Military Retired Pay

B-205366: Published: Dec 22, 1981. Publicly Released: Dec 22, 1981.

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This document discusses the application of a previous GAO decision regarding military retired pay. This individual, a civilian employee of the Federal government, is considering retiring, and is concerned that his retirement annuity will be less than if he had retired last year. GAO determined that because the individual is a civilian employee, the decision in question, 59 Comp. Gen. 691, would not be applicable to him. That decision applies only to service members who remain on active duty after becoming eligible to retire; it does not apply to civilian employees. Under the provisions of 10 U.S.C. 1401as discussed in that decision, generally, military members who remain on active duty after they become eligible for retirement, when they later retire, are permitted to compute their retired pay on the rates which were in effect on their earlier retirement eligibility date. Subsequent Consumer Price Index increases are then added to the retired pay computation thereby preventing the retired service member from receiving a lower retired pay rate than if he had retired earlier, and, thus, avoiding the retired pay “inversion.”

The laws upon which that decision was based do not apply to retirement annuities of civilian employees of the Federal Government.

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