B-166949, JUN. 12, 1969, 48 COMP. GEN. 780

B-166949, JUN. 12, 1969, 48 COMP. GEN. 780

PAY--RETIRED--ANNUITY ELECTIONS FOR DEPENDENTS--REVOCATION, ETC.- REDUCTION IN ANNUITY DETERMINATION ALTHOUGH THE REDUCTION MADE PURSUANT TO PUBLIC LAW 90-485, AUGUST 13, 1968 (10 U.S.C. 1436 (B)) IN THE ANNUITY ELECTED UNDER THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN BY AN AIR FORCE OFFICER RETIRED UNDER 10 U.S.C. 8911 FROM OPTION 1 WITH 4 AT 1/2 REDUCED RETIRED PAY TO "THE 1/4 PERCENTAGE FACTOR" DOES NOT CONFLICT WITH THE PRESCRIBED MINIMUM AMOUNTS ALLOWED BY THE ACT FOR THE REDUCTION OF AN ANNUITY, THE REQUEST COMBINING FRACTIONS AND PERCENTAGES WITHOUT MENTIONING THE PRINCIPAL AMOUNT TO WHICH THE REDUCTION SHOULD APPLY IS TOO VAGUE TO DETERMINE THE AMOUNT OF THE REDUCED ANNUITY ELECTED, BUT UPON CLARIFICATION OF THE EXACT AMOUNT OF THE NEW ANNUITY ELECTED, THE IRREVOCABLE REDUCTION MAY BE MADE RETROACTIVELY EFFECTIVE TO THE DATE OF REDUCTION APPROVAL BY THE SECRETARY OF THE AIR FORCE AND THE COST OF THE REDUCED ANNUITY COMPUTED AT THE DOLLAR COST OF THE ORIGINAL ANNUITY.

TO N. R. BRENINGSTALL, DEPARTMENT OF THE AIR FORCE, JUNE 12, 1969:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED APRIL 25, 1969, WHICH WAS FORWARDED HERE BY LETTER DATED MAY 13, 1969, OF HEADQUARTERS UNITED STATES AIR FORCE, REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF PAYMENT OF A VOUCHER FOR $584.77 REPRESENTING RETIRED PAY (EXCLUSIVE OF WITHHOLDING TAX AND ALLOTMENT DEDUCTIONS) TO LIEUTENANT COLONEL RODNEY D. GURLEY, FV 103 5275, FOR THE MONTH OF MAY 1969. YOUR REQUEST WAS ASSIGNED AIR FORCE REQUEST NO. DO-AF-1038 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

YOU SAY THAT COLONEL GURLEY RETIRED SEPTEMBER 1, 1964, UNDER 10 U.S.C. 8911 UPON COMPLETING 23 YEARS AND 15 DAYS OF ACTIVE SERVICE; THAT HIS GROSS RETIRED PAY AT RETIREMENT WAS $521.64 PER MONTH; THAT HE HAD MADE AN ELECTION UNDER THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN (10 U.S.C. 1441-1446) FOR OPTION 1 WITH 4 AT 1/2 REDUCED RETIRED PAY; AND THAT THE MONTHLY COST TO HIM FOR THAT ELECTION, $48.56 PER MONTH, HAS BEEN DEDUCTED FROM HIS RETIRED PAY SINCE RETIREMENT TO PROVIDE A MONTHLY ANNUITY OF $236.54 TO MRS. GURLEY UPON HIS DEATH.

UNDER THE AUTHORITY OF 10 U.S.C. 1436 (B), AS AMENDED BY SECTION 1 (6) OF THE ACT OF AUGUST 13, 1968, PUBLIC LAW 90-485, 82 STAT. 753, AND AS IMPLEMENTED BY SECTION 406, DOD DIRECTIVE 1332.17 DATED DECEMBER 18, 1968, COLONEL GURLEY, IN OCTOBER 1968, REQUESTED THAT THE AMOUNT OF THE ANNUITY SPECIFIED BY HIM BE "REDUCED TO THE 1/4 PERCENTAGE FACTOR." THIS REQUEST WAS APPROVED BY THE SECRETARY OF THE AIR FORCE AND UNDER THE TERMS OF THE LAW BECAME EFFECTIVE MAY 1, 1969.

YOU STATE THAT UNDER THE TERMS AND CONDITIONS OF COLONEL GURLEY'S FIRST ELECTION A 1/4 PERCENTAGE FACTOR WOULD HAVE COST HIM $25.46 PER MONTH AND WOULD HAVE PROVIDED AN ANNUITY OF $124.05 PER MONTH. HOWEVER, A REDUCTION ALLOWED BY 10 U.S.C. 1436 (B) MUST BE "TO NOT LESS THAN THE PRESCRIBED MINIMUM" AND SINCE THE MINIMUM PRESCRIBED IN CONNECTION WITH ELECTIONS UNDER 10 U.S.C. 1434 (A) AND 1434 (B) APPLIES TO THE ELECTOR'S FULL RETIRED PAY, YOU RAISE THE QUESTION WHETHER THE APPROVED REDUCTION IN COLONEL GURLEY'S CASE WILL PROVIDE AN ANNUITY OF $124.05 (COMPUTED AT 1/4 REDUCED RETIRED PAY) OR AN ANNUITY OF $130.41 (COMPUTED AT 1/4 OF FULL RETIRED PAY). YOU ALSO ASK, IF THE ANNUITY IS TO BE COMPUTED AT THE HIGHER RATE, WHETHER THE COST FOR THE $130.41 ANNUITY SHOULD BE INCREASED IN PROPORTION TO THE COST FOR A $124.05 ANNUITY, OR $26.76 AS OPPOSED TO $25.46 PER MONTH.

IT IS NOW PROVIDED IN 10 U.S.C. 1436 (B) THAT, IN ACCORDANCE WITH REGULATIONS AUTHORIZED TO BE PRESCRIBED TO CARRY OUT THE PROGRAM, THE SECRETARY CONCERNED MAY, UPON APPLICATION BY A RETIRED MEMBER, ALLOW SUCH MEMBER, AMONG OTHER THINGS, "TO REDUCE THE AMOUNT OF THE ANNUITY SPECIFIED BY HIM UNDER SECTION 1434 (A) AND 1434 (B) OF THIS TITLE BUT TO NOT LESS THAN THE PRESCRIBED MINIMUM * * *." THE ANNUITY OR ANNUITIES AUTHORIZED MAY NOT BE MORE THAN 50 PER CENTUM NOR LESS THAN 12-1/2 PER CENTUM OF THE ELECTOR'S RETIRED OR RETAINER PAY BUT IN NO CASE LESS THAN $25. IT DOES NOT APPEAR THAT COLONEL GURLEY'S CHANGED ELECTION CONFLICTS WITH THE PRESCRIBED MINIMUM AMOUNTS.

SECTION 406 OF THE IMPLEMENTING REGULATIONS FOR THE PLAN, EFFECTIVE DECEMBER 18, 1968, PROVIDES THAT THE NEW COST, AFTER A REDUCTION IN SURVIVOR ANNUITY, WILL BE COMPUTED FROM THE APPLICABLE COST TABLE AT THE TIME OF RETIREMENT.

AT THE TIME COLONEL GURLEY RETIRED, THE COST OF THE ANNUITY HE ELECTED UNDER THE FORMER PROVISIONS OF 10 U.S.C. 1434 (A) COMPUTED UNDER THE APPROPRIATE ACTUARIAL TABLE WAS DEDUCTED FROM HIS PAY BEFORE THE ELECTED FRACTION WAS APPLIED TO DETERMINE THE AMOUNT OF THE ANNUITY. ORDINARILY, PARTS OF A WHOLE ARE EXPRESSED IN TERMS OF EITHER FRACTIONS OR PERCENTAGES, RATHER THAN IN A COMBINATION OF THE TWO. THUS, SOME UNCERTAINTY EXISTS AS TO THE CHANGE DESIRED BY COLONEL GURLEY WHEN HE REQUESTED THAT HIS ELECTED ANNUITY "BE REDUCED TO THE 1/4 PERCENTAGE FACTOR" WITHOUT MENTIONING THE PRINCIPAL AMOUNT TO WHICH THE REDUCTION FACTOR SHOULD BE APPLIED. WE CONSIDER HIS REQUEST TOO VAGUE TO DETERMINE THE AMOUNT OF THE ANNUITY HE IS NOW ELECTING.

UNDER THE PROVISIONS OF 10 U.S.C. 1436 (B) (1) A RETIRED MEMBER MAY APPLY FOR ANY ANNUITY THAT IS LESS THAN THE ORIGINAL ANNUITY HE ELECTED PROVIDED IT IS NOT LESS THAN THE PRESCRIBED MINIMUM. SINCE A REQUEST TO REDUCE THE AMOUNT OF AN ANNUITY IS IRREVOCABLE, IT IS NECESSARY THAT THE RETIRED MEMBER BE SPECIFIC IN STATING THE AMOUNT TO WHICH HE DESIRES THE ANNUNITY TO BE REDUCED. ACCORDINGLY, COLONEL GURLEY SHOULD BE REQUESTED TO STATE THE EXACT AMOUNT OF THE ANNUITY HE HAD IN MIND WHEN HE REQUESTED THAT THE ANNUITY BE REDUCED. SINCE SUCH STATEMENT WOULD BE MERELY A CLARIFICATION OF HIS ORIGINAL APPLICATION FOR REDUCTION, THE REDUCED ANNUITY MAY BE MADE EFFECTIVE AS OF MAY 1, 1969.

AS TO THE COST OF THE REDUCED ANNUITY, THE COST PER DOLLAR OF THE ORIGINAL ANNUITY UNDER THE COST TABLE IN EFFECT AT THE TIME OF THE MEMBER'S RETIREMENT SHOULD BE DETERMINED AND THAT COST PER DOLLAR OF ANNUITY APPLIED TO THE DOLLAR AMOUNT OF THE REDUCED ANNUITY HE ELECTS. YOUR LETTER INDICATES THAT THE COST OF COLONEL GURLEY'S PRESENT ANNUITY IS $0.2053 PER DOLLAR AND IT WOULD APPEAR THAT THAT IS THE COST TO BE APPLIED TO THE REDUCED ANNUITY HE SPECIFIES.

THERE BEING NO BASIS FOR PAYMENT ON THE VOUCHER FORWARDED WITH YOUR LETTER, IT WILL BE RETAINED HERE.