The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. MONDAY, MARCH 21, 1932. THE STATE'S CONTRACT

Southland Times, Issue 21658, 21 March 1932, Page 6

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. MONDAY, MARCH 21, 1932. THE STATE'S CONTRACT

When the Farmers’ Union goes fully into the matter of the Superannuation of Civil Servants, it is to be hoped that the members will give due consideration to the fact that the State is party to a contract which it forced on its employees after 1908 by compelling all of them to contribute part of their salaries to the fund. No member of the Civil Service could decline, and the State undertook certain obligations on its part. It received benefits itself by means of transferring pensions, for which it was already liable, to this fund, and up to 1929 those benefits amounted to over £500,000. Any enlargement of the benefits accruing to those who have been contributors without any increase in their subscriptions, may be regarded as gifts which can be withdrawn without involving the contract, but the State has not yet kept its part of its bargain, and undoubtedly it has put on the fund heavier burdens than it was intended to bear. Superannuation Funds to which employers pay subsidies on contributions paid by their employees are common in public and private business, and invariably the employers regard their subsidy as part of a contract. In the case of the Civil Service no employee has the option of refusing to join, and if the necessary subsidies are withheld', allowing the fund to break down, the State will be guilty of a breach of contract, the results of which will be far reaching, because the legality of its act will be tested. The Economy Committee has recommended the ■withdrawal of fixed subsidies to the National Provident Fund, but only on new contributions, realizing that the State is under a contract to those who are now contributors. It urges that for the future the scale should be altered to make the Fund self-supporting. The Committee, though it proposes that grants to Superannuation Funds

should be by annual vote, declares it is impossible to recommend any reduction in the grants because of the actual unsoundness of the funds, the full blame for which is the State’s, since it made contributions by its employees compulsory and framed the scheme, as well as increasing its burdens -by acts which transferred obligations from the Consolidated Fund to the Superannuation Funds. The State cannot be advised to be dishonourable in dealing with its servants.