When he has completed 30 years of service, or when he is found not physically qualified in an examination under section 8385 of this title, a member of the Fleet Reserve or the Fleet Marine Corps Reserve shall be transferred—

(1) to the retired list of the Regular Navy or the Regular Marine Corps, as appropriate, if he was a member of the Regular Navy or the Regular Marine Corps at the time of his transfer to the Fleet Reserve or the Fleet Marine Corps Reserve; or

(2) to the appropriate Retired Reserve, if he was a member of the Navy Reserve or the Marine Corps Reserve at the time of his transfer to the Fleet Reserve or the Fleet Marine Corps Reserve.

For the purpose of subsection (a), a member’s years of service are computed by adding—

(1) the years of service credited to him upon his transfer to the Fleet Reserve or the Fleet Marine Corps Reserve;

(2) his years of active and inactive service in the armed forces before his transfer to the Fleet Reserve or the Fleet Marine Corps Reserve not credited to him upon that transfer; and

(3) his years of service, active and inactive, in the Fleet Reserve or the Fleet Marine Corps Reserve.

Unless otherwise entitled to higher pay, each member transferred to the retired list or the Retired Reserve under this section is entitled to retired pay at the same rate as the retainer pay to which he was entitled at the time of his transfer to the retired list or the Retired Reserve.

(Aug. 10, 1956, ch. 1041, 70A Stat. 397, § 6331; Pub. L. 85–583, § 1(4–6), Aug. 1, 1958, 72 Stat. 480; Pub. L. 109–163, div. A, title V, § 515(b)(1)(K), Jan. 6, 2006, 119 Stat. 3233; renumbered § 8331 and amended Pub. L. 115–232, div. A, title VIII, §§ 807(b)(15), 809(a), Aug. 13, 2018, 132 Stat. 1836, 1840.)