The Civil Service & Retired Pay Threat

​The early 1960s brought a serious challenge to retired pay policy for military officers employed by the federal government. Historically, retired military officers, including warrant officers, were prohibited from holding federal civilian positions. The original restriction dated back to 1894 under what became known as the Dual Office Act. The only exceptions were officers elected to public office or appointed by the President with the advice and consent of the Senate.

More than three decades later, the Economy Act of 1932 further restricted retired commissioned officers by prohibiting receipt of full military retired pay when combined federal salary and retired pay exceeded $10,000 annually.
The Association consistently sought parity between warrant officers and enlisted personnel regarding the receipt of retired military pay while employed in federal service. In 1961, Association counsel Mark B. Sandground argued:
“The severity of the prohibition is clear when one considers the nature of the warrant officer’s duty and his financial position at retirement; a warrant officer is a specialist in a very limited field. Upon retirement, sometimes it is exceedingly difficult for him to find private civilian employment because of his specialization during the years he devoted to government service.”
The Association was instrumental in introducing House Resolution 6637 in 1961, which would have exempted retired Coast Guard warrants from the Dual Office Act.
Two years later, following an intensive letter-writing campaign encouraged by the Association, some of the more restrictive provisions of the Dual Office Act were repealed. However, several statutory limitations remained in place. These included:
• 5 USC 5532 – reductions of military retired pay due to federal employment
• 5 USC 5533 – limits on pay entitlement
• 5 USC 5536 – prohibitions on civilian employment of active-duty military
Ultimately, retired officers were required to forfeit a portion of their retired pay if employed by the federal government. Strict post-retirement restrictions were also imposed, particularly concerning involvement in government contracting within three years of retirement.
In addition, warrant officer retirees were subject to a cap tied to Executive Schedule Level V pay. As of 1990, this meant that retired warrants could not receive full retired pay if their combined retired pay and federal salary exceeded $78,200.
The Association consistently maintained that retired warrants should be permitted to work in federal civilian service without penalty. Retired pay, in the Association’s view, was earned deferred compensation, not a gratuity.
In June 1981, the issue resurfaced dramatically when the House Post Office and Civil Service Committee voted to reduce federal salaries of military retirees by the full amount of their retired pay. Enlisted retirees were not subject to the same forfeiture requirement. The Association strongly opposed this action and urged members to contact their representatives. Some members of Congress characterized military retired pay as a “pension,” while the Association firmly maintained it was earned compensation.
The proposal ultimately died in the House.
Other changes to retired pay policy during this period included caps on cost-of-living adjustments and the shift to calculating retired pay based on the highest three years of base pay.