THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, MAY 18, 1931. PENSIONING FOR ECONOMY.

New Zealand Herald, Volume LXVIII, Issue 20875, 18 May 1931, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, MAY 18, 1931. PENSIONING FOR ECONOMY.

For the second time within a few weeks the General Manager of the Railway Department has made a public statement about the staffl educing policy now being enforced, the policy by which officers with .'35 years' service are being retired on superannuation. Mr. Sterling is concerned to justify the policy. He represents it as a measure of economy which has been chosen because, as he expounds it, the reduction of personnel is achieved in as humane a way as possible. He claims an additional social benefit, in that the procedure avoids casting on the labour market men whose future is not in any way secured. Tho original intention of the superannuation system was that public servants, on reaching the age of 65 or completing 40 years' service, should retire on pension. A further provision was that the Minister could retire contributors where the ago was not less than CO in the case of a male or 50 in case of a female officer; where a male contributor was not less than 55 if his length of service was 30 years or more; or where a male contributor had served at least 35 years. It is this last provision, retirement after 35 years in the service, irrespective of age, around which all the discussion has arisen concerning the railways. Mr. Sterling appears as its advocate. He represents the existence of the superannuation fund and the regulations just quoted as enabling the department to achieve economy through the reduction of staff and at the same time maintain the ideal of humanity.

First let his case be examined from the aspect of economy and efficiency, without the social implications on which Mr. Sterling has laid considerable emphasis. They are important, but are better considered separately. It can easily be seen, from the announcements of officers retiring that have appeared frequently of late, that many of them are in administrative posts of considerable importance. All would have dropped out of the service eventually, since time stands still for a railwayman no more than for anyone else. Yet the disquieting question to the taxpayer, more nearly concerned in the working of the railways to-day than ever before, is whether this wholesale process of dispensing with experienced officers who have reached the top grades in their various departments is true or false economy. With 35 years' service to his credit, a railwayman may easily be little more than 50 years of age. Early recruitment was the rule years ago, and is not unknown to-day. Such an officer should still be in his prime, with energies and faculties unimpaired, with experience ripened to its most valuable stage. There is a strong possibility that the services of the most efficient men the department has are being dispensed with under an order that is designed to produce retrenchment without pain. The General Manager says the policy has not been adopted "without a due sense of the very grave loss that the department is suffering." Hay this also been accompanied by an exact estimate of the effect it will have on the efficient running of theservico? That question is important because one of the most powerful influences demanding economy in the Railway Department—the intensified competition it faces—also demands that there shall be no loss of efficiency. It happens that the very policy now being followed was condemned when visible in a milder form some years ago by one now much concerned in railway policy. When the Superannuation Act was consolidated in 1927, a member of the then Opposition spoke strongly against the compulsory retirement of public servants at 60 years of age, or on completing 40 years' service. He declared it was putting a severe strain on the funds and added:—

All this is the result of the funds having been heavily overloaded by the compulsory retirement of quite a number of civil servants who are still in the prime of life. This is an enormous waste of public money and, furthermore, it. is seriously impairing the efficiency of the public service. It cannot bo other■vise. ... A young man—for surely

a man is sfill young at 55 years of age—is driven out of the service on the ground of old age when he is in (lie prime of life and is becoming a really first-class and valuable member of the service. There is another ten or fiffeen years' work in him in most cases. Who oh earth would think of retiring from his business when in (he fuli flush of health, at 55 years of age ?

This was said by the Hon. W. A. Vcitch, now Minister of Railways. His argument is perfectly sound, and his further observation that many of these pensioners immediately entered other work, and, therefore, competed in the labour market, was absolutely true. There .'ire a number of well-known instances. That the various superannuation funds are in an unsatisfactory position is well enough known. Mr. Sterling admits the need for reducing staffs, and says the method adopted is the only possible one for reasons of humanity. He does riot give any weight to the question of efficiency, which is outstanding, and has been handled so trenchantly by his own Minister in the words quoted. No allowance is made for the extra strain placed on the superannuation funds. Even though those retired after 35 years' service draw a smaller pension fhan if they qualified for the maximum rate, their contributions cease, and in the normal course they will draw pensions five years or more longer fhan in the other circumstances. There is the very definite social factor of competition in the labour market by these men. who cannot be compelled to remain idle, nor, if <,hey work, to do so without reward. It follows that the policy of staff retrenchment from the top does not stand vindicated as a measure of railway economy, nor as a social and humanitarian expedient to the extent that Mr. Sterling has claimed in liis statement s.