PROCEEDINGS

	IN THE CASE OF:       

	BOARD DATE:            1 February 2001
	DOCKET NUMBER:   AR2000045756

	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	
	Mr. Joseph A. Adriance		Analyst	

The following members, a quorum, were present:

	Mr. Luther L. Santiful		Chairperson	
	Mr. James E. Anderholm		Member	
	Ms. Barbara J. Lutz		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, in effect, that he receive the most favorable retired pay to which he is entitled based on his having satisfactorily served in both the rank and pay grade of Sergeant Major/E-9 (SGM/E-9) and First Lieutenant/0-2 (1LT/0-2). 

3.  The applicant states, in effect, that his retired pay grade should be adjusted to E-9, which is the most favorable to him, based on his satisfactory service in that pay grade.  He claims that receiving retired pay as a 1LT/0-2 has resulted in his receiving substantially less retired pay then he would receive if he received retired pay as a SGM/E-9, which is the rank and pay grade he held and in which he was transferred to the Retired Reserve.

4.  The applicant’s military records show that he was appointed a second lieutenant/0-1 (2LT/0-1) in the United States Army Reserve (USAR) on 2 June 1962 and that he entered active duty in that rank and pay grade on 7 November 1962.  He served on active duty, in a commissioned officer status, until being honorably separated on 6 May 1965, in the rank and pay grade of 1LT/0-2.  Upon his release from active duty he was transferred to the USAR Control Group (Reinforcement) and served in that inactive status until resigning on 3 July 1969.

5.  On 14 July 1973, he entered the Army National Guard (ARNG), in an enlisted status, and served until 31 December 1974.  On 1 January 1975, he reenlisted in the ARNG and served in an enlisted status until his transfer to the Retired Reserve on 22 October 1991. 

6.  Orders Number 27-1, on file in the applicant’s Military Personnel Records Jacket (MPRJ), issued by the South Carolina ARNG, confirms that he was promoted to the rank of SGM/E-9 on 1 June 1987.  

7.  He satisfactorily served as a SGM/E-9 until 12 June 1989 when he was administratively reduced to master sergeant/E-8 (MSG/E-8) as a result of his not being selected for the command sergeant major program, as codified in Orders Number 26-4, issued by the South Carolina ARNG.

8.  On 22 October 1991, the applicant was released from the ARNG and transferred to the USAR Retired Reserve after completing a total of 25 years, 
4 months, and 10 days of service creditable for retired pay.  Permanent Orders Number 130-1, dated 30 October 1991, authorized his transfer to the Retired Reserve, in the rank and pay grade of SGM/E-9, which was the highest rank and pay grade he held and in which he satisfactorily served in the ARNG. 

9.  On 13 May 2000, the Defense Finance and Accounting Service (DFAS), Cleveland, Ohio, published a letter advising the applicant that his retired pay account had been established.  A summary of his account enclosed with this letter indicated that his retired pay would be based on a retired rank and pay grade of 1LT/0-2.  

10.  Title 10 of the United States Code, section 12731 provides the legal authority for age and service retirement requirements for non-regular retirement.  It states, in pertinent part, that a member is entitled, upon application, to retired pay under this provision of the law if they are at least 60 years of age; have performed at least 20 years of service; and performed the last eight years of qualifying service while a member of a Reserve Component. 

11.  Title 10 of the United States Code, section 1401 (computation of retired pay) provides computation formulas for retired pay.  Public Law 99-348 amended this section of the law to add Section b (use of most favorable formula) which states, in pertinent part, that if a person would otherwise be entitled to retired pay computed under more than one formula or of any other provision of law, the person is entitled to be paid under the applicable formula that is most favorable to them.

12.  Title 10 of the United States Code, section 1406 provides the legal authority for computing final retired base pay.  It states, in pertinent part, that members retiring under non-regular service retirement provisions of the law are entitled to receive retired pay based on the highest grade held satisfactorily by the person at any time in the armed forces. 

CONCLUSIONS:

1.  In providing that an individual be retired in the highest grade satisfactorily held, the law, as outlined in the most favorable pay provisions of 10 USC 1406, clearly intended to provide for the highest amount of retired pay.  

2.  Neither does the law, in prescribing that a member should receive retired pay based on the pay grade most favorable to them, intend that these members must forfeit those other rights and privileges vested in or enjoyed as a result of their having satisfactorily served in a commissioned or warrant officer status.  

3.  Notwithstanding the computation done by DFAS at the time the applicant began receiving retired pay, it appears he is receiving retired pay based on a formula that is not the most favorable to him. 

4.  By law, a member is authorized to receive retired pay under the most favorable pay formula.  Thus, the Board finds that it would be appropriate to allow the applicant to remain on the Retired List in his commissioned officer rank of 1LT and to provide him retired pay based on the formula most favorable to him as a result of his satisfactory service as both a SGM/E-9 and a 1LT/0-2.

5.  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 by showing that the rank of the individual concerned as 1LT on the Retired List; by providing him retired pay based on the pay formula most favorable to him based on his satisfactory service in both pay grades E-9 and 0-2; and by paying him any back pay and allowances due if it is determined he did not receive retired pay based on the most favorable formula provisions of the law. 

BOARD VOTE:  

___ls____  ___ja ___  __bjl____  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		____Luther L. Santiful____
		        CHAIRPERSON

INDEX

CASE ID	AR2000045756	
SUFFIX		
RECON		
DATE BOARDED	2001/02/01	
TYPE OF DISCHARGE	HD	
DATE OF DISCHARGE	1991/10/22	
DISCHARGE AUTHORITY	Section 25-1-500 South Carolina Law	
DISCHARGE REASON	Transfer to Retired Reserve 	
BOARD DECISION	GRANT	
REVIEW AUTHORITY		
ISSUES         1.  307	139.0500	
2.		
3.		
4.		
5.		
6.