B-141131, DECEMBER 30, 1959, 39 COMP. GEN. 481

B-141131, DECEMBER 30, 1959, 39 COMP. GEN. 481

MILITARY PERSONNEL - RETIRED PAY - SURVIVOR ANNUITY OPTION ELECTIONS - CLARIFICATION SURVIVOR ANNUITY OPTION ELECTIONS MADE BY MEMBERS OF THE UNIFORMED SERVICES, WHICH ARE NOT ABSOLUTELY IN CONTRAVENTION OF THE STATUTE BUT WHICH CONTAIN A PATENT AMBIGUITY AS TO THE TYPE OF ANNUITY OR ANNUITIES DESIRED FOR A SURVIVING WIFE AND CHILDREN, DESIGNATED AS POTENTIAL BENEFICIARIES MAY BE REGARDED AS VALID ELECTIONS AND THE MEMBER SUBSEQUENTLY MAY CLARIFY THE ELECTION TO EXPRESS WITHOUT AMBIGUITY HIS ORIGINAL INTENTION. A MEMBER OF THE UNIFORMED SERVICES WHO EXECUTED A TIMELY ELECTION TO PROVIDE AN ANNUITY OR ANNUITIES FOR HIS WIFE AND CHILDREN, BUT WHO FAILED TO INDICATE HIS WIFE'S DATE OF BIRTH, MAY BE PERMITTED TO FURNISH THE INFORMATION AND TO CLARIFY THE ELECTION TO SHOW THE PARTICULAR OPTIONS FOR HIS WIFE AND CHILDREN; HOWEVER, HE MAY NOT BE PERMITTED TO MODIFY HIS ORIGINAL ELECTION TO ELIMINATE HIS WIFE AS A POTENTIAL BENEFICIARY.

TO R. A. WILSON, DEPARTMENT OF THE NAVY, DECEMBER 30, 1959:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 25, 1959, WITH ENCLOSURES, FORWARDED HERE UNDER SUBMISSION NO. DO-N-462 (ASSIGNED BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE) REQUESTING DECISION AS TO THE VALIDITY OF CERTAIN ELECTIONS UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501, 10 U.S.C. 1431-1444, BY MEMBERS WHO HAD BEEN AWARDED RETIRED OR RETAINER PAY BEFORE NOVEMBER 1, 1953. YOU STATE THAT THE ADMINISTRATIVE DETERMINATIONS CONCERNING THE VALIDITY OF THE ELECTIONS ARE QUESTIONABLE IN VIEW OF OUR DECISION OF APRIL 15, 1954, 33 COMP. GEN. 460.

THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953 PERMITS MEMBERS OF THE UNIFORMED SERVICES TO ELECT TO RECEIVE REDUCED RETIRED PAY IN ORDER TO PROVIDE ANNUITIES AT ONE-EIGHTH, ONE-FOURTH, OR ONE HALF SUCH REDUCED RETIRED PAY TO THEIR SURVIVING DEPENDENTS. SECTION 4 OF THE ACT, 67 STAT. 502, 503, 10 U.S.C. 1432, 1433, PROVIDES IN PERTINENT PART THAT:

(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 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.

SECTION 3 (B) OF THE ACT, 67 STAT. 502, PROVIDES THAT:

A RETIRED MEMBER WHO HAS HERETOFORE BEEN AWARDED RETIRED PAY BY A UNIFORMED SERVICE MAY, WITHIN ONE HUNDRED AND EIGHTY DAYS AFTER THE EFFECTIVE DATE OF THIS ACT, ELECT TO RECEIVE A REDUCED AMOUNT OF THAT RETIRED PAY IN ORDER TO PROVIDE ONE OR MORE OF THE ANNUITIES SPECIFIED IN SECTION 4, PAYABLE AFTER HIS DEATH TO HIS WIDOW, CHILD, OR CHILDREN. ELECTION SO MADE SHALL THEREAFTER BE IRREVOCABLE.

THE INFORMATION FURNISHED BY YOU ON THE FIVE CASES IS AS FOLLOWS:

A. CAPTAIN OLIN C. HENDRIX, MC, USNR ( RETIRED), 62826

ON 1 APRIL 1954 CAPT HENDRIX EXECUTED AN ELECTION OF OPTIONS 1 AND 4 AT ONE-HALF REDUCED PAY. IN THE SPACE PROVIDED FOR NAMES OF CHILDREN HE ENTERED THE NAMES AND BIRTH DATES OF TWO CHILDREN UNDER 18 YEARS OF AGE AND HE ATTACHED THEIR BIRTH CERTIFICATES. SEE ENCLOSURE (1).

SINCE FORM 591A STIPULATED THAT NAMES OF CHILDREN WERE TO BE FURNISHED IF OPTION 2 OR OPTION 3 WAS ELECTED, THE NAVY FINANCE CENTER ADVISED THE MEMBER BY LETTER DATED 26 APRIL 1954 THAT IT WAS PRESUMED HE MAY HAVE INTENDED TO ELECT OPTIONS 3 AND 4 FOR THE BENEFIT OF HIS WIFE AND CHILDREN. HE WAS FURTHER ADVISED THAT IT WAS CONSIDERED HE HAD NOT MADE AN ELECTION AND HE WAS FURNISHED A NEW SET OF ELECTION FORMS.

ON 28 APRIL 1954 THE MEMBER EXECUTED AN ELECTION OF OPTIONS 3 AND 4 AT ONE-HALF REDUCED PAY. THE ELECTION WAS POSTMARKED 28 APRIL 1954. ENCLOSURES (2) AND (3) ARE COPIES OF THE MEMBER'S NEW ELECTION AND OF HIS ACCOMPANYING LETTER. THE NAVY FINANCE CENTER COMPUTED THE MONTHLY COST ON THE BASIS OF THE SECOND ELECTION AND DEDUCTIONS HAVE BEEN MADE FROM HIS RETIRED PAY SINCE 1 APRIL 1954.

B. CHARLES IRVIN PRICE, 812 72 27, TN, USN ( RETIRED)

ON 28 APRIL 1954, PRICE ELECTED OPTIONS 1 AND 4 AT ONE-EIGHTH REDUCED PAY AND LISTED 4 CHILDREN UNDER AGE 18, BUT DID NOT FURNISH BIRTH CERTIFICATES FOR HIS WIFE OR HIS CHILDREN. SEE ENCLOSURE (4).

IN REPLY TO THE NAVY FINANCE CENTER'S INQUIRY BY TELEGRAM OF 30 APRIL 1954 AS TO HIS INTENTIONS, ON 1 MAY 1954 HE MAILED AN UNSIGNED AND UNDATED NOTE STATING HE WANTED THE OPTION FOR HIS WIFE AND CHILDREN. SEE ENCLOSURE (5). ON 29 SEPTEMBER 1954 THE NAVY FINANCE CENTER WROTE THE MEMBER LISTING THE COSTS FOR VARIOUS OPTIONS AND FRACTIONAL AMOUNTS AND REQUESTED FURTHER CLARIFICATION. THE MEMBER REPLIED BY CHECKING IN INK ON THE CARBON COPY OF THE LETTER THE FIGURES PERTAINING TO OPTIONS 3 AND 4 AT ONE-EIGHTH AND BY ATTACHING THERETO AN UNSIGNED NOTATION, LISTING THE FIGURES APPLICABLE TO OPTIONS 3 AND 4 AT ONE-EIGHTH. SEE ENCLOSURE (6).

THE NAVY FINANCE CENTER COMPUTED THE MONTHLY COST ON THE BASIS OF AN ELECTION OF OPTIONS 3 AND 4 AT ONE-EIGHTH REDUCED PAY AND EFFECTED SUCH DEDUCTIONS RETROACTIVE TO 1 APRIL 1954.

C. GEORGE BRAY, 274 101 19, RMNC, USN ( RETIRED)

ON 26 APRIL 1954, BRAY EXECUTED AN ELECTION OF OPTION 1 AT ONE-HALF REDUCED PAY. IN THE SPACE PROVIDED FOR NAMES OF CHILDREN, IF OPTION 2 OR OPTION 3 IS ELECTED, THE MEMBER LISTED TWO CHILDREN UNDER 18 YEARS OF AGE AND HE FURNISHED THE CHILDREN'S BIRTH CERTIFICATES, BUT SUBSTANTIATION OF HIS WIFE'S DATE OF BIRTH WAS NOT FURNISHED. SEE ENCLOSURE (7).

IN REPLY TO THE NAVY FINANCE CENTER'S INQUIRY BY TELEGRAM OF 30 APRIL 1954, AS TO HIS INTENTIONS, BRAY STATED IN A LETTER DATED 4 MAY 1954 THAT HE ELECTED OPTION 2 AT ONE-HALF FOR HIS CHILDREN ONLY. SEE ENCLOSURE (8).

THE NAVY FINANCE CENTER COMPUTED THE MONTHLY COST OF THE ELECTION ON THE BASIS OF OPTION 2 AT ONE-HALF AND EFFECTED SUCH DEDUCTIONS RETROACTIVE TO 1 APRIL 1954.

D. CHARLES WESLEY MCNEAR MCCLAIN, 133 41 99, SKGC, USN ( RETIRED)

BY LETTER DATED 15 APRIL 1954 (ENCLOSURE (9) (, MCCLAIN ASKED FOR FORMS ON WHICH TO MAKE AN ELECTION TO HIS WIFE AT ONE-HALF REDUCED PAY. ON 26 APRIL 1954 THE NAVY FINANCE CENTER WROTE THE MEMBER, FURNISHING ELECTION FORMS AND INFORMATION AS TO THE COST OF VARIOUS OPTIONS.

ON 30 APRIL 1954 THE MEMBER EXECUTED ENCLOSURE (10), AN ELECTION OF OPTION 1 AT ONE-EIGHTH, AND MAILED THE ELECTION TO THE NAVY FINANCE CENTER ON THAT DATE WITH A CHECK FOR $38.03 WHICH WAS THE COST OF AN ELECTION OF OPTION 1 AT ONE-HALF RATHER THAN AT ONE-EIGHTH.

THE NAVY FINANCE CENTER SENT A TELEGRAM TO THE MEMBER ON 10 MAY 1954 ASKING FOR ADVICE, OVER HIS SIGNATURE, AS TO WHICH FRACTIONAL AMOUNT HE DESIRED TO ELECT. IN REPLY THE MEMBER INDICATED IN ENCLOSURES (11) AND (12) THAT HE INTENDED TO ELECT A FRACTIONAL AMOUNT OF ONE-HALF. THEREFORE, THE NAVY FINANCE CENTER HAS CONSIDERED HIS ELECTION TO BE FOR THAT AMOUNT RATHER THAN ONE-EIGHTH AND HAS REQUESTED THE MEMBER TO FORWARD MONTHLY PERSONAL REMITTANCES FOR COSTS ON THAT BASIS.

E. WALTER CARL DOUGLAS, 217 74 94, ENDC, USN ( RETIRED)

ON 29 MARCH 1954 DOUGLAS EXECUTED AN ELECTION OF OPTION 1 AT ONE EIGHTH REDUCED PAY AND NOTED THEREON " I WISH TO TAKE $20.00 PERMANENTLY OUT.' IN THE SPACE PROVIDED FOR NAMES OF CHILDREN IF OR OPTION 2 OR OPTION 3 IS ELECTED, THE MEMBER LISTED FOUR CHILDREN UNDER 18 YEARS OF AGE. SEE ENCLOSURE (13). NO BIRTH CERTIFICATES WERE FURNISHED. THE ELECTION WAS POSTMARKED 5 APRIL 1954. ON 26 APRIL 1954 THE NAVY FINANCE CENTER WROTE THE MEMBER ADVISING HIM THAT, SINCE HIS INTENTIONS WERE NOT CLEAR, IT WAS CONSIDERED HE HAD NOT MADE AN ELECTION. HE WAS FURNISHED ANOTHER SET OF ELECTION FORMS.

ON 29 APRIL 1954 THE MEMBER EXECUTED AN ELECTION OF OPTION 3 AT ONE EIGHTH REDUCED PAY. THE ELECTION (ENCLOSURE (14) ( WAS POSTMARKED 3 MAY 1954. BY LETTER DATED 16 JULY 1954 THE NAVY FINANCE CENTER ADVISED THE MEMBER THAT, IN ACCORDANCE WITH REFERENCE (C), AN ELECTION COULD NOT BE MODIFIED, OR REVOKED AND THE DEDUCTIONS WOULD BE BASED ON HIS ORIGINAL ELECTION OF OPTION 1 AT ONE-EIGHTH. ACCORDINGLY, DEDUCTIONS WERE ESTABLISHED AT THE MONTHLY RATE OF $10.99 RETROACTIVE TO APRIL 1954.

ON 21 SEPTEMBER 1954 THE NAVY FINANCE CENTER WROTE THE MEMBER, STATING THAT HIS ORIGINAL ELECTION WAS NOT CLEAR AND REQUESTING THAT HE FURNISH INFORMATION AS TO THE OPTION AND FRACTIONAL AMOUNT WHICH HE DESIRED TO ELECT. IN REPLY, THE MEMBER FORWARDED A NEW ELECTION OF OPTIONS 1 AND 4 AT ONE-EIGHTH AND 2 AND 4 AT ONE-EIGHTH. THE ELECTION WAS EXECUTED 21 OCTOBER 1954 AND POST-MARKED THE SAME DATE. IN JANUARY 1955 THE NAVY FINANCE CENTER ADJUSTED THE MONTHLY DEDUCTIONS TO $13.97, RETROACTIVE TO 1 APRIL 1954, ON THE BASIS OF THIS ELECTION, AND IS CURRENTLY DEDUCTING ON THAT BASIS.

UNDER SECTION 4 OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, SUPRA, OPTIONS 1, 2, AND 3 MAY BE ELECTED SINGLY OR IN CERTAIN COMBINATIONS WITH OPTION 4. AN ATTEMPTED COMBINATION NOT AUTHORIZED BY THE STATUTE IS NO ELECTION. 34 COMP. GEN. 555. IF AN ATTEMPTED ELECTION DOES NOT EMBODY AN UNAUTHORIZED COMBINATION OF OPTIONS AND IS OTHERWISE PROPER EXCEPT THAT IT IS SILENT AS TO THE AMOUNT (ONE-EIGHT, ONE-FOURTH, OR ONE-HALF OF REDUCED RETIRED PAY) OF THE DESIRED ANNUITY, IT IS NEVERTHELESS A VALID ELECTION AND MAY BE CLARIFIED BY THE MEMBER. IF HE SHOULD DIE WITHOUT TAKING SUCH ACTION, HIS INTENT IN EXECUTING IT--- PRESUMED OR OTHERWISE PROVED--- WILL GOVERN. 34 COMP. GEN. 63. LIKEWISE, IF AN ATTEMPTED ELECTION IS OTHERWISE PROPER EXCEPT THAT IT CONTAINS SOME PATENT AMBIGUITY AS TO THE AMOUNT OF THE DESIRED ANNUITY, IT IS A VALID ELECTION AND THE MEMBER'S PRESUMED INTENT IN EXECUTING IT WILL GOVERN SHOULD HE DIE WITHOUT CLARIFYING THE MATTER (34 COMP. GEN. 35), OR SHOULD HE REFUSE TO CLARIFY IT AND ATTEMPT TO RESCIND (B-132012, JUNE 17, 1957).

IN CONSONANCE WITH THE THEORY OF THE THREE DECISIONS LAST CITED, THAT IS, THAT AN ATTEMPTED ELECTION, IF NOT ABSOLUTELY IN CONTRAVENTION OF THE STATUTE, SHOULD OPERATE TO EFFECTUATE THE MEMBER'S REASONABLY APPARENT INTENTION, WE THINK THAT IF AN ATTEMPTED ELECTION IS OTHERWISE PROPER EXCEPT THAT IT CONTAINS A PATENT AMBIGUITY AS TO THE TYPE OF ANNUITY OR ANNUITIES DESIRED FOR A SURVIVING WIFE AND CHILDREN, DESIGNATED AS POTENTIAL BENEFICIARIES, THAT IS, WHETHER IT WAS INTENDED TO ELECT OPTION 3--- ONE ANNUITY FOR WIFE AND CHILDREN--- OR OPTIONS 1 AND 2--- SEPARATE ANNUITIES FOR WIFE AND CHILDREN, THE ELECTION IS VALID AND THE MEMBER SUBSEQUENTLY MAY CLARIFY IT SO AS TO EXPRESS, WITHOUT AMBIGUITY, HIS ORIGINAL INTENTION. 36 COMP. GEN. 764.

A. CAPTAIN HENDRIX EXECUTED AN ELECTION, WITHIN THE PRESCRIBED PERIOD, WHICH INDICATED AN INTENTION TO PROVIDE AN ANNUITY OR ANNUITIES OF ONE- HALF OF HIS REDUCED RETIRED PAY FOR HIS WIFE AND CHILDREN, TOGETHER WITH OPTION 4. THE ELECTION WAS SUBSEQUENTLY CLARIFIED TO REFLECT SELECTION OF OPTION 3, ANNUITY TO WIFE AND CHILDREN OF ONE-HALF OF HIS REDUCED RETIRED PAY, TOGETHER WITH OPTION 4. WE THINK THAT DEDUCTIONS FROM HIS RETIRED PAY HAVE BEEN MADE ON THE PROPER BASIS.

B. PRICE'S CASE IS COMPARABLE TO THAT OF CAPTAIN HENDRIX AND WE THINK, THAT DEDUCTIONS FROM PRICE'S RETIRED PAY ALSO HAVE BEEN MADE ON THE PROPER BASIS.

C. LIKE CAPTAIN HENDRIX AND PRICE, BRAY EXECUTED A TIMELY ELECTION INDICATING AN INTENTION TO PROVIDE AN ANNUITY OR ANNUITIES FOR HIS WIFE AND CHILDREN. WE THINK THAT IT IS IMMATERIAL THAT SUBSTANTIATING EVIDENCE AS TO HIS WIFE'S DATE OF BIRTH WAS NOT FURNISHED WHEN THE ELECTION WAS FILED. SUCH EVIDENCE COULD HAVE BEEN FURNISHED WHEN THE ELECTION WAS FILED. SUCH EVIDENCE COULD HAVE BEEN FURNISHED LATER. LIKE THE CASES OF THE TWO MEMBERS ALREADY DISCUSSED, BRAY COULD HAVE CLARIFIED HIS ORIGINAL ELECTION TO SHOW THAT HE ORIGINALLY DESIRED OPTIONS 1 AND 2, ANNUITIES TO WIFE AND CHILDREN SEPARATELY, EACH AT ONE FOURTH OF HIS REDUCED RETIRED PAY, OR OPTION 3, AN ANNUITY TO HIS WIFE AND CHILDREN OF ONE-HALF OF HIS REDUCED RETIRED PAY. BUT HE COULD NOT MODIFY HIS ORIGINAL ELECTION SO AS TO ELIMINATE HIS WIFE AS A POTENTIAL BENEFICIARY. COMPARE 33 COMP. GEN. 460, CITED BY YOU, CASE OF BRIGGS DISCUSSED AT PAGE 463. HENCE, BRAY SHOULD NOW BE ADVISED OF HIS RIGHT TO CLARIFY IT, DEDUCTIONS WILL BE MADE FROM HIS RETIRED PAY, FROM APRIL 1, 1954, ON THE BASIS OF A PRESUMED ORIGINAL INTENT TO ELECT OPTIONS 1 AND 2, THUS INSURING THAT HIS CHILDREN WILL BE POTENTIAL BENEFICIARIES OF AN ANNUITY IN THEIR OWN RIGHT, WHICH SEEMS TO BE DESIRED BY HIM.

D. IT SEEMS APPARENT THAT MCCLAIN INTENDED TO EXECUTE AN ELECTION UNDER OPTION 1 AT ONE-HALF HIS REDUCED RETIRED PAY. HENCE, CLARIFICATION OF THE MATTER SO AS TO EXPRESS CLEARLY HIS ORIGINAL INTENT WAS PROPER AND DEDUCTIONS FROM HIS RETIRED PAY HAVE BEEN MADE ON THE PROPER BASIS.

E. DOUGLAS EXECUTED A TIMELY ELECTION INDICATING AN INTENTION TO PROVIDE ANNUITIES FOR HIS WIFE AND CHILDREN AT ONE-EIGHTH OF HIS REDUCED RETIRED PAY. ON APRIL 29, 1954, HE CLARIFIED HIS ELECTION TO SHOW THAT HE DESIRED OPTION 3, WIFE AND CHILDREN AT ONE-EIGHTH OF HIS REDUCED RETIRED PAY. DEDUCTIONS FROM HIS RETIRED PAY FROM APRIL 1, 1954, SHOULD HAVE BEEN MADE ON THE BASIS OF THE ELECTION AS CLARIFIED ON APRIL 29, 1954. DOUGLAS WAS ADVISED BY THE NAVY FINANCE CENTER THAT IN ACCORDANCE WITH "REFERENCE (C)" --- 33 COMP. GEN. 460, SUPRA--- AN ELECTION COULD NOT BE REVOKED OR MODIFIED. IN DISCUSSING BRAY'S CASE WE MADE REFERENCE TO ONE CASE CONSIDERED IN 33 COMP. GEN. 460, AN ATTEMPTED MODIFICATION OF AN ELECTION. THE OTHER CASES CONSIDERED IN THAT DECISION WERE ATTEMPTED REVOCATIONS OF ELECTIONS WITH CLAIMS FOR REFUNDS OF DEDUCTIONS ALREADY MADE FROM THE RETIRED PAY. THE PRESENT SUBMISSION DOES NOT PRESENT ANY QUESTION OF MODIFICATION EXCEPT IN THE CASE OF BRAY, AND DOES NOT PRESENT ANY CASE OF ATTEMPTED REVOCATION. WE THINK THAT 33 COMP. GEN. 460 IS NOT PERTINENT EXCEPT IN BRAY'S CASE.