B-149388, SEP. 4, 1962

B-149388, SEP. 4, 1962

TO KING AND KING:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 28, 1962, REQUESTING RECONSIDERATION OF GENERAL ACCOUNTING OFFICE SETTLEMENT DATED JUNE 14, 1962, DISALLOWING THE CLAIM OF MR. ROBERT EURY MCVAY, U.S. NAVY, RETIRED, FOR INCREASED RETIRED PAY EFFECTIVE FROM APRIL 1, 1955.

THE RECORDS SHOW THAT MR. MCVAY WAS TRANSFERRED TO THE RETIRED LIST OF NAVY EFFECTIVE JUNE 1, 1943, WHILE SERVING ON ACTIVE DUTY AS AN ENLISTED MEMBER OF THE FLEET RESERVE. SINCE THIS TRANSFER OCCURRED BEFORE HE HAD COMPLETED 30 YEARS OF CREDITABLE SERVICE, IT WOULD APPEAR TO HAVE BEEN ACCOMPLISHED BY REASON OF PHYSICAL DISABILITY AS PROVIDED IN SECTION 206 OF THE NAVAL RESERVE ACT OF 1938, 52 STAT. 1179, 34 U.S.C. 854E, 1940 ED. HE CONTINUED ON ACTIVE DUTY FOLLOWING HIS TRANSFER TO THE RETIRED LIST, RECEIVING A TEMPORARY PROMOTION ON OCTOBER 1, 1943, TO THE GRADE OF COMMISSIONED WARRANT OFFICER AND EFFECTIVE OCTOBER 12, 1945, HE WAS RELEASED TO INACTIVE STATUS ON THE RETIRED LIST.

OUR CLAIMS DIVISION HAS THREE TIME ADJUSTED THE RATES OF MR. MCVAY'S RETIRED PAY IN SETTLEMENTS DATED JUNE 21, 1955, JUNE 11, 1958, AND OCTOBER 2, 1958. IN THE LATTER SETTLEMENT RETIRED PAY WAS ALLOWED FOR THE PERIOD FROM OCTOBER 1, 1949, TO APRIL 30, 1952, INCLUSIVE, ON THE SAME BASIS AND AT THE SAME RATE ($207.90 PER MONTH) AS THAT TO WHICH HE WAS ENTITLED ON SEPTEMBER 30, 1949, NAMELY AT ONE-HALF OF THE BASE PAY OF A COMMISSIONED WARRANT OFFICER PLUS LONGEVITY CREDIT FOR OVER 24 YEARS' SERVICE, PLUS 10 PERCENT INCREASE FOR GOOD CONDUCT MARKS (SEE SEC. 203 OF THE NAVAL RESERVE ACT OF 1938, 52 STAT. 1179, 34 U.S.C. 854B, 1940 ED.) AS FOLLOWS: ONE- HALF OF $210, OR $105 PLUS $84 LONGEVITY, PLUS $18,90, AS 10 PERCENT INCREASE ON GOOD CONDUCT. FOR THE PERIOD FROM MAY 1, 1952, TO MARCH 31, 1955, HE WAS ALLOWED RETIRED PAY AT THE RATE OF $216.22 PER MONTH ($207.90 PLUS 4 PERCENT) AND FOR THE PERIOD APRIL 1, 1955, TO FEBRUARY 28, 1958, INCLUSIVE, RETIRED PAY WAS ALLOWED AT THE RATE OF $229.19 PER MONTH ($216.22 PLUS 6 PERCENT). THE NAVAL FINANCE CENTER, CLEVELAND, OHIO HAS REPORTED IN LETTER OF NOVEMBER 6, 1961, THAT PAYMENT OF RETIRED PAY HAS BEEN MADE TO MR. MCVAY IN THE AMOUNT OF $229.19 PER MONTH FOR THE PERIOD MARCH 1, 1958, TO MAY 31, 1958, INCLUSIVE, AND IN THE AMOUNT OF $242.94 PER MONTH (AN ADDITIONAL INCREASE OF 6 PERCENT) EFFECTIVE FROM JUNE 1, 1958.

THE SPECIFIC REQUEST CONTAINED IN YOUR LETTER IS FOR RECONSIDERATION OF THAT PART OF THE SETTLEMENT OF JUNE 14, 1962, WHICH DISALLOWED MR. MCVAY'S ALTERNATE CLAIM FOR AN INCREASE IN HIS RETIRED PAY EFFECTIVE, FROM APRIL 1, 1955, COMPUTED IN ACCORDANCE WITH METHOD (B) AS PRESCRIBED IN SECTION 511 OF THE CAREER COMPENSATION ACT OF 1949, CH. 681, 63 STAT. 829. YOU POINT OUT IN THIS CONNECTION THAT IF MR. MCVAY WAS "NOT ENTITLED TO THE BENEFITS OF SEC. 411 OF THE CAREER COMPENSATION ACT," AS STATED IN THE SECOND PARAGRAPH OF THE SETTLEMENT OF JUNE 14, 1962," AS STATED IN THE SECOND PARAGRAPH OF THE SETTLEMENT OF JUNE 14, 1962,"IT IS CLEAR THAT HE ALSO WAS NOT REQUIRED TO MAKE ANY ELECTION" FOR THE ALTERNATE BENEFITS PRESCRIBED UNDER METHODS (A) AND (B) OF SECTION 511.

IT APPEARS THAT MR. MCVAY WAS TRANSFERRED TO THE RETIRED LIST OF THE NAVY EFFECTIVE JUNE 1, 1943, BY REASON OF PHYSICAL DISABILITY AND THE RECORD FURTHER SHOWS THAT FOR PURPOSES OF SECTION 411 OF THE 1949 LAW, 63 STAT. 823, MR. MCVAY WAS RATED AT "ZERO" PERCENTAGE OF DISABILITY. THUS, ON OCTOBER 1, 1949, MR. MCVAY WAS IN FACT A MEMBER OF THE UNIFORMED SERVICES THERETOFORE RETIRED BY REASON OF PHYSICAL DISABILITY AND HENCE CLEARLY WITHIN THE SCOPE AND PURVIEW OF THE PROVISIONS OF SECTION 411. CONSEQUENTLY, IT WAS NECESSARY FOR HIM TO MAKE A POSITIVE ELECTION OF OPTION (B) PRIOR TO THE EXPIRATION OF THE 5-YEAR PERIOD PRESCRIBED IN SECTION 411 IF HE DESIRED TO BECOME ENTITLED TO HAVE HIS RETIRED PAY COMPUTED UNDER THE ALTERNATIVE METHODS PRESCRIBED IN SECTION 511.

THE BUREAU OF MEDICINE AND SURGERY, DEPARTMENT OF THE NAVY, HAS REPORTED THAT "MR. MCVAY'S SERVICE MEDICAL RECORDS DO NOT REVEAL THAT ANY OF THE DISABILITIES FOR WHICH HE WAS RETIRED WERE INCURRED WHILE HE WAS ENTITLED TO RECEIVE BASIC PAY.' THEREFORE, AN ELECTION BY HIM UNDER OPTION (A) OF SECTION 411 WOULD HAVE HAD NO EFFECT ON HIS RETIRED PAY STATUS SINCE, BY REASON OF THE FACT JUST STATED, HE COULD NOT HAVE QUALIFIED FOR DISABILITY RETIREMENT PAY UNDER THE PROVISIONS OF TITLE IV OF THE 1949 LAW. HENCE, THE STATEMENT APPEARING IN THE NAVY FINANCE CENTER LETTER OF NOVEMBER 6, 1961, THAT THE BUREAU OF NAVAL PERSONNEL IN LETTER OF OCTOBER 16, 1951,"STATES MR. MCVAY IS NOT ENTITLED TO BENEFITS UNDER SECTION 411 OF THE CAREER COMPENSATION ACT OF 1949"--- RELIED ON BY THE CLAIMS DIVISION IS THE SETTLEMENT OF JUNE 14, 1962--- IS WITHOUT ANY REAL SIGNIFICANCE INASMUCH AS THE ACTUAL ISSUE IS WHETHER MR. MCVAY WAS IN FACT GIVEN AN OPPORTUNITY TO ELECT OPTION (B) IN SECTION 411. IF HE WAS EXTENDED SUCH AN OPPORTUNITY AND DECLINED OR FAILED TO ACT WITHIN THE 5-YEAR PERIOD OF LIMITATION PRESCRIBED IN SECTION 411, HIS STATUS FALLS WITHIN THE SCOPE OF OUR DECISION OF MARCH 26, 1962, B-132032. SEE IN PARTICULAR PAGES 3 AND 4 OF THAT DECISION. ALSO, COMPARE THE CASE OF DIONICIO MANUEL, U.S. NAVY, RETIRED, CONSIDERED IN OUR DECISION TO YOU OF MARCH 27, 1962, B 147928, AND SEE OUR LETTER TO YOU OF JULY 11, 1962, ON THE SAME MATTER.

THE NAVY FINANCE CENTER HAS REPORTED THAT MR. MCVAY WAS IN RECEIPT OF RETIRED PAY ON SEPTEMBER 20, 1949, THE DAY BEFORE THIS EFFECTIVE DATE OF THE CAREER COMPENSATION ACT OF 1949, COMPUTED AT ONE-HALF OF THE BASE PAY OF AN ENLISTED MAN WITH OVER 24 YEARS' CREDITABLE SERVICE, PLUS 10 PERCENT FOR GOOD CONDUCT MARKS (SEE 34 U.S.C 854B, 1940 ED.) AS FOLLOWS--- ONE- HALF OF $165 OR $82.50 PLUS $66 LONGEVITY, PLUS $14.85, 10 PERCENT INCREASE FOR GOOD CONDUCT, MAKING A TOTAL OF $163.35 PER MONTH. IT IS FURTHER REPORTED THAT EFFECTIVE FROM OCTOBER 1, 1949, AND EXTENDING THROUGH THE PERIOD ENDING APRIL 30, 1952, MR. MCVAY WAS PAID RETIRED PAY AT THE RATE OF $167.58 PER MONTH, WHICH AMOUNT REPRESENTS THE COMPUTATION OF HIS RETIRED PAY ON THE BASIS OF AN ENLISTED MAN IN PAY GRADE E-7 WITH OVER 22 BUT NOT OVER 26 YEARS OF CREDITABLE SERVICE, $279.30 TIMES 60 PERCENT (24YEARS, 4 MONTHS AND 29 DAYS' ACTIVE SERVICE--- 24 TIMES 2 1/2 PERCENT).

THE AMOUNT OF $167.58 PER MONTH ABOVE REFERRED TO OBVIOUSLY REFLECTS THE COMPUTATION OF RETIRED PAY EFFECTIVE FROM OCTOBER 1, 1949, IN ACCORDANCE WITH THE PROVISIONS OF THE CAREER COMPENSATION ACT OF 1949. SINCE, AS PREVIOUSLY STATED, MR. MCVAY WAS QUALIFIED FOR THE BENEFITS OF INCREASED RETIRED PAY UNDER OPTION (A) OF SECTION 411, IT NECESSARILY FOLLOWS THAT IN ORDER TO INCREASE THE MONTHLY RATE OF HIS RETIRED PAY ABOVE THAT WHICH HE WAS RECEIVING ON SEPTEMBER 30, 1949, SUCH RETIRED PAY WAS REQUIRED TO BE COMPUTED PURSUANT TO AN ELECTION OF OPTION (B) IN SECTION 411, THAT IS, IN ACCORDANCE WITH THE METHOD (B) FORMULA CONTAINED IN SECTION 511 OF THE ACT.

ON THE BASIS OF THE FACTS ABOVE SET FORTH, IT REASONABLY MAY BE CONCLUDED THAT AN EFFECTIVE AND VALID ELECTION OF OPTION (B) UNDER SECTION 411 WAS ACCOMPLISHED IN THIS CASE. ACCORDINGLY, MR. MCVAY IS ENTITLED UNDER THE RAGAN (COVER) RULE--- SEE 40 COMP. GEN. 222--- TO INCREASED RETIRED PAY EFFECTIVE FROM APRIL 1, 1955, COMPUTED IN ACCORDANCE WITH METHOD (B) OF SECTION 511 OF THE 1949 LAW. IF OTHERWISE CORRECT A SETTLEMENT ON THE BASIS ABOVE STATED WILL ISSUE IN DUE COURSE.