B-55209, MARCH 20, 1946, 25 COMP. GEN. 657

B-55209, MARCH 20, 1946, 25 COMP. GEN. 657

RETIREMENT - PANAMA CANAL EMPLOYEES - CONCURRENT RECEIPT OF SURVIVOR AND DISABILITY ANNUITIES; REFUND OF RETIREMENT DEDUCTIONS A FORMER PANAMA CANAL EMPLOYEE SUBJECT TO THE PROVISIONS OF THE CANAL ZONE RETIREMENT STATUTE OF MARCH 2, 1931, AS AMENDED, WHO ELECTED TO BECOME A SURVIVOR ANNUITANT UNDER SECTION 4 OF THE ACT OF MAY 29, 1944, AS THE WIDOW OF AN EMPLOYEE ENGAGED IN OR ABOUT THE CONSTRUCTION OF THE PANAMA CANAL, IS PRECLUDED BY THE EXPRESS PROVISIONS OF SECTION 5 OF THE LATTER ACT FROM RECEIVING, IN ADDITION THERETO, A RETIREMENT ANNUITY UNDER THE FORMER ACT FOR TOTAL DISABILITY BY REASON OF HER SERVICES WITH THE PANAMA CANAL. WHILE SECTION 2 OF THE ACT OF JULY 29, 1942, PROVIDES THAT, IN THE CASE OF PANAMA CANAL EMPLOYEES WHO HAVE SERVED FIVE YEARS OR MORE, RETIREMENT DEDUCTIONS MAY NOT BE WITHDRAWN UPON SEPARATION FROM THE SERVICE, A FORMER EMPLOYEE WHO, BECAUSE OF HER ELECTION TO RETAIN HER RIGHTS AS A SURVIVOR ANNUITANT UNDER SECTION 4 OF THE ACT OF MAY 29, 1944, AS THE WIDOW OF AN EMPLOYEE ENGAGED IN OR ABOUT THE CONSTRUCTION OF THE PANAMA CANAL, IS PRECLUDED BY SECTION 5 THEREOF FROM RECEIVING RETIREMENT ANNUITY IN HER OWN RIGHT, MAY BE REFUNDED THE RETIREMENT DEDUCTIONS TO HER CREDIT.

COMPTROLLER GENERAL WARREN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, MARCH 20, 1946:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JANUARY 4, 1946, REFERENCE CZC- 1695, AS FOLLOWS:

THE COMMISSION WOULD APPRECIATE A DECISION FROM YOU INVOLVING THE APPLICABILITY OF SECTION 5 OF THE CANAL ZONE CONSTRUCTION ACT OF MAY 29, 1944, 58 STAT. 257, TO A CASE NOW PENDING BEFORE IT.

SECTION 5 OF THE ACT READS:

"IF, AFTER BECOMING AN ANNUITANT UNDER THE PROVISIONS OF THIS ACT, ANY PERSON, ON ACCOUNT OF ANY SERVICE RENDERED BY HIM AS HEREINBEFORE INDICATED, OR RENDERED BY HIM AS AN OFFICIAL OR EMPLOYEE OF THE PERMANENT ORGANIZATION OF THE PANAMA CANAL, OR OF THE PANAMA RAILROAD COMPANY, SUBSEQUENT TO MARCH 31, 1944, SHALL ELECT TO RECEIVE, AND SHALL RECEIVE, ANY SPECIAL REWARD OR ANNUITY, UNDER THE PROVISION OF LAW OTHER THAN THAT PROVIDED FOR BY THIS ACT, THEN AND IN THAT EVENT ALL HIS FURTHER RIGHT TO RECEIVE THE ANNUITY HEREUNDER AUTHORIZED SHALL THENCEFORTH CEASE.

"IN ANY CASE WHERE A CITIZEN OF THE UNITED STATES IS RECEIVING, OR BECOMES ENTITLED TO RECEIVE, AN ANNUITY UNDER THE PROVISIONS OF ANY LAW PROVIDING FOR THE RETIREMENT OF CIVILIAN OFFICERS AND EMPLOYEES OF THE UNITED STATES GOVERNMENT OR ANY OF ITS AGENCIES, AND HAD THREE YEARS OR MORE OF SERVICE ON THE ISTHMUS OF PANAMA OF THE CHARACTER DESCRIBED IN SECTION 2, HE MAY ELECT TO HAVE THAT ANNUITY CANCELED, AND THENCEFORTH TO BECOME AND BE AN ANNUITANT UNDER THE PROVISIONS OF THIS ACT, BUT HE SHALL NOT RECEIVE BOTH. THE ANNUITY WHICH MAY THUS BE PAID TO HIM UNDER THIS ACT SHALL BEGIN WITH THE DATE WHEREON HIS OTHER ANNUITY, HEREINBEFORE REFERRED TO, SHALL CEASE BECAUSE OF HIS ELECTION TO CANCEL SAME; AND THE SUBSTITUTED ANNUITY, THUS TO BE PAID HIM, UNDER THE PROVISIONS OF THIS ACT, SHALL THENCEFORTH CONTINUE UNTIL HIS DEATH. AS AN ANNUITANT UNDER THIS ACT, ALL OF ITS PROVISIONS SHALL BE APPLICABLE TO HIM.'

MRS. ANNA HELENA JENKINS EXECUTED AN APPLICATION FOR WIDOW'S ANNUITY ON JULY 21, 1944, UNDER THE ACT OF MAY 29, 1944, AS THE BENEFICIARY OF THE LATE BENJAMIN JENKINS, FORMER MACHINIST, ISTHMIAN CANAL COMMISSION, CANAL ZONE. HER CLAIM WAS ACCEPTED FOR ALLOWANCE ON NOVEMBER 22, 1944, AND SHE IS PRESENTLY RECEIVING A MONTHLY ANNUITY OF $52.05 UNDER THE CANAL ZONE CONSTRUCTION ACT.

MRS. JENKINS HAS BEEN SUBJECT TO THE TERMS OF THE CANAL ZONE RETIREMENT ACT FROM MARCH 12, 1929, TO JANUARY 31, 1945, AND RETIREMENT DEDUCTIONS HAVE BEEN TAKEN FROM HER SALARY FOR THIS PURPOSE. THE PANAMA CANAL GAVE AS THE REASON FOR HER SEPARATION " RES. ( ILL HEALTH)" AND IT IS ALLEGED SHE IS TOTALLY DISABLED FOR USEFUL AND EFFICIENT SERVICE IN THE POSITION HELD SO AS TO ENTITLE HER TO ANNUITY UNDER THE PROVISIONS OF PUBLIC LAW 31 OF THE CANAL ZONE CODE, APPROVED APRIL 12, 1939. SHE, HOWEVER, ELECTED TO RETAIN THE BENEFITS SHE IS NOW RECEIVING UNDER THE PROVISIONS OF SECTION 4 OF THE ACT OF MAY 29, 1944, SUPRA, RATHER THAN FILE A CLAIM FOR DISABILITY RETIREMENT, AND HAS SUBMITTED AN APPLICATION FOR REFUND OF RETIREMENT DEDUCTIONS IN ACCORDANCE WITH PUBLIC LAW 687, APPROVED JULY 29, 1942.

YOUR DECISION ON THE FOLLOWING QUESTION IS REQUESTED:

(1) IS MRS. JENKINS WHO RESIDED ON THE ISTHMUS WITH HER HUSBAND FOR APPROXIMATELY FOUR YEARS DURING HIS CONSTRUCTION SERVICE ENTITLED TO RECEIVE RETIREMENT ANNUITY BY REASON OF HER SERVICE WITH THE PANAMA CANAL, IN ADDITION TO THE BENEFITS PROVIDED IN SECTION 4 OF PUBLIC LAW 319?

(2) IF YOUR ANSWER TO THE FIRST QUESTION IS IN THE NEGATIVE, MAY SHE BE PAID A REFUND OF ALL RETIREMENT DEDUCTIONS OR ONLY THOSE DEDUCTIONS MADE THROUGH JULY 28, 1942?

THE ACT OF MAY 29, 1944, PUBLIC LAW 319, 58 STAT. 257, 258, PROVIDES, IN ADDITION TO SECTION 5, 58 STAT. 259, QUOTED IN YOUR LETTER, AS FOLLOWS:

SEC. 4. ANNUITIES GRANTED UNDER THE PROVISIONS OF THIS ACT SHALL COMMENCE FROM THE DATE WHEREUPON THE ACT TAKES EFFECT AND SHALL CONTINUE DURING THE LIFE OF THE ANNUITANT: PROVIDED, HOWEVER, THAT IN SUCH CASE AS WHERE A DECEASED PERSON, HAD HE BEEN ALIVE ON THE DATE WHEREON THE ACT TAKES EFFECT, WOULD HAVE BEEN ENTITLED TO RECEIVE AN ANNUITY HEREUNDER, AND SHALL HAVE BEEN SURVIVED BY A WIFE UNDIVORCED FROM HIM, WHO WAS HIS WIFE LIVING WITH HIM AT LEAST ONE YEAR OF HIS SERVICE ON THE ISTHMUS OF PANAMA DURING SAID CONSTRUCTION, AND HAS NOT SINCE REMARRIED, SUCH SURVIVOR SHALL BE ENTITLED TO RECEIVE SUCH ANNUITY FROM THE EFFECTIVE DATE OF THE ACT UNTIL HER DEATH: AND PROVIDED FURTHER, THAT IN ANY CASE WHERE AN ANNUITANT HEREUNDER SHALL DIE AFTER HE HAS RECEIVED ANY ANNUITY PAYMENT, OR PAYMENTS HEREUNDER, AND SHALL LEAVE SURVIVING HIM A WIFE UNDIVORCED FROM HIM, WHO WAS HIS WIFE LIVING WITH HIM AT LEAST ONE YEAR OF HIS SERVICE ON THE ISTHMUS OF PANAMA DURING SAID CONSTRUCTION, SUCH SURVIVOR SHALL BE ENTITLED TO RECEIVE THE ANNUITY FROM THE DATE TO WHICH SAME WAS PAID TO SUCH DECEASED ANNUITANT UNTIL HER DEATH.

ANY SURVIVING PERSON AS DESCRIBED IN THIS SECTION, SHALL BECOME AN ANNUITANT HEREUNDER AND SHALL BE SUBJECT TO ALL THE PROVISIONS OF THIS ACT REGARDING APPLICATIONS FOR, AND PAYMENT OF, ANNUITIES, AND SHE SHALL FURNISH SUCH PROOF OF HER MARRIAGE AND MARITAL RELATIONSHIPS TO ESTABLISH HER RIGHT TO BECOME SUCH ANNUITANT AS MAY BE REQUIRED BY THE CIVIL SERVICE COMMISSION.

FROM THE FACTS PRESENTED IN YOUR LETTER IT APPEARS MRS. JENKINS WAS AN EMPLOYEE OF THE PANAMA CANAL AND, AS SUCH WAS SUBJECT TO THE PROVISIONS OF THE CANAL ZONE RETIREMENT ACT OF MARCH 2, 1931 (46 STAT. 1471), AS AMENDED BY THE ACT OF JULY 29, 1942 (56 STAT. 726), FROM MARCH 12, 1929, TO JANUARY 31, 1945, THE DATE OF HER SEPARATION BECAUSE OF TOTAL DISABILITY. HOWEVER, IT APPEARS THAT ON JULY 21, 1944, SHE QUALIFIED AS AN ANNUITANT UNDER SECTION 4 OF THE ACT, SUPRA, AS THE WIDOW OF BENJAMIN JENKINS, A FORMER MACHINIST, ISTHMIAN CANAL COMMISSION, AND THEREBY BECAME "SUBJECT TO ALL THE PROVISIONS OF THIS ACT REGARDING APPLICATIONS FOR, AND PAYMENT OF, ANNUITIES" (QUOTING FROM THE SECOND PARAGRAPH OF SECTION 4, SUPRA). THEREFORE, HAVING ELECTED TO BECOME A WIDOW ANNUITANT UNDER THE SAID ACT, MRS. JENKINS IS PRECLUDED, BY THE EXPRESS PROVISION OF PARAGRAPH 5 OF THE STATUTE QUOTED IN YOUR LETTER, FROM RECEIVING, IN ADDITION THERETO, A RETIREMENT ANNUITY BY REASON OF HER SERVICES WITH THE PANAMA CANAL. ACCORDINGLY, QUESTION (1) IS ANSWERED IN THE NEGATIVE.

SINCE MRS. JENKINS HAS ELECTED TO RETAIN THE BENEFITS SHE NOW IS RECEIVING UNDER THE PROVISIONS OF THE 1944 STATUTE, SUPRA, AND THEREBY HAS WAIVED THE RIGHT TO RETIREMENT ANNUITY FOR TOTAL DISABILITY TO WHICH SHE OTHERWISE WOULD HAVE BEEN ENTITLED UNDER THE PROVISIONS OF THE CANAL ZONE RETIREMENT ACT, THE QUESTION IS PRESENTED WHETHER THERE MAY BE PAID TO HER A REFUND OF THE ENTIRE DEDUCTIONS TO HER CREDIT, OR ONLY THAT PART THEREOF MADE PRIOR TO JULY 29, 1942, THE EFFECTIVE DATE OF PUBLIC LAW 687 (56 STAT. 726), SECTION 2 OF WHICH, 56 STAT. 727, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

SEC. 2. THAT SECTION 95 OF TITLE 2, CANAL ZONE CODE, IS HEREBY REPEALED, AND IN LIEU THEREOF THE FOLLOWING IS SUBSTITUTED:

" SEC. 95. ANNUITY ON SEPARATION FROM SERVICE BEFORE BECOMING ELIGIBLE FOR RETIREMENT.--- (A) SHOULD ANY EMPLOYEE TO WHOM THIS ARTICLE APPLIES, AFTER HAVING SERVED FOR A TOTAL PERIOD OF NOT LESS THAN FIVE YEARS AND BEFORE BECOMING ELIGIBLE FOR RETIREMENT BECOME SEPARATED FROM THE SERVICE, SUCH EMPLOYEE SHALL BE PAID A DEFERRED ANNUITY BEGINNING AT THE AGE OF SIXTY-TWO YEARS, COMPUTED AS PROVIDED IN THE FIRST PARAGRAPH OF SECTION 96 OF THIS TITLE: PROVIDED, THAT ANY SUCH PERSON INVOLUNTARILY SEPARATED FROM THE SERVICE NOT BY REMOVAL FOR CAUSE ON CHARGES OF MISCONDUCT OR DELINQUENCY MAY ELECT TO RECEIVE AN IMMEDIATE ANNUITY BEGINNING AT THE AGE OF FIFTY-FIVE OR AT THE DATE OF SEPARATION FROM THE SERVICE IF SUBSEQUENT TO THAT AGE HAVING A VALUE EQUAL TO THE PRESENT WORTH OF A DEFERRED ANNUITY BEGINNING AT THE AGE OF SIXTY-TWO YEARS, OR AT AGE OF SEPARATION IF SUBSEQUENT TO AGE SIXTY-TWO, COMPUTED AS PROVIDED IN SECTION 96 OF THIS TITLE * * *.

ALTHOUGH IT IS PROVIDED BY THE ABOVE-QUOTED SECTION THAT AN EMPLOYEE WHO HAS SERVED A TOTAL OF FIVE YEARS OR MORE AND IS SEPARATED FROM THE SERVICE AFTER THE DATE OF THE ACT ( JULY 29, 1942) MAY NOT WITHDRAW FROM THE RETIREMENT FUND THE AMOUNT DEDUCTED FROM HIS SALARY FOR RETIREMENT PURPOSES ON AND AFTER THE DATE OF THE ACT, THE PROVISION IS FOR THE SPECIFIC PURPOSE OF RETAINING SUCH AMOUNTS AS A BASIS FOR FUTURE ANNUITY PAYMENTS TO THE EMPLOYEE, AND THERE IS NOTHING IN THE SAID ACT FROM WHICH IT REASONABLY MAY BE IMPLIED THAT THE CONGRESS INTENDED ANY SUCH AMOUNTS TO BE RETAINED IN THE RETIREMENT FUND AFTER THE POSSIBILITY OF RECEIVING AN ANNUITY HAS BECOME EXTINGUISHED. ON THE CONTRARY, WHEN AN EMPLOYEE HAS BECOME SEPARATED FROM THE SERVICE BY DEATH AND IT NO LONGER IS POSSIBLE FOR HIM TO RECEIVE THE BENEFITS OF FUTURE ANNUITIES, SPECIFIC PROVISION IS MADE IN THE SAID ACT FOR THE PAYMENT OF ALL RETIREMENT DEDUCTIONS TO THE LEGAL REPRESENTATIVE OF SUCH DECEASED EMPLOYEE.

IN THE INSTANT CASE THE EMPLOYEE HAS MADE AN ELECTION TO RETAIN THE ANNUITY SHE NOW IS RECEIVING AND BY MAKING SUCH ELECTION SHE IS PRECLUDED BY EXPRESS PROVISION OF LAW FROM RECEIVING ANY RETIREMENT ANNUITIES BY REASON OF HER PAST SERVICES AS AN EMPLOYEE OF THE CANAL ZONE. ACCORDINGLY, THERE BEING NO PRESENT OR FUTURE POSSIBILITY OF HER RECEIVING THE BENEFITS INTENDED TO BE PROVIDED BY THE AMOUNTS DEDUCTED FROM HER SALARY FOR RETIREMENT PURPOSES, THE CONCLUSION APPEARS JUSTIFIED THAT SHE IS ENTITLED TO REFUND OF THE ENTIRE AMOUNT TO HER CREDIT IN THE RETIREMENT FUND AS OF JANUARY 31, 1945, THE DATE SHE WAS SEPARATED FROM THE SERVICE. QUESTION (2) IS ANSWERED ACCORDINGLY.