THE RAILWAYMEN

Grey River Argus, 10 November 1931, Page 2

THE RAILWAYMEN

AND SUPERANNUATION. MR. CONNELLY’S STATEMENT. Mr M. Connelly, a member of the Railway Superannuation Board, and of the A.S-dLS. Executive, addressing a meeting of the Amalgamated Society of Railway Servants Otago branch recently said .'that superannuation was a question that was exercising the minds of both the public servants and the taxpayer—the former, because of the recent amendment to the Finance Acit, which had the effect of altering the retiring allowance scale embodied in the main Act, this being now known as the “acturial calculation,” and the

taxpayer because i; was suggested that the subsidy to the funds was not justified. Insofar as this suggestion referred to the present contributors and recent re ire me nits, it did not altogether represent the position. When the superannuation fund was first inaugurated the Government of the day undertook certain liabiliitie-. wh’ch b was now held should be placed on the shoulders of present contributors. The fact that members were at the passing of the Act granted all ‘heir service free, for superannuation purposes, placed a load on the fund which wa s not paid for No objection could very well be taken to this. In fact the Government was to be condemned for so recognising its old servants. This action left, however, a no;t inconsiderable, but definite, liability on the fund, and that liability belonged to the State in much the same way as compassionate allowances. Many of these had been passed by Parliament ,'to employees who have received princely salaries during their lifetime—but little or no comment had been made by the public. In the case of the railway fund, there were years when ’he subsidy was very low, and even a time when no subsidy was paid at all. Beneficiaries under the fund were debarred from participating in other pensions. They were, however, taxed in order that other s might receive these pensions. He (Mr. Connelly) dbl not complain of this, but said that critic- of the subsidy out of'.the public funds should know that their own pensions were being subsidised by State employees who were debarred from receiving these pensions He then cited the saving to 4 he State on widows’ ai d old-age pensions, and submitted following table.

Widow and Children of State Employee.

When the number of beneficiaries under the fund under this heading was 'aken into consideration, the taxpayer received no small return for any subsidy granted by the State. Similar savings were made in the old-age pens : ons. Any retiring allowance in excess of £2/15/- per week disqualified. the superannuated member and his wife from receiving the old-age pension. Under this heading alone the State saved £9l per annum. The speaker said he regarded superannuation more in the nature of a deferred payment in wages. This enabled the various State departments to keep trained men in the service at a lower salary than otherwise would bp ;th-e case were there no retiring allowance to look forward to. Turning to the Finance Act, which enabled the Railway Board to dispense with the services of members after thirty years, on ;i n allowance calculated actuarily, he said this was in accordance with the law as amended early in the year. He wa.s not satisfied that the correct method of obtaining the retired allowance was being pursued. The underlying principle in the Finance Act was that no member would receive more from the fund than if he had retired by right. Any calculation that did not have regard to a member’s probable increase in salary during the period between thirty and forty years’ service would be actuarially unsound. Nor could the righjt of a member to retire medically unfit be ignored. In addition to this, the right of a member to retire after ihirty-five years’ service had to be considered. To retire men on small pensions after

years’ service without these points being taken into consideration was unfair in that it did not give full effect to the legislation. I;t was true that the right to retire members on an actuarial basis could not be successfully contested, there were however, grounds for test ing the method of arriving at the pension.

-M Z3 c Widow and 1 child . . £56 Widow and 2 children . . £73 £5 Widow and 3 children . . £73 £31 Widow and 5 chidren . . £73 £83 Widow and 6 children .. £73 £109 Widow and 7 children . . £73 £135