B-167266, APR 7, 1975

B-167266, APR 7, 1975

AUTOMATIC AND BLANKET WAIVER OF ERRONEOUS ANNUITY PAYMENTS UNDER THE SURVIVOR BENEFIT PLAN (SBP) TO A SPECIFIC BUT UNNAMED CLASS OF ANNUITANTS, WHICH ERRONEOUS PAYMENTS WERE CAUSED BY A RETROACTIVE PAY INCREASE, IS DENIED BECAUSE WAIVER MAY BE GRANTED WHERE THERE IS NOT ONLY A SHOWING OF NO FAULT BY INDIVIDUAL BUT ALSO THAT RECOVERY WOULD RESULT IN A FINANCIAL HARDSHIP OR FOR SOME OTHER REASON BE CONTRARY TO PURPOSE OF PLAN AND THEREFORE BE AGAINST EQUITY AND GOOD CONSCIENCE AND RECORD DOES NOT INDICATE THAT HARDSHIP WOULD EXIST.

SURVIVOR BENEFIT PLAN - WAIVER OF ERRONEOUS ANNUITY PAYMENTS:

THIS ACTION IS IN RESPONSE TO A LETTER DATED AUGUST 16, 1974, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER), WHEREIN A DECISION IS REQUESTED AS TO THE PROPRIETY OF WAIVING RECOVERY OF OVERPAYMENTS OF ANNUITIES UNDER THE SURVIVOR BENEFIT PLAN (SBP) FROM SURVIVORS OF MEMBERS OR FORMER MEMBERS AFFECTED BY THE RETROACTIVE PAY INCREASE PAID IN COMPLIANCE WITH THE RULING IN THE CASE OF NATIONAL TREASURY EMPLOYEES UNION V. NIXON, 492 F.2D 587 (1974). IT IS ALSO REQUESTED THAT IF IT WOULD BE PROPER TO SO WAIVE, THAT ALL SUCH CASES OF ERRONEOUS OVERPAYMENTS BE TREATED AS A CLASS SO AS TO AVOID THE NEED FOR SEPARATE REQUESTS FROM EACH MILITARY DEPARTMENT.

THE LETTER FROM THE ASSISTANT SECRETARY STATES THAT THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA DETERMINED IN THE ABOVE CITED CASE, THAT PRESIDENT NIXON HAD A CONSTITUTIONAL DUTY TO GRANT THE OCTOBER 1, 1972, FEDERAL PAY INCREASE AS MANDATED BY THE FEDERAL PAY COMPARABILITY ACT OF 1970. IN COMPLIANCE WITH THIS DECISION THE PRESIDENT ISSUED EXECUTIVE ORDER NO. 11,778, APRIL 12, 1974, WHICH AMENDED SECTION 2 OF EXECUTIVE ORDER NO. 11,692, DECEMBER 15, 1972. THE AMENDED SECTION 2 REQUIRES THAT THE MONTHLY BASIC PAY INCREASE ORIGINALLY MADE EFFECTIVE BY THE PRESIDENT ON JANUARY 1, 1973, BE MADE RETROACTIVELY EFFECTIVE TO OCTOBER 1, 1972, IN COMPLIANCE WITH THE COURT OF APPEALS DECISION.

THE LETTER FROM THE ASSISTANT SECRETARY OF DEFENSE FURTHER STATES THAT THE MILITARY DEPARTMENTS ARE PRESENTLY MAKING PAYMENTS OF RETROACTIVE PAY TO ALL MEMBERS AND FORMER MEMBERS AFFECTED BY THE CHANGE IN THE EFFECTIVE DATE FROM JANUARY 1, 1973, TO OCTOBER 1, 1972. DUE TO THE CHANGE IN THE EFFECTIVE DATE OF THE BASIC PAY INCREASE, ADJUSTMENTS IN THE CONTRIBUTIONS TO AND THE AMOUNTS OF ANNUITIES PROVIDED UNDER THE SBP ARE NECESSARY.

IN ADDITION, THE LETTER STATES THAT IN COMPUTING THE NECESSARY ADJUSTMENTS IN EXISTING SBP ANNUITIES, IT HAD BEEN DETERMINED THAT IN CERTAIN CASES THE ANNUITIES MUST BE REDUCED. IT APPEARS THAT IN CASES WHERE ANNUITIES MUST BE REDUCED, THE SURVIVORS HAVE RECEIVED AN OVERPAYMENT. THIS OVERPAYMENT OCCURRED BECAUSE OF THE DELAY IN THE OCTOBER 1, 1972, PAY RAISE. THE AMOUNT OF THE ANNUITY PAID REFLECTED THE FULL CONSUMER PRICE INDEX (CPI) INCREASE OF 6.1 PERCENT EFFECTIVE JULY 1, 1973, HOWEVER, SINCE THE ACTIVE DUTY PAY INCREASE WAS MADE RETROACTIVE TO OCTOBER 1, 1972, IT SHOULD HAVE ONLY REFLECTED A PARTIAL CPI INCREASE OF 3.6 PERCENT. IN THIS REGARD, THE ASSISTANT SECRETARY STATES THAT THE CLASS OF CASES IN WHICH OVERPAYMENTS HAVE BEEN MADE INCLUDES ONLY THOSE IN WHICH THE RETIRED MEMBER (1) BECAME ENTITLED TO RETIRED PAY BETWEEN SEPTEMBER 30, 1972, AND JANUARY 1, 1973, (2) SELECTED A BASE AMOUNT OF LESS THAN THE MAXIMUM BASE AMOUNT, AND (3) DIED ON OR AFTER THE CPI INCREASE EFFECTIVE JULY 1, 1973.

SECTION 1453 OF TITLE 10, U.S.C. PROVIDES IN PART THAT RECOVERY OF ANY AMOUNT ERRONEOUSLY PAID IS NOT REQUIRED IF, IN THE JUDGMENT OF THE SECRETARY CONCERNED AND THE COMPTROLLER GENERAL, THERE HAS BEEN NO FAULT BY THE PERSON TO WHOM THE AMOUNT WAS ERRONEOUSLY PAID AND RECOVERY WOULD BE CONTRARY TO THE PURPOSES OF THE SBP OR AGAINST EQUITY AND GOOD CONSCIENCE.

IN 35 COMP. GEN. 401 (1956), WE HELD THAT SOMETHING MORE THAN FREEDOM FROM FAULT MUST BE SHOWN BEFORE A BASIS EXISTS FOR EXERCISING THE JUDGMENT AS TO WHETHER THE COLLECTION OF A PARTICULAR OVERPAYMENT, OR ERRONEOUS PAYMENT UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953 (NOW NAMED THE RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN (RSFPP)), SHOULD BE WAIVED. THE VIEW WAS EXPRESSED BY THIS OFFICE THAT UNLESS IT COULD BE ESTABLISHED THAT COLLECTION OF THE OVERPAYMENT WOULD WORK AN UNDUE HARDSHIP, OR SOME OTHER REASON COULD BE SHOWN AS TO WHY COLLECTION SHOULD NOT BE MADE, NO PROPER BASIS EXISTS FOR THE EXERCISE OF THE WAIVER AUTHORITY.

DUE TO THE SIMILARITY BETWEEN THE SBP AND THE RSFPP AND THE WAIVER AUTHORITY CONTAINED THEREIN, THIS OFFICE HELD IN B-182113, OCTOBER 1, 1974, 54 COMP. GEN. , THAT THE RULING IN 35 COMP. GEN. 401 SUPRA, IS FOR APPLICATION UNDER THE PROVISIONS OF 10 U.S.C. 1453. THEREFORE, WAIVER SHOULD ONLY BE GRANTED UNDER 10 U.S.C. 1453 WHERE THERE IS NOT ONLY A SHOWING OF NO FAULT ON THE PART OF THE ANNUITANT, BUT ALSO THAT RECOVERY WOULD RESULT IN A FINANCIAL HARDSHIP TO THE INDIVIDUAL OR FOR SOME OTHER REASON WOULD BE CONTRARY TO THE PURPOSE OF THE PLAN AND THEREFORE AGAINST EQUITY AND GOOD CONSCIENCE.

ALTHOUGH IN THE CASE OF A BLANKET WAIVER NO FINDING OF HARDSHIP IN THE INDIVIDUAL CASES COULD BE MADE, WE SAID IN THE CITED DECISIONS THAT A WAIVER WOULD BE GRANTED IF FOR SOME OTHER REASON RECOVERY WOULD BE CONSIDERED CONTRARY TO THE PURPOSES OF THE PLAN. IN THIS CASE AN EXTREMELY UNUSUAL SET OF CIRCUMSTANCES IS INVOLVED AND A COURT DECISION FAVORABLE TO THE INTERESTS OF EMPLOYEES AND RETIREES GENERALLY IS, FOR THIS GROUP OF SURVIVORS, UNFAVORABLE. FURTHER, THE PAYMENTS IN QUESTION WERE CONSIDERED PROPER UNTIL THE COURT RULED IN THE COLLATERAL MATTER OF ENTITLEMENT TO ACTIVE DUTY PAY AND ALLOWANCES. IN THE CIRCUMSTANCES WE CONSIDER THAT THE BASIC REQUIREMENTS FOR WAIVER ARE MET IN THESE CASES AND CONCUR IN ANY WAIVERS WHICH MAY BE GRANTED TO PERSONS WHO HAVE BEEN OVERPAID SURVIVOR'S ANNUITIES AS A RESULT OF THE DECISION IN NATIONAL TREASURY EMPLOYEES UNION V. NIXON, SUPRA. ACCORDINGLY, THIS DECISION WILL SERVE AS AUTHORITY FOR WAIVER OF OVERPAYMENTS OF ANNUITIES IN INDIVIDUAL CASES WITHOUT FURTHER ACTION BY US. ..END :