Superannuation & Taxation

Dominion, Volume 28, Issue 232, 28 June 1935, Page 13

Superannuation & Taxation

Sir, —Though your correspondent “J.H.’M.” states that he has no desire for a newspaper controversy with me (which I reciprocate), he does not refrain from introducing controversial points which I must notice. Surely he does not seriously contend that the fact of some of the funds being invested in farm mortgages is responsible for the unsound condition of the superannuation funds? The losses on such mortgages are so trifling, relatively, and so recent, that they are negligible as a factor. All other factors having been excluded by him, there was every excuse for my statement that “J.H.M.” implied that the Government was wholly at fault. 1 must emphatically protest against his allegation of “subterfuge” in publishing misleading figures and deductions.” It he reads my letter again carefully he will see that I quoted the 1933-34 figures to illustrate the continuance of losses, and the latest returns are therefore the fairest. The subsidy item is only incidental. “J.H.M.” has gone into personal history, and accuses me of inconsistency. This lias no bearing on the merits of the subject under discussion, but one may approve a principle nnd yet quite consistently disapprove and oppose the provisions and means for bringing it into effect; besides which the years may bring wisdom on some points. As he refers to the efforts of a State organisation before superannuation was established, I might state that had one of the provisions we advocated been then adopted the condition of the funds would have been much better to-day. We were insisting on Provision for a maximum pension of £4OO. The highly placed officers fought for unlimited pensions and won the day. That Sir Joseph Ward gave way to the highly salaried officials against his better judgment was indicated when in 1909 he had an amending Act passed in which provision was made for a maximum or £3OO. Thus, only a year after superannuation had been established, he went even further than we had advocated. Unfortunately the enacted maximum does not come into effect, to any extent, until about the year 19J0, whereas, had our wishes been met, the provision would have come into force from the inception, and the fund would have been saved the very heavy burden of excessive pensions during 40 years or more. But to-day, in the light of experience, I would revise the whole basis. That, however, is another story. In passing, I may say that I was surprised at “J.H.M.” showing preference for a "practical" stability and decrying actuarial stability. The latter is very essential, and. in my view, the actuarial method is tlie only practical one. it is not impossible of being understood. I :U ”’ C ' e - ' J. D. AVERY. Te Iloro, June 26.