SUPERANNUATION

Press, Volume LXIX, Issue 20978, 5 October 1933, Page 7

SUPERANNUATION

THE PROPOSED BILL REVIEW. BY EDUCATIONAL INSTITUTE "It will be seen that the proposed bill is an attempt to get somewhat nearer the fundamental principles laid down in the original scheme, that is, with regard to retirements on age and a sounder basis o£ calculation for the retiring allowance," says a statement issued by the New Zealand Educational Institute commenting upon the proposed Government Superannuation Bill which will probably be introduced this session. "It must be remembered, however," the statement adds, "that throughout the history of the fund ample provision was made by act of Parliament for keeping the fund in a sound financial condition, but this has been honoured more in the breach than in the observance." The statement explains that the original Superannuation Act gave a specific guarantee covering any deficiency in the fund. The concession granted original members, whereby non-contributory service was taken into account in computing their retiring allowances, was definitely a liability on the fund and, as such, was shouldered by the Government. By the 1912 amending act a subsidy of £17,000 annually was provided for, together with such further sums deemed necessary in accordance with the actuarial report to meet the charges on the fund during the ensuing year. In 1918 the subsidy was fixed at £43,000, together with such further amounts as were deemed necessary by the actuary. Shortage in Subsidy.

The total subsidy paid to January 31, 1932, was £972,607, which was £314,168 short of the amount actually paid out of the fund for allowances for non-contributory service. "Such allowances," says the report, "were definitely a liability on the Government, so that not only has the Government failed to meet its obligations in this respect, but it has not, in effect, when this aspect is considered, subsidised contributors' payments at all." If the liability for non-contributory service was omitted from the calculations the total subsidy represented less than 10s for every pound paid in by the contributors. The Government actuary, in his evidence before the Superannuation Committee, had shown that, were the fund liquidated and the present annuitants regarded as preference shareholders, they would receive 10s 5d in the pound pension, while contributors would receive nothing. If, on the other hand, contributors were paid back the full amount of their contributions, the annuitants would receive lOd in the pound pension. "The present unstable financial position of the fund is due to the neglect of successive governments to honour their obligations," concluded the statement. "Contributors have fulfilled to the letter the conditions laid down. Whv, then, should they be penalised because the Government guarantee has, up to the present, been merely so much ink and paper?"