33 U.S.C. § 3046 — Retired grade and retired pay

Each officer^* retired under law must be placed on the retired list with the highest grade^* satisfactorily held by that officer while on active duty^* including active duty under recall, under permanent or temporary appointment, and must receive retired pay based on such highest grade, if — (1) the officer’s performance of duty in such highest grade has been satisfactory, as determined by the Secretary^* of the department or departments under whose jurisdiction the officer served; and (2) unless retired for disability, the officer’s length of service in such highest grade is no less than that required by the Secretary of officers retiring under permanent appointment in that grade.