B-81063, JUNE 7, 1949, 28 COMP. GEN. 693

B-81063, JUNE 7, 1949, 28 COMP. GEN. 693

RETIREMENT - CIVILIAN - SALARY DEDUCTIONS UPON REEMPLOYMENT THE PROVISION IN SECTION 2 (B) OF THE ACT OF FEBRUARY 28, 1948, REQUIRING THAT THE SALARY OF A CIVIL-SERVICE ANNUITANT WHO IS REEMPLOYED BE REDUCED IN A SUM EQUAL TO THE RETIREMENT ANNUITY ALLOCABLE TO THE "PERIOD OF ACTUAL EMPLOYMENT.' HAS REFERENCE TO THE ACTUAL PERIOD DURING WHICH AN ANNUITANT HOLDS THE POSITION IN WHICH HE IS REEMPLOYED,( INCLUDING ALL PERIODS OF LEAVE WITHOUT PAY AS WELL AS ALL REGULAR NON-WORKDAYS FORMING A PART THEREOF. 28 COMP. GEN. 87, OVERRULED IN PART. UNDER SECTION 2 (B) OF THE ACT OF FEBRUARY 28, 1948, PROVIDING FOR A DEDUCTION FROM THE SALARY PAID AN ANNUITANT FOR A POSITION IN WHICH HE IS REEMPLOYED OF "A SUM EQUAL TO THE RETIREMENT ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT," THE TOTAL ANNUITY PAYABLE TO REEMPLOYED ANNUITANT MUST BE DEDUCTED FROM THE ANNUAL SALARY FOR THE POSITION, AND THE REMAINDER THEREOF REPRESENTS THE TOTAL SALARY AUTHORIZED TO BE PAID FOR A FULL YEAR OF EMPLOYMENT, OR THE MAXIMUM RATE OF COMPENSATION PAYABLE FOR ANY PERIOD OF LESS THAN ONE YEAR. 28 COMP. GEN. 103, DISTINGUISHED. THE HOLDING HEREIN TO THE EFFECT THAT THE ANNUITY PAYABLE TO A REEMPLOYED ANNUITANT MUST, IN CONSONANCE WITH SECTION 2 (B) OF THE ACT OF FEBRUARY 28, 1948, BE DEDUCTED FROM THE ANNUAL SALARY OF THE POSITION TO DETERMINE THE TOTAL SALARY PAYABLE IS FOR APPLICATION IN CASES WHERE ANNUITANTS ARE REEMPLOYED UPON A PER DIEM OR HOURLY BASIS; AND TO DETERMINE THE PER DIEM OR HOURLY RATE PROPERLY PAYABLE, THE RATES OF SUCH PAY SHOULD BE CONVERTED TO THEIR PER ANNUM EQUIVALENT, WHICH EQUIVALENT RATE SHOULD BE REDUCED BY THE TOTAL ANNUITY RECEIVED, AND THE REMAINDER THEREOF RECONVERTED TO A PER DIEM OR PER HOUR RATE. IN VIEW OF THE REQUIREMENT THAT A REEMPLOYED ANNUITANT MUST, UNDER SECTION 2 (B) OF THE ACT OF FEBRUARY 28, 1948, HAVE HIS PER ANNUM SALARY RATE REDUCED BY THE ANNUITY RECEIVED TO DETERMINE THE TOTAL SALARY PAYABLE, OVERTIME COMPENSATION MAY BE PAID UPON THE SAME BASIS AND AT THE SAME RATE AUTHORIZED BY LAW TO BE PAID OTHER EMPLOYEES WHO OCCUPY SIMILAR POSITIONS.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, INTERSTATE COMMERCE COMMISSION, JUNE 7, 1949:

CONSIDERATION HAS BEEN GIVEN LETTER OF OCTOBER 21, 1948, FROM THE THEN CHAIRMAN OF THE INTERSTATE COMMERCE COMMISSION, REQUESTING A DECISION WITH RESPECT TO THE PROPER METHOD OF COMPUTING THE SALARY TO BE PAID A CIVIL- SERVICE ANNUITANT WHO IS REEMPLOYED UNDER THE PROVISIONS OF SECTION 2 OF THE ACT OF MAY 29, 1930, AS AMENDED BY SECTION 2 OF THE ACT OF FEBRUARY 28, 1948, PUBLIC LAW 426, AND WHOSE COMPENSATION IS TO BE PAID UPON A PER ANNUM BASIS. YOU EXPRESS DOUBT AS TO THE APPLICATION TO PER ANNUM SALARIES OF THE METHOD OF COMPUTATION PRESCRIBED IN THE DECISION OF AUGUST 9, 1948, B-78841, 28 COMP. GEN. 87, AND SUBMIT EXAMPLES SHOWING THAT SUCH METHOD WOULD RESULT IN THE REEMPLOYED ANNUITANT RECEIVING A TOTAL PAYMENT FOR THE YEAR IN EXCESS OF THE ESTABLISHED SALARY RATE FOR THE POSITION IN WHICH REEMPLOYED.

AT THE OUTSET IT SHOULD BE STATED THAT SINCE THE ANNUITY RECEIVED BY A RETIRED CIVILIAN EMPLOYEE OF THE UNITED STATES IS NOT SALARY, THERE IS NO QUESTION OF THE APPLICATION OF THE $10,330 AGGREGATE ANNUAL SALARY LIMITATION PRESCRIBED BY THE CLASSIFICATION ACT, AS AMENDED, TO THE CONCURRENT RECEIPT OF SALARY AND RETIREMENT ANNUITY. THEREFORE, IT IS NECESSARY TO LOOK TO THE LAWS WHICH AUTHORIZE THE REEMPLOYMENT OF ANNUITANTS IN ORDER TO DETERMINE WHETHER, OR TO WHAT EXTENT, SUCH CONCURRENT PAYMENTS ARE ALLOWABLE IN ANY EVENT.

IN THAT CONNECTION SECTION 2 OF THE ACT OF MAY 29, 1930, AS AMENDED BY SECTION 2 OF THE ACT OF FEBRUARY 28, 1948, PUBLIC LAW 426, 62 STAT. 49, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

(B) NO PERSON WHO IS RECEIVING AN ANNUITY UNDER THE PROVISIONS OF THIS ACT AND WHO HAS REACHED THE AGE OF SIXTY YEARS SHALL BE ELIGIBLE AGAIN TO APPOINTMENT TO ANY APPOINTIVE OFFICE, POSITION, OR EMPLOYMENT UNDER THE GOVERNMENT OF THE UNITED STATES OR OF THE DISTRICT OF COLUMBIA, UNLESS THE APPOINTING AUTHORITY DETERMINES THAT HE IS POSSESSED OF SPECIAL QUALIFICATIONS: PROVIDED, 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 HIS SALARY, PAY, OR COMPENSATION OTHERWISE PAYABLE A SUM EQUAL TO THE RETIREMENT ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT: PROVIDED FURTHER, THAT THE ANNUITY IN SUCH CASE SHALL NOT BE REDETERMINED UPON SUCH PERSON'S SUBSEQUENT SEPARATION FROM THE SERVICE. THAT SECTION, IN SUBSTANCE, CONTINUES THE PROVISION WHICH IT AMENDS IN RESPECT TO AUTHORIZING UNDER CERTAIN CIRCUMSTANCES THE REEMPLOYMENT OF CIVIL-SERVICE ANNUITANTS. HOWEVER, WHERE THE PREVIOUS SECTION PROVIDED THAT UPON REEMPLOYMENT THE ANNUITY WOULD BE TERMINATED AND THE ANNUITANT'S FUTURE RIGHTS REDETERMINED AS OF THE DATE OF SUBSEQUENT SEPARATION, THE PRESENT LAW AUTHORIZES THE CONTINUANCE OF THE ANNUITY UPON REEMPLOYMENT BUT REQUIRES THAT THE SALARY OF THE POSITION TO WHICH APPOINTED BE REDUCED "IN A SUM EQUAL TO THE RETIREMENT ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT.' THE REASON FOR THAT CHANGE IS EXPLAINED IN REPORT NO. 888 OF THE HOUSE COMMITTEE ON POST OFFICE AND CIVIL SERVICE AND REPORT NO. 746 OF THE SENATE COMMITTEE ON CIVIL SERVICE (ACCOMPANYING H.R. 4127 WHICH SUBSEQUENTLY BECAME PUBLIC LAW 426) IN THE FOLLOWING LANGUAGE:

IT IS PROPOSED THAT THE SAME PRIVILEGES OF REEMPLOYMENT BE CONTINUED EXCEPT THAT IF THE PERSON IS AGE 60 OR OVER, THE ANNUITY WILL CONTINUE TO BE PAID DURING HIS REEMPLOYMENT AND HIS SALARY, AS AN EMPLOYEE, REDUCED BY THE AMOUNT OF ANNUITY BEING RECEIVED. THE EMPLOYEE WOULD ACQUIRE NO ADDITIONAL RETIREMENT RIGHTS DURING SUCH PERIOD OF REEMPLOYMENT.

THIS WILL RESULT IN A SAVING IN ADMINISTRATIVE COSTS BECAUSE OF THE ELIMINATION OF DROPPING ANNUITANTS FROM THE ROLL, RECOMPUTING ANNUITIES, AND REENTERING ANNUITANTS ON THE ROLL. IT WILL PREVENT INEQUITIES ARISING AS A RESULT OF ANNUITANTS BEING REEMPLOYED PRIMARILY FOR THE PURPOSE OF ACQUIRING NEW OR ADDITIONAL RETIREMENT RIGHTS. THUS, IT WOULD APPEAR THAT AS TO THE ULTIMATE EFFECT OF THE AMENDMENT NO CHANGE WAS CONTEMPLATED IN THE ORIGINAL CONCEPT THAT A RETIREMENT STATUS IS INCONSISTENT WITH AN ACTIVE EMPLOYMENT STATUS AND THAT NO ANNUITY SHOULD BE PAID IN SUCH CASES. HOWEVER, THE LANGUAGE USED IN THE SAID AMENDMENT, VIZ., "PERIOD OF ACTUAL EMPLOYMENT," IS SUSCEPTIBLE OF A MEANING SYNONYMOUS WITH ACTUAL RENDITION OF SERVICE. UNDER THAT DEFINITION OF THE TERM, THE PROVISION COULD BE CONSTRUED AS REQUIRING A REDUCTION IN SALARY ONLY TO THE EXTENT OF SUCH PART OF THE ANNUITY AS WOULD BE APPORTIONABLE TO THE DAYS ON WHICH SERVICES WERE ACTUALLY RENDERED OR FOR WHICH COMPENSATION ACTUALLY WAS PAID (B-78841 OF AUGUST 9, 1948). BUT, TO PURSUE SUCH A THEORY TO ITS LOGICAL CONCLUSION, NOT ONLY WOULD THERE BE ELIMINATED FROM THE COMPUTATIONS ALL REGULAR NON-WORKDAYS, BUT ALSO NON-WORK HOURS OUTSIDE A REGULAR DAILY TOUR OF DUTY FOR WHICH NO COMPENSATION IS PAID. I CANNOT BELIEVE THE CONGRESS INTENDED A RESULT IN SUCH IRRECONCILABLE CONFLICTS WITH ITS PREVIOUS CONCEPT OF CIVILIAN RETIREMENT.

THEREFORE, IN ORDER TO EFFECTUATE THE DECLARED PURPOSE OF THE PROVISION AND AT THE SAME TIME ACHIEVE A RESULT REASONABLY WITHIN CONTEMPLATION OF THE CONGRESS, IT APPEARS THAT THE TERM "PERIOD OF ACTUAL EMPLOYMENT" AS USED IN THE SAID SECTION PROPERLY SHOULD BE CONSIDERED AS RELATING TO THE ACTUAL PERIOD DURING WHICH AN ANNUITANT HOLDS THE POSITION IN WHICH HE IS REEMPLOYED. IN OTHER WORDS, THE TENURE OF EMPLOYMENT WHICH INCLUDES, OF COURSE, ALL PERIODS OF LEAVE WITHOUT-PAY, AS WELL AS ALL REGULAR NON- WORKDAYS FORMING A PART THEREOF, SHOULD BE REGARDED AS THE PERIOD OF ACTUAL EMPLOYMENT AS THAT TERM IS USED IN SECTION 2 OF THE ACT OF FEBRUARY 28, 1948, SUPRA.

WITH RESPECT TO THE COMPUTATION OF THE SALARY AUTHORIZED TO BE PAID AN ANNUITANT FOR THE POSITION IN WHICH HE IS REEMPLOYED, THE ACT SPECIFICALLY PROVIDES THAT THERE SHALL BE DEDUCTED FROM SUCH SALARY "A SUM EQUAL TO THE RETIREMENT ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT.' THUS, THE PROVISION DOES NOT OPERATE TO REDUCE THE ANNUITY PAYABLE FOR SUCH PERIOD, AS WAS THE CASE IN THE MILITARY RETIRED PAY CONSIDERED IN THE DECISION OF AUGUST 19, 1948, B-75253 (28 COMP. GEN. 103), BUT, ON THE CONTRARY, IT PLACES A LIMITATION UPON THE TOTAL SALARY OTHERWISE PAYABLE FOR THE POSITION IN WHICH REEMPLOYED. THEREFORE, ANNUITY ALLOCABLE TO THE PERIOD OF EMPLOYMENT IS TO BE REGARDED ONLY AS A MEASURE OR THE MEANS PROVIDED FOR DETERMINING THE AMOUNT IN WHICH THE SALARY PAYMENTS ARE TO BE REDUCED. ACCORDINGLY, SINCE ANNUITY BY ITS VERY DESIGNATION IS AN ANNUAL INCOME, A REDUCTION IN THE AMOUNT EQUAL TO AN ANNUITY AS RELATING TO SALARY OR COMPENSATION ALSO MUST BE APPLIED UPON THAT BASIS. FOR EXAMPLE, USING THE ILLUSTRATION REFERRED TO IN YOUR LETTER, OF A RETIRED EMPLOYEE RECEIVING AN ANNUITY OF $5,772 AND REEMPLOYED AT AN ANNUAL SALARY OF $10,330, THERE IS REQUIRED TO BE DEDUCTED FROM SUCH SALARY THE TOTAL ANNUITY OF $5,772. THE REMAINDER, $4,558, REPRESENTS THE TOTAL SALARY AUTHORIZED TO BE PAID TO HIM FOR A FULL YEAR OF EMPLOYMENT, OR THE MAXIMUM RATE OF COMPENSATION AUTHORIZED TO BE PAID FOR ANY PERIOD OF EMPLOYMENT OF LESS THAN ONE YEAR. IT FOLLOWS, OF COURSE, THAT IN COMPUTING THE PER DIEM OR PER HOUR EQUIVALENT OF THE PER ANNUM RATE, THE PROPER METHOD OF COMPUTATION IS THAT PRESCRIBED BY LAW OR REGULATION APPLICABLE TO THE SALARY INVOLVED.

THE FOREGOING RULE IS FOR APPLICATION IN ALL CASES IRRESPECTIVE OF THE BASIS UPON WHICH THE COMPENSATION IS FIXED OR OF THE FACT THAT THE EMPLOYMENT MAY BE PART TIME, TEMPORARY, OR INTERMITTENT. FOR EXAMPLE, IN THE EVENT AN ANNUITANT IS REEMPLOYED UPON A PER DIEM OR HOURLY BASIS, SUCH RATES OF PAY SHOULD BE CONVERTED TO THEIR PER ANNUM EQUIVALENT IN ACCORDANCE WITH THE METHOD PRESCRIBED BY THE APPLICABLE LAW; THE PER ANNUM RATE REDUCED IN THE TOTAL AMOUNT OF ANNUITY BEING RECEIVED BY THE EMPLOYEE, AND THE REMAINDER RECONVERTED TO A PER DIEM OR PER HOUR BASIS AS THE CASE MAY BE.

WITH RESPECT TO THE DOUBT EXPRESSED IN YOUR LETTER AS TO THE METHOD OF COMPUTING OVERTIME COMPENSATION IN THE CASE OF REEMPLOYED ANNUITANT, YOU ARE ADVISED THAT SINCE UNDER THE ABOVE-STATED RULE THE BASIC SALARY OF THE POSITION IS REDUCED IN THE TOTAL AMOUNT REQUIRED BY LAW, OVERTIME COMPENSATION OTHERWISE PROPER MAY BE PAID TO THE ANNUITANT INVOLVED UPON THE SAME BASIS AND AT THE SAME RATE AUTHORIZED BY LAW TO BE PAID OTHER EMPLOYEES WHO OCCUPY SIMILAR POSITIONS.

YOUR SUBMISSION IS ANSWERED ACCORDINGLY, AND SO FAR AS THE DECISION OF AUGUST 9, 1948, B-78841 (28 COMP. GEN. 87), IS INCONSISTENT WITH THE FOREGOING, THAT DECISION NO LONGER WILL BE FOLLOWED AND PAYMENTS MADE FOR SERVICES RENDERED HEREAFTER WILL BE GOVERNED BY THE RULE SET FORTH ABOVE.