B-125814, OCT. 2, 1959

B-125814, OCT. 2, 1959

TO MR. MELVIN JAMES WARD:

REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 2, 1959, AND AUGUST 25, 1959, CONCERNING OUR DECISIONS OF AUGUST 6, 1956, AND SEPTEMBER 6, 1957, B -125814, HOLDING THAT YOU WERE INDEBTED TO THE UNITED STATES IN THE AMOUNT OF $481.56 AS A RESULT OF AN ERRONEOUS ADJUSTMENT OF YOUR RETAINER PAY BY SETTLEMENTS DATED JANUARY 21, 1954, COVERING THE PERIOD MAY 10, 1947, TO SEPTEMBER 30, 1953, ON THE BASIS THAT YOU HAD 22 YEARS OF ACTIVE FEDERAL SERVICE INSTEAD OF 21 YEARS OF SUCH SERVICE FOR THE PURPOSE OF COMPUTING SUCH PAY.

THE RECORD SHOWS THAT YOU WERE TRANSFERRED TO THE FLEET RESERVE, CLASS F- 5, ON MARCH 5, 1947, AND THAT YOU WERE RETAINED ON ACTIVE DUTY THROUGH MAY 9, 1947. YOU WERE CREDITED FOR THE PURPOSE OF TRANSFER AND RETAINER PAY WITH A TOTAL OF 22 YEARS' ACTIVE FEDERAL SERVICE (COUNTING YOUR MINORITY ENLISTMENT AS A FULL FOUR YEARS OF SUCH SERVICE). HOWEVER, YOU HAD BUT 21 YEARS, 2 MONTHS, AND 28 DAYS OF ACTUAL ACTIVE FEDERAL SERVICE ON MAY 9, 1947. ON MAY 1, 1955, UPON THE COMPLETION OF 30 YEARS' SERVICE, YOU WERE TRANSFERRED TO THE RETIRED LIST OF THE REGULAR NAVY. THE DECISIONS OF AUGUST 6, 1956, AND SEPTEMBER 6, 1957, WERE BASED ON THE CONCLUSION IN COMPUTING RETAINER PAY ONLY YEARS OF ACTUAL ACTIVE FEDERAL SERVICE (21 IN YOUR CASE) MAY BE USED IN DETERMINING AS THE PERCENTAGE MULTIPLE FACTOR WHICH IS APPLICABLE IN ANY PARTICULAR CASE.

IN YOUR LETTER, YOU REFER TO OUR DECISION OF AUGUST 5, 1958, B 135771, 38 COMP. GEN. 110. FOR THE REASONS STATED IN THAT DECISION, COPY ENCLOSED, IT IS CONCLUDED THAT YOUR RETAINER PAY FOR THE PERIOD MAY 10, 1947, TO SEPTEMBER 30, 1949, INCLUSIVE, PROPERLY IS TO BE COMPUTED ON THE BASIS OF 22 YEARS OF ACTIVE SERVICE.

ON AND AFTER OCTOBER 1, 1949, YOUR RETAINER PAY WAS COMPUTED UNDER THE PROVISIONS OF SECTION 511 OF THE CAREER COMPENSATION ACT OF 1949, 63 STAT. 829, AND YOU WERE PAID AN INCREASED AMOUNT OF RETAINER PAY. MEMBERS OF THE UNIFORMED SERVICES WHO WERE TRANSFERRED TO THE FLEET RESERVE PRIOR TO OCTOBER 1, 1949, BECAME ENTITLED (EFFECTIVE FROM THAT DATE), TO RECEIVE RETAINER PAY UNDER ONE OF THE TWO METHODS THERE PRESCRIBED. UNDER METHOD (A) THEY WERE ENTITLED TO RECEIVE THEIR MONTHLY RETAINER PAY IN THE AMOUNT AUTHORIZED FOR SUCH MEMBERS BY THE PROVISIONS OF LAW WHICH WERE IN EFFECT ON THE DAY IMMEDIATELY PRECEDING THE DATE OF ENACTMENT OF THE ACT. METHOD (B) IN SECTION 511 AUTHORIZED "RETAINER PAY * * * EQUAL TO 2 1/2 PERCENTUM OF THE MONTHLY BASIC PAY * * * WHICH SUCH MEMBER * * * WOULD BE ENTITLED TO RECEIVE IF SERVING ON ACTIVE DUTY * * * MULTIPLIED BY THE NUMBER OF YEARS OF ACTIVE SERVICE CREDITABLE TO HIM.' INSOFAR AS HEREIN PERTINENT, THE TERM "ACTIVE SERVICE" IS EXPRESSLY DEFINED FOR THE PURPOSES OF SECTION 511 AS MEANING "ALL SERVICE AS A MEMBER OR AS A FORMER MEMBER OF THE UNIFORMED SERVICES * * * WHILE ON THE ACTIVE LIST OR ON ACTIVE DUTY OR WHILE PARTICIPATING IN FULL-TIME TRAINING OR OTHER FULL-TIME DUTY PROVIDED FOR OR AUTHORIZED IN THE NATIONAL DEFENSE ACT, AS AMENDED, THE NAVAL RESERVE ACT OF 1938, AS AMENDED, OR IN OTHER PROVISIONS OF LAW.' SUCH DEFINITION OF THE TERM "ACTIVE SERVICE" INCLUDES ONLY PERIODS OF ACTUAL SERVICE AND THE CONCLUSION IS REQUIRED THAT PERIODS OF CONSTRUCTIVE SERVICE RESULTING FROM MINORITY ENLISTMENTS AS AUTHORIZED BY SECTION 202 OF THE NAVAL RESERVE ACT OF 1938, 52 STAT. 1178, FOR THE PURPOSES OF THAT ACT, PROPERLY MAY NOT BE CONSIDERED AS CONSTITUTING CREDITABLE ACTIVE SERVICE IN DETERMINING THE PERCENTAGE MULTIPLE FACTOR TO BE USED IN THE FORMULA PRESCRIBED IN METHOD (B) OF SECTION 511 OF THE CAREER COMPENSATION ACT OF 1949.

ON THE DATE OF YOUR RELEASE FROM ACTIVE DUTY, MAY 9, 1947, YOU HAD LESS THAN 21 YEARS AND 6 MONTHS OF CREDITABLE (ACTUAL) "ACTIVE SERVICE.' HENCE, THE CORRECT MULTIPLIER FACTOR IN YOUR CASE IS 52 1/2 PERCENT (21 TIMES 2 1/2 PERCENT) FOR THE PERIOD FROM OCTOBER 1, 1949. YOU WERE PROPERLY PAID ORIGINALLY ON SUCH BASIS BY THE DEPARTMENT OF THE NAVY FOR THIS PERIOD AND THE SETTLEMENTS OF JANUARY 21, 1954, WERE ERRONEOUS TO THAT EXTENT. HOWEVER, FOR THE PRIOR PERIOD INVOLVED--- FROM MAY 10, 1947, TO SEPTEMBER 30, 1949--- THE CORRECT MULTIPLIER FACTOR IN YOUR CASE IS 55 PERCENT (22 TIMES 2 1/2 PERCENT) AND YOU WERE ENTITLED TO THE ADJUSTMENT IN YOUR RETAINER PAY OF THE DIFFERENCE BETWEEN $122.51 AND $116.94 PER MONTH ALLOWED UNDER THOSE SETTLEMENTS FOR THAT PERIOD, A TOTAL OF $159.86.

IT IS UNDERSTOOD THAT THE AMOUNT ONCE BELIEVED TO BE DUE ($481.56) IS BEING LIQUIDATED BY THE U.S. NAVY FINANCE CENTER, CLEVELAND, OHIO, BY CHECK AGES AGAINST YOUR RETIRED PAY. INSTRUCTIONS ARE BEING ISSUED THAT SUCH OFFICE BE INFORMED THAT THE AMOUNT OF YOUR INDEBTEDNESS STILL DUE SHOULD BE REDUCED BY $159.86.