B-61647, NOVEMBER 25, 1946, 26 COMP. GEN. 362

B-61647: Nov 25, 1946

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IS ABSOLUTE AND MAY NOT BE DIVESTED EXCEPT BY A REVOCATION OF THE DESIGNATION. CAN BE CONSIDERED AS THE DULY DESIGNATED BENEFICIARY FOR LEAVE PAYMENT PURPOSES IS NOT CLEAR FROM A READING OF THE TWO LAWS INVOLVED. YOUR DECISION THEREON IS RESPECTFULLY REQUESTED. PERMITS AN EMPLOYEE TO DESIGNATE ONE BENEFICIARY TO RECEIVE PAYMENT FOR ACCRUED ANNUAL LEAVE AND ANOTHER BENEFICIARY TO RECEIVE RETIREMENT DEDUCTIONS WAS ANSWERED AS FOLLOWS: 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. THIS QUESTION IS ANSWERED IN THE NEGATIVE. IT IS CLEAR THAT ONCE AN EMPLOYEE LAWFULLY DESIGNATES A BENEFICIARY UNDER THE APPLICABLE RETIREMENT ACT.

B-61647, NOVEMBER 25, 1946, 26 COMP. GEN. 362

LEAVES OF ABSENCE - ANNUAL - LUMP-SUM PAYMENTS - RIGHT OF BENEFICIARY UNDER RETIREMENT ACT TO PAYMENT WHEN AN EMPLOYEE LAWFULLY DESIGNATES A BENEFICIARY UNDER THE APPLICABLE RETIREMENT ACT, THE RIGHT OF SUCH DESIGNATED BENEFICIARY, UPON THE DEATH OF THE EMPLOYEE, TO THE LUMP SUM DUE FOR ACCRUED ANNUAL LEAVE UNDER SECTION 2 OF THE ACT OF DECEMBER 21, 1944, IS ABSOLUTE AND MAY NOT BE DIVESTED EXCEPT BY A REVOCATION OF THE DESIGNATION, AND, THEREFORE, ANY QUALIFYING WORDS USED IN THE DESIGNATION NAMING ONE PERSON AS BENEFICIARY "FOR RETIREMENT ONLY," AND ANOTHER PERSON TO RECEIVE "ACCRUED ANNUAL LEAVE ONLY," MAY NOT BE GIVEN EFFECT SO AS TO DEFEAT THE DESIGNATED BENEFICIARY'S RIGHT TO PAYMENT FOR SUCH ACCRUED LEAVE. 24 COMP. GEN. 540, AMPLIFIED.

ACTING COMPTROLLER GENERAL YATES TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, NOVEMBER 25, 1946:

THERE HAS BEEN CONSIDERED YOUR LETTER OF OCTOBER 25, 1946, AS FOLLOWS:

SECTION 2 OF THE ACT OF DECEMBER 21, 1944 ( PUBLIC, NO. 525, 78TH CONGRESS) STIPULATES THAT UPON THE DEATH OF A CIVILIAN OFFICER OR EMPLOYEE, PAYMENT COVERING HIS ACCUMULATED AND ACCRUED ANNUAL LEAVE SHALL BE MADE.

"FIRST, TO THE BENEFICIARY OR BENEFICIARIES, IF ANY, LAWFULLY DESIGNATED BY THE EMPLOYEE UNDER THE RETIREMENT ACT APPLICABLE TO HIS SERVICE.'

IN ORDER THAT THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE MAY PROPERLY ADJUDICATE THESE CLAIMS, THE CIVIL SERVICE COMMISSION UPON REQUEST CERTIFIES IN EACH INDIVIDUAL CASE THE NAME OF THE BENEFICIARY (OR BENEFICIARIES) OR THE FACT THAT NO VALID DESIGNATION HAS BEEN FILED.

THE AUTHORIZATION IN THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, AS AMENDED, FOR DESIGNATING BENEFICIARIES READS ( SEC. 12 (F) ):

"EACH EMPLOYEE OR ANNUITANT TO WHOM THIS ACT APPLIES MAY, UNDER REGULATIONS PRESCRIBED BY THE CIVIL SERVICE COMMISSION, DESIGNATE A BENEFICIARY OR BENEFICIARIES TO WHOM SHALL BE PAID, UPON THE DEATH OF THE EMPLOYEE OR ANNUITANT ANY SUM REMAINING TO HIS CREDIT (INCLUDING ANY ACCRUED ANNUITY) UNDER THE PROVISIONS OF THIS ACT.'

THE COMMISSION HAS NOW RECEIVED A DESIGNATION IN WHICH THE EMPLOYEE NAMES HIS WIFE AS BENEFICIARY TO RECEIVE "ACCRUED ANNUAL LEAVE ONLY" AND HIS SON TO BE PAID "RETIREMENT ONLY.' THIS CONSTITUTES A VALID DESIGNATION OF THE SON TO RECEIVE THE AMOUNT DUE FROM THE RETIREMENT FUND UPON THE EMPLOYEE'S DEATH. THE QUESTION OF WHETHER THE WIDOW, WHO RECEIVES NOTHING UNDER THE RETIREMENT ACT, CAN BE CONSIDERED AS THE DULY DESIGNATED BENEFICIARY FOR LEAVE PAYMENT PURPOSES IS NOT CLEAR FROM A READING OF THE TWO LAWS INVOLVED.

HOWEVER, SINCE THIS LATTER POINT APPEARS TO BE PRIMARILY FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE, YOUR DECISION THEREON IS RESPECTFULLY REQUESTED.

IN DECISION OF JANUARY 18, 1945, B-46946, 24 COMP. GEN. 540, TO YOU, THE QUESTION OF WHETHER SECTION 2 OF THE ACT OF DECEMBER 21, 1944, 58 STAT. 845, PERMITS AN EMPLOYEE TO DESIGNATE ONE BENEFICIARY TO RECEIVE PAYMENT FOR ACCRUED ANNUAL LEAVE AND ANOTHER BENEFICIARY TO RECEIVE RETIREMENT DEDUCTIONS WAS ANSWERED AS FOLLOWS:

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.

UNDER THE RULE LAID DOWN IN THAT DECISION, IT IS CLEAR THAT ONCE AN EMPLOYEE LAWFULLY DESIGNATES A BENEFICIARY UNDER THE APPLICABLE RETIREMENT ACT, THE RIGHT OF THE DESIGNATED BENEFICIARY TO THE AMOUNT DUE FOR ACCRUED ANNUAL LEAVE IS ABSOLUTE; AND HE MAY NOT BE DIVESTED OF THAT RIGHT, EXCEPT, OF COURSE, BY A REVOCATION OF THE DESIGNATION. IT NECESSARILY FOLLOWS, THEREFORE, THAT ANY QUALIFYING WORDS USED BY THE EMPLOYEE IN THE DESIGNATION, SUCH AS "FOR RETIREMENT ONLY," OR THE EMPLOYEE'S UNAUTHORIZED DESIGNATION OF A THIRD PARTY TO RECEIVE "ACCRUED ANNUAL LEAVE ONLY," LEGALLY MAY NOT BE GIVEN EFFECT SO AS TO DEFEAT THE RIGHT OF THE PROPERLY DESIGNATED BENEFICIARY UNDER THE RETIREMENT ACT TO PAYMENT OF THE SUM DUE FOR ACCRUED LEAVE.