10 USC 14513 - Failure of selection for promotion: transfer, retirement, or discharge

Each reserve officer of the Army, Navy, Air Force, or Marine Corps who is in an active status and whose removal from an active status or from a reserve active-status list is required by section 14504, 14505, or 14506 of this title shall (unless the officers separation is deferred or the officer is continued in an active status under another provision of law) not later than the date specified in those sections
(1) be transferred to an inactive status if the Secretary concerned determines that the officer has skills which may be required to meet the mobilization needs of the officers armed force;
(2) be transferred to the Retired Reserve if the officer is qualified for such transfer and does not request (in accordance with regulations prescribed by the Secretary concerned) not to be transferred to the Retired Reserve; or
(3) if the officer is not transferred to an inactive status or to the Retired Reserve, be discharged from the officers reserve appointment.