BOARD DATE:	  30 July 2015

		DOCKET NUMBER:  AR20140010065 


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 the following:

* removal/waiver of reduction of his retired pay under the Temporary Early Retirement Authority (TERA) reduction factor 
* recalculation of his retired pay to reflect the 2012 cost-of-living allowance (COLA) of 3.6 percent (%) with appropriate adjustments thereafter
* Survivor Benefit Plan (SBP) coverage for his spouse effective
15 November 2011 and reduction of premiums

2.  The applicant states, in effect:

   a.  He retired from the Army under TERA on 30 June 1998.  He received involuntary mobilization orders and returned to active duty on 5 February 2006.  Following multiple additional mobilizations and extensions he was again retired on 14 November 2011 with over 23 years of active service.  Upon retirement, he requested SBP for his spouse, but he was denied by Fort Knox Retirement Services.  The Army Retired Pay Division, Defense Finance and Accounting Service (DFAS), readjusted his military retired pay and elected to apply the 1998 TERA Reduction Factor to his retired pay.  They further determined that he would not be eligible to receive the 2012 COLA of 3.6% effective 1 December 2011.

   b.  He attempted to resolve his SBP request with Army Retired Pay and the Army SBP Headquarters.  The Senior Manager and retired sergeant major (SGM) at SBP Headquarters telephonically shared that when he (the applicant) retired in 1998 and elected to decline SBP that decision was permanent and when he returned to active duty the Army provided SBP at no cost for nearly 
6 years and that coverage ended upon his return to retirement.  The SGM also stated that a Soldier can only retire once.  

   c.  He addressed all three matters with DFAS in two letters.  DFAS did not offer the courtesy of a written response; however, several months after submission a DFAS retired pay senior specialist telephoned him and discussed his requests for assistance and correction.  The DFAS official could not refer to any specific rule or law; however, he shared that the TERA reduction was in fact applied to his recalculated retired pay despite him having well over 20 years of active Federal service (AFS).  The DFAS official explained that Congress intended and meant for TERA reductions to be permanent.  The applicant referred to specific law allowing for TERA reductions to be reduced or even eliminated with recalculation for those Soldiers performing community service following retirement as an example for which Congress did not intend for permanent reductions.

   d.  The applicant pointed out that Title 10, U.S. Code (USC), section 1402a, provides for members who return to retirement be afforded retired pay as if retiring upon release or rather a regular retirement as in his situation.  The DFAS official politely disagreed and added that DFAS had an internal legal division that determined TERA reductions are permanent.  The applicant respectfully disagreed.  They then discussed the 2012 COLA allowance.  The DFAS official stated the law provided for a reduction or elimination of COLA during the 1st year of retirement and confirmed the applicant did not receive the benefit of any of the 2012 COLA increase that would have been effective 1 December 2011.

   e.  The applicant offered that the law the DFAS official cited provided for a one-time reduction in COLA during the 1st year of eligibility for retirement pursuant to Title 10, USC, section 1401a, and that his eligibility for retired pay dated back to 1998.  Accordingly, no reductions should have occurred in 2011 as he apparently had not retired; but rather simply resumed retirement based on what he had learned from staff members of the Army SBP Headquarters.  

   f.  The DFAS official mentioned that the legal division determined that high-3 retirees would be subject to the COLA reduction whenever retiring or returning to retirement.  He could not identify any law or rule to substantiate the opinion and added that if he (the applicant) had been a high-pay retiree he would not have been subject to the COLA reduction.  The DFAS official then concurred with the SGM that he had retired in 1998 and therefore could not elect SBP coverage based on his original retirement and declination of coverage.  The DFAS official also stated that in all three situations, without specific law or regulations on point, his retirement was conveniently determined to have occurred either in 1998 (SBP and TERA) or during 2011 (COLA reduction) to reduce his retired pay.  The DFAS official offered to have his case reviewed by the DFAS Legal Division to which he agreed.  However, he has not heard from them and no corrective action has occurred.

   g.  He is seeking removal of the original TERA reduction, effective 15 November 2011; his 23 years of AFS should afford regular retirement benefits pursuant to Title 10, USC, section 1402a and the opportunity to secure SBP benefits for his spouse of 33 years since his return to retirement following nearly 6 additional years of service.  He also requests restoration of the 2012 COLA of 3.6%.  He requests a review by the Army Board for Correction of Military Records (ABCMR) as he remains convinced that DFAS is not following the law, regulations, or appropriate precedent.  He offers that rather than providing interpretations with veterans and retirees being afforded all benefit of doubt, DFAS is mistakenly doing the opposite.     

3.  The applicant provides copies of the following:

* Orders Number 049-0007
* DD Forms 214 (Certificate of Release or Discharge from Active Duty) ending on 30 June 1998, 4 February 2009, 3 August 2009, and
14 November 2011
* Orders Number M-01-600041
* Orders Number 292-1303
* two letters written to DFAS

CONSIDERATION OF EVIDENCE:

1.  Title 10, U.S. Code, section 1552(b), provides that applications for correction of military records must be filed within 3 years after discovery of the alleged error or injustice.  This provision of law also allows the ABCMR to excuse an applicant's failure to timely file within the 3-year statute of limitations if the ABCMR determines it would be in the interest of justice to do so.  While it appears the applicant did not file within the time frame provide in the statute of limitations, the ABCMR has elected to conduct a substantive review of the cases and, only to the extent relief, if any, is granted, has determined it is in the interest of justice to excuse the applicant's failure to timely file.  In all other respects, there are sufficient bases to waive the statute of limitations.




2.  The applicant was born on XX July 1962.

3.  His military records show he enlisted in the Regular Army (RA) on 20 November 1980.  He was awarded military occupational specialty 71D (legal specialist).  

4.  He served continuously on active duty in various assignments through several reenlistments.  He was honorably retired on 30 June 1998, under the provisions of Army Regulation 635-200 (Personnel Separations – Enlisted Separations), chapter 12, by reason of Voluntary Early Retirement.  He was credited with completing 17 years, 7 months, and 11 days of active service.  Item 18 (Remarks) of his DD Form 214 contain the following entries:

* subject to active duty recall by the Secretary of the Army 
* member is retiring as provided by section 4403 of the Fiscal Year (FY) 1993 National Defense Authorization Act (NDAA) (Public Law 102-484) and may qualify for a recomputation of retired pay at age 62 (Section 4464 of same law)

5.  His record is void of the complete facts and circumstances surrounding his SBP election at the time of retirement.  

6.  Orders Number M-01-600041, dated 19 January 2006, issued by the U.S. Army Human Resources Command (HRC), shows he was ordered to active duty in a retired status (recall) for partial mobilization in support of Operation Noble Eagle not to exceed 365 days unless extended or terminated by proper authority.

7.  He entered active duty on 5 February 2006.  He was released from active duty on 4 February 2009 and he was transferred back to his retired status.  He was issued a DD Form 214 crediting him with completing 3 years of active service.

8.  He was again recalled to active duty and entered on 5 February 2009.  He was released on 3 August 2009 and was transferred back to his retired status.  He was issued a DD Form 214 crediting him with completing 5 months and 29 days of active service.

9.  He was again recalled to active duty and entered on 15 November 2009.  He was reverted to a retired status effective 14 November 2011.  He was issued a DD Form 214 crediting him with completing 2 years of active service.


10.  Orders Number 292-1303, issued by Headquarters, U.S. Army Training Center and Fort Jackson, SC on 19 October 2011, supports that he was released from active duty and reverted to a retired status effective 14 November 2011.  

11.  He provided copies of two letters written to DFAS, dated 15 and 
28 December 2011, wherein he requested assistance regarding recalculation of his retired pay and the 2012 COLA increase, an audit and change of his retired pay, and SBP coverage for his spouse.

12.  On 6 February 2015, a staff member of DFAS verified the following:

   a.  The applicant's TERA reduction factors were in place and that was correct. He made an SBP election initially at retirement; therefore, he was unable to make another after his recall.  As far as the COLA’s were concerned he was only entitled to the 1.7% COLA that was given in 2012.  When he was returned back to the retired rolls in November 2011, he was not entitled to a COLA because High 36 retiree recalls were considered new retirees for pay and no COLA was authorized in the 4th quarter of the year (October to December).  

   b.  As noted in Title 10, USC, section 1293, TERA was a voluntary plan under which a member volunteered to retire with less than 20 years, and was expected to perform community service.  At the time that the TERA member reached age 62 the community service would be credited as active service to reduce the reduction factor and increase the percentage factor and the retired pay would be recomputed.  By law, only community service could be utilized to change the reduction factor.

   c.  He was retired under TERA on 1 July 1998 with 17 years, 7 months, and 11 days of active service.  He was recalled in 2006 for 3 years and again in 2009 for 2 years.  The only way they could remove the reduction factor would be to invalidate the TERA retirement which would result in an overpayment for all TERA pay received.  

   d.  As for the 3.6% COLA, the last recall ended in November 2011.  Since the high average recalls were treated as new retirements when they returned to the retired rolls, anyone retiring in the 4th quarter of the year was not entitled to a COLA increase that year.  The 1st COLA the applicant was entitled to receive was the 2012 COLA of 1.7%.

13.  The DFAS email was forwarded to the applicant for acknowledgment or possible rebuttal on 16 July 2015.  In a statement, received on 16 July 2015, the applicant stated:

   a.  The specific portion of his appeal related to the SBP was withdrawn.  He fortunately qualified and was successful in acquiring other life insurance for his wife earlier this year that in essence replaced SBP and they are both content in keeping that coverage.  As a result, this portion of his request will not be further discussed in this Record of Proceedings.  

   b.  He finds it consoling that DFAS did not provide an official "advisory opinion" similar to their staff not rendering the courtesy of a written reply to him when he originally raised matters of concern with them as related to his retirement and pay.  It is more than apparent that specific statutory and/or regulatory reference is not available to DFAS in support of their decisions or they most certainly would have provided that in their response to the Board, and likely as part of an advisory opinion.

   c.  While DFAS recites the facts and general law, there exists no legal nexus to their opinion that "High 26 retiree recalls are considered new retires for pay and no COLA is authorized in the 4th quarter of the year (October through December)."  In other words, they are simply "bridging" existing law to conform to their position in support of their opinion in denying COLA.  Further, Title 10, USC, section 1401A and other regulatory guidance specifically provides for a one-time reduction in COLA during the 1st year of eligibility for retired pay.  As he retired in 1998, that was the 1st year of his eligibility for retired pay and he did receive a reduced COLA in that year.  

   d.  In 2002, he returned to retirement and received retired pay, but there exists no law, statute, or regulatory provision that specifically provided for any subsequent reduction authority as it related to COLA.  Accordingly, pursuant to Title 10, USC, section 10401a, his existing retiree pay effective 1 December 2011 should have been afforded a non-reduced COLA to financially aid his family in covering the expected increase in the cost of goods and services in 2012 and thereafter.  While he understands how DFAS is extrapolating and confirming existing law to consider him as a new retiree for the purpose of pay and therefore subject to a COLA reduction, the fact remains that they have no legal or regulatory basis to do so.  Unlike DFAS, he does not have to consider himself anything other than a service member who first retired in 1998; had his COLA reduced pursuant to law and regulation in that same year; therefore, he was in receipt of military retired pay as of 1 December 2011 that should have been afforded unreduced COLA pursuant to law.

   e.  DFAS shared that based upon their "policy and legislation" that he was considered to be a "new retiree" for the purposes of pay when he returned to 

retirement in 2011 and that he is therefore subject to a COLA reduction.  In the same breath they conversely insist that for the purposes of his 1998 TERA retirement, the "only way they can remove the reduction factor would be to invalidate the TERA retirement which would result in an overpayment for all TERA pay received."  Unlike their COLA reduction opinion, he cannot extrapolate from existing law how DFAS formulated their opinion except that it was again consistent in reducing his retired pay which appeared to be their overriding concern.

   f.  The bottom line is that their "threat" that the only remedy to eliminating the TERA reduction would be to recover "all TERA pay received" is baseless and ridiculous.  To do so would immediately make him eligible for all active duty pay forfeited due to receipt of retired pay since 1998, as at the time of retirement his enlistment contract was "indefinite"; this is equally as ridiculous.

   g.  In returning to reality, the TERA reduction factor formula was based on the amount of AFS the service member was short of 20 years of AFS.  Accordingly, when applying his current 23 years of AFS, no reduction would occur per the formula upon his return to retirement.  Further, pursuant to Title 10, USC, section 1402a, his 23 years of AFS should afford retirement benefits equal to that of regular retirement upon his return to retirement following recall, thereby allowing him the most advantageous retirement available as if retiring at that time.

   h.  Title 10, USC, section 1402a, states a member of the armed forces who first become a member of the uniformed service after 7 September 1980, who has become entitled to retired pay or retainer pay, and who thereafter serves on active duty (other than for training) is entitled to recomputation of his retired pay or retainer pay upon release from that duty according to the following:

		(1)  Retired pay base or retainer pay base under section 1407 which he would be entitled to if he was retiring upon released from that active duty.

		(2)  The retired pay multiplier or retainer pay multiplier prescribed in section 14909 for the sum of.

   i.  In other words, the DFAS opinion that Congress meant for TERA reductions to be permanent was moot, even if acceptable and true, when other applicable law provides for relief from that very same reduction.  Personally, he did not see how the requirements set forth in Title 10, USC, section 1402a can 



be interpreted in any other fashion than to eliminate the reduction.  Unlike the DFAS opinion regarding COLA whereby they considered him essentially "as a new retiree for the purposes of pay," Title 10, USC, section 1402a truly affords statutory authority for them to do exactly that with regard to the original TERA reduction. 

   j.  To comply with the law contained within Title 10, USC, section 1402a, he respectfully requests that DFAS simply apply their own logic that "retiree recalls are considered new retirees for pay" upon release from that active duty.  Under this application, his retirement remains effective since 1998; however, his pay would be considered more advantageously as if he "were retiring upon release from active duty" with no TERA reduction factor applied.
   
   k.  Rather than applying common sense, fairness, applicable law, DFAS's opinion with regard to his pleas for relief are baseless and without merit.  Rather than applying "good intent" with the benefit of doubt afforded to the veteran, DFAS shamefully sought and interpreted law and regulation only to the extent that it resulted in his retired pay being reduced.  Again, if they had applicable law and/or regulation it would be shared and likely part of an advisory opinion.  In the end, what DFAS provided to the Board in support of their decisions amounted to essentially their "considerations."  He requests favorable consideration of his appeal by eliminating the TERA reduction applied to his retired pay and restoration of the 1 December 2011 COLA that DFAS wrongfully withheld.

14.  He will reach 62 years of age on XX July 2024.

15.  Army Regulation 635-200, chapter 12, in effect at the time, set the policies and procedures for voluntary retirement of Soldiers because of length of service and governed the retirement of Active Army Soldiers who were retiring in their enlisted status. 

16.  Army Regulation 635-5 (Separation Documents), in effect at the time, governed the preparation of the DD Form 214.  It stated the DD Form 214 would be prepared for all personal at the time of their retirement, discharge, or release from active duty.  The regulation stated item 18 of the DD Form 214 for a Soldier who retired with 15 years but less than 20 years of active Federal service would list the entry, "Soldier is retiring as provided by section 4403 of the FY 93 NDAA (Public Law 102-484) and may qualify for a recomputation of retired pay at age 62 (Section 4464 of same law)."  

17.  Public Law 102-484 (NDAA for FY93) - established policy, assigned responsibilities, and prescribed procedures to certify the public and community service employment of eligible retired members under Section 4464 of the FY 93 NDAA.  Such certified employment would be used to recompute military retired pay and, where applicable, the SBP base amount when the retired member attains or would have attained 62 years of age.  The instructions applied to a member of the Military Services who retires (other than for disability) under the TERA before the completion of 20 years of creditable service and is employed within the period beginning on the date of retirement and ending on the date the retired member would have attained 20 years of creditable service for computing retired pay.

DISCUSSION AND CONCLUSIONS:

1.  With regard to removal/waiver of reduction of his retired pay under the TERA reduction factor:

   a.  DFAS stated, in effect, by law, only community service under TERA can be utilized to change the reduction factor.  The only way they could remove the reduction factor would be to invalidate the TERA retirement which would result in an overpayment for all TERA pay received.  

   b.  His additional years of service were acquired through active duty recalls.  That service did not "unretire" him nor entitle him to a regular retirement (20 years) as he was already retired under TERA.  That retirement was not vacated and he was returned to active duty in a retiree recall status.

   c.  There is no evidence of record and he did not provide sufficient evidence showing he met the criteria for removal/waiver of reduction of his retired pay under TERA, i.e., community service.  Therefore, there is insufficient evidence to support the requested relief.

2.  With regard to recalculation of his retired pay to reflect the 2012 COLA of 3.6 % with appropriate adjustments thereafter:

   a.  He was retired on 1 July 1998.  He was recalled to active duty in 2006 for 3 years, in 2006 for 5 months and 29 days, and in 2009 for 2 years.  His last recall ended in November 2011 and he was returned to the retired rolls.  

   b.  At that time, the high average recalls were treated as new retirees for pay and anyone retiring in the 4th quarter (October to December) of the year was not entitled to a COLA increase that year.  As a returning retiree in November 2011, during the 4th quarter, he was only entitled to the 1.7% COLA that was given in 2012.

   c.  There is no evidence and he provided none showing he met the criteria for the 2012 COLA of 3.6% with appropriate adjustments thereafter.  Therefore, he should not receive 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)                                         AR20140010065





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