B-61109, APR. 3, 1963

B-61109: Apr 3, 1963

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RETIRED: FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 4. IN WHICH YOU HAVE PRESENTED CLAIM FOR INCREASED DISABILITY RETIRED PAY. YOU HAVE ADVISED THAT YOU ARE IN RECEIPT OF DISABILITY RETIRED PAY AS A RETIRED LIEUTENANT. COMPUTED AT THE RATE OF 75 PERCENT OF THE ACTIVE DUTY PAY YOU WERE RECEIVING AT THE TIME OF YOUR . YOU HAVE REFERRED TO THE CASE OF FAGAN. HAVE STATED THAT UNDER YOUR INTERPRETATION OF OUR DECISION YOU ARE ELIGIBLE TO RECEIVE RETIRED PAY AT THE RATE OF 70 PERCENT OF THE RETIRED PAY AS PRESCRIBED BY THE CAREER INCENTIVE ACT OF 1955. THAT DECISION MERELY HELD THAT YOU WERE AN "OFFICER" WITHIN THE PURVIEW OF THE FOURTH PARAGRAPH OF SECTION 15 OF THE PAY READJUSTMENT ACT OF 1942 AND THAT YOU WERE ENTITLED TO HAVE YOUR RETIRED PAY COMPUTED ON THE BASIS OF 75 PERCENT OF YOUR ACTIVE DUTY PAY AT TIME OF RETIREMENT.

B-61109, APR. 3, 1963

TO LIEUTENANT WALTER ZUR-LINDEN, USN, RETIRED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 4, 1963, IN WHICH YOU HAVE PRESENTED CLAIM FOR INCREASED DISABILITY RETIRED PAY, EFFECTIVE JANUARY 1, 1963, BELIEVED TO BE DUE YOU AS A RETIRED OFFICER OF THE NAVY, PURSUANT TO THE PROVISIONS OF THE CAREER INCENTIVE ACT OF 1955, APPROVED MARCH 31, 1955, CH. 20, 69 STAT. 18.

YOU HAVE ADVISED THAT YOU ARE IN RECEIPT OF DISABILITY RETIRED PAY AS A RETIRED LIEUTENANT, COMPUTED AT THE RATE OF 75 PERCENT OF THE ACTIVE DUTY PAY YOU WERE RECEIVING AT THE TIME OF YOUR ,RE-RETIREMENT" ON MARCH 16, 1945, PURSUANT TO THE PAY READJUSTMENT ACT OF 1942, APPROVED JUNE 16, 1942, CH. 413, 56 STAT. 367, 37 U.S.C. 115, AND THE SAVED PAY PROVISIONS OF SUBSEQUENT PAY INCREASE ACTS (CAREER COMPENSATION ACT OF 1949, CH. 681, 63 STAT. 802, AS AMENDED, AND CAREER INCENTIVE ACT OF 1955). ALSO, YOU HAVE REFERRED TO THE CASE OF FAGAN, ET AL. (LEWIS L. GOVER, PLAINTIFF NO. 2) V. UNITED STATES, 149 CT.CL. 716, AND OUR DECISION OF APRIL 23, 1959, B -138719, REPORTED IN 38 COMP. GEN. 715, AND HAVE STATED THAT UNDER YOUR INTERPRETATION OF OUR DECISION YOU ARE ELIGIBLE TO RECEIVE RETIRED PAY AT THE RATE OF 70 PERCENT OF THE RETIRED PAY AS PRESCRIBED BY THE CAREER INCENTIVE ACT OF 1955. IN OTHER WORDS, YOU FEEL THAT YOU SHOULD BE PRESENTLY RECEIVING MONTHLY DISABILITY RETIRED PAY AT THE RATE OF $381.98 RATHER THAN $361.53.

WE FIND NOTHING IN THE DECISION RENDERED IN YOUR FAVOR BY THE COURT OF CLAIMS ON JULY 18, 1962 (WALTER ZUR-LINDEN V. UNITED STATES, CT.CL.NO. 207 -58), TO SERVE AS AUTHORITY FOR PAYMENT OF THE INCREASED RETIRED PAY FROM JANUARY 1, 1963, AS CLAIMED. THAT DECISION MERELY HELD THAT YOU WERE AN "OFFICER" WITHIN THE PURVIEW OF THE FOURTH PARAGRAPH OF SECTION 15 OF THE PAY READJUSTMENT ACT OF 1942 AND THAT YOU WERE ENTITLED TO HAVE YOUR RETIRED PAY COMPUTED ON THE BASIS OF 75 PERCENT OF YOUR ACTIVE DUTY PAY AT TIME OF RETIREMENT. YOUR ELIGIBILITY TO INCREASED RETIRED PAY PURSUANT TO THE CAREER INCENTIVE ACT OF 1955 MUST BE DETERMINED BY THE PERTINENT PROVISIONS OF SECTION 411 OF THE CAREER COMPENSATION ACT OF 1949.

UNDER THAT SECTION PERSONS RETIRED ON ACCOUNT OF PHYSICAL DISABILITY PRIOR TO THE EFFECTIVE DATE OF THAT ACT WERE GRANTED THE CHOICE OF TWO OPTIONS: (A) TO QUALIFY UNDER SECTION 402 (D) AND THUS HAVE RETIRED PAY COMPUTED BY EITHER (1) THE YEARS OF SERVICE METHOD (BASIC PAY MULTIPLIED BY YEARS OF ACTIVE SERVICE MULTIPLIED BY 2 1/2 PERCENT), OR (2) THE PERCENTAGE OF DISABILITY METHOD (BASIC PAY MULTIPLIED BY THE PERCENTAGE OF DISABILITY); OR (B) THE HIGHER OF THE TWO METHODS OF COMPUTATION UNDER SECTION 511 OF THE ACT CONSISTING OF (A) THE RETIRED PAY AUTHORIZED BY THE PROVISIONS OF LAW IN EFFECT ON SEPTEMBER 30, 1949, AND (B) A YEARS OF SERVICE METHOD SIMILAR TO THAT IN SECTION 402 (D). IN THE ABSENCE OF AN ELECTION UNDER SECTION 411, PERSONS THERETOFORE RETIRED FOR PHYSICAL DISABILITY WERE PAID ON THE BASIS OF THE RATES OF PAY IN EFFECT ON SEPTEMBER 30, 1949, PURSUANT TO THE PROVISIONS OF SECTION 519 OF THE 1949 ACT. DISABILITY RETIRED PAY COMPUTED UNDER THE LAWS IN EFFECT ON SEPTEMBER 30, 1949, AS WELL AS RETIRED PAY BASED ON PERCENTAGE OF DISABILITY AFTER THAT DATE, WAS NOT INCLUDABLE IN A PERSON'S GROSS INCOME FOR TAX PURPOSES.

IT IS APPARENT FROM THE FILE THAT PRIOR TO JULY 1, 1954, YOU TOOK NO ACTION TOWARDS MAKING AN ELECTION UNDER SECTION 411 OF THE CAREER COMPENSATION ACT OF 1949. ON THAT DATE YOU EXECUTED A FORM, COPY ENCLOSED, WHICH YOU RECEIVED FROM THE NAVY. ON THAT FORM YOU INDICATED YOUR DESIRE TO RECEIVE YOUR RETIRED PAY UNDER "METHOD C" AT THE RATE OF $299.06 PER MONTH BASED ON LAWS IN EFFECT PRIOR TO OCTOBER 1, 1949. YOU DID NOT ELECT "METHOD B," $309.23 UNDER A YEARS OF SERVICE FORMULA, OR "METHOD A" BASED ON PERCENTAGE OF DISABILITY. INASMUCH AS YOU DECIDED TO CONTINUE RECEIVING TAX-EXEMPT RETIRED PAY WHICH WAS BEING PAID TO YOU UNDER THE PROVISIONS OF THE PAY READJUSTMENT ACT OF 1942 RATHER THAN ELECTING TO RECEIVE EITHER OF THE RATES SPECIFIED IN "METHOD A" (PERCENTAGE OF DISABILITY FORMULA) OR "METHOD B" (YEARS OF SERVICE FORMULA), IT IS CLEAR THAT YOUR ACTION DID NOT CONSTITUTE AN ELECTION UNDER EITHER OPTIONS (A) OR (B) OF SECTION 411. YOUR ACCEPTANCE OF THE AMOUNT OF $1,407.39 PURSUANT TO THE JUDGMENT OF THE COURT OF CLAIMS, WHICH WAS BASED ON THE RETIRED PAY TO WHICH YOU WERE ENTITLED ON SEPTEMBER 30, 1949, PLUS STATUTORY INCREASES THEREON AND WHICH REPRESENTED THE DIFFERENCE IN RETIRED PAY DUE YOU FOR THE PERIOD MAY 1, 1952, TO JULY 18, 1962, COMPUTED ON THAT BASIS,WAS TANTAMOUNT TO A REAFFIRMATION IN 1962 OF YOUR PRIOR ELECTION MADE ON JULY 1, 1954, TO REMAIN ON SAVED PAY RATHER THAN TO COME WITHIN THE PROVISIONS OF SECTION 411.

SINCE YOU FAILED TO MAKE AN ELECTION UNDER THE PROVISIONS OF SECTION 411 TO RECEIVE RETIRED PAY UNDER SECTION 511 OF THE 1949 ACT WITHIN THE 5-YEAR PRESCRIBED PERIOD AFTER HAVING BEEN FURNISHED FULL INFORMATION BY THE NAVY DEPARTMENT, YOU WERE NOT ELIGIBLE TO RECEIVE RETIRED PAY UNDER THE PROVISIONS OF THAT SECTION, BUT REMAINED ON "SAVED PAY" UNDER THE PROVISIONS OF SECTION 519 OF THE CAREER COMPENSATION ACT. HENCE, UPON ENACTMENT OF THE CAREER INCENTIVE ACT OF 1955 AND THEREAFTER THE NAVY WAS REQUIRED TO PAY YOU RETIRED PAY ON THE BASIS OF THE "SAVED PAY" RATE RATHER THAN ON THE RATE APPLICABLE TO A PERSON WHO PRIOR THERETO HAD MADE AN ELECTION UNDER SECTION 411 OF THE CAREER COMPENSATION ACT OF 1949.

THE GOVER CASE IS NOT FOR APPLICATION IN YOUR CASE, SINCE THE HOLDING THEREIN WAS TO THE EFFECT THAT A MEMBER COVERED BY THE PROVISIONS OF SECTION 511 HAD A RIGHT TO RECOMPUTATION OF HIS RETIRED PAY BETWEEN THE TWO METHODS THERE PRESCRIBED AND THAT THIS RIGHT CONTINUED TO EXIST UNTIL CUT OFF BY THE PAY INCREASE ACT OF MAY 20, 1958, 72 STAT. 122.

OUR DECISION OF APRIL 23, 1959, CITED BY YOU, B-138719, INVOLVED A QUESTION CONCERNING THE DISABILITY RETIRED PAY OF AN OFFICER WHO RETIRED SUBSEQUENT TO THE EFFECTIVE DATE OF THE CAREER COMPENSATION ACT OF 1949 UNDER PROVISIONS OF LAW DIFFERENT FROM THOSE UNDER WHICH YOU WERE RETIRED. INASMUCH AS A DIFFERENT FACTUAL SITUATION WAS PRESENTED THEREIN AND AN INTERPRETATION WAS MADE OF LAWS OTHER THAN THOSE HERE APPLICABLE, THAT DECISION PROVIDES NO BASIS FOR ALLOWANCE OF YOUR CLAIM.