Section 5
SEC. 5. Retirement grades and benefits.&mdashAn officer below the grade of captain who is entitled to retire under this Act, shall be retired in the grade next higher to the grade he holds at the time of retirement and his retirement benefits shall be computed upon such next higher grade. Captains and flag officers shall be retired in the grade they held at the time of their retirement, without any adjustment in grade; but the retirement benefits due an officer in the grade of captain or commodore shall be computed on the basis of the base and longevity pay of the next higher grade. However, any officer retired under subparagraph (b) of Section eleven of this Act shall be retired only in the grade held by him at the time of retirement, without any adjustment in grade or retirement benefits. Officers holding permanent grade of rear admiral or higher at the time of retirement shall receive retirement benefits computed upon such grade.