B-80764, JANUARY 27, 1949, 28 COMP. GEN. 438

B-80764, JANUARY 27, 1949, 28 COMP. GEN. 438

RETIREMENT - REDEPOSIT OF DEDUCTIONS - INTEREST UNDER SECTIONS 7 (C) AND 12 (B) (2) OF THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED, REQUIRING THE CHARGING OF INTEREST ON REDEPOSITS OF RETIREMENT DEDUCTIONS EXCEPT FOR PERIODS AN EMPLOYEE WAS SEPARATED FROM THE SERVICE, AN EMPLOYEE WHO ENTERED THE ARMED FORCES IS NOT TO BE REGARDED, IN CONSONANCE WITH SECTION 5 OF THE ACT, AS SEPARATED FROM THE SERVICE, SO THAT REDEPOSITS OF RETIREMENT DEDUCTIONS PREVIOUSLY REFUNDED TO HIM MUST BE MADE WITH INTEREST COMPUTED OVER THE PERIOD OF SERVICE WITH THE ARMED FORCES.

COMPTROLLER GENERAL WARREN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, JANUARY 27, 1949:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 7, 1948, RELATIVE TO THE CASE OF AN EMPLOYEE WHO ACCEPTED A COMMISSION IN THE REGULAR ARMY IN FEBRUARY 1947, SHORTLY AFTER HIS REEMPLOYMENT IN THE CIVILIAN SERVICE UPON RELEASE FROM ACTIVE DUTY IN THE ARMED FORCES DURING WORLD WAR II.

YOU STATE THAT THE OFFICER NOW DESIRES TO REDEPOSIT THE RETIREMENT DEDUCTIONS WHICH PREVIOUSLY WERE RETURNED TO HIM, AND YOU REQUEST TO BE ADVISED WHETHER THE OFFICER SHOULD BE CONSIDERED AS SEPARATED FROM THE CIVILIAN SERVICE FROM AND AFTER FEBRUARY 1947, FOR THE PURPOSE OF PERMITTING THE REDEPOSIT TO BE MADE WITHOUT INTEREST BEING CHARGED AFTER SUCH DATE OF ENTRANCE INTO THE MILITARY SERVICE, OR WHETHER HE SHOULD BE CONSIDERED AS CONTINUING IN HIS CIVILIAN POSITION IN A FURLOUGH STATUS AND INTEREST CHARGED ON THE REDEPOSIT FROM AND AFTER SAID DATE. ALSO, YOU REQUEST A DECISION ON THE FOLLOWING QUESTION:

(2) IF THE INDIVIDUAL MAKING THE REDEPOSIT HAD ENLISTED IN THE ARMED FORCES OF THE UNITED STATES SUBSEQUENT TO JUNE 24, 1948, UNDER CIRCUMSTANCES WHICH WOULD ENTITLE HIM TO RESTORATION UNDER SECTION 9 (G) (1) OF THE SELECTIVE SERVICE ACT OF 1948 ( PUBLIC LAW 759, 80TH CONGRESS, APPROVED JUNE 24, 1948), SHOULD OR SHOULD NOT INTEREST BE CHARGED FOR THE PERIOD FROM AND AFTER THE DATE OF ENTRANCE INTO THE MILITARY SERVICE?

SECTION 5 OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, AS AMENDED BY SECTION 1 OF THE ACT OF NOVEMBER 9, 1945, 59 STAT. 577, READS IN PART AS FOLLOWS:

NO OFFICER OR EMPLOYEE TO WHOM THIS ACT APPLIES WHO DURING THE PERIOD OF ANY WAR, OR OF ANY NATIONAL EMERGENCY AS PROCLAIMED BY THE PRESIDENT OR DECLARED BY THE CONGRESS, HAS LEFT OR LEAVES HIS POSITION TO ENTER THE ARMED FORCES OF THE UNITED STATES SHALL BE CONSIDERED AS SEPARATED FROM SUCH POSITION FOR THE PURPOSES OF THIS ACT BY REASON OF HIS SERVICE WITH THE ARMED FORCES OF THE UNITED STATES. THIS PARAGRAPH SHALL NOT BE SO CONSTRUED AS TO PREVENT THE PAYMENT OF REFUNDS AS PROVIDED BY SECTION 7 (A) OR 12 (B) OF THIS ACT. THE PROVISIONS OF SECTIONS 7 (A) AND 12 (B) REFERRED TO ABOVE--- NOW CONTAINED IN SECTIONS 7 (A) AND 12 (B) (1) OF THE SAID RETIREMENT ACT, AS AMENDED BY THE ACT OF FEBRUARY 28, 1948, 62 STAT. 52, 54--- ARE DIRECTED TO THE MATTER OF REFUND OF AMOUNTS TO THE CREDIT OF INDIVIDUALS IN THE RETIREMENT FUND UPON THEIR BECOMING SEPARATED FROM THE SERVICE. HOWEVER, THE MATTER OF REDEPOSIT OF REFUNDS, SUCH AS INVOLVED HERE, IS GOVERNED BY THE PROVISIONS OF SECTIONS 7 (C) AND 12 (B) (2) OF THE SAID RETIREMENT ACT, AS AMENDED BY THE ACT OF FEBRUARY 28, 1948, 62 STAT. 52, 54. SAID SECTION 7 (C) READS AS FOLLOWS:

(C) ALL AMOUNTS RETURNED TO AN OFFICER OR EMPLOYEE UNDER THIS SUBSECTION MUST, UPON REINSTATEMENT, RETRANSFER, OR REAPPOINTMENT TO A POSITION WITHIN THE PURVIEW OF THIS ACT, BE REDEPOSITED, TOGETHER WITH INTEREST AT 4 PERCENTUM PER ANNUM TO DECEMBER 31, 1947, AND 3 PERCENTUM PER ANNUM THEREAFTER, COMPOUNDED TO DECEMBER 31 OF EACH YEAR, BY SUCH OFFICER OR EMPLOYEE BEFORE HE MAY RECEIVE ANY CREDIT FOR THE SERVICE COVERED BY THE REFUND. SUCH INTEREST SHALL NOT BE REQUIRED FOR ANY PERIOD DURING WHICH THE OFFICER OR EMPLOYEE IS SEPARATED FROM THE SERVICE.

IDENTICAL PROVISIONS ARE CONTAINED IN THE SAID SECTION 12 (B) (2).

IT SEEMS CLEAR THAT THE PROVISIONS OF SECTION 5, SUPRA, AUTHORIZING THE PAYMENT OF REFUNDS AS PROVIDED BY SECTIONS 7 (A) AND 12 (B) TO AN EMPLOYEE WHO ENTERED THE ARMED FORCES, EVEN THOUGH HE WAS NOT TO BE CONSIDERED AS SEPARATED FROM THE SERVICE, HAVE NO EFFECT UPON THE PROVISIONS OF SECTIONS 7 (C) AND 12 (B) (2). CONSEQUENTLY, UNDER THE PLAIN PROVISIONS OF THE SAID SECTION 5, AND EMPLOYEE WHO ENTERS THE ARMED FORCES UNDER THE CIRCUMSTANCES THERE STATED--- WHILE ENTITLED TO A REFUND OF THE AMOUNT TO HIS CREDIT IN THE RETIREMENT FUND--- IS NOT SEPARATED FROM THE SERVICE AND, THEREFORE, ANY REDEPOSIT MUST BE WITH INTEREST COMPUTED OVER THE PERIOD OF SERVICE WITH THE ARMED FORCES.