LETTERS TO EDITOR

Dominion, Volume 18, Issue 183, 29 April 1924, Page 3

LETTERS TO EDITOR

SUPERANNUATION OF PUBLIC SERVANTS

Sir, — Advertisements (presumably emanating from Government sources) have recently appeared in all the New Zealand papers relative to the dispute between the A.S.R.S. and the Government, and in these advertisements references have been made to the superannuation benefits of Public servants, which from their nature can only bo intended to create a false impression in the public mind. Statements on similar lines have also been made by the Prime Minister and the Minister for Railways. Since all Public servants are concerned in the matter, the P. and T. Association desire to submit to the public the following statement of the position:— 1. Public servants who joined the service prior to 18S6 were entitled by the law then existing to compensation on retirement without contribution by the officer. When the superannuation funds were established,, the Government transferred this liability to the superannuation funds and agreed to compensate the latter by way of subsidy in such manner as might be found neoessarv on actuarial examination of the funds from time to time. Twelve of tho thirteen cases quoted in the Government circular came under this heading and are therefore not fairly representative of the benefits of the fund. They are, however, quoted by the advertisement as “typical.”. 2. Officers in the Public Service pay from 5 to 10 per cent, (depending on age on joining) of their salaries into the fund. Those in the service when the funds were established were allowed to count previous service for superannuation purposes and are therefore at some advantage as compared with those joining the service at a later date, and particularly those joining since 1909, as the latter are restricted to a maximum pension of £3OO per annuni. The adequacy of the these contributions may be judged from the remarks of the late Mr. Morris Fox in his report on the actuarial investigation of the fund for the triennium ended December 31, 1910. He said: “So far as the contributors’ own pensions are concerned, and excluding the pensions for back service, for which no contributions have been received, the contributions actually payable are on the whole amply sufficient without Government assistance ; but when to these pensions are added the widows’ and children s pensions and return of contributions on death or withdrawal, . it . becomes necessary that the contributions payable by members should be supplemented by Government subsidies, as provided by the Act.” This, result is possible by reason of the investment of the contributions at compound interest. It should be noted that all widows and not only those of deceased Public servants can draw pensions lor oiphaned children under 14 years of age, and also that the State by the superannuation funds of the neces sity of paying old age pensions to lublic servants. ~ , „ , • 3. The National Provident Fund is subsidised by the State to a grea er extent than the superannuation fund even though the latter is burdened by the Government liability for compensation referred to above. The fund pays its own administrative expenses, while those of the National Provident Society are a charge on the public. Ju other words, the Public servant is “privileged” (to quote the Prime Minister) to pay more for superannuation than the general public. 4. The following comparison with other superannuation funds will show how “privileged” tho Public servant is: — 1. Wellington Harbour Board; Subsidy 65 per cent, of members contributing. 2. Auckland Harbour Board: Subsidy 60 per cent, of members contributing. 3. Buller County Council: Subsidy 80 per cent, of members contributing. 4. National Provident Fund, 1920 (including maternity benefit and cost of administration): Subsidy 47.9 per cent, of members contributing. 5. P.S. Superannuation Fund, 1920 (including payment for compensation liability): Subsidy 37.7 per cent, of members contributing. 5. It is generally recognised that the employer equally with the employee derives an advantage from the establishment of a superannuation system. The above facts show that the State receives these advantages at a lower cost than is usual in such systems while the Public servant is burdened to a correspondingly greater extent.—l am, TI. E. COMBS, Secretary. Wellington, April 24.