B-146028, AUGUST 24, 1961, 41 COMP. GEN. 138

B-146028, AUGUST 24, 1961, 41 COMP. GEN. 138

PAY - RETIRED - ANNUITY ELECTIONS FOR DEPENDENTS - TERMINATION - WAIVER OF RETIRED PAY - REFUND OF DEDUCTIONS TO PERMIT A MEMBER OF THE UNIFORMED SERVICES TO RELINQUISH RETIRED PAY IN ORDER TO RECEIVE ANNUITY BENEFITS UNDER THE CIVIL SERVICE RETIREMENT ACT, 5 U.S.C. 2251-2262, OR DISABILITY COMPENSATION UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT, 5 U.S.C. 751-780, WITHOUT RESIGNATION OR REMOVAL FROM THE RETIRED LIST AND WITHOUT PAYMENT OF THE AMOUNTS REQUIRED FOR THE SURVIVOR ANNUITY WHICH HE HAD ELECTED TO PURCHASE WOULD BE TANTAMOUNT TO A REVOCATION OF THE ANNUITY ELECTION WHICH IS NOT PERMITTED UNDER 10 U.S.C. 1431; THEREFORE, THE MEMBER'S SURVIVOR COVERAGE IS NOT AUTOMATICALLY TERMINATED BY THE RELINQUISHMENT OF RETIRED PAY WHEN HE REMAINS ON THE RETIRED LIST AND THE MEMBER IS REQUIRED UNDER 10 U.S.C. 1438 TO PAY TO THE TREASURY THE EQUIVALENT AMOUNT THAT WOULD HAVE BEEN DEDUCTED FROM THE RETIRED PAY FOR THE SURVIVOR ANNUITY. IN THE ABSENCE OF A REQUEST BY A MEMBER OF THE UNIFORMED SERVICES FOR TERMINATION OF, OR RESIGNATION FROM, HIS RETIRED STATUS INCIDENT TO RELINQUISHMENT OF RETIRED PAY WHILE IN RECEIPT OF ANNUITY BENEFITS UNDER THE CIVIL SERVICE RETIREMENT ACT, 5 U.S.C. 2251, OR DISABILITY COMPENSATION AS A CIVILIAN EMPLOYEE UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT, 5 U.S.C. 751, THE MEMBER'S SURVIVOR ANNUITY COVERAGE UNDER 10 U.S.C. 1431 MAY NOT BE TERMINATED AT THE REQUEST OF EITHER THE MEMBER ALONE OR OF THE MEMBER AND HIS BENEFICIARY, AND, THEREFORE, THE MEMBER IS REQUIRED UNDER 10 U.S.C. 1438, TO PAY TO THE TREASURY THE AMOUNT THAT WOULD HAVE BEEN DEDUCTED FROM HIS MILITARY RETIRED PAY FOR THE SURVIVOR ANNUITY ELECTION. THE TERMINATION OF SURVIVOR BENEFIT COVERAGE OF A MEMBER OF THE UNIFORMED SERVICES UNDER 10 U.S.C. 1431-1444 DOES NOT PROVIDE A BASIS FOR THE REFUND OF SURVIVOR ANNUITY DEDUCTIONS AND/OR REMITTANCES UNLESS THE MEMBER MEETS THE REQUIREMENTS OF 10 U.S.C. 1439, WHICH PROVISIONS ARE STRICTLY LIMITED TO MEMBERS ON THE TEMPORARY DISABILITY RETIRED LIST OF AN ARMED FORCE WHO HAVE ELECTED AN ANNUITY AND WHO HAVE BEEN REMOVED FROM THE TEMPORARY DISABILITY RETIRED LIST FOR ANY REASON OTHER THAN RETIREMENT OR GRANT OF RETIRED PAY.

TO THE SECRETARY OF DEFENSE, AUGUST 24, 1961:

THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER), BY LETTER OF MAY 26, 1961, REQUESTED A DECISION AS TO WHETHER A MEMBER OF THE ARMED FORCES WHO RELINQUISHES HIS MILITARY RETIRED PAY IN ORDER TO RECEIVE A CIVIL SERVICE ANNUITY OR DISABILITY COMPENSATION UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT, 5 U.S.C. 751, IS REQUIRED UNDER 10 U.S.C. 1438 TO DEPOSIT IN THE TREASURY OF THE UNITED STATES THE AMOUNT THAT WOULD OTHERWISE HAVE BEEN DEDUCTED FROM HIS MILITARY RETIRED PAY HAD HE NOT RELINQUISHED SUCH RETIRED PAY.

FIVE SPECIFIC QUESTIONS UPON WHICH DECISION IS REQUESTED ARE SET OUT AND DISCUSSED IN COMMITTEE ACTION NO. 282 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, A COPY OF WHICH WAS TRANSMITTED WITH THE LETTER OF MAY 26, 1961. THE QUESTIONS ARE AS FOLLOWS:

1. IF A MEMBER OF THE ARMED FORCES RELINQUISHES (AS DISTINGUISHED FROM WAIVES) HIS RETIRED PAY IN ORDER TO RECEIVE THE ANNUITY BENEFITS PROVIDED BY THE CIVIL SERVICE RETIREMENT ACT OF 1930 (5 U.S.C. 2251), AS AMENDED BY PUBLIC LAW 854, 31 JULY 1954 (70 STAT. 736), IS HIS SURVIVOR COVERAGE UNDER THE CONTINGENCY OPTION ACT ( CHAPTER 73, TITLE 10, UNITED STATES CODE) AUTOMATICALLY TERMINATED?

A. WOULD THE ANSWER BE THE SAME IF RETIRED PAY IS RELINQUISHED TO RECEIVE A DISABILITY COMPENSATION AS A CIVIL SERVICE EMPLOYEE UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT, AS AMENDED ( CHAPTER 15, TITLE 5, UNITED STATES CODE/?

2. IF COVERAGE UNDER THE CONTINGENCY OPTION ACT DOES NOT AUTOMATICALLY TERMINATE, MAY IT BE TERMINATED AT THE REQUEST OF THE MEMBER?

3. WOULD A RELINQUISHMENT OF COVERAGE UNDER THE CONTINGENCY OPTION ACT SIGNED BY THE MEMBER AND THE BENEFICIARY BE MATERIAL IN THE EVENT OF A NEGATIVE REPLY TO QUESTIONS 1 AND 2?

4. IF COVERAGE IS AUTOMATICALLY OR OTHERWISE TERMINATED MAY REFUND OF SURVIVOR ANNUITY DEDUCTIONS AND/OR REMITTANCES BE MADE IN THE MANNER PRESCRIBED IN 10 U.S.C. 1439?

5. IF THE ANSWER TO QUESTION 4 IS IN THE AFFIRMATIVE, MAY THE REFUND COVER THE ENTIRE PERIOD FOR WHICH DEDUCTIONS AND/OR REMITTANCES WERE MADE OR ONLY FROM THE DATE RETIRED PAY IS RELINQUISHED?

SECTION 3 (A) OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 502, PERMITTED ACTIVE MEMBERS TO ELECT ANNUITIES FOR THEIR DEPENDENTS WITHIN THE TIME PRESCRIBED TO BE FINANCED BY DEDUCTIONS MADE FROM THEIR RETIRED PAY AND PROVIDED THAT:

* * * 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. SECTION 3 (B) OF THE ACT PERMITTED MEMBERS THERETOFORE AWARDED RETIRED PAY TO ELECT SUCH AN ANNUITY WITHIN THE PRESCRIBED TIME AND SPECIFICALLY PROVIDED THAT SUCH ELECTION "SHALL THEREAFTER BE IRREVOCABLE.' THOSE PROVISIONS ARE NOW CODIFIED IN 10 U.S.C. 1431 (C) AND (D), RESPECTIVELY.

DURING ANY PERIOD WHEN A RETIRED MEMBER DOES NOT RECEIVE RETIRED PAY, SECTION 5 OF THE 1953 ACT PROVIDED FOR DIRECT PAYMENTS BY THE MEMBER TO THE TREASURY TO PAY FOR THE ANNUITY IN LIEU OF DEDUCTIONS FROM RETIRED PAY. THAT PROVISION IS NOW CODIFIED IN 10 U.S.C. 1438, WHICH READS AS FOLLOWS:

IF, FOR ANY PERIOD, A PERSON WHO HAS BEEN RETIRED OR HAS BECOME ENTITLED TO RETIRED OR RETAINER PAY, AND WHO HAS ELECTED AN ANNUITY UNDER THIS CHAPTER, IS NOT ENTITLED TO RETIRED OR RETAINER PAY, HE MUST DEPOSIT IN THE TREASURY THE AMOUNT THAT WOULD OTHERWISE HAVE BEEN DEDUCTED FROM HIS PAY FOR THAT PERIOD TO PROVIDE THE ANNUITY.

THE CESSATION OF RECEIPT OF RETIRED PAY APPEARS TO BE OF NO CONSEQUENCE WHERE A MEMBER REMAINS ON THE RETIRED LIST AND HAS ELECTED TO PROVIDE A SURVIVOR ANNUITY.

WE HELD IN 33 COMP. GEN. 460 THAT, IN VIEW OF THE EXPRESS PROHIBITION AGAINST THE REVOCATION OF ELECTIONS BY RETIRED MEMBERS CONTAINED IN SECTION 3 (B) OF THE 1953 ACT, NOW CODIFIED IN 10 U.S.C. 1431, SUCH ELECTIONS ARE IRREVOCABLE AND THAT ONLY THE CONGRESS MAY RELIEVE SUCH MEMBERS OF THE CONSEQUENCES OF THEIR ONEROUS ELECTIONS.

IN OUR DECISION OF JUNE 8, 1955, 34 COMP. GEN. 664, IT WAS HELD IN EFFECT THAT, SINCE THE CONTINGENCY OPTION ACT PROVIDES FOR THE PURCHASE OF ANNUITIES FOR DEPENDENTS OUT OF RETIRED PAY, IT WAS CONTEMPLATED THAT TO BE ENTITLED TO THE BENEFITS OF THE ACT A RETIRED MEMBER SHOULD CONTINUE IN A RETIRED PAY STATUS AFTER RETIREMENT AND, WITH THE EXCEPTION COVERED BY SECTION 5 OF THAT ACT (NOW 10 U.S.C. 1438), BE BASICALLY ENTITLED TO SUCH PAY UNTIL HIS DEATH. THE SITUATION THERE CONSIDERED WAS THAT OF RETIRED MEMBERS WHO HAD VOLUNTARILY RESIGNED FROM THE SERVICE OR WHO HAD BEEN INVOLUNTARILY REMOVED FROM THE RETIRED LIST, WHO MIGHT NEVERTHELESS WISH TO DEPOSIT IN THE TREASURY OF THE UNITED STATES AMOUNTS WHICH WOULD OTHERWISE HAVE BEEN WITHHELD FROM THEIR RETIRED PAY SO AS TO ENTITLE THEIR BENEFICIARIES TO THE BENEFITS OF THAT ACT. WE HELD THAT THE PROVISION IN SECTION 5 (10 U.S.C. 1438) DID NOT APPLY TO SUCH PERSONS, BUT WAS REGARDED AS RELATING TO SITUATIONS WHERE RETIRED MEMBERS TEMPORARILY MAY NOT BE PAID THE RETIRED PAY TO WHICH THEY OTHERWISE ARE ENTITLED, SUCH AS IS THE CASE WHEN A RETIRED MEMBER IS RECALLED TO ACTIVE DUTY OR IS EMPLOYED BY THE FEDERAL GOVERNMENT IN A CIVILIAN STATUS AND AGAIN BECOMES ENTITLED TO RETIRED PAY UPON HIS RELEASE TO INACTIVE DUTY ON THE RETIRED LIST.

THE RELINQUISHMENT OF RETIRED PAY WITHOUT RESIGNATION OR REMOVAL FROM THE RETIRED LIST IS NO MORE THAN A WAIVER OF THE RECEIPT OF RETIRED PAY. VIEWED IN ANOTHER MANNER, TO PERMIT A RETIRED MEMBER TO RELINQUISH RETIRED PAY AND YET REMAIN ON THE RETIRED LIST WITHOUT PAYMENT OF THE AMOUNTS REQUIRED FOR THE SURVIVOR ANNUITY IS TANTAMOUNT TO PERMITTING THE REVOCATION OF AN ELECTION ALREADY MADE TO PURCHASE AN ANNUITY. THE STATUTE DOES NOT PERMIT THE REVOCATION OF AN EFFECTIVE ELECTION, AND WE CANNOT SANCTION THE ACCOMPLISHMENT OF THAT RESULT BY INDIRECTION.

IN A DECISION DATED JUNE 20, 1946, B-57537, WE HELD THAT COMPLIANCE WITH THE REQUEST OF A RETIRED NAVY ENLISTED MAN TO "RELINQUISH" HIS RIGHT TO RETIRED PAY IN ORDER THAT HIS NAVAL SERVICE FORMING THE BASIS OF SUCH RETIRED PAY MAY BE INCLUDED IN THE COMPUTATION OF HIS SERVICE FOR CIVILIAN RETIREMENT PURPOSES WILL NOT OPERATE TO TERMINATE HIS STATUS AS A MEMBER OF THE FLEET NAVAL RESERVE TRANSFERRED TO THE RETIRED LIST OF THE NAVY.

QUESTION NO. 1 IS THEREFORE ANSWERED IN THE NEGATIVE, AND NO. A IN THE AFFIRMATIVE.

QUESTION NO. 2 ALSO IS ANSWERED IN THE NEGATIVE, UNLESS THE REQUEST OF THE MEMBER TO TERMINATE HIS RETIRED PAY IS ACCOMPANIED BY A REQUEST FOR TERMINATION OF (RESIGNATION FROM) HIS RETIRED STATUS. SEE 38 COMP. GEN. 279.

IN VIEW OF OUR CONCLUSIONS ABOVE, THE ADDITIONAL CIRCUMSTANCE OF A BENEFICIARY RELINQUISHING THE CONTINGENT BENEFITS OF THE ACT, WHERE THE RETIRED MEMBER RETAINS HIS RETIRED STATUS, IS NOT MATERIAL. THE LAW CLEARLY REQUIRES THE MONTHLY DEDUCTIONS FROM RETIRED PAY OR DEPOSITS IN THE TREASURY OF THE UNITED STATES OF EQUIVALENT AMOUNTS, WHERE A VALID ELECTION HAS BEEN MADE AND THE MEMBER IS IN A RETIRED STATUS, NOTWITHSTANDING THE RECEIPT OR NONRECEIPT OF RETIRED PAY. THE JOINING OF THE BENEFICIARY ANNUITANT WITH THE RETIRED MEMBER TO RELINQUISH COVERAGE UNDER THE ACT CAN BE CONSIDERED NO MORE THAN AN ATTEMPT TO ACCOMPLISH THE REVOCATION OF A VALID ELECTION OF COVERAGE UNDER THE ACT, WHICH WE HAVE INDICATED IS NOT PERMISSIBLE.

QUESTION 3 IS ANSWERED IN THE NEGATIVE.

SECTION 1439, 10 U.S. CODE, PROVIDES AS FOLLOWS:

IF A PERSON WHOSE NAME IS ON THE TEMPORARY DISABILITY RETIRED LIST OF AN ARMED FORCE, AND WHO HAS ELECTED AN ANNUITY UNDER THIS CHAPTER, HAS HIS NAME REMOVED FROM THAT LIST FOR ANY REASON OTHER THAN RETIREMENT OR GRANT OF RETIRED PAY, HE IS ENTITLED TO A REFUND OF THE DIFFERENCE BETWEEN THE AMOUNT BY WHICH HIS RETIRED PAY WAS REDUCED TO PROVIDE THE ANNUITY AND THE COST OF AN AMOUNT OF TERM INSURANCE EQUAL TO THE PROTECTION PROVIDED FOR HIS DEPENDENTS DURING THE PERIOD THAT HE WAS ON THAT LIST.

THE PROVISIONS OF THIS SECTION ARE STRICTLY LIMITED TO MEMBERS ON THE TEMPORARY DISABILITY RETIRED LIST OF AN ARMED FORCE WHO HAVE ELECTED AN ANNUITY AND WHO HAVE BEEN REMOVED FROM THE TEMPORARY DISABILITY RETIRED LIST FOR ANY REASON OTHER THAN RETIREMENT OR GRANT OF RETIRED PAY. UNLESS A RETIRED MEMBER MEETS THE REQUIREMENTS OF THAT SECTION, THERE IS NO PROVISION OF LAW PROVIDING FOR THE REFUND OF SURVIVOR ANNUITY DEDUCTIONS AND/OR REMITTANCES.

QUESTION NO. 4 IS ANSWERED IN THE NEGATIVE, AND QUESTION NO. 5 REQUIRES NO ANSWER.