Public Servants (Pensions) (Hansard, 13 April 1984)

§ The Prime Minister

In 1983 the Top Salaries Review Body recommended new rates of salary for the judiciary, senior officers of the armed forces and members of the higher Civil Service, to come into effect on 1 April 1983. On 21 July 1983 I announced that the Government had decided to increase the pay of those concerned in two stages, from 1 August 1983 and from 1 January 1984. The pensions of those concerned are based upon salary on or in the period immediately before the date of retirement and therefore those who retired between 1 April and 31 July receive no benefit to their pensions. It has been represented to the Government that, having regard to past experience and the date on which decisions on pay were announced, those concerned might reasonably have expected their pensions to reflect an increase from 1 April 1983. After careful consideration the Government have decided that, in view of the uncertainty and expectations that may have been created, it would be fair for the pensions of those in question to be calculated as if the increases which came into effect on 1 August 1983 has been implemented from 1 April 1983. This is to be regarded, however, as an exception to the principle that pension benefits of public servants are based on rates of salaries payable. It is the Government's intention that, if in future it is necessary to delay or stage the implementation of Review Body salary recommendations, this principle will be applied, and the pensions of retiring public servants in the group concerned will be calculated on the basis of rate of salary payable at or in the period before the date of retirement and not on notional or deemed rates of salary which were not in payment on that date. I propose in future, when announcing the Government's decisions on the salary recommendations of Review Bodies, to make clear in any cases of doubt how the pensions of those concerned will be affected.