I move:—
That the Defence Forces (Pensions) (Amendment) (No. 2) Scheme, 1957, prepared by the Minister for Defence, with the consent of the Minister for Finance, under Sections 2, 3 and 5 of the Defence Forces (Pensions) Act, 1932, and Section 4 of the Defence Forces (Pensions) (Amendment) Act, 1938, and laid before the House on the 8th day of October, 1957, be confirmed.
This pensions scheme arises from alterations which have been made in the Defence Force Regulations governing retiring ages for certain officers who, having been granted the 1916 Medal or the Service (1917-1921) Medal or both of these medals, were eligible to have applied to them retiring ages which were higher than those normally applicable. I should perhaps explain that at present the normal ages prescribed by Defence Force Regulations for the retirement of officers with the 1916 Medal or the Service (1917-1921) Medal are one year higher than the normal retiring ages for officers without those medals. Furthermore, up to recently an additional extension of two years could have been granted to an officer with either of the medals subject to certain requirements as to health and efficiency and to my being satisfied that it was in the best interests of the Service if he continued to serve beyond the normal age for his retirement. All such extensions were, of course, subject to the overriding maximum of 65 years of age.
These extended age limits were brought into force in July, 1949, in so far as the additional year is concerned and in November, 1954, in so far as the extra two years are concerned.
I do not think I am called upon to go into the reasons which actuated the Governments then in power in granting these benefits to the officers concerned. I am satisfied, however, that the two year extension granted in 1954 did not redound to the general well-being of the Army in that it created a serious sense of injustice in the officers in the junior ranks who had not the medals and whose normal prospects of advancement were suddenly seriously impaired. The position was aggravated, of course, by the fact that the great majority of the officers benefiting were senior officers. In the circumstances, I have taken steps to have the authority for granting the additional two year extension withdrawn in the case of officers retiring on or after 1st November, 1957. The necessary amendment to Defence Force Regulations has been promulgated. Officers who are already serving on a two year extension are not affected by the amendment to the regulations mentioned and they may, if they wish, continue to serve until they reach the extended age limits already approved in their cases.
I recognise that those officers who up to this have acted on the assumption that they would have the benefit of a retiring age limit extended by two years may feel aggrieved by this amendment to the regulations. I am fully satisfied, however, that the general well-being and morale of the Army as a whole demand that this two year extension of age limits should be withdrawn. In order, however, to ensure that the remedying of one grievance will not create another, the Government have authorised me to prepare this pensions scheme which provides that the officers concerned will on retirement be paid supplementary retired pay which, when added to their normal retired pay, will bring their income by way of retired pay and supplementary retired pay up to the amount of the Army pay which would be payable to them if they had continued to serve for a further period of two years in the same ranks as they held at the dates of their retirement. This scheme, therefore, maintains for the officers concerned the financial benefits of a further two years' Army service. The supplementary retired pay will cease when the officer reaches either the extended age limit which would have been applicable to him if the Defence Force Regulations had not been amended or the age of 65 years, whichever is the earlier. Provision to the foregoing effect is contained in Article 5 of the scheme which Article also provides in effect that an officer in the category concerned who is already serving subject to an age limit extended by two years and who retires voluntarily before he reaches such extended age limit, will likewise be eligible for supplementary retired pay from the date of his retirement and up to the date on which he reaches either the extended age limit or the age of 65, whichever is the earlier.
Article 6 makes provision for a case where an officer to whom the scheme applies qualifies for a disablement pension on retirement. In such an event, the supplementary retired pay would be reduced to such amount as would keep the total payable by way of retired pay, supplementary retired pay and disablement pension to the equivalent of his Army pay.
Article 7 applies to supplementary retired pay certain general provisions of the pension schemes which at present apply to normal retired pay. There is nothing new involved and I do not think it necessary to deal in detail with these.
As to the numbers of officers affected by these proposals, at present there are 64 officers serving whose dates of retirement, without the extension of two years, fall after the 1st November, 1957. These officers, therefore, cannot be granted the two year extension of retiring age but they will instead qualify for the grant of supplementary retired pay for two years after retirement.
There are a further 25 officers serving who have already been granted the extension of two years and whose extended dates of retirement will fall after the 1st November, 1957. It will be open to them, as I have mentioned, to continue to serve until they reach the extended retiring age. If, however, they choose to retire before that time, they will be eligible for the grant of supplementary retired pay as from the date of retirement and up to the date on which they would otherwise have retired on age grounds.
With regard to the cost of the supplementary retired pay, it is impossible to give any precise figure as it cannot be stated in advance what the 25 officers already serving on an extension of the age limit will do. They may decide to retire voluntarily immediately after the 1st November next and, of course, they may not. Apart from those, there are five other officers with medals who must retire at the normal age limit in the period between the 1st November next and the 31st March, 1958. However, for the purpose of estimating the cost of supplementary retired pay in respect of the remainder of the present financial year, if it is assumed that the 25 officers serving on extensions will retire voluntarily on the 1st November next, the amount of supplementary retired pay payable to them up to 31st March next plus the amount payable to the five who must retire, would be £6,520. Normal retired pay amounting to £6,630 would be payable concurrently making a total of £13,150. This additional expenditure would be borne on the Vote for Army Pensions but there would be a saving—acting on the same assumption as I have mentioned —on the Vote for Defence of approximately an equal amount for the same period. Of course there will also fall on the Vote for Army Pensions the amounts payable on foot of married officers' gratuities ordinarily payable on retirement and—again on the same assumption—these would amount to approximately £26,000.
