The Daily News MONDAY, JUNE 10, 1929. PENSIONS AND SUPERANNUATION.

Taranaki Daily News, 10 June 1929, Page 8

The Daily News MONDAY, JUNE 10, 1929. PENSIONS AND SUPERANNUATION.

When speaking at Auckland recently, Sir Joseph Ward referred to the accumulated shortages against currgit pensions, particularly in the case of Public Service grants, Teachers’ Fund, and the Railway Service. He asserted that the shortage for these three funds amounted to a very large sum, and he intimated that steps i ould have to be taken to deal with these arrears —which must be provided by the State —irrespective of what was done to place the funds on a sound basis for the future. Few have any idea of the vast amount of money which is provided every year for the payment of the various pensions and retiring allowances made by the State. The following totals up to March 31 last will show the extent of the burden of pensions on the taxpayers since the various Acts under which they are pavable came into force: Old Age, £14,630,341; War, £14,850,609 (excluding South African veterans); Widows, £2,326,077; Maori War Veterans, £549.065; Miners (including funeral expenses), £351,089; Epidemics, £436,265; Blind, £31,691, making a total of over 33 millions, exclusive of grants under the Civil Service Act, special annuities and family allowances. On the top of this huge sum is to be placed the contributions of the various superannuation funds, ■which must amount to several millions. The total payment on account of miscellaneous pensions last year is set down at £2,613,770. It is,

however, in connection with the superannuation funds that most interest will probably centre. The Premier candidly admitted that these funds were not in a satisfactory financial position, adding, that in recent years the altered price levels and the resulting salary increases arising out of the war had led to larger retiring allowances, vliile the accumulated funds were not increased proportionately. Tie also contended that the State subsidies should liave been increased because retirements at a much earlier 1 age than was originally contemplated, particularly in the railway and postal departments, had added ■mnsiderably to the burden of the funds. It should be noted that the Government subsidy to the Public Service Superannuation Funds was originally £20,000, but rose to £86,000 in 1919, while an extra £lOO.OOO was granted between the years 1923-24 and 1924-25. As against the Premier’s contention relative to the operation of high prices and increased salaries, may be placed the actuary’s report for the triennium ended on March 31, 1927, wherein it is stated that on the basis of valuation adopted, the subsidies paid for 1911 and 1912 were too low by £25,000 a year, and that the same fault appeared in the following periods, the shortages being respectively £lB,OOO a year, £38,000, £39,000, £86,000, £104,000 and £154,000, a total shortage to March 31, 1927, of £804,000, or, with accumulations of interest, well over a million. The result is that the actuarial value of future subsidies to be provided by the State, over and above the present subsidy of £86,000, amounts to £4,748,659. The position is, therefore, that at least £50,000 a year should be added to the subsidy t) meet past deficiencies, while there is required a further £4OOO a year to relieve the fund of administrative expenses. With regard to the teachers’ superannuation fund the total paid thereto by the Government up to January 31, 1928, was £680,753, and, according to the Premier, the fund shows an accumulated shortage of £607,000. As to the Railways Fund, the retiring age is sixty, instead of sixty-five, and the allowances now involve an annual liability of £247,442. This fund also shows a shortage, but the latecst figures are not available. Apparently the only fund which is well managed and in a healthy state is the National Provident Fund. In the face of these facts and figures there is ample ground for the whole posi-‘ tion of these superannuation funds to be thoroughly investigated. It is well known that many men are retired from the service of the State when they have several years of first-class work before them; they are receiving high salaries and corresponding pensions, and it is not exceptional for many of them to enter into business life after receiving superannuation, thereby competing with others. The encouragement given to early retirements has made inroads into the f-unds, and now the taxpayers, in addition to finding the Governvent subsidies to these funds, will evidently be called upon to make up past deficiencies and largely increased contributions. There is urgent need for a drastic revision of the Whole system, especially now that taxation presses heavily

on the community. The existing contracts will, of course, have to be kept. If the superannuation system, 'is good for one class it is good for all, and a national system might well be established and placed upon self-supporting lines. It hardly seems just that one portion of the people should have to pay towards superannuation enjoyed by. another portion which has enjoyed good salaries.