"Entitled Officer" means an officer in receipt of expatriation pay who is serving (otherwise than on contractor agreement for a specified period) in a public office in the Federation of Malaya. The expression should also be taken to include any locally-domiciled officer holding his appointment by approval of the Secretary of State for the Colonies who can show to the satisfaction of the Secretary of State that he has reasonable grounds for anxiety over the future of his career in the public service.
"Earned pension" means the pension or reduced pension and gratuity which an entitled officer would be eligible to receive under existing Pensions Regulations but not subject to the usual ten-year period of qualifying service,
"Additional allowance" means a supplementary pension calculated at a specified rate additional to earned pension.
"Lump-sum compensation" means the payment of a sum of money as compensation for the loss sustained by an officer on the premature termination of his career.
50. We recognise two clearly defined phases. Phase I is the situation as at present. We agree that the assumption of office by the Alliance Government in August, 1955, coupled with the break-up of the Malayan Establishment in July, 1954, constituted a major change in the conditions of service of overseas officers. We do not consider that this change in conditions is sufficiently radical to warrant payment of an additional allowance or lump-sum compensation to any officers who now wish to leave the Federation Service, but we do consider that it justifies their being allowed to go on accrued pension. We have therefore agreed that a Phase I scheme should be introduced at once and that under it an entitled officer should be allowed to retire at any time after reasonable notice and with the permission of the High Commissioner, acting in his discretion, and that such permission should not be withheld unless proceedings for the officer's dismissal are being taken or are about to be taken.
51. Phase II will begin when the Public Service Commission is established with executive powers. Since this will involve a radical change in the conditions of service of the public service we agree that at that point a full lump-sum compensation scheme for loss of career should be brought into operation.
52. We have not considered it to be part of our task to attempt to draw up this scheme in detail. Not only would this not be possible in the absence of certain actuarial information but we consider that, once the principles of such a scheme have been accepted by the Federation Government, details should be worked out in the Federation in consultation with the representatives of the Staff Associations ooncerned. For this reason we do not wish to comment on the various points of detail which we discussed with the representatives of the Staff Associations whom we invited to give evidence during the Conference, but we consider that negotiations between the Federation Government and the Staff Associations concerned should begin at once
53. We agree that the compensation scheme should provide that on retirement an entitled officer should receive his earned pension plus at his option either an additional allowance or lump-sum compensation. The amount of lump-sum compensation will have to be worked out actuarially having regard to certain factors such as age and, possibly, length of service, but the scheme should contain a provision whereby officers whose services it is particularly desired to retain in the Federation Servioe will be able during a specified period (e.g, four years) to "freeze" their entitlement to lump-sum compensation at the point in the actuarial table which is most advantageous to them during that period. We agree that the Government should also give consideration to other inducements which might be offered to officers whose services it is particularly desired to retain, in addition to the normal compensation.
54. We have agreed that the right to retire on compensation should be exercisable at their option by all entitled officers on giving due notice.
55.We have given careful consideration to the question whether, after Phase II has started, the Federation Government should be able to require officers to retire, at its discretion, or whether the compensation scheme should be entirely voluntary.
