(a)(1) The retired pay of a member who first became a member of a uniformed service (as defined in section 101 of title 10) before September 8, 1980, is determined by multiplying—

(A) the sum of—

(i) the basic pay of the member's retired grade or rate, and

(ii) all permanent additions thereto including longevity credit to which the member was entitled at the time of retirement; by

(B) the retired pay multiplier determined under section 1409 of title 10 for the number of years of service that may be credited to the member under section 1405 of such title.

(2) In the case of an officer who served as Commandant of the Coast Guard, retired pay under paragraph (1) shall be computed at the highest rate of basic pay applicable to the officer while so serving.

(3) In the case of an enlisted member who served as the master chief petty officer of the Coast Guard, retired pay under paragraph (1) shall be computed at the highest rate of basic pay to which the member was entitled while so serving, if that basic pay is greater than the basic pay of the grade or rate to which the member is otherwise entitled at the time of retirement.

(4) In the case of an officer whose retired pay is computed on the pay of a grade for which basic pay is not based upon years of service, retired pay under paragraph (1) shall be computed on the basis of the number of years of service for which the officer would be entitled to credit in the computation of pay on the active list had the officer been serving in the grade of captain at the time of retirement.

(b) The retired pay of a member who first became a member of a uniformed service (as defined in section 101 of title 10) on or after September 8, 1980, is determined by multiplying—

(1) the retired pay base determined under section 1407 of title 10; by

(2) the retired pay multiplier determined under section 1409 of title 10 for the number of years of service that may be credited to the member under section 1405 of such title.

(c)(1) In computing for the purpose of subsection (a) or (b) the number of years of service that may be credited to a member under section 1405 of title 10—

(A) each full month of service that is in addition to the number of full years of service creditable to the member shall be counted as 1/12 of a year; and

(B) any remaining fractional part of a month shall be disregarded.

(2) Retired pay computed under this section, if not a multiple of $1, shall be rounded to the next lower multiple of $1.

(Aug. 4, 1949, ch. 393, 63 Stat. 525; Aug. 3, 1950, ch. 536, §23, 64 Stat. 407; Pub. L. 85–422, §11(b), May 20, 1958, 72 Stat. 132; Pub. L. 88–132, §5(i), Oct. 2, 1963, 77 Stat. 214; Pub. L. 92–455, §2, Oct. 2, 1972, 86 Stat. 761; Pub. L. 96–342, title VIII, §813(f)(2), Sept. 8, 1980, 94 Stat. 1109; Pub. L. 97–295, §2(12), Oct. 12, 1982, 96 Stat. 1302; Pub. L. 98–94, title IX, §§922(b), 923(d), Sept. 24, 1983, 97 Stat. 642, 643; Pub. L. 98–557, §15(a)(3)(A), Oct. 30, 1984, 98 Stat. 2865; Pub. L. 99–348, title II, §205(a), July 1, 1986, 100 Stat. 699.)

Based on title 14, U.S.C., 1946 ed., §§162a, 167, 175c, 185d (Apr. 12, 1902, ch. 501, §9, 32 Stat. 101; Jan. 12, 1938, ch. 3, §3, 52 Stat. 5; May 24, 1939, ch. 146, §5, 53 Stat. 756; Feb. 21, 1946, ch. 34, §10, 60 Stat. 29).

Section was enlarged to include computation of retired pay in all situations. It is in accord with the provisions of Navy statutes. 81st Congress, House Report No. 557.

**1986**—Pub. L. 99–348 amended section generally. Prior to amendment, section provided that retired pay of a grade or rating would be computed at the rate of 2½ percent of the sum of the basic pay of that grade or rating and all permanent additions thereto including longevity credit, multiplied by the number of years of service credited, with certain exceptions, and that retired pay of an officer or member of the Coast Guard who first became a member of a uniformed service, as defined in section 1407(a)(2) of title 10, after Sept. 7, 1980, would be computed at the rate of 2½ percent of the monthly retired pay base computed under section 1407(f) of title 10, multiplied by the number of years of service credited, but that retired pay was not to be more than 75 percent of such monthly retired pay base.

**1984**—Subsec. (a). Pub. L. 98–557 substituted reference to enlisted member concerned for reference to enlisted man concerned.

**1983**—Subsec. (a). Pub. L. 98–94, §923(d), substituted “In computing the number of years of service by which the rate of 2½ percent is multiplied, each full month of service that is in addition to the number of full years of service creditable to a member is counted as one-twelfth of a year and any remaining fractional part of a month is disregarded” for “A fractional year of six months or more shall be considered a full year in computing the number of years of service by which the rate of 2½ percent is multiplied”.

Pub. L. 98–94, §922(b), inserted “Retired pay, if not a multiple of $1, shall be rounded to the next lower multiple of $1.”

**1982**—Subsec. (b). Pub. L. 97–295 substituted “after September 7, 1980” for “on or after the date of the enactment of the Department of Defense Authorization Act, 1981”.

**1980**—Pub. L. 96–342 designated existing provisions as subsec. (a), substituted “Except as provided in subsection (b), the” for “The”, and added subsec. (b).

**1972**—Pub. L. 92–455 provided for computation of retired pay of an enlisted member serving as the master chief petty officer of the Coast Guard at the highest basic pay applicable to him while he so served, if that basic pay is greater than the basic pay of the grade or rating to which he was otherwise entitled at the time of retirement.

**1963**—Pub. L. 88–132 substituted “basic” for “active-duty” wherever appearing.

**1958**—Pub. L. 85–422 substituted “that may be credited to him under section 1405 of title 10” for “for which he was entitled to credit in the computation of his pay when last on active duty”.

**1950**—Act Aug. 3, 1950, struck out reference to computation of pay of retired personnel retired by reason of physical disability.

Amendment by section 922 of Pub. L. 98–94 effective Oct. 1, 1983, see section 922(e) of Pub. L. 98–94, set out as a note under section 1401 of Title 10, Armed Forces.

Amendment by section 923 of Pub. L. 98–94 applicable with respect to the computation of retired or retainer pay of any individual who becomes entitled to that pay after Sept. 30, 1983, see section 923(g) of Pub. L. 98–94, set out as a note under section 1174 of Title 10.

Amendment by Pub. L. 88–132 effective Oct. 1, 1963, see section 14 of Pub. L. 88–132, set out as a note under section 201 of Title 37, Pay and Allowances of the Uniformed Services.

Amendment by Pub. L. 85–422 effective June 1, 1958, see section 9 of Pub. L. 85–422.