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PUBLIC RECORD OFFICE
Reference :-
EPERFIC.O.882/11
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
| PUBLIC RECORD OFFICE, LONDON
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I recommend, in order that there may be no room for complaint on the grounds that an option has been exercised under the Pension Minute, or allowed to lapse, before the special pensions regulations were published, that a transitory provision (of which a draft marked D is annexed) should be introduced into the Pension Minute giving everyone entitled to retire under the Order in Council six months from the date of the special regulations in which to change his mind if he wants to. During this time options already exercised can be revoked and lapsed options can be exercised provided that in any case the latest date for the exercise of the option will be one month after retirement. Thereafter the option under the Pension Minute will also be the option under special regulations, again with the proviso that if an option is exercisable but unexercised at date of retirement, the latest date for its exercise will be one month after retirement
30. Commutation of one-quarter of the pension will be calculated at ten years' purchase (as in the case of commutation under the Pension Minute) if the officer has If he is less than 55 the number already reached 55 at the date of his retirement.
of years' purchase will be as shown in the table embodied in the regulations. This table is identical with that part of the table adopted by the Government of India for commutation of proportionate pensions which relates to ages 55 and earlier. I do not know what rate of interest is assumed in these tables, but it is probably the rate at which the Government of India was able to borrow when the table was prepared. The Indian table presupposes a medical examination at the date of commutation and reduc- tion of the number of years' purchase in the case of an impaired life. On the other hand, in the case of Indian proportionate pensions the option of commutation is exercis- able at retirement-not in advance of retirement as under our Pension Minute. In view of the fact that this Indian table at age 55 practically coincides with the ten years' purchase prescribed by our Pension Minute for all ages of retirement (which, except in the case of retirement on medical grounds, would be between 55 and 60) it seems to be fairly suitable for the purpose to which I have adapted it.
The Presidents of the two Service Associations concur in my proposals in regard to commutation.
31. Notice, leare, and passages.—On the subject of notice, leave, and passages the views of the two Service Associations as expressed to me by their respective Presidents do not differ from mine. It is proposed that passages on retirement will be granted under the regulations governing the grant of ordinary retirement passages (General Order 1399 (xviii)). Three months' notice (exclusive of leave prior to retirement) will be required from officers in actual employment in Ceylon. Officers on leave out of the Island will not be required to give notice; their retirement will date from the date on which their notification is received, but if they so elect it can be antedated to the date on which the leave prior to retirement which they might have heen granted at the commencement of their leave would have expired. (Of course if an officer elects to retire during the period of this hypo- thetical leave prior to retirement, his retirement will date from the end of such leave.) An officer on leave out of the Island retiring on a date subsequent to the expiry of the hypothetical leave prior to retirement, will be required to refund any salary drawn by him in excess of half-pay during the interval. It is implied in the foregoing that all officers whether in or out of the Island at the time of retirement will be eligible for leave prior to retirement under the ordinary regulations governing the grant of such leave. The regulations also provide that an officer returning to Ceylon from leave after the date of their publication cannot retire or go on leave prior to retirement until he has done a year's service except on forfeiture of half-pay and cost of outward passages, but the Governor is empowered to relax this rule for special reasons. It is also laid down that an officer on leave out of Cevlon on the date on which the Order in Council was published cannot go on pension under the special regulations at a date earlier than 15th April, 1931: such an officer will, of course, be required to refund any salary in excess of half-pay drawn by him subsequent to the expiry of his hypothetical leave prior to retirement. It is, I find, impossible (unless one is prepared to introduce elaborations bordering on absurdity) to provide in the regulations for all the conceivable contingencies which may arise, e.g., when an officer is sent on duty out of the Island or when an officer takes long vacation leave in India. Australia, or else- where. There is, I think, no need to provide for exceptional cases. The regulations are accordingly framed to meet the standard cases and it will, I anticipate, he quite simple in the course of administrative practice to apply the general principle underlying the provisions to any unusual cases which are not specifically covered.
32. To recapitulate briefly the salient facts and conclusions relating to the matter principally in issue (a recapitulation of the points on which there is no difference of oninion is unnecessary) :—
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(1) The scheme which I now submit adheres in its main features to the Phillipson scheme but is more liberal in three respects to officers with 10 years' service or over than that scheme, viz., (a) it provides a period of three years during which the maximum compensatory fraction of 7/60ths remains constant, (b) it extends to the age of 58 the period during which additions to the compensatory pension are accruable, and (e) no automatic reduction of the compensatory addition takes place in respect of service falling short of 15 years. The scheme is described in detail in paragraphs 4-7.
(2) The maximum compensatory pension fraction of 7/60ths, which represents a 50 per cent. addition to the maximum allowed under " abolition "terms and which closely approximates to the maximum which would be allowed under the Secretary of State's scheme No. 2, is in my view amply sufficient (if not more than sufficient) to meet the situation in which officers find themselves as a result of a change in the Constitution (paragraph 10).
(3) Even with the maximum addition of 74/60ths the contrast in the position of an officer whose health breaks down in service and an officer who retires under the Order in Council will be sufficiently striking, and it is inadvisable to accentuate that contrast by greater liberality to the latter officer (paragraph 11).
(4) A scheme of pensions intended to compensate officers for loss of career cannot in my view operate fairly if it is based exclusively on service. The total grant is properly divisible into two parts, one based entirely on past service and the other inainly on prospective service irrespective of past service (subject always to a minimum of past service). Otherwise officers who join late suffer both in respect of their basic pension and their compensatory addition: officers with short service receive inade- quate compensation; and the addition is excessive in cases where the officer retires at an age near the date of ordinary retirement (paragraphs 13-15).
(5) It is important that officers should have some method by which they can readily compare their "accrued "pension rights under the Pension Minute with the total Order in Council pension granted. For this reason as well as for the reason that it would complicate the calculation of mixed service and other special pensions. I deprecate the adoption of a new pension fraction of 600ths in place of the pension fraction of 720ths on which "Medical Certificate " pensions are computed (para- graph 16).
(6) The ages 40-50 are the most critical from the point of view of the probable number of retirements and the additional pensions to be awarded at these ages are of special importance. The schemes now furnished by the Civil Service Association would yield excessive (in some cases flagrantly excessive) additions to an officer's
Medical Certificate "pension (paragraphs 18 and 19)
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(7) By providing that an officer who has done at least ten years' service shall not be penalized in respect of his compensatory addition for deficiency of service and by extending the period during which compensatory additions are accruable the claim preferred by the technical officers that they should not be placed at a disadvantage by reason of their late age on entry has, in my view, been adequately met in the revised scheme now submitted. As the major part of any pension must of necessity be based on service, it is quite impossible to adopt any plan by which an officer joining late will be at no disadvantage as compared with an officer joining early (paragraph 20).
(S) While I agree with the view of the Civil Service Association that age is the most suitable basis for a scheme of general application I do not accept the view which is implicit in their own age-basis scheme that an officer with less than 10 years'
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service should receive the same fractional compensatory addition as an officer with ten years' service or over as this might lead to fantastic results (paragraph 23).
(9) It is almost certain that the Civil Service Association" service "scheme would
be just as expensive, if not more so, as the Secretary of State's scheme No. 1. while it is quite clear that their " age "scheme would be considerably more costly, (para- graph 24).
(10) By offering a strong inducement to Civil Servants to retire in their forties (from 45 the total pension fraction would remain static at 32/50ths for all Civil Servants who were appointed at the age of 23 or under) the Civil Service Association schemes would liberally benefit both those who go and those who remain, as the former would receive decidedly substantial pensions and the latter rapidly accelerated promotion (paragraph 25).
I am, &c..
W. W. WOODя.
Colonial Treasurer.
PUBLIC RECORD OFFICE
Reference :-
C.O.882/11
PAL DE V