B-87, JANUARY 14, 1939, 18 COMP. GEN. 607

B-87, JANUARY 14, 1939, 18 COMP. GEN. 607

RETIREMENT - CANAL ZONE RETIREMENT ACT AMENDMENT - SUBSTITUTION OF CANAL ZONE ACT ANNUITY FOR CIVIL SERVICE RETIREMENT ACT ANNUITY THE ACT OF AUGUST 10, 1937, AMENDING THE CANAL ZONE RETIREMENT ACT BY ENLARGING THE CLASS OF BENEFICIARIES THEREUNDER IS LIMITED TO FORMER EMPLOYEES WHOSE LAST SERVICE WAS WITH THE PANAMA CANAL, OR PANAMA RAILROAD CO., AND IS NOT FOR APPLICATION TO A FORMER EMPLOYEE SEPARATED FROM THE PANAMA CANAL SERVICE PRIOR TO THE EXISTENCE OF ANY RETIREMENT ACT APPLICABLE TO HIS CLASS WHO WAS SUBSEQUENTLY EMPLOYED IN THE FEDERAL SERVICE IN WASHINGTON, D.C., AND RETIRED THEREFROM UNDER THE CIVIL SERVICE RETIREMENT ACT AND WHO NOW HAS MADE CLAIM FOR THE HIGHER ANNUITY UNDER THE CANAL ZONE ACT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, JANUARY 14, 1939:

YOUR LETTER OF NOVEMBER 26, 1938 (FILE CZA-676 R-21547), IS AS FOLLOWS:

MR. PHILIP B. KEEFER, RETIRED FROM THE CIVIL SERVICE UNDER THE OPTIONAL PROVISION OF SECTION 1 OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930 (46 STAT. 468), EFFECTIVE OCTOBER 1, 1935, ON AN ANNUITY OF $1,200 PER ANNUM, HE HAVING AT THAT TIME COMPLETED MORE THAN 30 YEARS' SERVICE AND BEING 60 YEARS OF AGE. WHILE MR. KEEFER'S LAST SERVICE WAS AS A WATCHMAN, NATIONAL GALLERY OF ART, SMITHSONIAN INSTITUTION, WASHINGTON,D.C., HE HAD RENDERED MORE THAN 15 YEARS' SERVICE IN THE TROPICS ON THE ISTHMUS OF PANAMA AND WAS THEREFORE IN THE 62-YEAR RETIREMENT AGE GROUP.

THE ACT OF AUGUST 10, 1937 (50 STAT. 619), AMENDING THE CANAL ZONE RETIREMENT ACT, READS AS FOLLOWS:

"BE IT ENACTED BY THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES OF AMERICA IN CONGRESS ASSEMBLED, THAT SECTION 103 OF TITLE 2 OF THE CANAL ZONE CODE, APPROVED JUNE 19, 1934, IS AMENDED BY ADDING AT THE END THEREOF THE FOLLOWING PARAGRAPH:

"ANY CITIZEN OF THE UNITED STATES SEPARATED FROM THE SERVICE OF EITHER THE PANAMA CANAL OR THE PANAMA RAILROAD CO. ON THE ISTHMUS OF PANAMA SUBSEQUENT TO AUGUST 1, 1920, AND BEFORE JULY 1, 1926, NOT BY REMOVAL FOR CAUSE ON CHARGES OF MISCONDUCT OR DELINQUENCY, UPON MAKING THE NECESSARY CONTRIBUTIONS TO THE RETIREMENT AND DISABILITY FUNDS AS PROVIDED IN THIS ARTICLE AND WHO MEETS THE REQUIREMENTS AS TO AGE AND SERVICE SET FORTH IN SAID SECTION 103 OF TITLE 2 OF THE CANAL ZONE CODE, APPROVED JUNE 19, 1934, SHALL BE ENTITLED TO AN ANNUITY COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE, NOTWITHSTANDING THE FACT THAT HIS SEPARATION FROM THE SERVICE OCCURRED PRIOR TO THE EXISTENCE OF ANY RETIREMENT ACT APPLICABLE TO EMPLOYEES OF THE PANAMA CANAL OR THE PANAMA RAILROAD ON THE ISTHMUS OF PANAMA: PROVIDED, THAT SUCH ANNUITY SHALL BE PAYABLE ONLY FROM THE DATE OF ENACTMENT OF THIS ACT.'

MR. KEEFER WAS SEPARATED FROM THE SERVICE OF THE PANAMA CANAL ON THE ISTHMUS OF PANAMA, FEBRUARY 7, 1923, NOT DUE TO MISCONDUCT OR DELINQUENCY, AND AT THAT TIME HAD COMPLETED A TOTAL OF 22 YEARS, 5 MONTHS, AND 28 DAYS' SERVICE. HE MEETS ALL REQUIREMENTS FOR TITLE TO ANNUITY AS PROVIDED BY THE AMENDMENT OF AUGUST 10, 1937. IF ENTITLED TO THE BENEFIT OF THIS AMENDMENT THE ANNUITY, BASED ON SERVICE RENDERED TO THE DATE OF SEPARATION FROM THE SERVICE OF THE CANAL ZONE, WOULD BE $1,344.48 PER ANNUM, AND HE HAS MADE CLAIM FOR THIS ANNUITY, RELINQUISHING HIS RIGHT TO ANNUITY UNDER CIVIL SERVICE RETIREMENT ACT.

UNCLASSIFIED EMPLOYEES OF THE PANAMA CANAL WERE NOT BROUGHT WITHIN THE OPERATION OF THE CIVIL SERVICE RETIREMENT LAW UNTIL JULY 1, 1926 (SECTION 3, ACT OF JULY 3, 1926), AND THE AMENDMENT OF AUGUST 10, 1937, WAS ENACTED PRIMARILY TO PROVIDE BENEFITS FOR EMPLOYEES SEPARATED BETWEEN AUGUST 1, 1920, AND JULY 1, 1926, UNDER CONDITIONS WHICH WOULD HAVE ENTITLED THEM TO ANNUITY HAD THE ORIGINAL RETIREMENT ACT OF MAY 22, 1920, INCLUDED SUCH GROUP. HOWEVER, MR. KEEFER'S SEPARATION FROM THE PANAMA CANAL WAS NOT HIS FINAL SEPARATION FROM THE GOVERNMENT SERVICE, AND THE QUESTION PRESENTED IS WHETHER THE FACT THAT HE WAS SUBSEQUENTLY EMPLOYED IN A POSITION WITHIN THE PURVIEW OF THE CIVIL SERVICE RETIREMENT ACT AND GRANTED THE BENEFITS OF THAT ACT WOULD BAR AN ELECTION TO RELINQUISH SUCH BENEFITS AND RECEIVE AN ANNUITY UNDER THE CANAL ZONE RETIREMENT ACT.

IF YOUR DECISION IS IN THE AFFIRMATIVE, WOULD THIS ALSO APPLY IF THE EMPLOYEE WAS SEPARATED FROM THE PANAMA CANAL AND IMMEDIATELY REEMPLOYED WITHOUT BREAK IN CONTINUITY OF SERVICE TO A POSITION WITHIN THE PURVIEW OF THE CIVIL SERVICE RETIREMENT ACT.

THE ACT OF AUGUST 10, 1937, QUOTED IN YOUR LETTER, IS AN ADDITION TO SECTION 103 OF THE CANAL ZONE CODE, SECTION 13 OF THE ACT OF MARCH 2, 1931, 46 STAT. 1479, PROVIDING AS FOLLOWS:

IN THE CASE OF THOSE EMPLOYEES OF THE PANAMA CANAL OR THE PANAMA RAILROAD COMPANY WHO BEFORE JULY 1, 1931, SHALL HAVE BEEN RETIRED ON ANNUITY UNDER THE PROVISIONS OF THE CIVIL SERVICE RETIREMENT ACT (U.S. CODE, TITLE 5, CH. 14). OR SAID ACT AS AMENDED, OR AS EXTENDED BY EXECUTIVE ORDERS, OR UNDER THE PROVISIONS OF THE PANAMA RAILROAD PENSION PLAN, THE ANNUITY SHALL BE COMPUTED, ADJUSTED, AND PAID UNDER THE PROVISIONS OF THIS ARTICLE, BUT THIS ARTICLE SHALL NOT BE SO CONSTRUED AS TO REDUCE THE ANNUITY OF ANY PERSON RETIRED BEFORE ITS EFFECTIVE DATE, NOR SHALL ANY INCREASE IN ANNUITY COMMENCE BEFORE SUCH EFFECTIVE DATE.

ALL THOSE WHO WERE SEPARATED FROM THE SERVICE OF EITHER THE PANAMA CANAL OR THE PANAMA RAILROAD CO. ON THE ISTHMUS OF PANAMA, SUBSEQUENT TO AUGUST 1, 1920, AND BEFORE JULY 1, 1931, NOT BE REMOVAL FOR CAUSE ON CHARGES OF MISCONDUCT OR DELINQUENCY, WITHOUT HAVING BEEN GRANTED RETIREMENT ANNUITIES DUE TO THE FACT THAT ALL OF THEIR SERVICE WHICH WOULD BE ALLOWABLE UNDER THE PROVISIONS OF THIS ARTICLE WAS NOT COUNTED IN ARRIVING AT THEIR TOTAL SERVICE, AND WHO ARE OTHERWISE ELIGIBLE BY HAVING MADE THE NECESSARY CONTRIBUTIONS TO THE RETIREMENT AND DISABILITY FUNDS AS HEREIN PROVIDED, SHALL, FROM JULY 1, 1931, BE PAID ANNUITIES IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE. (MAR. 2, 1931, CH. 375, SEC. 13, 46 STAT. 1479 (U.S. CODE, TITLE 48, SEC. 13711).

THUS, THE ACT OF AUGUST 10, 1937, ADDED A NEW PARAGRAPH TO THE ABOVE- QUOTED SECTION OF THE CODE THE PURPOSE OF WHICH ADDITION IS MERELY TO ENLARGE THE CLASS OF BENEFICIARIES OF THE CANAL ZONE RETIREMENT ACT WITHOUT IN ANY WISE AFFECTING THE PROVISIONS OF THE TWO PARAGRAPHS OF THE ACT AS ORIGINALLY ENACTED. ITS APPLICATION, THEREFORE, MUST OF NECESSITY BE LIMITED TO FORMER EMPLOYEES WHOSE LAST SERVICE WAS WITH THE PANAMA CANAL OR PANAMA RAILROAD CO. THE FIRST PARAGRAPH OF THE SECTION CONTAINS THE ONLY AUTHORITY FOR READJUSTING ANNUITIES COMPUTED PURSUANT TO THE CIVIL SERVICE RETIREMENT ACT WHICH AUTHORITY IS SPECIFICALLY LIMITED TO "THE CASE OF THOSE EMPLOYEES OF THE PANAMA CANAL OR THE PANAMA RAILROAD CO. WHO BEFORE JULY 1, 1931, SHALL HAVE BEEN RETIRED ON ANNUITY UNDER THE PROVISIONS OF THE CIVIL SERVICE RETIREMENT ACT, ETC.' MR. KEEFER WAS NOT RETIRED AS AN EMPLOYEE OF THE PANAMA CANAL OR THE PANAMA RAILROAD CO. BUT AS AN EMPLOYEE OF THE SMITHSONIAN INSTITUTION. A STUDY OF THE LEGISLATIVE HISTORY IN THIS MATTER REVEALS NO LEGISLATIVE INTENT TO COVER CASES SUCH AS THAT PRESENTED HERE. SEE, PARTICULARLY, REPORT NO. 1356, HOUSE OF REPRESENTATIVES, ON BILL S. 81, SEVENTY-FIFTH CONGRESS, WHICH BECAME THE ACT OF AUGUST 10, 1937, IN WHICH REPORT IT IS STATED THAT THE PURPOSE OF THE LEGISLATION WAS TO EXTEND THE BENEFITS OF THE PANAMA CANAL RETIREMENT ACT TO 15 FORMER EMPLOYEES OF THE PANAMA CANAL OR THE PANAMA RAILROAD CO. WHO HAD BEEN INVOLUNTARILY SEPARATED FROM THE SERVICE DURING THE PERIOD AUGUST 1, 1920, TO JULY 1, 1926, AT A TIME WHEN THE RETIREMENT LAW IN FORCE HAD NOT BEEN SUFFICIENTLY BROADENED TO AUTHORIZE RETIREMENT OR DISABILITY ANNUITIES.

YOU ARE ADVISED, THEREFORE, THAT THERE APPEARS NO AUTHORITY UNDER THE ACT OF AUGUST 10, 1937, OR OTHERWISE, TO RECOMPUTE THE ANNUITY OF MR. KEEFER UNDER THE PANAMA CANAL RETIREMENT ACT. THIS RENDERS UNNECESSARY ANY ANSWER TO THE QUESTION PRESENTED IN THE CONCLUDING PARAGRAPH OF YOUR LETTER.