DOMINION PARLIAMENT

Waikato Times, Volume 112, Issue 18776, 26 October 1932, Page 8

DOMINION PARLIAMENT

STATE SUPERANNUATION. BILL BROUGHT DOWN. QUESTIONS IN HOUSE. (By Telesrapn.—press Association.) Tuesday. The Government Superannuation Funds Bill tt’as introduced in the House of Representatives to-day. The Prime Minister, the Rt. Hon G. W. Forbes, said the measure followed the lines of the report of the National Expenditure Commission with two exceptions. One of these was the period of service taken into consideration for the purpose of assessment of superannuation. The commission had recommended that payments should he computed on an average salary over seven years prior to retirement, but the bill proposed that payments should be based on an average salary over 10 years prior to retirement.

The other exception was that no provision had been made in the bill for setting up a hardship tribunal. It was proposed to leave to a committee, which would be appointed, to decide whether this tribunal would be necessary. It was proposed to refer the bill to a committee to hear evidence from all persons concerned; Everybody would have the opportunity of being heard. The committee would be asked to make recommendations to the House whether alterations in the bill were advisable. The Government did not want to do anything that was unfair. It was desirable that those benefiting from the fund should be able lo rest assured as to the future.

Mr J. A. Lee (Labour —Grey Lynn) said the bill would deny public servants that to which they were entitled. 'He asked whether a time limit would be fixed by the bill in the same way as a period had been fixed for interest reduction.

Mr J. McCombs (Labour— Lyttelton) said a more appropriate title for the bill would be the “ WhoKpsale Repudiation Bill” or “ Government Defaulting Bill.” He asked whether foreign bondholders were the only people to whom the Government would not break faith. It was a sad state of affairs when the Government proposed to break a contract Into which the State had definitely entered. Mr D. G. Sullivan (Labour —Avon) asked whether existing superannuation payments were affected by the bill. Mr Forbes: Yes. » Mr Stallw-opthy’s Criticism. Mr. A. J. Stallworthy (Government —Eden) asked whether any provision had been made for returned soldiers, who were entitled to special consideration. Medical evidence showed that returned men did not have the same length of expectation of efficient service as those who had not gone to the war. He complained that the public servant had been made the football of politicians. There had been a cry for younger men and the consequent retirements had placed a burden on the superannuation funds. Then when it had been found that the Consolidated Fund was in need of relief, there had been further retirements, hut no provision had been' made to strengthen the superannuation funds to enable them to hear the additional burden.

Mr W. Nash (Labour —Hutt) declared the proposals in the bill would not stand before a Court of Equity. There might be something to be said for alteration in the terms for future contributors, but there was nothing which could defend repudiation of the existing agreement. Mr Forbes said the bill abolished the £3OO limit. At the inauguration of the funds steps should have been taken to safeguard them from excessive burdens. Early retirements had also affected the position. The time had been reached when it needed £23,000,000 to make the funds actually sound and the Publio Service recognised It was to its advantage to have the funds strengthened. The position of'the funds was due to the omissions of previous Governments. Mr Semple: And now you are going to punish civil servants. Mr Forbes said it was not a question whether the Government was going to default or not. If the Government had allowed the matter to drift, the time would have arrived when the funds would have broken down. That fear would have been constantly in the minds of civil servants and he believed the service welcomed the fact that steps were being taken to place the funds on a sound basis once more.

Mr Forbes said the committee which was to consider the bill would be absolutely free and unfettered. Mr Savage said the Government had ruined the fund by failing to honour its obligations and was now going to make the contributors shoulder the whole of the burden of reconstruction. The bill was read a first time. Mr Forbes moved the second reading of tho bill pro forma to enable it to ne referred to a Select Committee consisting of the Prime Minister, Sir Apirana Ngata, Messrs. A. E. Ansell, \V. A. Bodkin, 11. G. Dickie, J. Hargest, J. A. Nash, W. A. Veiteh (Government members), M. J. Savage, J. McCombs and W. Nash (Labour) and G. A. Wilkinson (Independent). The motion was adopted.

the measure outlined SEVERAL ALTERATIONS. WELLINGTON, Tuesday. Dealing firstly witli tiie Public Service Superannuation Fund, the Government Superannuation Funds Bill which will operate from January 1 next, defines the position as it affects future retiring allowances. A male contributor will be entitled to retire on attaining Hie age of 05, as at present, or on attaining the age of GO, provided he lias also completed 40 years' service. At present there is no age restriction for retirement after 40 years have been served. A female contributor may now retire at 55, or after 30 years’ service, without age restriction, but the bill provides that she must have attained the age of GO or that she must have served for 35 years if she wishes to retire at 55.

Options to retire with a Minister’s consent, etc., earlier than provided above, are eliminated, but in order to avoid hardship in the case of those compulsorily retired through no fault of their own, provision is made for an aelunrily reduced annuity, instead of a proportionately reduced pension as at present, so that tho Superannuation Fund will be placed in the same (Continued in next Column.)

financial position as if the contributor had been retained in ?fce service to the earliest date on which he could have retired as of right. The basis of calculation of the allowance to be paid to those who retire after fulfilling requirements as to age and length of service is unaltered. The computation Is made as follows: —For every year of service, the contributor will receive one-sixtieth part of his annual salary, and for every fraction of a year of service, he shall receive a proportionate part of onesixtieth of his salary. In no case shall the retiring allowance exceed two-thirds of the salary.

Maximum Retirement Allowances. A special provision Is made regarding contributors compulsorily retired otherwise than for misconduct or who retire voluntarily without complying with the age and length of service stipulation. At present, a male has the option to retire at 60 and a female at 50. Either may also retire now after 35 years’ service or at the age of 55, if this is combined with 30 years’ service. The bill provides for the elimination of these options and for actuarilyreduced annuities only if contributors are compulsorily retired through no fault of their own after 25 years’ service or the attainment of the age of 50. Dealing with voluntary retirements, the bill stipulates that a male contributor who has served for not less than 40 years and whose age is not less than 55 years, will receive an actuarllyreduced annuity. A female contributor will receive a similarly calculated annuity if she retires voluntarily at a minimum age of 50 or after a minimum service of 35 years. These amendments will not affect a provision In the Public Service Superannuation Act which gives to a contributor, who, after at least 20 years’, service, but before qualifying for the retiring allowance, is compulsorily retired for any reason other than misconduct, the right to receive a refund of his contributions with compound interest.

The bill abolishes the maximum retiring allowance of £3OO applicable to persons who entered the service after 1909. In recommending that step, the commission considered the £3OO limit operated unfairly against those officers who, by industry and ability, rose to higher positions in the service.

Other Funds Affected. With certain exceptions of minor importance, provisions of the Bill relating to the Teachers’ Superannuation Fund are identical with those dealing with the Public Service Superannuation Fund. One additional clause dealing with teachers provides that a dispute whether the retirement of a contributor is or lias been compulsory, or whether the retirement was due to misconduct, shall be determined by the Teachers’ Superannuation Board, decision of which shall lie final. Although similar provisions govern alterations in the Government Railways superannuation Fund, there is an additional stipulation increasing ttie rate of contributions to the fund by persons who became contributors before January 1, 1 908, bringing it up to the rate payable by officers who joined subsequent to that date. At present there is a difference of 2 per cent in the two scales. The rale of contributions for officers who joined before 1908 will range from "> per cent if the age was not more than 30 years at the time the first contribution became payable, to !o per cent if the age then exceeded 50 years. Under the present law, there is no statutory requirement for a triennial actuarial investigation of this fund. The bill, however, brings the Railways Fund into line with the other two funds in that respect.