CO885-11 — Page 491

487

PUBLIC RECORD OFFICE

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Reference :-

C.O.882/11

PUBLIC RECORD OFFICE, LONDON

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We

14. We would, therefore, earnestly urge that Government should recommend this less costly modification of the scheme suggested by the Secretary of State. understand that His Excellency has been advised that the scheme which we have set out and that suggested by the Secretary of State would both serve as an inducement to retire to officers who would otherwise have been prepared to remain. Whilst this might possibly apply to a limited extent under the scheme suggested by the Secretary of State in the case of officers whose age at retirement was in the immediate neighbour- hood of 55, there could be no question of the terms available under the scheme pro- posed by us acting as any inducement to retire to any officer who would otherwise have been willing to remain in the Service. But on the other hand, we feel confident that in so far as the terms which we propose would be regarded as affording a possible alternative to which officers could resort in case of necessity, they would result in a number of officers deciding to remain in the Service and endeavour to adapt them- selves if possible to the future conditions, who, if more inadequate terms were offered, would decide to retire before advancing years impaired their prospect of obtaining any employment to supplement an entirely inadequate pension.

15. The modification of the Secretary of State's scheme which we propose, in common with the Secretary of State's scheme, bases the compensatory pension to be awarded on the length of previous service at the time of retirement. In the case of a service such as the Civil Service, where the age of entry is confined within narrow limits, such a basis may be quite satisfactory, but we would point out that in reality previous service is hardly a relevant consideration in determining compensation for loss of career. The relevant factors are, we would submit, the salary at the time of retirement, the normal expectation of salary during the period of service foregone, and the number of years of service foregone. Where compensation is granted as 50ths or 60ths of the salary at the time of retirement and is thus directly governed by such salary, the single factor which gives the best measure of the number of 50ths or 60ths which should be received as compensation is therefore clearly the age at retirement, which varies with the number of years of service foregone. Though, therefore, a scheme of compensation based upon length of service at the time of retirement might be suitable for the Ceylon Civil Service, it would not be equally suitable if applied to a service in which there was a fixed age of entry differing materially from that of the Ceylon Civil Service; still less could it be equally suitable or applicable to Services in which there was considerable variation in the age of entry. We would submit, there- fore, that in any scheme intended to be applicable to all the Public Services, the basis of compensation should be the age at the time of retirement and not the length of previous service. We append to this memorandum a formula based on service, which would give effect to the scheme which we propose, and we also append a formula under which the basis is transferred to ages which in the Ceylon Civil Service would correspond to the various periods of service. This latter formula, we submit, whilst giving identical results in the case of the Ceylon Civil Service, would be equally applic- able to all Services, and would avoid the anomalies which inevitably result from a scheme based on length of service.

16. In conclusion, we would again urge that the scheme of compensation which we propose in this memorandum is one which, while affording a distribution of com- pensation which would be fairer and more acceptable to the Services than that result- ing from the scheme suggested by the Secretary of State, would at the same time almost certainly involve less cost to Government. Whilst the scheme falls short of the measure of compensation which we feel we might reasonably have expected to receive, we are confident that to the limited extent which we have indicated in this memorandum it would be accepted by the Services generally, and we would respectfully urge that Government 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.

Formula where Compensation is Based on Length of Service.

Each officer on premature retirement to receive, if he has had less than 10 years' gross service, the gratuity provided for in the existing Pension Minute, and if he has had more than 10 years' gross service, a basic pension of 1/50th of his pensionable- salary for each year of service counting for pension.

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Both classes of officers to receive in addition a compensatory pension of 1/50th

of their pensionable emoluments for each two years of service counting for pension, subject to the following provisos :-

(1) that the addition as compensation shall not exceed 10/50ths of the pension-

able emoluments;

(2) that the total pension received by any officer shall not exceed 2/3rds of

his highest pensionable emoluments; and

(3) that the number of 50ths added as compensation shall not in any case exceed that number which, if added to the age of the officer, would bring that age to 55.

Formula where Compensation is Based on Age.

Each officer on premature retirement to receive, if he has had less than 10 years' gross service, the gratuity provided for in the existing Pension Minute, and if he has had more than 10 years' gross service, a basic pension of 1/50th of his pensionable salary for each year of service counting for pension.

Both classes of officers to receive in addition a compensatory pension of 1/50th of their pensionable emoluments for each two years by which their age at retirement exceeds 23, subject to the following provisos:

(1) that the addition as compensation shall not exceed 10/50ths of the pension-

able emoluments;

(2) that the total pension received by any officer shall not exceed 2/3rds of

his highest pensionable emoluments; and

(3) that the number of 50ths added as compensation shall not in any case exceed that number which, if added to the age of the officer, would bring that age to 55.

Note. In all cases an officer should have the option of pure abolition

be prefers them.

terms if

Supplementary Memorandum by the Committee of the Civil Service Association.

1. In the scheme of retirement and compensation set out in our memorandum of

6th May, 1931, one of the main data was that, as far as possible, compensatory pension should be zero or small at age 55.

2. To fulfil this condition we found it necessary to depart from the Secretary of State's 50 per cent. scheme; and to compensate for the difference as well as to benefit officers in the middle of their service, we suggested the raising of the limit of 84/50ths to 10/50ths.

3. This basic datum has, however, been now altered by the Government of Ceylon in the scheme which we understand is being recommended by His Excellency the Governor, in that this scheme arranges for compensatory pension till the age of

58 is reached.

4. Had we been aware before 6th May that such a modification would be adopted by the Government, it is probable that we should not have attempted to adjust the Secretary of State's 50 per cent. scheme, but that we should have adopted it as it stood, with a suggestion for grading it down.

5. In view of the modification referred to, it is now our considered opinion that the Secretary of State's 50 per cent. scheme would be welcomed by the officers con- cerned and the requisite grading down to some age in the neighbourhood of 60 can be easily effected by substituting the age which the Secretary of State may select in place of "55" in provisos (3) of the formulæ annexed to our memorandum of 6th May, 1931.

6. We may say here that the scheme of 1/50ths is greatly preferred by the Services to that of 1/60ths with the unchanging 5 years' tropical allowance which is retained in the scheme now being recommended by Government (see also paragraphs 10 and 11 of our memorandum of 6th May, 1931).

7. We would also add with regard to the Government scheme that while the modification now made in it recognizes the claims of many public officers who normally continue in service after the age of 55, we are still unanimous in the view that it is so inadequate that it will be in no way acceptable to the Civil Service or to any branch of the Public Services.