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The Department of Defense raised questions concerning whether: (1) the Air Force properly reduced in grade a member who had met the statutory requirements for retirement in a higher grade, but not the time-in-grade requirements; (2) 10 U.S.C. 1401a(f) would affect an officer who retired while serving in a particular grade but who had not met the statutory time-in-grade requirements; and (3) a determination should be applied retroactively to those members whose retirement pay was based on the higher grade. GAO held that: (1) statutory law authorized an alternative retirement pay calculation method based on a member's earlier eligibility retirement date, rather than on his actual retirement date; (2) any member who had not met the statutory and regulatory time-in-grade retirement requirements in a certain grade could not have his retired pay computed on the basis of a higher grade under the law, unless the proper officials waived the requirement; and (3) the Air Force properly reduced the member's grade for his retirement pay base, since he had not served in that grade for 2 years. Accordingly, the Air Force should preclude collection actions against individuals who already received payments on the basis of past statutory inconsistencies, but should recompute the retired pay of the members affected for the future.

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