PENSIONS SCHEMES

Evening Post, Volume CXXV, Issue 83, 8 April 1938, Page 12

PENSIONS SCHEMES

PRIVATE COMPANIES

EXEMPTION SOUGHT

The case of private companies that have established superannuation funds through insurance companies was placed- before the Committee by Messrs. J. W. Carr and'H. S. Beaumont, representatives of the A.M.P. Society, who said further taxation for the Government's scheme could not be borne by contributors.

"The A.M.P. Society has in New Zealand alone some seventy schemes in operation, embracing about 3000 employees of well-known corporations and business; houses, and there are also many similar schemes with other life offices," they stated. "These are usually based on a contribution of 5 per cent, from employees, with a subsidy, from the employer ranging from 5 per cent, upwards. The total amount available is applied to purchase endowment assurances maturing at ages 60 or 65. Trustees are appointed to administer the scheme in accordance with the regulations, which are drawn up to protect the employees' interests. These regulations are in every case approved by the Commissioner of Taxes. The sums available at retirement will, in the majority of cases, provide pensions of not less than £2 per week and in many cases much in excess of this. In addition, a substantial death benefit is provided. For example, an employee aged 20, on a salary of £150 per annum, with annual increases of £15 to age 40, contributing 5 per cent, and receiving a 5 per cent, subsidy and retiring at age 60, would secure an initial death benefit of £627, ranging to approxi-

mately £2876 at age 60, when he would be entitled to a pension of £230 per annum.

"Some of these schemes in which we are personally interested have been operating for over 15 years, and in one company alone death benefits amounting to £8000 have already been paid.

EXEMPTIONS URGED,

"The Prime Minister is reported in the daily Press to have given the assurance that none of the superannuation schemes at present in existence would be interfered with, except with the consent of those concerned. We would submit to the Committee that when the Government scheme comes into force, contributors who are unable to devote more than 5 per cent, towards present superannuation schemes should be exempted from the necessity of contributing to the Government scheme, and that it is highly desirable that impending legislation should ratify the Prime Minister's assurance that contribution to the Government scheme is optional for those already contributing to private schemes.

"To illustrate further the liberality of .these schemes, we would mention that in some cases the employee's subsidy is as •much as £3 for every £1 contributed. It would surely be a pity if such benefits had to be forfeited.

"There is .only one other point we wish to raise: that assuming a man elects to contribute to the Government scheme as well as a private scheme, he would be excluded from the Government pension because of the means test."