CO885-(20-21) — Page 164

PUBLIC RECORD

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Reference :-

C.O.885

21 PUBLIC RECORD OFFICE, LONDON

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peration for several years and it has apparently given complete satisfaction. The method equires, however, some adjustment to fit it for general adoption; hitherto it has been used only in groups of Colonies using the same pension scale, but in the case of an fficer who has served in Colonies using different scales allowance must be made for the difference in scale.

63. The Committee have accordingly, as already indicated, prepared two alternative drafts of Part II of these Regulations. The draft headed "First Draft" embodies the Interdepartmental Committee's method, and that headed "Second Draft

the aggregate method of apportionment.

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64. The general principle on which an officer's total pension is computed is the same in each case.

It is, in fact, the principle recommended in the report of the Inter- departmental Committee of 1905, though it has been found desirable to discard the description of pension as "ordinary" and "additional." The scheme adopted is to take as a basis a continuous pension in respect of total service calculated in sixtieths of final salary and to build up upon it additions representing difference of scale in respect of service on any higher scale and calculated on final salary in such service, the additions in each case being divided between contributing Governments upon the same principlě as the main pension.

65. So far the two drafts are the same. It is, as already explained, the method of apportioning the charge amongst the different employers that constitutes the difference between the two drafts.

66. The manner in which this difference operates will be best understood by reference to the illustrations printed in Appendix 11, of which the last three are based on recent actual cases.

It will be seen from these illustrations, which may be taken as fair sample cases, that in the majority of cases the tropical Colony bears an increased charge under the Interdepartmental Committee's scheme, as compared with the aggregate scheme. In illustration I (probably the most usual case) the charge is greater by 9 per cent. ; in illustration III (also not uncommon) by 61 per cent. ; in illustration IV by 60 per cent. : and in illustration VI by 34 per cent. On the other hand in illustrations II and V, where a tropical Colony is the first employer, the charge on the tropical Colony is lower under the Interdepartmental Committee's scheme by 9 per cent. and 27 per cent. respectively. These cases are, however, not so common as those where the tropical Colony is not the first employer. It is fair to add that, although the extra charge thrown on the tropical Colonies by the Interdepartmental Committee's scheme would be substantial in individual cases, it would not throw a seriously increased charge upon the revenues of those Colonies, since the number of transferred officers is always small as compared to the total number of officers in the service.

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67. The chief advantage claimed for the Interdepartmental Committee's scheme of apportionment is that as regards the earlier employing Governments it harmonizes with the long established Treasury practice, as embodied in the recent Treasury rules, and also with the long established rule in the Colonies generally (other than the "grouped' Colonies)-under which the Government whose service an officer leaves on transfer to other public service knows (with one possible slight exception, viz. under the regulation as to the apportionment of an addition for professional qualifications) the amount of pension for which the officer has already qualified and which cannot be modified by the length of service or emoluments received under any subsequent employing Government.

68. On the other hand the Committee are of opinion that the aggregate method of apportionment operates as fairly as any system which can be devised, since it apportions the shares of pension according to the length of service combined with salary, that is, in some rough measure according to the officer's actual value during his service to the several employing Governments. They therefore definitely recommend that it should, if possible, be the one adopted.

69. Unofficial enquiry of the Treasury has elicited the fact that they would perhaps raise no objection in principle to the adoption of the aggregate method, but that it would probably take some considerable time to issue amended rules for that purpose, and it would also be necessary to secure the concurrence of the Indian Government to such an amendment.

70. Should the Secretary of State decide to adopt the aggregate scheme for the Colonies generally, it would be necessary, pending an amendment of the Treasury rules, which might perhaps never be secured, that the Secretary of State should continue to treat all cases of transfer from the Home service to the Colonies under No. 9 of the existing Treasury rules: this arrangement has already been provisionally agreed to

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In certain cases.

The effect of such a course would be that an officer transferred from the Home service to service in a Colony would generally, if not always, get less totul pension on his final retirement than an officer transferred from service in a "healthy Colony with salary and length of service identical with the first officer's Home service. The only observation which it is necessary to make upon this is that it may in some cases operate to discourage transfer from the Home service to the Colonies, and perhaps make it a little difficult at times for a Colony to get the particular class of man that it wants.

71. If it be admitted that the aggregate method is, on the whole, the fairer to the employing Governments, then it seems hardly desirable to reject that method simply because it is not adopted in the legislation of the Home Government. Though uniformity is most desirable it is not a paramount consideration, and it has been suggested to this Committee that the Governments of the tropical African Colonies would make such a strong protest against apportionment on the other system that it would be difficult for the Secretary of State to prese for its acceptance.

72. The Committee desire to point out that if some Colonies were to adopt the aggregate scheme of apportionment, and others to adopt the Interdepartmental Cou- mittee's scheme, it might result in an officer whose earlier service is in one of the former and final service in one of the latter Colonies being able to earn a considerably larger total pension than if his whole service was in one or more of the latter Colonies, while if the transfer were in the reverse direction the officer would not get the full benefit of the continuous system. The Committee therefore strongly recommend that every endeavour should be made to arrange for the acceptance as a whole and by all Colonies interested of that method of division which the Secretary of State finally approves.

The

73. And this leads to the mention of one contingency to which the Committee feel bound to call attention. In a large number of Colonies at the present time legislation provides that pensions shall be granted at the rate of fifteen-sixtieths of an officer's pensionable emoluments for ten years' service with an additional one-sixtieth for every additional year of service. This is the ordinary statutory way of giving the so-called climate bonus. In respect of ten years it is the equivalent of a one-fortieth scale. value of the addition decreases gradually with length of service and on the average will be found not very different in the result to the individual from the scale of one-fiftieth. As in the Report of the Interdepartmental Committee of 1908, so in the draft Regulations, it has been assumed that Colonies having the above-mentioned provision would replace it by legislation giving one-fiftieth for each year of service. If, however, some of the Colonies object to the change, serious difficulties and anomalies will arise in applying to them the mixed service rules as drafted, whichever of the alternative drafts is adopterl. Therefore the Committee recommend that every endeavour should be made to obtain the acceptance of the one-fiftieth scale by the Colonies referred to above.

74. It now only remains to discuss briefly certain details which apply to both drafts of Part II of the Regulations.

75. Regulation 16 (both drafts). This regulation is designed simply to apply to mixed service those provisions of the regulations relating to simple service which form an essential part in the calculation of all pensions.

76. Regulation 17 (both drafts). This regulation is that which brings up the important question of apportionment discussed in the foregoing paragraphs of the Report.

77. It will be seen that this regulation, together with Regulation 19 in the first draft of Part II, corresponds to Regulation 17 in the second draft; and that similarly Regulations 18 and 20 in the first draft correspond to Regulation 18 in the second. In other words four Regulations in the first draft are represented by two in the second draft.

78. As regards the drafting of the regulation, it may be worth while to observe that, though it may at first sight appear to be somewhat lengthy, it has, in fact, the advantage of forming a clear and comparatively simple code, which will enable the financial officers in a Colony to calculate a mixed pension in a straightforward manner. The chief difficulty which faced the Committee in framing it was that of putting these arrangements for mixed service into clear and intelligible language, and they believe that by breaking them up in the manner adopted in the drafts they have attained that object.

79. The Committee came to the conclusion that it would not meet the case if they provided in general terms merely for difference of scale between one Colony and another, and their drafts are based on the assumption that all Colonies will adopt either a one- sixtieth, a one-fiftieth, or a one-fortieth scale.

80. As regards the words "subject always to the limit prescribed in Section 10 of the Ordinance," it is desirable to note that if apportionment on the aggregate system is

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