Superannuation Problems

Dominion, Volume 25, Issue 167, 11 April 1932, Page 11

Superannuation Problems

Sir, —For specious and fallacious reasoning just refer to the letter signed “Superannuated” in your issue of April 5, Notwithstanding the financial depression and the fact that all other sections of the community are being taxed even beyond what they can afford, and the Government has stated that there should be equality of sacrifice for the salvation of the country, he maintains that superauuuitants should still have their pound of flesh —and large numbers of them live in a state of luxury and ease, while men, women and children on the bread line must continue to pay into the consolidated fund to assist to keep them in luxury. How many hundreds have been added to the superannuation list in the best two years who have no right to be there for some years, except that the Government has retired them? If the Government has power to dismiss these people and arrange to place them on superannuation prematurely, surely it must be granted the right to rearrange superannuation payments in accordance with the means available. It surely was never intended that these funds should lie anything but actuarially sound, and if some subsidy was in view, and that at the discretion of Parliament, to assist the actuarial basis, tbs subsidising of millions from the consolidated fund was never intended, and when millions are not there the Government must do something to protect those who have yet to come on the fund, and whos® payments are being more than used up by the allowances to those at present drawing from the funds, “Superannuated” says: "If the Govern* inent were to reduce the allowance payable out of the superannuation fund, an appeal would lie to the I’rivy Council,” Can he say if there is any fund to pay out of? Isn’t it rather that the payment# being made into the fund are being drawn out by those on the fund to-day, meaning that those subscribing now have nothing to look forward to but the consolidated fund of the future for their annuities? If this is the case, then the sooner the Government or the Privy Council liquidate the funds, and put it on a better or proper footing, the better for the taxpayers and the future superannuation dependants. No one suggests, as “Superannuated” tries to make out, that superannuation should be withdrawn. Where the greatest trouble lies is allowing people in a good financial position to draw from £4OO to £2OOO a year from a fund which has to be subsidised by payments from the consolidated fund, drawn from the taxes on tea, sugar, clothes, boots, tobacco, etc., which have all recently been increased for the benefit of the country generally, and which are paid by thousands who are scarcely able to live at present. Equality of sacrifice is demanded by all of all. In conclusion, might I ask “Superannuated” what he suggests to do for the thousands at present paying into superannuation, with hopes?—l am, etc,, EQUITY. Sir, —Can you or any of your readers enlighten us as to tbe correctness or otherwise of tbe following statement made by your correspondent, “Superannuated,” in “'ll6 Dominion”: “What, tbe Government has contributed by way ot subsidy (to the superannuation funds) is not more than half the amount they agreed to pay and last year was only one-fifth of the superannuation fund income”? This appears a wild statement. Some variation of the Act w made a few years ago to allow others not participating to come in on special payments being made to boost the funds. As each fresh contribution creates a liability, and the Act can be altered thus, why not to allow of an alteration in the payment? In the . event of the fund being in difficulties, is it not in the interest of subscribers to have it placed on a financial basis, especially when there is no further taxation to be had from taxpayers to assist the fund? If not, where will the present subscribers come in in their turn, as it is evident those subscribing nowarc paying for those on superannuation instead of providing for themselves in their turn. Could the Privy Council or any court object to an insolvent concern being brought financial even if the shareholders or subscribers suffered in the process? The fund should be placed on an actuarial basis and no withdrawals should be permitted as those who die early help to pay for those who live beyond the actuarial average. What does “Superannuated” have to say now? —I am, etc., TAXPAYER. Wellington, April 5. [An authority supplies the following note: —“The Public Service Superannuation Act provides that the Alinister of Finance shall pay each year into the fund out of the Consolidated Fund the sum of £86,000, together with such further amount, if any. as is deemed by the Governor-General in Council to be required to meet the charges on the fund during the ensuing year. It is also provided that an actuary appointed by the Governor-General shall make a triennial examination of the fund, and set forth the result of such examination ip the report which shall he so prepared as to show the state of the fund at: the close of tbe period, having regard to the prospective liabilities and assets, and the probable annual sums required by the fund, to provide the retiring and other allowances falling due within the. ensuing’ three years, without affecting or having recourse to the actuarial reserve appertaining to the contributors’ contributions. To March 31, 1931, contributors to the fund have contributed £4.500,000. while the subsidy paid by Government was £1.750.000. The difference between the amount recommended by the actuary and I lie amount actually paid us shown by the Aetuarv’s report on the fund ns at March 31. 1927. is £BOl.OOO. which shortage a<cumulated nt. -11 per cent, to March 31. 1928. is £1.060.325. There are also superannuation funds for both teachers and railways.)