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Dáil Éireann díospóireacht -
Thursday, 15 Dec 1955

Vol. 153 No. 11

Local Government (Superannuation) Bill, 1955—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

There are two main grounds for superannuation, the humanitarian and the practical. Even where a man holds a life tenure of his office increasing years or ill-health force him either to give up work, or continue working beyond his physical capacity to do so. It is right and proper that such a man should be able to avail himself of a pension.

Beyond a certain age few officers are in a position to give a full return for their salaries. For that reason it is normal practice that a retiring age around the age of 65 be fixed for pensionable officers. A retiring age is a most important step towards making an efficient public service and a superannuation scheme makes it practicable to enforce it.

Superannuation schemes for the local service date from 1865, when the Union Officers Superannuation (Ireland) Act was passed. In the following 20 years, six separate Superannuation Acts were passed for various classes of local officers, medical officers, asylum officers and county surveyors, as well as certain miscellaneous officers. Under the Local Government (Ireland) Act, 1919, a single superannuation code for all officers of local authorities was attempted. That Act was superseded by the Local Government Act, 1925. This Act, apart from embracing all classes of officers (apart from mental hospital officers) had a notable feature. Under the previous Superannuation Acts, an officer could reckon service only under the local authority that employed him at the time he came to be pensioned. The Act of 1925 made what was, in its way, a revolutionary departure in that it allowed continuous service under all local authorities to be aggregated. This was crucial in bringing about the circumstances in which a real local government service could be established. It became possible for the gifted officer, without loss, to make a career in the local government service as a whole. That has had its drawbacks from time to time, but the present efficiency of the local government service is due to a great extent to that change.

The Act of 1925 provided for a pension up to two-thirds of remuneration, or a gratuity where an office was abolished and an officer had less than ten years of service, or a marriage gratuity for women officers of one month's pay for each year of service. The pension was the same as had been available under previous Superannuation Acts. It had two features: the Act laid down no scale on which it was to be granted, and it could be granted only with the sanction of the Minister. In practice, one-sixtieths, up to a maximum of forty-sixtieths, of pay was reckoned for each year of pensionable service, with added years in certain circumstances; but the vagueness of the provision left the calculation of some superannuation allowances somewhat arbitrary. The other main feature of the Act of 1925 was that the service of an officer must be continuous to be reckoned. A striking defect of the superannuation scheme was that no provision was made for the dependent of an officer who died prematurely.

These three features were remedied in the Local Government (Superannuation) Act, 1948. A precise scale for granting a pension was set out in that Act and necessity for the sanction of the Minister to each grant of superannuation was dispensed with. Secondly, the requirement that service be continuous was not for the future insisted upon. Thirdly, the Civil Service practice of granting a gratuity to the dependent of an officer should he die in office was adopted. The former idea of a pension based on sixtieths of retiring pay was superseded by a pension based on eightieths. In return for this reduction in the size of the pension the officer was guaranteed either a lump sum of up to one and a half times his retiring pay, should he live to retirement, or a death gratuity to his dependent.

These provisions are retained in the present Bill, except that some further provisions are made for a widow of an officer. These I shall refer to later.

So far as the law relating to the superannuation of officers generally is concerned, the Bill proposes to make four main changes.

First, it proposes that all existing officers of local authorities will henceforth be dealt with under a single comprehensive measure, the present Bill, and not under any of the previous Acts. I should mention here that this does not refer to officers of mental hospital authorities who have always had an entirely separate code of superannuation law. The Act of 1948 gave a free option to existing officers to come within its terms or to stay under their own Act. The present Bill gives such officers a free option between the benefits they could have had under the Act of 1925 and the new benefits, but brings them all under this single comprehensive code of superannuation law.

Secondly, "a pensionable officer" henceforth will be only an officer whose name is entered on the register of pensionable officers kept under the Bill; and 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 unhappy position both for officer and 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.

The third difference from the Act of 1948 is a small one, but of some interest. We have seen that under the Act of 1925 no scale for the calculation of a pension based on years of service was laid down, but that 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 for each year of service up to 40, and a pension so calculated did not require sanction. Where, however, in certain specified circumstances or where the local authority were of opinion that "special reasons existed" they could add years under the Act of 1948 up to a maximum of ten. The Act did not specify these "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 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. However, ample provision is made in the Bill for appeal to the Minister when an officer is aggrieved in relation to his superannuation.

The fourth main difference for officers is that in Section 50 of the Bill. Under that section an officer may give up part of his lump sum or death gratuity in return for the assurance of a pension for his widow should he die in office or should he die on pension. The general idea is that regulations to be made under the section will provide that 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 either would have drawn should he have retired on grounds of ill health instead of dying before the normal pensionable age, or one-third of his pension should he die on pension. It is intended that the contribution by the officer from his lump sum or death gratuity will in general pay for the cost of the benefit. Should that cost change new regulations will have to be made under the section.

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 the Act of 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 some exceptional cases (e.g., officers paid wholly by fee or poundage) seem to have been overlooked. Section 27 of the Bill endeavours to deal with the problem on the general lines of the intentions of the Act of 1948.

Part III of the Bill relates to pensions for servants of local authorities. Apart from a private Act of the Dublin Corporation, and the Dublin, Limerick and Waterford City Management Acts, there was no specific statutory power to give servants of local authorities pensions before the Act of 1948. Part III of the Act of 1948, which will be wholly superseded by Part III of the present Bill, attempted to provide a comprehensive superannuation scheme not only for servants of urban bodies, the bulk of whom have permanent and constant employment, but also for servants of county councils, a high proportion of whom have no proper permanent status and who do not get full-time employment each year.

The normal criteria for accruing pensionable service is that it be whole-time and permanent. If a superannuation scheme insisted that county council road workers be whole-time, that is, be employed for the whole of each year by the county council, very few of them would benefit under the scheme. The Act of 1948 accordingly provided that service of 200 days and more in a year could be regarded as pensionable service. There are about 300 working days in a year, so that a person who devoted at least 200 days of them to the county council could be held to be deriving his main livelihood from the local authority and if he did this year after year, as very many of them do, he could reasonably be regarded as coming within the scope of full-time employee.

Once one departs from the concept of complete whole-timeness in a matter of this kind it is difficult to know where exactly the line should be drawn; but it is clear that it should be drawn in such a way that only those who devote the greater part of their time to the service of the local authority should be included. For example, a man who is a small farmer and devotes only a few months each year to the service of the local authority has no claim on the ratepayers for a pension when he ceases to be able to work for them. If that is accepted, it is clear that the most liberal line it is possible to take, while still meeting the genuine needs of the great mass of road workers, is the requirement that they should devote at least two-thirds of their time to the service of the local authority in respect of any year which they can reckon for pension purposes. Hence the figure of 200 days in the Act of 1948, which is repeated in the present Bill. There is a slight modification in that the Act of 1948 required that the days be working days, whereas the present Bill includes other days such as paid leave, service with Defence Forces, days (up to a year) while on workmen's compensation and whole-time concurrent service with two or more local authorities.

The other big concept for pensionable status is that a person be permanent. This is normally regarded as crucial under any superannuation scheme. Most of the trouble under Part III of the Act of 1948 arose because of this. To distinguish between the really permanent type of servant and the other types it laid down a number of conditions that must be satisfied by a permanent servant. He must be deemed by the local authority to be a permanent servant; he must not have been absent in any of three consecutive years after he is so deemed unless involuntarily and then for not more than 60 days in each year; he must then be under 60 years of age; he must come within the overriding figure of pensionable servants fixed by the council each five years; he must work for at least 200 days in each of the eight consecutive years after becoming, technically, a permanent servant (failure at that stage would put him back to the beginning again); and, if he happened to be a servant at the adoption of the Act of 1948 he had, in addition, to opt for it within six months (failure to opt barred him permanently from pensionable status); or, if he happened then to be over 60 years of age, to have had continuous service.

A high proportion of persons regularly employed by local authorities fall at these hurdles. The present Bill proposes to remove all these hurdles and to replace them by a single, simple objective test, namely, had he 200 days that could be reckoned as service days under the local authority in a local financial year? If he had, his name is put on the register of pensionable servants for the following year, unless he specifically says, during any month of April, that he does not wish to have his name entered for that year. Thus all attempt to distinguish formally between permanent and other servants has been abandoned and is replaced by this simple test. It is believed that in the normal course the really permanent servants and the others will separate themselves. The really permanent ones will stay and the others will go. Hence the local authorities will be incurring no appreciable additional responsibilities. Those who do not wish to keep on with the local authority for their lives can take the contributions they have paid and go.

Apart from the difficulty of getting pensionable status under the Act of 1948, a servant also encountered, under the Act, difficulty in acquiring or retaining his pensionable service. He could not, for example, reckon the following periods:—(1) the three years qualifying period, if that should be after the commencement of the Act in relation to him; (2) any period before the age of 18; (3) any period in his first five years of service as a permanent servant if he lost that status at any time; (4) any period of service forfeited by certain kinds of strike, unless on appeal the period is reinstated by the Minister; (5) possibly all service if he were not working (e.g. because of illness) when he made his actual claim for superannuation; (6) service before he ceased to be a permanent servant even when he subsequently resumes; and (7) all, or not less than half, of his service if the local authority when his pension is being fixed considered he gave unsatisfactory service.

It is proposed to wipe out all these restrictions except the last and to allow him to reckon every period of 200 days or more in a local financial year on which his name appeared on the register, unless he gets his contributions back from the local authority and does not repay them.

The basic scheme under the Act of 1948 was that where a servant worked at least 200 days he could reckon that period of the year for superannuation. For a contribution of 4 per cent. (½d. in 1/-) the benefits were:— (1) a pension of one-sixtieth of pay for each year of pensionable service, or (2) a short service, or death, gratuity, or (3) a marriage gratuity for women. The present Bill does not in effect change that basic scheme. The benefits for servants remain unchanged.

There were a lot of practical difficulties in adjusting the new arrangements to those of the old. The general idea has been so to draft the Bill that so far as existing servants are concerned they will get all the benefits of the present Bill as if it, instead of the Act of 1948, had from the beginning applied to them. So far as those who are now on pension are concerned we have tried, in Section 54 of the Bill, to permit local authorities to deal with them for the future as they can deal with existing servants.

A difficulty under the Act of 1948 was in arriving at a year in which a servant could be held to have worked. For each servant a different year had to be taken. This led to a good deal of trouble in administration and servants had difficulty in verifying their service to their satisfaction. As the normal employment year on the roads is the local financial year that has been taken as a standard period in respect of which service will be reckoned. For that reason, it is important that the Bill be passed before 1st April next; otherwise its main benefits for servants could not come into operation for a further 12 months.

Part III of the Act of 1948 was a very liberal measure, but its practical effects were severely limited because of a number of the difficulties I have outlined. I hope that the improvements I am now putting before the Dáil will enable the principles of the Act of 1948 to be operated in the spirit in which it was conceived and to the satisfaction of local authorities and their employees.

Part III of the present Bill also deals with a certain number of other practical snags that arose in administration. I hope that the experience that has been gained of the practical operation of the Act of 1948 has enabled us to provide a really workable measure.

I have already touched to some extent on Part IV of the Bill. Section 50 enables an officer of a local authority to give up part of his lump sum in return for a pension for his widow. It does not apply to servants partly because they have not lump sums to give up, and partly because they are normally insured for pensions for widows and orphans under the Social Welfare Acts.

Section 51 of the Bill also relates to widows. In this case a person, whether officer or servant, going on pension may give up an amount not exceeding one-third of his pension in return for a pension for his widow or for a single dependent. The widow or the dependent will be granted a pension the actuarial equivalent of the amount yielded up by the pensioner.

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 decided, defect in the existing law. Sometimes, as when a small urban district, with a part-time town clerk, is being deurbanised there is no comparable employment that he can be offered by that local authority or another local authority. Thus if he cannot continue on as town clerk to the new town commissioners he would lose his job without compensation. This section is intended to remedy that defect.

Part V of the Bill contains a number of machinery sections to deal with financial arrangements between various authorities concerned with awarding pensions. There is nothing new about the provisions except in sub-section (7) of Section 57, and in 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 to make for some economy of administration. Obviously, payments of this kind taken as a whole cancel each other out and are, also as a whole, largely a waste of time; 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, I think, for little comment. They are almost all, subject to relatively minor modifications, re-enactments of the provisions of the Act of 1948. Section 69, however, is new. This relates to a peculiar situation that arose in Cork City. The servants of all the county boroughs, except Cork, had statutory superannuation schemes and in Cork City a sort of superannuation scheme had grown up in practice. The general idea under the Act of 1948 was to exempt from the contribution to be paid under that Act any person who had a superannuation scheme free of contributions before that Act came into operation. It was provided in the transitional provision (Section 63 of the Act of 1948) that where a person's name was entered in a register of permanent employees when Part III of the Act of 1948 was adopted he would be exempt from contributions. It so happened that no such register was maintained in Cork and accordingly the servants of the Cork Corporation became liable for contributions under the Act. The representatives of the workers concerned took the issue to court and it was eventually decided against them by the Supreme Court. It was not 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 arises of returning them to them. The total amount involved is very considerable and Section 69 proposes to deal with the problem by arranging that servants who have retired before the passing of the Bill will have any contributions that they paid returned to them at once, and servants still in employment following the passing of the Bill will have the contributions returned to them when they come to draw a benefit under the Bill. In this way the men concerned will get their money back, but the incidence of the repayment will be staggered so that its effect on the ratepayers will be mitigated.

So much for the provisions of the Bill. I think I should say a few words about a provision that is not in the Bill. I refer to the question of existing pensioners of local authorities. I am well aware of the representations that have been made for giving these pensioners compensation for changes in the value of money. I know that in the Act of 1948 (Section 79) some provision of this kind was made for certain pensioners. However, this is not a question that can be considered in isolation. Just two-thirds of the Ministers in the Government have direct concern with the superannuation of staffs. Quite obviously if any change is to be made that will have to be extended to all of these pensioners generally the change itself must be general. I have on a number of occasions told Deputies who have raised the matter by way of parliamentary question that I was having the whole question examined. I did have the matter examined very carefully indeed with a view to seeing whether it was practicable for me to deal with this question in isolation. I was conscious of the fact that the Act of 1948 did deal with it to some extent; but the position is that that Act only applied, to some pensioners, a concession that had already been generally approved of for some civil service pensioners in the Superannuation Act, 1947. The Minister for Finance has already said that he will consider the whole question— the Exchequer is, of course, mainly involved—in connection with next year's Budget. It is not practicable for me, therefore, to include any proposal in this Bill in advance of that consideration. In 1950 when, under the Pensions (Increase) Act of that year pension increases were given generally a comprehensive Bill, dealing with all kinds of pensioners, was introduced. In the circumstances it would be quite impracticable for me to deal with local pensioners in isolation in this particular Bill.

I have on previous occasions told the Dáil that I personally believed that Bills should avoid the device of legislation by reference wherever that is possible. This is what we have tried to do in the present Bill. So far as is possible with a single Bill, it stands on its own feet, and can be read with only the minimum reference to other legislation. However, it is not possible to produce a Bill in a complete vacuum and although strenuous efforts have been made to produce a single comprehensive Bill dealing with the superannuation of officers and servants of local authorities a certain minimum degree of reference to other legislation has been absolutely unavoidable.

The fact that the Bill is self-contained to a very great extent does not, however, mean that it is necessarily clear and simple in all respects. Superannuation is a complex question, and it is not possible to deal with such a subject as simply as would be possible were the problems more straightforward. Moreover, the separate parts of the Bill are composed of sections that are very largely interdependent and must be read together, and there is a large degree of interdependence between a number of the parts themselves. Thus the Bill, notwithstanding the efforts that have been made to keep it lucid, is by no means a simple measure. I have tried, in the explanatory memorandum I have had circulated with the Bill, to have most of the detailed points explained as clearly as possible, but if any obscurity still exists no doubt it can be resolved in the debate.

Would the Minister move the adjournment of the debate?

It was agreed between the Whips that the Minister would make his introductory statement only and that the debate would then be adjourned to the forthcoming session when the entire Second Reading of the debate would follow.

I do not think that is the agreement. I was to make my introductory speech and the agreement was that Deputy Jack Lynch would follow and that I would be given the Second Reading. I was further informed that it was agreed by the Whips that I would be given the Bill before the 1st April. In other words, I understood I was to be given the Second Reading to-night.

Give it the Second Reading now. It is a Committee Bill anyway.

It is really a Committee Bill.

I know it is but members of this side of the House may wish to speak on it. Particularly the Minister's predecessor might wish to speak and, on the understanding which I have mentioned, he has now left the House.

As I have said, I understood from the Whips that I would be given the Second Reading to-night. Of course I may be completely wrong.

I understood you were to be given the Second Reading to-night.

I thought there was a unanimous recommendation that the Second Reading would be given to-night. I thought there was agreement on that.

I do not see how Deputy Byrne can suggest what my Whip agreed to. I came in here under the clear impression that the Minister would move the adjournment of the debate having made his introductory statement. Even if I wanted to speak on the Second Reading, I am not equipped to do so on such short notice.

This is all completely new to me. I clearly understood that there was to be a Second Reading of the Bill before the recess so that we could have gone through all stages by the 1st April. I understood that there was an undertaking given to that effect. Perhaps we might have an opportunity of clearing the matter up. Perhaps I would be given an opportunity of consulting with the Whip for a moment.

The Minister will be given that opportunity.

Having consulted with the Whip, I am afraid that I was wrong. The arrangement made was that having made my introductory speech Deputy Jack Lynch would say a few words and then that we would move the Adjournment. It was also understood that we would get the Bill through by April 1st.

I think I can certainly bear out the fact that we hope this Bill will become law by the 1st April in order to ensure that the Minister's intentions, as declared in his statement, will be carried out. I feel sure he will get the utmost co-operation from this side of the House. I now move the adjournment of the debate.

Debate adjourned.
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