B-122507, MAY 2, 1955, 34 COMP. GEN. 555

B-122507, MAY 2, 1955, 34 COMP. GEN. 555

PAY - RETIRED - ANNUITIES FOR DEPENDENTS - UNIFORMED SERVICES CONTINGENCY OPTION ACT, 1953 UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, AN ELECTION MADE UNDER OPTION 3 TO PROVIDE SEPARATE ANNUITIES FOR WIFE AND CHILDREN, AT THE SAME TIME AN ELECTION WAS MADE UNDER OPTION 2 ON BEHALF OF CHILDREN, DID NOT CONSTITUTE AN AUTHORIZED ELECTION, AND THE SUBSEQUENT SELECTION OF OPTION 3 EXCLUSIVELY IS AN ORIGINAL ELECTION AND NOT SUBJECT TO THE RESTRICTION APPLICABLE TO MODIFICATION OR REVOCATION OF PRIOR ELECTIONS.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF DEFENSE, MAY 2, 1955:

THE ASSISTANT SECRETARY OF DEFENSE, BY LETTER OF JANUARY 5, 1955, REQUESTED A DECISION ON THE FOLLOWING TWO QUESTIONS ARISING UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501, AS SET FORTH IN COMMITTEE ACTION NO. 1 OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT COMMITTEE, DEPARTMENT OF DEFENSE:

QUESTION 1:

UNDER THE ACT OF 8 AUGUST 1953 (67 STAT. 501), MAY AN ACTIVE MEMBER ELECT TO RECEIVE A REDUCED AMOUNT OF ANY RETIRED PAY WHICH MAY BE AWARDED HIM IN ORDER TO PROVIDE AN ANNUITY PAYABLE TO OR ON BEHALF OF HIS SURVIVING CHILD OR CHILDREN (OPTION (2) ( AND AN ANNUITY PAYABLE TO OR ON BEHALF OF HIS WIDOW AND SURVIVING CHILDREN (OPTION (3) (, IF OTHERWISE PROPER?

THE CONTINGENCY OPTION ACT OF 1953, 67 STAT. 502, 503, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

SEC. 3. (A) AN ACTIVE MEMBER MAY ELECT, PRIOR TO THE COMPLETION OF EIGHTEEN YEARS OF SERVICE WHICH IS CREDITABLE IN THE COMPUTATION OF ACTIVE -DUTY PAY IN THE UNIFORMED SERVICE OF WHICH HE IS A MEMBER, TO RECEIVE A REDUCED AMOUNT OF ANY RETIRED PAY WHICH MAY BE AWARDED HIM AS THE RESULT OF SERVICE IN HIS UNIFORMED SERVICE IN ORDER TO PROVIDE ONE OR MORE OF THE ANNUITIES SPECIFIED IN SECTION 4, PAYABLE AFTER HIS DEATH IN A RETIRED STATUS TO HIS WIDOW, CHILD, OR CHILDREN, IF SUCH WIDOW, CHILD, OR CHILDREN ARE LIVING AT THE DATE OF HIS RETIREMENT. * * * THE TERMS OF THE ELECTION MAY BE MODIFIED OR REVOKED BY A MEMBER AT ANY TIME PRIOR TO HIS RETIREMENT BUT ANY MODIFICATION OR REVOCATION SO MADE SHALL NOT BE EFFECTIVE IF HE RETIRES WITHIN FIVE YEARS AFTER THE DATE IT IS MADE. * * *

SEC. 4. (A) UNDER THE CONDITIONS SET FORTH IN SECTION 3, AN ACTIVE OR RETIRED MEMBER MAY ELECT ONE OR MORE OF THE FOLLOWING ANNUITIES, PAYABLE UNDER THIS ACT, IN SUCH AMOUNT, EXPRESSED AS A PERCENTAGE OF THE REDUCED AMOUNT OF HIS RETIRED PAY, AS HE MAY SPECIFY AT THE TIME OF ELECTION, IN AMOUNTS EQUAL TO ONE-HALF, ONE-QUARTER OR ONE-EIGHTH OF THE REDUCED AMOUNT OF HIS RETIRED PAY.

(1) AN ANNUITY PAYABLE TO OR ON BEHALF OF HIS WIDOW, * * *

(2) AN ANNUITY PAYABLE TO OR ON BEHALF OF HIS SURVIVING CHILD OR CHILDREN, * * *

(3) AN ANNUITY PAYABLE TO OR ON BEHALF OF HIS WIDOW AND SURVIVING CHILDREN, * * *

(4) AN ANNUITY PAYABLE UNDER THE SAME TERMS AND CONDITIONS AS SPECIFIED IN (1), (2), OR (3), OF THIS SUBSECTION, WITH THE ADDITIONAL PROVISION THAT NO FURTHER DEDUCTIONS SHALL BE MADE FROM THE RETIRED PAY OF THE MEMBER COMMENCING WITH THE FIRST DAY OF THE MONTH FOLLOWING THAT IN WHICH THERE WAS NO BENEFICIARY WHO WOULD HAVE BEEN ELIGIBLE TO RECEIVE, UPON THE DEATH OF THE MEMBER, AN ANNUITY PAYABLE UNDER THE ELECTION MADE BY HIM.

(B) WHERE AN ACTIVE OR RETIRED MEMBER DESIRES TO PROVIDE MORE THAN ONE ANNUITY, HE MAY ELECT (1) AND (2) OF SUBSECTION (A) OF THIS SECTION, WITH OR WITHOUT THE PROVISIONS OF (4) THEREOF, BUT IN NO CASE MAY THE COMBINED AMOUNTS OF THE ANNUITIES EXCEED 50 PERCENTUM OF THE AMOUNT OF HIS REDUCED RETIRED PAY.

WHILE BOTH SECTIONS 3 (A) AND 4 (A) OF THE ACT PERMIT ELECTIONS OF "ONE OR MORE" OF THE ANNUITIES SPECIFIED IN SECTION 4, IT IS NOT STATED WHICH COMBINATIONS ARE OPEN TO SELECTION AND IT IS NECESSARY TO REFER TO THE MORE DETAILED PROVISIONS OF SECTION 4 TO DETERMINE THAT MATTER. THERE SEEMS NO DOUBT THAT A MEMBER MAY ELECT COMBINATIONS OF OPTIONS (1) AND (4), (2) AND (4), AND (3) AND (4). SECTION 4 (B) SPECIFICALLY PROVIDES, HOWEVER, THAT IF A MEMBER DESIRES TO PROVIDE MORE THAN ONE ANNUITY HE MAY ELECT (1) AND (2) WITH OR WITHOUT (4). OPTION (3) IS A FAMILY ANNUITY AND THE ONLY OTHER ELECTION APPARENTLY CONTEMPLATED WHICH WOULD PROVIDE AN ANNUITY FOR BOTH THE WIDOW AND CHILDREN, IS A COMBINATION OF (1) AND (2). IN THIS CONNECTION ATTENTION IS INVITED TO THE EXPLANATIONS OF OPTIONS WHICH APPEAR ON PAGE 4 OF HOUSE REPORT NO. 496 TO ACCOMPANY H.R. 5304 (WHICH BECAME THE CONTINGENCY OPTION ACT) AND ON PAGES 7 AND 8 OF THE HEARINGS ON THAT BILL BEFORE THE SENATE COMMITTEE ON ARMED SERVICES. THE ONLY COMBINATION OF OPTIONS (1), (2), AND (3) THERE LISTED IS (1) AND (2). IF THE DRAFTERS OF THE BILL ENVISIONED A SITUATION WHICH SUGGESTED THE DESIRABILITY OF A COMBINATION OF (2) AND (3) SUCH AS IS MENTIONED IN THE DISCUSSION IN COMMITTEE ACTION NO. 1, THAT IS, WHERE A MEMBER HAS A WIFE SO IMPROVIDENT THAT HE WISHES TO PROVIDE SEPARATE ANNUITIES FOR HIS WIFE AND CHILDREN AND MAKE CERTAIN THAT HER ANNUITY WOULD PASS TO THEM IN THE EVENT SHE PREDECEASED THEM, IT PRESUMABLY WAS THOUGHT THAT SUCH SITUATION WOULD ARISE SO SELDOM AS NOT TO WARRANT CONSIDERATION BY THE CONGRESS. SEE, ALSO, SECTION 202 OF THE REGULATIONS FOR THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953. ACCORDINGLY, QUESTION 1 IS ANSWERED IN THE NEGATIVE.

QUESTION 2:

IF THE ANSWER TO QUESTION 1 IS IN THE NEGATIVE, MAY A MEMBER WHO HAS ELECTED OPTIONS (2) AND (3, EACH IN AMOUNTS EQUAL TO ONE-QUARTER OF HIS REDUCED RETIRED PAY, CORRECT HIS ELECTION BY SELECTING OPTION (3) ONLY, IN AN AMOUNT EQUAL TO ONE-QUARTER OF HIS REDUCED RETIRED PAY, WITHOUT BEING SUBJECT TO THE RESTRICTION THAT SUCH CORRECTION IS NOT EFFECTIVE IF HE RETIRES WITHIN FIVE YEARS AFTER THE DATE THE CORRECTION IS MADE?

SINCE THE ELECTION OF OPTIONS (2) AND (3) WAS NOT AN ELECTION WHICH WAS OPEN TO THE MEMBER, HIS ACTION DID NOT CONSTITUTE AN ELECTION UNDER THE LAW. HENCE, A LATER SELECTION OF OPTION (3) WOULD BE AN ORIGINAL ELECTION AND COULD NOT BE REGARDED AS A MODIFICATION OR REVOCATION OF A PRIOR ELECTION WITHIN THE MEANING OF SECTION 3 (A).