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REAR ADMIRAL WILFRED A. HEARN, JAGC, USN Judge Advocate General of the Navy

REAR ADMIRAL ROBERT H. HARE, JAGC, USN Deputy Judge Advocate General of the Navy

LIEUTENANT Commander R. L. SLATER, JAGC, USN Editor

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DUAL COMPENSATION-Intermittent Employment by Nonappropriated Fund Activity on Variable Compensation Basis

The Comptroller General, in Decision B-162090 of September 27, 1967, considered the effect to be given the retired pay reduction formula contained in section 201 of the Dual Compensation Act of 1964, 5 U.S.C. 5532, in the case of a retired officer of the Regular Navy who was employed by a nonappropriated fund activity on an hourly basis with no guaranteed minimum of pay per day. The officer in question was employed by an "aero" club as a flight instructor at $5 per hour on an intermittent basis, that is, he was compensated for actual flight instruction time with no guaranteed minimum. His compensable hours averaged about 5 a day, but varied and were limited by student bookings, weather conditions, and the Federal Aviation Administration limitation of 36 hours of instruction per week.

The retired pay reduction formula applies to employment by nonappropriated fund instrumentalities under the jurisdiction of the armed forces, as well as to employment in other federal positions. It provides, generally, that during the period for which a Retired Regular officer receives pay from such employment his retired pay shall be reduced to an annual rate equal to the first $2,074 of retired pay, plus one-half of any remaining retired pay. The statute further provides that in the

case of a retired officer employed on an intermittent basis, as in the case considered, the reduction of retired pay should be effected only as to the days on which he actually receives pay from his federal civilian position. The question presented in the instant case was whether the statute requires application of the reduction formula in full force on each day for which the retired officer received any hourly compensation from the nonappropriated fund activity or whether it permits flexibility under some equitable system in which deduction from retired pay would be made only as to days on which the retired officer was compensated for 8 full hours of work.

The Comptroller General held that the statute required application of the reduction formula to retired pay for each day as to which the retired officer received any compensation, no matter how slight, from his federal civilian employment. The Comptroller pointed out, however, that any department or agency may request the U. S. Civil Service Commission to grant an exception from the reduction formula upon a showing that such an exception is warranted by reason of special or emergency employment needs which otherwise cannot be readily met.

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