I move:
That the Defence Forces (Pensions) (Amendment) (No. 3) Scheme, 1970, 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 11th day of December, 1970, be confirmed.
This scheme amends the Defence Forces (Pensions) Schemes, 1937 to 1970, so as to provide improved retirement benefits for certain officers, non-commissioned officers and privates of the permanent Defence Force. It also amends the schemes in other respects.
The Defence Forces (Pensions) Schemes do not follow a conventional pay-related superannuation pattern. This is because of the particular nature and circumstances of military service, which involve such things as retirement at earlier ages than apply to the public service generally and facilitating officers to retire on pension after relatively short periods of service. A pay-related pensions scheme would have administrative advantages and it may come about later, but there are difficulties for the reason I have mentioned. In the course of an examination of the matter which has been taking place between the civil and military sides of my Department, certain points emerged in regard to which the improvement of the provisions of the schemes seemed desirable. These are now incorporated in the present scheme, and are generally effective as from the 1st June, 1969, the effective date of the pay increases which arose out of the Army pay review.
The officers who hold the highest posts of responsibility in the Defence Forces—the Chief of Staff, the Adjutant-General, the Quartermaster-General, the Assistant Chief of Staff and the Officers Commanding the Commands—are paid at the regimental rates appropriate to their ranks and in addition receive responsibility allowances. Hitherto these responsibility allowances have not been reflected in their retired pay. There is already in the schemes a precedent for the inclusion of the allowances for retired pay purposes, in that officers in receipt of additional pay in respect of professional qualifications receive a percentage increase in the normal rate of retired pay—20 per cent in the case of officers of the Army Medical Corps and 10 per cent in other instances. It is proposed to apply this percentage increase to the officers I have mentioned—a 20 per cent increase in the case of officers retiring while holding the appointment of Chief of Staff, Adjutant-General. Quartermaster-General or Assistant Chief of Staff and a 10 per cent increase for Officers Commanding Commands. The necessary provisions are contained in article 5 which also makes provision for some special types of circumstances that may arise.
At present the maximum gratuity which an officer may receive on retirement in addition to retired pay does not reach the maximum of one and a half years pay which applies in the public service generally. On the other hand, officers may retire on maximum retired pay and the present maximum gratuity at ages at which public servants generally would be eligible for neither pensions nor gratuity. It is now proposed, however, that where an officer makes the Army his career and serves to the end. so to speak, he will be eligible, in addition to retired pay. for a maximum gratuity of one and a half years pay. An officer will commence to qualify for an increase in the present gratuity once he is within five years of the retiring age appropriate to him and will be eligible for the full gratuity if he serves up to within two years of retiring age. This is the effect of article 6.
With regard to soldiers, the amending scheme of 1947 provided a pension increment of Is a week in the basic 21-year pension for each year of service over 21 years and not exceeding 31. This increment is now being increased by the average increase in the pay of the various non-commissioned ranks since 1947. The table to article 9 shows the amounts of the increases, which vary with the date of discharge. For soldiers discharged on or after the 1st June, 1969, the increase will apply as from the date of discharge. The effective date of increase for soldiers who were discharged before the 1st June, 1969, and who were not affected by the Army pay review will be the 1st April, 1970. I should emphasise that the amounts shown in the table are additional. For instance, a soldier discharged on or after the 1st January, 1971, with 31 years service will become eligible for a total increment of £3 5s a week in his basic 21-year pension instead of the present 10s—5s 6d multiplied by ten, plus the present 10s. When a man becomes eligible for an old age pension or retirement pension under the Social Welfare Acts, he will revert to the lower rate of increment.
It has long been felt that soldiers should be eligible for gratuities in addition to pensions, and article 10 now provides that a married long-service soldier discharged on pension on or after the 1st June, 1969, will receive a gratuity of one week's ordinary pay for each year of service up to a maximum of 31.
A few examples of what these pensions will mean may be of interest to Deputies. A married private leaving the Army after 21 years service, when he might be still only 40 years of age, will be eligible for a pension of £7 18s. 3d a week and gratuity of £467 5s. A married private with 31 years service will be eligible for a pension of £11 3s 3d a week and a gratuity of £689 15s. A married sergeant with 21 years service will be eligible for a pension of £9 Is a week and a gratuity of £554 8s, and a married sergeant with 31 years service will be eligible for a pension of £12 6s a week and a gratuity of £818 8s.
Under the existing schemes, a condition for the payment of an additional married pension to a soldier is that he be in receipt of marriage allowance at the date of discharge. Marriage allowance now being incorporated in the married rate of pay, the married pension will, from the 1st June, 1969, be payable if a soldier was in receipt of the married rate of pay at discharge. It will also be payable to a widower soldier on discharge, as a soldier now retains the married rate of pay if his wife dies. Consequently, the married pension will, in the case of a solider discharged on or after the 1st June, 1969, also be continued if he becomes a widower after leaving the Army.
There are a few other unconnected provisions of the scheme to which I may refer before concluding. Reserve officers called out on full-time service in August, 1969, had their retired pay suspended under article 17 of the principal scheme for the duration of such service. Article 7 of the present scheme revokes article 17 and will thus enable the officers in question to receive their retired pay for the relevant period.
A contributory widows' and orphans' pension scheme operative as from the 23rd July, 1968, is being introduced for the widows and orphans of deceased officers on the same lines as the contributory scheme for the widows and orphans of civil servants and local authority officers. Article 8 provides that the existing non-contributory pensions payable under the scheme to the widows and children of deceased officers will not be payable in cases where the contributory pensions are payable.
Article 12 provides for the reckoning, for pension purposes, of service in the Army Nursing Service before retirement on marriage of a widow who is reappointed to the Service. Any marriage gratuity paid will be deducted from her pay or from her pension on final retirement. The article also provides for the aggregation of separate periods of service in the case of a particular member who resigned for domestic reasons but was subsequently reappointed to the Service.
I feel that Deputies will approve wholeheartedly of the provisions of this scheme, some of which represent a considerable breakthrough. They represent, for the period from the 1st June, 1969, to 31st March, 1971, a cost of £350,000 and an estimated annual cost thereafter, based on current rates, of £230,000.