTITLEMENT TO MONTHLY RETIRED PAY WITH A REDUCTION OF $21.57 EXISTED. WAS ADVISED THAT AS A RESULT OF THE CORRECTION OF HIS MILITARY RECORDS HE WAS REQUIRED TO BE CONSIDERED FOR ALL PURPOSES AS HAVING BEEN RETIRED EFFECTIVE JUNE 1, 1956; THAT THE ELECTION DATED OCTOBER 11, 1954, BECAME OPERATIVE ON JUNE 1, 956; THAT THE REQUEST FOR REVOCATION DATED MAY 27, 1960, WAS PROHIBITED; AND THAT PRIOR TO THE ENACTMENT OF PUBLIC LAW 87-381 ON OCTOBER 4, 1961, 10 U.S.C. 1431 1444 (SUPP. III, 1959-1961), THERE WERE NO PROVISIONS OF LAW UNDER WHICH A RETIRED MEMBER COULD MODIFY OR REVOKE HIS ELECTION.

IT IS REPORTED THAT SETTLEMENT FOR THE RETROACTIVE PERIOD WAS OFFERED MAJOR GILMAN BY LETTER DATED NOVEMBER 9, 1962, AND THAT THE CLAIM CERTIFICATE ATTACHED TO THAT LETTER SHOWED THAT THE REDUCTION UNDER THE PROVISIONS OF THE "RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN" WAS OFFERED AND INTENDED AS A PART OF THE SETTLEMENT OF ALL CLAIMS BASED ON THE CORRECTION OF HIS RECORDS. MAJOR GILMAN DECLINED THE OFFERED SETTLEMENT BY LETTER DATED NOVEMBER 17, 1962, STATING THAT ON SEPTEMBER 24, 1962, HE HAD SENT A FORMAL REQUEST TO THE SECRETARY OF THE ARMY FOR WITHDRAWAL FROM THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN, AND THAT IF FAVORABLE ACTION WAS TAKEN BY THE SECRETARY, IT WOULD ELIMINATE THE DEDUCTION OF $1,660.89 ON THE CLAIM CERTIFICATE. THE SECRETARY OF THE ARMY, ON DECEMBER 6, 1962, APPROVED MAJOR GILMAN'S REQUEST TO WITHDRAW FROM THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN, EFFECTIVE DECEMBER 31, 1962, AND IT IS REPORTED THAT THE REDUCTION IN HIS RETIRED PAY WAS TERMINATED EFFECTIVE DECEMBER 31, 1962. IN HIS LETTER OF DECEMBER 15, 1962, MAJOR GILMAN STATED THAT HE HAD BEEN INFORMED THAT HE HAD BEEN PERMITTED TO WITHDRAW FROM THE "FAMILY PROTECTION PLAN" EFFECTIVE DECEMBER 31, 1962, AND THAT HE DID NOT KNOW WHAT EFFECT SUCH ACTION WOULD HAVE ON THE DEDUCTION OF $1,660.89 ON THE CLAIM CERTIFICATE WHICH WAS SENT TO HIM FOR SIGNATURE WITH THE LETTER OF NOVEMBER 9, 1962. HOWEVER, THE CLAIM CERTIFICATE WAS SIGNED BY HIM IN DUPLICATE AND RETURNED. IT APPEARS THAT THE AMOUNT IN QUESTION WAS DEDUCTED WHEN PAYMENT WAS MADE TO MAJOR GILMAN FOR THE PERIOD FROM JUNE 1, 1956, TO OCTOBER 31, 1962, AND THAT MONTHLY DEDUCTIONS OF $21.57 FOR NOVEMBER AND DECEMBER 1962 INCREASED THE TOTAL OF SUCH DEDUCTIONS TO $1,704.03.

YOU STATE THAT IT APPEARS THAT THE ADMINISTRATIVE ACTION TAKEN IN THIS CASE WAS CORRECT, BUT THAT DOUBT NOW EXISTS AS TO WHETHER:

A. THE PROTESTS SHOULD HAVE BEEN CONSIDERED AS A CONCURRENT CLAIM ARISING OUT OF THE SAME CORRECTION OF RECORDS SO THAT REFUND MAY BE MADE ON THE PRESENT RECORD OF ALL AMOUNTS OF REDUCTION WITHHELD UNDER RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN.

B. THE ACCEPTANCE PRECLUDES FURTHER CORRECTION OF THE SAME RECORDS UNDER TITLE 10, UNITED STATES CODE, SECTION 1552, TO SHOW THAT MAJOR GILMAN DID NOT MAKE A VALID ELECTION UNDER THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN AND, THEREFORE, AMOUNTS OF REDUCTION UNDER RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN WOULD BE REFUNDABLE.

C. THE REDUCTION CONSTITUTES AN ADMINISTRATIVE ERROR, AND THEREFORE, REFUNDABLE UNDER THE AUTHORITY GOVERNING THE CORRECTION OF ADMINISTRATIVE DEFICIENCIES AS CONTAINED IN SECTION 1445 OF TITLE 10, U.S.C. AS AMENDED.

SECTION 3 (A) OF THE CONTINGENCY OPTION ACT, AS AMENDED BY THE ACT OF APRIL 29, 1954, CH. 176, 68 STAT. 64, 37 U.S.C. 372 (A), PROVIDED, AMONG OTHER THINGS, THAT AN ACTIVE MEMBER, WHO, PRIOR TO AUGUST 8, 1953, HAD COMPLETED 18 YEARS OF SERVICE WHICH WAS CREDITABLE IN THE COMPUTATION OF ACTIVE DUTY PAY IN THE UNIFORMED SERVICE OF WHICH HE WAS A MEMBER MIGHT ELECT, WITHIN 1 YEAR AFTER THE EFFECTIVE DATE OF THE ACT (NOVEMBER 1, 1953), TO RECEIVE A REDUCED AMOUNT OF ANY RETIRED PAY WHICH MIGHT BE AWARDED HIM AS THE RESULT OF SERVICE IN HIS UNIFORMED SERVICE IN ORDER TO PROVIDE ONE OR MORE OF THE ANNUITIES SPECIFIED IN SECTION 4, 10 U.S.C. 1436, PAYABLE AFTER HIS DEATH IN A RETIRED STATUS TO HIS WIDOW, CHILD,OR CHILDREN, IF SUCH WIDOW, CHILD, OR CHILDREN WERE LIVING AT THE TIME OF HIS RETIREMENT. IT WAS SPECIFICALLY PROVIDED IN SECTION 3, 10 U.S.C. 1434, THAT THE TERMS OF AN ELECTION MADE UNDER THAT SECTION MIGHT BE MODIFIED OR REVOKED BY A MEMBER AT ANY TIME PRIOR TO HIS RETIREMENT BUT THAT ANY MODIFICATION OR REVOCATION SO MADE SHOULDN-T BE EFFECTIVE IF HE RETIRED WITHIN 5 YEARS AFTER THE DATE SUCH MODIFICATION OR REVOCATION WAS MADE.

EFFECTIVE AUGUST 10, 1956, THE CONTINGENCY OPTION ACT WAS SUPERSEDED BY CH. 73, TITLE 10, U.S. CODE, WHICH INCLUDES SECTIONS 1431 TO 1444. SUBSECTION (B), WHICH WAS ADDED TO SECTION 1436 BY THE ACT OF OCTOBER 4, 1961, PUBLIC LAW 87-381, 75 STAT. 811, 10 U.S.C. 1436 (B), READS AS FOLLOWS:

UNDER REGULATIONS PRESCRIBED UNDER SECTION 1444 (A) OF THIS TITLE, THE SECRETARY CONCERNED MAY, WHENEVER HE CONSIDERS IT NECESSARY BECAUSE OF THE MEMBER'S SEVERE FINANCIAL HARDSHIP, ALLOW HIM TO WITHDRAW FROM PARTICIPATION IN AN ANNUITY PROGRAM UNDER THIS CHAPTER, WHEN REQUIRING THE MEMBER TO CONTINUE TO PARTICIPATE IN THE PROGRAM WOULD VIOLATE EQUITY AND GOOD CONSCIENCE. THE ABSENCE OF AN ELIGIBLE BENEFICIARY SHALL NOT OF ITSELF BE A BASIS FOR SUCH ACTION. HOWEVER, NO AMOUNTS BY WHICH RETIRED OR RETAINER PAY IS REDUCED MAY BE REFUNDED TO HIM UNDER THIS SUBSECTION.

THE 1961 ACT ALSO AMENDED CHAPTER 73 BY ADDING SECTION 1445 WHICH READS AS FOLLOWS:

WHENEVER HE CONSIDERS IT NECESSARY, THE SECRETARY CONCERNED MAY, UNDER REGULATIONS PRESCRIBED UNDER SECTION 1444 (A) OF THIS TITLE, CORRECT ANY ELECTION, OR ANY CHANGE OR REVOCATION OF AN ELECTION, UNDER THIS CHAPTER WHEN HE CONSIDERS IT NECESSARY TO CORRECT AN ADMINISTRATIVE ERROR. EXCEPT WHEN PROCURED BY FRAUD, A CORRECTION UNDER THIS SECTION IS FINAL AND CONCLUSIVE ON ALL OFFICERS OF THE UNITED STATES.

PAYMENTS BASED ON CORRECTIONS OF MILITARY OR NAVAL RECORDS EFFECTED UNDER 10 U.S.C. 1552 ARE REQUIRED TO BE MADE IN THE AMOUNTS DETERMINED TO BE DUE BY APPLYING PERTINENT LAWS AND REGULATIONS TO ALL THE MATERIAL FACTS SHOWN BY THE RECORDS SO CORRECTED. 34 COMP. GEN. 7. ACCORDINGLY, IF A MEMBER'S CORRECTED RECORDS SHOW 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. MAJOR GILMAN'S RIGHTS ARE FOR DETERMINATION, THEREFORE, ON THE SAME BASIS AS THEY WOULD HAVE BEEN DETERMINED HAD HIS NAME BEEN PLACED ON THE RETIRED LIST ON JUNE 1, 1956.

IT APPEARS THAT ON NOVEMBER 1, 1953, THE EFFECTIVE DATE OF THE CONTINGENCY OPTION ACT, MAJOR GILMAN HAD COMPLETED 20 YEARS OF SATISFACTORY SERVICE AS DEFINED IN SECTION 302 OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT OF 1948, CH. 708, 62 STAT. 1087, 10 U.S.C. 1036A. HENCE, HE WAS AN "ACTIVE MEMBER" FOR THE PURPOSES OF THE CONTINGENCY OPTION ACT (SECTION 2 (C), 67 STAT. 501, 37 U.S.C. 371 (C) (SUPP II, 1952 ED.) (, AND AS HE HAD THERETOFORE COMPLETED OVER 18 YEARS OF SERVICE UNDER SECTION 3 (A) OF THAT ACT, AS AMENDED, HE COULD MAKE AN ELECTION OF BENEFITS UNDER THAT ACT WITHIN 1 YEAR AFTER ITS EFFECTIVE DATE. SINCE HE MADE AN ELECTION ON OCTOBER 11, 1954, WHICH WAS WITHIN THE SPECIFIED 1-YEAR PERIOD, SUCH ELECTION WAS A VALID AND TIMELY ELECTION. ALSO, SINCE HIS NAME WAS PLACED ON THE RETIRED LIST AS OF JUNE 1, 1956, AND SINCE THE STATUTE, PRIOR TO ITS AMENDMENT BY THE 1961 ACT, DID NOT PERMIT THE REVOCATION OF A VALID AND TIMELY ELECTION UNLESS MADE AT LEAST 5 YEARS PRIOR TO THE DATE OF RETIREMENT, THE ATTEMPTED REVOCATION OF MAY 27, 1960, WAS INEFFECTIVE TO REVOKE THE ELECTION OF OCTOBER 11, 1954.

IN THE CIRCUMSTANCES, WE FIND NO BASIS FOR CONSIDERING THAT THE REDUCTION IN MAJOR GILMAN'S RETIRED PAY CONSTITUTES AN ADMINISTRATIVE ERROR AND THAT IT IS, THEREFORE, REFUNDABLE UNDER THE AUTHORITY GOVERNING THE CORRECTION OF ADMINISTRATIVE ERRORS AS CONTAINED IN 10 U.S.C. 1445. NOR DO WE FIND ANYTHING IN THE FILE WHICH WOULD INDICATE THAT MAJOR GILMAN'S PROTESTS SHOULD HAVE BEEN CONSIDERED AS A CONCURRENT CLAIM ARISING OUT OF THE SAME CORRECTION OF RECORDS SO THAT PAYMENT MAY BE MADE IN THE PRESENT RECORD OF THE AMOUNTS WITHHELD FROM HIS RETIRED PAY, SINCE THERE IS NO LEGAL BASIS FOR PAYING SUCH AMOUNTS IN ANY EVENT. ACCORDINGLY, PAYMENT ON THE VOUCHER, WHICH IS RETAINED HERE, IS NOT AUTHORIZED ON THE PRESENT RECORD.

YOUR QUESTION AS TO THE LEGAL EFFECT OF A FURTHER CORRECTION OF THE OFFICER'S RECORD IS HYPOTHETICAL, AND THE ANSWER THERETO NECESSARILY WOULD DEPEND ON WHAT CORRECTION, IF ANY, IS MADE. ACCORDINGLY, NO ANSWER TO THAT QUESTION IS APPROPRIATE AT THIS TIME.