SUPERANNUATION FUNDS

New Zealand Herald, Volume LXIX, Issue 21326, 29 October 1932, Page 12

SUPERANNUATION FUNDS

Sir, —Your sub-leader of Wednesday rightly states that the bill as introduced must be regarded as in tentative shape. There is no gainsaying the fact that something has to be done to put these fundi on a more secure basis. While this is so. however, care should be taken to that no very undue hardship is placed on any particular class. The bill as intro duced appears to deal unjustly to those who have already retired after 35 years' /service with the consent of the Minister. The Act appears to assume that members did not comply with the law as regards length .of service, and provides that their retiring allowance shall be on a purely actuarial basis. The former Act, however, provided for their retirement with the consent of the Minister, and that consent having been given, everything was in order. They received of course a proportionately less allowance. To 6ingl» these members out now for special adverse treatment would be most unfair and this is one of the matters which should be put right before the bill becomes law. i ' Fairplat.

Sir, —May I attempt a reply to somo points in your tempefiate and -well-reasoned leading article of October 13 on the above subject ? First, let %e admit without cavil that all the superannuation funds are in a state of hopeless insolvency and that any efforts to resfbre them to a sound actuarial basis are doomed to failure from the start. I cannot admit, however, the whole of your leader's contention that the superannuation schemes were actuarially unsound from the outset. The elements of unsoundness, or most of them, were, in my opinion, caused by wide and frequent departures from the original scheme, and the failures of varivous Governments to implement their promises in the way of State sid. Then, again, your article states that "each fund began with a liability which has never been met for the 'back service' of the first contributors." I would like to point out here that when the Public Service Superannuation Bill was first introduced, all public servants were given the option of either joining the proposed fund or of retaining their rights under the Compensation Act then in force, which entitled them to the payment of one month's salary for every year of service, the sum total being calculated on the basis of the salary received at date of retirement. I think it speaks well for the Public Service generally that at least 95 per cent of its members elected -to forfeit their compensation rights, amounting in the aggregate to many thousands of pounds, and at once commenced payments from their salaries into the. new fund at rates from 5 to 10 per cent per annum. Surely the saving of this huge sum in compensation can fairly be taken as a set-ofi against- the non-payment of contributions for the years of service prior to the introduction of superannuation. In my own case, had I qliosen to remain under the Compensation v Act I should have been entitled to a payment of nearly £1950; I not only subjected myself to a deduction of 8 per cent from my salary, but I was forced to relinquish an endowment insurance policy then in force; I could not manage both. To go to the drastic lengths now proposed by the Government means not only a grave breach of contract made with their servants, and honourably kept by the latter, but, will almost, certainly entail a state of poverty and destitution among those who still have commitments such as I have referred to above.. Would it not be a fairer method to allow the first £2OO of a retired officer's supei-annuation to remain untouched by any "cuts" and make these only on all amounts over and above that sum ? I am not fighting for those of us drawing large sums, but only for the men and women of very moderate means, to whom such a drastic reduction as proposed would necessitate some other means of supplementing their incomes and so place them in competition with llie general public. I am sure that retired public servants, as a body, are ready and willnig to accept their share of the general sacrifices necessary in these distressful times, and I hope I will be permitted to say, in self-defence, that my suggestion, if adopted, would involve a personal sacrifice of over two-fifths of my allowance. Further, I know that the great majority of annuitants' are f New Zealanders born, sons and daughters of early fiioneers, who gave the best years of their ives and the best ir their abilities to the public service; surely they are entitled to just and equitable treatment in this matter. a Forty-three Years' Servick.