B-168768, FEBRUARY 25, 1970, 49 COMP. GEN. 521

B-168768: Feb 25, 1970

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MAY NOT HAVE THE PAYMENTS HE MADE INTO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND FORM THE BASIS FOR A SURVIVOR'S ANNUITY UNDER SECTION 7448(H) OF THE INTERNAL REVENUE CODE SHOULD HE NOT APPLY FOR THE REFUND OF HIS DEPOSITS TO THE FUND THAT IS AUTHORIZED IN SECTION 7447(G)(2)(C). THE PERIOD TO INCLUDE ALL THE SERVICE HE PERFORMED AS A JUDGE PLUS SO MUCH OF HIS PRIOR SERVICE SUBJECT TO THE CIVIL SERVICE RETIREMENT SYSTEM THAT IS NECESSARY TO COMPLETE THE 5 YEAR PERIOD. THE QUESTION OF REINSTATING COVERAGE UNDER THE SYSTEM IS FOR SUBMISSION TO THE CIVIL SERVICE COMMISSION. YOU POINT OUT THAT YOU WERE APPOINTED JUDGE OF THE UNITED STATES TAX COURT ON OCTOBER 1. YOU ALSO POINT OUT THAT CONTRIBUTIONS HAVE BEEN MADE TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND FOR ALL OF YOUR PRIOR SERVICE EXCEPT ACTIVE MILITARY SERVICE.

B-168768, FEBRUARY 25, 1970, 49 COMP. GEN. 521

COURTS -- JUDGES -- SERVIVORSHIP BENEFITS -- DEPOSITS IN CIVIL SERVICE RETIREMENT AND DISABILITY FUND A JUDGE OF THE UNITED STATES TAX COURT WITH PRIOR GOVERNMENT SERVICE WHO ELECTS TO RECEIVE RETIRED PAY UNDER 26 U.S.C. 7447(D), MAY NOT HAVE THE PAYMENTS HE MADE INTO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND FORM THE BASIS FOR A SURVIVOR'S ANNUITY UNDER SECTION 7448(H) OF THE INTERNAL REVENUE CODE SHOULD HE NOT APPLY FOR THE REFUND OF HIS DEPOSITS TO THE FUND THAT IS AUTHORIZED IN SECTION 7447(G)(2)(C), IN VIEW OF HIS STATUTORY ENTITLEMENT TO REFUND UPON ELECTION OF RETIRED PAY UNDER THE INTERNAL REVENUE CODE AND THE PROVISIONS IN THE STATUTE, PUBLIC LAW 91- 172, WHICH AMENDS 26 U.S.C. 7447(G), THAT EXCLUDE HIM FROM ENTITLEMENT TO A CIVIL SERVICE RETIREMENT ANNUITY, INCLUDING A SURVIVOR'S ANNUITY, AND FROM THE REQUIREMENT TO CONTRIBUTE TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND. COURTS -- JUDGES -- SURVIVORSHIP BENEFITS -- PROCEDURE TO OBTAIN A JUDGE OF THE UNITED STATES TAX COURT WITH PRIOR GOVERNMENT SERVICE WHO ELECTS RETIRED PAY UNDER 26 U.S.C. 7447(E), MAY OBTAIN IMMEDIATE SURVIVOR'S PROTECTION UNDER SECTION 7448 OF THE INTERNAL REVENUE CODE UPON MAKING AT THE TIME OF HIS ELECTION THE APPLICABLE DEPOSITS IN THE TAX COURT SURVIVOR'S ANNUITY FUND FOR THE 5-YEAR PERIOD IMMEDIATELY PRECEDING THE DATE OF ELECTION--THE PERIOD TO INCLUDE ALL THE SERVICE HE PERFORMED AS A JUDGE PLUS SO MUCH OF HIS PRIOR SERVICE SUBJECT TO THE CIVIL SERVICE RETIREMENT SYSTEM THAT IS NECESSARY TO COMPLETE THE 5 YEAR PERIOD. HOWEVER, TO OBTAIN MAXIMUM SURVIVOR PROTECTION, THE JUDGE MUST MAKE DEPOSIT TO THE FUND FOR ALL THE SERVICE FOR WHICH HE CLAIMS CREDIT, AND ANY SERVICE IN EXCESS OF 5 YEARS FOR WHICH HE DOES NOT MAKE A DEPOSIT, THE SURVIVOR'S ANNUITY MUST BE REDUCED IN ACCORDANCE WITH SECTION 7448(D). COURTS -- JUDGES -- RETIREMENT -- TERMINATION PRIOR TO ELIGIBILITY UPON TERMINATION OF THE SERVICES OF A JUDGE OF THE UNITED STATES TAX COURT PRIOR TO ELIGIBILITY FOR RETIREMENT UNDER 26 U.S.C. 7447, THE JUDGE WHO HAD PRIOR SERVICE SUBJECT TO THE CIVIL SERVICE RETIREMENT LAWS MAY AGAIN ACQUIRE COVERAGE UNDER THE CIVIL SERVICE RETIREMENT SYSTEM IF UPON REEMPLOYMENT IN A POSITION SUBJECT TO THE SYSTEM, HE REDEPOSITS TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND ANY REFUNDS RECEIVED FROM THE FUND AND UNDER SECTION 7448, WITH INTEREST FROM THE DATE OF REFUNDS TO DATE OF REDEPOSIT, AND THE SERVICE INVOLVED MAY BE RECREDITED FOR CIVIL SERVICE RETIREMENT PURPOSES, BUT IN NO CASE MAY THE DEPOSIT EXCEED THAT NORMALLY REQUIRED UNDER THE CIVIL SERVICE RETIREMENT SYSTEM. IN THE ABSENCE OF REEMPLOYMENT, THE QUESTION OF REINSTATING COVERAGE UNDER THE SYSTEM IS FOR SUBMISSION TO THE CIVIL SERVICE COMMISSION.

TO THE HONORABLE WILLIAM H. QUEALY, TAX COURT OF THE UNITED STATES, FEBRUARY 25, 1970:

WE REFER AGAIN TO YOUR LETTER OF JANUARY 6, 1970, CONCERNING YOUR LETTER OF JANUARY 6, 1970, CONCERNING YOUR RETIREMENT ENTITLEMENT SHOULD YOU ELECT IN ACCORDANCE WITH 26 U.S.C. 7447(E) TO RECEIVE RETIRED PAY UNDER 7447(D). YOU POINT OUT THAT YOU WERE APPOINTED JUDGE OF THE UNITED STATES TAX COURT ON OCTOBER 1, 1969, FOR A TERM EXPIRING ON JUNE 1, 1972. YOU SAY YOU HAD PRIOR GOVERNMENT SERVICE CONSISTING OF EMPLOYMENT BY THE HOUSE OF REPRESENTATIVES FROM JANUARY 1, 1962, TO SEPTEMBER 30, 1969; ACTIVE MILITARY SERVICE IN THE UNITED STATES ARMY FROM MARCH 3, 1942, TO NOVEMBER 24, 1945, AND SLIGHTLY MORE THAN ONE ADDITIONAL YEAR IN OTHER FEDERAL EMPLOYMENT. YOU ALSO POINT OUT THAT CONTRIBUTIONS HAVE BEEN MADE TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND FOR ALL OF YOUR PRIOR SERVICE EXCEPT ACTIVE MILITARY SERVICE.

YOU REQUEST OUR ADVICE UPON THE FOLLOWING SPECIFIC QUESTIONS:

(1) WHETHER SUCH ELECTION, WITHOUT THE MAKING OF ANY APPLICATION FOR PAYMENT OF THE LUMP SUM CREDIT PROVIDED FOR IN SECTION 7447(G)(2)(C), RESULTS IN THE DISQUALIFICATION OF SUCH PRIOR PAYMENTS TO THE CIVIL SERVICE RETIREMENT FUND FOR PURPOSES OF DETERMINING THE SURVIVOR'S BENEFIT UNDER SECTION 7448(D) AND SECTION 7448(H) OF THE INTERNAL REVENUE CODE;

(2) IF YOU CONCLUDE THAT SUCH ELECTION UNDER SECTION 7447(E), WITH OR WITHOUT APPLICATION FOR REFUND UNDER SECTION 7447(G)(2)(C), PRECLUDES CONSIDERATION OF PRIOR PAYMENTS UNDER THE CIVIL SERVICE RETIREMENT ACT FOR PURPOSES OF DETERMINING ENTITLEMENT OF A SURVIVOR TO AN ANNUITY UNDER SECTION 7448(H), WHETHER SUCH ENTITLEMENT MAY BE OBTAINED BY DEPOSITING IN THE TAX COURT SURVIVOR'S ANNUITY FUND THE SALARY DEDUCTIONS REQUIRED BY THE CIVIL SERVICE RETIREMENT ACT FOR A PERIOD OF NOT LESS THAN FIVE YEARS IMMEDIATELY PRECEDING OCTOBER 1, 1969; AND

(3) IF MY SERVICE AS A JUDGE IS TERMINATED PRIOR TO BECOMING ELIGIBLE FOR SUCH RETIREMENT, WILL SUCH ELECTION UNDER SECTION 7447(E) PRECLUDE ME FROM REINSTATEMENT UNDER THE CIVIL SERVICE RETIREMENT ACT?

SECTION 954(C) OF PUBLIC LAW 91-172 AMENDS SUBSECTION (G) OF 26 U.S.C. 7447 BY STRIKING OUT PARAGRAPHS 2, 3, AND 4 THEREOF AND SUBSTITUTING IN LIEU THEREOF THE FOLLOWING LANGUAGE:

(2) EFFECT OF ELECTING RETIRED PAY.--IN THE CASE OF ANY INDIVIDUAL WHO HAS FILED AN ELECTION TO RECEIVE RETIRED PAY UNDER SUBSECTION (D)--

(A) NO ANNUITY OR OTHER PAYMENT SHALL BE PAYABLE TO ANY PERSON UNDER THE CIVIL SERVICE RETIREMENT LAWS WITH RESPECT TO ANY SERVICE PERFORMED BY SUCH INDIVIDUAL (WHETHER PERFORMED BEFORE OR AFTER SUCH ELECTION IS FILED AND WHETHER PERFORMED AS JUDGE OR OTHERWISE);

(B) NO DEDUCTION FOR PURPOSES OF THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND SHALL BE MADE FROM RETIRED PAY PAYABLE TO HIM UNDER SUBSECTION (D) OR FROM ANY OTHER SALARY, PAY, OR COMPENSATION PAYABLE TO HIM, FOR ANY PERIOD BEGINNING AFTER THE DAY ON WHICH SUCH ELECTION IS FILED; AND

(C) SUCH INDIVIDUAL SHALL BE PAID THE LUMP-SUM CREDIT COMPUTED UNDER SECTION 8331(8) OF TITLE 5 OF THE U.S.C. UPON MAKING APPLICATION THEREFOR WITH THE CIVIL SERVICE COMMISSION.

THE EFFECT OF THE QUOTED SECTION IS TO EXCLUDE PRIOR SERVICE COVERED BY THE CIVIL SERVICE RETIREMENT LAWS FROM FORMING THE BASIS FOR ANY CIVIL SERVICE RETIREMENT ANNUITY, INCLUDING A SURVIVOR'S ANNUITY, IN THE CASE OF ANY JUDGE WHO FILES AN ELECTION TO RECEIVE RETIRED PAY UNDER SECTION 7447(D). ALSO, IT PROVIDES THAT NO CONTRIBUTIONS BE MADE TO THE CIVIL SERVICE RETIREMENT AND DISABILTY FUND FOR ANY PERIOD AFTER THE DAY ON WHICH SUCH ELECTION IS FILED AND IT CONFERS A RIGHT ON AN INDIVIDUAL ELECTING TO RECEIVE RETIRED PAY UNDER 7447(D) TO BE PAID IN A LUMP SUM THE AMOUNTS CREDITED TO HIS ACCOUNT IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND.

WHILE IT IS NOT EXPRESSLY STATED THEREIN, IT IS OUR VIEW THAT THE AMENDED SUBSECTION (G) CONTEMPLATES THAT THE CONTRIBUTIONS MADE TO SUCH FUND SHALL NO LONGER FORM THE BASIS FOR DETERMINING THE AMOUNT OF A SURVIVOR'S ANNUITY UNDER SECTION 7448(H) OF TITLE 26, UNITED STATES CODE SINCE A JUDGE ELECTING TO RECEIVE RETIREMENT BENEFITS UNDER 7447(D) NOW IS VESTED WITH A STATUTORY ENTITLEMENT TO REFUND OF THOSE CONTRIBUTIONS. IN THIS CONNECTION WE NOTE THAT SECTION 7448(D), ENACTED OCTOBER 4, 1961, PROVIDED THAT NO DEPOSIT SHALL BE REQUIRED FROM A JUDGE--TO OBTAIN CREDIT IN THE COMPUTATION OF A SURVIVOR'S ANNUITY UNDER SECTION 7448--FOR ANY YEAR WITH RESPECT TO WHICH DEDUCTIONS FROM HIS SALARY WERE ACTUALLY MADE UNDER THE CIVIL SERVICE RETIREMENT ACT. THE REASON FOR SUCH A PROVISION IS EXPLAINED ON PAGES 6 AND 7 OF S. REPT. NO. 730, AUGUST 14, 1961, WHICH ACCOMPAINED H. R. 4317, SUBSEQUENTLY ENACTED AS PUBLIC LAW 87-370, AS FOLLOWS:

*** HOWEVER, THE CIVIL SERVICE RETIREMENT SYSTEM WAS FOR MANY YEARS THE ONLY RETIREMENT SYSTEM AVAILABLE TO JUDGES OF THE TAX COURT, AND, UNTIL ENACTMENT OF THIS SECTION, HAS BEEN THE ONLY SYSTEM AFFORDING THEM SURVIVORSHIP PROTECTION. AS A RESULT, A NUMBER OF THE JUDGES OF THE TAX COURT HAVE BEEN MAKING SUBSTANTIAL CONTRIBUTIONS AT THE REGULAR 6-1/2 PERCENT RATE TO THE CIVIL SERVICE RETIREMENT SYSTEM FOR MAY YEARS. ORDER TO ELECT THE BENEFITS OF THE SYSTEM PROVIDED BY THIS SECTION, SUCH JUDGES MUST WAIVE THEIR RIGHTS TO ANY BENEFITS UNDER THE CIVIL SERVICE SYSTEM, INCLUDING THEIR RIGHT TO REFUND OF THEIR CIVIL SERVICE CONTRIBUTION. IT IS NOT PRACTICAL TO PROVIDE FOR A TRANSFER OF AMOUNTS PREVIOUSLY CONTRIBUTED BY JUDGES TO THE CIVIL SERVICE FUND FROM THAT FUND TO THE NEW FUND CREATED BY THIS SECTION. THEREFORE, IF IT WERE NOT FOR THE SPECIAL PROVISION REFERRED TO, A JUDGE WOULD BE REQUIRED TO CONTRIBUTE AGAIN WITH RESPECT TO THE SAME SERVICE. NO SIMILAR PROBLEM WAS INVOLVED IN CONNECTION WITH PUBLIC LAW 973 BECAUSE MEMBERS OF THE JUDICIARY GENERALLY WERE NOT AFFORDED COVERAGE UNDER THE CIVIL SERVICE RETIREMENT SYSTEM.

IN OTHER WORDS, THE PROVISION REQUIRING NO DEPOSITS FOR PERIODS FOR WHICH CIVIL SERVICE RETIREMENT DEDUCTIONS WERE MADE WAS PREDICATED UPON THE FACT THAT SUCH DEDUCTIONS WERE REQUIRED TO REMAIN IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND WITHOUT ANY COMPENSATING BENEFIT UNDER THE CIVIL SERVICE RETIREMENT SYSTEM.

WE ALSO NOTE UNDER 26 U.S.C. 7448(H), BEFORE A SURVIVOR'S ANNUITY WAS PAYABLE, THAT EITHER SALARY DEDUCTIONS IN ACCORDANCE WITH 7448(C) OR DEPOSITS IN ACCORDANCE WITH 7448(D) MUST HAVE BEEN MADE FOR THE LAST 5 YEARS OF SERVICE OR IN LIEU THEREOF CONTRIBUTIONS MUST HAVE BEEN MADE TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND FOR SUCH PERIOD. HERE AGAIN IT IS OUR VIEW THAT ALLOWING CREDIT FOR CONTRIBUTIONS MADE TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND WAS PREDICATED UPON THE FACT THAT AT THE TIME SUCH CONTRIBUTIONS WERE REQUIRED TO REMAIN FOREVER IN SUCH FUND.

ACCORDINGLY, IN ANSWER TO YOUR FIRST QUESTION IT IS OUR VIEW THAT THE AMOUNTS PAID INTO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND WHICH WOULD BE REFUNDABLE TO YOU SHOULD YOU MAKE AN ELECTION TO RECEIVE RETIRED PAY UNDER 26 U.S.C. 7447, MAY NOT FORM THE BASIS FOR A SURVIVOR'S ANNUITY UNDER SECTION 7448(H) OF THE INTERNAL REVENUE CODE.

CONCERNING YOUR SECOND QUESTION IT IS OUR VIEW THAT YOU MAY OBTAIN IMMEDIATE SURVIVOR'S PROTECTION UNDER SECTION 7448 OF THE INTERNAL REVENUE CODE IF YOU MAKE THE APPLICABLE DEPOSITS IN THE TAX COURT SURVIVOR'S ANNUITY FUND AT THE TIME OF YOUR ELECTION TO BE COVERED BY 7447(D) COVERING THE 5-YEAR PERIOD IMMEDIATELY PRECEDING THE DATE SUCH ELECTION IS MADE. THIS PERIOD WOULD INCLUDE ALL OF YOUR SERVICE AS A JUDGE PLUS SO MUCH OF YOUR PRIOR SERVICE SUBJECT TO THE CIVIL SERVICE RETIREMENT SYSTEM AS IS NECESSARY TO COMPLETE THE 5-YEAR PERIOD. IN ORDER TO OBTAIN MAXIMUM SURVIVOR PROTECTION, HOWEVER, IT WOULD BE NECESSARY TO MAKE DEPOSIT FOR ALL SERVICE FOR WHICH YOU CLAIM CREDIT. FOR SERVICE IN EXCESS OF 5 YEARS FOR WHICH NO DEPOSIT IS MADE YOUR SURVIVOR'S ANNUITY WOULD BE REDUCED IN ACCORDANCE WITH 7448(D). QUESTION 2 IS ANSWERED ACCORDINGLY.

WE HAVE BEEN INFORMED BY THE CIVIL SERVICE COMMISSION, WHICH IS THE AGENCY OF THE GOVERNMENT VESTED WITH THE STATUTORY RESPONSIBILITY TO ADMINISTER THE CIVIL SERVICE RETIREMENT PROVISIONS CONTAINED IN TITLE 5, U.S.C. THAT SHOULD YOUR SERVICE AS A JUDGE TERMINATE BEFORE YOU ARE ELIGIBLE TO RETIRE UNDER SECTION 7447, YOU MAY AGAIN ACQUIRE COVERAGE UNDER THE CIVIL SERVICE RETIREMENT SYSTEM. THE COMMISSION POINTS OUT THAT IF YOU AGAIN ARE EMPLOYED IN A POSITION SUBJECT TO THE SYSTEM YOU MAY REDEPOSIT TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND ANY REFUNDS YOU MAY HAVE RECEIVED FROM SUCH FUND AND UNDER SECTION 7448 WITH INTEREST FROM THE DATE OF THE REFUNDS TO THE DATE OF REDEPOSIT AND HAVE THIS SERVICE RECREDITED FOR CIVIL SERVICE RETIREMENT PURPOSES. THE COMMISSION ALSO POINTS OUT THAT THE REDEPOSIT WOULD NOT IN ANY CASE EXCEED THAT NORMALLY REQUIRED UNDER THE CIVIL SERVICE RETIREMENT SYSTEM. WE POINT OUT, HOWEVER, THAT THE CIVIL SERVICE COMMISSION DID NOT ADVISE US SPECIFICALLY WHETHER IN THE ABSENCE OF YOUR REEMPLOYMENT IN A POSITION SUBJECT TO THE CIVIL SERVICE RETIREMENT SYSTEM YOUR COVERAGE UNDER SUCH SYSTEM WOULD BE REINSTATED. IF THIS IS THE SITUATION TO WHICH YOUR QUESTION RELATES WE SUGGEST THAT IT BE REFERRED TO THE COMMISSION FOR AN AUTHORITATIVE DETERMINATION.

A COPY OF THIS LETTER IS BEING SENT TO THE ADMINISTRATIVE OFFICER OF THE TAX COURT OF THE UNITED STATES.