SUPERANNUATION.

Auckland Star, Volume LXIII, Issue 227, 24 September 1932, Page 12

SUPERANNUATION.

REPORT BY ACTUARY. IMPORTANT PROPOSALS. NEW BASIS OF CALCULATION. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. Important recommendations concerning the State's superannuation funds are made in the annual report of the Government actuary, Mr. G. Gostelow, presented to Parliament yesterday. It is possible that legislation dealing with the funds will be framed in the light of his proposals. The chief item on the income side is the Government subsidy, eays Mr. Gostelow. The subsidies paid in during the triennium show a shortage of about £500,000, apart from the loss of interest. "Retiring allowances are increasing, and "will continue to do 60 for many years to come," says the actuary. "It will be noted that the outgo for benefits during the triennium exceeds the total of contribution income and Government subsidy, and is about 75 per cent of the combined income from contributions, interest and Government subsidy. Aβ was pointed out i;i my last valuation report, these high, percentages are somewhat disturbing, since the liabilities are essentially of a deferred nature, and consequently the funds should be increasing rapidly while the fund is young and the membership is expanding."

State's Liability £7,87ij43g. ■ It is shown that the total State liability at March 31, 1930, was £7,871,439, an increase of £1,211,669 since the last valuation. This increase Was mainly due to the accumulation at interest of that part of the State's, liability which was unprovided for, and to the number of retirements of comparatively young officers with long service being in excess of valuation assumptions. The actuary gives the following estimate of demands on the fund in the years mentioned and the Government subsidy required:— 1931-32. 1032-33. £ £ Estimated pensions .. 394,159 406,900 Contributions 147,362 155,060 Amount due by State 246,827 251340 The figures give an average subsidy between 1930 and 1933 of £248,000, which was £162,000 more than was being paid in each year. Mr. Goetelow recommends that there should be a : modification of the present rights of members to retire by length of service, by restricting it to those who have attained a specific'age—for example, 60 years in the ca3e of males and 55 for females—and also that there should be an increase by five yeare of the, minimum age or length of service at which the female contributor has the right to retire. He also recommends that the Government should eliminate all existing powers of extending the provisions of the Act to provide for early retirements; that the basis'of calculation of "final .salary" should be altered to the aveage salary of the last seven or ten years, instead of three years, as at present; or that any salary increases after a specified age, say, 55, should be disregarded for pension (and contribution) : purposes.

Weed of Special Subsidy. "It is not my function to comment on policy mattere," says I Mr. Go3telow, "but I would be lacking in my responeibility if I did hot enunciate the general principle that any additional financial strain on the superannuation fund due to policy measures .of the Government should be a charge on the Con' solidated Fund by way of a.special subsidy. It is important '. to note that although the problem k approached from different angles it ie agreed in recognising that a , superannuation fund must be financially safeguarded in the event of any departure from what might be termed its fundamental obligations to contributors." In a separate report it was stated that the amount paid into the fund by the Government by way of subsidy was £49,955, being, one-fifth ojr the total contributions paid jnto the fund during the year ended December 31, 1931.