IN THE CASE OF:	

		BOARD DATE:	24 September 2009  

		DOCKET NUMBER:  AR20090004164 


THE BOARD CONSIDERED THE FOLLOWING EVIDENCE:

1.  Application for correction of military records (with supporting documents provided, if any).

2.  Military Personnel Records and advisory opinions (if any).


THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests, in effect, that his record be corrected to show he is reinstated in the "High-Three" retirement system based on the erroneous allocation of his career status bonus (CSB).

2.  The applicant states, in effect, that the CSB he received was improperly allocated.  He claims that the percentage of his CSB allocated to the Thrift Savings Plan (TSP) was incorrectly entered as 5 percent by a finance clerk instead of 75 percent as he requested.  He claims this resulted in his losing several thousands of dollars to taxes.  He also claims that a local finance official wrongly informed him that the maximum allowable deferment into the TSP was 100 percent.  As a result of this erroneous information, he elected to enter the reduced retirement (REDUX) program and receive the CSB.  He states that not only was he incorrectly informed of the maximum allowable percentage he could put in TSP, the local finance officials also input the wrong amount.

3.  The applicant provides a self-authored memorandum and the 17 enclosures listed in his memorandum in support of his application.

CONSIDERATION OF EVIDENCE:

1.  On 19 July 2002, the applicant completed a CSB election in which he requested a lump sum payment of the $30,000.00 bonus.

2.  On 29 July 2002, the applicant completed a TSP-U-1 (Thrift Savings Plan Election Form) in which he requested a 2 percent contribution from his basic pay and a 75 percent contribution from his bonus pay.

3.  Page 2 (Information and Instructions) of the TSP-U-1 provided information and instructions on the TSP and instructions for completing the form.  Section II contains guidance on completing items 7, 8, 9, and 10 of the form.  The instructions for item 7 (percentage of basic pay per pay period) stated that the member could contribute up to the limits specified below (but could not exceed the Internal Revenue Code (IRC) annual limits).  It outlined the annual limits by year and indicated that for pay periods beginning in 2004, the maximum contribution allowed from basic pay was 9 percent.  The instructions for items 8, 9, and 10 stated that if a member elected to contribute from basic pay, he or she could also elect to contribute from 1 percent to 100 percent of any special pay, incentive pay, or bonus received (but the total contributions for the year could not exceed the IRC limits).  It further indicated that IRC, section 402g and section 415(c), could limit annual contributions.

4.  The applicant's leave and earnings statement for the month of January 2003 shows he was paid the $30,000 CSB and that $1,559.81 (5 percent) was deducted as a TSP contribution.  It also shows that $7,823. 89 was deducted for Federal taxes and $2,110.39 was deducted for State taxes.

5.  On 17 June 2008, the State of Arkansas Adjutant General notified the applicant that he had reviewed the applicant's request for reinstatement in the
"High-Three" retirement system versus the REDUX election he made in September 2002 and concluded he did not have the authority to allow a change to his election.  He indicated that the Defense Finance and Accounting Service was working to correct the TSP issue; however, regardless of the TSP election he made, the law limited the maximum annual amount of a TSP contribution, which prohibited the TSP election amount he requested.

6.  On 21 September 2006, the applicant's original application was returned without referral to the Board in order for him to exhaust all administrative remedies.  In the letter returning his case, the applicant was advised that if he reapplied, he should acknowledge that if the Board recommended his reinstatement to the "High Three" retirement system, it could entail a recoupment of his CSB.  In his latest application, the applicant has again requested both reinstatement to the "High Three" retirement system and retention of his CSB.  He has failed to accept or concur with recoupment of his CSB in conjunction with return to the "High Three" retirement system.

7.  Title 37, U.S. Code, section 322, provides the legal authority for the 15-year CSB for members entering service on or after 1 August 1986.  It states, in pertinent part, that the Secretary concerned shall pay a bonus to an eligible career bonus member if the member elects to receive the bonus under this section of law and executes a written agreement to remain continuously on active duty until the member has completed 20 years of active duty service.  The bonus authorized under this section is $30,000.00 which the member may elect to receive in a single lump sum payment, two installments, three installments, four installments, or five installments.

DISCUSSION AND CONCLUSIONS:

1.  The applicant's contention that his record should be corrected to show he is reinstated in the "High-Three" retirement system based on the erroneous allocation of his CSB was carefully considered.  However, there is an insufficient evidentiary basis to support granting the requested relief.

2.  The evidence of record confirms the applicant voluntarily elected to receive the CSB and reduced retired pay in a CSB election form he completed on 19 July 2002.  The applicant provides page 1 of a TSP election form, dated 29 July 2002, which shows he elected a 2 percent basic pay TSP contribution and a 75 percent contribution of his CSB.  However, he failed to provide page 2 (information and instructions) of this form.

3.  Page 2 of the TSP election form completed by the applicant contained information instructions on completing the form and contribution rules.  Section II contained guidance and instructions for completing items 7, 8, 9, and 10 which relate to basic pay, incentive pay, special pay, or bonus pay contributions.  The instructions specifically stated that the IRS code maximum annual contribution limit for 2004 was 9 percent.  It further stated that a member could contribute from 1 percent to 100 percent of any incentive and special pay, including bonus pay received; however, the total contributions for the year could not exceed the IRC limits.  As a result, notwithstanding what contributions were ultimately made, the applicant knew or should have known his contributions were limited by law.

4.  Further, the applicant received the CSB and had access to and use of the bonus money not contributed to TSP or deducted for taxes and was ultimately responsible for the allocation and use of his bonus money, to include payment of taxes, in spite of any erroneous counseling he may have received.

5.  Given there may have been errors in the counseling the applicant received and the TSP contribution allocations, equity relief to change the applicant's retirement system back to the "High Three" retirement system may have been supportable had the applicant agreed to recoupment of the CSB bonus he received.  However, given he has not agreed to this and has taken the position he should be allowed to keep his bonus and revert to the "High-Three" retirement system, this relief would result in a windfall to the applicant and would not be appropriate.  As a result, there is an insufficient evidentiary basis to support granting the requested relief.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

____x____  ____x____  ____x____  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The evidence presented does not demonstrate the existence of a probable error or injustice.  Therefore, the Board determined that the overall merits of this case are insufficient as a basis for correction of the records of the individual concerned.



      _____________x____________
                   CHAIRPERSON
      
I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case.

ABCMR Record of Proceedings (cont)                                         AR20090004164



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ABCMR Record of Proceedings (cont)                                         AR20090004164



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