B-141122, JAN. 6, 1960

B-141122, JAN. 6, 1960

TO COMMANDER R. A. WILSON, DISBURSING OFFICER, UNITED STATES NAVY FINANCE CENTER:

BY SECOND INDORSEMENT OF OCTOBER 27, 1959, THE COMPTROLLER OF THE NAVY FORWARDED YOUR LETTER DATED SEPTEMBER 23, 1959, REQUESTING AN ADVANCE DECISION AS TO THE LEGAL EFFECT OF TWO ELECTIONS MADE BY LIEUTENANT SAMUEL J. ABBOTT (DC) USNR, UNDER THE PROVISIONS OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501, AS AMENDED, 37 U.S.C. 371 (NOW CODIFIED IN 10 U.S.C. 1431-1444). THE REQUEST FOR ADVANCE DECISION WAS ASSIGNED SUBMISSION NO. DO-N-465 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

YOU REPORT THAT ON NOVEMBER 17, 1953, LIEUTENANT ABBOTT EXECUTED AND MAILED TO THE NAVY FINANCE CENTER AN ELECTION UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, ELECTING A COMBINATION OF OPTIONS, 1 (FOR HIS WIDOW) AND 2 (IN EQUAL SHARES TO OR ON BEHALF OF HIS SURVIVING CHILDREN), EACH FOR ONE-HALF OF HIS REDUCED RETIRED PAY. HE ELECTED TO COMBINE OPTION 4 WITH OPTION 1. BY LETTER DATED DECEMBER 4, 1953, THE NAVY FINANCE CENTER INFORMED LIEUTENANT ABBOTT THAT HIS ELECTION WAS NOT PROPERLY COMPLETED DUE TO THE FACT THAT THE FRACTIONS DESIGNATED TOTALED IN EXCESS OF 50 PERCENT OF HIS REDUCED RETIRED PAY AND, THEREFORE, IT WAS CONSIDERED THAT HE HAD NOT MADE AN ELECTION. NEW ELECTION FORMS WERE TRANSMITTED TO HIM FOR COMPLETION. ON DECEMBER 14, 1953, A SECOND FORM WAS SUBMITTED BY HIM ELECTING OPTION 3 AT ONE-HALF OF HIS REDUCED RETIRED PAY, PAYABLE UPON HIS DEATH TO OR ON BEHALF OF HIS SURVIVING WIDOW UNTIL HER REMARRIAGE OR DEATH, AND THEREAFTER TO HIS SURVIVING CHILDREN UNDER 18 YEARS OF AGE AND UNMARRIED. OPTION 4 WAS NOT ELECTED. ON THE BASIS OF THE SECOND ELECTION FORM IN JANUARY 1954 THE NAVY FINANCE CENTER ESTABLISHED MONTHLY DEDUCTIONS OF $30.01 FROM HIS RETIRED PAY RETROACTIVE TO DECEMBER 1, 1953.

IN OCTOBER 1954, THE NAVY FINANCE CENTER ADVISED LIEUTENANT ABBOTT BY NOTATION ON PAY ACCOUNT CERTIFICATION FORM THAT IN 33 COMP. GEN. 460 IT WAS HELD THAT "AN ELECTION ONCE MADE UNDER THE USCC ACT OF 1953 CANNOT BE REVOKED EVEN THOUGH THE ELECTION FORM CONTAINS AN ERROR," AND THAT PURSUANT THERETO IT WAS NECESSARY TO ADJUST HIS ACCOUNT TO REFLECT THE COST FOR AN ANNUITY PURSUANT TO HIS ELECTION OF OPTION 3 AT ONE-HALF REDUCED RETIRED PAY BASED ON THE AGES AT THE TIME OF HIS ORIGINAL ELECTION NOVEMBER 17, 1953. ALSO, HE WAS TOLD THAT A CHECK AGE FOR THE MONTH OF NOVEMBER 1953 WAS REQUIRED SINCE HE EXECUTED HIS ELECTION IN THAT MONTH AND WAS PROVIDED COVERAGE FROM NOVEMBER 1, 1953. ACCORDINGLY, DEDUCTIONS WERE ADJUSTED IN HIS RETIRED PAY TO THE MONTHLY RATE OF $30.91 RETROACTIVE TO NOVEMBER 1, 1953. YOU REQUEST A DECISION AS TO WHETHER ON THE BASIS OF 36 COMP. GEN. 764, THE ELECTION OF DECEMBER 14, 1953, MAY BE CONSIDERED TO BE A ,SUBSTANTIALLY CONTEMPORANEOUS CORRECTION OF A PATENT ERROR" IN THE ELECTION OF NOVEMBER 17, 1953, RATHER THAN A MODIFICATION THEREOF.

UNDER SECTION 4 (A) OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT THE MEMBER COULD ELECT ONE OR MORE OF THE DIFFERENT OPTIONS THERE PROVIDED WHEREBY ANNUITIES MIGHT BE PAID IN AMOUNTS EQUAL TO ONE-HALF, ONE-QUARTER OR ONE-EIGHT OF THE REDUCED AMOUNT OF HIS RETIRED PAY. WHILE LIEUTENANT ABBOTT'S ELECTION OF NOVEMBER 17, 1953, WAS DEFICIENT IN THAT THE TWO ONE- HALF RATES STATED--- POSSIBLY THROUGH INADVERTENCE- EXCEEDED IN THE AGGREGATE THE MAXIMUM PERCENT OF THE REDUCED AMOUNT OF HIS RETIRED PAY (50 PERCENT) PERMITTED BY THE STATUTE, SUCH ELECTION WAS LEGAL IN OTHER RESPECTS AND EVIDENCED A CLEAR INTENT TO APPLY FOR COVERAGE FOR HIS WIFE AND CHILDREN CONCURRENTLY IN THE MAXIMUM AMOUNT AUTHORIZED BY LAW. SUCH ELECTION WAS NOT A NULLITY AND MUST BE GIVEN EFFECT IF SUCH ACTION CAN BE TAKEN WITHIN THE LIMITATIONS OF THE STATUTE. IT APPEARS THAT THE ELECTION OF NOVEMBER 17, 1953, MAY BE GIVEN EFFECT BY REDUCING THE ONE-HALF RATES STATED IN THAT ELECTION FOR OPTIONS 1 AND 2, TO THE MAXIMUM (ONE-QUARTER) RATES PERMISSIBLE UNDER THE STATUTE FOR A COMBINATION OF SUCH OPTIONS. SEE 34 COMP. GEN. 35. COMPARE B-132215, DATED SEPTEMBER 18, 1957.

SECTION 3 (B) OF THE ACT, PROVIDES THAT AN ELECTION ONCE MADE BY A RETIRED MEMBER SHALL THEREAFTER BE IRREVOCABLE. IN THE PRESENT CASE, THE SECOND ELECTION ELIMINATED OPTION 4 WHICH WAS A PART OF THE FIRST ELECTION AND THUS CONSTITUTED A NEW AND DIFFERENT ELECTION, RATHER THAN A MERE CORRECTION OF A PATENT ERROR IN THE FIRST ELECTION WITHIN THE RULE STATED IN 36 COMP. GEN. 764. IT IS OUR VIEW THAT, UNDER THE FACTS APPEARING IN HIS CASE, LIEUTENANT ABBOTT'S FIRST ELECTION WAS VALID AND EFFECTIVE AND THUS WAS IRREVOCABLE AND THAT ITS DEFECT MAY BE CURED, AS INDICATED ABOVE BY REDUCING THE ONE-HALF RATES TO ONE QUARTER RATES. YOUR QUESTION IS ANSWERED ACCORDINGLY.