B-46946, JANUARY 18, 1945, 24 COMP. GEN. 540

B-46946: Jan 18, 1945

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- MAY BE SETTLED IN THE USUAL MANNER ON VOUCHERS CERTIFIED AND APPROVED UNDER THE ADMINISTRATIVE OFFICE FROM WHICH THE EMPLOYEE IS SEPARATED OR TRANSFERRED. TO BE MADE TO THE DESIGNATED BENEFICIARY OR ESTATE OF A DECEASED EMPLOYEE IS NOT TO BE REGARDED AS SALARY OR COMPENSATION FOR ANY PURPOSE. NO RETIREMENT DEDUCTION IS REQUIRED OR AUTHORIZED TO BE MADE FROM SUCH A PAYMENT. AT WHICH TIME HE IS ENTITLED UNDER THE STATUTE TO RECEIVE A LUMP-SUM PAYMENT FOR ALL ACCUMULATED AND CURRENT ACCRUED LEAVE TO HIS CREDIT ON THE LAST DAY OF ACTIVE DUTY. 1945: I HAVE YOUR LETTER OF JANUARY 11. THE QUESTIONS WILL BE STATED AND ANSWERED IN THE ORDER PRESENTED. (1) ARE CLAIMS UNDER PUBLIC LAW 525 TO BE ADJUDICATED AND PAID BY THE EMPLOYING DEPARTMENTS AND AGENCIES OR BY THE GENERAL ACCOUNTING OFFICE IN (A) CASES INVOLVING DEATH IN SERVICE OR DEATH AFTER SEPARATION BUT BEFORE SETTLEMENT HAS BEEN MADE.

B-46946, JANUARY 18, 1945, 24 COMP. GEN. 540

LEAVES OF ABSENCE - LUMP-SUM PAYMENTS CLAIMS UNDER THE LUMP-SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944, INVOLVING SEPARATION FROM SERVICE AND TRANSFER TO AGENCIES UNDER DIFFERENT LEAVE SYSTEMS--- AS DISTINGUISHED FROM CLAIMS INVOLVING DEATH IN SERVICE OR DEATH AFTER SEPARATION BUT BEFORE SETTLEMENT HAS BEEN MADE--- MAY BE SETTLED IN THE USUAL MANNER ON VOUCHERS CERTIFIED AND APPROVED UNDER THE ADMINISTRATIVE OFFICE FROM WHICH THE EMPLOYEE IS SEPARATED OR TRANSFERRED. UNDER SECTION 2 OF THE ACT OF DECEMBER 21, 1944, PERMITTING A LUMP SUM PAYMENT FOR AN EMPLOYEE'S LEAVE, UPON HIS DEATH, TO HIS BENEFICIARY DESIGNATED UNDER THE APPLICABLE RETIREMENT ACT, AN EMPLOYEE MAY NOT DESIGNATE ONE BENEFICIARY TO RECEIVE THE LEAVE PAYMENT AND ANOTHER TO RECEIVE RETIREMENT DEDUCTIONS. THE LUMP-SUM LEAVE PAYMENT AUTHORIZED BY SECTION 2 OF THE ACT OF DECEMBER 21, 1944, TO BE MADE TO THE DESIGNATED BENEFICIARY OR ESTATE OF A DECEASED EMPLOYEE IS NOT TO BE REGARDED AS SALARY OR COMPENSATION FOR ANY PURPOSE, AND, THEREFORE, NO RETIREMENT DEDUCTION IS REQUIRED OR AUTHORIZED TO BE MADE FROM SUCH A PAYMENT. IN VIEW OF THE MANDATORY NATURE OF THE LUMP-SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944, A RETIRING EMPLOYEE MAY NOT BE GRANTED TERMINAL ANNUAL LEAVE EITHER IMMEDIATELY PRIOR OR SUBSEQUENT TO RETIREMENT, WHETHER THE RETIREMENT BE VOLUNTARY OR INVOLUNTARY; INSTEAD, HE MUST WORK THROUGH THE LAST DAY OF THE MONTH IN WHICH HE RETIRES, AT WHICH TIME HE IS ENTITLED UNDER THE STATUTE TO RECEIVE A LUMP-SUM PAYMENT FOR ALL ACCUMULATED AND CURRENT ACCRUED LEAVE TO HIS CREDIT ON THE LAST DAY OF ACTIVE DUTY. IN VIEW OF THE REQUIREMENTS OF THE ACT OF DECEMBER 21, 1944, RESPECTING LUMP-SUM LEAVE PAYMENTS TO EMPLOYEES TRANSFERRING TO POSITIONS UNDER OTHER LEAVE SYSTEMS, SUCH AN EMPLOYEE MAY NOT BE GRANTED TERMINAL ANNUAL OR VACATION LEAVE IMMEDIATELY PRIOR TO TRANSFER.

COMPTROLLER GENERAL WARREN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, JANUARY 18, 1945:

I HAVE YOUR LETTER OF JANUARY 11, 1945, SUBMITTING FOR DECISION SEVERAL QUESTIONS RELATIVE TO THE APPLICATION OF THE ACT OF DECEMBER 21, 1944, 58 STAT. 845, PUBLIC LAW 525.

THE QUESTIONS WILL BE STATED AND ANSWERED IN THE ORDER PRESENTED.

(1) ARE CLAIMS UNDER PUBLIC LAW 525 TO BE ADJUDICATED AND PAID BY THE EMPLOYING DEPARTMENTS AND AGENCIES OR BY THE GENERAL ACCOUNTING OFFICE IN (A) CASES INVOLVING DEATH IN SERVICE OR DEATH AFTER SEPARATION BUT BEFORE SETTLEMENT HAS BEEN MADE; (B) CASES OF SEPARATION; AND (C) CASES OF TRANSFERS TO AGENCIES UNDER DIFFERENT LEAVE SYSTEMS?

ALL CASES DESCRIBED IN (A) ARE TO BE SETTLED BY THE GENERAL ACCOUNTING OFFICE. SEE ANSWER TO QUESTION (4), DECISION OF JANUARY 13, 1945, B- 46726, 24 COMP. GEN. 522. THE LUMP-SUM PAYMENTS DUE IN CASES DESCRIBED IN (B) AND (C) MAY BE MADE IN THE USUAL WAY ON VOUCHERS CERTIFIED AND APPROVED UNDER THE ADMINISTRATIVE OFFICE FROM WHICH THE EMPLOYEE IS SEPARATED OR TRANSFERRED TO A POSITION IN AN AGENCY UNDER A DIFFERENT LEAVE SYSTEM.

(2) DOES SECTION 2 OF PUBLIC LAW 525 PERMIT AN EMPLOYEE TO DESIGNATE ONE BENEFICIARY TO RECEIVE PAYMENT FOR ACCRUED LEAVE AND ANOTHER BENEFICIARY TO RECEIVE RETIREMENT DEDUCTIONS?

SECTION 2 OF THE ACT OF DECEMBER 21, 1944, PUBLIC LAW 525, FIXES THE ORDER OF PRECEDENCE FOR PAYMENT IN DEATH CASES AS FOLLOWS:

FIRST, TO THE BENEFICIARY OR BENEFICIARIES, IF ANY, LAWFULLY DESIGNATED BY THE EMPLOYED UNDER THE RETIREMENT ACT APPLICABLE TO HIS SERVICE;

SECOND, IF THERE BE NO SUCH DESIGNATED BENEFICIARY, TO THE ESTATE OF SUCH DECEASED EMPLOYEE.

THE LAW DOES NOT PROVIDE FOR THE DESIGNATION OF A SEPARATE BENEFICIARY TO RECEIVE THE LUMP-SUM PAYMENTS FOR LEAVE TO THE CREDIT OF A DECEASED EMPLOYEE, BUT REQUIRES THAT SUCH PAYMENT BE MADE TO THE BENEFICIARY LAWFULLY DESIGNATED UNDER THE APPLICABLE RETIREMENT ACT AND, IF THERE BE NO "SUCH DESIGNATED BENEFICIARY"--- UNDER THE RETIREMENT ACT--- THEN TO THE ESTATE. HENCE, THIS QUESTION IS ANSWERED IN THE NEGATIVE.

(3) SECTIONS 1 AND 3 OF PUBLIC LAW 525 PROVIDE THAT THE LUMP-SUM PAYMENT IN CASE OF SEPARATION OR TRANSFER TO AGENCIES UNDER DIFFERENT LEAVE SYSTEMS SHALL NOT BE REGARDED, EXCEPT FOR PURPOSES OF TAXATION, AS SALARY OR COMPENSATION AND SHALL NOT BE SUBJECT TO RETIREMENT DEDUCTIONS. SIMILAR PROVISION APPEARS IN SECTION 2 WHICH AUTHORIZES LUMP-SUM PAYMENT IN CASE OF DEATH. SHOULD THE OMISSION OF THIS PROVISION IN SECTION 2 BE INTERPRETED TO MEAN THAT RETIREMENT DEDUCTIONS ARE REQUIRED TO BE MADE FROM THE AMOUNT OF COMPENSATION DUE FOR ACCUMULATED AND CURRENT ACCRUED LEAVE IN DEATH CASES?

THE AMOUNT TO BE PAID IN DEATH CASES UNDER SECTION 2 OF THE STATUTE IS NOT SALARY OR COMPENSATION FOR ANY PURPOSE. SEE ANSWER TO QUESTIONS (5) AND (6), DECISION OF JANUARY 13, 1945, B-46726. HENCE, NO RETIREMENT DEDUCTIONS ARE REQUIRED OR AUTHORIZED TO BE MADE FROM THE LUMP-SUM PAYMENT IN DEATH CASES. THIS QUESTION IS ANSWERED IN THE NEGATIVE.

(4) THE ANNUAL LEAVE ACT OF MARCH 14, 1936, PROVIDES THAT ANNUAL LEAVE SHALL BE GRANTED AT SUCH TIMES AS THE HEADS OF THE VARIOUS DEPARTMENTS AND ESTABLISHMENTS MAY PRESCRIBE. SECTION 1 OF PUBLIC LAW 525 PROVIDES THAT WHENEVER AN EMPLOYEE IS SEPARATED FROM THE SERVICE HE SHALL BE PAID COMPENSATION IN A LUMP SUM FOR ALL OF HIS ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE. THE COMMISSION BELIEVES THAT THE ACTS ARE SEPARATE AND DISTINCT AND THAT AN EMPLOYEE MAY APPLY FOR AND BE GRANTED THE AMOUNT OF HIS ACCUMULATED AND CURRENT ACCRUED LEAVE UNDER THE ACT OF MARCH 14, 1936, AND THE REGULATIONS PROMULGATED PURSUANT THERETO PRIOR TO SEPARATION FROM THE SERVICE. IN OTHER WORDS, LUMP SUM PAYMENT UNDER PUBLIC LAW 525 IS NOT REQUIRED UNTIL THE EMPLOYEE "IS SEPARATED.' EMPLOYEES ARE GIVEN SERVICE CREDIT UNDER THE RETIREMENT ACT FOR PERIODS OF LEAVE BUT IN THE CASE OF IMMEDIATE SEPARATION AND A LUMP-SUM PAYMENT NO SERVICE CREDIT WOULD BE GIVEN FOR THE PERIOD COVERED BY THE LEAVE PAYMENT. THE QUESTION THEREFORE BECOMES IMPORTANT IN RETIREMENT CASES AS TO WHETHER AN EMPLOYEE MAY BE GRANTED LEAVE UNDER THE ACT OF MARCH 14, 1936, AND HAVE THE PERIOD COVERED BY SUCH LEAVE COUNTED AS CREDITABLE SERVICE UNDER THE RETIREMENT ACT. FOR EXAMPLE, AN EMPLOYEE WILL REACH AUTOMATIC RETIREMENT AGE ON JUNE 30, 1945, AND ON THAT DATE WILL HAVE COMPLETED 30 YEARS' SERVICE. MAY HE APPLY FOR 90 DAYS' ANNUAL LEAVE UNDER THE ACT OF MARCH 14, 1936, PRIOR TO JUNE 30, OR DOES PUBLIC LAW 525 REQUIRE THAT HE MUST PERFORM ACTIVE DUTY UNTIL JUNE 30 AND RECEIVE A LUMP SUM PAYMENT FOR THE AMOUNT OF HIS ACCUMULATED AND CURRENT ACCRUED LEAVE ON THAT DATE? SIMILARLY, MAY AN EMPLOYEE WHO IS RESIGNING OR TRANSFERRING TO A POSITION UNDER A DIFFERENT LEAVE SYSTEM BE GRANTED ANNUAL LEAVE UNDER THE ACT OF MARCH 14, 1936, OR DOES PUBLIC LAW 525 REQUIRE THAT HE ACCEPT A LUMP-SUM PAYMENT COVERING THE PERIOD OF HIS SERVICE?

IN DECISION OF JANUARY 11, 1945, B-46683, 24 COMP. GEN. 511 (ANSWER TO QUESTION 2), IT WAS HELD---

* * * THAT THE STATUTE IS MANDATORY AND THAT TERMINAL ANNUAL OR VACATION LEAVE MAY NOT BE GRANTED IMMEDIATELY PRIOR TO SEPARATION FROM THE SERVICE IN ANY CASE WHERE IT IS KNOWN IN ADVANCE THAT THE EMPLOYEE IS TO BE SEPARATED FROM THE SERVICE. * * *

PRELIMINARY TO THAT CONCLUSION, SAID DECISION DISCUSSED THE LEGISLATIVE HISTORY OF THE ENACTMENT, SHOWING ITS PRIMARY PURPOSE AND INTENT, AND GAVE CONSIDERATION TO THE PROCEDURE IN FORCE PRIOR TO DECEMBER 21, 1944, PURSUANT TO WHICH EMPLOYEES WERE AUTHORIZED TO COUNT THE PERIOD OF TERMINAL LEAVE FOR RETIREMENT PURPOSES, TO WHICH YOU REFER. SEE, ALSO, THE FOLLOWING ANSWER TO QUESTION (2), DECISION OF JANUARY 13, 1945, B- 46790, 24 COMP. GEN. 526:

AN EMPLOYEE RETIRING FOR AGE--- 70 YEARS--- MAY NOT BE GRANTED TERMINAL ANNUAL LEAVE EITHER IMMEDIATELY PRIOR, OR SUBSEQUENT, TO RETIREMENT. INSTEAD, HE MUST WORK THROUGH THE LAST DAY OF THE MONTH IN WHICH HE REACHED 70 YEARS OF AGE, AT WHICH TIME HE IS ENTITLED TO RECEIVE A LUMP- SUM PAYMENT FOR ALL ACCUMULATED AND CURRENT ACCRUED LEAVE TO HIS CREDIT UPON THE LAST DAY OF ACTIVE DUTY.

THE SAME IS TRUE WITH REGARD TO RETIREMENT FOR ANY REASON, EITHER VOLUNTARY OR INVOLUNTARY. ALSO, FOR THE REASONS STATED IN THE PRIOR DECISIONS OF THIS OFFICE, ABOVE CITED, AN EMPLOYEE MAY NOT BE GRANTED TERMINAL ANNUAL OR VACATION LEAVE IMMEDIATELY PRIOR TO TRANSFER TO A POSITION IN AN AGENCY UNDER ANOTHER LEAVE SYSTEM. ACCORDINGLY, EACH OF THE SUBQUESTIONS INCLUDED IN HIS GENERAL QUESTION IS ANSWERED IN THE NEGATIVE.