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[PIO] Announcement of the Audit Office regarding multiple pensions and the parallel payment of pension and salary

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In today's publications an opinion of the Legal Service, which was forwarded to the political parties in view of their meeting with the Government today, is presented. The opinion comments on the two bills that were sent by the Minister of Finance to the Parliament on 21.3.2024 as technically checked, as well as the six (6) texts that our Service forwarded to the Parliament on 24.11.2023 with the recommendation that they be examined by the body to solve the problem.

On the publications we note the following.

1. Regarding the possibility of attending today's meeting, the answer is that we will not attend as we have not been invited. It is interesting that today the Government and the Legal Service will be explaining to the political parties why they are rejecting our recommendations in our absence and without ever having had any consultation with us.

2. One of the two government bills provides that the pension commencement date for former and current officials is moved from age 60 to age 65. We expressed the view that such a provision is unconstitutional for former officials, but also for current officials for the portion of their pension that they have accrued to date (by "today" we mean the day the new legislation is enacted). Now the Legal Service admits unconstitutionality for the regulation it proposed that applies to former officers. That is, there is an admission by the Legal Service that the bill sent to Parliament, noting that it was drafted with its own guidance, is unconstitutional, as the Service has been saying all along.

3. Despite the above admission by the Legal Service and its acknowledgement that there can be no interference with the pension already established, the Legal Service insists with respect to the current officers.

Our view continues to be that, for example, a sitting MP who has already served 13 years and is now 57 years old, when he leaves office in two years' time will be entitled to a full pension on his 60th birthday, having already accrued his full pension (a full MP's pension is after ten years' service). Similarly, a Member of Parliament who has served eight (8) years to date, his pension for 8/10ths of his service is vested and should be paid to him at his 60th year of age

4. Our Office did not devise the above, nor are they its own interpretations. The above was explained by the Supreme Court in Auguste stating that "the expectation of acquiring a claim to a pension accrues at the time of hire, constitutes, potentially, property and crystallizes as a property right upon completion of pensionable service in a pensionable position."

5. The position of the Legal Service on active officials, always according to the reports, also conflicts with the regulation made in 2012 for the then active civil servants, when the cut-off date was set at 31.12.2012, i.e. there was respect for the pension they had established up to the cut-off date and regulation (in the amount of the pension and the date of payment) only of the pension they established after that date. This law of 2012 was found to be constitutional and this was recently upheld (19.3.2024) by the Supreme Constitutional Court.

6. Of particular interest is the fact that the Legal Service considers constitutional a regulation that would interfere with the established pension of a sitting MP with 13 years of service, but considers unconstitutional our proposal that protects this established pension. This, together with references in the opinion to our Service's alleged argument that our Service's argument is based on the officer's knowledge in the future before he or she assumes the new office of the conditions that will apply (an argument we never made, since it has been definitively ruled unconstitutional in the Koutselini case), simply demonstrates that the Legal Service has not understood what our Service is recommending.

We explain again: Our Office did something simple. It copied the judicially "iron-headed" regulation made in 2012 for civil servants, inserted it into the texts of legislative proposals for current and future officials, sent these texts to the House of Representatives' Services, which are experienced in legislative checks, and adopted to the last iota every recommendation they made to it.

7. The Government insists on a bill for serving officers, which would risk being quashed at the first court appeal, and a bill for future officers, which abolishes multiple pensions and introduces multiple lump sums.

Also, the Government continues to leave the issue of multiple pensions for existing officials untouched, when it could regulate the issue to the extent that it relates to the pension they will accrue from now on.

The Government also leaves untouched the issue of the suspension of payment of a civil servant's pension to a retired civil servant who takes up another office. In fact, the Act does not deal with civil servants at all.

This means that a civil servant who retires and becomes a Minister will, during the time he or she is a Minister, receive a civil servant's pension and the Minister's salary.

Under our proposal, the civil servants' pension, which will accrue after the passage of the Act, will be suspended if the retired civil servant takes up any other office.

8. We think it is obvious that the Government does not wish to resolve the problem. It is therefore our view that the House of Representatives should, in the exercise of its sovereign power, take the initiative in moving forward and by proposing legislation to finally remove the distortions that are rightly seen as a challenge by civil society.

(NZ/GC)


Contents of this article including associated images are owned by PIO
Views & opinions expressed are those of the author and/or PIO

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