SUPERANNUATION FUNDS

New Zealand Herald, Volume LXIX, Issue 21359, 7 December 1932, Page 14

SUPERANNUATION FUNDS

CRITICISM OF BILL FORMER PUBLIC SERVANTS UNFAIR SACRIFICE ' ASKED [by: telegraph —special reporter] WILLING TON, Tuesday The Select Conunitteo of the House of .Representatives, which is hearing evidence on t! 10 Government Superannuation Funds Bill, resumed its sittings to-day. The parties heard were the superannuated Public Servants of Pnlmorston North and the superannuated teachers of New Zealand. Evidence for the superannuated teachers was given by Mr. John Caughley, exDirector of Education. " Under the proposals of this bill," said Mr. Caughley, "the Slate puts itself in the position of a man who, after pushing another into the river, finally proposes to rescue the other on condition that the latter will meet half the cost of damage to the rescuer's clothing. Mr. Caughley said that a totally wrong atmosphere was being created by the suggestion that the Government was coming to the rescue of these funds, with the reasonable right to expect members of the funds to undergo some financial loss and hardship to assist in the work of rescue.

Tho actual fact was that the Government was proposing to force members of the funds to como to its rescue by surrendering guaranteed statutory benefits to pay half of a State debt incurred to a preponderating degree by the default actions and negligence of the State itself. Very strangely it was represented that members of the funds should, and no doubt would, welcome the proposal of the Government to put the funds on a sound basis, and that after the enactment of this bill members would enjoy a feeling of security for the future. It could not be too strongly represented that the proposal by the State now to violate tho most apparently impregnable statutory pledge of security of benefits that could be enacted could surely not be regarded as a foundation for security in the future. On the contrary, it would undermine all faith in the integrity of the State and all sense of security for tho future.

It was computed by Mr. Caughlcy that even on a low estimate the bill proposed that present contributors and annuitants should sacrifice such part of their guaranteed benefits as would meet at least threefifths of the liability for a debt incurred largely by the default and negligence of the State. Three-fifths of the liability would be nearer £14,000,000 than £13,000,000. This showed the grotesque nature of the suggestion that members should greet with welcome such a remarkable method of stabilising the funds. Mr. Caughley offered tho suggestion that with the excision of all retrospective provisions affecting the benefits due to present contributors or annuitants, the bill be approved and enacted as it stood. Failing that, the retrospective, provisions should be held over until the next session of Parliament, and in the interim an actuary should provide detailed information regarding the proportionate value to the funds of each of the proposals of the bill. Without such information, it was submitted that neither the committee nor Parliament and not even the Government was in a position fairly to judge what the proportionate effects would be to the various' interests concerned.