This Bill proposes an improved code of superannuation benefits for the officers and servants of local authorities. It is a measure which, to a large extent, brings together for consolidation the series of Acts which begins with the Union Officers Superannuation (Ireland) Act of 1865 and ends with the Local Government (Superannuation) Act, 1948. The Bill was already foreshadowed when the Act of 1948 was being enacted as it was appreciated at the time that the novel scheme provided for in that Act for the superannuation of local authority servants would in all probability give rise to the need for amending legislation as experience was gained of the operation of the scheme and suggestions for improvement presented themselves. Thus, while the present Bill is a comprehensive measure dealing with both officers and servants, it differs from the 1948 Act principally in Part III, the servants' part, which represents an attempt to simplify and improve, so far as practicable, the unique provisions of Part III of the 1948 Act.
I shall deal first with the provisions relating to officers which are mostly concentrated in Part II. The Bill aims at providing for the superannuation of all officers of local authorities who are entitled to superannuation rights whether they are at present under the Act of 1948, the Local Government Act, 1925, or the Local Government (Ireland) Act, 1919. It does not apply to officers of mental hospital authorities who have always had a superannuation code separate from the rest of the local government service. The Act of 1948 provided that existing officers at the 1st April, 1948, could, within a period of six months, opt for the benefits of that Act in lieu of the benefits to which they were then entitled under other Acts. Some officers who elected to retain their existing benefits regret their choice, because the older schemes did not provide for the death gratuity which under the 1948 Act may be granted to the legal personal representative of an officer who dies while in the service. The present Bill offers to those who were existing pensionable officers at the 1st April, 1948, a second chance to choose whichever set of benefits suits them best but the alternative sets of benefits will be provided for in the Bill and none of them will, for the future, derive from earlier Acts.
Exemption from superannuation contributions is a question which has been raised with me in its various aspects by very many interested parties since this Bill was introduced in the Dáil. Under the Bill, as under the Act of 1948, officers are required to contribute 5 per cent. of their remuneration towards their superannuation but provision is made for exemption from contributions for certain classes of officers. Exemption from contributions is based on the principle that officers who enjoyed superannuation rights, free of contributions, under earlier enactments such as the Local Government Act, 1925, or the Local Government (Ireland) Act, 1919, are specially exempted from contributions under this Bill as they were under the Act of 1948. Officers appointed in a pensionable capacity before the 1st April, 1948, had the benefit of a free pension scheme and have had this right preserved to them under the 1948 Act and under the present Bill. Many claims for exemption from contributions have been made on behalf of officers whose present period of pensionable service began on or after the 1st April, 1948, but it has not been found possible to admit any of these claims.
It is proposed in the Bill that the expression "pensionable officer" will henceforth apply only to an officer whose name is entered on the register of pensionable officers kept under the Bill; and that his name will not be entered on that register until he is clearly a permanent officer. Under the Act of 1925 the question of whether an officer was pensionable or not was usually determined only when he came to retire from his office. This was an unsatisfactory position both for the officer and the local authority. The Act of 1948 dealt with this problem by providing that officers who came under its terms should be entered on a register of established officers, but it did not exclude the possibility of there being pensionable officers who were not entered under the register. When staffs are being recruited for the future their status must be properly declared. If they are permanent whole-time officers, or permanent medical officers, their names will be entered on the register of pensionable officers. That entry will be their title to a pension. It is proposed in the Bill that all existing officers entitled to pension will be entered on this new register of pensionable officers.
Under the Act of 1925, no scale for the calculation of a pension based on years of service was laid down, but every pension had to be sanctioned by the Minister. The Act of 1948 remedied that for the normal pension where no question of added years arose. There was a fixed scale under the Act, of one-eightieth of remuneration for each year of service up to 40, and a pension so calculated did not require sanction. In certain specified circumstances or where the local authority were of opinion that "special reasons existed", years could be added under the Act of 1948 up to a maximum of ten. The Act did not specify those "special reasons", but practice has for a good while determined what they are and what scale of years should be taken in calculating them. In Section 13 of the present Bill all the headings under which years might be added are specified. The section proposes to give the Minister power to make regulations, which will be laid before both Houses of the Oireachtas, governing the precise additions that may be made in each circumstance. In this way the practice governing added years will both for local authorities and for local officials, be made explicit and each officer will know, when his pension is being calculated, what he might reasonably expect to get in the circumstances of his case. This permits the sanction of the Minister to be dispensed with entirely in the awarding of superannuation benefits to officers. Ample provision is, however, made in the Bill for appeal to the Minister when an officer is aggrieved in relation to his superannuation.
It should be noted that Section 13 does not involve any diminution of the rights of officers in the matter of added years but merely sets out in statutory form what has for long been accepted practice. It is an effort to set out clearly the circumstances in which an officer may expect to be allowed added years by his local authority and to eliminate any suggestion of secrecy or unequal treatment as between one officer and another. I may say that it is intended that the regulations to be made under the section will be based on existing practice in relation to "added years".
In Part IV of the Bill, Section 50, there is provision whereby an officer may agree to give up part of his lump sum or death gratuity in consideration of a pension for his widow. This rearrangement of benefits is to be self-financing and to involve no extra burden on local authorities. It is proposed that regulations to be made under the section will provide that in the normal case two-thirds of the lump sum or death gratuity will be given up in return for a pension of one-third of what the officer's pension would have been had he retired on grounds of ill-health instead of dying where death occurs while he is in office or one-third of his pension where death occurs while he is on pension.
A further improvement in the Bill— it applies to both officers and servants —is the provision to link up various branches of the public service for pension purposes. The Act of 1948 linked up service in the Civil Service, harbour authorities and teaching service with service under local authorities, but the present Bill goes a good deal further in that respect. It is thus a considerable step towards the achieving of a single public service for all public authorities just as a single local service for local authorities was achieved after 1925.
A matter that gave a good deal of trouble under the Act of 1948 was how to calculate the remuneration on which a benefit under the Act could be based. The Act of 1925 provided that it should be the average of pay during the three years preceding cesser of office. The Act of 1948 said that it should normally be the pay on cesser of office, but in any exceptional case the average of the three preceding years. The Act did not give precise effect to its intentions, and gave rise to considerable difficulty and diverse interpretations in some exceptional cases, for example, officers paid wholly by fee or poundage. Section 27 of the Bill endeavours to resolve these difficulties on the general lines of the intentions of the Act of 1948.
Part III of the Bill contains the pension scheme for servants of local authorities and is intended to supersede the scheme embodied in Part III of the Local Government (Superannuation) Act, 1948. Prior to the 1948 Act there was no statutory pension scheme for servants, except in respect of the county borough corporations of Dublin, Limerick and Waterford and the Borough of Dún Laoghaire where provision existed for the grant of pensions to servants whose service was, like that of pensionable officers, permanent and fully continuous. Such provision would obviously not benefit the majority of road workers and other servants of local authorities whose service is in many cases frequently intermittent. Accordingly, if pensions and other superannuation benefits were to be provided for road workers and other servants of local authorities whose service was broken a radical departure from the type of scheme applied to officers was required. Part III of the 1948 Act represented an attempt to devise a superannuation scheme which would suit the employment conditions existing amongst local authority servants.
Briefly, the scheme was that permanent servants who were not absent for more than 60 days in any one of three successive years could be enrolled in a register of "established servants". They could then reckon their future service for superannuation purposes in each year in which they worked at least 200 days for the local authority. The scheme was hedged around with many restrictions, limitations and prohibitions, which had in practice the effect of preventing many servants from qualifying under it or, if they did qualify, of reducing the length of service which could be reckoned towards the benefits payable. It has been the objective in drawing up Part III of this Bill to eliminate as many as possible of these restrictions, limitations and prohibitions, to make the scheme as simple and straightforward as possible and to ensure that it will be effective in providing benefits for those whom it was designed to benefit.
Under Part III of the 1948 Act, a servant had to comply with the following conditions before his name could be entered in the register of servants who were eligible for superannuation benefits:—
1. He had to be deemed by the local authority to be a permanent servant.
2. He had to complete three successive years' service with his local authority with not more than 60 days' absence in any year—any absences within the limit of 60 days had to be involuntary.
3. He had to come within the maximum figure of permanent servants fixed by the local authority.
4. He had to be under the age of 60 years.
The present Bill proposes to drop all these restrictive conditions and to substitute one straightforward test of fact for enrolment in the register of pensionable servants. If a servant has 200 "service days" in a local financial year his name will, under the Bill, be entered in the register as from the following 1st April unless he applies during the month of April to have his name removed from the register. A service day is, briefly, a day on which the servant has worked, or for which he has been paid; a day on workmen's compensation, subject to a limit of a year, or a day on which he has been doing Reserve Defence Force training.
Under the Act of 1948, a servant whose name was on the pension register ran the risk of having it removed if in any of the first five years in which his name was enrolled he worked for the local authority for less than 200 days. This provision has been deleted in the present Bill.
Further improvements are made in the Bill as regards the periods which a servant can reckon for the purpose of computing the various benefits. Under the 1948 Act, working days which did not reach a total of at least 200 days in any year were not reckoned. In this Bill, the restriction to "working days" is modified and the minimum annual requirement is to be 200 "service days" instead of 200 working days. This is a much more liberal requirement since, as I have mentioned above, the expression "service day" covers many days on which the servant does not actually work.
Under the 1948 Act, a servant could not reckon the following periods towards superannuation benefit:
(a) The three-year period which a servant, who was not an existing permanent servant at the commencement of the Act in relation to him, spent in qualifying for enrolment in the register.
(b) All his previous service, if, before he had completed five years of pensionable local service, he worked for less than 200 days in any year.
(c) Any period before he reached the age of 18.
(d) All service prior to certain kinds of strike unless reinstated by the Minister on appeal by the servant.
(e) Possibly all service if he were not working (e.g. because of illness) when he made his actual claim for superannuation.
(f) Service before ceasing to be a permanent servant in a case where the servant subsequently resumes.
All these limitations on the reckoning of service are being removed in this Bill and the only vestige of them which may be said to survive is the single year with 200 service days which a servant in future must serve to qualify for entry on the register of pensionable servants. The service days in that year are not reckonable in the present Bill, but otherwise all the limitations mentioned are being removed.
To return to what has been called the "200 day rule"; this is the minimum requirement in the direction of permanency and continuity in this unique superannuation scheme. There is no other scheme known to me where the employer provides pensions and other benefits for employees who are not in regular employment. The universal rule in other pension schemes both for office staffs and manual workers is that the employers accept no liability to superannuate any of their workers who is not in their permanent, regular employment. The 1948 Act and this Bill break new ground in providing full-scale benefits for employees whose service is broken, who may in fact at times be working for other employers or for themselves. The principle of requiring full and regular service of at least eight months out of the 12 for the local authority is an indispensable minimum requirement. No matter where the line is drawn there will always be unlucky individuals who find themselves just on the wrong side of the line. To lower that requirement any further would impose on local authorities an unwarranted liability in respect of persons who could not be regarded as being their regular employees in any realistic sense.
The benefits proposed to be payable under Part III of the Bill are the same as those in Part III of the 1948 Act and the contribution rate is also unchanged. The contribution rate is 4? per cent. of remuneration (½d. in the shilling) and the benefits are:— (a) a pension of one-sixtieth of pay for each year of pensionable service, or (b) a short service, or death gratuity, or (c) a marriage gratuity for women.
In endeavouring to graft the proposed new scheme for servants on to the 1948 Act scheme, the general idea has been to apply the improvements so far as possible to the past service of existing servants. So far as persons who were formerly servants of local authorities where Part III of the 1948 Act had been adopted are concerned, there is provision in Section 54 enabling local authorities, in their discretion, to grant allowances in certain cases where the persons concerned make application for the benefits of the section.
It is hoped that Part III of the Bill will overcome the difficulties which arose in connection with the administration of Part III of the 1948 Act and which only experience could have revealed, and that the superannuation scheme for local authority servants will in the future work smoothly and simply and to the satisfaction of the local authorities and their employees.
We now come to Part IV of the Bill, and I have already referred to the new provision in Section 50 by which an officer, by surrendering portion of his lump sum or death gratuity, can provide for a pension for his widow. In Section 51 there is a further new provision enabling an officer or servant on retirement to surrender any portion of his pension, not exceeding one-third, in consideration of a pension for his widow or one specified dependant, or alternatively a pension for his wife while he lives which will be doubled on his death. The amount of the pension to be paid to the wife, widow or specified dependant, as the case may be, is intended to be actuarially equivalent to the amount surrendered by the officer or servant, so that the section really provides for a rearrangement of existing benefits which may appeal to some officers and servants as a handy device for making a certain definite provision for a widow or other dependant in the event of death.
The other new provision, in Part IV, apart from those mentioned, is that in Section 53 which permits a part-time officer, who is not a pensionable officer, to be granted a gratuity if his office is abolished or if for some reason, apart from his own misconduct, he has to be asked to resign from it. This remedies a small, but definite, defect in the existing law inasmuch as it provides for the grant of compensation in the rare case where a part-time officer who has a permanent tenure of his office but who has no pension rights must be removed from his office through no fault of his by the local authority.
Part V of the Bill contains a number of sections to deal with financial arrangements between various authorities concerned with awarding pensions. There is nothing new about the provisions except in subsection (7) of Section 57, and Section 58. These provide that two or more of the various authorities concerned can enter into an agreement to abandon claims on one another in relation to pensions and contributions. This will enable some rather elaborate accounting procedures to be dropped, and make for some economy of administration. Obviously, payments of this kind taken as a whole cancel each other out but from the standpoint of a single local authority there may be some difficulties. The entering into an agreement is, accordingly, left on a voluntary basis.
The provisions of Part VI of the Bill call for little comment. They are almost all, subject to relatively minor modifications, re-enactments of provisions of the Act of 1948. Section 69, however, contains special provisions to deal with a certain situation which arose in Cork City. It was a general principle in the 1948 Act, as it is in this Bill, that exemption from superannuation contributions should be allowed to servants (as well as officers) who were already in the enjoyment of rights under an existing superannuation scheme free of contributions. In practice it was intended that the permanent servants of the four county boroughs, the Borough of Dun Laoghaire and certain servants of the Dublin City Vocational Education Committee who were the only servants who had existing "free" pension rights should be exempt from contributions. To achieve this in the four county boroughs, it was provided in Section 63 of the 1948 Act that where a person's name was entered in a register of permanent employees when Part III of the Act was adopted he would be exempt from contributions. No register of permanent servants was maintained in Cork, and accordingly the servants of Cork Corporation became liable for contributions. The issue was taken to the courts, and it was eventually decided against the local authority servants by the Supreme Court.
It had not, however, been the intention under the Act that these servants should pay contributions and they are accordingly exempted from this liability under paragraph (c) of sub-section (5) of Section 48 of the Bill. These contributions have, however, been collected since 1948 from these servants and the problem of a refund of them arises. The total amount involved is considerable, and in the Bill as introduced I proposed in Section 69 to deal with the problem by arranging that servants who had retired before the passing of the Bill would have any contributions that they had paid returned to them at once and servants still in employment following the passing of the Bill would have the contributions returned when they came to draw a benefit under the Bill. In this way the incidence of the repayment would have been spread over a number of years.
The section was, however, unanimously amended on the Committee Stage in the Dáil so as to provide that the return of contributions would be made within a period to be fixed by the corporation by resolution. Accordingly the question of the return of contributions will now be a matter for decision by the members of the Cork City Council.
I have tried to make this Bill as comprehensive as possible so that it would provide a complete superannuation code for officers and servants of all local authorities other than mental hospital authorities and so that it could be read and administered without reference to earlier enactments. A certain amount of reference to previous legislation has, nevertheless, been found to be unavoidable.
An explanatory memorandum was circulated with the Bill on its original introduction in the Dáil explaining the detailed points as clearly as possible. This memorandum still holds good except in relation to Section 69, which deals with the return of contributions to certain servants of Cork Corporation, and which was amended in the manner I have mentioned above.
I would like, if I may be permitted, to ask the House for a speedy passage for this Bill, so that it may be enacted before the 31st March. It is my intention, if the Bill becomes law this month, to fix, in accordance with Section 4, the 1st April next as the day on which Part II of the Bill, which relates to officers, will come into operation. This will have the effect of giving to officers who are at present under the 1925 Act for pension purposes the opportunity of availing of an alternative set of benefits which includes a death gratuity to the legal personal representative in the case of an officer who dies in office. Nothing is payable under the 1925 Act to officers who die in office.
So far as servants are concerned the enactment of the Bill before the 1st April is even more important than it is for officers. Part III of the Bill (the servants' part) will come into operation on the 1st April next after the passing of the Act in respect of every local authority which has adopted Part III of the 1948 Act. Thus the operation of the pension scheme for servants would be put back to 1st April, 1957, unless the Bill is passed this month. This would be unfortunate, as it is virtually certain that considerable numbers of road workers and other servants will be eligible to have their names put on the register of pensionable servants as soon as Part III of the Bill comes into operation. As soon as their names are on the register they have the assurance of certain benefits for themselves or their dependants in the event of permanent incapacity or death which, of course, they cannot get until the commencement of Part III of the Bill. In the interests of these people, therefore, I would respectfully ask the co-operation of the Seanad for the passage of this Bill in time to have it enacted before the 31st of this month.
