B-701, JULY 13, 1939, 19 COMP. GEN. 52

B-701: Jul 13, 1939

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THAT A FORMER EMPLOYEE WAS ENTITLED TO RETIREMENT UNDER THE LIGHTHOUSE RETIREMENT ACT OF JUNE 20. BECAUSE OF WHICH HE WAS NOT ENTITLED TO ANY BENEFITS UNDER THE CIVIL SERVICE RETIREMENT ACT OF MAY 22. NO OBJECTION WILL BE MADE TO REFUND OF THE DEDUCTIONS TO HIS CREDIT IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND PROVIDED NO INTEREST IS ALLOWED ON THE AMOUNT SO DEDUCTED OR WITHHELD. AS FOLLOWS: THERE IS ATTACHED CORRESPONDENCE RECEIVED FROM THE AUDIT DIVISION. THE DETERMINATION AS TO WHICH EMPLOYEES ARE SUBJECT TO THE ACT OF JUNE 20. IS WITHIN THE JURISDICTION OF THE ADMINISTERING OFFICE. WHEN AN EMPLOYEE IS VIEWED BY THAT DEPARTMENT AS WITHIN THE OPERATION OF SUCH ACT. HE IS AUTOMATICALLY DISQUALIFIED FOR BENEFITS UNDER THE ACT OF MAY 29.

B-701, JULY 13, 1939, 19 COMP. GEN. 52

RETIREMENT - CIVIL SERVICE RETIREMENT ACT DEDUCTIONS - REFUNDS - EMPLOYEE RETIRED UNDER A DIFFERENT RETIREMENT ACT WHERE THE ADMINISTRATIVE DEPARTMENT CONCERNED HAS DETERMINED, IN ACCORDANCE WITH AN OPINION OF THE ATTORNEY GENERAL OF THE UNITED STATES WITH RESPECT THERETO, THAT A FORMER EMPLOYEE WAS ENTITLED TO RETIREMENT UNDER THE LIGHTHOUSE RETIREMENT ACT OF JUNE 20, 1918, 40 STAT. 608, BECAUSE OF WHICH HE WAS NOT ENTITLED TO ANY BENEFITS UNDER THE CIVIL SERVICE RETIREMENT ACT OF MAY 22, 1920, 41 STAT. 614, AS AMENDED, WHICH SPECIFICALLY EXCEPTED EMPLOYEES WHO CAME WITHIN THE PROVISIONS OF SECTION 6 OF THE LIGHTHOUSE RETIREMENT ACT, NO OBJECTION WILL BE MADE TO REFUND OF THE DEDUCTIONS TO HIS CREDIT IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND PROVIDED NO INTEREST IS ALLOWED ON THE AMOUNT SO DEDUCTED OR WITHHELD.

COMPTROLLER GENERAL BROWN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, JULY 13, 1939:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF MARCH 10, 1939 (R 429779), AS FOLLOWS:

THERE IS ATTACHED CORRESPONDENCE RECEIVED FROM THE AUDIT DIVISION, GENERAL ACCOUNTING OFFICE, WITH RESPECT TO CLAIM FOR REFUND OF RETIREMENT DEDUCTIONS FILED BY MR. WILLIAM CODY, A FORMER EMPLOYEE OF THE LIGHTHOUSE SERVICE, DEPARTMENT OF COMMERCE.

THE LIGHTHOUSE RETIREMENT ACT OF JUNE 20, 1918, INCLUDES WITHIN ITS OPERATION ALL OFFICERS AND EMPLOYEES ENGAGED IN THE FIELD SERVICE OR ON VESSELS OF THE LIGHTHOUSE SERVICE, EXCEPT PERSONS CONTINUOUSLY EMPLOYED IN DISTRICT OFFICES OR SHOPS. SECTION 3 OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930 SPECIFICALLY EXCLUDES FROM ITS PURVIEW SUCH EMPLOYEES OF THE LIGHTHOUSE SERVICE AS COME WITHIN THE ACT OF JUNE 20, 1918. THE DETERMINATION AS TO WHICH EMPLOYEES ARE SUBJECT TO THE ACT OF JUNE 20, 1918, IS WITHIN THE JURISDICTION OF THE ADMINISTERING OFFICE, THE DEPARTMENT OF COMMERCE, AND WHEN AN EMPLOYEE IS VIEWED BY THAT DEPARTMENT AS WITHIN THE OPERATION OF SUCH ACT, HE IS AUTOMATICALLY DISQUALIFIED FOR BENEFITS UNDER THE ACT OF MAY 29, 1930.

THE POSITION OF FOREMAN OF LABORERS HELD BY MR. CODY AT DATE OF SEPARATION, AUGUST 31, 1938, WOULD PROPERLY HAVE PLACED HIM UNDER THE ACT OF MAY 29, 1930, AND HE HELD VARIOUS POSITIONS IN THE DISTRICT OFFICE AT STATEN ISLAND FROM AUGUST 8, 1900. HOWEVER, FROM OCTOBER 18, 1897, TO AUGUST 7, 1900, HE SERVED AS A FIREMAN ON LIGHTHOUSE VESSELS, AND THE SOLICITOR OF THE COMMERCE DEPARTMENT CONSTRUED THE RENDITION OF THIS FORMER SERVICE AS PLACING MR. CODY IN THE CATEGORY OF ONE NOT CONTINUOUSLY EMPLOYED IN THE DISTRICT OFFICE, THEREBY MEETING THE TERMS OF THE ACT OF JUNE 20, 1918, FOR INCLUSION THEREUNDER. CONSEQUENTLY, HE WAS NOT AT ANY TIME SUBJECT TO THE CIVIL SERVICE RETIREMENT ACT, AND THE DEDUCTIONS TAKEN FROM HIS SALARY SINCE AUGUST 1, 1920, WERE WITHHELD IN ERROR.

THE DEPARTMENT OF COMMERCE SUBMITTED THE QUESTION INVOLVED IN THIS CASE TO THE ATTORNEY GENERAL, WHICH OFFICIAL REQUESTED THE COMMENTS OF THIS COMMISSION ON THE QUESTIONS RAISED. A COPY OF THE COMMISSION'S REPLY IS ENCLOSED, FROM WHICH IT WILL BE NOTED THAT WHILE THIS OFFICE DID NOT CONCUR IN THE DEPARTMENT'S INTERPRETATION IT RECOGNIZED THAT THE DEPARTMENT'S HOLDING WOULD BE BINDING IN THIS CLASS OF CASES. THE ATTORNEY GENERAL IN OPINION DATED NOVEMBER 3, 1938, AFFIRMED THE VIEW OF THE DEPARTMENT, AND THE AUDIT DIVISION OF YOUR OFFICE DOES NOT QUESTION THE CORRECTNESS OF THIS OPINION.

WITH REGARD TO THE QUESTION RAISED BY THE AUDIT DIVISION OF CONSENT TO SUCH DEDUCTIONS, IT MAY BE OBSERVED THAT SECTION 10 OF THE ACT OF MAY 29, 1930, PROVIDES ONLY THAT EVERY EMPLOYEE COMING WITHIN THE PROVISIONS OF THE ACT SHALL BE DEEMED TO CONSENT AND AGREE TO DEDUCTIONS FROM HIS SALARY, PAY, OR COMPENSATION. AS MR. CODY WAS NOT AT ANY TIME SUBJECT TO THE ACT OF MAY 29, 1930 THIS QUESTION DOES NOT APPEAR TO BE FOR CONSIDERATION.

THE COMMISSION FEELS THAT AS THIS FORMER EMPLOYEE WAS SEPARATED FROM THE SERVICE BEFORE BECOMING ELIGIBLE FOR RETIREMENT ON ANNUITY THE ACT OF MAY 29, 1930, HE IS, UNDER THE TERMS OF SECTION 12 THEREOF, ENTITLED TO A REFUND OF THE DEDUCTIONS TO HIS CREDIT IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND. FURTHERMORE, AS THE RETIREMENT LAW MAKES NO PROVISION FOR WITHHOLDING DEDUCTIONS FROM EMPLOYEES NOT SUBJECT THERETO, IT IS QUESTIONABLE WHETHER ANY REQUIREMENT OF SUCH LAW WOULD HAVE TO BE MET TO MERELY CORRECT THE ERROR AND RETURN SUCH DEDUCTIONS TO MR. CODY. CERTAINLY HE SHOULD NOT BE REQUIRED TO PROSECUTE A SUIT IN A FEDERAL COURT TO SECURE PAYMENT OF MONEY WHICH THERE IS NO AUTHORITY OR REASON TO FURTHER HOLD IN THE RETIREMENT FUND.

THE COMMISSION IS OF THE OPINION THAT THE CLAIM FOR REFUND SHOULD, IF THE HOLDING OF THE COMMERCE DEPARTMENT OPINION OF THE ATTORNEY GENERAL IS TO BE FOLLOWED, BE CERTIFIED FOR PAYMENT AND RESPECTFULLY REQUESTS YOUR DECISION IN THIS REGARD WITH RETURN OF CORRESPONDENCE FROM THE AUDIT DIVISION.

IT MAY BE STATED THAT IN A SIMILAR CASE OF JOHN T. VAN IDERSTINE, THE AUDIT DIVISION RAISED NO QUESTION AS TO THE CORRECTNESS OF REFUND OF RETIREMENT DEDUCTIONS, CHECK FOR WHICH WAS ISSUED UNDER DATE OF MAY 31, 1938, ALTHOUGH THE FILE CONTAINED AN OPINION OF THE SOLICITOR OF THE COMMERCE DEPARTMENT TO THE SAME EFFECT AS THAT IN THE INSTANT CASE.

IN DECISION OF JUNE 19, 1939, B-4290, TO THE SECRETARY OF COMMERCE, IT WAS HELD:

* * * WHETHER AN EMPLOYEE IS ENTITLED TO RETIREMENT UNDER ANY PARTICULAR RETIREMENT ACT IS FOR DETERMINATION PRIMARILY BY THE HEAD OF THE ESTABLISHMENT CHARGED WITH THE DUTY OF ADMINISTERING THE APPLICABLE RETIREMENT ACT AND SUCH OFFICER MAY, FOR HIS GUIDANCE, SUBMIT TO THE ATTORNEY GENERAL ANY LEGAL QUESTION REGARDING HIS RIGHT TO RETIRE ANY PARTICULAR EMPLOYEE UNDER HIS JURISDICTION--- THE QUESTION BEING PRIMARILY ONE OF ADMINISTRATION RATHER THAN ONE REQUIRING THE CONSIDERATION OF THE GENERAL ACCOUNTING OFFICE UNDER ITS STATUTORY DUTIES WITH REFERENCE TO THE DETERMINATION OF THE PROPER USES OF PUBLIC FUNDS. * * *

IN THE INSTANT CASE THE ADMINISTRATIVE DEPARTMENT CONCERNED HAS DETERMINED, IN ACCORDANCE WITH AN OPINION OF THE ATTORNEY GENERAL OF THE UNITED STATES WITH RESPECT THERETO, THAT THE FORMER EMPLOYEE WAS ENTITLED TO RETIREMENT UNDER THE LIGHTHOUSE RETIREMENT ACT OF JUNE 20, 1918, 40 STAT. 608. ON THE BASIS OF THIS ADMINISTRATIVE DETERMINATION, THE EMPLOYEE WAS NOT ENTITLED TO ANY BENEFITS UNDER THE RETIREMENT ACT OF MAY 22, 1920, 41 STAT. 614, AS AMENDED, WHICH SPECIFICALLY EXCEPTED THEREFROM EMPLOYEES WHO CAME WITHIN THE PROVISIONS OF SECTION 6 OF THE ACT OF JUNE 20, 1918, SUPRA. ACCEPTING THAT VIEW OF THE MATTER, THE DEDUCTIONS FROM THE SALARY OF WILLIAM CODY MAY BE REGARDED AS HAVING BEEN MADE IN ERROR. ACCORDINGLY, THIS OFFICE IS NOT REQUIRED TO OBJECT TO REFUND OF THE AMOUNT DEDUCTED PROVIDED NO INTEREST IS ALLOWED ON THE AMOUNT SO DEDUCTED OR WITHHELD.