PRIVATE BENEFIT SCHEMES

Press, Volume LXXIV, Issue 22372, 8 April 1938, Page 14

PRIVATE BENEFIT SCHEMES

EFFECT OF PROPOSED STATE PLAN

COMMITTEE HEARS COMPANY REPRESENTATIVES

Imm ABBOCIATIO* TBLIOEAM.) WELLINGTON, April 7. The possible effect of the Government’s proposed superannuation, scheme on workers already contributing to pension schemes was placed before the Parliamentary Committee to-day by representatives of the Shell Oil Company, for whom Mr A. G. Johnston appeared. With Mr Johnston was Mr A. P. Corry, as legal adviser, Mr Johnston outlined the provisions already made for Shell Company employees, and said if they had to contribute to a State scheme on which they could have no claim it would mean a forced reduction of their income. A provident fund had been established by the combined petroleum companies at The Hague in 1912 and was administered by a group. Each staff member of his company who Joined the fund contributed 10 per cent, sterling (about 12£ per cent. New Zealand) of his salary or wages, and the company made an equal contribution. From time to time the earned interest was added to the fund and in the past companies had made extra contributions as a bonus from time to time. Provident fund accumulations would go on until a member’s account readied £IO,OOO. Whatever the amount was it could be drawn in one sum when a member retired or resigned from the company, but only the member’s contribution, plus interest, was paid if his service was under five years. Insurance and Pensions In conjunction with the provident fund there was in operation a scheme from which employees could obtain the benefit of life or endowment insurance, and in addition a pension scheme had recently been established. This scheme was for the employee, and applied to men only. This pension scheme replaced the uncertain “bonus” contributions. Benefits became available at the age of 60 or at 55 in tropical countries. Mr Johnston said the pension payable was 40 per cent, of the average salary during the last five years’ service, less 4 per cent, on the company’s contributions to the provident fund, with a maximum of £I2OO a year. The pension was in addition to the provident fund, which was drawn in a lump sum on retirement. “It is desired that the committee should know of the contributions made by the staff to these funds so that this can be taken into account when considering any further compulsory contribution, lessening the spending power of members of the company’s staff,” said Mr Johnston. Mr Johnston said it seemed certain that members of the company’s staff, by reason of the provisions made for them by the employers, would not obtain superannuation benefits under the Government scheme, because the non-contributory pension provided for them when they reached the age of 60, and, in addition, they would have the income earned by their own contributions and those made by the company to the provident fund. Many Contributors Mr Johnston said that of the company’s 850 employees in New Zealand, more than 600 were contributors to the fund, which was purely for superannuation. There were no medical benefits. Appreciation of the Government’s proposals for a national health service was expressed by Mr T. E. Hogarth on behalf of the Wellington United Friendly Societies’ Medical Institute. It fwas hoped that the Government scheme would succeed, but when it was established they would have to go out of business. They had never anticipated such a comprehensive scheme, and had acquired properties that would leave them with a liability; of £6OOO if they closed down. As they had given remarkably \cheap service to their members for 21 years, they considered the Government should take their service over as a going concern and relieve them of all liability. The institute was prepared to co-operate and establish a national scheme, and they believed their experience would be of value. To Mr H. S. S. Kyle, Mr Hogarth said that free medical, hospital, and medicine benefits could be secured for a man and his family for £2 4s 4d a year. He considered that the benefits offered by the Government’s scheme would be better even when the extra cost was taken into account. In reply to the chairman. Mr Hogarth said that each doctor engaged by the institute would have a panel of approximately 2000 patients, but all of the members were fit when admitted. The institute took the best, but the Government would hffve to take the sick with the healthy. The institute could not attempt that without greatly increased fees.

“FINANCIALLY UNSOUND”

VIEW OF WAIROA CHAMBER OP COMMERCE (PBE3S association telegram.) WAIROA, April 7. “That in the opinion of this chamber, the Government medical and re vised pension scheme, although desirable in the main, is, in view of New Zealand’s dependence on world markets, financially unsound and is beyond the means and resources of the Dominion, and that the Associated Chambers of Commerce be requested to call evidence before the present Parliamentary Committee with a view to modifying the scheme,” was a motion carried by the council of the Wairoa Chamber of Commerce. The motion was moved by Mr G. de V. Robinson and it was decided to refer it to the associated chambers.