The purpose of this Bill is to amend the Superannuation Acts so as to enable a retiring civil servant to surrender, subject to certain conditions, part of his pension in order to secure a pension for his wife or for one dependent nominated by him. A woman civil servant may provide a pension for a dependent. I undertook to sponsor this measure in answer to requests made over a number of years by staff representative bodies, and I am glad that the opportunity now arises of obtaining the necessary statutory authority for this new feature of the superannuation code.
The pension payable under this Bill for a wife or a dependent will be the actuarial equivalent of the amount of his own pension which he surrenders —so that, in the long run, the total of pensions surrendered should balance the total of pensions paid to wives or dependents. In essence, the Bill allows the civil servant an option to distribute, within limits, the pension awarded to him or to her under the Superannuation Acts. Any additional costs of administration, if any, will be borne on public funds.
The superannuation code is a somewhat difficult one and, for that reason, I might therefore, perhaps, facilitate the House by giving some details of the effect of the sections.
Section 1 of the Bill contains a number of definitions, the most important of which is that of "dependent"—the person in favour of whom a civil servant may make a surrender of pension. For the purpose of the Bill a dependent means one of the relatives specified in the section, including a legally adopted child, who is wholly or partly dependent financially on the civil servant. The wife of a civil servant does not appear here because she is provided for specifically throughout the Bill. I do not wish to widen unduly the circle of persons in whose favour a civil servant may allocate part of his pension, which is, after all, intended to provide for his years of retirement. I was also anxious to avoid a searching investigation of dependency, which would be necessary if persons other than relatives were admitted to benefit. The provision which I have made is therefore, I think, reasonable and one which will do substantial justice in all the circumstances.
Civil servants retiring after the appointed day can avail themselves of the provisions of the Bill. The appointed day will be fixed by Order under Section 2 and it will not be later than three months after the date on which the Bill becomes law. It is necessary to provide a short interval to enable regulations to be made under the Bill and the necessary actuarial tables to be brought into final form and effect.
Section 3 enables a civil servant to surrender part of his or her pension in return for the grant of a pension to a wife or to one specified dependent. The section also empowers the making of regulations to provide for administrative procedures. These regulations will provide that, to make a valid surrender of pension, the retiring civil servant must be of sound health. This requirement is necessary because the actuarial tables showing the pension to be granted to a wife or dependent in return for a surrender are framed on the basis that the person making the surrender is a "good life", with an expectation of drawing his own pension for a reasonable period. A statutory declaration will be required in proof of financial dependency.
Section 4 provides that the pension to a wife or dependent shall be the actuarial equivalent of the amount of pension surrendered. As I indicated a moment ago, actuarial tables are being compiled and will be published in final form in the interim period of three months before the appointed day.
Sections 5 and 6 provide an option for the payment of a wife's pension as from the date of her husband's death, or, alternatively, from the date of her husband's retirement at a rate which will be doubled after his death. The rates of pension will vary with the option.
Section 7 enables a life pension under the Act in favour of a young person to be converted into an annuity for a limited period of years. Where a retiring civil servant has made a surrender in favour of a comparatively young person, the equivalent dependent's pension, which has to be spread over the long life expectancy of the dependent, will necessarily be small and may be of no practical benefit to the dependent at a time when, for instance, heavy educational expenditure is being incurred. To meet such a case it is provided that, on the application of the parent or guardian, the Minister for Finance will have discretion to convert a life pension payable to a minor into an annuity terminable after a minimum period of five years or on the earlier death of the beneficiary. The power is discretionary because it might not always be in the minor's best interests to allow the conversion to be made. The minor must also be in good health as the annuity is calculated on the assumption that the beneficiary is a normally good insurance risk.
Section 9 imposes certain limits on the amount of pension which a retiring civil servant may surrender. The idea here is that he may not, on the one hand, divest himself of an unduly large proportion of his pension or, on the other, surrender so little that the beneficiary's would be trifling in amount.
The remaining sections of the Bill are consequential or administrative and need not concern us very deeply at this stage.
Facilities for the allocation of pension in favour of a wife or dependent have been long requested and I hope, therefore, that the House will agree to give approval to this measure bearing in mind, as I indicated earlier, that it is not a question of any increase in cost but rather one of reallocation.