SUPERANNUATION FUNDS

Otago Daily Times, Issue 22346, 21 August 1934, Page 8

SUPERANNUATION FUNDS

It -will be expected that the Minister of Finance will afford some indication in the Budget this week of the intentions of the Government with reference to the State superannuation funds, of which not a great deal has been heard lately. The question of the position of these funds has, in fact, been relegated to the background since the report of the National Expenditure Commission pointedly directed attention to it. In the first place, it was referred to a parliamentary committee which held several sittings but came to no conclusion on the subject. Subsequently, it was considered at a conference between the Government and representatives of the public service organisations without, as far as the community could ascertain, any definite settlement of the grave issues that were involved. The funds cannot, however, be allowed to drift without some effort to place them on a secure footing. The reports concerning the position of two of the schemes have been laid on the table of the Lower House during the present session. Neither of them makes satisfactory reading. The state of the Public Service Superannuation Fund has altered very little in the past three years, as the following figures will show: —

The income for the past year, it will be seen, barely sufficed to cover the expenditure, and the increase in the accumulated fund in the three years has been quite insubstantial. Actually, the accumulated fund at March 31 last was smaller than it was three years previously, although the liability on the fund has appreciably grown. The position of the Railways Superannuation Fund, which could at no time be said to have actuarially been as sound as it should be, is, however, much less favourable than that of the Public Service Fund. The payments from the fund are exceeding the income, and are doing so in a degree that must cause concern. During the past year the receipts, inclusive of subsidies amounting to £183,000, were exceeded by the payments to the extent of £92,449. This balance of payments over receipts was £12,263 more than it was in the preceding year. The fund is being required to bear the effect of the reduction in the railway personnel that was necessitated by the depression. While the contributions by members of the fund have thus been reduced, the aggregate of the allowances to those who were contributors has been increased. And, as a consequence, the accumulated fund is shrinking somewhat heavily. It was £1,240,830 at the end of the past year in comparison with £1,333,245 at the close of the previous year, and in the course of the twelve months it was deemed necessary to transfer the sum of £93,263 from the investment account to the current account. The accumulated fund has fallen to a figure corresponding somewhat closely with its total at March 31, 1929. Whereas, however, the annual liability of the scheme at that date was £258,632 it had increased to £440,370 at the close of the last financial year. The need for an overhaul of these two funds and of the Teachers' Superannuation Fund, which is also in an unfavourable condition, must be obvious. Nothing would be gained by ignoring the fact that the condition of the funds must become precarious if a successful attempt to place them on a sound foundation is not made at an early date.

1932. 1933. 1934. £ £ £ Income .. 466,280 535,021 535,093 Outgo .. • • 491,400 Accumulated 525,640 532,944 fund .. 2,888,033 2,897,41a 2,899,o64