B-162829, DECEMBER 8, 1967, 47 COMP. GEN. 327

B-162829, DECEMBER 8, 1967, 47 COMP. GEN. 327

PAY - RETIRED - INCREASES - COST OF LIVING INCREASES - ACTIVE DUTY RECALL THE RECALL TO ACTIVE DUTY ON JULY 11, 1966 OF AN ARMY STAFF SERGEANT WHO HAD BEEN RETIRED ON JULY 1, 1964 UNDER 10 U.S.C. 3914, AND HIS ENTITLEMENT PURSUANT TO SECTION 1402 (B) TO RECOMPUTE HIS RETIRED PAY IN ACCORDANCE WITH SECTION 1402 (D) UPON REVERTING TO INACTIVE DUTY ON MARCH 24, 1967, NOT HAVING TERMINATED THE MEMBER'S SECTION 3914 RETIRED PAY STATUS, ABSENT A JUDICIAL DETERMINATION OF RE-RETIREMENT, THE MEMBER'S RECOMPUTED RETIRED PAY MAY NOT BE FURTHER INCREASED BY THE 3.7 PERCENTAGE COST-OF-LIVING INCREASE AUTHORIZED BY SECTION 1401A (B), EFFECTIVE DECEMBER 1, 1966, THE MEMBER ALTHOUGH SERVING ON ACTIVE DUTY AFTER JULY 11, 1966, NOT ENTITLED TO RECOMPUTE HIS RETIRED PAY UNDER SECTIONS 1402 (B) AND (D) UNTIL HE REVERTED TO A INACTIVE STATUS ON MARCH 24, 1967, UNDER THE TERMS OF SECTION 1401A (B), REQUIRING HIM TO BE ENTITLED PRIOR TO DECEMBER 1, 1966 TO THE RETIRED PAY TO BE INCREASED, THERE IS NO BASIS TO INCREASE THE RETIRED PAY RECOMPUTED MARCH 24, 1967, BY THE CONSUMER PRICE INDEX INCREASE EFFECTIVE DECEMBER 1, 1966.

TO LIEUTENANT COLONEL FRANK BERRISH, DEPARTMENT OF THE ARMY, DECEMBER 8, 1967:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 24, 1967, REQUESTING A DECISION AS TO THE PROPRIETY OF PAYMENT ON A VOUCHER STATED IN FAVOR OF STAFF SERGEANT (E-6) WOODROW W. KITCHENS, A RETIRED ENLISTED MEMBER OF THE ARMY. THE AMOUNT OF THE VOUCHER, $25.80, REPRESENTING ADDITIONAL RETIRED PAY AT THE RATE OF $8.60 PER MONTH FOR THE MONTHS OF MAY, JUNE AND JULY 1967, REFLECTS THE DIFFERENCE BETWEEN THAT PAID TO HIM AT $232.56 PER MONTH AND $241.16 PER MONTH ($232.56 INCREASED BY 3.7 PERCENTUM). YOUR REQUEST WAS FORWARDED HERE OCTOBER 25, 1967, BY THE OFFICE OF THE COMPTROLLER OF THE ARMY UNDER D.O. NUMBER A-967, ALLOCATED BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

SERGEANT KITCHENS WAS RETIRED EFFECTIVE JULY 1, 1964, UPON HIS OWN APPLICATION IN ACCORDANCE WITH THE PROVISIONS OF 10 U.S.C. 3914. ON JULY 11, 1966, HE WAS RECALLED TO ACTIVE DUTY AND SERVED THROUGH MARCH 23, 1967. ON MARCH 24, 1967, HE REVERTED TO INACTIVE STATUS ON THE RETIRED LIST HAVING BEEN DETERMINED TO BE PHYSICALLY UNFIT FOR FURTHER MILITARY SERVICE. UPON HIS RELEASE FROM SUCH ACTIVE DUTY HIS RETIRED PAY STATUS CAME WITHIN THE PURVIEW OF 10 U.S.C. 1402 (B) ENTITLING HIM TO RECOMPUTE HIS RETIRED PAY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 1402 (D).

IT IS STATED THAT HE ELECTED TO RECEIVE RETIRED PAY EFFECTIVE FROM MARCH 24, 1967, RECOMPUTED UNDER CLAUSE (2) OF SECTION 1402 (D) ON THE BASIS OF THE PERCENTAGE OF HIS PHYSICAL DISABILITY (60 PERCENTUM). THE HIGHEST MONTHLY BASIC PAY THAT SERGEANT KITCHENS RECEIVED WHILE SERVING ON ACTIVE DUTY DURING THE PERIOD STATED WAS $387.60, THE MONTHLY BASIC PAY PRESCRIBED IN SECTION 203 (A), TITLE 37, U.S. CODE, AS AMENDED EFFECTIVE JULY 1, 1966, BY SECTION 301, PUB.L. 89-501, JULY 13, 1966, 80 STAT. 278, FOR AN ENLISTED MEMBER IN GRADE E-6 WITH OVER 22 YEARS OF SERVICE CREDITABLE FOR BASIC PAY PURPOSES. THUS HE HAS BEEN ENTITLED TO RECEIVE RETIRED PAY FROM MARCH 24, 1967, COMPUTED UNDER AUTHORITY OF SECTION 1402 (D) AT THE RATE OF $232.56 PER MONTH (60 PERCENTUM OF $387.60).

THE ISSUE RAISED IN YOUR REQUEST FOR AN ADVANCE DECISION IS WHETHER SERGEANT KITCHENS' RECOMPUTED RETIRED PAY OF $232.56 PER MONTH MAY BE FURTHER INCREASED TO $241.16 PER MONTH BY REASON OF THE COST-OF-LIVING 3.7 PERCENTAGE INCREASE IN RETIRED PAY THAT BECAME EFFECTIVE DECEMBER 1, 1966, UNDER AUTHORITY OF 10 U.S.C. 1401A (B), WHICH, AS AMENDED BY SECTION 5 (B), PUB.L. 89-132, AUGUST 21, 1965, 79 STAT. 547, PROVIDES AS FOLLOWS:

"/B) THE SECRETARY OF DEFENSE SHALL DETERMINE THE PERCENTUM THAT THE CONSUMER PRICE INDEX FOR EACH CALENDAR MONTH AFTER THE CALENDAR MONTH IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF THIS ACT HAS INCREASED OVER THE BASE CONSUMER PRICE INDEX (THAT FOR THE CALENDAR MONTH IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF THIS ACT OR, IF LATER, THAT USED AS THE BASIS FOR THE MOST RECENT ADJUSTMENT OF RETIRED PAY AND RETAINER PAY UNDER THIS SUBSECTION). IF THE SECRETARY DETERMINES THAT, FOR THREE CONSECUTIVE CALENDAR MONTHS, THE INDEX HAS SHOWN AN INCREASE OF AT LEAST 3 PERCENTUM OVER THE BASE INDEX, THE RETIRED PAY AND RETAINER PAY OF MEMBERS OR FORMER MEMBERS OF THE ARMED FORCES SHALL BE INCREASED, EFFECTIVE THAT DAY, BY THE HIGHEST PER CENTUM OF WHO BECAME ENTITLED TO (*THAT PAY) BEFORE THE FIRST DAY OF THE THIRD CALENDAR MONTH BEGINNING AFTER THE EXPIRATION OF THOSE THREE MONTHS SHALL BE INCREASED, EFFECTIVE THAT DAY, BY THE HIGHEST PERCENTUM OF INCREASE IN THE INDEX DURING THOSE THREE MONTHS, ADJUSTED TO THE NEAREST ONE-TENTH OF 1 PERCENTUM.'

*THE TWO WORDS UNDERSCORED IN THE ABOVE QUOTATION FORM THE BASIS OF THE DISCUSSION AND THE QUESTIONS WHICH ARE SET FORTH IN YOUR LETTER. INDICATED BY YOU, PRIOR TO JUNE 1, 1958, RETIRED MEMBERS GENERALLY WERE ENTITLED TO HAVE THEIR RETIRED PAY RECOMPUTED ON THE BASIS OF THE NEW BASIC PAY RATES WHENEVER THE RATES OF ACTIVE DUTY PAY WERE INCREASED. SECTION 3 OF PUB.L. 85-422, 72 STAT. 128, WHICH BECAME EFFECTIVE JUNE 1, 1958, EXPRESSLY TERMINATED SUCH AUTOMATIC RECOMPUTATION. PUB.L. 88-132, 77 STAT. 210-218, EFFECTIVE OCTOBER 1, 1963, IMPLEMENTED THE POLICY ENACTED IN PUBLIC LAW 85-422 BY ADDING SECTION 1401A TO CHAPTER 71, TITLE 10, U.S. CODE, BARRING, UNLESS OTHERWISE SPECIFICALLY PROVIDED BY LAW, RECOMPUTATION OF RETIRED OR RETAINER PAY TO REFLECT ANY FUTURE INCREASE IN THE RATES OF BASIC PAY AND EXPRESSLY PROVIDING THAT FUTURE ADJUSTMENTS (INCREASES) IN RETIRED PAY AND RETAINER PAY WOULD BE BASED SOLELY ON CHANGES (INCREASES) IN THE CONSUMER PRICE INDEX.

AS POINTED OUT IN YOUR LETTER, SECTION 1401A (B) MAKES NO REFERENCE TO BASIC PAY RATES OR TO THE SPECIFIC AMOUNT OF RETIRED PAY TO WHICH A MEMBER WAS ENTITLED ON THE DAY BEFORE THE EFFECTIVE DATE OF A CONSUMER PRICE INDEX PERCENTAGE INCREASE "BUT SEEMS TO REQUIRE ONLY THAT A RETIRED MEMBER MUST HAVE BECOME ENTITLED TO -THAT PAY- BEFORE THE EFFECTIVE DATE OF ANY SUCH INCREASE.' YOU STATE THAT IN VIEW OF RECENT PAY LEGISLATION "IT APPEARS THAT PAST INTERPRETATION OF THE WORDS -THAT PAY- TO MEAN THE -SAME PAY- AS COMPUTED ON A SPECIFIED DATE, MAY HAVE BEEN CHANGED AND AFTER 1 DEC 66 THE WORDS AS USED IN SECTION 1401A (B) AS AMENDED, MEAN LITERALLY - RETIRED PAY,- INASMUCH AS RECOMPUTATION UNDER NEW BASIC PAY RATES HAS BEEN REPLACED BY A PERCENTAGE INCREASE FOR ALL MEMBERS RETIRED BEFORE THE EFFECTIVE DATE OF ANY SUCH INCREASE.'

CONSEQUENTLY YOU EXPRESS UNCERTAINTY AS TO THE RETIRED PAY STATUS OF THOSE RETIRED MEMBERS WHO BECOME ENTITLED TO A RECOMPUTATION OF THEIR RETIRED PAY AFTER THE EFFECTIVE DATE OF A CONSUMER PRICE INDEX PERCENTAGE INCREASE IN RETIRED PAY UNDER CIRCUMSTANCES SIMILAR TO THOSE FOUND IN SERGEANT KITCHENS' CASE WITH RESPECT TO THE 3.7 CONSUMER PRICE INDEX PERCENTAGE INCREASE WHICH BECAME EFFECTIVE DECEMBER 1, 1966. SEEKING "CLARIFICATION OF THE MEANING OF -RETIRED PAY- IN CONJUNCTION WITH THE WORDS -WHO BECAME ENTITLED TO THAT PAY- BEFORE THE EFFECTIVE DATE OF ANY SUCH INCREASE," YOU INQUIRE WHETHER--

"A. THE RECOMPUTATION PROVISIONS OF SECTION 1402 (B) AND (D) OF TITLE 10, U.S.C. WOULD TERMINATE THE STATUS ON THE RETIRED LIST WHICH ACCRUED TO THE MEMBER UPON RETIREMENT 1 JUL 64, ALTHOUGH HIS RIGHT TO COMPUTE RETIRED PAY FROM 24 MAR 67 BASED ON PERCENTAGE OF DISABILITY WAS NOT UNDER AUTHORITY OF A LAW PROVIDING RETIREMENT WHILE IN A DISABILITY STATUS?

"B. IF THE REPLY TO A, IS IN THE NEGATIVE, THEN SINCE STATUTORY AUTHORITY NOW PROVIDES FOR PERCENTAGE INCREASES IN RETIRED PAY, MUST THE RETIRED PAY TO WHICH SGT KITCHENS BECAME ENTITLED BEGINNING 24 MAR 67, BE THE SAME PAY TO WHICH HE WAS ENTITLED (ALTHOUGH SERVING ON ACTIVE DUTY) ON THE DAY BEFORE 1 DEC 66 IN ORDER TO RECEIVE THE PERCENTAGE INCREASE?

"C. UNLESS RECOMPUTATION OF RETIRED PAY AFTER 1 DEC 66 BECAUSE OF ACTIVE SERVICE IS AUTHORIZED UNDER A HIGHER BASIC PAY RATE THAT WAS EFFECTIVE AFTER THE LAST PERCENTAGE INCREASE IN RETIRED PAY, WOULD RECOMPUTATION UNDER THE CURRENT BASIC PAY RATES IF EFFECTIVE BEFORE THE LAST PERCENTAGE INCREASE IN RETIRED PAY, PREVENT THE MEMBER, AS A RETIRED MEMBER, FROM FURTHER INCREASING HIS RETIRED PAY BY THAT PERCENTAGE INCREASE, NOTWITHSTANDING HIS RELEASE FROM ACTIVE DUTY WAS SUBSEQUENT TO THE EFFECTIVE DATE OF THE PERCENTAGE INCREASE?

UNDER CERTAIN DECISIONS OF THE COURT OF CLAIMS SERGEANT KITCHENS' RELEASE FROM ACTIVE DUTY AND REVERSION TO AN INACTIVE STATUS ON THE RETIRED LIST EFFECTIVE MARCH 24, 1967, MIGHT BE CONSTRUED AS CONSTITUTING A "RE- RETIREMENT" AND AS A CONSEQUENCE THE 3.7 CONSUMER PRICE INDEX PERCENTAGE INCREASD WHICH BECAME EFFECTIVE ON DECEMBER 1, 1966, WOULD NOT BE APPLICABLE IN THE COMPUTATION OF HIS RETIRED PAY FROM MARCH 24, 1967. HOWEVER, SINCE CLAUSE (1) IN 10 U.S.C. 1402 (D) PERMITTED HIM TO ELECT TO RECEIVE THE RETIRED PAY TO WHICH HE BECAME ENTITLED WHEN HE WAS RETIRED ON JULY 1, 1964, AND IN THE ABSENCE OF A CONCLUSIVE JUDICIAL DETERMINATION ON THE "RE-RETIREMENT" ASPECT ABOVE MENTIONED, IT IS CONCLUDED THAT THE RECOMPUTATION OF SERGEANT KITCHENS' RETIRED PAY UNDER SUBSECTION (D) EFFECTIVE FROM MARCH 24, 1967, DID NOT TERMINATE HIS TITLE 10, SECTION 3914, RETIRED STATUS WHICH BECAME EFFECTIVE JULY 1, 1964. QUESTION A IS ANSWERED IN THE NEGATIVE.

IT IS OBVIOUS THAT THE WORDS "THAT PAY" CAN HAVE DIFFERENT MEANINGS DEPENDING ON THE CONTEXT IN WHICH THEY ARE USED. WHILE THE ABOVE QUOTED PROVISIONS OF LAW MAKE NO EXPRESS REFERENCE TO BASIC PAY RATES OR TO THE SPECIFIC AMOUNT OF RETIRED PAY TO WHICH A MEMBER WAS ENTITLED PRIOR TO THE EFFECTIVE DATE OF A CONSUMER PRICE INDEX PERCENTAGE INCREASE, THE WORDS "THAT PAY" IN THE CONTEXT OF SUBSECTION (B) OF SECTION 1401A, CLEARLY HAVE REFERENCE TO THE AMOUNT OF RETIRED PAY OR RETAINER PAY TO WHICH THE INDIVIDUAL CONCERNED WAS ENTITLED PRIOR TO THE DATE SPECIFIED AND NOT MERELY TO THE FACT THAT SUCH PERSON HAD BECOME ENTITLED TO RECEIVE RETIRED OR RETAINER PAY IN SOME AMOUNT PRIOR TO SUCH DATE. IT IS THE AMOUNT OF RETIRED OR RETAINER PAY WHICH THE PERSON WAS ENTITLED TO RECEIVE ON THE DATE PRIOR TO THE DATE SPECIFIED IN SUBSECTION (B) THAT STANDS IN THE RELATIONSHIP OF AN ANTECEDENT TO THE WORDS "THAT PAY" SINCE THAT IS THE AMOUNT OF RETIRED OR RETAINER PAY WHICH IS TO BE INCREASED BY THE CONSUMER PRICE INDEX PERCENTAGE FACTOR.

WHILE SERGEANT KITCHENS WAS SERVING ON ACTIVE DUTY AFTER JULY 11, 1966, HE RECEIVED ACTIVE DUTY PAY AT THE RATE OF $387.60 PER MONTH. HOWEVER, HE DID NOT BECOME ENTITLED TO RETIRED PAY RECOMPUTED UNDER THE PROVISIONS OF 10 U.S.C. 1402 (B) AND (D) ON THE BASIS OF THE HIGHEST MONTHLY BASIC PAY ($387.60) WHICH HE RECEIVED WHILE SERVING ON ACTIVE DUTY AFTER RETIREMENT UNTIL HE REVERTED TO INACTIVE STATUS ON THE RETIRED LIST ON MARCH 24, 1967.

A 3.7 PERCENTAGE INCREASE IN RETIRED AND RETAINER PAY REFLECTING A CORRESPONDING INCREASE IN THE CONSUMER PRICE INDEX FOR THE BASE PERIOD PRESCRIBED IN 10 U.S.C. 1401A (B) (AS AMENDED BY PUBLIC LAW 89-132) WAS ADMINISTRATIVELY DECLARED EFFECTIVE AS OF DECEMBER 1, 1966. UNDER THE EXPRESS TERMS OF SECTION 1401A (B) SUCH CONSUMER PRICE INDEX PERCENTAGE INCREASE WAS APPLICABLE ONLY TO THOSE "MEMBERS OR FORMER MEMBERS OF THE ARMED FORCES WHO BECAME ENTITLED TO THAT PAY" BEFORE DECEMBER 1, 1966. INASMUCH AS SERGEANT KITCHENS DID NOT BECOME ENTITLED TO RETIRED PAY RECOMPUTED ON THE BASIS OF THE 1966 RATES OF ACTIVE DUTY PAY AT ANY TIME PRIOR TO DECEMBER 1, 1966, NO PROPER BASIS IS PRESENTED TO INCREASE HIS PRESENT RETIRED PAY, $232.56 PER MONTH EFFECTIVE FROM MARCH 24, 1967, BY THE 3.7 CONSUMER PRICE INDEX PERCENTAGE INCREASE THAT BECAME EFFECTIVE ON DECEMBER 1, 1966.

QUESTIONS B AND C ARE ANSWERED ACCORDINGLY.

THE VOUCHER RECEIVED WITH YOUR LETTER IS NOT PROPER FOR PAYMENT AND, THEREFORE, WILL BE RETAINED HERE.