N.Z.R. SUPERANNUATION

Evening Post, Volume CXVI, Issue 96, 20 October 1933, Page 15

N.Z.R. SUPERANNUATION

INVESTMENT OF FUNDS

TO BE INVESTIGATED

The position of the Government Railway Superannuation Fund, and the nature of .0 securities in which the Accumulated Fund had been invested, were discussed at a full meeting of the executive committee of the Eailway Superannuitants' Association held last evening. ~~ , , ~.' . . The association's statistician pretented a comprehensive review of the fund for submission to the Minister of Finance. This showed that coinciding with tho policy of early retirements first instituted in 1924, the drain on the fund then commenced, and continned steadily until 1932, when the peak load was reached owing to the abnormal number of early retirements, ranging from one year up to ten years hpfnrp thfl diiß elate '1? wal' lo^astfd'however, that with a return to more settled economic conditions, and in the absence of any further unjustifiable liability being inourred, the fund should rehabilitate itself within a few years. The average of all the life allowances now • being paid out was £180 per year. From 1903 until 1911 the fund had received no financial assistance apart from members' contributions,, which alone during that period provided for the payment of allowances to superannuitants and to the widows and children of deceased ormtrJVmtnr* contributors. „„„„„,„,<, BUILDING UP OF RESERVES. Attention was drawn to the fact that in 1902, during the early negotiations, it was urged that the fund should be given a rest, say, for four years, with the idea of then establishing a reserve fund. There were then in the employ of the Department, however, a fair number of men who were long past the retiring age. These men had joined the Department during tho early developcmnt of the railway system, and some of them had served with the Imperial forces in the Maori War. The question of providing for them arose, •and Sir Joteph Ward decided that they should be retired on superannuation after paying contributions to the fund for a very short period only. With his usual humanitarian outlook, he considered, moreover, that these men had earned, by their war service and by their continuance at duty after the usual age, some reward in addition, and the Government even assisted to* wards their contributions to the fund for that short period, to enable them to become beneficiaries of tho fund. STATE GUARANTEE. The original proposal was that the State, as employer, should pay into the fund a sum equal to that subscribed by the contributors. The basis was subsequently altered, and the Government guaranteed the fund, instead of paying a contribution each year. As it was put by the Leader of the Legislative Council: —"The State, instead of paying a direct contribution annually, calculated on a percentage scale, came is as a guarantor of any possible deficiency." Provision for this was accordingly made in the Bill, and now was embodied in the Government Eailways Act. It was evident that the amount contributed by tho State was far short of tho contribution of the employees. * Considerable discussion took place in regard to the investment of the Accumulated Funds. Under the Government Railways Act there is power to make regulations enabling the Public Trustee to invest surplus funds, which now amount to £1,330,000. Members' contributions, really their savings, not immediately required to pay allowances, are handed to the Public Trustee and become part of the Reserve Fund. The committee had no definite information as to how this £.1,300,000 was invested, but from evidence taken before a Select Committee of Parliament it would appear that part of the moneys was invested in Government securities and part was used to provide credit in the shape of advances for the development of primary and secondary industries. _ A lengthy discussion on this subject ensued. The committee felt that it owed a duty to superannuitants, who wore really in the position of beneficiaries. An investigation was decided upon, and as a preliminary it was decided to obtain information to enable this to be carried out.