B-146545, SEP. 25, 1961

B-146545, SEP. 25, 1961

TO THE SECRETARY OF THE ARMY:

THERE HAS BEEN BROUGHT TO OUR ATTENTION THE MATTER OF THE INDEBTEDNESS OF SECOND LIEUTENANT FRANK M. EDMONDSON, 01321694, AUS, RETIRED, FOR THE COST OF ANNUITY FOR THE PERIOD NOVEMBER 1, 1953, THROUGH JUNE 30, 1957, UNDER THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501, NOW CODIFIED IN TITLE 10, U.S.C. SECTIONS 1431-1444.

IT APPEARS THAT LIEUTENANT EDMONDSON WAS RELEASED FROM ACTIVE DUTY ON JULY 15, 1944, BY REASON OF PHYSICAL DISABILITY; THAT HE WAS RECALLED TO ACTIVE DUTY FOR THE PERIOD AUGUST 1 TO 19, 1944; AND THAT AT THE TIME OF HIS RELEASE FROM ACTIVE DUTY ON JULY 15, 1944, HE HAD ACTIVE SERVICE TOTALING 4 YEARS AND 4 DAYS AND SERVICE FOR LONGEVITY PAY PURPOSES TOTALING 5 YEARS, 11 MONTHS AND 19 DAYS. IT FURTHER APPEARS THAT ON JUNE 11, 1957, THE SECRETARY OF THE ARMY DIRECTED THAT MR. EDMONDSON BE CERTIFIED AS ELIGIBLE FOR RETIREMENT PAY BENEFITS EFFECTIVE JULY 16, 1944, BY REASON OF PHYSICAL DISABILITY, IN THE GRADE OF SECOND LIEUTENANT, UNDER THE PROVISIONS OF THE ACT OF APRIL 3, 1939, 53 STAT. 557, AS AMENDED.

BY LETTER DATED JULY 3, 1957, THE OFFICE OF THE ADJUTANT GENERAL ADVISED MR. EDMONDSON OF THE DETERMINATION AND CERTIFICATION OF ENTITLEMENT TO RETIREMENT PAY BENEFITS, AND THAT IF HE DESIRED DETERMINATION AS TO HIS ELIGIBILITY TO RECEIVE REDUCED RETIRED PAY TO PROVIDE AN ANNUITY FOR HIS DEPENDENT SURVIVORS AN ENCLOSED FORM SHOULD BE EXECUTED AND RETURNED WITHIN 30 DAYS. BY LETTER DATED JULY 8, 1957, MR. EDMONDSON STATED THAT A DECISION AS TO ELECTION OF OPTIONS COULD NOT BE MADE UNTIL HE RECEIVED INFORMATION AS TO THE AMOUNT OF HIS RETIREMENT PAY; WHETHER SUCH PAY WAS RETROACTIVE, AND IF SO, TO WHAT DATE; AND WHETHER, IF AN OPTION WERE ELECTED, PAYMENTS FOR A RETROACTIVE PERIOD WOULD BE REQUIRED. THE RETIRED PAY DIVISION, FINANCE CENTER, U.S. ARMY, REPLIED BY LETTER DATED JULY 17, 1957, AND ADVISED MR. EDMONDSON THAT HIS CURRENT GROSS RETIREMENT PAY WAS $173.63, COMPUTED ON THE BASIS OF 75 PERCENT OF THE ACTIVE DUTY PAY OF A SECOND LIEUTENANT WITH OVER 5 YEARS (BUT LESS THAN 6 YEARS) SERVICE; THAT IF AN OPTION WERE ELECTED, THE COST WOULD BE DUE EFFECTIVE THE FIRST DAY OF THE MONTH OF RETIREMENT OR THE MONTH OF POSTMARK OF THE ELECTION FORM; AND THAT RETIREMENT PAY FOR THE PERIOD PRIOR TO JULY 1, 1957, WOULD BE PROCESSED BY THE GENERAL ACCOUNTING OFFICE. IN HIS LETTER DATED JULY 20, 1957, TO THE RETIRED PAY DIVISION, MR. EDMONDSON RETURNED THE FORM INDICATING HIS ELECTION OF ANNUITY FOR HIS DEPENDENTS AND STATED THAT IT WAS HIS UNDERSTANDING THAT ANNUITY PAYMENT DEDUCTIONS WERE EFFECTIVE JULY 1, 1957, AND THAT HE HAD OVER 6 YEARS' SERVICE FOR RETIREMENT PAY PURPOSES. HE ALSO ASKED THAT HE BE ADVISED OF THE AMOUNT OF THE ANNUITY COST AND THE AMOUNT OF NET RETIRED PAY AFTER THE DEDUCTION.

THEREAFTER, IN AUGUST AND SEPTEMBER 1957, MR. EDMONDSON WAS ADVISED THAT THE TOTAL SERVICE OF 5 YEARS, 11 MONTHS AND 19 DAYS' SERVICE CREDITABLE FOR LONGEVITY PURPOSES IN THE COMPUTATION OF HIS RETIRED PAY WAS CORRECT, AND ALSO THAT HIS GROSS RETIRED PAY WAS $173.63 A MONTH; THE COST OF THE ANNUITY WAS $23.04 A MONTH EFFECTIVE JULY 1, 1957, WITH NET RETIRED PAY OF $150.59 A MONTH, AND ANNUITY PAYABLE TO HIS SURVIVING DEPENDENTS OF $75.30 A MONTH. IN A LETTER DATED NOVEMBER 18, 1957, MR. EDMONDSON ATTEMPTED TO REVOKE HIS ELECTION OF ANNUITY FOR DEPENDENTS, STATING THAT AT THE TIME HE EXECUTED THE APPLICATION HE BELIEVED HE HAD OVER 6 YEARS' SERVICE FOR LONGEVITY PURPOSES, AND THAT THE DIFFERENCE IN RETIRED PAY PREDICATED ON THAT BELIEF AFFECTED HIS DECISION. THE RETIRED PAY DIVISION, BY LETTER DATED NOVEMBER 29, 1957, ADVISED MR. EDMONDSON THAT THE LAW DID NOT PERMIT A REVOCATION AND THAT DEDUCTIONS WOULD CONTINUE TO BE MADE.

IT FURTHER APPEARS THAT BY SETTLEMENT DATED DECEMBER 12, 1957, THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE ALLOWED MR. EDMONDSON THE NET AMOUNT OF $18,398.46, REPRESENTING RETROACTIVE RETIRED PAY FOR THE PERIODS JULY 16 TO 31, 1944, AND AUGUST 20, 1944, THROUGH JUNE 30, 1957, LESS VETERANS ADMINISTRATION DISABILITY COMPENSATION PAYMENTS AND MUSTERING-OUT PAY. NO DEDUCTION WAS MADE FOR THE COST OF THE OPTION SELECTED BY HIM UNDER THE CONTINGENCY OPTION ACT.

BY LETTER DATED MAY 4, 1961, FROM THE RETIRED PAY DIVISION, MR. EDMONDSON WAS ADVISED AS FOLLOWS:

"2. THE COMPTROLLER GENERAL OF THE UNITED STATES HELD IN DECISION B- 113387 DATED 25 AUGUST 1958 THAT FOR THE PURPOSE OF DETERMINING THE EFFECTIVE DATE OF DEDUCTIONS AND COST OF ANNUITY, THE RETROACTIVE DATE OF RETIREMENT OR 1 NOVEMBER 1953, THE EFFECTIVE DATE OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT, WHICHEVER IS LATER, MUST BE USED.

"3. YOU WERE DETERMINED TO HAVE BEEN RETIRED 16 JULY 1944; THEREFORE, THE COST OF ANNUITY SHOULD HAVE BEEN COMPUTED BASED ON YOUR AGE AS OF 1 NOVEMBER 1953, AND THE AMOUNT OF COST FOR THE PERIOD 1 NOVEMBER 1953 THROUGH 30 JUNE 1957 SHOULD HAVE BEEN SUBMITTED FOR DEDUCTION FROM THE ADJUSTMENT PAID BY THE UNITED STATES GENERAL ACCOUNTING OFFICE FOR THE PERIOD 16 THROUGH 31 JULY 1944 AND 20 AUGUST 1944 THROUGH 30 JUNE 1957.' HE WAS FURTHER ADVISED THAT THE ANNUITY COST WAS REDUCED FROM $23.04 TO $20.21 A MONTH FROM NOVEMBER 1, 1953, PROVIDING AN ANNUITY OF $71.80 TO HIS DEPENDENTS, AND IT WAS DETERMINED THAT THERE WAS AN INDEBTEDNESS OF $759.06 DUE THE UNITED STATES AFTER ADJUSTMENT OF COSTS OF ANNUITY. MR. EDMONDSON PROTESTED THE INDEBTEDNESS, AND POINTED OUT THAT AT THE TIME OF HIS CERTIFICATION FOR RETIREMENT PAY, HE HAD REQUESTED INFORMATION AS TO THE EFFECTIVE DATE OF DEDUCTIONS FOR THE ANNUITY, AND ALSO RENEWED HIS REQUEST FOR REVOCATION OF ELECTION BECAUSE HE WAS NOT PROPERLY INFORMED. THE RETIRED PAY DIVISION AGAIN ADVISED MR. EDMONDSON THAT THAT OFFICE WAS OF THE OPINION THAT DECISION B-113387, AUGUST 25, 1958, 38 COMP. GEN. 146, IS FOR APPLICATION IN THE PRESENT CASE, AND THAT WITHHOLDINGS TO LIQUIDATE THE INDEBTEDNESS WOULD BE INITIATED AUGUST 1, 1961, IF REMITTANCE WAS NOT MADE. MR. EDMONDSON THEN ADDRESSED A LETTER HERE SETTING FORTH THE CIRCUMSTANCES SUBSTANTIALLY AS SET OUT ABOVE, REQUESTING A RULING AS TO THE PROPRIETY OF THE INDEBTEDNESS, AND THE VALIDITY OF HIS ORIGINAL ELECTION. WE REQUESTED A REPORT OF THE RETIRED PAY DIVISION, U.S. ARMY FINANCE CENTER, AND SUGGESTED THAT COLLECTION ACTION IN THIS CASE BE SUSPENDED PENDING OUR CONSIDERATION OF THE MATTER.

ON THE BASIS OF THE FACTS AS REFLECTED IN THE RECORD AS STATED ABOVE, IT IS OUR VIEW THAT MR. EDMONDSON WAS MISINFORMED AT THE TIME HE MADE THE ELECTION IN 1957 AS TO A MATERIAL FACT AFFECTING THAT ELECTION, THAT IS, IN RELATION TO THE EFFECT OF THAT ELECTION WITH RESPECT TO THE DEDUCTIONS TO BE MADE FOR THE PERIOD PRIOR TO JULY 1957. HENCE, WE ARE OF THE OPINION THAT SUCH ELECTION IS NOT BINDING ON HIM. ACCORDINGLY, WE HAVE SO INFORMED HIM. WE ALSO HAVE INFORMED HIM THAT, IN VIEW OF HIS HAVING BEEN MISINFORMED OF A MATERIAL FACT, HE MAY RATIFY THE ELECTION MADE, WITH DEDUCTIONS FROM HIS RETIRED PAY BEGINNING NOVEMBER 1, 1953, OR HE MAY DISAFFIRM THAT ELECTION AND OBTAIN REFUND OF ALL ANNUITY DEDUCTIONS THAT HAVE BEEN MADE FROM HIS RETIRED PAY. A COPY OF OUR LETTER TO LIEUTENANT EDMONDSON IS ENCLOSED. IF THE ELECTION IS DISAFFIRMED HIS DEPENDENTS WILL NOT BE ELIGIBLE TO RECEIVE AN ANNUITY.