B-163963, MAY 7, 1968, 47 COMP. GEN. 635

B-163963, MAY 7, 1968, 47 COMP. GEN. 635

PAY - RETIRED - ANNUITY ELECTIONS FOR DEPENDENTS - COST DEDUCTIONS - CONSUMER PRICE INDEX INCREASES THE REDUCTION REQUIRED IN THE RETIRED PAY OF AN OFFICER OF THE UNIFORMED SERVICES RETIRED ON APRIL 1, 1968 UNDER 10 U.S.C. 6323 TO PROVIDE AN ANNUITY UNDER THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN IS FOR COMPUTATION ON HIS RETIRED PAY BASED ON THE BASIC PAY RATE EFFECTIVE OCTOBER 1, 1967, WITHOUT REGARD TO ANY INCREASE IN RETIRED PAY TO REFLECT CHANGES IN THE CONSUMER PRICE INDEX, EVEN THOUGH PURSUANT TO SECTION 1401A (E) THE OFFICER IS ENTITLED TO RETIRED PAY COMPUTED ON THE BASIC PAY RATES EFFECTIVE JULY 1, 1966, PLUS INCREASES DUE TO CHANGES IN THE CONSUMER PRICE INDEX, SECTION 1436 (A), PROVIDING THAT THE REDUCTION OF RETIRED PAY OR RETAINER PAY OF A PERSON ELECTING AN ANNUITY SHALL BE COMPUTED AS OF THE DATE OF ELIGIBILITY FOR RETIREMENT WITHOUT REGARD TO ANY INCREASE IN PAY TO REFLECT CHANGES IN THE CONSUMER PRICE INDEX.

TO J. J. BURKHOLDER, UNITED STATES MARINE CORPS, MAY 7, 1968:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 26, 1968, YOUR FILE RP-JB-DJW, FORWARDED HERE BY LETTER DATED APRIL 3, 1968, OF HEADQUARTERS, UNITED STATES MARINE CORPS, REQUESTING A DECISION AS TO THE PROPER RATE OF RETIRED PAY TO BE USED IN COMPUTING THE ANNUITY REDUCTION IN RETIRED PAY UNDER 10 U.S.C. 1436 (A) FOR LIEUTENANT COLONEL HENRY FISCHER, JR., 046116, USMC, RETIRED, IN THE CIRCUMSTANCES OF HIS CASE. THE REQUEST HAS BEEN ASSIGNED CONTROL NUMBER DO-MC-990 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

YOU SAY THAT COLONEL FISCHER WAS TRANSFERRED TO THE RETIRED LIST OF THE MARINE CORPS ON APRIL 1, 1968, UNDER THE PROVISIONS OF 10 U.S.C. 6323, WITH 25 YEARS AND 29 DAYS OF SERVICE FOR BASIC PAY PURPOSES AND 24 YEARS AND 9 MONTHS OF ACTIVE SERVICE. YOU POINT OUT THAT EXCEPT FOR 10 U.S.C. 1401A (E), AS ADDED BY SECTION 2 (A) (1) OF THE ACT OF DECEMBER 16, 1967, PUBLIC LAW 90-207, 81 STAT. 652, HE WOULD BE ENTITLED TO RETIRED PAY COMPUTED ON THE MONTHLY BASIC PAY RATE OF $1,047.90 X 2-1/2 PERCENT X 25 YEARS OF SERVICE OR $654.94 PER MONTH INCREASED BY 1.3 PERCENT UNDER THE PROVISIONS OF 10 U.S.C. 1401A (D) TO $663.45 PER MONTH. HOWEVER, UNDER 10 U.S.C. 1401A (E) HIS RETIRED PAY MAY NOT BE LESS THAN THAT COMPUTED ON THE APPLICABLE BASIC PAY RATE EFFECTIVE JULY 1, 1966, OR $992.40 X 2-1/2 PERCENT X 25 YEARS OF SERVICE OR $620.25 INCREASED BY 3.7 PERCENT AND 3.9 PERCENT TO $668.28 PER MONTH.

YOU STATE THAT THE REASON FOR YOUR DOUBT WHETHER THE ANNUITY REDUCTION IN RETIRED PAY SHOULD BE BASED ON THE RETIRED PAY OF $654.94 PER MONTH OR $620.25 PER MONTH IS THAT 10 U.S.C. 1401A (E) IS NOT WORDED IN THE MANNER OF THE USUAL SAVINGS CLAUSE PROVISION IN THAT IT DOES NOT STATE THAT A MEMBER IS ENTITLED TO EITHER AMOUNT, WHICHEVER IS GREATER.

AS AMENDED BY SECTION 2 (A) (3) OF PUBLIC LAW 90-207, THE FIRST SENTENCE OF 10 U.S.C. 1436 (A) READS AS FOLLOWS:

THE REDUCTION IN THE RETIRED OR RETAINER PAY OF ANY PERSON WHO ELECTS AN ANNUITY UNDER THIS CHAPTER SHALL BE COMPUTED BY THE ARMED FORCE CONCERNED AS OF THE DATE WHEN THE PERSON BECOMES ELIGIBLE FOR THAT PAY BUT WITHOUT REGARD TO ANY INCREASE IN THAT PAY TO REFLECT CHANGES IN THE CONSUMER PRICE INDEX.

THE RETIRED PAY OF AN OFFICER RETIRED UNDER 10 U.S.C. 6323 IS COMPUTED IN ACCORDANCE WITH SUBSECTION (E) OF THAT SECTION WHICH PROVIDES AS FOLLOWS:

(E) UNLESS OTHERWISE ENTITLED TO HIGHER PAY, AN OFFICER RETIRED UNDER THIS SECTION IS ENTITLED TO RETIRED PAY AT THE RATE OF 2-1/2 PERCENT OF THE BASIC PAY OF THE GRADE IN WHICH RETIRED MULTIPLIED BY THE NUMBER OF YEARS OF SERVICE THAT MAY BE CREDITED TO HIM UNDER SECTION 1405 OF THIS TITLE, BUT THE RETIRED PAY MAY NOT BE MORE THAN 75 PERCENT OF THE BASIC PAY UPON WHICH THE COMPUTATION OF RETIRED PAY IS BASED.

THUS, COLONEL FISCHER'S BASIC ENTITLEMENT TO RETIRED PAY AS OF APRIL 1, 1968, WAS AND IS 2-1/2 PERCENT OF $1,047.90 MULTIPLIED BY 25 YEARS OF SERVICE OR $654.94. THE AMOUNT OF ADJUSTED RETIRED PAY TO WHICH HE MAY BE ENTITLED UNDER 10 U.S.C. 1401A, AS AMENDED, IS BASED ON CHANGES IN THE CONSUMER PRICE INDEX, AS APPLICABLE TO HIS CASE AND MAY NOT BE CONSIDERED IN THE COMPUTATION OF THE REDUCTION IN HIS RETIRED PAY TO PROVIDE AN ANNUITY UNDER THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN.

HENCE, EVEN THOUGH COLONEL FISCHER IS ENTITLED TO RETIRED PAY AT THE RATE OF $668.28 PER MONTH COMPUTED ON THE BASIC PAY RATES EFFECTIVE JULY 1, 1966, PLUS INCREASES DUE TO CHANGES IN THE CONSUMER PRICE INDEX, THE ANNUITY REDUCTION IN RETIRED PAY SHOULD BE COMPUTED ON HIS RETIRED PAY RATE OF $654.94 BASED ON THE BASIC PAY OF HIS GRADE EFFECTIVE AS OF OCTOBER 1, 1967, TO WHICH HE IS ENTITLED "WITHOUT REGARD TO ANY INCREASE * * * TO REFLECT CHANGES IN THE CONSUMER PRICE DEX.'