B-140632, APR. 5, 1963

B-140632, APR. 5, 1963

TO COLONEL WEBSTER MILLS, HEADQUARTERS, DEPARTMENT OF THE ARMY:

YOUR LETTER OF DECEMBER 7, 1962, REQUESTING AN ADVANCE DECISION ON RETIRED PAY ADJUSTMENT IN THE CASE OF COLONEL GOLDEN P. KRATZ, 0 203 702, RETIRED, WAS FORWARDED TO THIS OFFICE BY FIRST INDORSEMENT DATED FEBRUARY 25, 1963, FROM THE OFFICE, CHIEF OF FINANCE. THE REQUEST WAS ASSIGNED D.O. NUMBER A-693 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE. ATTACHED THERETO IS A VOUCHER IN THE AMOUNT OF $587.49 REPRESENTING RETIRED PAY ADJUSTMENT FOR THE DIFFERENCE BETWEEN THE PAY OF A COLONEL AND THAT OF LIEUTENANT COLONEL FOR THE PERIOD MARCH 8, 1962, THROUGH SEPTEMBER 30, 1962, BASED ON THE DECISION IN GOLDEN P. KRATZ V. UNITED STATES, CT.CL. NO. 347-59, DECIDED MARCH 7, 1962. IN A JUDGMENT RENDERED ON JUNE 15, 1962, HE WAS AWARDED THE SUM OF $8,373.15, REPRESENTING ADDITIONAL RETIRED PAY DUE PURSUANT TO THE DECISIONS OF MARCH 7, 1962, FOR THE PERIOD AUGUST 1, 1953, TO MARCH 7, 1962.

IT IS STATED THAT COLONEL KRATZ WAS RETIRED IN THE GRADE OF LIEUTENANT COLONEL EFFECTIVE OCTOBER 31, 1952, UNDER THE PROVISIONS OF SECTIONS 402 AND 409 OF THE CAREER COMPENSATION ACT OF 1949, CH. 681, 63 STAT. 802, BY REASON OF 60 PERCENT PERMANENT DISABILITY. HE WAS CREDITED WITH 25 YEARS, 1 MONTH AND 16 DAYS OF SERVICE FOR BASIC PAY PURPOSES AND 10 YEARS, 9 MONTHS AND 20 DAYS' ACTIVE SERVICE AND PERFORMED SERVICE FROM JUNE 12, 1917, TO MARCH 20, 1919, A PORTION OF WHICH SERVICE IS STATED TO HAVE FULFILLED THE REQUIREMENTS FOR PAYMENT OF RETIRED PAY AT 75 PERCENT.

HE WAS PAID RETIRED PAY COMPUTED AT 75 PERCENT OF THE BASIC PAY OF A LIEUTENANT COLONEL WITH OVER 25 YEARS' SERVICE FOR BASIC PAY PURPOSES. THE OFFICER WAS EMPLOYED BY AN AGENCY OF THE UNITED STATES GOVERNMENT DURING THE PERIOD DECEMBER 1, 1952, THROUGH OCTOBER 31, 1953, WITH A SALARY IN EXCESS OF THE $3,000 ANNUAL LIMITATION IMPOSED BY SECTION 212 OF THE ACT OF JUNE 30, 1932. RETIRED PAY WITHHELD DURING THIS PERIOD OF EMPLOYMENT IN THE AMOUNT OF $3,410.12 WAS PAID TO HIM IN AUGUST 1957 ON THE BASIS OF THE ADMINISTRATIVE INTERPRETATION OF 36 COMP. GEN. 808.

YOUR DOUBT AS TO THE PROPRIETY OF PAYMENT OF THE VOUCHER IS BROUGHT ABOUT BY THE FACT THAT, WHILE YOUR RECORDS INDICATE THAT COLONEL KRATZ HELD THE GRADE OF LIEUTENANT COLONEL IN THE OFFICERS RESERVE CORPS ON THE DATE OF RETIREMENT, THE ADJUTANT GENERAL, DEPARTMENT OF THE ARMY, HAS INFORMED YOU THAT THE MEMBER WAS CONSIDERED AND SELECTED FOR PROMOTION TO THE TEMPORARY GRADE OF COLONEL IN THE ARMY OF THE UNITED STATES, AS INDICATED BY INCLUSION OF HIS NAME IN DAGO 82, DATED AUGUST 28, 1952. IT WAS BY REASON OF THIS SELECTION THAT THE COURT OF CLAIMS IN ITS DECISION OF MARCH 7, 1962, ALLOWED COLONEL KRATZ- CLAIM FOR RETIRED PAY BASED ON THE GRADE OF COLONEL.

YOU INDICATE THAT THE OFFICER SHOULD THEREFORE BE CONSIDERED TO BE SUBJECT TO THE DUAL COMPENSATION RESTRICTION OF SECTION 212 OF THE ACT OF JUNE 30, 1932, AS AMENDED, PURSUANT TO DECISIONS OF MAY 18, 1961, AND JULY 9, 1962, B-136459. YOU STATE FURTHER THAT, WHILE RETIRED PAY OF COLONEL KRATZ WAS INCREASED TO THAT OF A COLONEL EFFECTIVE OCTOBER 1, 1962, ADJUSTMENT OF RETIRED PAY OF $587.49 FOR THE PERIOD MARCH 8 THROUGH SEPTEMBER 30, 1962, WAS WITHHELD PENDING INFORMATION AS TO WHETHER RETIRED PAY OVERPAYMENT AS A RESULT OF DECISIONS DATED MAY 18, 1961, AND JULY 9, 1962, B-136459 WOULD BE VALIDATED BY THE CONGRESS.

WITH RESPECT TO THE QUESTION OF WHETHER THE OFFICER WAS EXEMPT FROM DUAL COMPENSATION, WE SAID IN DECISION OF MAY 18, 1961, B-136459 THAT AN OFFICER APPOINTED IN THE ARMY OF THE UNITED STATES UNDER AUTHORITY CONTAINED IN THE ACT OF SEPTEMBER 22, 1941, 55 STAT. 728, 729, WAS "ENTITLED TO THE SAME RIGHTS, PRIVILEGES, AND BENEFITS AS MEMBERS OF THE OFFICERS' RESERVE CORPS OF THE SAME GRADE AND LENGTH OF ACTIVE SERVICE.' SECTION 1 (B) OF THE ACT OF JULY 1, 1947, 61 STAT. 239 (AMENDED BY SECTION 29 (C) OF THE ACT OF AUGUST 10, 1956, 5 U.S.C. 30R (C), WAS CONSIDERED TO COVER ANY PERSON WHO HAD BECOME ENTITLED TO RETIREMENT PAY "BY REASON OF SERVICE IN A RESERVE COMPONENT" AND THAT BY VIRTUE OF THE ABOVE ACT OF SEPTEMBER 22, 1941, AN OFFICER HOLDING A COMMISSION IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT UNDER THAT ACT WAS EXEMPT FROM THE DUAL COMPENSATION RESTRICTIONS OF THE 1932 ECONOMY ACT DURING A PERIOD OF CIVILIAN EMPLOYMENT SO LONG AS HE CONTINUED TO HAVE A STATUS IN THE ARMY OF THE UNITED STATES. IN THE SAME DECISION WE NOTED THAT ARMY OF THE UNITED STATES OFFICERS APPOINTED UNDER THE PROVISIONS CONTAINED IN SECTION 515 (H) OF THE OFFICER PERSONNEL ACT OF 1947, 61 STAT. 908 (NOW CODIFIED IN 10 U.S.C. 3491 WITH RESPECT TO ARMY PERSONNEL) WERE GRANTED ONLY THE RIGHTS, PRIVILEGES AND BENEFITS OF RESERVES WHILE SERVING ON ACTIVE DUTY.

IN DECISION OF JULY 9, 1962, B-136459 WE HELD THAT RESERVE OFFICERS OF THE ARMY OR AIR FORCE WHO WERE SERVING ON ACTIVE DUTY IN TEMPORARY GRADES (TO WHICH THEY WERE APPOINTED UNDER SECTION 515 OF THE OFFICER PERSONNEL ACT OF 1947, CH. 521, 61 STAT. 906) EQUAL TO, OR HIGHER THAN THEIR RESERVE GRADES AT THE TIME OF RETIREMENT FOR PHYSICAL DISABILITY (UNDER ANY PROVISION OF LAW) MAY NOT BE CONSIDERED AS HAVING BEEN RETIRED UNDER LAWS RELATING TO RESERVE OFFICERS SO AS TO EXEMPT THEM FROM THE DUAL COMPENSATION RESTRICTIONS CONTAINED IN SECTION 212 OF THE ECONOMY ACT, AS AMENDED. SINCE COLONEL KRATZ- GRADE AT RETIREMENT WAS HELD TO BE THAT OF COLONEL, ARMY OF THE UNITED STATES, TO WHICH HE WAS APPOINTED UNDER THE OFFICER PERSONNEL ACT OF 1947 WHILE HIS RESERVE GRADE WAS LIEUTENANT COLONEL, HE MUST BE CONSIDERED AS HAVING BEEN RETIRED AS OFFICER OF THE ARMY OF THE UNITED STATES AND THEREFORE SUBJECT TO THE SECTION 212 LIMITATION DURING THE PERIOD FOLLOWING HIS RETIREMENT. THEREFORE HE WAS NOT ENTITLED TO THE PAYMENT OF RETIRED PAY FOR THE PERIOD DECEMBER 1, 1952, TO OCTOBER 31, 1953, WHICH WAS PAID TO HIM IN 1957.

IN DECISION OF AUGUST 14, 1962, B-136459, ADDRESSED TO THE SECRETARY OF DEFENSE RELATIVE TO WITHHOLDING COLLECTION ACTION FOR THE AMOUNTS DUE THE UNITED STATES FOR RETIRED PAY PAYMENTS MADE TO CERTAIN OFFICERS IN CONTRAVENTION OF SECTION 212, WE STATED THAT THE OPERATION OF THE DECISION OF JULY 9, 1962, MAY NOT BE POSTPONED TO PERMIT SUCH PAYMENTS TO CONTINUE FOR A PERIOD OF TIME IN EXCESS OF THAT REQUIRED FOR THE ADMINISTRATIVE OFFICE TO COMPLETE THE NECESSARY EXAMINATION OF ACCOUNTS AND THAT THE DECISION SHOULD BE APPLIED PROSPECTIVELY NOT LATER THAN OCTOBER 1, 1962. RESPECTING COLLECTION ACTION FOR PAYMENTS MADE PRIOR TO OCTOBER 1, 1962, WE STATED IN THAT DECISION THAT, PENDING CONSIDERATION OF LEGISLATION TO GRANT RELIEF IN THIS CLASS OF CASE, FURTHER COLLECTION ACTION MAY BE POSTPONED UNTIL THE END OF THE FIRST SESSION OF THE 88TH CONGRESS EXCEPT WHERE SUCH COLLECTION ACTION IS REQUIRED TO PROTECT THE INTERESTS OF THE GOVERNMENT.

SINCE THE ERRONEOUS PAYMENTS HERE INVOLVED WERE MADE PRIOR TO, AND COVERED A PERIOD PRIOR TO, OCTOBER 1, 1962, NO COLLECTION ACTION WOULD APPEAR REQUIRED AT THIS TIME AND PAYMENT OF THE ..END :