PUBLIC SERVICE

Evening Post, Volume CX, Issue 156, 30 December 1925, Page 5

PUBLIC SERVICE

COMPULSORY RETIRE-

MENTS

EFFECT ON SUPERANNUATION

FUND

INCREASE IN SUBSIDY

REQUIRED.

It vv£u recently announced that the principle of retirement after forty years' service, which obtains in the Railways and Post and Telegraph Departments, was to bo given application throughout the Public Service generally. As a consequence a relatively large number of officers have been given notice of retirement. • In connection with thiß matter, the following letter has been sent to tho Public Service Commissioner by.the executive of the Public Service Association: —. "In view of the Press paragraph relating to the question of retirement from the Public Service, the' association considers the time opportune to press yet once again for the full recognition of the association's claims in this direction. • "We ask that all officers of 65 years of age should be retired irrespective of service and without exception, also that all other officers should be retired, on attaining 40 years' service, pro : vided they are not less than 60 yea"rs of age. .... Mln the, Railway.ar.d Post and Telegraph Services this rule almost universally obtains, and there appears no logical reason why it should, not fully apply in the General,Service. ''The association .recognises that the Public Service .Commissioner has, in the last two years, inclined towards this course, but we submit that the , policy proposed by 'the . association i should be the rigid r.:le in the future." A HEAVY STRAIN. Reporting to the contributors to the Public Service Superannuation Fund, the elected members of the board representing the General Servicsi say it is obvious that the heavy strain on the fund,due to the recent numerous retirements of comparatively, young contributors can only be relieved by a, substantial increase of the statutory --'isidy, and the actuary's report will disclose the amount required. Th-re is reason to anticipate that the Government will discharge its obligation to tho contrife'uto: -t,: in" which case the fund will <,pe restored to a condition of actuarial solvr«*y.-

The total amount invested in the fund op Ist January, 1922, has increased by £558,630, anjd now stands! at £2,250,000. The average rate of ia-r tcrcst earned has also increased from £5 6s Od per cont. to £5 18s 7d per cent. Of the total amount invested 82 per cent, is Becured by mortgage of freehold property, the balance-by inscribed stock and debentures of the general and local Governments. No loss ."has been made on any of the investments in respect of either principal or interest, whilst the .board ha» invested the fund. Reasonable',lat,V tudo was allowed to borrowers during the slump period, and it is satisfactory to record that in all cases tho position is now quite satisfactory. CONCESSION USED TOO FREELY.

The representatives say ihef were alarmed at the advantages taken by Departments of section 28 of the Finance Act, 1921, which modified the age and service qualifications for retirement on pension. The ostensible reason for the legislation was to avoid undue hardship to a fe r contributors who were retrenched, but unfortunately the concession was used too freely, much- to the detriment of the fund. A far more serious matter, so far as it affects the financial strength, of the fund, both immediately and'in^the future, is the retirement of contributors on reaching forty years or less of, service. In many cases these persons are ten or eleven years, short of .sixtyfive years of age, and in normal circumstances may have re: aincd in the Service until reaching that age. By these retirements the fund suffers from. the loss of contributions, and from the payment of allowances for many years longer than was ever anticipated owing to a greater anticipation of life. Originally it was assumed that few retirements wo"uld take place under the age of sixty-five for male contributors, and actuarial lalcu]ations were based on that assumption. The tricunial investigation / of ' the fund is now, being made by the actuary, who will report to the GoveriK ment the amount of annual subsidy required to meet the liabilities which have arisen. This report cannot be made public until it has been presented to Parliament. During each of the past two financial years the sum of £50,000 was paid to the!fund in addition to the statutory subsidy, but no provision has been made for a similar grant for the current financial year. Trading departments of the State arc now require! to pay their proportionate share of the subsidy out of their earnings, and it is hoped that in those circumstances the Consolidated Fund will continue its rate of subsidy.