In dealing with this particular Bill I would like to make an open confession at the start. Some months ago when the Bill was first circulated I read it with much interest and with very close attention, but I had not time to read it since. I intended to read it to-day but I had not time. I am giving these few words of explanation so that if my memory is faulty any misrepresentation or faulty deductions on the details of the Bill may be attributed to faulty memory rather than a design to misinterpret any section.
Briefly this is a Bill to replace for the future the existing pension Act dealing with Local Government officials. The existing pension Act entitles officials to one-sixtieth of a year's pay for each year's service, but it carries with it no bonus or gratuity on death or retirement, and the pension is reckoned on the average salary for three years previous to retirement; there is no contribution under this scheme. This Bill allows for a smaller pension, one-eightieth of a year's pay for each year served. The maximum pension under this Bill is one half the salary as against two-thirds under the other, and for new officers the contribution is 5 per cent. of their pay under this Bill as against no contribution under the last. But against this, this Bill carries a bonus of one-thirtieth of a year's pay for each year's service, a bonus to be paid on death or retirement. Existing officers are being treated very very fairly and very generously under this particular Bill as they are given the option of remaining on under the old Bill or, by making application in writing, of coming under the new Bill.
But there is one very big defect in this Bill and I think it is a defect for which there does not occur to me to be any justification or reasonable defence. That is that this Bill carries on an old-time precedent that has at least application to the existing officers, that their pension is only reckoned on continuous service rather than on their aggregate or cumulative service. I and colleagues of mine and others have repeatedly put to the Minister, to legal men and to higher officials to explain what is the reason why a person is not pensioned on the amount or the number of years' service which he has given to the State rather than on the number of years of continuous service. I have never got any reply but one, namely, that this is the precedent laid down in the 1864 or the 1884 Act and carried into subsequent legislation. I do not see any other explanation or justification. Surely the idea of a pension is for the years of service rendered to the State or to the organisation and pension should be reckoned on the number of years' service given. In this particular Bill before us for future entrants you are brushing aside completely this precedent. You are giving a pension based on years of service but for other existing officials the old word "continuous" is carried on, instead of aggregate or cumulative service. Let us take the case of two colleagues in the same office. One of them has served the local authority for 30 years and gets a pension of 30/60ths or 30/80ths, dependent on the Act under which he elects to take his pension. The other officer has served the same local authority in the same capacity for 20 years but, at the end of 15 years, he left that employment for a month and came back. He is pensionable on the basis of 15 years' service. The other officer is pensionable on the basis of 30 years' service although the service rendered by each of them to the same authority was similar in type and in quality.
I should be interested to hear the justification for the continuance of that particular wrong. Quite evidently, it is regarded as a wrong. You are departing from that in the case of the registered officer and servant of the future. They will get their pensionable service carried on from one local authority to another. It appears to me that we are just following precedent in respect of an indefensible and unjust position.
The question is of more importance in this State than, I think, in any other country inasmuch as this State is wedded to the system of appointment by the machinery of the Local Appointments Commission. The Local Appointments Commission aim at getting the most highly qualified type of officer or servant for any vacancy which they are called upon to fill. Heretofore, people got into various offices on what I might call a basic qualification. With the initiation of the Appointments Commission machinery, an ambitious young man or woman, anxious to secure advancement and a better type of position, clearly understood that the only way to secure appointment was by obtaining the highest possible qualifications. In the case of many people down the country, particularly, their only chance of securing those higher qualifications was to save a little money, resign, come up to one of the university or teaching centres, take a post-graduate course and, with the higher qualifications thus obtained, go back into the public service. That is exactly the type of officer or servant who should be encouraged by a Government Department. That officer or servant sacrificed the number of years' service he had up to that date for pensionable purposes. On the day he returned to employment, he ranked as one without an hour's service for pensionable purposes. Section 18 (4) makes that point particularly clear. The term "continuous service" is used there. Under Section 35 (3) a person is pensionable according to the amount of pensionable service he enjoys under Part IV of the Local Officers Pension Act. Part IV of that Act lays down that a pension can be reckoned only on the basis of continuous service.
I submit that particular point to the Minister as a fair and reasonable one. I submit it with a certain amount of confidence that it will get fair and reasonable consideration. I should rather have an apparent injustice, such as this, rectified from the Government Front Bench than by an amendment from any other corner of the House. I think that the intention in this Bill is to improve the pension code of the country, to put it on a more reasonable basis, to make it watertight and to provide a bonus or gratuity for the person retiring so as to meet the expense of a possible change of abode, while including in the pension scheme the workers as well as the officers. All that is sound and worthy of commendation but it would be unfortunate if the injustices of an old-time pension code, enacted in the British House of Commons 60 or 70 years ago, were to be carried into the future pension scheme of this State. I do not think that any Deputy or Minister would contest the point that a pension is earned by the years of service given to a particular authority and that it should not matter one fig whether those years of service were temporarily interrupted or not.
There is another point which, I think, is worthy of attention. The existing officials get the option of remaining under the old pension scheme or coming under this scheme. Everybody may have a different point of view. I think that this scheme is more attractive than the old one. It all depends on how long a person hopes to live after he is pensioned. If he is optimistic and says: "I am going to retire at 65 and live to 85", it would be more profitable to remain under the old scheme and take 1/60th of a year's pay for each year of service than to take 1/80th and a lump sum. If a person be a pessimist and looks forward to a short life and a gay one, then I think it is better business to accept the lump sum and a smaller pension. Be that as it may, this Bill leaves it open to the bulk of the existing officers either to remain under the old scheme or come under this scheme. Officers who have reached the age of 60 years are, however, excepted from that option. I do not quite see the justification for denying the option to officers or servants who have reached 60 years. There can always be the old argument based on those immediately on one side or the other side of the line.
Compare the case of the person who is 59 years and 11 months with that of the person who is 60 years and one month. I do not see any great point in denying the benefit of the option to a small minority of officials who may be past 60 years of age on the date this Bill becomes law. I do not see that public funds are going to be committed to any greater sum because, as against the option of the person taking the gratuity, he takes a much smaller pension—a pension based on 1/80th as against a pension based on 1/60th. I do not see and I have not learned from the Minister what justification there is for paragraph (b) of Section 35, that is, that if a person has passed 60 years of age he cannot enjoy the benefit of having an option as between one Act and the next. That is a point that I would certainly urge the Minister to look into and to consider before the next stage of the Bill.
There is one other point which I consider is of very great importance, particularly in this year. A great number of officers, officials, servants, have been retired in the course of this year, having reached the age of 65. Some of them retired even, we will say, as late as a week or a fortnight ago. In addition to that all pay was altered last January. It was increased 30 per cent., 40 per cent., 60 per cent. The pension a person retiring to-day would receive is based on the average of his pay over the last three years. The pension of a person retiring under this Bill is based on the pay he would be in receipt of on the date of retiral. Seeing that, following the removal of the standstill Order and in view of the increased cost of living, it was found to be sound State policy to increase the salaries of officers and officials according to a graded scale—those on the smaller scale of salary getting the highest percentage increase—I think that, whether over 60 years of age and eligible to opt under this Bill or not, the pensions of at least those who retired since the scales of salary were raised should be based on the scale of salary on the date of retiral.
I understand that those who retired within a month or two of the new rates of salary, basing their pension on the average of three previous years' income, got no benefit by way of pension through the increase of salary just secured before their resignation. That particular point matters to a very considerable number of officials who have retired not only directly under the Minister's Department but also under the Department of his colleague, the Minister for Health. I think, if consideration of that particular point is put up to the Minister's colleague, he will find that the view is that the benefits at least of having their pension based on their present rates of pay rather than on that which prevailed two or three years back is a reasonable thing to urge on the Minister. Again, on that point of denying benefits in the case of a person who is 60 years of age on the date of the passing of the Bill, I consider that if the full benefits of the new Bill were given to those who are past 60 years of age they would at least be given the benefits of retiring on a pension based on the scale of pay on the date of their retiral.
With regard to the portion of the Bill that deals with established servants, I wish to state that I consider it to be a step in the right direction to endeavour to include them within the pensions scheme but I can see very great difficulties. The work of a great number of these people is interrupted work. They are a servant or an employee of a local authority for five months, seven months, or one year; for perhaps ten months in the next year, and so on. The Bill lays down that on retiral, or on ceasing to be an employee, where they have not reached the pensionable grade of service, contributions made will be returned. That means that a person who has been employed for ten months, say, then gets a return of his contribution.
With the poor people there is always a very great demand for any pound that happens to be in their pockets. This means that their contributions are returned in a lump sum. The contributions are distributed or spent. Then, if they return perhaps a year or two years later to the local authority I take it they are either non-pensionable or they have to refund that portion of their contributions which had previously been restored to them. That would be a financial impossibility in most such cases. I would like to see the registered servant end of the pensions scheme working smoothly, simply, satisfactorily and efficiently, but I can see very great difficulties. The main difficulties are the application of the contributory system of 5 per cent. in the case of workers. I submit to the Minister that the game is not worth the candle, that in the servants' end of this matter the wisest action would be to make them pensionable on the aggregate of their service and to drop the contributory end. If it is to be collected at all the only satisfactory way of collecting from workers is to collect weekly. I submit that the volume of accountancy and the amount of work in connection with the number of pennies to be secured weekly from the workers' contributions is scarcely worth the effort. Then if these contributions have to be returned every time an employee ceases to be an employee it means increased work, increased worrying with regard to the accountancy and very little public gain.
These points are, briefly, what I wanted to bring to the Minister's attention. On the whole, I think, the Bill is a very sound Bill. The aims and objects of the Bill are entirely commendable. The perpetuation of that old blunder of 60 or 80 years ago to pension a person only on continuous service and to deny him a pension for years of service if there was a month's interruption in his service is, to my mind, unfair. I cannot see any reason why the option to go under this Bill or remain under the present Act should be denied to officials who have passed 60 years of age on the date of the passing of the Bill. I do not see the justification for that particular thing. Thirdly, I think the pension of any official or servant who resigned since the salaries were readjusted should be based on the salary at the date of retirement rather than on the average salary for three years back. As I said, these are points that I am referring to the Minister with a certain degree of confidence that they will be seriously and sympathetically looked into. I would prefer that adjustments of this kind should be made from the Ministerial bench rather than forced through the House by amendments from the Opposition benches.