APPLICANT REQUESTS:  Correction of his military records to show that he elected the Voluntary Separation Incentive (VSI) option in lieu of the Special Separation Benefit (SSB) option offered under the Voluntary Separation Incentive Program (VSIP). 

APPLICANT STATES: In effect, that he originally selected the VSI option but changed his mind and elected the SSB option based on the penalties associated with electing the VSI option.  Shortly after his separation, Congress approved a change in the law, allowing an individual to receive both VSI payments and Reserve drill pay and to obtain federal employment without penalty.  Had the benefit been the same for both programs at the time of his separation he would have elected to remain with his decision to select the VSI option which was a better financial package.   

EVIDENCE OF RECORD:  The applicant's military records show:

To assist in the drawdown of the Army, the VSIP was established to provide incentives to soldiers to voluntarily separate from the active duty and accept an appointment or enlistment in, or transfer to, the Ready Reserve or a reserve component.  Both separation incentive options, the VSI and the SSB, were offered jointly.  Service members who were approved for the VSIP had the option of receiving either the VSI or the SSB.

Those who chose the SSB received a lump sum payment equal to 15 percent of his/her annual basic pay multiplied by his/her number of years of active military service.  In return, they had to agree to serve in the Ready Reserve for a period of not less than 3 years after completion of any remaining service obligation.  (Note: If involuntary separation pay was received, an offset of the SSB payment had to be made.)
 
Those choosing the VSI were to receive an annual payment equal to 2.5 percent of his/her annual basic pay, multiplied by the number of years of active Federal service.  The member had to agree to serve in the Ready Reserve for the entire period that he/she received annual payments.  (NOTE: If involuntary separation pay was received, an offset had to be made against future payments until the amount received was recouped.)

The applicant, then serving as a USAR captain on active duty, tendered his request for voluntary release from active duty under the VSI option of the VSIP on 23 March 1992.  On 5 June 1992 he submitted a request to change his election to separate under the SSB option instead of the VSI option.  His request was approved by the Total Army Personnel Command (PERSCOM) on 10 June 1992 and he was voluntarily released on 30 September 1992 under the provisions of Army Regulation 635-120, chapter 3, and the VSIP, having elected the SSB separation incentive option.  He received a lump sum payment of $65,808.84.

The PERSCOM, in a comment to the Board in a similar case, advised that the penalties originally associated with electing the VSI option included deducting the pay earned as an active Reservist from the VSI annuity and not receiving credit for military service toward civil service retirement. The PERSCOM went on to state that based on subsequent Congressional legislation, certain changes were incorporated into the VSIP which removed the aforementioned penalties.  Further, the PERSCOM noted in that case that the approval of the applicant’s request for the SSB option and the implementation of the legislatively amended VSI benefits occurred very close together.  In view of the foregoing, coupled with the fact that, in its opinion, it was the intent of Congress not to penalize individuals who wish to serve in the reserve components and/or the Federal government (civil service), approval of that applicant’s request was recommended by the PERSCOM.

Prior to receipt of this opinion, the staff of the Board learned that the Army Reserve Personnel Center (ARPERCEN), which oversees the VSIP had been administratively approving requests for changes in separation incentive options.  The basis for the ARPERCEN’s administrative actions was its belief that it was the intent of the Office of the Deputy Chief of Staff for Personnel (ODCSPER) to allow individuals the opportunity to change separation incentive options after separation.  However, the ARPERCEN ceased making these changes after the DOD General Counsel ruled that the only way to change a separation incentive option after separation was through the actions of this Board.

The ODCSPER, in a comment (COPY ATTACHED) to this Board, advised that while the possibility of offering soldiers the opportunity to change separation incentive options after separation may have been explored, it was never incorporated into Army policy.  The current Army policy allows soldiers to change their VSI/SSB elections up to the date of separation, but make no provision for changes in elections after separation from the Army.  It was recommended that the Board deny requests for correction of military records in those cases in which soldiers want to change their VSI/SSB elections after separation.

A staff member of the Board contacted the ODCSPER for additional information concerning the aforementioned comment.  The ODCSPER then advised that changing an individual’s election from SSB to VSI would immediately cause the individual to be indebted to the Government and that full recoupment, including the portion withheld for taxes, of the previously received SSB (which was a lump sum payment) would be required.  (Repayment by agreed upon installments would require payment of interest, administrative costs and possibly penalties).  Since the recouped SSB funds could not be applied to “out-year” VSI payments, this would result in the Department paying both SSB and VSI.  If, on the other hand, the Department were to recoup SSB by witholding VSI payments until the SSB was recovered, those who switch would receive a much greater benefit than those individuals who originally elected VSI (a large upfront lump sum for initial transition followed by an annuity as a source of income).  To allow recoupment by this method would not only create a powerful economic incentive for all SSB electees to switch to VSI but would also obligate the Department for additional unprogrammed “out-year” VSI payments.

DISCUSSION:  Considering all the evidence, allegations, and information presented by the applicant, together with the evidence of record, applicable law and regulations, and advisory opinion(s), it is concluded:

1.  The applicant in this case, as in any other case, must show to the satisfaction of the Board, or it must otherwise appear that the record is in error or that he was mistreated by the Army.  In this case, the applicant has failed to meet this requirement.

2.  To grant the applicant’s request would afford him greater benefits than those individuals who initially elected VSI and, therefore, would not be equitable to those individuals.

3.  Also, the applicant may not be aware of the adverse financial ramifications of changing options at this late date, as pointed out by the ODCSPER.  In this regard, the Board endeavors, when making its recommendations to the Secretary, not to leave an applicant in a worse position than he was when he petitioned the Board.  In the Board’s opinion such would be the case, were the applicant’s records corrected as requested.

4.  Although Congress amended the law to alleviate what it perceived to be several shortcomings in the VSIP, there is no express language contained in the amendment to allow an individual to change his/her separation incentive option after separation.

5.  In view of the foregoing, there appears to be no basis for granting the applicant’s request.
DETERMINATION:  The applicant has failed to submit sufficient relevant evidence to demonstrate the existence of probable error or injustice.

BOARD VOTE:

                       GRANT          

                       GRANT FORMAL HEARING

                       DENY APPLICATION




						Karl F. Schneider
						Acting Director