B-32434, APRIL 20, 1943, 22 COMP. GEN. 980

B-32434, APRIL 20, 1943, 22 COMP. GEN. 980

RETIREMENT DEDUCTIONS - SENATE EMPLOYEES SINCE ADMINISTRATION OF THE CIVIL SERVICE RETIREMENT ACT IS VESTED BY LAW IN THE CIVIL SERVICE COMMISSION, THIS OFFICE IS NOT REQUIRED TO OBJECT TO THE COMMISSION'S VIEW THAT IN APPLYING THE PROHIBITION IN SECTION 2 OF THE ACT OF JULY 13, 1937, AS AMENDED, AGAINST THE MAKING OF RETIREMENT DEDUCTIONS FROM THE SALARIES OF SENATE EMPLOYEES UNTIL THEY SHALL HAVE SERVED 7 YEARS, THERE SHOULD BE INCLUDED IN THE FIRST 7 YEARS OF SERVICE NOT ONLY ACTUAL SERVICE AS SENATE EMPLOYEES BUT, SO,"ANY SERVICE WHICH MAY BE CREDITED TOWARD RETIREMENT, WHETHER RENDERED IN THE SENATE OR ELSEWHERE.' 22 COMP. GEN. 834, MODIFIED.

COMPTROLLER GENERAL WARREN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, APRIL 20, 1943:

I HAVE YOUR LETTER OF APRIL 3, 1943, AS FOLLOWS:

THE COMMISSION RESPECTFULLY REQUESTS RECONSIDERATION THAT PORTION OF YOUR DECISION OF FEBRUARY 25, 1943, (B-32434) WHICH HOLDS THAT NO RETIREMENT DEDUCTIONS MAY BE MADE FROM THE SALARIES OF SENATE EMPLOYEES UNTIL THEY HAVE SERVED SEVEN YEARS AS SENATE EMPLOYEES.

THAT PORTION OF THE ACT OF JULY 13, 1937, (50 STAT. 512) PERTINENT TO THE ISSUE READS AS FOLLOWS:

"NO SUCH EMPLOYEE WHOSE SALARY OR ANY PART THEREOF IS PAID BY THE DISBURSING OFFICER OF THE SENATE SHALL MAKE ANY DEPOSIT REQUIRED BY SECTION 9, OR ANY REDEPOSIT REQUIRED BY SUBSECTION (B) OF SECTION 12, OF SUCH ACT OF MAY 29, 1930, AND THERE SHALL NOT BE DEDUCTED AND WITHHELD FROM THE BASIC SALARY, PAY, OR COMPENSATION OF ANY SUCH EMPLOYEE THE SUM REQUIRED TO BE DEDUCTED AND WITHHELD BY SECTION 10 OF SUCH ACT OF MAY 29, 1930, UNLESS AND UNTIL SUCH EMPLOYEE SHALL HAVE COMPLETED FIFTEEN YEARS OF SERVICE: * * * (REDUCED TO SEVEN YEARS BY THE ACT OF JUNE 25, 1938, 52 STAT. 1197.)"

IN THE ADMINISTRATION OF THE RETIREMENT LAW, THE COMMISSION HAS ALWAYS CONSIDERED THE REQUIRED SEVEN (OR FIFTEEN) YEARS OF SERVICE TO INCLUDE ANY SERVICE WHICH MAY BE CREDITED TOWARD RETIREMENT, WHETHER RENDERED IN THE SENATE OR ELSEWHERE. FOLLOWING SUCH INTERPRETATION, THE DISBURSING OFFICER OF THE SENATE HAS MADE AND IS NOW MAKING DEDUCTIONS IN MANY CASES INVOLVING EMPLOYEES WHO HAVE SERVED LESS THAN SEVEN YEARS IN THE SENATE, BUT WHOSE TOTAL GOVERNMENT SERVICE AGGREGATES OR EXCEEDS SUCH PERIOD. YOU WILL NOTE THAT THE ACT MERELY SETS SEVEN YEARS OF SERVICE WITHOUT SPECIFYING ANY PARTICULAR TYPE, AND THERE APPEARS NO INDICATION OF ANY INTENTION PRIOR TO ITS ENACTMENT TO ACCOMPLISH ANY DIFFERENT RESULT.

WHEN THE ACT OF JULY 13, 1937, SUPRA, WAS APPROVED, A MINIMUM OF FIFTEEN YEARS OF SERVICE, EXCEPT IN DISABILITY CASES, WAS REQUIRED FOR TITLE TO ANNUITY. THE PURPOSE OF THIS RESTRICTION ON DEDUCTIONS, DEPOSITS, AND REDEPOSITS, WAS TO RELIEVE THE DISBURSING OFFICER OF THE SENATE FROM MAKING DEDUCTIONS IN CASES OF PERSONS WHOSE INSUFFICIENT SERVICE EXCLUDED THEM AS POTENTIAL ANNUITANTS. THE ACT OF JANUARY 24, 1942, HOWEVER, VESTS ANNUITY RIGHTS IN ANY EMPLOYEE SEPARATED AFTER HAVING SERVED AT LEAST FIVE YEARS. THIS TOGETHER WITH THE DEFINITELY INCONSISTENT PROVISIONS OF SECTION 3 OF THE JANUARY, 1942, AMENDMENT SHOWS, IN OUR OPINION, A CLEAR INTENTION ON THE PART OF CONGRESS TO REPEAL THE SEVEN YEAR RESTRICTION ON DEDUCTIONS, DEPOSITS AND REDEPOSITS. IN OTHER WORDS, THE RETIREMENT ACT AS NOW AMENDED REQUIRES THE AUTOMATIC WITHHOLDING OF RETIREMENT DEDUCTIONS FROM THE SALARIES OF ALL EMPLOYEES WHO ACQUIRE A STATUS THEREUNDER WITHOUT EXCEPTION. WE FIND NOTHING IN THE PRESENT LAW WHICH LEADS TO THE CONCLUSION THAT SENATE EMPLOYEES SHOULD BE EXCLUDED FROM THIS PROVISION VESTING ANNUITABLE TITLE AFTER FIVE YEARS OF SERVICE.

ANY OTHER INTERPRETATION OF THE LAW WOULD LEAD TO INEQUITABLE RESULTS IN THE CASES OF MANY EMPLOYEES. FOR EXAMPLE, AN INDIVIDUAL MAY HAVE SERVED IN THE EXECUTIVE BRANCH OF THE GOVERNMENT IN A POSITION WITHIN THE PURVIEW OF THE RETIREMENT ACT AND HAD DEDUCTIONS MADE FROM HIS SALARY FOR AS MANY AS FIFTEEN OR TWENTY YEARS. UPON TRANSFER TO A SENATE POSITION, HE COULD NOT CURRENTLY MAKE CONTRIBUTIONS TO THE RETIREMENT FUND UNTIL SEVEN YEARS THEREAFTER, AT WHICH TIME HE WOULD BE COMPELLED TO DEPOSIT NOT ONLY THE DEDUCTIONS OMITTED BUT ALSO INTEREST THEREON COMPOUNDED AT 4 PERCENT PER ANNUM BEFORE HE WOULD HAVE ANY TITLE TO ANNUITY. THE COMMISSION DOES NOT BELIEVE THAT THE LIBERALIZED RETIREMENT LAW CONTEMPLATES SUCH A RESULT.

THAT PORTION OF MY DECISION OF FEBRUARY 25, 1943, B-32434, 22 COMP. GEN. 834, OF WHICH YOU REQUEST RECONSIDERATION, WAS TO THE EFFECT THAT THE PROVISIONS OF THE ACT OF JULY 13, 1937, 50 STAT. 512, QUOTED IN YOUR PRESENT LETTER, WERE NOT VIEWED AS HAVING BEEN SUPERSEDED OR RENDERED INOPERATIVE BY ANY PROVISION APPEARING IN THE ACT OF JANUARY 24, 1942, 56 STAT. 13, PUBLIC LAW 411, AMENDING THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, IN VIEW OF WHICH THERE APPEARED NO PROPER BASIS FOR DISTURBING THE HOLDING MADE BY THE ACTING COMPTROLLER GENERAL OF THE UNITED STATES IN HIS DECISION OF MARCH 2, 1939, 18 COMP. GEN. 683.

YOUR SUBMISSION OF FEBRUARY 6, 1939, ON THE BASIS OF WHICH THE LATTER DECISION WAS RENDERED, APPEARS TO HAVE BEEN ACTUATED BY A PRIOR DECISION OF THE ACTING COMPTROLLER GENERAL OF THE UNITED STATES TO THE FINANCIAL CLERK OF THE UNITED STATES SENATE, DATED JANUARY 5, 1939, B 329, WHEREIN IT WAS CONCLUDED:

THE TERMS OF SECTION 2 OF THE ACT OF JULY 13, 1937, 50 STAT. 512, QUOTED IN YOUR LETTER, AS AMENDED BY PARAGRAPH (B) OF THE ACT OF JUNE 25, 1938, PUBLIC NO. 740, 75TH CONGRESS, UNQUESTIONABLY PROHIBIT RETIREMENT DEDUCTIONS FROM THE COMPENSATION OF ANY EMPLOYEE "WHOSE SALARY OR ANY PART THEREOF IS PAID BY THE DISBURSING OFFICER OF THE SENATE," UNLESS AND UNTIL SUCH EMPLOYEE SHALL HAVE COMPLETED SEVEN YEARS OF SERVICE. NO DISCRETION IS VESTED IN THOSE RESPONSIBLE FOR MAKING THE DEDUCTIONS AND NO OPTION IS GRANTED SENATE EMPLOYEES DURING THE FIRST SEVEN YEARS OF SERVICE. I AM IN AGREEMENT WITH THE POSITION YOU HAVE TAKEN IN THE CASE PRESENTED. IT IS TO BE UNDERSTOOD, OF COURSE, THAT THE EMPLOYEE CONCERNED IS NOT REQUIRED TO WITHDRAW FROM THE RETIREMENT FUND THE AMOUNTS PLACED THEREIN TO HIS CREDIT AS A RESULT OF DEDUCTIONS FROM HIS COMPENSATION DURING HIS PRIOR SERVICE.

IT WOULD APPEAR FROM YOUR PRESENT LETTER THAT THE RESPONSIBLE OFFICERS OF THE UNITED STATES SENATE AND OF THE UNITED STATES CIVIL SERVICE COMMISSION HERETOFORE HAVE CONCLUDED THAT THERE COULD BE INCLUDED IN THE FIRST SEVEN YEARS OF SERVICE WITHIN THE MEANING OF THE ACT OF 1937, NOT ONLY ACTUAL SERVICE AS SENATE EMPLOYEES BUT, ALSO,"ANY SERVICE WHICH MAY BE CREDITED TOWARD RETIREMENT, WHETHER RENDERED IN THE SENATE OR ELSEWHERE" (QUOTING FROM THE THIRD PARAGRAPH OF YOUR LETTER), AND THAT RETIREMENT DEDUCTIONS HAVE BEEN MADE FROM THE COMPENSATION OF THE INVOLVED EMPLOYEES ACCORDINGLY.

AS THE ADMINISTRATION OF THE CIVIL SERVICE RETIREMENT ACT HAS BEEN VESTED BY LAW IN THE CIVIL SERVICE COMMISSION, AND AS THE QUESTION PRESENTED DOES NOT INVOLVE THE EXPENDITURE OF APPROPRIATED FUNDS, THE VIEW STATED IN MY LETTER OF FEBRUARY 25, 1943, B-32434, TO YOU, WILL NOT BE INSISTED UPON. HENCE, THE EXISTING PRACTICE INDICATED IN YOUR LETTER WILL NOT BE OBJECTED TO BY THIS OFFICE.