B-61385, NOVEMBER 8, 1946, 26 COMP. GEN. 320

B-61385: Nov 8, 1946

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000 PREVIOUSLY PRESCRIBED (22 U.S.C. 21 (C) ON WHICH THE 5 PERCENT RETIREMENT CONTRIBUTION IS COMPUTED. SALARY DEDUCTIONS WHICH WERE CURRENTLY MADE IN ACCORDANCE WITH THE PRIOR LIMITATION ARE NOT REQUIRED TO BE RECOMPUTED EITHER WITH RESPECT TO THOSE RECEIVING ANNUITIES ON THE EFFECTIVE DATE OF THE 1946 ACT OR THOSE WHO MIGHT QUALIFY FOR RETIREMENT WITHIN LESS THAN 5 YEARS THEREAFTER. 1946: I HAVE YOUR LETTER OF OCTOBER 18. AS FOLLOWS: SECTION 1112 OF THE FOREIGN SERVICE ACT OF 1946 CONTAINS THE FOLLOWING PROVISION CONCERNING PERSONS WHO ARE RECEIVING ANNUITIES FROM THE FOREIGN SERVICE RETIREMENT AND DISABILITY FUND: "SEC. 1112. THE SECRETARY SHALL CAUSE ANNUITIES OF ALL PERSONS WHO ARE RECEIVING ANNUITIES FROM THE FOREIGN SERVICE RETIREMENT AND DISABILITY FUND ON THE EFFECTIVE DATE OF THIS ACT TO BE RECOMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 821 (A) AND ANNUITIES PAYABLE TO SUCH PERSONS SHALL.

B-61385, NOVEMBER 8, 1946, 26 COMP. GEN. 320

RETIREMENT - FOREIGN SERVICE - RECOMPUTATION OF ANNUITIES UNDER FOREIGN SERVICE ACT OF 1946 UNDER SECTION 811 (A) OF THE FOREIGN SERVICE ACT OF 1946, INCREASING TO $13,500 THE BASIC PER ANNUM SALARY LIMITATION OF $10,000 PREVIOUSLY PRESCRIBED (22 U.S.C. 21 (C) ON WHICH THE 5 PERCENT RETIREMENT CONTRIBUTION IS COMPUTED, FROM AND AFTER THE EFFECTIVE DATE OF THE ACT, AND SECTION 1112, REQUIRING THAT ANNUITIES BE RECOMPUTED ON THE BASIS OF THE AVERAGE BASIC SALARY NOT IN EXCESS OF $13,500 RECEIVED FOR FIVE YEARS PRECEDING RETIREMENT, SALARY DEDUCTIONS WHICH WERE CURRENTLY MADE IN ACCORDANCE WITH THE PRIOR LIMITATION ARE NOT REQUIRED TO BE RECOMPUTED EITHER WITH RESPECT TO THOSE RECEIVING ANNUITIES ON THE EFFECTIVE DATE OF THE 1946 ACT OR THOSE WHO MIGHT QUALIFY FOR RETIREMENT WITHIN LESS THAN 5 YEARS THEREAFTER.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF STATE, NOVEMBER 8, 1946:

I HAVE YOUR LETTER OF OCTOBER 18, 1946, AS FOLLOWS:

SECTION 1112 OF THE FOREIGN SERVICE ACT OF 1946 CONTAINS THE FOLLOWING PROVISION CONCERNING PERSONS WHO ARE RECEIVING ANNUITIES FROM THE FOREIGN SERVICE RETIREMENT AND DISABILITY FUND:

"SEC. 1112. THE SECRETARY SHALL CAUSE ANNUITIES OF ALL PERSONS WHO ARE RECEIVING ANNUITIES FROM THE FOREIGN SERVICE RETIREMENT AND DISABILITY FUND ON THE EFFECTIVE DATE OF THIS ACT TO BE RECOMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 821 (A) AND ANNUITIES PAYABLE TO SUCH PERSONS SHALL, COMMENCING ON THE EFFECTIVE DATE OF THIS ACT, BE PAID AT THE RATES SO DETERMINED, BUT NO SUCH RECOMPUTATION OR ANY OTHER ACTION TAKEN PURSUANT TO THIS ACT SHALL OPERATE TO REDUCE THE RATE OF THE ANNUITY RECEIVED BY ANY SUCH PERSON UNLESS SUCH PERSON VOLUNTARILY ELECTS TO RECEIVE A REDUCED ANNUITY AS PROVIDED IN SECTION 821 (C).'

SECTION 821 (A) READS AS FOLLOWS:

"THE ANNUITY OF A PARTICIPANT SHALL BE EQUAL TO 2 PERCENTUM OF HIS AVERAGE BASIC SALARY, NOT EXCEEDING $13,500 PER ANNUM, FOR THE FIVE YEARS NEXT PRECEDING THE DATE OF HIS RETIREMENT MULTIPLIED BY THE NUMBER OF YEARS OF SERVICE, NOT EXCEEDING THIRTY YEARS.'

SECTION 821 (A) SUPERSEDES A PROVISION OF 22 U.S.C. 21 (E) WHICH READS AS FOLLOWS:

"THE ANNUITY OF A RETIRED FOREIGN SERVICE OFFICER SHALL BE EQUAL TO 2 PERCENTUM OF HIS AVERAGE BASIC SALARY FOR THE TEN YEARS NEXT PRECEDING THE DATE OF RETIREMENT, MULTIPLIED BY THE NUMBER OF YEARS OF SERVICE NOT EXCEEDING THIRTY YEARS * * *.'

THE EXISTING LIMITATION ON BASIC SALARIES THAT IS USED IN THE COMPUTATION OF THIS AVERAGE SALARY IS CONTAINED IN 22 U.S.C. 21 (C):

"FIVE PERCENTUM OF THE BASIC SALARY OF ALL FOREIGN SERVICE OFFICERS ELIGIBLE FOR RETIREMENT SHALL BE CONTRIBUTED TO THE FOREIGN SERVICE RETIREMENT AND DISABILITY FUND. . . .: PROVIDED, THAT ALL BASIC SALARIES IN EXCESS OF $10,000 PER ANNUM SHALL BE TREATED AS $10,000 . . . .'

AN ANNUITANT WHOSE SALARY WAS IN EXCESS OF $10,000 PER ANNUM BEFORE RETIREMENT IS AT PRESENT RECEIVING AN ANNUITY COMPUTED ON THE BASIS OF HIS SALARY OVER THE LAST 10 YEARS OF SERVICE, A SALARY IN EXCESS OF $10,000 PER ANNUM BEING TREATED AS $10,000. IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 1112 AND 821 (A), HIS ANNUITY WILL BE RECOMPUTED, AND A SALARY IN EXCESS OF $13,500 PER ANNUM WILL ENTER INTO COMPUTATION OF THE AVERAGE AS IF IT HAD BEEN AT THE RATE OF $13,500 PER ANNUM.

IN CONNECTION WITH THE RECOMPUTATION AND POSSIBLE INCREASE IN AN ANNUITY, SECTION 1112 DOES NOT MAKE MENTION OF ANY REQUIREMENT TO MAKE CONTRIBUTIONS TO THE FUND ON THAT PORTION OF A SALARY THAT LIES BETWEEN $10,000 AND $13,500 ON WHICH THE FIVE PERCENT CONTRIBUTION HAS NOT BEEN MADE PREVIOUSLY AND WHICH MAY ENTER INTO THE COMPUTATION OF THE AVERAGE SALARY. HOWEVER, THE QUESTION HAS BEEN RAISED AS TO WHETHER OR NOT SUCH ADDITIONAL CONTRIBUTIONS MAY BE REQUIRED BY CONSTRUCTION. IN A CASE IN WHICH AN ANNUITANT'S SALARY WAS IN EXCESS OF $10,000 PER ANNUM BEFORE RETIREMENT, I SHOULD APPRECIATE YOUR INFORMING ME AS TO WHETHER OR NOT YOU CONSIDER IT NECESSARY THAT HE MAKE THE FIVE PERCENT CONTRIBUTION TO THE FOREIGN SERVICE RETIREMENT AND DISABILITY FUND ON THAT PORTION OF HIS SALARY THAT WAS IN EXCESS OF $10,000 PER ANNUM BUT NOT IN EXCESS OF $13,500 PER ANNUM BEFORE RECEIVING AN ANNUITY COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 821 (A) QUOTED ABOVE.

THE PROVISION QUOTED IN YOUR SUBMISSION FROM 22 U.S.C. 21 (C) IS RESTATED AS SECTION 811A OF THE FOREIGN SERVICE ACT OF 1946, PUBLIC LAW 724, APPROVED AUGUST 13, 1946, 60 STAT. 1020, AS FOLLOWS:

FIVE PERCENTUM OF THE BASIC SALARY OF ALL PARTICIPANTS SHALL BE CONTRIBUTED TO THE FUND, AND THE SECRETARY OF THE TREASURY IS DIRECTED TO CAUSE SUCH DEDUCTIONS TO BE MADE AND THE SUMS TRANSFERRED ON THE BOOKS OF THE TREASURY DEPARTMENT TO THE CREDIT OF THE FUND FOR THE PAYMENT OF ANNUITIES, CASH BENEFITS, REFUNDS, AND ALLOWANCES.

SECTION 1141 OF THE FOREIGN SERVICE ACT OF 1946, 60 STAT. 1040, FURTHER PROVIDES:

THE EFFECTIVE DATE OF THIS ACT SHALL BE THREE MONTHS FOLLOWING THE DATE OF ITS ENACTMENT.

WHILE SECTION 1112 OF THE FOREIGN SERVICE ACT OF 1946, 60 STAT. 1035, DIRECTS THE RECOMPUTATION, IN ACCORDANCE WITH THE PROVISIONS OF SAID STATUTE, OF ANNUITIES OF ALL PERSONS WHO ARE RECEIVING ANNUITIES ON THE EFFECTIVE DATE OF THE ACT, THERE IS NOTHING IN THAT STATUTE REQUIRING ANY ADDITIONAL CONTRIBUTIONS BY REASON OF SUCH RECOMPUTATION, AND AS SECTION 811A, WHICH REQUIRES THE 5 PERCENT CONTRIBUTION TO THE RETIREMENT FUND TO BE BASED UPON BASIC SALARIES UP TO $13,500, DOES NOT BECOME EFFECTIVE UNTIL THE EFFECTIVE DATE OF THE ACT, I FIND NO AUTHORITY FOR REQUIRING ANY RECOMPUTATION OF DEDUCTIONS FROM SALARIES CURRENTLY MADE IN ACCORDANCE WITH THE PRIOR STATUTE, 22 U.S.C. 21 (C), EITHER WITH RESPECT TO THOSE IN RECEIPT OF THE ANNUITIES ON THE EFFECTIVE DATE OF THE ACT OR THOSE WHO MIGHT QUALIFY FOR RETIREMENT WITHIN LESS THAN 5 YEARS AFTER THE EFFECTIVE DATE OF SAID ACT.

ACCORDINGLY, THE QUESTION POSED IN THE CLOSING PARAGRAPH OF YOUR LETTER IS ANSWERED IN THE NEGATIVE.