Manawatu Evening Standard. FRIDAY, APRIL 11, 1930. THE SUPERANNUATION FUNDS.

Manawatu Standard, Volume L, Issue 115, 11 April 1930, Page 8

Manawatu Evening Standard. FRIDAY, APRIL 11, 1930. THE SUPERANNUATION FUNDS.

In his Budget statement last year the Minister of Finance' stated that the position of the State Superannuation Funds was a matter for serious concern. His investigations, Sir Joseph Ward said, showed that “the cash shortage on account of current pensions alone, which should have been covered by State subsidies in the past, is over £2,000,000.” That ‘“huge shortage,” Sir Joseph went on to say, “has arisen from the neglect in the past to pay the subsidies which the Actuary has certified from time to time, in terms of the Superannuation Act, as necessary to make up the amount required to pay the pensions of the public servants who have already retired.” The pensions have, of course, been paid, but the payments have been made “partly out of the contributions of the officers at present in the service which contributions should be accumulating against their /own pensions.” The effect of this is, of course, to impair the solvency of the funds, which, in Sir Joseph’s opinion, can only be remedied by “a large and permanent increase in the subsidies, with a corresponding additional charge on taxation ... to rehabilitate and maintain the funds on their present basis.” The Minister finding it impossible to bring down amending legislation to deal with the matter last session, proposed to “set up an inquiry as soon as possible to investigate the position thoroughly and report' to the Government on the state of the funds and generally as to what should be done to place superannuation for public servants on a satisfactory footing.” Nothing further has been heard upon this matter, although it is possible the inquiry has been or is being held, with a view- to legislation being brought down during the coming Parliamentary session, -and, - if the Budget statement is correct, the position is sufficiently serious to demand that attention shall be given to it with as little delay as possible. A Treasury statement published in 1928, however, showed that, from the inception of superannuation to the'3lst March of that year the contributions by the State to superannuation and provident funds and to friendly* societies had amounted to £4,174,716, of which the public service, teachers and railways superannuation funds had received £3,469,400, while the employees’ contributions to thore funds had amounted to £7,214,-

600. For the year ended March 31st, 1929, as shown in the Budget (table 8) the subsidies to superannuation funds and the national provident fund amounted to £204,716, an increase of £6935 on the previous year. That figure however only covers the subsidies to the public service, teachers’ and national provident funds, the Railway Department paying its subsidy out of its own funds. Actually (as shown by the Year Book tables, pages 681, 682 and 683) the subsidies paid into the three funds for the year ended March 31st, 1929, were as follows :

Public Service Superan- £ nuation Fund 100,007 Teachers’ Superannuation Fund ... .' ... 72,000 Railway Superannuation Fund 182,337 The payments made from the Rational Provident Fund which, with 30,870 contributors, amounted to £2,275,682, an increase of £318,445 on the previous year, totalled £76,552, £43,422 being an account of maternity benefits, the Government contribution to the fund under the Act amounting’ to £59,125. Since 1926 (and including that year), when the Railway Department became resible for its own finance, the railway superannuation fund has been subsidised to an appreciably greater extent than either of the other funds, rising from £105,000 in 1925 to £182,465 in 1926; the amount was £182,609 in 1927; £182,380 in 1928, and £182,337 in 1929. The subsidies to the teachers’ superannuation fund also show increases from £53,689 in 1924, to £68,000 in 1925, thence on to £70,681 in 1926, and to over £71,000 in the three following years, the subsidy for 1929 being £72,000. The public service fund has not been so well supported, however, as from £136,000 in each of the years 1924 and 1925, ‘the subsidies dropped to £99,269, in 1926; £99,444 in 1927, and'£99,Blo in 1928, rising to £100,007 in 1929. The annual values of the allowances paid have increased from £251,894 in 1924 to £359,084 in 1929, and it is l this increase, doubtless, which has occasioned Sir Joseph’s comments on the serious position of the superannuation funds. The contributions to the public service fund by members of the service, together with the Government subsidies, apart from the interest received from investments, have however more than sufficed to cover the annual value of the allowances up to the year ended March 31st, 1929, when they fell some £SOOO short of the combined contributions, but as the income from investments lias increased during the last five years from £122,510 to £147,040 it can scarcely be seriously contended that the fund is in a bad way. During the 14 years or so of the Reform Administration, the superannuation funds appear to have been built up on a fairly solid basis. The demands that are likely to be made upon them by the retirement of public servants after 40 years’ service, possibly necessitate “a change in the policy of automatic early retirement”' as Sir- Joseph Ward suggests. Apart from that there does not appear to be occasion for any serious alarm in regard to the solvency of the superannuation funds.