PENSION CLAIM

New Zealand Herald, Volume LXXV, Issue 23220, 14 December 1938, Page 22

PENSION CLAIM

COMPUTATION BASIS WITH OR WITHOUT CUTS RAILWAY SUPERANNUATION COURT ASKED TO DECIDE [BY TELEGRAPH —PRESS ASSOCIATION] WELLINGTON, Tuesday Whether the depression euts in salary affected the computation of superannuation for a railway servant was argued in the Supreme Court before the 1 Chief Justice, Sir Michael Myers. It was submitted for plaintiff that he was entitled to have his superannuation based on the salary listed in the classification, but the Superannuation Board contended that it should be based on the average over three years of salary actually received. The case was one in which George Potticarv Holland, retired railway servant, of Petone, proceeded against the .Railways Superannuation Board. Mr. F. C. Spratt appeared for'plaintiff and the Solicitor-General, Mr. H. H. Cornish, K.C., with him Mr. F. W. Aitkin, represented defendant. Plaintiff said he retired from the railways service on July 3, 1937, having served 40 years. On March 17, 1932, lie was promoted to foreman, grade 5, snbgrade 1, the salary payable according to the classification list then in force being £355 a year. Reductions and Restoration At the time of his promotion the salary was subject to a 10 per cent reduction, under section 6 of the Finance Act, 1931, and was accordingly £319 10s. Qn April 1, 1932, it was reduced by a further 10 per cent, to £287 lis, under section 7 qf the National Expenditure Adjustment Act. On March 17, 1933, plaintiff was promoted another sub-grade. The salary payable was then £3BO, but under the statutory provisions had been reduced to £307 16s. All tho salaries reduced were successively restored by the Finance Acts of 1934, 1935 and 1936. Tho salary payable to plaintiff from April 1, 1934, was £323 4s; from August .1,. 1935, £347 9s; and from July 1» 1936; £3BO. . • _ . Plaintiff claimed to be entitled to superannuation allowance as from July 3, 1937, at the rate of £253 a year, the amount based on. the rate of salary he was entitled to at the time of his retirement. The board had paid him £232 2s a year, and denied his right to receive an allowance at any higher rate. A declaration was sought that plaintiff was entitled to £253 7s a year, and judgment for £2O 5s a year, payable monthly, from July, 1937, that the board had withheld. Counsel's Contention Mr. Spratt said that neither side proposed to call evidence. The whole case depended upon the true contraction of the Statute. If a man was in receipt of, say, £360 a year at the time of his retirement, and had served a full 40 years, he was entitled to twothirds of that sum as superannuation. That was the general principle. However, added counsel, there was a proviso that, if a man had served in a grade lower than that he held at the time of his retirement within three years prior to his retirement, his pay was averaged- for the three years. During the three years immediately prior to his retirement plaintiff, along with every member of the railway service had liad restored the cuts made during the depression. Plaintiff, said ♦ counsel, maintained that he had served in one grade during the last three years of his service, but the board contended that his increments in salary were equivalent v to promotion from one grade to another. The Solicitor-General: We don't put it quite that way ' Practice in the Past His Honor: Weren't there cases similar to this before the cuts ? Mr. Aitken replied that from 1931 to the present the averaging principle had been adopted. • His Honor: Prior to that? > Mr. Spratt: Prior to that what we contend for operated. This has been a bone of contention between the various organisations of men since 1931. Mr. Aitken: Prior to 1931, if a member or officer received an increase in pay and changed his title, he was averi aged j but if he did not change his title he was not averaged. His Honor: In this case the title was not altered in the last three years of service. Mr. Aitkin: It was considered in 1931 that the previous practice was wrong. His Honor: How long did it operate ? Mr. Aitkin: I should say for about 11 years. Mr. Spratt said that a note handed to him by a responsible person stated that the practice had operated for 30 years. • His Honor: It appears then that, prior to 1931 —and presumably the practice obtained for 30 years —in a case like the present, where the superannuitant had. held a position with the same title for the last three years of his service, but with varying rates of pay, he received superannuation on the basis of his last year's pay. Decision was reserved.