Police officers will be able to claim more pension money after a judge ruled in their favour following a pay row with Government.

Justice Ian Kawaley yesterday upheld a previous ruling that ten percent of their pay — called the 'Combined Allowance' and previously unpensionable — should now be treated as a full part of their salary.

Government, which was challenging last June's Permanent Police Tribunal ruling, had claimed this would cost an extra $6.4 million owed to officers dating back to 2005, and nearly $800,000 a year from now — cash it said it could not afford.

It also argued the Combined Allowance is merely supposed to cover expenses and is not meant be part of the salary.

Bermuda Police Association (BPA), which has about 400 members, countered that the Combined Allowance has effectively been part of their salary since it was introduced as a fixed monthly amount in 1990. Justice Kawaley said in his judgment: "The main element of the award, namely that the allowance should be incorporated into salary with the result that it becomes pensionable, was validly made."

Reacting in Supreme Court, Inspector Darrin Simons, BPA's lead negotiator, told The Royal Gazette: "I'm excited and happy. It certainly will affect their pensions.

"The reality for some people is that it was a complex issue, but the closer you get to retirement, the greater clarity you get on this."

Combined Allowance was introduced in January 1990 about a year after BPA started collective bargaining, and was fixed at ten percent in 1999.

But because it was not part of the salary, no pension deductions could be made from it in the short-term, and no additional pension payments made on it in the long-term.

Justice Kawaley stated that BPA lawyer Alan Dunch had argued: "For far too long, a percentage of a Police officer's salary has been paid out in the form of something called a 'Combined Allowance'.

"There can be no serious dispute over the fact that this is not in reality an allowance but, rather, part of an officer's total pay package.

"However, it is not taken into account when calculating the officer's entitlement to a pension, even though payroll tax is payable on it.

"There is no justification for this and the very notion of the Combined Allowance is today a historical anachronism. It should be done away with, the amount should be incorporated into salary and the total amount should be pensionable with appropriate contributions being paid into the superannuation fund."

Regarding Government's position, Justice Kawaley stated: "The Government produced as 'evidence' a financial consultant's letter dated February 7, 2008, which stated that the BPA proposal would cost an additional $6,481,000 (past costs, because the last agreement expired on September 30, 2005), and $796,000 annually (future costs)."

He added that the letter was described as an 'actuarial report', but the firm that produced it did not hold itself as having actuarial experience and the document itself did not purport to be an actuarial report.

The Arbitration Award from last summer's Permanent Police Tribunal also saw Police get a pay rise following three years of negotiation with Government.

Government rejected that, prompting a historic march on Parliament by Police officers on June 27, before an agreement over pay was reached later in the year.

The Combined Allowance issue was challenged by Government on the grounds that the Tribunal had exceeded its jurisdiction.

On this point, Justice Kawaley stated: "The primary ground of complaint was that the Permanent Police Tribunal in its June 11, 2008, decision had unlawfully decided that the Combined Allowance should be included in the salaries of Police officers below the rank of Chief Inspector for the purposes of years 2005/06, 2006/07 and 2008/09.

"This complaint was somewhat surprising because this was precisely the issue the Tribunal was requested to adjudicate."