B-78841, AUGUST 9, 1948, 28 COMP. GEN. 87

B-78841: Aug 9, 1948

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RETIREMENT - CIVILIAN - SALARY DEDUCTIONS UPON REEMPLOYMENT SINCE A CIVIL SERVICE RETIREMENT ANNUITY IS FIXED ON A YEARLY BASIS. WHICH IS REQUIRED BY SECTION 2 (B) OF THE ACT OF FEBRUARY 28. IS NOT TO BE TREATED AS A COLLECTION FOR DEPOSIT TO MISCELLANEOUS RECEIPTS. NOR IS THE AMOUNT THEREOF REQUIRED TO BE DEPOSITED TO THE CREDIT OF THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND. 1948: I HAVE YOUR LETTER OF JULY 27. WE HAVE PREPARED THE PAYROLL CONCERNED BY DIVIDING THE YEARLY ANNUITY RECEIVED BY 2080 HOURS IN ORDER TO ARRIVE AT AN HOURLY RATE TO BE DEDUCTED FROM THE EMPLOYEE'S CLASSIFIED SALARY RATE. WE HAVE BEEN INFORMALLY ADVISED BY AUDITORS FROM YOUR OFFICE. THAT THIS EMPLOYEE IS PROBABLY BEING UNDERPAID AND ALSO THAT THIS QUESTION HAS NEVER YET BEEN PRESENTED TO YOUR OFFICE.

B-78841, AUGUST 9, 1948, 28 COMP. GEN. 87

RETIREMENT - CIVILIAN - SALARY DEDUCTIONS UPON REEMPLOYMENT SINCE A CIVIL SERVICE RETIREMENT ANNUITY IS FIXED ON A YEARLY BASIS, THE PORTION OF THE ANNUITY ALLOCABLE TO A PERIOD OF REEMPLOYMENT OF AN ANNUITANT, WHICH IS REQUIRED BY SECTION 2 (B) OF THE ACT OF FEBRUARY 28, 1948, TO BE DEDUCTED FROM THE SALARY OF THE ANNUITANT, WOULD BE 1/360 OF THE ANNUITY FOR EACH DAY OF ACTUAL SERVICE, AND, FOR SERVICE LESS THAN A FULL DAY, 1/8 OF SUCH DAILY RATE FOR EACH HOUR WORKED. THE COMPENSATION DEDUCTION EQUAL TO THE CIVIL SERVICE RETIREMENT ANNUITY ALLOCABLE TO A PERIOD OF REEMPLOYMENT OF AN ANNUITANT, MADE PURSUANT TO THE PROVISIONS OF SECTION 2 (B) OF THE ACT OF FEBRUARY 28, 1948, IS NOT TO BE TREATED AS A COLLECTION FOR DEPOSIT TO MISCELLANEOUS RECEIPTS, NOR IS THE AMOUNT THEREOF REQUIRED TO BE DEPOSITED TO THE CREDIT OF THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND, THE NET AMOUNT PAYABLE BEING FOR CHARGING TO THE SALARY APPROPRIATION INVOLVED.

COMPTROLLER GENERAL WARREN TO THE LIBRARIAN OF CONGRESS, AUGUST 9, 1948:

I HAVE YOUR LETTER OF JULY 27, 1948, AS FOLLOWS:

I WISH TO RAISE A QUESTION REGARDING THE PAYMENT OF SALARY TO AN ANNUITANT WHO HAS BEEN REEMPLOYED. IN A SPECIFIC INSTANCE HERE IN THE LIBRARY OF CONGRESS, WE HAVE PREPARED THE PAYROLL CONCERNED BY DIVIDING THE YEARLY ANNUITY RECEIVED BY 2080 HOURS IN ORDER TO ARRIVE AT AN HOURLY RATE TO BE DEDUCTED FROM THE EMPLOYEE'S CLASSIFIED SALARY RATE.

WE HAVE BEEN INFORMALLY ADVISED BY AUDITORS FROM YOUR OFFICE, THAT THIS EMPLOYEE IS PROBABLY BEING UNDERPAID AND ALSO THAT THIS QUESTION HAS NEVER YET BEEN PRESENTED TO YOUR OFFICE.

PUBLIC LAW NO. 426, 80TH CONGRESS, UNDER SECTION 2 (B), PROVIDES IN PART AS FOLLOWS: "THAT NO DEDUCTIONS FOR THE RETIREMENT FUND SHALL BE WITHHELD FROM THE SALARY, PAY, OR COMPENSATION OF SUCH PERSON, BUT THERE SHALL BE DEDUCTED FROM THE SALARY, PAY, OR COMPENSATION OTHERWISE PAYABLE A SUM EQUAL TO THE RETIREMENT ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT.'

IN ORDER TO ARRIVE AT AN HOURLY RATE OF PAY TO BE DEDUCTED FROM A SUM EQUAL TO THE RETIREMENT ANNUITY, HOW MANY HOURS SHOULD BE DIVIDED INTO THE ANNUAL ANNUITY?

A FURTHER QUESTION IS RAISED AS TO WHETHER FOR PAYROLL PURPOSES THE NET AMOUNT SHOULD BE CHARGED AGAINST THE APPROPRIATION FROM WHICH THE EMPLOYEE IS BEING PAID, OR, WHETHER, THE GROSS AMOUNT SHOULD BE CHARGED AND THE DIFFERENCE DEPOSITED TO THE CREDIT OF SYMBOL 8135.1, DONATIONS, CIVIL SERVICE RETIREMENT AND DISABILITY FUND.

THE CIVIL SERVICE RETIREMENT ANNUITY IS FIXED ON A YEARLY BASIS. HENCE, THAT PORTION OF THE ANNUITY ALLOCABLE TO ONE DAY REPRESENTS 1/360 OF THE TOTAL ANNUITY. CONSEQUENTLY, IN COMPUTING THE DEDUCTION FROM THE CIVILIAN COMPENSATION AS REQUIRED UNDER SECTION 2 (B) OF PUBLIC LAW 426, APPROVED FEBRUARY 28, 1948, 62 STAT. 49, THERE SHOULD BE DEDUCTED AN AMOUNT EQUAL TO 1/360 OF THE ANNUITY FOR EACH DAY OF ACTUAL SERVICE. IN THE CASE OF EMPLOYEES WHO WORK LESS THAN A FULL DAY, AN AMOUNT EQUIVALENT TO 1/8 OF THE DAILY RATE SHOULD BE DEDUCTED FOR EACH HOUR WORKED.

WITH RESPECT TO YOUR SECOND QUESTION, WHILE SECTION 2 (B) OF PUBLIC LAW 426 CONTAINS NO SPECIFIC DIRECTIONS RESPECTING THE METHOD OF ACCOUNTING FOR THE DEDUCTION FROM COMPENSATION OF THE ANNUITY PAYMENTS AS THEREIN PROVIDED, IT APPEARS THAT THE REQUIREMENT OF SAID SECTION 2 (B) WILL BE MET BY EFFECTING THE DEDUCTION FROM THE GROSS COMPENSATION PAYABLE FOR THE CIVILIAN POSITION--- THE NET AMOUNT PAYABLE BEING FOR CHARGING TO THE SALARY APPROPRIATION INVOLVED. IN OTHER WORDS, THE REQUIRED DEDUCTION IS NOT TO BE TREATED AS A COLLECTION FROM THE EMPLOYEE SUCH AS IS REQUIRED BY SECTION 2617, REVISED STATUTES, TO BE DEPOSITED TO MISCELLANEOUS RECEIPTS, AND NEITHER IS IT REQUIRED TO BE DEPOSITED TO THE CREDIT OF THE FUND,"1CONTRIBUTIONS, CIVIL SERVICE RETIREMENT AND DISABILITY FUND," MENTIONED IN YOUR LETTER.