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PUBLIC RECORD OFFICE
Reference :-
EPEREC.O.882/11
PUBLIC RECORD OFFICE, LONDON
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until the officer reaches 58, unless, of course, before that time he has struck the over- riding maximum of two-thirds of his highest pensionable emoluments. This admittedly meets only one of the objections urged on behalf of the technical officers who join late. It does not remedy their complaint that by joining late their total pension at retirement poor as compared with officers who, retiring at the same age and on the same salary, joined young. If this is a grievance at all, which I cannot admit, it arises out of exist- ing conditions of service (the pensions regulations) which have not been affected by the change of the Constitution, and there is at all events no case for a remedy in connexion with that change. Nor does the new scheme meet the demand urgently pressed by the President of the Public Service Association (as well as by the President of the Civil Service Association) for a maximum compensatory addition of 8.3/50ths to a basic pension of 1/50th for each year of service. With that demand I have already dealt in paragraphs 10-12 above. By providing that an officer, however late he may join the service, provided he has done the minimum service qualifying for a pension, shall not be penalized in respect of his compensatory addition for the deficiency in his service and by extending to 58 the period over which the compensatory addition is accruable, I think that all that can be done to meet the reasonable claims of this group of officers has been done.
21. Discussion with the Presidents of the Two Associations. On the 3rd instant I had a discussion with the Presidents of the two Service Associations and described to them the scheme which I then intended to submit to His Excellency. They both expressed themselves, on behalf of their respective Associations, as entirely dis- satisfied with my proposals. In the light of their criticisms and representations I have made modifications of the proposals I discussed with them, and the result is the scheme which I have already described at length. There is not the slightest doubt, however, that they will also be dissatisfied with this latest scheme because it does not give the large maximum addition which they demand. I suggested at the interview that the two Presidents should send me a written statement of their criticisms of the main features of the scheme I then propounded to them to be annexed to my report to Government. The President of the Public Service Association has done this, and I annex a copy of his memorandum-marked B. The President of the Civil Service Association has sent representations direct to Government, in response, I understand, to an invitation given to him verbally by His Excellency. I did not see these repre- sentations until this report was almost completed, but I find that I have dealt with practically every point contained in the Memorial. Mr. de Glanville, at my request, had sent me a copy of the two alternative schemes of pensions which the Civil Service Association had included in its Memorial. The reference in the tables to the "Civil Service Association schemes" is to the schemes in the Memorial.
22. The Memorial of the Public Service Association (marked B). I think I have already dealt with all the points raised in this memorandum in the course of my remarks on the scheme now put forward by me, and it is not necessary that I should go over the same ground again.
23. The Latest Schemes of the Civil Service Association. The two alternative formulæ submitted by the Civil Service Association are equally beneficial to the Civil Service, but one (the service basis) would secure for officers who join young like the police the maximum at an earlier age and over a longer period, while the other (the age basis) would ensure that technical officers do not suffer the disadvantages inherent for them in any scheme based solely on service. The Memorial suggests that the age-basis should be adopted for all services. On this point I agree with the Civil Service Association, as my previous remarks have indicated, and my revised scheme is constructed accordingly. I do not, however, accept the view implied in the Civil Service Association scheme which is based on age that an officer with less than 10 years' service should receive the same fractional compensatory addition as an officer with ten years' service or over, as this would lead to fantastic results, e.g., it would be possible for an officer with only one year's service retiring at 43 to receive in addition to his minute gratuity a compensatory pension of 10/50ths of his salary; under my scheme such an officer would receive only half a sixtieth.
24. The Association in its Memorial makes the points that its own scheme would be less costly to Government than the Secretary of State's scheme 1 and that " Govern- ment should not stand between the services and the grant of a scheme of compensation which the Secretary of State clearly considers is not unreasonable and is prepared to sanction." There is no reason to believe that the Civil Service Association schemes would be less costly than the Secretary of State's scheme 1, and it is not a scheme which the Secretary of State has stated that he is prepared to sanction. It provides
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for a maximum addition of 113/60ths, as compared with the Secretary of State's maximum of 10/60ths, and, what is far more important shifts that maximum from 48 (in the case of an officer joining not later than 23) back to 43. I agree that this is about where the maximum should be, but the Secretary of State has not agreed to this, and it is absurd to argue as if this shifting of the incidence of the maximum would not increase the cost, having regard to its probable influence on the number of premature retirements. The fact is, of course, that after 25 years' service under the Secretary of State's scheme No. 1 the static maximum pension fraction of 2/3rds is reached. After that length of service an officer will not secure any better pension fraction, however long he may serve. Under either of the Civil Service Association schemes, if an officer has joined at 23, his pension fraction after 22 years' service (ie., at the age of 45) will be 32/50ths (i.e., 13/50ths less than the maximum of 2/3rds) and will remain static thereafter until 55. If an officer joined the Service earlier (say, at 20) he would actually achieve his maximum pension fraction of 2/3rds in his 24th year of service, that is, soon after 43, and this fraction would remain static for him for the rest of his service. It is thus almost certain that the Civil Service Association "service" scheme would be just as expensive, if not more so, than the Secretary of State's scheme No. 1, while it is quite clear that their "age" scheme would be considerably more costly.
25. I think that a cursory examination of the two Civil Service Association schemes would suggest that the Association has taken a somewhat narrow view of the problem. It is perhaps natural that they should look at it with reference to factors which have special importance to their own service, but it would have been gratifying to have observed some evidence of a livelier appreciation of the political and financial background and of the special claims and interests of other services. They award, as I have shown, high pensions to officers retiring with 17 to 27 years' service (i.e., in the case of Civil Servants at 40-50 years of age), offering a great inducement to retirement at that age and thereby endowing richly both those who elect to stay and those who elect to go the former with a handsome pension and the latter with greatly improved prospects of promotion.
26.
It will be seen that the Civil Service Association has modified the Secretary of State's scheme No. 1 in two ways. It has increased the maximum compensatory addition from 100/600ths to 120/600ths, thereby assisting the production of the result referred to in the preceding paragraph, and has brought all compensation to an end at 55, thereby achieving at the expense of officers who (unlike themselves) join late, and must therefore stay on beyond 55 to get the full benefit of the Secretary of State's schemes, some saving to counterbalance the extravagance of the pensions awarded to those who join young and can afford to retire at 40-50. The Civil Service Association schemes will not only induce retirements in the Civil Service between 40 and 50, but will aggravate the apprehended tendency of technical officers to retire as soon as they are affected by the condition that the compensatory addition must not bring the age above 55. At that point, which would be 45, an officer who had reached his maximum would go up a fiftieth on his basic pension but down a fiftieth on his compensatory addition. This is merely a repetition in an aggravated and extended form of that feature of the original * Phillipson scheme which resulted from the unavoidable incorporation of "abolition " terms.
27. The main criticism of the Civil Service Association scheme, however, is that it awards excessive pension at the ages at which retirement is likely to be attractive and therefore, for reasons which I have already indicated in paragraph 13 above, it will quite unnecessarily accentuate a tendency which is likely to have embarrassing administrative and financial consequences.
28. Draft Special Regulation under the Order in Council.-A complete draft marker C of the special regulations under the Order in Council required to give effect to the revised scheme is annexed. I suggest that it is advisable, if my recommenda- tions are adopted, that these regulations should be examined by the Honourable the Attorney-General for drafting faults. If the Honourable Mr. Jackson would be so good as to revise them personally I would arrange to go through them with him. I mention below the points in these draft regulations which seem to require corament.
29. Commutation. I have provided that one-quarter of the whole Order is Council pension shall be commutable if the officer has exercised his option to commute his ordinary pension, but not otherwise. To meet cases where retirement under the Order in Council takes place before the latest date on which the option under the Pension Minute is exercisable, I give the officer, in such cases, a month from date of retirement in which to exercise it.