Protest Concerning Military Retired Pay

A request was made for a decision concerning the computation of retired pay for members of the Armed Forces. Military retired pay was adjusted to reflect changes in the Consumer Price Index rather than changes in active duty pay rates under Federal law. Service members remaining on active duty after becoming eligible for retirement were receiving less retired pay upon retirement than they would have received if they had retired earlier An amendment was adopted to alleviate this retired pay inversion problem. The amendment was also intended to provide an alternate method of calculating retired pay or retainer pay. Questions arose with respect to the date of retirement eligibility to be used in computing military retired pay. The questions were whether: (1) the day preceding an active duty basic pay rate change should be used as the earlier day of voluntary retirement eligibility; (2) the 6-month time-in-grade requirement should be negated for all three- and four-star Army and Air Force general officers; and (3) the same aforementioned date should apply for those members eligible to retire only under a law which specifically provides for retirement on the first day of the month. GAO held that: (1) the day preceding an active duty basic pay rate change should be used as the earlier day of voluntary retirement eligibility in computing retired pay, if the resulting computation is more favorable to the member concerned; (2) when a member is retired in the grade of Lieutenant General or General, the time-in-grade restrictions do not apply in selecting an earlier more advantageous date for computing the retired pay; and (3) statutory language provides for voluntary retirements on the first day of the month which may be regarded as a surplusage, insofar as retired pay computations are concerned. This makes it possible for those officers to have their retired calculted pay in the same manner as other service members on the basis of retirement eligibility on the date immediately preceding an active duty pay rate change.