THE NATIONAL PROVIDENT FUND

Otago Daily Times, Issue 22219, 23 March 1934, Page 11

THE NATIONAL PROVIDENT FUND

TO THE EDITOR. Sir,—l would like to draw the notice of the members of the_ National Provident Fund to the conditions of that fund in Tts relation to the superannuation benefits. (1) The National Provident Fund Act provides that before accepting the first payment a contributor may elect to receive a refund of contributions in lieu of the pension, but there is no provision for obtaining such a refund after the acceptance of the first payment. (2) Payments out of the fund of £2 and upwards arc held to be liable to stamp duty. (31 The pension from the fund is assessable income for the purposes of the emergency unemployment charges. (4) The provision whereby moneys payable out of the fund were not deemed to be income or accumulated property _ within the meaning of the Old Age Pension Act was repealed by the National Expenditure Adjustment Act, 1932. When I became a member of the National Provident Fund I obtained a copy of the extracts from the National Provident Fund Act, 1910, for the information of contributors. It contained a clause which reads; “A contributor to the fund may at any time elect in the prescribed manner to cease to be a contributor thereto and may at the expiration of 12 months be entitled to receive a return of all contributions less any benefits received.” There is also a clause, not in the extracts, which reads: “Every contributor who becomes entitled to receive a pension may, at any time before receiving and accepting the first payfnent thereof, elect in the prescribed manner to accept in lieu of his pension a return of all contributions made by him to the fund less all sums theretofore received by him from the fund in respect of the benefits provided by this Act.” The contributor knows nothing of that particular clause and may be under the impression he can withdraw at any time. After accepting a payment, however, he becomes a pensioner and cannot then withdraw. As Superannuation Fund payments, the old age pension, or the soldiers' pensions are not liable to stamp duty, the question arises, Why should the National Provident Fund payments be? As the Government contracts to return all moneys less any benefits received, why should the Government put the levy on the pensioner till all the money that lias been paid in has been refunded? Till then the Government is only returning the capital. The position at present is that, should the pensioner die before all the capital is returned, the Government is practically conficating 5 per cent, of the capital—that is, unless the balance of the capital is forfeited to the Government, as it may be for all I know. Tlie first three clauses to which I have referred are comparative trifles compared to the fourth one. This is a straightout breach of contract. The National Provident Fund was inaugurated to induce persons outside the public service to endeavour to provide for their old age and also to confer other benefits such as sickness or maternity. It is essentially a small man’s fund. When I joined the fund the combined income of a man and his wife was not allowed to exceed £2OO for the 12 months just preceding the birth of a child, this showing that the then Government was not catering for the man with a salary. The Government, in order to induce the working man or women to join, inserted a clause in the “contract” which reads: “Moneys payable out of the fund to any person in pursuance of this Act shall not be deemed to be income or accumulated property within the meaning of the Old Age Pension Act, 1908. If the English language means anything, this means that in the event of the member being in such a position as to require the old age pension the receipt of the National Provident Fund pension would not count against him, and that it would be an additional help in his old age. The effect of the repeal of this clause is to rob the member of his pension, ns I shall proceed to prove. A man attains the age of GO and commences to draw his pension, for which, by the way, he may have paid, ns I do, “through the nose.” He gets his 10s a week, till he attains the ago of 05. (I am reasoning on the assumption that the pension remains as it is at present.) He is now eligible for the old age pension, and entitled to receive the full amount. Under the conditions under which I joined he would now receive £4O 19s from tiie Oldage Pensions Department, and £39 which ho is allowed to earn or get privately, and his TOs a week from the National Provident Fund, this being an additional £2O per annum. Through the operation, however, of the repealing clause in the National Expenditure Adjustment Act, his £2O is now counted as income, and is deducted off the £39, so that he is allowed to earn or get only an additional £l3. He now gets £4O 19s, plus £l3, and £26 National Provident Fund income. He would have got the same total had he not been in the National Provident Fund. But suppose he has doubled his contributions in order to get £1 per week, his income from it then is £52 per annum. As he is allowed to earn or get £39, his income now is £l3 over that amount. That £l3 comes off the old age pension, so that ho gets £27 19s old age pension, plus £53 National Provident Fund pension. Still the same total. But, suppose he trebled his contributions in order to get 30s per week, bringing bis income to £7B per annum, he is allowed to earn or get £39. He hag in this case a surplus of £39. That £39

comes off Lis pension. His old affe pension now is £1 19s, plus £7B National Provident Fund pensions. Still the same total. . Suppose he quadrupled his contributions in order to get £2 per week, so that his income is £lO4 per annum, he >s allowed to earn or get £39. He has in this case a surplus of £65 arid gets no old age pension at all. It has vanished completely. Had he not been in the National Provident Fund, and been eligible for the pension, he would get £4O 19s plug £39, which he can earn, making a total of £79 19s, for which he is given no direct monetary equivalent. The man, therefore, who pays contributions to get £2 per week really only gets £24 Is in place of £lO4. In all four cases tne only case in which the member would not lose, should the earning power be cut out, is the first, where he getg only £26. _ But the old age pension is after all in itself only a privilege. The concession to earn may at, any time be cut out, and the National Provident Fund pension would at once reduce the amount that the member could get from the old age pension. In fact, his National Provident Fund pension is valueless. He would got a s much as if he were not in the I wish to, point out here that while the old age pension is in itself a privilege, the contract that the Government made with the National Provident Fund member is not a privilege. It is a contract to grant a certain privilege while tuere is such a thing d a the old age pension. If the old age pension ceased that is the end of it.' You can’t take something out of nothing. I have come in contact with a goodly number of National Provident Fund' members, not one of whom knew anything about the repudiation by the Government of its contract with them. They have never been notified. Ad, they have never been notified I anl justified in assuming that no member has been notified I, myself, found out indirectly. In that case there will be over 20,000 persons paying into this fund believing tnau their contract holds good. It is a most unprincipled confidence trick put over tuc gullible'working man. . I suggest that meetings be called m the various centres, and that the meinhers demand that that clause be reinserted in the contract, or otherwise that the Government return the contributors money with interest on demand. ie Government i s conferring with the superannuated servants before altering the conditions of the Superannuation Fund, The National Provident Fund members apparently were not worth considering. The Government was morally bound, when deleting the clause of the National Provident Fund Act, to notify the members.— I am, etc., MEMBER.