PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:            21 December 2000                  
	DOCKET NUMBER:   AR2000043543

	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	
	Ms. Wanda L. Waller		Analyst	

  The following members, a quorum, were present:

	Ms. Karol A. Kennedy 		Chairperson	
	Mr. Ernest W. Lutz		Member	
	Ms. Gail J. Wire 		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 orders transferring him to the Retired Reserve be revoked and that he be reinstated in the Individual Ready Reserve so that he can continue to draw his annual VSI (Voluntary Separation Incentive) payments.

3.  The applicant states that last year he was misinformed by his Personnel Management Officer concerning his VSI payments.  He contends that his Personnel Management Officer told him that if he voluntarily transferred to the Retired Reserve, it would not affect his VSI payments.  The applicant claims that he emphasized several times that he did not want his VSI affected and was assured by the Personnel Management Officer that his VSI payments would continue.  However, he has since learned that voluntary transfer from the Ready Reserve cancels VSI.  He states that had he been correctly informed, he would never have agreed to transfer to the Retired Reserve.  He further states that his VSI payments are critical to his economic situation.  He goes on to state that he understands if the transfer orders are voided, he would be in the Individual Ready Reserve and a part of the Ready Reserve.  He also understands that he must remain in the Ready Reserve for the length of his VSI payments, unless removed through incapacity, physical disability, two time pass over for promotion, age, or other factors beyond his control.  In support of his application, he submits a letter of explanation dated 21 June 2000.  

4.  The applicant’s military records show that he tendered his unqualified resignation/request for release from active duty under the VSI on 6 May 1993.  In his request, there is an annotated note which states “I agree to serve in the ready reserve for the entire period VSI is received.”  The applicant’s request was approved on 8 May 1993. 

5.  Accordingly, the applicant was honorably discharged in the rank of captain on
1 August 1993 under the provisions of Army Regulation 635-120, chapter 3, Early Release Program - Voluntary Separation Incentive.  Based upon his completion of 17 years, 4 months and 13 days of active service, his VSI annuity was calculated as $17,696.29 annually for 34 years. 

6.  Records show that upon the applicant’s release from active duty, he was appointed a Reserve officer and transferred to the USAR Control Group (Reinforcement).  

7.  Army Reserve Personnel Command Orders C-09-832794, dated 
16 September 1998, show the applicant was released from USAR Control Group (Reinforcement) based on completion of 20 or more years reserve duty and  assigned to the Retired Reserve effective 18 September 1998.

8.  To assist in the draw down of the Army, the VSI was established to provide incentives to soldiers to voluntarily separate from active duty and accept an appointment or enlistment in, or transfer to, the Ready Reserve or a Reserve component.  Both separation incentive options, the Voluntary Separation Incentive (VSI) and the Special Separation Benefit (SSB), were offered jointly.

9.  Those choosing the VSI were to receive an annual payment equal to 2.5 percent of his/her annual basic pay, multiplied by 12 and multiplied again by the number of years of active Federal service.  The member had to agree to serve in the Ready Reserve (usually the Individual Ready Reserve where members do not drill but remain subject to recall) for the entire period that he/she received annual payments.  Individuals who elected VSI and chose to affiliate with the Selected Reserve (where members drill and receive basic and/or drill pay) forfeited some or all of their VSI payment while serving.  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.

10.  Army Regulation 140-10 states that soldiers not sooner removed for another reason will be removed from the Army Reserve when they reach maximum age.  Removal date for field and company grade USAR officers will be the last day of the month in which they reach age 60.

CONCLUSIONS:

1.  The applicant’s contention that he was misinformed by his Personnel Management Officer concerning his VSI payments, appears to be valid.

2.  The evidence of record shows the applicant was released from the USAR Control Group (Reinforcement) and transferred to the Retired Reserve on
18 September 1998.  As a result of this action, the applicant’s entitlement to his annual VSI payments was discontinued.   

3.  The Board contends that it is unreasonable to believe that an individual would request transfer to the Retired Reserve knowing that such an action would terminate his annual VSI annuity payments. 

4.  The evidence also shows that the only way the applicant would continue to be eligible for the VSI payments were if the orders for his transfer to the Retired Reserve were voided.  The applicant has not yet reached the maximum age requirement for mandatory transfer to the Retired Reserve nor is there any medical evidence, which would make him ineligible for continuation in the Individual Ready Reserve.  As such the only appropriate action would be reinstatement in the Individual Ready Reserve.

5.  The applicant’s record confirms that he served honorably for over 17 years on active duty and was entitled to the VSI upon his separation in 1993 and appointment in the USAR.  It would be unjust to hold the applicant to a decision he made based on erroneous information which ultimately affected his eligibility to continue to receive his VSI payments.

6.  The Board contends that in view of the circumstances, and in the interest of justice, the applicant’s status in the Individual Ready Reserve should be restored by voiding the 1998 transfer action to the Retired Reserve, that his VSI payments be resumed and that any annual payments which were lost as a result of his transfer to the Retired Reserve be paid retroactively.
 
7.  In view of the foregoing, the applicant’s records should be corrected as recommended below.

RECOMMENDATION:

That all of the Department of the Army records related to this case be corrected in the interest of justice: 

	a.  by voiding the applicant’s release from the USAR Control Group (Reinforcement) and transfer to the Retired Reserve effective 18 September 1998; 

	b.  by reinstating the applicant in the Individual Ready Reserve in the grade of captain without any loss of creditable service;   

	c.  by restoring his entitlement to annual VSI payments; and

	d.  retroactive payment of any lost VSI payments, which resulted from the transfer action.

BOARD VOTE:  

KAK____  EWL____  GJW_____  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		Karol A. Kennedy______
		        CHAIRPERSON

INDEX

CASE ID	AR2000043543	
SUFFIX		
RECON		
DATE BOARDED	20001221	
TYPE OF DISCHARGE	(HD)	
DATE OF DISCHARGE	19930801	
DISCHARGE AUTHORITY	AR 635-120 Chapter 3  	
DISCHARGE REASON	Early Release Program – Voluntary Separation Incentive	
BOARD DECISION	(GRANT)	
REVIEW AUTHORITY		
ISSUES         1.	129.0200	
2.		
3.		
4.		
5.		
6.