SUPERANNUATION FUNDS

Otago Daily Times, Issue 21773, 12 October 1932, Page 6

SUPERANNUATION FUNDS

THE RAILWAY- SERVICE/ QUESTION OF IMPROVING STABILITY I . ■ • •;/ findings of the commission • . /■ (Peb United Press Association.) , WELLINGTON, October IIA statement was issued to-day by Messrs Dash, Connelly, and Elliott, of tho i Amalgamated Society of /Railway Ser- | vants, who are also membeps of tbe.-Rail-way Superannuation Fund,, regretting ! that when the question of, improving, the stability of the railway .superannuation fund was being considered' 'by' the Economy Commission an opportunity. wa» not afforded representatives of Division 2 of the railway service ito tender evi- £ dence, as had this been Rone they believed that the findings,of the commission would have, been more acceptable «o the 1 great bulk of contributors and superannuitants. .. . V v : VAfter referring to a ninhber of points they say: “ Whilst reitarating that'- the contracts should not be- broken we unhesitatingly say, if they; must be . interfered with, there is no reason why those in receipt of large annuities shoufld no’t be simi-’ larly treated and the maximum pension payable reduced to. £3OO a year. This would involve a considerable" saving to , the fund and would inake possible' the retention of the more’/justifiable benefit* ta the great bulk of-’the contributors, i " . jf ' ■ CHRISTCHURCH SUPERANNUIXANTS V ■ I■'1 ■' STRONG OPPOSITION TO “CUTS.” - (Special to/ DArnt Times;)' CHRISTCHURCH, October 11. \ A meeting of about 200 superannuated civil servants in determined on the fullest pbssible resistance, if the Government proposes togiveelfefet to. National Expenditure Commission’s recommendations' involving a reduction-, io the superannuation payments. <lf cute are contemplated the Christchurch superannuitants represented at the meeting, intend to contribute to a fighting fund whick will enable the matter td be fought out in the courts, even in the Privy Council if necessary., : ■ - v •' _ The meeting appointed Mr W, H. Hagger, formerly conciliation commissioner in 'Christchurch, to discuss tho situation .with a, committee .of. superannuated civil servants in Wellington. It was .stated, at the meeting that tho late, Sir Charles Skerrett, former Chief Justice o£ New Zealand, had given it a* , his opinion ■ that the Government was under a'bond in the matter of superannuation and. could not alter ... the) original superannuation agreement. The meeting turned down a suggestion that the Government should be asked not to reduce superannuation payments of £2OO yearly or less, standing out for no reductions at all.- It was contended that the super annuitants, considering the sums which the civil servants, had paid into the fund, were entitled? to press for the full returns provided for. _ . ■. ; proposed legislation COMMENT BY PRIME MINISTER. (From Our Parliamentary Reporter.) WELLINGTON, October 11. J Very brief comment ■Was made by tho Prime Minister (Mr G. W, Forbes) this Evening bn the announcement frodi Christchurch that the superannuated civil servants there had determined to resist any /reduction of. their pensions .even. to', the/extent of going to the;, Privy .. Council. " When the Bill relating to the' State superannuation funds' comes before tho. House it will at once be referred to 4 Select Committee for the hearing of evidence,” said Mr Forbes. “The Government has decided to take this step for the 'special purpose of enabling those concerned to make their representations before the Bill is passed.” ' • - > TEACHERS* FUND SEVERELY STRAINED ■ —■ v - ; ; HEAVY STATE LIABILITY (From Our Parliamentary’.Reporter.) WELLINGTON. October 11. A State liability of £5,559,202 towank the Teachers’ Superannuation,. Fund: is disclosed by the triennial report of the Government actuary, Mr C. Goftelow, which was presented in the House of Representatives to-day. The liability at the previous valuation in 1927 was £4,047,798, so that the increase in three-years has been £9(1,404. It is explained that the increase is mainly due to the accumulation at’interest of that part'of the State-* liability which is unprovided- for and to the niimber of retirements of compara-, lively young teachers with, long ser vie* being in excess of the .valuation assumptions. ~ "As regards the first-mentioned source of valuation loss,” says the' report, " i t Is scarcely necessary to yoint out that u tlia fund is in deficiency at one Valuation the amount of the deficiency at the succeedirig valuation will, all other : things being equal, increase at compound interest,, since, in addition to a shortage in capital, the fund is deprived of the interest which that capital would have earbed during the valuation period. The. latter source of loss is self-evident in the /ca*o of those teachers who are retired- irrespective of age after completing the maxi- • mum service that may be counted for pension, not only from the greater number of years' during which the Superannuation Fund is called on to pay pensions, but also from the loss of contribution income until the normal retirng age.” The reptfrt states that the number of pensioners ,on the fund at January 31, 1930, was 1231. The pensions drawn amounted to £218,109 annually, eschmvp of 300 pensions amounting to £8893 annually granted to the widows apd children of deceased members. The number of contributors was 9614, with aggregate salaries amounting, to £2,613,078, who paid contributions amounting to £140,844 annually. The Government subsidy was £204)900, which, compared with the amount ,> reported as' necessary in the last actuarial renort, showed a shortage of, £31p,000 anart from the loss of interest. The, outgoings for benefits exceeded 110 per cent, of the total of contribution income and the Government subsidy, and watt mor* than 85 per cent, of the combmed'income coßtributio.., ment subsidy, compared with 90 pw cent, and 70 per cent, respectively at the previous valuation. Such high percentage* were somewhat disturbing, sincehabilities were essentially of a-deferried nature, and consequently the iuii^^riiould be increased rapidly while the l«nd wai young and the membership was . expandin?<'l would be lacking in my. fesponsibiHtv if I did not enunciate the general principle that no additional financial strain should be imposed on the fund by measures of the Goverment" Mneludes Mr Gostelow. In ,th,e South African public service superannuation scheme? if an officer is forced on pension due to a retrenchment or other policy measure, .all, pension payments up to the date pi ni» attaining the normal pension age are paid out of the public revenue and not out of the.^weraOTUation fund. It is scarcely possible under the present financial conditions for tne Consolidated Fund to assume any. *uch responsibility, and the only sound Alternative in the event of any. departure from what might be termed a- superannuation fund's fundamental obligations to cpntributors is to prevent any increase in «• liabilities by granting pensions rithat arc the actuarial equivalents of tnfrAJension* that would normally be received at tlif statutory retiring aged, having regard to the contributions payable in the meantime. The Commonwealth of Australia safeguards its public' service superaannotion fund by fixing -65 as the normal pension age, with a provision that if any officer is retired after 60, either compulsorily or of His own wish, be is granted a reduced pension .actuarially calculated.”