14 U.S.C. § 2501 — Grade on retirement

(a) Commissioned officers.

(1) In general. A commissioned officer retired under any provision of this title must be retired from active service in the highest grade the officer held for at least six months on active duty in which the Secretary^* decides the officer’s performance was satisfactory.

(2) Conditional determination. If an officer is being investigated for alleged misconduct when retiring—
(A) the Secretary may conditionally decide the highest grade in which the officer’s service was satisfactory while the investigation is pending; and
(B) the grade under subparagraph (A) is subject to resolution under subsection (c)(2).

(b) Warrant officers. A warrant officer retired under section 580, 1263, 1293, or 1305 of title 10 must be retired from active service in the highest commissioned grade above chief warrant officer, W–4, that the officer held for at least six months on active duty in which the Secretary decides the officer’s performance was satisfactory.

(c) Retirement in a lower grade.

(1) Misconduct in a lower grade. If the Secretary decides a commissioned officer committed misconduct in a lower grade, the Secretary may decide that the officer did not serve satisfactorily in any grade equal to or higher than that lower grade.

(2) Adverse findings. After a conditional decision under subsection (a)(2), the officer’s retired grade must be resolved if the investigation or personnel action produces adverse findings.

(3) Recalculation of retired pay. If this subsection lowers the officer’s retired grade, the officer’s retired pay must be recalculated under chapter 71 of title 10. Any change takes effect on the date the lower retired grade takes effect.

(d) Finality of retired-grade decisions.

(1) In general. Except as paragraph (2) provides, a decision under this section about a commissioned officer’s retired grade becomes administratively final on the retirement date and may not be reopened.

(2) Reopening decisions. The decision may be reopened if—
(A) fraud obtained the officer’s retirement or retired grade;
(B) after retirement, substantial evidence appears that could have led to a lower grade and was unknown to a competent authority at retirement;
(C) substantial evidence appears that, during commissioned service, the officer failed to carry out applicable laws with intent to deceive or defraud;
(D) after retirement, substantial evidence appears that the officer committed rape or sexual assault, as described in sections 920(a) and 920(b) of title 10, at any time during commissioned service;
(E) after retirement, substantial evidence appears that the officer knew about and failed to report through proper channels, as required by the law existing when the incident allegedly occurred, a known sexual assault by a Coast Guard member under the officer’s command during the officer’s service;
(F) the decision contained a mistake of law or calculation;
(G) for a retired grade following a conditional decision under subsection (a)(2), the investigation or personnel action produces adverse findings; or
(H) the Secretary decides under regulations prescribed by the Secretary that good cause exists to reopen it.

(3) Requirements. If a decision is reopened under paragraph (2), the Secretary—
(A) must notify the officer; and
(B) may not make an adverse decision about the retired grade until the officer has had a reasonable chance to respond about the reason for reopening.

(4) Recalculation of retired pay. If reopening under paragraph (2) lowers the officer’s retired grade, retired pay must be recalculated under chapter 71 of title 10. Any change takes effect on the date the lower retired grade takes effect.

(e) No application to commissioned warrant officers. This section, including subsection (b), does not apply to commissioned warrant officers.