B-176602, FEB 2, 1973, 52 COMP GEN 469

B-176602, FEB 2, 1973, 52 COMP GEN 469

PAY - RETIRED - RE-RETIREMENT - RECOMPUTATION OF RETIRED PAY - COST-OF LIVING INCREASES MEMBERS OF THE UNIFORMED SERVICES INITIALLY RETIRED ON OR BEFORE OCTOBER 1, 1967, WITH RETIRED OR RETAINER PAY BASED ON THE BASIC PAY RATES PRESCRIBED IN PUBLIC LAW 92-129, EFFECTIVE OCTOBER 1, 1971, WHO ARE RECALLED TO ACTIVE DUTY AND UPON RELEASE FROM THAT DUTY BECOME ELIGIBLE TO THE RECOMPUTATION OF THEIR RETIRED OR RETAINER PAY PURSUANT TO 10 U.S.C. 1402(A), ARE WITHIN THE PURVIEW OF 10 U.S.C. 1401AE) AND ENTITLED TO AN ADJUSTMENT OF SUCH PAY TO REFLECT CHANGES IN THE CONSUMER PRICE INDEX, FOR UNDER THE LITERAL TERMS OF SECTION 1401AE) THE PAY OF THE MEMBERS MAY NOT BE LESS THAN IT WOULD HAVE BEEN HAD THEY BECOME ENTITLED TO RETIRED OR RETAINER PAY ON SEPTEMBER 30, 1971, THE EFFECTIVE DATE OF PUBLIC LAW 92- 129, IN VIEW OF THE INTENDED PURPOSE OF 10 U.S.C. 1401A TO TREAT MEMBERS AS EQUAL AS POSSIBLE IN MATTERS INVOLVING CONSUMER PRICE INDEX ADJUSTMENTS AND, THEREFORE, IT WOULD BE INCONSISTENT TO LIMIT APPLICATION OF SECTION 1401AE) "SAVED PAY" PROVISIONS TO INITIAL RETIREMENT FORMULAS ONLY.

TO THE SECRETARY OF DEFENSE, FEBRUARY 2, 1973:

FURTHER REFERENCE IS MADE TO A LETTER DATED JULY 21, 1972, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION AS TO WHETHER THE PROVISIONS OF 10 U.S.C. 1401AE) ARE APPLICABLE TO MEMBERS, INITIALLY RETIRED ON OR AFTER OCTOBER 1, 1967, WHO ARE RECALLED TO ACTIVE DUTY AND UPON RELEASE FROM THAT DUTY BECOME ENTITLED TO RECOMPUTE THEIR RETIRED PAY UNDER THE PROVISIONS OF 10 U.S.C. 1402(A). A COPY OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 465 SETTING FORTH AND DISCUSSING THE QUESTION WAS ATTACHED.

THE QUESTION PRESENTED IS AS FOLLOWS:

ARE THE PROVISIONS OF SECTION 1401AE), TITLE 10, U.S.C. APPLICABLE TO MEMBERS, INITIALLY RETIRED ON OR AFTER 1 OCTOBER 1967, WHO BECOME ENTITLED TO RECOMPUTATION OF RETIRED OR RETAINER PAY UNDER SECTION 1402(A) OF THAT TITLE?

SUBSECTION (A) OF SECTION 1402, TITLE 10, U.S. CODE, AUTHORIZES RECOMPUTATION OF RETIRED OR RETAINER PAY FOR MEMBERS WHO SERVE ON ACTIVE DUTY (OTHER THAN FOR TRAINING), AFTER BECOMING ENTITLED TO RETIRED OR RETAINER PAY. THE SECOND SENTENCE OF FOOTNOTE 1 TO THAT SUBSECTION PROVIDES THAT SUCH A MEMBER WHO HAS BEEN ENTITLED TO BASIC PAY FOR A CONTINUOUS PERIOD OF AT LEAST 2 YEARS AT THE TIME OF HIS RELEASE FROM ACTIVE DUTY, BUT WHO HAS NOT BEEN ENTITLED TO RECEIVE BASIC PAY UNDER THE RATES OF BASIC PAY IN EFFECT UPON THAT RELEASE FROM ACTIVE DUTY, FOR A CONTINUOUS PERIOD OF AT LEAST 2 YEARS, MAY HAVE HIS RETIRED OR RETAINER PAY RECOMPUTED UNDER THE RATES OF BASIC PAY REPLACED BY THOSE IN EFFECT UPON RELEASE FROM ACTIVE DUTY.

THE DISCUSSION IN THE COMMITTEE ACTION STATES THAT UNDER THE LITERAL TERMS OF SUBSECTION 1401AE), THE RETIRED OR RETAINER PAY OF A MEMBER RETIRED ON OR AFTER OCTOBER 1, 1967, WHOSE PAY IS BASED ON THE BASIC PAY RATES PRESCRIBED IN PUBLIC LAW 92-129, 85 STAT. 348, EFFECTIVE OCTOBER 1, 1971, MAY NOT BE LESS THAN IT WOULD HAVE BEEN HAD HE BECOME ENTITLED TO RETIRED OR RETAINER PAY ON SEPTEMBER 30, 1971, THE DAY BEFORE THE EFFECTIVE DATE OF PUBLIC LAW 92-129. AS POINTED OUT IN THE DISCUSSION, SUBSECTION 1401AE) MAKES NO DISTINCTION AS TO WHETHER THE RETIRED OR RETAINER PAY IS BASED ON THOSE BASIC PAY RATES BY VIRTUE OF AN INITIAL RETIREMENT OR WHETHER IT IS BASED ON THOSE RATES THROUGH THE OPERATION OF SECTION 1402(A).

FOR COMPARISON PURPOSES, THE COMMITTEE ACTION POINTS OUT THAT MEMBERS WHO WERE INITIALLY RETIRED ON OR AFTER JUNE 1, 1971, BUT BEFORE OCTOBER 1, 1971, WHOSE RETIRED OR RETAINER PAY WAS COMPUTED UNDER THE BASIC PAY RATES THEN IN EFFECT (EXECUTIVE ORDER 11577, EFFECTIVE JANUARY 1, 1971), BECAME ENTITLED TO A 0.6 PERCENT INCREASE (THIS ADJUSTMENT BECAME EFFECTIVE JUNE 1, 1971, AND REPRESENTS THE PERCENT BY WHICH THE BASE INDEX OF MARCH 1971 EXCEEDED THE CONSUMER PRICE INDEX FOR DECEMBER 1970) UNDER 10 U.S.C. 1401AD). THE ENTITLEMENT TO THIS 0.6 PERCENT INCREASE, HOWEVER, TERMINATED ON OCTOBER 1, 1971, THE EFFECTIVE DATE OF NEW BASIC PAY RATES PRESCRIBED BY PUBLIC LAW 92-129.

IT WAS FURTHER POINTED OUT THAT MEMBERS WHO WERE INITIALLY RETIRED ON OR AFTER OCTOBER 1, 1971, BUT BEFORE JANUARY 1, 1972, WHOSE RETIRED OR RETAINER PAY WAS COMPUTED UNDER BASIC PAY RATES PRESCRIBED BY PUBLIC LAW 92-129, BUT WHOSE BASIC PAY RATES WERE NOT ACTUALLY INCREASED THEREBY, WERE ENTITLED TO RECEIVE THE 0.6 PERCENT PARTIAL CPI INCREASE IN RETIRED OR RETAINER PAY BY VIRTUE OF THE PROVISIONS OF 10 U.S.C. 1401AE).

THE DISCUSSION CONCLUDES BY SAYING THAT SINCE A MEMBER RETIRING ON SEPTEMBER 30, 1971, IS ENTITLED TO RECEIVE A 0.6 PERCENT PARTIAL CPI INCREASE IN SUCH PAY AND TO A FULL INCREASE AT THE NEXT CPI ADJUSTMENT, THE VIEW IS EXPRESSED THAT A MEMBER WHOSE RETIRED OR RETAINER PAY IS RECOMPUTED UNDER SECTION 1402(A) AND BASED ON PUBLIC LAW 92-129 BASIC PAY RATES, WOULD ALSO BE ENTITLED TO THOSE INCREASES. IN SUPPORT OF THE VIEW THAT THE PROVISIONS OF SUBSECTION 1401AE) OF TITLE 10 SHOULD BE APPLICABLE TO SECTION 1402(A) MEMBERS, THE COMMITTEE ACTION CITES 50 COMP. GEN. 232(1970).

SUBSECTION (E) OF SECTION 1401A OF TITLE 10, U.S. CODE, PROVIDES IN PERTINENT PART:

(E) NOTWITHSTANDING SUBSECTIONS (C) AND (D), THE ADJUSTED RETIRED PAY OR RETAINER PAY OF A MEMBER OR FORMER MEMBER OF AN ARMED FORCE RETIRED ON OR AFTER OCTOBER 1, 1967, MAY NOT BE LESS THAN IT WOULD HAVE BEEN HAD HE BECOME ENTITLED TO RETIRED PAY OR RETAINER PAY ***ON THE DAY BEFORE THE EFFECTIVE DATE OF THE RATES OF MONTHLY BASIC PAY ON WHICH HIS RETIRED PAY OR RETAINER PAY IS BASED.

IN 51 COMP. GEN. 384(1971), WHERE WE CITED WITH APPROVAL 50 COMP. GEN. 232(1970), WE TOOK THE POSITION THAT 10 U.S.C. 1401AE) PRESERVES ENTITLEMENT TO A MEMBER, INITIALLY RETIRED ON OR AFTER OCTOBER 1, 1971(BUT NO LATER THAN DECEMBER 31, 1971), WHOSE RETIRED PAY IS COMPUTED BASED ON THE BASIC PAY RATES PRESCRIBED IN PUBLIC LAW 92-129, TO AN AMOUNT NOT LESS THAN HE WOULD HAVE BEEN ENTITLED TO RECEIVE AS ADJUSTED RETIRED PAY HAD HE RETIRED ON SEPTEMBER 30, 1971, THE DAY BEFORE THE EFFECTIVE DATE OF THE THEN NEW BASIC PAY RATES. IT WAS ALSO SAID IN THAT DECISION THAT:

SINCE IT HAS BEEN DETERMINED THAT THE RATES OF BASIC PAY PRESCRIBED IN PUBLIC LAW 92-129 ARE THE APPLICABLE RATES FOR THE PURPOSE OF ADJUSTED RETIRED PAY UNDER 10 U.S.C. 1401A FOR MEMBERS WHO RETIRE ON OR AFTER OCTOBER 1, 1971, AND SINCE MEMBERS COVERED BY 10 U.S.C. 1402(A) ARE ENTITLED TO A PARTIAL CPI ADJUSTMENT UNDER 10 U.S.C. 1401AC) AND (D)(SEE 50 COMP. GEN. 232(1970)), IT WOULD BE INCONSISTENT TO ADOPT A DIFFERENT RULE IN RECOMPUTING RETIRED OR RETAINER PAY FOR SECTION 1402(A) MEMBERS. IT IS OUR VIEW THAT FOR THE PURPOSES OF THE FIRST SENTENCE OF FOOTNOTE 1 THE STARTING DATE IS OCTOBER 1, 1971. FOR PURPOSES OF THE SECOND SENTENCE OF THE FOOTNOTE THE BASIC PAY RATES PRESCRIBED BY PUBLIC LAW 92-129 ARE THE RATES IN EFFECT AT THE TIME OF RELEASE (ON OR AFTER OCTOBER 1, 1971) AND THE RATES PRESCRIBED BY EXECUTIVE ORDER 11577 EFFECTIVE JANUARY 1, 1971, ARE THE RATES REPLACED.

THUS, IN THE CASE OF A MEMBER, INITIALLY RETIRED ON OR AFTER OCTOBER 1, 1967, RECALLED TO ACTIVE DUTY AND RELEASED FROM SUCH DUTY ON OR AFTER OCTOBER 1, 1971, BUT BEFORE JANUARY 1, 1972, WHOSE RETIRED PAY IS RECOMPUTED UNDER THE FORMULA OF SECTION 1402(A) AND THE SECOND SENTENCE OF FOOTNOTE 1, SUCH RETIRED PAY WOULD BE BASED ON THE BASIC PAY RATES WHICH BECAME EFFECTIVE JANUARY 1, 1971(EXECUTIVE ORDER 11577). ADDITIONALLY, SUCH A MEMBER WOULD BE ENTITLED TO HAVE HIS RETIRED PAY INCREASED BY THE 0.6 PERCENT PARTIAL CPI ADJUSTMENT WHICH BECAME EFFECTIVE JUNE 1, 1971(METHOD B COMPUTATION, 50 COMP. GEN. 232(1970)), UPON THAT RELEASE FROM ACTIVE DUTY.

IN LIGHT OF THE HOLDING IN 50 COMP. GEN. 232 AND 51 ID. 384, CITED ABOVE, AND THE INTENDED PURPOSE OF 10 U.S.C. 1401A TO TREAT MEMBERS AS EQUAL AS POSSIBLE IN MATTERS INVOLVING CONSUMER PRICE INDEX ADJUSTMENTS, IT IS OUR VIEW THAT IT WOULD BE INCONSISTENT TO LIMIT APPLICATION OF SUBSECTION 1401AE) "SAVED PAY" PROVISIONS TO INITIAL RETIREMENT FORMULAS ONLY. FOLLOWS THAT THE PROVISIONS OF SUBSECTION 1401AE) ARE APPLICABLE TO MEMBERS RETIRED ON OR AFTER OCTOBER 1, 1967, AND WHO THEREAFTER BECOME ENTITLED TO RECOMPUTATION OF RETIRED OR RETAINER PAY UNDER SECTION 1402(A) OF TITLE 10.

ACCORDINGLY, THE QUESTION IS ANSWERED IN THE AFFIRMATIVE.