B-167961, OCTOBER 16, 1969, 49 COMP. GEN. 263

B-167961: Oct 16, 1969

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

IS NOT SUBJECT TO THE AUTOMATIC PAY RESTORATION FEATURE OF PUBLIC LAW 90-485. 1969: FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 8. YOUR LETTER WAS FORWARDED HERE UNDER DATE OF SEPTEMBER 19. IT IS INDICATED IN YOUR LETTER AND ENCLOSURES THAT COLONEL MCGOWAN WAS RETIRED FROM THE AIR FORCE ON SEPTEMBER 7. THE OFFICER'S GROSS RETIRED PAY (PRIOR TO DEDUCTION FOR RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN) WAS $961.17 A MONTH WHICH AMOUNT WAS INCREASED TO $981.35 EFFECTIVE FEBRUARY 1. WHICH AT THAT TIME WAS OPTIONAL AT THE MEMBER'S ELECTION UNDER 10 U.S.C. 1434(C). YOU SAY THAT THE MONTHLY DEDUCTION FOR RSFPP WAS $94.96 FOR A REDUCED RETIRED PAY OF $866.21 AND AN ANNUITY OF $433.11.

B-167961, OCTOBER 16, 1969, 49 COMP. GEN. 263

PAY -- RETIRED -- ANNUITY ELECTIONS FOR DEPENDENTS -- AUTOMATIC PAY RESTORATION FEATURE -- SAVINGS CLAUSE AN AIR FORCE OFFICER RETIRED SEPTEMBER 7, 1968, WHO IN 1958 HAD ELECTED OPTION 3 UNDER THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN (10 U.S.C. 1434(A)(3)) TO PROVIDE AN ANNUITY OF ONE-HALF REDUCED RETIRED PAY FOR HIS SURVIVORS, BUT WHO HAD NOT ELECTED OPTION 4, THE PAY RESTORATION FEATURE OF THE PLAN, IS NOT SUBJECT TO THE AUTOMATIC PAY RESTORATION FEATURE OF PUBLIC LAW 90-485, APPROVED AUGUST 13, 1968, FOR PERSONNEL RETIRING ON OR AFTER THAT DATE, WHEN AN ELIGIBLE BENEFICIARY NO LONGER EXISTS. TO HOLD OTHERWISE AND INCREASE THE OFFICER'S MONTHLY ANNUITY COST BY IMPOSING THE PAY RESTORATION PROVISION NOT ONLY WOULD BE CONTRARY TO HIS ELECTION, BUT CONTRARY TO THE SAVINGS CLAUSE IN THE 1968 ACT, WHICH PERMITS MEMBERS NOT YET RETIRED WHO HAD MADE AN ELECTION PRIOR TO ITS ENACTMENT TO REMAIN UNDER THE LAW IN EFFECT PRIOR TO THE 1968 ACT.

TO MAJOR N. C. ALCOCK, DEPARTMENT OF THE AIR FORCE, OCTOBER 16, 1969:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 8, 1969 (FILE REFERENCE ALRA), REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF MAKING PAYMENT ON A VOUCHER IN THE AMOUNT OF $886.39 IN FAVOR OF COLONEL SAMUEL B. MCGOWAN, USAF, RETIRED, REPRESENTING RETIRED PAY FOR THE MONTH OF AUGUST 1969 AFTER DEDUCTION OF $94.96 FOR RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN COVERAGE ELECTED UNDER CHAPTER 73, TITLE 10, U.S.C. YOUR LETTER WAS FORWARDED HERE UNDER DATE OF SEPTEMBER 19, 1969, BY THE DEPUTY ASSISTANT COMPTROLLER FOR ACCOUNTING AND FINANCE AND HAS BEEN ASSIGNED AIR FORCE REQUEST NO. DO-AF-1052 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

IT IS INDICATED IN YOUR LETTER AND ENCLOSURES THAT COLONEL MCGOWAN WAS RETIRED FROM THE AIR FORCE ON SEPTEMBER 7, 1968, UNDER 10 U.S.C. 1201 BY REASON OF PHYSICAL DISABILITY. AT THE TIME OF HIS RETIREMENT HE HAD A DISABILITY RATING OF 20 PERCENT AND HAD 28 YEARS, 2 MONTHS AND 13 DAYS OF ACTIVE SERVICE FOR RETIREMENT PURPOSES. YOU SAY THAT AT THE TIME OF RETIREMENT, THE OFFICER'S GROSS RETIRED PAY (PRIOR TO DEDUCTION FOR RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN) WAS $961.17 A MONTH WHICH AMOUNT WAS INCREASED TO $981.35 EFFECTIVE FEBRUARY 1, 1969, BY 2.1 PERCENT UNDER 10 U.S.C. 1401AC).

YOU STATE THAT ON FEBRUARY 25, 1958, THE OFFICER ELECTED OPTION 3 TO PROVIDE AN ANNUITY OF ONE-HALF REDUCED RETIRED PAY FOR HIS SURVIVORS UNDER 10 U.S.C. 1434(A)(3) BUT THAT HE DID NOT ELECT OPTION 4, THE PAY RESTORATION FEATURE--WHICH AT THAT TIME WAS OPTIONAL AT THE MEMBER'S ELECTION UNDER 10 U.S.C. 1434(C). UNDER THIS ELECTION, YOU SAY THAT THE MONTHLY DEDUCTION FOR RSFPP WAS $94.96 FOR A REDUCED RETIRED PAY OF $866.21 AND AN ANNUITY OF $433.11. YOU STATE, HOWEVER, THAT UNDER SECTION 1(3) AND SECTION 3 OF PUBLIC LAW 90-485, APPROVED AUGUST 13, 1968, 82 STAT. 751, 10 U.S.C. 1434, AND 1431 NOTE, THE PAY RESTORATION FEATURE APPEARS TO BE AUTOMATIC FOR PERSONNEL RETIRING ON OR AFTER AUGUST 13, 1968. BY USING THE COST TABLES IN EFFECT ON SEPTEMBER 7, 1968, CONTAINING THE OPTION 4 FEATURE, YOU SAY THAT THE COST TO COLONEL MCGOWAN FOR THIS ELECTION WOULD BE INCREASED TO $103.81 A MONTH. THE OFFICER'S RETIRED PAY WOULD THEN HAVE BEEN $857.36 FOR AN ANNUITY OF $428.68 A MONTH.

YOU FURTHER STATE THAT THE OFFICER DOES NOT DESIRE THE PAY RESTORATION FEATURE OF THE COVERAGE ELECTED AND HE BELIEVES THAT THE LAST SENTENCE IN SECTION 6 OF THE ACT OF AUGUST 13, 1968, PERMITS HIM TO ELECT TO REMAIN UNDER THE PROVISIONS OF LAW IN EFFECT BEFORE AUGUST 13, 1968. YOU EXPRESS THE VIEW, HOWEVER, THAT SECTION 6 OF PUBLIC LAW 90-485, APPEARS TO PERTAIN ONLY TO THE 18-YEAR AND 3-YEAR RULE FOR MAKING ELECTIONS, OR MODIFYING OR REVOKING PRIOR ELECTIONS, RATHER THAN TO THE OPTION 4 FACTOR.

IN EXPRESSING DOUBT IN THE MATTER, YOU ASK WHETHER THE CORRECT RETIRED PAY ENTITLEMENT FOR COLONEL MCGOWAN (AFTER DEDUCTION FOR RSFPP) SHOULD BE $886.39 ($981.35 LESS $94.96) AS SHOWN ON THE SUBMITTED VOUCHER, OR $877.54 ($981.35 LESS $103.81).

ACCOMPANYING YOUR SUBMISSION IS A MEMORANDUM OF THE DEPUTY DIRECTOR SECRETARY OF THE AIR FORCE PERSONNEL COUNCIL DATED SEPTEMBER 13, 1968, TO THE EFFECT THAT THE SECRETARY OF THE AIR FORCE APPROVED COLONEL MCGOWAN'S REQUEST OF SEPTEMBER 3, 1968, TO REMAIN UNDER THE PROVISIONS OF THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN IN EFFECT PRIOR TO THE ENACTMENT OF PUBLIC LAW 90-485, AUGUST 13, 1968.

PRIOR TO THE ACT OF AUGUST 13, 1968, A MEMBER COULD ELECT, UNDER 10 U.S.C. 1431, TO PROVIDE AN ANNUITY FOR HIS SURVIVORS PROVIDED THE ELECTION WAS MADE PRIOR TO COMPLETING 18 YEARS OF SERVICE OR AT LEAST 3 YEARS BEFORE THE FIRST DAY FOR WHICH RETIRED OR RETAINER PAY WAS GRANTED. THE TYPES OF ANNUITY WHICH THE MEMBER MAY ELECT ARE ENUMERATED IN 10 U.S.C. 1434(A). UNDER SUBSECTION (C) OF SECTION 1434 THE SO-CALLED PAY RESTORATION OPTION (OPTION 4)--WHEN AN ELIGIBLE BENEFICIARY NO LONGER EXISTS--HAD TO BE SPECIFICALLY ELECTED BY THE MEMBER TO BE EFFECTIVE. ELECTION OF THE PAY RESTORATION OPTION (OPTION 4) IN COMBINATION WITH ANY OF THE OTHER 3 OPTIONS MENTIONED IN 1434(A) RESULTED IN AN INCREASE TO THE MEMBER IN THE COST OF THE ANNUITY.

SECTION 1434(C) OF TITLE 10 WAS AMENDED BY CLAUSE 3 OF SECTION 1 OF THE ACT OF AUGUST 13, 1968, TO PROVIDE THAT NO REDUCTION SHALL BE MADE IN A MEMBER'S RETIRED OR RETAINER PAY AFTER THE LAST DAY OF THE MONTH IN WHICH THERE IS NO BENEFICIARY WHO WOULD BE ELIGIBLE FOR AN ANNUITY FOLLOWING THE MEMBER'S DEATH. SECTION 3 OF THE ACT OF AUGUST 13, 1968, PROVIDES AS FOLLOWS:

SEC. 3 FOR MEMBERS TO WHOM SECTION 1431 OF TITLE 10, U.S.C. APPLIES ON THE DATE OF ENACTMENT OF THIS ACT, THE PROVISIONS OF SECTION 1434(C) OF THAT TITLE, AS AMENDED BY THIS ACT, ARE EFFECTIVE IMMEDIATELY AND AUTOMATICALLY. IN EXPLAINING THE PURPOSE OF SECTION 3, IT IS STATED ON PAGE 11 OF S. REPT. NO. 1480, DATED JULY 26, 1968, TO ACCOMPANY H. R. 12323, WHICH BECAME THE ACT OF AUGUST 13, 1968, THAT:

SECTION 3 PROVIDES THAT IN THE CASE OF THOSE MEMBERS WHO, ON THE DATE OF ENACTMENT HAVE ELECTED AN ANNUITY UNDER SECTION 1431 OR TITLE 10, U.S.C. AND HAVE NOT YET RETIRED, THE PROVISIONS OF SECTION 1434(C) OF TITLE 10, U.S.C. AS AMENDED BY CLAUSE (3) OF SECTION 1, ARE IMMEDIATELY AND AUTOMATICALLY EFFECTIVE. THE EFFECT OF THIS SECTION WILL BE TO INSURE THAT IN THE CASE OF ALL MEMBERS RETIRED AFTER THE DATE OF ENACTMENT OF THIS ACT, REDUCTIONS IN RETIRED PAY TO PROVIDE AN ANNUITY UNDER CHAPTER 73 OF TITLE 10, U.S.C. WILL CEASE AUTOMATICALLY WHENEVER THERE IS NO SURVIVING ELIGIBLE BENEFICIARY.

WHILE THE PAY RESTORATION FEATURE OF SECTION 3 BY ITS PLAIN TERMS IS EFFECTIVE IMMEDIATELY AND AUTOMATICALLY TO THOSE MEMBERS TO WHOM SECTION 1431 OF TITLE 10 APPLIED ON AUGUST 13, 1968, SECTION 6, OF THE SAME LAW EXPRESSLY PROVIDES, IN PERTINENT PART, THAT:

*** HOWEVER, NOTWITHSTANDING ANY OTHER PROVISION OF THIS ACT, ANY MEMBER TO WHOM SECTION 1431 OF TITLE 10, U.S.C. APPLIES ON THE DATE OF ENACTMENT OF THIS ACT MAY, BEFORE THE FIRST DAY OF THE THIRTEENTH CALENDAR MONTH BEGINNING AFTER THE DATE OF ENACTMENT OF THIS ACT, SUBMIT A WRITTEN APPLICATION TO THE SECRETARY CONCERNED REQUESTING THAT AN ELECTION OR A CHANGE OR REVOCATION OF ELECTION MADE BY SUCH MEMBER PRIOR TO THE DATE OF ENACTMENT OF THIS ACT SHALL CONTINUE TO BE GOVERNED BY THE PROVISIONS OF SECTION 1431 (B) OR (C) OF TITLE 10, UNITED STATES CODE, AS IN EFFECT ON THE DATE BEFORE THE DATE OF ENACTMENT OF THIS ACT.

IN EXPLAINING THE SAVINGS CLAUSE PROVISION IN SECTION 6, IT IS STATED ON PAGE 6 OF S. REPT. NO. 1480, MENTIONED ABOVE, THAT:

SAVINGS CLAUSE--MEMBERS NOT YET RETIRED MAY ELECT TO REMAIN UNDER LAW IN EFFECT PRIOR TO ENACTMENT.

THE COMMITTEE AMENDMENT PROVIDES THAT, BEFORE THE FIRST DAY OF THE 13TH MONTH BEGINNING AFTER THE DATE OF ENACTMENT OF THE BILL, A MEMBER NOT YET RETIRED MAY SUBMIT A WRITTEN APPLICATION REQUESTING THE EFFECTIVE DATE OF HIS RSFPP ELECTION BE DETERMINED UNDER THE LAW APPLICABLE PRIOR TO THE DATE OF ENACTMENT.

PURPOSE OF THIS SAVINGS CLAUSE IS, FOR EXAMPLE, TO ALLOW AN ACTIVE DUTY MEMBER WHO RETIRES WITHIN 1 YEAR OF ENACTMENT, TO AVOID ACCELERATION UNDER THE BILL OF THE EFFECTIVE DATE OF A CHANGE OR REVOCATION OF ELECTION. SUCH A MEMBER MAY HAVE SINCE CHANGED HIS MIND REGARDING THE DESIRABILITY OF THAT CHANGE OR REVOCATION OF ELECTION, AND COULD BE RELYING IN GOOD FAITH ON RETIREMENT BEFORE SUCH CHANGE OR REVOCATION COULD BECOME EFFECTIVE UNDER THE LAW IN EFFECT PRIOR TO ENACTMENT OF THIS BILL. SEE, ALSO, THE REMARKS ON PAGE 12 OF THE SAME REPORT CONCERNING THE EFFECT OF SECTION 6.

WHILE SECTION 6 AND ITS LEGISLATIVE HISTORY SUPPORTS THE VIEW THAT THE SAVINGS PROVISION WAS ADDED BY THE SENATE COMMITTEE ON ARMED SERVICES FOR THE PURPOSE OF ALLOWING AN ACTIVE DUTY MEMBER COVERED THEREBY TO AVOID ACCELERATION OF THE EFFECTIVE DATE OF ELECTION OR CHANGE OR REVOCATION OF AN ELECTION, WE FIND NOTHING IN THE LAW OR ITS LEGISLATIVE HISTORY WHICH WOULD LIMIT THE SCOPE OF THE SAVINGS PROVISION TO EXCLUDE THEREFROM AN OTHERWISE VALID ELECTION MADE UNDER THE LAW IN EFFECT PRIOR TO AUGUST 13, 1968, WHICH ELECTION DID NOT INCLUDE THE PAY RESTORATION FEATURE OF OPTION 4.

AN ELECTION MADE UNDER THE FORMER PROVISIONS OF SECTION 1431 OF TITLE 10 WAS GOVERNED BY THE TYPE OF ANNUITY AND THE OPTIONS ELECTED BY THE MEMBER UNDER SECTION 1434. IN OTHER WORDS, THE PROVISIONS OF SECTION 1431 ARE CONSIDERED IN CONJUNCTION WITH SECTION 1434 AND THE LATTER SECTION AT THAT TIME GAVE THE MEMBER THE OPTION TO ELECT OR NOT TO ELECT THE PAY RESTORATION FEATURE OF OPTION 4.

TO HOLD A MEMBER IN COLONEL MCGOWAN'S SITUATION TO THE PAY RESTORATION FEATURE NOW PROVIDED IN SECTION 3 OF THE 1968 ACT, WOULD NOT ONLY BE CONTRARY TO THE MEMBER'S PRIOR ELECTION, BUT WOULD BE CONTRARY TO SECTION 6 OF THAT ACT WHICH IS APPLICABLE "NOTWITHSTANDING ANY OTHER PROVISION OF THIS ACT," AND WHICH SAVES TO THE MEMBER WHO HAS MADE AN ELECTION BEFORE AUGUST 13, 1968, AND NOT YET RETIRED, THE RIGHT TO HAVE SUCH "AN ELECTION *** CONTINUED TO BE GOVERNED BY THE PROVISIONS OF SECTION 1431 (B) OR (C) OF TITLE 10," IN EFFECT PRIOR TO AUGUST 13, 1968. IN THIS CONNECTION, REGULATIONS IMPLEMENTING THE LAW PROVIDE IN SECTION 604D THAT:

D. ANY MEMBER WHO HAS FILED AN ELECTION, MODIFICATION, OR RECOVATION PRIOR TO 13 AUGUST 1968 MAY BEFORE 1 SEPTEMBER 1969 SUBMIT A WRITTEN APPLICATION TO THE SECRETARY CONCERNED REQUESTING THAT SUCH ELECTION, MODIFICATION, OR REVOCATION REMAIN UNDER THE TIME-OF-ELECTION PROVISIONS OF THE LAW APPLICABLE ON THE DATE IT WAS FILED.

SINCE IT APPEARS THAT COLONEL MCGOWAN MADE A VALID ELECTION IN 1958 WITHOUT THE PAY RESTORATION FEATURE OF OPTION 4, AND SINCE THE SECRETARY OF THE AIR FORCE HAS APPROVED HIS REQUEST THAT HIS ELECTION BE GOVERNED BY THE PROVISIONS OF LAW IN EFFECT PRIOR TO AUGUST 13, 1968, IT IS OUR VIEW THAT HE IS ENTITLED TO HAVE THE COST OF HIS ANNUITY BASED ON HIS ELECTION IN 1958 WITHOUT THE PAY RESTORATION FEATURE.

ACCORDINGLY, THE VOUCHER AND SUPPORTING PAPERS ARE RETURNED HEREWITH, PAYMENT BEING AUTHORIZED THEREON IF OTHERWISE CORRECT.