Pensions

Pensions may be broadly divided into two classes—superannuation allowances and rewards for special services. In Great Britain a sum of £1,500,000 per annum is required for superannuation in the various departments of state, including the consular, diplomatic, and colonial services. The number of these pensioners in 1889-90 was 3258, and the grants for them are in the estimates classed among 'Non-effective and charitable services.' The pensions granted from the Civil List (q.v.) are altogether on a different footing from those in the civil service, which last are part of the condition of employment, and are thus somewhat in the nature of deferred pay. Of the same nature is the retired pay of army and navy officers, as well as the service-pensions to soldiers and seamen. Pensions to the widows and children of deceased servants of the state are often granted under the term of 'compassionate allowances.' The enormous character of the burden of the non-effective services has given occasion for much discussion, and has called forth many suggestions. Thus, in the session of 1888 a motion was carried in the House of Commons, the effect of which is to restrict the system of compulsory retirement on pension of civil servants. The principle has been laid down that officials no longer required in their own departments who are still able and willing to render service for the public money should be provided with employment in other departments, instead of being forced to become useless burdens upon the country. Perpetual pensions must be regarded as somewhat of an abuse of the principle upon which a state rewards good and faithful servants. The matter became the subject of a parliamentary inquiry on the initiation of Mr Bradlaugh in 1887. A select committee was appointed, which, after taking evidence of a curious and interesting kind, recommended that no more pensions or allowances should be granted in perpetuity. This committee also reported in favour of the abolition of all sinecure offices with salaries but no duties, and recommended that all existing perpetual pensions, allowances, and payments, and all hereditary offices, should be determined and abolished. In commuting such pensions it has been laid down as necessary to differentiate cases of grants for actual services by the original grantees, and cases of mere gratuity. Where no service or merely nominal service was rendered either by the present holder or the original grantee it was proposed that the payment should in no case continue beyond the life of the present holder. In former commutations of perpetual pensions a scale of twenty-seven years' purchase was usually adopted. On or about this scale there were, between 1881 and 1887, 330 pensions and allowances of the annual value of £18,957 commuted for a sum total of £527,933. The rate was reported to be too high, and in the session of 1888 a motion was passed for giving effect to the recommendation of the select committee, and for a return in detail of all outstanding hereditary pensions and the circumstances in which they were granted. Pensions such as those of £4000 per annum to the Duke of Marlborough, and of £5000 to Lord Nelson, and to their heirs in perpetuity, are, of course, well understood as in return for 'value received' in special services to the state. The objection to the principle of them is that it is a burdening of posterity with payment for services rendered to one generation. The rewards for distinguished services should be defrayed by the generation receiving the benefit of them, and should be conferred upon the persons who actually render them, either in the form of a capital sum down, or of a life-pension only.

There are, again, a number of hereditary pensions conferred not for services, but as solutum for the loss of the fees of abolished offices. Thus, when the offices of Custos Brevium and Clerk of the Juries were abolished in 1837 the holders were compensated with hereditary pensions of £786 each. These were commuted on a basis of twenty-seven years' purchase. One of the numerous perquisites conferred by Charles II. on his illegitimate son, the Duke of Grafton, was that of Officer of the Pipe, or Remembrancer of First Fruits and Tenths of the Clergy in the Court of Exchequer. This office was sold by the duke in 1765, and when the fees were abolished the holder was compensated with a perpetual pension of £62, 9s. 8d. A still more remarkable case was that of the hereditary office of Master of the Hawks, granted by James II. to the Duke of St Albans and his heirs for ever. The emoluments consisted of £391, 1s. 3d. as salary, £200 for four falconers, £600 for provision of hawks, and £182, 10s. for other provisions—together, £1373, 11s. 3d. This total was subsequently reduced to £965, at which it stood until commuted, in 1891, for £18,335, although there had been neither hawks nor falconers for many generations. A pension of £4000 per annum granted in 1779 to William Penn, the founder of Pennsylvania, and his heirs for ever, was in 1884 commuted for a ten years' annuity of £12,796, considered equivalent to twenty-seven years' purchase. In 1676 Charles II. granted to the Duke of Richmond and his heirs for ever a duty of one shilling per ton on all coals exported from the Tyne for consumption in England. One hundred years later that charge was converted into a perpetual pension of £19,000 (chargeable on the Consolidated Fund), which, again, was afterwards redeemed for £633,333, and invested in lands settled upon the duke and his heirs. The Duke of Hamilton, as Hereditary Keeper of Holyrood, has an hereditary pension of £45, 10s., and the descendants of the Heritable Usher of Scotland enjoy one of £242, 15s. These are a few of the examples of a wholly indefensible system. There are also limited hereditary pensions granted for a certain number of lives, which are not so unjustifiable, as, for instance, the pension of £4000 to the Duke of Wellington and two successors, and the pension of £2000 to Lord Napier of Magdala and one successor. In 1891 there were eight of these limited hereditary pensions in existence (viz. Lords Combermere, Gongh, Hardinge, Keane, Napier, Raglan, Seaton, and the Duke of Wellington), most of which were in the possession of the last holder. It is probable that this system of reward for military services will also be discontinued. Pensions, but for life only, may be claimed by ministers who have held office under the crown (not necessarily continuously) for four years in the first class (£2000), six years in the second class (£1200), or ten years in the third class (£800). The following is a summary of the total amount paid by Great Britain in pensions, superannuations, and compassionate allowances: we take the figures for the fiscal year 1887-88, because that period coincides with the movement to terminate perpetual pensions:

In round numbers the present outlay of the government of the United Kingdom in pensions and superannuations is 7½ millions per annum, of which quite 5½ millions go to the army and navy, and form a proper item in the cost of the national defence, although probably capable of better distribution. It is an open question how far the remaining 2 millions may be wisely expended, but for hereditary allowances the national accounts will not incur fresh charges, and existing charges are being equitably extinguished. On the Indian List there are set down 10,500 pensioners drawing £6,000,000, of which £2,500,000 belongs to the civil and £3,500,000 to the military department.

ARMY PENSIONS are temporarily granted to officers of the army severely wounded in action at the following rates, and if the wound entails the loss of an eye or limb, or an equivalent injury, the pension may be made permanent: Field-marshals, general, or lieutenant-general commanding-in-chief, a special rate; lieutenant-general, £400 a year; major-general or brigadier, £350; colonel or lieutenant-colonel, £300; major, £200; captain, £100; lieutenant and second-lieutenant, £70. These pensions may be held together with retired pay (see RETIREMENT). If an injury of similar character is received on duty, but not in action, a general officer receives a special rate of pension; a colonel or lieutenant-colonel, £250 a year; a major, £150; a captain, £75; and a lieutenant or second-lieutenant, £50. Pensions are also granted to the widows of officers dying in the service, at rates varying from £40 a year in the lowest rank to £120 in the highest, subject to an increase of 50 per cent. if the officer is killed in action. Compassionate allowance (£10 to £20, according to rank) is granted to their sons if under eighteen, and to their daughters if under twenty-one, increased by 25 per cent. if the father is killed in action. On remarriage a widow forfeits her pension, but on again becoming a widow it may be restored if she is left in need. If the mother or sisters of an officer killed in action were dependent upon him, compassionate allowances may be granted to them.

Warrant officers, after more than twenty years' service, may receive a pension varying from 3s. 6d. to 5s. a day, according to length of service, their widows £20, and their children £5 a year, with certain limitations.

Non-commissioned officers and soldiers, whether European or natives, are classed for pension according to rank and service in that rank, the highest daily rate being 2s. 9d. and the lowest 6d. No soldier of less than fourteen years' service is entitled to a pension, except for injuries sustained in action or on duty, when the rates vary from 6d. to 3s. a day, according to rank, service, extent of the injury, and other considerations, and the pension is not made permanent until a medical board has pronounced the injury to be a permanent disability. A special pension, in addition to any other, of £10 a year is granted to every soldier who has gained the Victoria Cross, and an addition of £5 is granted for each further act of bravery. Medals, with annuities not exceeding £20, are granted to soldiers above the rank of corporal who have performed distinguished or meritorious services, and are selected by the commander-in-chief. These annuities are in addition to pension.

NAVY PENSIONS were first instituted in the reign of William and Mary; those for officers may be classed as follows: Good-service pensions, Greenwich Hospital pensions, pensions for wounds, and the ordinary pension to which an officer may be entitled on retirement, now known as retired pay. No officer is entitled to a retiring pension until he is forty years of age; should he retire earlier he receives merely the half-pay of his rank. The amount of the retired pay depends upon an officer's rank, length of service, and age. The maximum retired pay of an admiral is £850 a year, for which thirty years' sea-service as a commissioned officer is requisite; he may in addition hold a good-service pension of £300 a year. The maximum retired pay of vice-admirals, with twenty-nine years' service, is £725 a year; that of rear-admirals, with twenty-seven years' service, £600; of captains, with twenty-seven years' service, £600; of commanders, with twenty-one years' service, £400; and of lieu- tenants, with nineteen years' service, £300. The retired pay of officers of other branches of the service is calculated in the same way, on length of service and age. The good-service pensions, so-called, consist of ten of £300 a year for admirals, which may be held after retirement, and of twelve of £150 a year for captains; these last are conferred on captains on the active list, and are relinquished when their holders are promoted to rear-admiral or retire. Pensions for wounds are conferred on officers and men; they range from small yearly sums, according to rank of holder and nature of wound, to a maximum of £200 a year.

All seamen and marines are entitled to a pension after twenty-one years' service from the age of eighteen, or from the date of enlistment; this pension ranges from 10d. a day to a maximum of 1s. 2d. a day, the increase depending upon the number of good-conduct badges a man may have; of these he may have three, and he receives an additional 1d. a day for each, and, if he holds a good-conduct medal, an additional penny for that. Petty officers, in addition to the rates of pension awarded them as seamen, are allowed for each year's service in the capacity of superior petty officer 15s. 2d. a year, as junior petty officer 7s. 7d. There still remain the Greenwich Hospital pensions, which are held in addition to the ordinary pensions. The idea of establishing a hospital for infirm and disabled seamen originated with Mary, the consort of William III., and Sir Christopher Wren was employed to build an additional wing to Greenwich Palace. The king granted £2000 a year towards it, large subscriptions were added by noble and wealthy people, forfeited and unclaimed prize-money and various grants were given, and finally the forfeited estates of the Earls of Derwentwater were added to the endowment. The revenue of the hospital is now about £167,000 a year. The Greenwich Hospital pensions are divided as follows: Ten of £150 a year for admirals, six of £80 a year for captains, twenty-three of £65 for commanders, and forty-six of £50 a year for lieutenants; three of £80 and seventeen of £50 a year for officers of the old navigating branch, and fifty-seven varying from £100 to £50 a year for officers of the civilian branches of the service. There are fifty-two of £35 and £25 a year for warrant officers. The Greenwich Hospital pensions for the men are termed 'age' and 'special' pensions. They are given entirely at the discretion of the Admiralty, and are not granted to any person whose character whilst in or after leaving the navy has not been good. A naval pensioner is eligible for the age pension of 5d. a day on attaining the age of fifty-five, if he has been in receipt of his pension for five years; and for the increase of such age pension to 9d. a day at the age of sixty-five, if he has been in receipt of his naval pension for ten years. Age pensions are given to naval pensioners only, and the number of pensions in force at any one time is not to exceed 7500; the vacancies to be filled by those whose health renders them completely incapable of earning a living.

Special pensions are given at the discretion of the Admiralty to men unable to contribute materially to their own support, and vary in amount and duration according to each man's degree of disability and the other circumstances of his case; the amount of the fund from which these pensions are given is limited to £22,000 a year. They are tenable in addition to naval and age pensions; these pensions range from 6d. to 1s. 3d. a day.

Widows of officers of royal navy and marines are allowed pensions, and their children compassionate allowances. These cannot be claimed as a right, and, except in the case of pensions conferred on widows of officers killed in action or dying from wounds or other special causes, are not granted to widows whose private incomes may exceed a certain scale which is fixed by the Admiralty. These pensions in ordinary cases range from £120 to £40 a year. In the case of officers killed in action their widows, however, may receive a maximum pension of £200 a year. Compassionate allowances to children may be continued in the case of sons until they attain the age of eighteen, and of daughters until they marry or attain the age of twenty-one, but no longer, except in very special cases. These allowances vary from £5 to £20 a year. Gratuities, pensions, and compassionate allowances are made to widows and children of petty officers and men at the discretion of the Admiralty, but there is no fixed scale.

The Pension System of the United States presents two peculiar features, in the almost entire absence of a civil list, and the non-recognition of long service as a ground for pension. Generally speaking, pensions are granted only for active service in time of war, and therefore the beneficiaries are the survivors (or their widows and children) of the armies of volunteers and conscripts who took part in the country's several wars. What are called 'service pensions' have been granted to survivors of the War of the Revolution (under Act of 1818; the last pensioner under this act died in 1867, aged 101, but the last Revolutionary pensioner under a special act, not till 1869, aged 109), the War of 1812 (under Act of 1871), and the Mexican War (under Act of 1887), or to their widows (37 survived in 1888). But the bulk of the United States pensions are 'invalid pensions,' for total or partial disablement from wounds or disease contracted in the military or naval service; the widows and minor children under sixteen years of age of those who have died from such wounds or disease; or, in the event of no such widows or minor children surviving, then the dependent mothers, fathers, or minor brothers and sisters of officers or men so dying. The pensions, which range from 24 to 2000 per annum, are graded, and many specific wounds and disabilities are scheduled and priced. Thus, where the regular aid and attendance of others is required, from 50 to 72 a month is paid; where the beneficiary is incapacitated for manual labour, 30 a month; for the loss of a hand or foot, or total deafness, 30, but of both feet or hands, or both eyes, 72 a month; and for amputation at the shoulder or hip joint, 45. Widows of privates receive 12 a month; dependent relatives the same; children 2 each, but if the widow does not survive they receive their pension jointly. Widows or dependent relatives of officers receive from 15 to 30 a month. The pension of widows ceases when they marry. For the administration of the pension system an independent bureau was created in 1833; since 1849 it has been a bureau of the Department of the Interior. Under the commissioner, who is appointed by the president, there are nearly 2000 persons employed in the settlement of claims for pensions; and besides there are nearly 3000 surgeons throughout the country engaged to examine applicants. The following figures show plainly enough the enormous growth of the American pension system. In 1862 the disbursements slightly exceeded 790,000, in 1872 they exceeded 30,000,000, in 1882 54,000,000; while in 1888 they were over 82,000,000, in the next year over 87,000,000, in 1890 109,357,534, and in 1897 $140,000,000. In June 1890 a Dependent Pension Law was passed, under which in three months 460,282 claims were received. In 1897 pensions swallowed nearly one-third of the revenue of the republic (while 500,000 claims were still awaiting adjudication!), and represented a greater cost than the British or the German imperial army.—It may be added that, by an act of 1882, widows and minor children of keepers or crew of a life-saving or life-boat station who perish in or from injuries received through the life-saving service are given the full pay of the deceased for two years.