SUPERANNUATION FUND

New Zealand Herald, Volume LXX, Issue 21561, 4 August 1933, Page 6

SUPERANNUATION FUND

TEACHERS' ACCOUNTS ' MORTGAGE REVISIONS SERIOUS • EFFECTS FEARED An apprehensive view of the effect of mortgage relief legislation on the finances of the Teachers' Superannuation Fund is taken by the executive .if th& New Zealand Educational Institute '> k in a letter recently forwarded to the acting-Prime Minister, the Rt. Hon. i J. Q. Coatas. - ."As'is well known to you, this fund'*? is ' in a very unsatisfactory condition, : .V due chiefly to'the fact that succesi m sive. Governments have not paid ipto it the necessary subsidies," the letter 4 \- stated. "The bad condition of the fund ; has recently been accentuated by the application of the legislation adopted for the relief of mortgagors. In explanation of this statement it has been * pointed out that of the Teachers' Superannuation Fund the sum £884,345 was, on January 31, 1932? invested in "i land mortgages, though the Superan- - sf] nuation . Board had no voices in ar- ' ranging them. These mortgages, are subject to orders of the Supreme , Court IB and adjustment by the Adjustment Commission. The result is that by reduction, suspension or remission of in- •" terest the fund has been subjected to 1 very heavy losses. "These losses have been accentuated by the policy pursued by the mortgagees of stock —chiefly banks and istock agencies.. As they have the handling of all receipts from the produce of the land, they have followed the practice of retaining all but the bare necessaries of the cost of operating the farms, thereby securing the payment of their own^pterest in full and apply, ing any surplus to the reduction of the principal: The result is that the mortgagee of the land does not get even * the feduced interest ordered by the Court, and may, and in some cases does, lose the principal as well. "It is therefore submitted that measures should be taken to relieve the fund of at least a portion of this loss. It seems a reasonable request to make that power should be given to the Supreme Court to deal with stock mortgages at the same tim% ,as it deals with land mortgages, and'in the same way so far as that is applicable. It would thus be possible, and equitable, to apportion the losses between the parties concerned. Failing some measure of this kind it seems evident that. no option will be left to the Superannuation Board but to proceed to the drastic step of foreclosure in order to preserve as much as possible of the fund entrusted to its care. It will be obvious to you that such procedure is.to be'.' avoided if at all possible. "The executive , of the institute has no hesitation in bringing this matterbefore you. The condition of the fund is s cause cf anxiety to thousands of teachers; and they do not view with, equanimity the depletion of the Superannuation Funds for the benefit of financial institutions." the letter concluded. . . - Comment concerning the difficulty of doing, justice between stock mortgagees and land mortgagees has been made by Judges during the hearine of casfes brought under the Mortgagors' Relief Act, 1931, and its amendments. • and -the suggestion has been made that ;; the legislation should be amended inorder to give the Court power to bind Btock mortgagees by t an orjjer for what is known as pooling arrangements.. >• A Press Association* message from Well-, ington on July ll stated that it was understood the Government would give consideration to the question oif extending the Court's powers, and legislation would probably be introduced next session. „ , , The 1933 edition of the New Zealand Official Year Book shows the accumulated fund of the Teachers' Superannuation Fund at £1,218,166, as at January 31, 1932.