479
| PUBLIC RECORD OFFICE
Reference :-
C.O.882/11
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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at 55 is to be taken as a standard of comparison, allowance being made, of course. for the greater expectation of life (and smaller salary) of the younger officer.
15. The Secretary of State described discrimination according to age as a factor in the original * Phillipson scheme extraneous to the general pension system, but 1 venture to submit that it is a most important factor in the regulation in the Pension Minute which seems to be most relevant to the question of compensation for loss of career, viz., regulation 7 prescribing the method of calculation of the pension to be awarded on abolition of office. Without some discrimination according to age it seems impossible to avoid the over-liberal additional pensions to officers with long service which are a feature of both the Secretary of State's schemes.
16. There remains to be discussed my proposal to adhere to 720ths of salary. although the Secretary of State's proposals are expressed in 600ths. The net effect under the Secretary of State's scheme I of granting 1/600th for each month of service (without climate bonus) in lieu of 1/720th (with half service as climate bonus up to a maximum of 60/720ths in all) is to reduce the 5 years' climate bonus which would be granted in the case of a "Medical Certificate "pension where the service is less than 25 years and to leave it unaffected thereafter (there is actually a gain in climate bonus after 25 years, but the gain is counterbalanced by loss of compensatory addition owing to the operation of the maximum of 100/600ths). Presumably the reduction of climate bonus before 25 years' service has been completed would be justified by the Secretary of State on the grounds that 5 years' climate bonus is not grantable after 10 years' service unless the officer in fact retires on medical certificate. In that case we are left
without any means of assessing the "basic " part of the officer's pension except with reference to a fraction which finds no place in our pensions' regulations and appears therefore to be unsuitable for the purpose. It will never be possible to make an officer with, say, 15 years' service understand why, under the Secretary of State's scheme I. he cannot be given an addition of 50 per cent., or 100/600ths, to what he will regard as his "basic " pension of 20/60ths, but must be content with 90/600ths in addition to a" basic " of 18/60ths calculated by a fraction which finds no place in the Pension Minute. As I have suggested in paragraph 11, it is of real importance that the Services 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 awarded, and the "Medical Certificate " pension seems to be the only easily under- stood method of calculating the "accrued" pension. For this reason alone I would strongly urge retention of 1/720th. Apart from this reason, I deprecate the intro- duction of the new fraction for the other practical reason that it will complicate the calculation of pensions, especially in the case of "mixed service" and other special pensions. There is no doubt that the Treasury will be inundated with requests from officers to calculate for them their pensions under the Order in Council and to tell them by how much these pensions will exceed the pensions for which they would be eligible under the Pension Minute. This extra work can hardly be avoided and it is important that it should not be unnecessarily complicated.
17. Results of revised scheme.—I have annexed to this a rather large table, marked A, showing in sixtieths in all cases the compensatory fraction, i.e., the fraction additional to the "Medical Certificate" fraction, which the scheme would give at stated ages of retirement after stated periods of service. The difference between the age of retirement and years of service indicates of course, the age at entry. The table shows in each case the corresponding number of sixtieths which would be given by the two latest Civil Service Association schemes (which I shall discuss later) and the two schemes suggested by the Secretary of State.
18.
For reasons explained in paragraphs 13 and 14 I regard the ages 40-50 as the most critical from the point of view of the probable number of retirements and. therefore, the additional pensions to be awarded at these ages are of special importance. It is mainly at these ages that the scheme now put forward falls below the demands of the Services. At the earlier ages (provided the officer has had 10 vears' service) the revised scheme is generally more favourable than that one of the Civil Service Asso- ciation schemes under which the addition is computed on service without reference to age (it is generally less favourable than the scheme under which the addition is com- puted on age without reference to service): and it is more favourable than either of the Secretary of State's schemes. At the ages after 50 the differences between the compensatory additions granted under the revised scheme and those granted under the Civil Service Association schemes are not striking, but of course the Secretary of State's schemes which are framed with exclusivë reference to service provide for much more liberal additions at these ages. In order to illustrate the results of the revised scheme between these ages of 40-50 and to compare them with the results of the other
23
schemes I give below the Medical Certificate pension and the additional (com- pensatory) pension which would be awarded under each of the schemes now before Liovernment, ie the two latest Civil Service Association scheines and the two schemes suggested by the Secretary of State, to:-
A. A Police Officer who joined at 19. B. A Civil Servant who joined at 23.
C. A Technical Officer who joined at 29.
Case
Age Years at retire. of
ment service
Salary
Medical at retire- Certificate
ment
Pension
Revised Scheme
Additional Pension
Latest C.S.A. Scheme
Secretary of State's Scheme
Age
Service
No. 1
No. 2
basis
basis
£
£
$
£
£
£
£
A 1
40
21
920
399
115
144
172
141
98
2
42
*23
960
448
120
176
186
154
109
3
44
25
1,000
500
117
166
166
160
120
4
46
27
1,000
533
100
133
133
133
127
48
29
1,000
567
83
100
100
100
100
G
50
31
1,000
600
67
67
67
67
67
B 1
40
17
1,250
458
156
179
179
175
108
42
19
1,300
520
162
221
221
191
130
44
21
1,500
650
175
280
280
230
160
46
1,550
723
155
269
269
218
176
1,600
800
133
224
224
267
192
50
27
1,700
907
142
181
181
227
215
C 1
40
11
900
240
112
111
57
57
24
2
42
13
900
270
112
135
81
81
42
3
44
15
1,100
367
128
183
128
128
73
4
46
17
1,100
403
110
169
158
154
05
5
48
19
1,100
440
92
132
132
161
110
6
50
21
1,100
477
92
95
95
169
117
**
1234 0
387938 9278 99999
CAR CARRS CROMA,
19. I invite careful scrutiny of the column headed Medical Certificate pension and the "Revised Scheme" column under "Additional Pension" which show, I submit, that the revised scheme treats all the cases given very liberally indeed. If the sole responsibility for preparing a scheme had rested with me, I should have regarded even these additions as more liberal than the circumstances required. If the additional pension under the revised scheme is then compared with the columns showing the additional pensions under the Civil Service Association schemes and the Secretary of State's schemes it will be seen that in nearly all cases these other schemes are more liberal still. The most flagrant example of what I should regard as excessive compensation is B.4 (a Civil Servant in Class I, Grade II) which I have underlined. In this case the Medical Certificate" pension of £723 is increased by £155 under the revised scheme, £269 under the Civil Service Association schemes, and £248 or £176 under the Secretary of State's scheme 1 or 2. A scheme which would enable an officer at 46 on £1,550 to retire voluntarily on a pension just short of £1,000 per annum in my view stands self-condemned as inherently unreasonable and exorbitant. The points between 40 and 50 at which the revised scheme is more favourable than the Secretary of State's scheme 1 are at 40-42 in the case of a technical officer with only 11-13 years' service (C.1 and C.2), the additions under the revised scheme being These £111 to £135 against £57 to £81 under the Secretary of State's scheme 1. additions are undoubtedly high, but they are much less than the Secretary of State's scheme 1 would give at the same ages to an officer on the same salary retiring after, As the additions are for loss of future service I do not think say, 21-23 years' service.
the increases under C.1 and C.2 are open to serious criticism. Any scheme framed solely with reference to length of service would fail to give equitable treatment in the matter of compensation for loss of career to those technical officers whose age on appointment is generally well advanced.
20.
"scheme might
I have done something to meet the objection raised by Mr. Lees as President of the Public Service Association that the original "Phillipson encourage the retirement of technical officers at 50, because after that date anything they gained on their ordinary fraction by additional service they would lose from their compensatory fraction. (I may say, parenthetically, that this feature of the "Phillip- son" scheme only found a place there because it was necessary to provide the minimum alternative of abolition terms which are so framed that between 50 and 55 an officer must drop 5 years, though, of course, he gains an equivalent by service). By extend- ing to 58 the age at which prospective service ceases to be taken into account, I have arranged that every additional month of service will bring additional total pension
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