National Annuities.

Northland Age, Volume 3, Issue 8, 25 September 1906, Page 5

National Annuities.

Friendly society members, wago earners, and parents blessed with largo families, receive special consideration m the National Annuities Bill, which was introduced on Thursday by Governor’s message. Briefly the measure proposes to subsidise annuities taken out with tho Government Insurance Department upon a sliding scale varying from-10 to 50 per cent, of the premiums paid, and also to encourage Friendly Societies by subsidising their payments to incapacitated members. The very comprehensive proposals aim at providing extra asßistanco to parents of large families, and also discriminate in favour of those earning low wages. The hill will, it is understood, not be put through this session, but is circulated at an early stage in order to give full opportunity for discussion.

Details of the Bill.

The bill is intituled an Act to Encourage the Making of Provision for Old Age. The Commissioner in charge of the Government Insurance Department is empowered to giant deferred life annuities and life insurances, and to enter into any contract for the sale of annuities, tho granting of endowments and superannuation allowances or pensions. These annuities are to be subsidised. The important clause of the hill, clause 5, commences, “in order to encourage the making of provision for old age there shall annually be paid into the National Annuities Account by the Colonial Treaourcr out of the Consolidated Fund the estimated amount of subsidies according to the second schedulo.”

Sliding Scale of Subsidies.

The schedule contains a scale of subsidies, ten in number, ranging from 10 per cent, upon the deposits for unmarried persons, 12$ per cent for married persons without children, 15 per cent, where there is one child, and increasing by 2$ per cent, for each additional child up to a maximum of 35 per cent, for persons with 12 or more children. The maximum annuity upon which premiums will bo subsidised is £l5O per annum. There are additional subsidies as follows; Five per cent, extra if the annuitant’s earnings are less than £156 per annum, 2A per cent, where tho earnings are between £156 and £260 per annum, 2$ per cent, to a widow or widower, 5 per cent, to a member of a friendly society’, and 2$ per cent, for persistency in depositing, which is explained to moan the continuance of three years deposits averaging not less than £2 12/- per annum. Examples arc quoted in the schedule showing that an unmarried man earning £5 a week or more, not being a friendly society member, would receive a ten per cent, subsidy, while a single man earning less than £3 and a member of a friendly society would receive 2$ per cent, subsidy if a persistent depositor. The maximum subsidy and allowance of 5 per cent, is to be obtained by a widow or widower with 12« children, earning less than £3, being a friendly society member, and a persistent depositor. The schedule of deferred annuities accompanying the bill shows that the payment of £1 on account of a person aged five years entitles the annuitant to 9/4 at the age of £6O, or the payment of £6 4/3 in cash, a similar payment of £l by a person aged 20 secures an annuity of 5/7 at 60, or £3 14/2 in cash, while a person aged 39 secures 2/11 per £1 deposit, or £1 18/7 when he attains the age of 60. If the annuities or cash payments are deferred until the age of 65 or 70, the amounts are proportionately larger. Yearly premiums of £1 paid from the age of five enable the annuitant to secure an annuity of £ll 14/9 per annum, or a cash payment of £155 19/7 on reaching the age #f 60, exclusive of subsidies, and it will be possible to take advantage of the ordinary table of annuity assurances with £IOO payable at death if it occurs before reaching the deferred age. All figures quoted in connection with the schedules are exclusive of the subsidies provided by the bill. The minimum annuity is to be £l3 per annum. In the event of death before the deferred age annuity becomes due, all deposits with subsidies will be returned, together with 3 per cent, compound interest. There is also provision for return of deposits if policies are surrendered.

Friendly Societies Subsidised.

Clause 6 states that subsidy shall be paid at the end of each year to any society dr branch registered under the Friendly Societies’ Act, 1882, in respect to tho weekly allowances made by it during the year to its aged members (those over 65 years), on account of sickness or other infirmity, and also to members under the age of 65 years, who on account of sickness or other infirmity have received allowances continuously for over 12 months. The amount of the subsidy is to be as follows: (a) Where the incapacitated member’s age is between 55 and 65 years, a subsidy equal to 50 per centum of the total allowance paid during the preceding year ending the 31st day of December; (b) whore his age is between 45 and 55 years a subsidy equal to 60 per centum of the total allowance ; (c) where his age is between 35 and 45 years, a subsidy equal to 70 per centum of such allowance ; (d) where his age is between 35 and 45 years, a subsidy equal to 80 per centum of such allowance ; and (e) where his age is under 35 years a subsidy equal to 90 per centum of such allowance.

Provision For Deficiency. The Insurance Commisioner is empowered to make all payments connected with the National Annuities scheme and its administration without further appropriation from the National Annuities Account. If, after recourse has been had to the available funds and securities, the balance in the National Annuities Account is at any time insufficient to meet tho charges thereon, it shall be the duty of the Controller and Auditor-General, under the waiTant of the Governor, and on the requisition of the Colonial Treasurer, countersigned by the Commissoner, to issue the amount of such deficiency out of the Consolidated Fund to the Colonial Treasurer, to be transferred by him to be the credit of the National Annuities Account. The money transferred to meet a deficiency is to be regarded as a loan carrying 5 per cent interest, and within 14 days of the issue of any sums in aid of the Annuities Fund the Colonial Treasurer is to report the deficiency to _ Parliament The triennial investigation prescribed under tbe life Insurane Acts shall apply to the

Lear any action svafclbt the Commissioner, though they migfctße interested in Annuities or assutanoee granted by the Commissioner. The Govemor-in-Couheil is to be authorised to gazette regulations from time to time directing the use of tables fixing premiums, defining the nature and extent of risks to be covered in contracts entered into under the Act, and for general purposes connected with the administration of the scheme.