XCR (80)252
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2
that an officer retiring between 1st April and 1st July gets both increases (i, e. an increase in salary on 1st April, on which his pension is based, and an increase in pension on 1st July). The reason for adopting different dates is to highlight the fact that pension increases are based on factors different from those applicable to salary increases. However, this practice has placed an officer retiring between 1st April and 1st July in a more financially advantageous position vis-a-vis an officer retiring outside this period.
Proposed modifications
5
The present arrangements have therefore been reviewed in the light of these criticisms, and the conclusion reached is that a fairer way of dealing with future pension increases would be :-
(a)
to base them on changes in the purchasing power
as reflected by the Moving Annual Average of Consumer Price Index (A) during the 12-month period from 1st April of the previous year to 31st March of the year of review;
(b)
to apply any resultant increase to pensions in payment on 1st April of the year of review; and
(c)
to pay any increase in pensions with effect from 1st April of the year of review.
These modifications to the existing criteria would remove the double benefit referred to in paragraph 4 of this memorandum. It would also remove the 3-month gap in the effective date of payment of pension increases, thus avoiding the complaints referred to in paragraph 3 of this memorandum.
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The Ministry of Overseas Development has indicated that
there would be no objection to the proposed modifications, and the
Treasury has confirmed that, with computerisation, any inconvenience caused by the almost simultaneous implementation of salary and pension increases would be manageable.
7
G.S. 84
(a)
It is therefore proposed that:-
for next year's pension adjustment, the review period should run from 1st July 1980 (i.e. the date immediately after the review period for this year's increase) to 31st March 1981, and the resultant award should be applied to pensions in payment on 1st April 1981 and take effect from that date; and
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