PROCEEDINGS

	IN THE CASE OF:     

	BOARD DATE:           26 August 2003                 
	DOCKET NUMBER:   AR2002082324

	I certify that hereinafter is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in the case of the above-named individual.  

	Mr. Carl W. S. Chun		Director	
	Mr. Edmund P. Mercanti		Analyst	

  The following members, a quorum, were present:

	Mr. Raymond J. Wagner		Chairperson	
	Mr. Robert L. Duecaster		Member	
	Ms. Marla J. N. Troup		Member	

	The applicant and counsel if any, did not appear before the Board.

	The Board considered the following evidence:

	Exhibit A - Application for correction of military 
                records
	Exhibit B - Military Personnel Records (including
	            advisory opinion, if any)

FINDINGS:

1.  The applicant has exhausted or the Board has waived the requirement for exhaustion of all administrative remedies afforded by existing law or regulations.

2.  The applicant requests that his discharge from the US Army Reserve (USAR) Control Group, Individual Ready Reserve (IRR), be corrected to transfer to the Retired Reserve.

3.  The applicant states he was never required to complete any forms during the 10 years he received Voluntary Separation Incentive (VSI) payments.  His VSI payments have now stopped, and he had been told he will forfeit the remaining 18 years of payments if he does not have his discharge corrected to a transfer to the Retired Reserve.

4.  The applicant’s military records show that he enlisted in the Regular Army on 28 February 1978, was awarded the military occupational specialty of journalist, and was promoted to pay grade E-5.

5.  On 26 July 1981, the applicant was honorably discharged due to his acceptance of an appointment as a commissioned officer.  

6.  The applicant remained on active duty in a commissioned status and was promoted to captain.

7.  On 30 September 1992, the applicant was honorably released from active duty, at his own request, with 29 annual VSI payments of $14,144.42.

8.  On 4 June 2001, the US Army Reserve Personnel Command 
(AR-PERSCOM) published orders discharging the applicant, with an effective date of 1 September 2001.

9.  In the processing of this case, the staff of the Board contacted the 
AR-PERSCOM.  The AR-PERSCOM stated that the applicant was considered and not selected for promotion to major for a second time on 9 May 2000, which resulted in his discharge.  
 
10.  Department of Defense (DOD) Financial Management Regulation, Volume 7A, Chapter 35, paragraph 350801, subparagraph F, states:  "The member must accept voluntary appointment…to the Ready Reserve of a Reserve Component and must continue to serve in a Reserve Component during the entire period of eligibility for VSI.  If the member does not continue to serve in the Ready Reserve, the VSI installments terminate on the date of separation from the Reserve Component or transfer to the Retired Reserve."  Exceptions are provided for 2-time non-selection for promotion, medical disability, age, or for other involuntary reasons.

11.  Army policy and the Department of Defense Military Pay and Allowances Entitlements Manual (DODPM), based on Public Law 102-190, dated 5 December 1991, as amended, prescribes the qualifications for entitlement to readjustment benefits for certain voluntarily separated members.  The VSI was one of the monetary benefits associated with this incentive program.  The voluntary incentive program was designed to support the Army's drawdown.  HQDA message 281802Z January 1992, clarified issues associated with the voluntary separation incentive program via a question and answer format.  It stated that, soldiers approved for VSI would be paid in annual installments commencing on their departure date from Active Duty, and on each anniversary date thereafter for twice the number of years on Active Duty, provided the soldier continues to serve in the Ready Reserve.  VSI annual payments will be discontinued if the member is separated from the Ready Reserve unless the individual becomes ineligible to continue to serve due to medical or age limitations in which case the soldier will be transferred to the Standby Reserve or the Retired Reserve.

12.  Headquarters, Department of the Army message 281802Z January 1992, which clarified the issues associated with the voluntary separation incentive program via a question and answer format.  It stated that soldiers approved for VSI would be paid in annual installments commencing on their departure date from active duty and on each anniversary date thereafter for twice the number of years on active duty provided the soldier continued to serve in the Ready Reserve.  VSI annual payments would be discontinued if the member was separated from the Ready Reserve, unless the individual became ineligible to continue to serve due to medical or age limitations in which case the soldier would be transferred to the Standby Reserve or the Retired Reserve.  
 
13.  Army Regulation 135-175, Section II, Reserve Component (Discharge Criteria), paragraph 4-4, provides that officers in the Army Reserve will be removed from an active status, with or without their consent, regardless of the length of commissioned service when not-selected for promotion after second consideration by the Department of the Army Reserve Components selection board for the grades of first lieutenant, captain or major.  Removal will be by discharge, transfer to the Retired Reserve (if eligible and requested by the member) or, if eligible, transfer to Control Group (Inactive).
 
14  Army Regulation 140-10, in effect at the time, set forth the basic authority for the assignment, attachment, detail, and transfer of USAR soldiers.  Chapter 7 of the regulation relates to the removal of soldiers from an active status and states, in pertinent part, that soldiers removed from an active status will be discharged or, if qualified and if they so request, will be transferred to the Retired Reserve.
Paragraph 7-4 requires removal of officers who are twice not selected for promotion to chief warrant officer three, chief warrant officer four, captain, major,
or lieutenant colonel.  
 
15.  Title 10, United States Code (USC), section 14506, states that an officer in the grade of major who twice fails to be selected for promotion to lieutenant colonel will be separated no later than the first day of the month after the month in which the officer completes 20 years of commissioned service.
 
16  Title 10, USC, section 14513, states that a Reserve officer of the Army, who is in an active status and whose removal from an active status or from a Reserve active-status list is required by section 14506 of this title shall:  1) be transferred to an inactive status if the Secretary concerned determines that the officer has skills which may be required to meet the mobilization needs of the officer’s armed force; 2) be transferred to the Retired Reserve, if the officer is qualified and applies for such transfer; or 3) if the officer is not transferred to an inactive status or the Retired Reserve, be discharged from the officer’s Reserve appointment.  
 
17.  Public Law 107-107, enacted 28 December 2001, modified Title 10, U.S. Code section 14513 and now allows the transfer of a soldier to the retired reserve without submitting a request to ARPERSCOM to qualify.  However, soldiers still may request not to be transferred to the retired reserve and be subsequently discharged.  
 
18.  Department of Defense (DOD) Financial Management Regulation 7000.
14-R, Volume 7A, Chapter 35 “Separation Payments”, dated February 2002, provides revised guidance for officers twice passed over for promotions, under paragraph 350801, sub-paragraph F (2), Voluntary Separation Incentive (VSI) entitlement. 
 
CONCLUSIONS:
 
1.  The Board concludes that it is reasonable to believe that the applicant would have elected from an option letter to transfer to the Retired Reserve, with the continuation of his 18 remaining annual VSI payments, after being nonselected for promotion if he had been given such an option.
 
2.  Notwithstanding, the applicant was properly discharged in accordance with the regulation, set forth at the time.  
 
3.  It would now be appropriate, as a matter of fairness and equity, to revoke his honorable discharge and allow him to be transferred to the Retired Reserve effective 1 September 2001, that his VSI payments be resumed, and that any annual payments, which were lost as a result of his separation, be paid retroactively.

4.  In view of the foregoing findings and conclusions, correcting the applicant’s records as recommended below would correct an error or rectify an injustice.

RECOMMENDATION:
 
That all of the Department of the Army records related to this case for the individual concerned be corrected:
 
	a.  by revoking AR-PERSCOM orders, dated 1 September 2001, which discharged the applicant effective 1 September 2001;
 
	b.  by issuing orders showing that he was transferred to the Retired Reserve effective 1 September 2001;
 
	c.  by restoring the applicant’s entitlement to annual VSI payments; and 

d.  by retroactively paying to the applicant any lost VSI payments which 
resulted from the separation action.

BOARD VOTE:  

___rjw___  ____mjnt  ___rld___  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		_________Raymond J. Wagner_____
		        CHAIRPERSON

INDEX

CASE ID	AR2002082324	
SUFFIX		
RECON	YYYYMMDD	
DATE BOARDED	YYYYMMDD	
TYPE OF DISCHARGE	(HD, GD, UOTHC, UD, BCD, DD, UNCHAR)	
DATE OF DISCHARGE	YYYYMMDD	
DISCHARGE AUTHORITY	AR . . . . .  	
DISCHARGE REASON		
BOARD DECISION	GRANT	
REVIEW AUTHORITY		
ISSUES         1.		
2.		
3.		
4.		
5.		
6.