B-5238, AUGUST 22, 1939, 19 COMP. GEN. 246

B-5238: Aug 22, 1939

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ARE MADE UP OF TWO PARTS. PART ONE OF WHICH IS THE PART PAID OR GUARANTEED BY THE GOVERNMENT AND COMPUTED UPON THE LENGTH OF SERVICE REGARDLESS OF THE AMOUNT TO THE CREDIT OF THE EMPLOYEE IN THE RETIREMENT FUND. PART TWO OF WHICH IS THE PART PURCHASED BY THE EMPLOYEE'S DEPOSITS IN THE RETIREMENT FUND COMPUTED WITHOUT REGARD TO LENGTH OF SERVICE. TO A SUBSEQUENT DATE WHEN THEY WERE BROUGHT WITHIN THE PURVIEW OF THE ACT. INCLUDING THAT FOR WHICH NO DEPOSITS ARE MADE. OR SO MUCH OF PART TWO OF THE ANNUITY AS CAN BE PURCHASED BY SUCH DEPOSITS AS ARE PROPERLY TO THE CREDIT OF THE EMPLOYEE IN THE RETIREMENT FUND. 1939: I HAVE YOUR LETTER OF JULY 26. SUCH INTEREST SHALL NOT BE INCLUDED FOR ANY PERIOD DURING WHICH THE EMPLOYEE WAS SEPARATED FROM THE SERVICE.

B-5238, AUGUST 22, 1939, 19 COMP. GEN. 246

RETIREMENT - CIVILIAN - ANNUITIES - COMPUTATION ANNUITIES UNDER THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED, ARE MADE UP OF TWO PARTS, PART ONE OF WHICH IS THE PART PAID OR GUARANTEED BY THE GOVERNMENT AND COMPUTED UPON THE LENGTH OF SERVICE REGARDLESS OF THE AMOUNT TO THE CREDIT OF THE EMPLOYEE IN THE RETIREMENT FUND, AND PART TWO OF WHICH IS THE PART PURCHASED BY THE EMPLOYEE'S DEPOSITS IN THE RETIREMENT FUND COMPUTED WITHOUT REGARD TO LENGTH OF SERVICE, AND THE MERE FAILURE OF EMPLOYEES TO DEPOSIT INTO THE RETIREMENT FUND THE FULL AMOUNT NEEDED TO COVER THE PERIOD FROM AUGUST 1, 1920--- THE EFFECTIVE DATE OF THE ORIGINAL RETIREMENT ACT FOR SALARY DEDUCTION RETIREMENT FUND PURPOSES- -- TO A SUBSEQUENT DATE WHEN THEY WERE BROUGHT WITHIN THE PURVIEW OF THE ACT, DOES NOT DEPRIVE THEM OF EITHER PART ONE OF THE ANNUITY COMPUTED ON ALL SERVICE, INCLUDING THAT FOR WHICH NO DEPOSITS ARE MADE, OR SO MUCH OF PART TWO OF THE ANNUITY AS CAN BE PURCHASED BY SUCH DEPOSITS AS ARE PROPERLY TO THE CREDIT OF THE EMPLOYEE IN THE RETIREMENT FUND.

COMPTROLLER GENERAL BROWN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, AUGUST 22, 1939:

I HAVE YOUR LETTER OF JULY 26, 1939, AS FOLLOWS:

SECTION 9 OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930 READS AS FOLLOWS:

"BEGINNING WITH THE EFFECTIVE DATE OF THIS ACT, ALL EMPLOYEES WHO MAY BE BROUGHT THEN OR THEREAFTER WITHIN THE PURVIEW OF THE ACT BY LEGISLATIVE ENACTMENT, OR BY APPOINTMENT, OR THROUGH CLASSIFICATION, OR BY TRANSFER, OR REINSTATEMENT, OR EXECUTIVE ORDER, OR OTHERWISE, SHALL BE REQUIRED TO DEPOSIT WITH THE TREASURER OF THE UNITED STATES TO THE CREDIT OF THE "CIVIL-SERVICE RETIREMENT AND DISABILITY FUND" A SUM EQUAL TO 2 1/2 PERCENTUM OF THE EMPLOYEE'S BASIC SALARY, PAY, OR COMPENSATION RECEIVED FOR SERVICES RENDERED AFTER JULY 31, 1920, AND PRIOR TO JULY 1, 1926, AND ALSO 3 1/2 PERCENTUM OF THE BASIC SALARY, PAY, OR COMPENSATION FOR SERVICES RENDERED FROM AND AFTER JULY 1, 1926, TOGETHER WITH INTEREST COMPUTED AT THE RATE OF 4 PERCENTUM PER ANNUM COMPOUNDED ON JUNE 30 OF EACH FISCAL YEAR, BUT SUCH INTEREST SHALL NOT BE INCLUDED FOR ANY PERIOD DURING WHICH THE EMPLOYEE WAS SEPARATED FROM THE SERVICE. ALL EMPLOYEES WHO MAY HEREAFTER BE BROUGHT WITHIN THE PURVIEW OF THIS ACT MAY ELECT TO MAKE SUCH DEPOSITS IN INSTALLMENTS DURING THE CONTINUANCE OF THEIR SERVICE IN SUCH AMOUNTS AND UNDER SUCH CONDITIONS AS MAY BE DETERMINED IN EACH INSTANCE BY THE COMMISSIONER OF PENSIONS (NOW CIVIL SERVICE COMMISSION). THE AMOUNT SO DEPOSITED, LESS $1 FOR EACH MONTH, OR MAJOR FRACTION THEREOF, OF SERVICE AFTER THE EFFECTIVE DATE OF THIS ACT, SHALL BE CREDITED TO THE EMPLOYEE'S INDIVIDUAL ACCOUNT, AS PROVIDED IN SECTION 12 (A) HEREOF. UPON MAKING SUCH DEPOSIT THE EMPLOYEE SHALL BE ENTITLED TO CREDIT FOR THE PERIOD OR PERIODS OF SERVICE INVOLVED: PROVIDED, THAT FAILURE TO MAKE SUCH DEPOSIT SHALL NOT DEPRIVE THE EMPLOYEE OF CREDIT FOR ANY PAST SERVICE RENDERED PRIOR TO AUGUST 1, 1920, TO WHICH HE OR SHE WOULD OTHERWISE BE ENTITLED.'

SECTION 9 OF THE ACT OF JULY 3, 1926, WAS IDENTICAL WITH THE ABOVE, WITH THE EXCEPTION OF THE INSTALLMENT PAYMENT AND TONTINE PROVISIONS. INTERPRETING THE PROVISIONS OF THIS SECTION THE ASSISTANT SECRETARY OF THE INTERIOR UNDER DATE OF SEPTEMBER 8, 1926 (22 P. AND R.D. 198) AFTER QUOTING THE CORRESPONDING SECTION OF THE ORIGINAL ACT OF MAY 22, 1920, WHICH PERMITTED THE PURCHASE OF A PORTION OF SUCH SERVICE, HELD:

"THE SECTION OF THE ORIGINAL ACT NEXT ABOVE QUOTED WAS CONSTRUED TO BE MERELY PERMISSIVE AND NOT COMPULSORY. IT PROVIDED A CONDITION UPON WHICH CREDIT COULD BE OBTAINED AT THE ELECTION OF THE EMPLOYEE FOR PAST SERVICE. IF HE WANTED CREDIT FOR THE SERVICE, HE WAS REQUIRED TO DEPOSIT AN AMOUNT EQUIVALENT TO THE DEDUCTIONS WITH INTEREST WHICH WOULD HAVE ACCRUED IF HE HAD BEEN SUBJECT TO THE OPERATION OF THE ACT DURING THE PERIOD INVOLVED, BUT IF HE DID NOT SEEK CREDIT FOR SUCH PAST SERVICE WHEN HE WAS NOT SUBJECT TO THE ACT, HE NEED NOT MAKE THE PAYMENT, AND HIS FAILURE TO DO SO DID NOT DEPRIVE HIM OF CREDIT FOR ANY SERVICE RENDERED PRIOR TO AUGUST 1, 1920, WHEN DEDUCTIONS UNDER THE ACT FIRST BECAME OPERATIVE. HE WAS NOT LIMITED AS TO TIME OF PAYMENT IN ORDER TO OBTAIN CREDIT FOR SUCH SERVICE RENDERED AFTER AUGUST 1, 1920, BUT PAYMENT HAD TO BE MADE BEFORE CREDIT WOULD BE ALLOWED. 21 P. AND R.D. 77, 249.

"IT IS FURTHER HELD THAT AN EMPLOYEE COULD CLAIM CREDIT FOR ANY PORTION OF SUCH PAST SERVICE BY PAYING FOR SUCH PORTION AND NEED NOT PAY FOR THE WHOLE THEREOF UNLESS HE DESIRED CREDIT FOR THE WHOLE PERIOD.

"THE RECENT ACT OF JULY 3, 1926, AMENDED THE PRIOR LAW IN MANY PARTICULARS, INCLUDING SECTION 10 ABOVE QUOTED. SOME OF THE AMENDATORY BILLS CONSIDERED PROVIDED COMPULSORY PAYMENT BY ALL EMPLOYEES TO COVER ANY SERVICE RENDERED AFTER JULY 3, 1920. PRIOR TO ENACTMENT THE COMPULSORY FEATURE WAS ELIMINATED, SO THAT THE NEW LAW IS THE SAME AS THE OLD IN THIS RESPECT. THERE IS, HOWEVER, A MATERIAL AMENDMENT OF SECTION 10 OF THE ORIGINAL ACT, TO WIT: THE OMISSION FROM SECTION 9 OF THE NEW ACT OF THE EXPRESSION "OR PART THEREOF" USED IN SECTION 10 OF THE PRIOR LAW, HAVING REFERENCE TO THE PERIOD OF PAST SERVICE.

"BY THE OMISSION OF THAT PROVISION IT MUST BE ASSUMED THAT CONGRESS INTENDED TO CHANGE THE LAW IN THAT RESPECT SO AS TO PERMIT CREDIT FOR THE PAST SERVICE AFTER JULY 31, 1920, AS A UNIT OF TIME UPON PROPER PAYMENT, BUT NOT TO ACCORD THE PRIVILEGE OF PAYMENT FOR ONLY A PORTION THEREOF SUCH AS MIGHT SUIT THE CONVENIENCE OF THE EMPLOYEE, AS HAD BEEN PERMITTED UNDER THE OLD LAW.

"THE BODY OF THE SECTION AS AMENDED POSITIVELY REQUIRES PAYMENT OF PROPER DEDUCTIONS WITH INTEREST COVERING ALL PAST SERVICE AFTER JULY 31, 1920, AND ALLOWS CREDIT FOR THE FULL TIME UPON MAKING SUCH PAYMENT, BUT THIS ABSOLUTE FORM OF REQUIREMENT IS MODIFIED BY THE PROVISO WHICH RECOGNIZES A POSSIBLE FAILURE TO MAKE PAYMENT COVERING THE TIME AFTER JULY 31, 1920, AND SPECIFIES THAT SUCH FAILURE SHALL NOT BAR THE RIGHT TO CREDIT FOR ANY PAST SERVICE RENDERED PRIOR TO AUGUST 1, 1920, TO WHICH THE EMPLOYEE MAY BE OTHERWISE ENTITLED. THIS IS THE ONLY CONDITION PROVIDED FOR RECEIVING CREDIT FOR PAST SERVICE OR ANY PORTION THEREOF. THERE SEEMS TO BE NO JUSTIFICATION UNDER THE LAW, AS THUS AMENDED, FOR ALLOWING A BENEFICIARY TO SPLIT THE PERIOD OF SERVICE AND ELECT TO PAY FOR ONLY A PORTION OF IT.'

IT IS A WELL-ESTABLISHED RULE OF LAW THAT EVERY STATUTE MUST BE CONSTRUED WITH REFERENCE TO THE OBJECT INTENDED TO BE ACCOMPLISHED. IN ORDER TO ASCERTAIN THIS OBJECT IT IS PROPER TO CONSIDER THE OCCASION AND NECESSITY OF ITS ENACTMENT, THE DEFECTS OR EVILS IN THE FORMER LAW AND THE REMEDY PROVIDED BY THE NEW ONE; AND THE STATUTE SHOULD BE GIVEN THAT CONSTRUCTION WHICH IS BEST CALCULATED TO ADVANCE ITS OBJECT, BY SUPPRESSING THE MISCHIEF AND SECURING THE BENEFITS INTENDED. IT MUST BE ASSUMED THAT CONGRESS RECOGNIZED THE DEFECTS AND EVILS IN THE ACT OF MAY 22, 1920, AND THEREFORE THE ELIMINATION OF THE WORDS "OR PART THEREOF" IN THE ACT OF JULY 3, 1926, MUST BE GIVEN THE EFFECT NATURALLY PRESUMED FROM SUCH OMISSION.

THE CONSTRUCTION PLACED UPON A STATUTE BY THE OFFICERS WHOSE DUTY IT IS TO EXECUTE IT IS ENTITLED TO GREAT CONSIDERATION, ESPECIALLY IF SUCH CONSTRUCTION HAS BEEN MADE BY THE HIGHEST OFFICERS IN THE EXECUTIVE DEPARTMENT OF THE GOVERNMENT, OR HAS BEEN OBSERVED AND ACTED UPON FOR MANY YEARS, AND SUCH CONSTRUCTION SHOULD NOT BE DISREGARDED OR OVERTURNED UNLESS IT IS CLEARLY ERRONEOUS. FURTHERMORE, WHERE A STATUTE THAT HAS BEEN CONSTRUED BY THE COURTS IS REENACTED IN THE SAME OR SUBSTANTIALLY THE SAME TERMS, THE LEGISLATURE IS PRESUMED TO HAVE BEEN FAMILIAR WITH ITS CONSTRUCTION, AND TO HAVE ADOPTED IT AS A PART OF THE LAW UNLESS IT EXPRESSLY PROVIDES FOR A DIFFERENT CONSTRUCTION. SO WHERE WORDS OR PHRASES EMPLOYED IN A NEW STATUTE HAVE BEEN CONSTRUED BY THE COURTS TO HAVE BEEN USED IN A PARTICULAR SENSE IN A PREVIOUS STATUTE ON THE SAME SUBJECT OR ONE ANALOGOUS TO IT, THEY ARE PRESUMED, IN THE ABSENCE OF A CLEARLY EXPRESSED INTENT TO THE CONTRARY, TO BE USED IN THE SAME SENSE IN THE NEW STATUTE AS IN THE PREVIOUS STATUTE. THESE RULES ARE ALSO EXTENDED TO STATUTES AND PARTS OF STATUTES THAT HAVE BEEN REENACTED AFTER HAVING RECEIVED A PRACTICAL CONSTRUCTION BY THE LEGISLATIVE OR EXECUTIVE DEPARTMENTS OF THE GOVERNMENT.

THIS HOLDING IS SUPPORTED BY THE ACTING COMPTROLLER GENERAL'S DECISION OF SEPTEMBER 15, 1936 (16 COMP. GEN. 245) WHICH, WHILE REFERRING PARTICULARLY TO REDEPOSITS OF AMOUNTS PREVIOUSLY REFUNDED, WOULD APPEAR EQUALLY APPLICABLE TO DEPOSITS COVERING SERVICE WHEN THE EMPLOYEES HAD NO RETIREMENT STATUS. THIS DECISION READS IN PART AS FOLLOWS:

"IT IS TO BE NOTED, HOWEVER, THAT SAID RULE TO THE EFFECT THAT THE ENTIRE ACCREDITED SERVICE IS TO BE CONSIDERED AS AN ENTIRETY FOR THE PURPOSE OF ADJUDICATING CLAIMS FOR REFUND OF RETIREMENT DEDUCTIONS, THE CHARACTER OF THE LAST SEPARATION ONLY TO BE CONSIDERED IN DETERMINING WHETHER THE TONTINE IS TO BE WITHHELD OR REFUNDED, IS MADE APPLICABLE ONLY IN THOSE CASES WHERE THERE WAS NO WITHDRAWAL FROM THE RETIREMENT FUND FOLLOWING THE FORMER SEPARATION OR, IF THERE WAS SUCH WITHDRAWAL, WHERE REDEPOSIT OF THE FULL AMOUNT WITHDRAWN WAS MADE AFTER REENTRY INTO THE SERVICE. IN SUCH CASES IT IS CLEAR THAT THE ENTIRE SERVICE, THAT IS, THE AGGREGATE OF THE PERIODS OF SERVICE, MUST BE CONSIDERED AS AN ENTIRETY FOR PURPOSES OF RETIREMENT, AND THERE APPEARS NOTHING IN THE LAW TO WARRANT THE APPLICATION OF A DIFFERENT RULE IN ADJUDICATING CLAIMS FOR REFUND OF DEDUCTIONS.'

THE ACT OF JUNE 23, 1938, AMENDED SECTION 9 OF THE ACT OF MAY 29, 1930, BY ALLOWING CREDIT FOR OPTIONAL SERVICE WITHOUT DEPOSIT, BUT STIPULATED THAT UNLESS THE EMPLOYEE ELECTED TO ELIMINATE SUCH SERVICE ENTIRELY FROM CREDIT, FAILURE TO MAKE DEPOSIT WOULD OPERATE TO REDUCE HIS ANNUITY BY THE AMOUNT SUCH DEPOSIT WOULD PURCHASE IF MADE. AS THIS AMENDMENT MAKES NO CHANGE IN THE REQUIREMENT FOR DEPOSIT TO COVER SERVICE RENDERED AFTER JULY 31, 1920, BUT MERELY AFFECTS THE PENALTY IMPOSED FOR FAILURE TO MAKE SUCH DEPOSIT BY DENYING ONLY THE ANNUITY PURCHASABLE BY THE DEPOSIT INSTEAD OF REFUSING ANY CREDIT FOR THE SERVICE, IT WOULD APPEAR THAT THE INTERIOR DEPARTMENT RULING HEREINBEFORE QUOTED IS NOT ALTERED THEREBY. IF THIS BE TRUE, THEREFORE, UNLESS AN EMPLOYEE ELECTS TO ELIMINATE THE OPTIONAL SERVICE ENTIRELY FROM CREDIT, THE FAILURE TO MAKE THE TOTAL DEPOSIT COVERING SAME WILL HAVE THE EFFECT OF REDUCING THE ANNUITY OTHERWISE ALLOWABLE BY THE AMOUNT SUCH TOTAL DEPOSIT WOULD HAVE PURCHASED.

THIS SUBMISSION TO YOUR OFFICE INVOLVES THE CASE OF AN EMPLOYEE WHO HAS DEPOSITED IN THE RETIREMENT FUND APPROXIMATELY TWO-THIRDS OF THE AMOUNT REQUIRED TO COVER SERVICE FROM AUGUST 1, 1920, TO DATE HE SECURED A RETIREMENT STATUS, THEREBY LEAVING ABOUT ONE-THIRD OF SUCH SUM UNPAID, AND HAS NOW BEEN SEPARATED UNDER CONDITIONS AUTHORIZING THE ALLOWANCE OF ANNUITY UNDER THE ACT OF MAY 29, 1930. HE REQUESTS EITHER THE RETURN OF THE PARTIAL PAYMENTS ALREADY MADE WITH RESULTANT ELECTION OF REDUCED ANNUITY UNDER THE ACT OF JUNE 23, 1938, OR THE USE OF SUCH PARTIAL DEPOSIT IN DETERMINING HIS ANNUITY RATE. THE COMMISSION HAS HELD IN SUCH CASES THAT (1) THE INCOMPLETE DEPOSIT MAY NOT BE CONSIDERED IN THE ADJUDICATION OF THE ANNUITY CLAIM AND (2) NONE OF THE REQUIREMENTS OF SECTION 12 OF THE ACT OF MAY 29, 1930 (ABSOLUTE SEPARATION FROM SERVICE PRIOR TO BECOMING ELIGIBLE FOR RETIREMENT ON ANNUITY OR TRANSFER TO A POSITION NOT WITHIN THE PURVIEW OF THE ACT) FOR TITLE TO ANY REFUND HAVING BEEN MET, THE PARTIAL DEPOSIT MUST BE HELD IN THE RETIREMENT FUND FOR PAYMENT UPON THE EMPLOYEE'S DEATH TO HIS BENEFICIARY OR TO HIS ESTATE. HOWEVER, IN VIEW OF THE APPARENT INTENT OF CONGRESS BY THE AMENDMENT OF SECTION 9 OF THE RETIREMENT ACT ON JUNE 23, 1938, TO GIVE CREDIT FOR SERVICE IN CERTAIN CASES WITHOUT PURCHASE BY THE EMPLOYEE, IT IS BELIEVED EQUITABLE THAT THE EMPLOYEE SHOULD RECEIVE SOME BENEFIT THEREFROM EITHER IN THE FORM OF ANNUITY OR REFUND.

IN THIS CONNECTION TWO QUESTIONS ARE PRESENTED FOR YOUR CONSIDERATION:

(1) CAN THE AMOUNT OF PARTIAL PAYMENTS MADE IN THIS AND SIMILAR CASES BE USED IN COMPUTING THE ANNUITY RATE?

(2) IF YOUR ANSWER TO THE ABOVE IS IN THE NEGATIVE, CAN PARTIAL PAYMENTS BE REFUNDED TO THE EMPLOYEES UPON APPLICATION, AND IF SO, MAY THIS BE DONE DURING EMPLOYMENT OR AT DATE OF ETIREMENT?

YOUR DECISION ON THESE POINTS IS RESPECTFULLY REQUESTED.

THE ACT OF JUNE 23, 1938, 52 STAT. 943, PROVIDES AS FOLLOWS:

THAT SECTION 9 OF THE CIVIL SERVICE RETIREMENT ACT, APPROVED MAY 29, 1930, IS AMENDED BY STRIKING OUT THAT PORTION OF THE SECTION FOLLOWING THE PHRASE "AS PROVIDED IN SECTION 12 (A) HEREOF," AND INSERTING IN LIEU THEREOF THE FOLLOWING: "PROVIDED, THAT FAILURE TO MAKE SUCH DEPOSIT SHALL NOT DEPRIVE THE EMPLOYEE OF CREDIT FOR ANY PAST SERVICE RENDERED PRIOR TO AUGUST 1, 1920, TO WHICH HE OR SHE WOULD OTHERWISE BE ENTITLED: AND PROVIDED FURTHER, THAT, NOTWITHSTANDING THE FAILURE OF AN EMPLOYEE TO MAKE SUCH DEPOSIT, CREDIT SHALL BE ALLOWED FOR THE SERVICE RENDERED, BUT THE ANNUITY OF SUCH EMPLOYEE SHALL BE REDUCED BY THE AMOUNT SUCH DEPOSIT WOULD PURCHASE IF MADE, UNLESS THE EMPLOYEE SHALL ELECT TO ELIMINATE SUCH SERVICE ENTIRELY FROM CREDIT UNDER THIS ACT.'

SECTION 4 OF THE ACT OF MAY 29, 1930, 46 STAT. 471, PROVIDES, IN PART, AS FOLLOWS:

THE ANNUITY OF AN EMPLOYEE RETIRED UNDER THE PROVISIONS OF THE PRECEDING SECTIONS OF THIS ACT SHALL BE A LIFE ANNUITY, TERMINABLE UPON THE DEATH OF THE ANNUITANT AND SHALL BE COMPOSED OF (1) A SUM EQUAL TO $30 FOR EACH YEAR OF SERVICE NOT EXCEEDING THIRTY: PROVIDED, THAT SUCH PORTION OF THE ANNUITY SHALL NOT EXCEED THREE-FOURTHS OF THE AVERAGE ANNUAL BASIC SALARY, PAY, OR COMPENSATION RECEIVED BY THE EMPLOYEE DURING ANY FIVE CONSECUTIVE YEARS OF ALLOWABLE SERVICE AT THE OPTION OF THE EMPLOYEE; AND (2) THE AMOUNT OF ANNUITY PURCHASABLE WITH THE SUM TO THE CREDIT OF THE EMPLOYEE'S INDIVIDUAL ACCOUNT AS PROVIDED IN SECTION 12 (A) HEREOF, TOGETHER WITH INTEREST AT 4 PERCENTUM PER ANNUM COMPOUNDED ON JUNE 30 OF EACH YEAR, ACCORDING TO THE EXPERIENCE OF THE CIVIL-SERVICE RETIREMENT AND DISABILITY FUND AS MAY FROM TIME TO TIME BE SET FORTH IN TABLES OF ANNUITY VALUES BY THE BOARD OF ACTUARIES: * * * THE ABOVE-QUOTED SECTION AS AMENDED BY SECTION 2 OF THE ACT OF AUGUST 4, 1939, PUBLIC NO. 263, EFFECTIVE JANUARY 1, 1940, 53 STAT. 1200, BUT THE AMENDMENT DOES NOT APPEAR TO AFFECT IN ANY MANNER THE QUESTION HERE PRESENTED.

THE RETIREMENT ANNUITY CONSISTS OF TWO SEPARATE AND DISTINCT PARTS, WHICH MAY BE REFERRED TO FOR THE PURPOSE OF THIS DECISION AS (1) THE PART PAID OR GUARANTEED BY THE GOVERNMENT AT THE RATE OF $30 PER YEAR NOT TO EXCEED 30 YEARS' OF SERVICE WITH CERTAIN LIMITATIONS, AND (2) THE PART PURCHASED BY THE EMPLOYEES' DEPOSITS IN THE RETIREMENT FUND. PART (1) IS BASED ON LENGTH OF SERVICE AND PART (2) IS BASED ON THE AMOUNT TO THE EMPLOYEES' CREDIT IN THE RETIREMENT FUND. IT IS UNDERSTOOD FROM YOUR LETTER THAT IN COMPUTING BOTH PARTS OF THE ANNUITY UNDER LAWS IN FORCE PRIOR TO THE ACT OF JUNE 23, 1938 SUPRA, CREDIT FOR PAST SERVICE SUBSEQUENT TO JULY 31, 1920, FOR WHICH CURRENT DEDUCTIONS WERE NOT MADE WAS CONDITIONED UPON THE EMPLOYEES ACTUALLY MAKING THE DEPOSITS COVERING ALL OF THE PAST SERVICE AND THAT THE ADMINISTRATIVE RULE HAS BEEN THAT THE ENTIRE PERIOD OF SUCH PAST SERVICE WAS CONSIDERED AS ONE UNIT THIS ALLOWING NO CREDIT FOR ANY PORTION OF SUCH PAST SERVICE IN COMPUTING EITHER PART OF THE ANNUITY, UNLESS DEPOSITS HAD BEEN MADE COVERING THE ENTIRE PERIOD.

WHILE THERE MAY HAVE BEEN JUSTIFICATION FOR THE CONCLUSION REACHED IN THE CITED OPINION OF THE THEN ASSISTANT SECRETARY OF THE INTERIOR--- OPINION DATED SEPTEMBER 8, 1926 (22 P. AND R.D. 198/--- TO THE EFFECT THAT AN INCOMPLETE DEPOSIT INVOLVING A PERIOD DURING WHICH NO RETIREMENT DEDUCTIONS WERE MADE MAY NOT BE CONSIDERED IN THE ADJUDICATION OF THE ANNUITY CLAIM, THAT CONCLUSION WOULD NOT NOW APPEAR TO BE CONTROLLING IN VIEW OF THE APPARENT INTENT OF CONGRESS AS SHOWN BY THE ACT OF JUNE 23, 1938, SUPRA--- ENACTED SUBSEQUENT TO THE OPINION REFERRED TO--- TO GIVE CREDIT FOR SERVICE IN CERTAIN CASES WITHOUT PURCHASE BY THE EMPLOYEE, THERE BEING FOR NOTING IN THIS CONNECTION HOUSE OF REPRESENTATIVES REPORT NO. 2707, ACCOMPANYING BILL S. 3548, WHICH LATER BECAME THE CITED ACT OF JUNE 23, 1938, THE PERTINENT PART OF WHICH REPORT IS AS FOLLOWS:

* * * THE PURPOSE OF THIS BILL IS TO PERMIT SUCH EMPLOYEES TO RECEIVE THE BASIC GOVERNMENT RETIREMENT ALLOWANCE IF THEY DESIRE TO DO SO WITHOUT THE REQUIREMENT THAT THEY PAY AN ADDITIONAL DEPOSIT OUT OF THEIR OWN POCKETS FOR THE ADDITIONAL ALLOWANCE. MANY OF THEM ARE NOT FINANCIALLY ABLE TO PAY THE DEPOSIT, AND UNLESS THEY DO SO UNDER PRESENT LAW THEY LOSE THE BASIC GOVERNMENT ALLOWANCE OF $30 PER YEAR FROM AUGUST 1, 1920, TO THE TIME THEY ENTERED THE RETIREMENT SYSTEM.

UNDER THE SECOND PROVISO TO THE ACT OF JUNE 23, 1938, THE FAILURE OF AN EMPLOYEE, WHO OTHERWISE MEETS THE REQUIREMENT OF THE STATUTE AS TO AGE, ETC., TO MAKE DEPOSITS FOR PAST SERVICE FOR WHICH CURRENT DEDUCTIONS WERE NOT MADE DOES NOT APPEAR TO DEPRIVE THE EMPLOYEE OF LONGEVITY CREDIT FOR THE SERVICE IN COMPUTING PART (1) OF THE ANNUITY, BUT, OF COURSE, THE EMPLOYEE WOULD NOT BE ENTITLED TO HAVE PART (2) OF THE ANNUITY COMPUTED ON THE BASIS OF ANY AMOUNT HE HAS NOT DEPOSITED IN THE RETIREMENT FUND. HENCE, UNDER THE EXISTING LAW, PART (1) OF THE ANNUITY IS COMPUTED UPON THE LENGTH OF SERVICE REGARDLESS OF THE AMOUNT TO THE CREDIT OF THE EMPLOYEE IN THE RETIREMENT FUND REGARDLESS OF LENGTH OF SERVICE.

AS THE LAW AUTHORIZES INSTALLMENT PAYMENTS FOR PAST SERVICE DURING WHICH CURRENT DEDUCTIONS WERE NOT MADE WHICH ARE AUTHORIZED TO BE CREDITED TO THE EMPLOYEE IN THE RETIREMENT FUND AS MADE, AND AS PART (2) OF THE ANNUITY IS NOW AUTHORIZED TO BE COMPUTED ON THE ACTUAL AMOUNT TO THE CREDIT OF THE EMPLOYEE IN THE RETIREMENT FUND REGARDLESS OF LENGTH OF SERVICE--- PROVIDED, OF COURSE, THAT THE EMPLOYEE HAS THE REQUIRED SERVICE TO BECOME ELIGIBLE FOR AN ANNUITY--- IT IS CONCLUDED THAT ALL DEPOSITS PROPERLY TO THE CREDIT OF AN EMPLOYEE IN THE RETIREMENT FUND LEGALLY MAY BE CONSIDERED IN COMPUTING PART (2) OF THE ANNUITY NOTWITHSTANDING THAT SUCH DEPOSITS MAY NOT COVER ALL OF THE INVOLVED PAST SERVICE. ACCORDINGLY, QUESTION (1) IS ANSWERED IN THE AFFIRMATIVE, MAKING IT UNNECESSARY TO ANSWER QUESTION (2).