The Dominion FRIDAY, AUGUST 5, 1932. THE STATE SUPERANNUATION FUNDS

Dominion, Volume 25, Issue 266, 5 August 1932, Page 10

The Dominion FRIDAY, AUGUST 5, 1932. THE STATE SUPERANNUATION FUNDS

publishing the Commission’s report. There is notmng to g by Sedge that the positior■ M SeNaiSnal Commission may ttereVenwK comments have never been on a sound footing. To make them so the Government in heavy commitments. On> the othet Barria policy of drift would merely postpone a-reckoni g cumulatively more difficult. • ~ fi w0 In The fundamental weaknesses of the funds are cmeny the first place the Government subsidies aril t gprnnd the benefits conferred were too liberal, inese weaKness have been aggravated by the failure of the Government to keep up its payments fn full measure. Further privileges conceded to contributors and annuitantsby successive G c over . nm ® nts J ,a^®l S fTSers’ the burdens on the funds. The Public Service Fund. and the Teacher Fund may be cited as examples. In each case the original contributor, were entitled to superannuation benefits computed on theiryears cff service prior to the establishment of the scheme in 1908, toward which undertook to do this by way of subsidy. Government assistance was also required for supplementary benefits to widows ifnd children. In the case of the Public Service the original subsidy was £20,000 Pg 1910 and 1919, it rose successively to £22,500, £23,500, £4B,UUU ana £86,000. ’ Actuarial investigation of the position in a additional contribution from the Government of £lOO,OOO, divided between the years 1923-24 and 1924-25. Another *lOO,OOO was contributed in 1929-30 following upon an actuarial report on the position as it stood on March 31, 1927, t , This report showed that on the basis of valuations adopted the subsidies paid for 1911 and 1912 were too> lowby £25,000 per ( annum: for the three years, 1914-16, too low by £lB,OOO per annum; 1917 and 1918, by £38,000 per annum; for the three years, 1920-22, by £39,000 per annum; 1923, by £86,000. This rate of retrogression was maintained until by March 31, 1927, the total shortage in the Government subsidies had amounted to £804,000, or with accumulations at 4| per cent, to 1928, to £1,060,325. -The Teachers” Fund has suffered from the same handicap. The shortage on January 31, 1927, v was £420,251, or with accumulated interest at 4£ per cent, to the end ot 1929, £607,528. , The Government Actuary, in his report on the position covering the 1920-24 period, estimated that the State at the valuation date had contributed, only £399,417, as against £1,031,725 contributed by the teachers themselves. Other factors contributing to the instability ot the Teachers’ Fund are the house allowance, added to salary since the inception qf the scheme, and counting toward superannuation, and the liberal benefits conceded to women annuitants. Contributors, moreover, are entitled to retire on allowances computed on the last three years of their service (the highest average), notwithstanding the fact that they may have .paid at comparatively low rates on a lower salary during the major part of the contributory period. , Many other anomalies emphasising the factors at work in undermining the stability of the funds could be cited. Sufficient evidence has been brought, however, to show that a stock-taking is necessary and urgent in order that the schemes may be revised and their conditions brought within the margin of solvency.