GOVERNMENT RAILWAYS SUPERANNUATION FUND. REPORT BY THE ACTUARY, SHOWING THE RESULTS OF AN INVESTIGATION INTO THE POSITION OF THE FUND AT 31st MARCH, 1919.

Appendix to the Journals of the House of Representatives, 1920 Session I, D-05a

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1920. NEW ZEALAND

GOVERNMENT RAILWAYS SUPERANNUATION FUND. REPORT BY THE ACTUARY, SHOWING THE RESULTS OF AN INVESTIGATION INTO THE POSITION OF THE FUND AT 31st MARCH, 1919.

Laid on the Table of the House of Representatives by Leave-.

BE PORT. Introouction, I. In accordance with Hie instructions of the Hon. the Minister of Finance, given in October last, I have made an investigation into the position of the Government, .Railways Superannuation Fund, and have the honour to report as follows : — 2. The fund, which was established on the Ist January, 1903, includes persons then permanently employed who elected to contribute, and all subsequent permanent employees; those taken over with the Manawatu Railway, however, were given the option of becoming contributors. The fund is administered by the Government Railways Superannuation Fund Board. 3. In certain respect's the fund differs from the Public Service and the Teachers' Superannuation Funds. For example, the contributions of members who joined prior to 1908 at ages under fifty (including employees of the Manawatu Railway Company) are lower in the Railways Fund by ,£2 per annum per £100 of salary than in the other schemes; a contributor with less than forty years' service may retire at age sixty instead of age sixty-five, as in the other funds ; the family benefits payable on death while contributing are not extended to the case of death after retiring, as in the other funds; and there is no provision for periodical actuarial valuation. 4. The prime difficulty in respect of superannuation schemes all over the world, whether public or private, arises from (he fact that the employees who are already old at the commencement of a scheme cannot possibly pay for.their own pensions, and unless the employer makes the proper provision for these cases from the very outset the contributions of the younger men, which should manifestly be set aside and accumulated at interest for many years, are wholly or partially absorbed in meeting them, and the whole future interest that would have been earned upon these contributions is also lost, leaving a legacy of future trouble. 5. The Bailways Superannuation Fund received no subsidy from the employer (the State) for the first seven years, consequently the pensions of the older men were from the outset wrongly ]>aid out of the immature accumulations of the younger men, apparently upon the unsound principle of treating the yoiiii<4 men's'deposits as income to be freely handed out as expenditure to (he older men, instead of being jealously guarded and accumulated, somewhat like savings-bank deposits, against the maturity of the liabilil ies for which they were paid. Tn 1911 a subsidy of £25,000 was commenced, and this has continued to the end of the period under review, with the exception of one year when a double subsidy was received by the fund. The total State contribution to the 31st March, 1919, was ,£250,000. The total pensions paid out to members up to the 31st March, 1919, amount to ,£776,299, of which, on a rough, calculation, less than £360,00(1 has been provided by the total Stale subsidy and the contributions of the pensioners concerned, the balance of £416,299 being taken from the contributions of the younger men, which are wholly required, together with a certain amount of subsidy and all the interest that can possibly be earned on them, to provide their own pension. 6. The remarks in paragraphs I and 5 arc designed to give a rough-and-ready idea of some of the more elementary aspects of the finance of a pension fund. It should be clearly understood that any examination of the accounts such as might, for example, be made by a skilled accountant is quite insufficient to enable a correct idea to be gained of the position of such a fund, because

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it takes no account of the liabilities to which the fund is committed. These liabilities are deferred for periods ranging from one year to a whole lifetime, whilst the contributions to meet them are coming in in present cash, and the, funds are accumulating because the liability for which they are paid lies hidden, and only emerges just when the corresponding contributions have ceased to come in. 7. A glance at the accounts of the Railways Superannuation Fund shows that the fund had increased lo £377,585 by March, 1917, and fhat it decreased in the next two years to £363,804 at the 31st March, 191!). The increase in the funds to 1917, far from denoting solvency, did not nearly keep pace with the liabilities; whilst, on the other hand, the decrease between 1917 and 1919, while very alarming to a layman, actually arose largely from a circumstance beneficial to the fund -viz., the withdrawal of a large number of members, who released the fund from a much larger liability than is represented by the cash they drew out. 8. The object, of the actuarial valuation is to weigh all the assets and liabilities, including the near and distant engagements entered into by the fund; and it may be stated that in any concern where money is paid in respect of long-deferred engagements, particularly those depending upon the duration of human life, there is no other method of approximating to the position. In making an actuarial valuation it- becomes necessary to compare the weight of sums of money payable at, different epochs of Lime and upon different contingencies, and the only practicable method of doing this is by discounting them all (with due allowance for interest, mortality, &c.) to one period of time, reducing them to common capital, or present, values. The Valuation. 9. In making the valuation it is taken that interest at the rate of 4 per cent, per annum will be earned upon the funds during the whole future lifetime of members; that a proportion of members will leave the service and a proportion die at each, age, in accordance with the prewar experience of the fund, drawing the appropriate benefits and relieving the pension liability; and that salaries and the corresponding contributions will increase from age to age according to ratios of increase deduced from the average salaries at the Ist April, 1919, the pensions payable at retirement depending upon the same rates of salary-increase. These and other factors are more specifically set out in the appendix. Tn regard to the rate of interest, the rates earned for the past seven years run from £4 2s. sd. to £4 12s. 4d. per cent.; and, while a higher rate than 4 per cent, may continue to be earned for some time, it is hardly safe to allow more than 4 per cent, for the very long period of time covered by a pension fund. 1 0. The result of the valuation shortly is as follows : — Present or discounted value of the liabilities for benefits contracted for, after allowing for interest, rates of secession and mortality of members, increases of salary, (fee, as indicated £ above ... ... ... ... 5,582,506 Present value (on same basis) of contributions £ receivable from members ... ... 1,259,247 Funds in hand at 31st March, 1919 ... 363,804 1,623,051 Present value of subsidies to be furnished by State ... ... £3,959,455 A.t the date of the valuation the State was paying a subsidy of £25,000 per annum. This 'was increased last year by £50,000, making £75,000 per annum. [f this amount is made permanent the position will be as follows : — £ £ Present value of subsidies to be furnished (as above) ... ... 3,959,455 Less present value, £25,000 per annum 625,000 Less present value, £50,000 per annum 1,250,000 1,875,000 Present value of further subsidies to be found in addition lo the. £75,000 ... ... ... ... ... ... £2,084,455 11. As compared with the valuation made as at the 31st March, 191.2, the total liability of the State is now valued at £3,959,455 (or nearly £4,000,000), as against £1,776,851 then. This increase is mainly due to the higher pay-roll and the increase in the pension-list. The pay-roll increased approximately from £1,425,117 to £2,256,369, and the average salary in the general division from £147 to £202 and in the salaried division from £182 to £240, and I need hardly say that an increase of salary given to a contributor approaching the pension age adds materially to' the value of his pension and comparatively little to the value of his contributions, hence the increase in the liability. This applies also, but in a less degree, to any contributor with service prior to the increased scale of salaries coming into operation, for his pension will necessarily be computed on the new scale for past as well as future service, while the increased contributions will apply only to the future. 12. The high scale of salaries resulting from the effects of the war is the cause of very great, difficulty in estimating the liabilities, as it is hard to judge the future course of the salary scale, a matter upon which so much depends. In point of fact the scale in force at the moment of writing represents an increase as compared with that, of April, 1919, which will have the effect of adding still further to the liabilities.

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Reoommendat ioss. 13. It will be seen from the above that if the recently increased subsidy of £75,000 is continued, this provision will still be far from adequate, even upon the assumption that it is continued in perpetuity. It is recommended that in place thereof a subsidy of £170,000 be provided, which is calculated to extinguish the existing deficiency in about seventy-five years. The amount should, of course, be subject to occasional adjustment to meet changes in the factors. As already stated, the total pay-roll of the employees included in the fund is £2,256,369 per annum, and it may be pointed out that the subsidy recommended represents approximately- 7| per cent, thereon. It is usually considered by the highest actuarial authorities that a subsidy of 5 or 6 per cent, on the pay-roll is quite a reasonable amount for an employer to pay for the undoubted benefits he gets from a pension fund. In this case the figure is somewhat higher by reason of the fact that the State (as employer) failed to make the proper contributions to the fund from the very inception, and has now to provide not only the short payments of the past, but interest thereon. 14. In this connection a great deal of assistance could be rendered by the remunerative investment of the funds. It is doubtful whether this has been realized by those in control, as witness the following comparison : — Rates of Interest earned by Superannuation Funds. PubMs (Service Teachers' Railways Year. Fund. Fund. Fund. £ s. d. £ s. d. £ s. d. 1913 ... ... ... ... 4 6 7 5 3 5 4 6 1 1914 ... ... ... ... 4 5 10 4 6 9 4 5 0 1915 ... ... ... ... 4 5 4 4 4 7 4 2 5 1916 ... ... ... ... 5 1 2 4 1.2 8 4 4 7 1917 ... ... ... ... 5 3 3 4 12 4 4 12 3 1918 ... ... ... ... 5 4 1 5 3 3 4 12 4 1919 ... ... ... ... 5 5 10 5 8 5 4 12 4 In the case of the Public Service Fund the Board has made its own investments since the Ist January, 1916, and the arrangement in the case of the Teachers' Fund is described in the annual report for the year ended 31st December, 1918, as follows: "During the year the Board, with the consent of the Government, came to a very satisfactory arrangement with the Public Trustee for investment of the fund. On the Ist, July, 1918, an allocation was made pro rata, from the Public Trust Common Fund investments to the total amount of the Superannuation Fund on that date. The Superannuation Fund receives the interest on the investments so allocated, instead of the flat rate of interest payable on moneys in the Common Fund of the Public Trust Office. All moneys belonging to the fund now available for investment are invested at current rates of interest. The Public Trustee charges 2|- per cent, on the interest collected for his services in connection with the fund. After allowing for this commission the average rate of interest received on the 31st December last was approximately 52 per cent., which compares very favourably with the rate of about 467 per cent, previously received by the Board." An arrangement having practically the same effect as the above, and involving even less trouble, would be for the Public Trustee to allow interest on the mean amount to the credit of the Railways Superannuation Fund at the rates earned, after allowing for losses, on the mean amount to the credit of the Common Fund. If the subsidy recommended is granted the funds will increase rapidly for.some years, and it is desirable in the interest of the scheme that they should be invested to the best advantage. 15. Not only should suitable legislation be enacted to provide for the subsidy being placed on a proper footing, but it is a matter of the greatest importance that provision should be made for the periodical valuation of the fund. Conclusion. 16. In conclusion it may hardly be necessary to point out that it is erroneous to suppose that a fund of this character exists only for the benefit of one of the two parties involved —the employer and the employees. The following remarks by the late Mr. H. W. Manly, a past president of the Institute of Actuaries, London, and a world-wide authority on pension funds, will bear repetition : " A fund maintained in a sound financial condition is, in my opinion, a blessing to both employer and employed. The employer secures a continuitj- of service, for the employee will think twice before he leaves a service where he has a number of years to his credit for pension, for a small additional income; and if he (the employer) makes a proper contribution to the fund, in addition to guaranteeing a good rate of interest, lie secures efficiency in the service by superannuating his servants with a reasonable pension when they are no longer useful. His salary list is a good 5 per cent.—l am inclined to think in many cases nearer 10 per cent. — less than it would be, if there were no fund, and I do not think, therefore, that he can reasonably object to subscribe 5 or 6 per cent, of salaries to the fund." Percy Muter, F.1.A., Wellington, 24th September, 1920. Actuary, Government Insurance Department.

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APPENDIX. TABLE I. The Benefit's and Contributions provided fob by the Act. The contributions vary according to the age at the time when the, first contribution becomes payable and are as follows : — For contributors who joined prior to the Ist January, 1908— Age 30 and under . . . . .. . . 3 per cent, of pay. Over 30 and not exceeding 35 .. .. • 4 ~ „ 35 „ 40 .. .. 5 „ 40 „ 45 .. ..6 „ 45 „ 50 .. ..7 ~ , -, , - ~ age 50 . . . . . . 10 ~ ' For contributors who joined the scheme on or after the Ist January, 1908— Age 30 and under . . . . .. . . 5 per cent, of pay. Over 30 and not exceeding 35 . . . . 6 ~ „ 35 „ 40 .. ..7 „ 40 „ 45 .. ..8 „ 45 „ 50 .. ..9 I „ age 50 .. .. .. ..10 - I, On attaining of Pension Age 65 with Option of retiring at Age, 00 or after Forty Years' Service. (I.) A pension of one-sixtieth of yearly salary for each year's service, with, a limit of forty-sixtieths (two-thirds) of salary. Maximum pension for entrants after 24th December, 1909, £300. (2.) Or the option, in lieu thereof, of a return of contributions, together with any compensation the contributor may be, entitled to under section 76 of the Government Kailways Act, 1887. With, the consent of the Minister a contributor may retire after thirty-five years' service. 11. On Retirement before Pension Age (on the Grounds of being Medically Unfit for Future Duty). (1.) A pension of one-sixtieth of yearly salary for every year of service, limited to forty-sixtieths. In the case of entrants after 24th December, 1909, maximum pension, £300. (2.) Or the option, in lieu thereof, of a return of contributions, together with any compensation the contributor may be entitled to under section 76 of the Government Railways Act, 1887. .benefits . . - jj [ q % Retirement before Pension Age (on other Grounds than Medical Unfitness). (1.) On voluntary retirement or dismissal for any other reason than misconduct, a return of contributions, together with any compensation the contributor may be entitled to under section 76 of the Government Railways Act, 1.887. (2.) On dismissal for misconduct, return of contributions. IV. At Death, before, becoming entitled lo a Retiring-allowance. (I.) Leaving no widow or children: A return of contributions, together with any compensation the contributor is entitled to under section 76 of the Government Railways Act, 1887. (2.) Leaving a widow : — (a.) £18 per annum during widowhood, or if she so elects, (6.) A return of such portion of the contributions and of the compensation to which the contributor was entitled as the, Board, having regard to the rights of children, thinks fit. (3.) Leaving children : ss. weekly to each child until age 14. V. At Death, after becoming entitled to a Pension. Return of the contributions and compensation (if any) less any sums received Jrom the Fund. Pensions arc payable by monthly instalments, and are computed on the, final salary, unless the contributor has during the previous five years served in any inferior grade to that held at the time of retirement, in which case the average salary for the last seven years is taken.

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TABLE II. Statement of Progress of Active Membership.

TABLE III. Statement of Progress of Pensions.

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New Members Oisoont: lnuei il. Trans- ■"»'""- ftom * c ""'»"- other Funds. By Withdrawal or Dismissal. l tiy V 'ensions. -a al ifear. Total By De Contribu- , tions refunded. ;ath. Family reunion. 1 oi or I Sc Id Aj ,engt ii-vie ge Medial of cuily :c. Unlit. i'.y Transfer to other Funds. Members contributing at End of Financial Year. Part 1903 1903-04 1904 05 1905- 06 j 1906-07 1907-08 1908 0!) 1909 4 0 1910-11 191 I 12 1912-13 1913-14 1914 15 1915-16 I 916 17 1917 18 1918-19 M. ]!'. M. 3,425 1 3.452 3 708 , . 663 . .| 841 .. ! .. 1,174 2 1.325* .. .. 554 .. 2 733 . . 3 857 . . 4 1,388 .. 2 1,223 .. 3 1,298 .. 1 1,450 .. 5 1,267 .. ■ 4 632 . . 2 716 .. 3 21,706 6 29 3,426 3,455 708 063 841 1,176 1,325 556 736 861 1,390 1,226 1,299 I ,455 1,271 634 719 M. F. 3 | .. 15 . . re .. 16 17 .. 13 I . . 17 i .. 10 , . . li :: 21 .. 17 j .. 16 .. 65 j . . 118 | .. 146 i 1 130 I M. 3 27 oo 20 20 20 22 26 20 19 17 29 18 22 42 51 105 M, 7 212 205 231 343 413 406 394 504 539 577 580 550 805 895 1,000 773 • M. 8 156 99 57 58 73 50 123 77 52 81 75 83 59 09 39 29 P. 1 Total m. 8 5 156 28 1.00 15 57 12 58 12 73 14 56 9 123 6 77 17 52 14 81 15 75 10 83 15 59 27 69 25 39 31 29 19 Total 8 150 1.00 57 58 73 56 123 77 52 81 75 83 59 69 39 29 M. 7 8 ■> 3 I 12 2 •i 38 20 438 I 354 330 . 450 533 510 565 642 645 713 714 683 990 1,151 1,270 1 ,064 M. F. Total. 3,399 1 3,400 6,413 4 6,417 6,768 3 6,771 7,095 3 7,098 7,486 3 7,489 8.127 5 8,132 8,942 5 8,947 8,933 5 8,938 9,027 5 9,032 9,243 5 9,248 9,920 5 9,925 10,432 5 10,437 11,048 5 11,053 11,513 5 11,518 11,033 5 11,638 10,998 4 11,002 10,054 3 10,657 Totals .. 21,741 i 052 2 489 8,434 1,194 1 1,195 274 1,195 ! 11,084 __ i is 3:35 ex-em iployees oi Wellington an u Railway Con * Includi nl Mam li Railwi l Wilt I limy.

Attainment ol J^Sn A 80,^c'f '"*'' '" S " rVi ™'' Lietlred M ' M [um - (S°°tion si, Ac.) dioally 0 Year, Void by Death. . In Foroe. Granted. Bxpta™ 1 * to Faroe. *;™- Pension, N ™- , Pension. I Pension. { j Pension. Num- ! |> ,, ||si(l|l Void or ] Granted. Or j N . um - Pension. ber. Number. I Num.- I 1908-04 . . 1904-05 .. 1905-00 .. 1900-07 . . 1907-08 . . 1908-09 .. 1909-10 .. 1910-11 .. 1914.-12 .. 1912-43 .. 1913-14 .. 191.4-15 .. 1915-10 .. 1916-17 . . 1917-18 .. 1918-19 .. I ' | £ 161 9,950 100* 5,848 50 3,788 59 3.911 74 5,626 53 4,816 123 10,066 80 6,305 54 5,229 81 7,050 74 7,958 84 9,344 59 ■ 0,823 09 7,977 39 4,440 29 4,090 161 100* 56 59 74 53 123 80 54 81 74 84 59 69 39 29 1 8 1.0 17 12 18 9 27 24 30 27 20 30 34 34 40 " ! '~ I I £ £ £ £ £ 1 00 1.00 I 9,884 33 1,700 5 256 28 1,444 8 425 252* 15,307 15 1,040 4 483 39 2,007 10 672 298 18,422 12 632 3 135 48 2,503 17 1,020 340 21,314 12 712 9 466 51 2,750 12 683 402 26,257 14 852 8 416 57 3,185 18 1,233 437 29,840 8 485 8 444 57 3,226 9 502 551 39,404 7 120 2 ! 130 62 3,517 27 1,598 004 44,111 17 1,325 8 I 421 71 4,421 24 1,666 634 47,674 14 605 5 237 80 4,789 30 2,766 685 52,558 15 903 10 450 85 5,242 27 1,920 732 58,590 9 790 4 148 90 5,884 20 1,668 790 66,266 15 1.314 7 396 98 6,802 30 2,448 819 70.641 27 1,945 10 603 115 8,144 34 2,806 854 75,812 25 1,862 10 498 130 9,508 34 2,927 859 77,325 32 1,885 10 500 152 10,887 40 3,841 842 77,574 19 1,659 12 805 159 11,741 Totals .. 1,195 103,821 1,195 353 353 26,247 | .. .. 274 18,135 1.15 6,394 Death of i I II I I i I I Oontribu (Scctic Jontributor. Family Pension. ,,, . , Penatonfl (Section 82, Ac.) I0UI "> 1SI » 11 - Year. 0 runted. Void 1 HI 1 I V "nOM,hy! tU toFor0S - (il ' a " t ''' L V " kl - """<"'<-■ *;;,".'- Pension. j Pension. Pension. N ™" Pension, i Xl-.' ] ''™ 10 "- I N ber" Pension, Number. IT PW°». Num - I'Mixinn N,im " £ 12 400 262 18 98li 127 24 950 | 526 42 1 ,704 616 32 1,275 I 729 51. 2,032 i 801 36 997 986 ! 65 2,429 11,084 50 2,1.96 11,145 77 3,737 1,204 09 I 2,038 I,300 79 2,707 1,370 80 3,094 1,433 97 4,038 1,548 93 4,105 1,040 110 5,392 1,892* 941 39,280 i' I i I i 1903-04 .. 1904-05 .. 1905-00 .. 1900-07 .. 1907-08 .. 1908-09 .. 1909-10 .. 1910-11 .. 1911-12 .. 1912-13 .. 1913-14 .. ! 1914-15 -■ 1915-16 .. 1916-17 .. 1917-18 .. 1918-19 .. ■ 80 1,190 68 989 55 815 61 893 57 836 62 916 91 1,313 66 983 43 044 40 605 88 1 ,279 50 735 57 850 ' I 1 8 I,744 114 1,707 314 4,002 6 0 II 10 12 25 25 30 21 37 38 10 10 53 49 52 £ £ £ £ £ 6 78 74' 1,112 274 12,840 12 400 202, 12,440 0 78 I 136 2,023 183* 7,883 18 986 127 19,337 11 143 ! 180 2,695 123 j 5,235 24 950 | 520 23,020 16 218 225 3,870 132 ! 5,516 42 1,704 616 27,434 12 176 270, 4,030 145 7,314 32 1,275! 729 33,472 25 355 I 307 I 4,591 123 I 6,217 51 2,032 i 801. 37,657 25 365 ! 373 , 5,539 221 11,799 36 997 986 I 48,460 30 410 ! 409 I 6,112 163 I 8,613 65 2,429 [1,084 54,644 21 293 | 431 I 0,463 1111 6,478 50 2,1.96 11,145 58,926 37 521 434 I 6,547 136 9,158, 77 3,737 1,204 64,347 38 501 , 484 i 7,202 171 10,027; Oil! 2,038 1,300 71,730 46 643 488; 7,354 149 11,393 79 2,707 1,370 80,422 10 013 499 7,567 143 9,624 80 3,694 1,433 86,352 53 734 564! 8,577 212 11,583: 97 4,038 1,548 93,897 49 072 i 629 9,612 1 185 8,032 ! 93 4,105 1,040 97,824 52 740 j 891 13,468 362 10,351 110 5,392 1,892* 102,783 473 0,039' .. .. 2,833 142,063 941 39,280 £ 274 12,840 183* 7,883 123 , 5,235 132 ! 5,516 145 7,314 123 i 6,217 221 11,799 163 i 8,613 III I 6,478 136 9,158 171 10,027 149 II,393 ! 143 9,624 212 I I,583 185 8,032 362 10,351 Totals .. I 1,364 ! 20,107 473 2,833 142,063 J_ _L_ I _ ,K Includes one female pensioner, £51 12s. lid. ',£61 12s. lid.

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TABLE IV. Present Annual Pay and Contributions of Officers now in Service.

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First Divisioi n. Second Division. Age attained. ' Present Annual Pay. Present Annual Contributions. ' Nunibi Present Present, Annual Annual Pay. Contributions. Age attained. Number. M. £ £ | i I M. 1 I 5 6 13 12 22 19 28 47 44 28 36 48 47 53 64 71 78 102 100 123 152 158 170 215 215 220 243 251 302 298 319 329 322 323 336 300 331 291 244 217 182 198 190 183 188 171 177 126 141 III 38 25 4 F. i 1 £ 203 188 986 1,307 2,637 2,488 4,632 3,959 6,143 10,501 9,509 5,939 7,903 10,814 1.0,407 11,520 13,412 1.5,439 16,511 22,209 21,925 26,810 33,022 34,000 36,942 46,293 45,714 46,637 51,473 53,124 64,619 62,937 66,403 69,314 67,021 05,896 68,164 00,002 05,988 57,699 49,133 43,272 36,020 38,868 37,122 35,973 35,885 82,169 31,863 19,711 18,577 13,248 4,006 1,964 313 £ 20-4 18-8 98-6 110-5 184-6 174-2 324 3 277-2 380-5 6300 575-7 356-3 474-2 581-1 527-2 580-6 687-3 793-1 756-8 935-7 9200 1,134-6 1 ,3900 1,279-4 1,333-8 1,780-6 1,815-0 1,851-2 2,097-8 2,247-2 2,641-2 2,762-9 2,903 8 2,963-7 3,028-4 2,927-4 2,986-3 2,0202 2,858-4 2,030 0 2,353-2 1,987-5 1,715-6 1,943-7 1,850-4 1,798-9 1,794-5 1,0080 1,593-3 985-6 928-9 662-4 2003 98-2 15-7 72 68 67 66 65 64 63 62 61 60 59 58 57 56 55 54 53 52 51 50 49 48 47 40 45 44 43 42 41 40 39 88 37 80 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 10 15 72 68 67 1 66 3 65 3 64 0 63 8 62 7 61 12 60 16 59 18 58 22 57 23 56 27 55 32 54 21 53 35 52 38 51 38 50 29 49 37 48 35 47 20 40 41 45 49 44 43 43 23 42 23 41 23 40 15 39 35 38 39 37 41 30 58 35 82 34 00 33 49 32 48 31 58 30 57 29 08 28 80 27 89 20 50 25 48 24 09 23 93 22 130 21 129 20 158 19 220 18 188 17 127 10 80 15 15 ' 750 900 1,220 2,080 3,550 2,820 5,930 6,130 7,980 10,060 9,500 10,040 12,670 7,905 13,100 14,905 14,600 10,425 12,805 1.1,915 8,684 14,360 17,900 15,190 8,010 8,020 7,630 4,795 10,875 11,720 12,160 17,345 24,905 - 17,805 14,605 14,125 15,735 15,145 17,470 22,135 22,720 12,535 10,680 14,550 17,245 24,290 20,820 22,650 28,325 22,190 13,725 7,775 1,425 75-0 630 85-4 145-6 248-5 197-4 365-6 379-8 478-8 611-7 570-0 543-4 033-5 395-2 658-1 748-2 050-2 4170 520-3 476-6 354-4 461-8 567-9 455-7 240-3 258-6 228-9 143-8 326-3 365-1 376-6 525-6 776-3 554-3 447-7 4400 4765 4631) 5905 894-4 1,032-4 626-8 534-0 727-5 862-2 1,214-5 1,041-0 1,132-5 1,416-2 1,109-5 686-3 388-8 71-3 Totals 2,737 057,489 28,054-0 7,918 2 1,598,880 72,215-0

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TABLE V. Classification of New Pensions granted during the Period from 1st April, 1912, to the 31st March, 1919, showing the Ages at which they were granted.

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Attainment of Pension Age on Length of Service. (Section 80 G.B. Act,) , T , „„ Amount of Number. penBlon 1 1 lletired Medically Unfit. (Section 81.'.) Willows anil Children. (Section 82, Ac.) Total. Age at which Pension granted. NnTnlici- Amount, of Numucr. p en8 i on . Number. Amount of Pension. Number Am " u " tof M,m ""- Pension. 67 66 65 64 63 62 61 60 59 58 57 56 55 . 54 53 52 51 50 49 48 47 46 45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 17 14 13 12 II 10 9 8 7 6 5 4 3 2 1 0 M. £ 8. d. 2 107 18 0 12 1,932 18 0 49 5,059 8 8 14 1,327 16 3 27 3,014 9 II 33 4,i28 10 3 98 10,551. 9 8 1.66 16,692 14 5 11 1,525 12 0 5 555 0 0 3 504 4 0 7 1,335 10 0 2 446 13 0 5 862 3 0 1 230 13 0 £ s. d. £ M. 2 12 50 14 27 34 99 171 23 15 I 7 16 12 14 4 4 7 3 4 3 2 1 2 3 4 I 2 2 2 1 1 4 6 3 2 I 2 4 1 3 3 2 3 1 239 F. 1 "l I "2 3 1 "5 4 3 3 0 5 4 6 3 2 9 8 8 7 4 10 8 9 10 13 10 9 17 9 II 15 12 11 II 7 2 4 2 1 1 o 267 1 Total. 2 12 51 14 28 35 99 171 25 18 8 16 12 19 8 7 10 5 9 7 8 4 4 12 12 9 9 6 12 9 10 14 19 19 11 18 11 15 16 15 14 13 7 g 7 4 5 1 1 3 506 1 1 £ s. d. 107 18 0 1,932 18 0 5,184 13 8 1,327 16 3 3,032 9 II 4.285 0 3 10,678 17 8 17,198 12 5 2,707 4 0 1.696 13 0 850 10 0 2,288 12 0 1,378 0 0 1,074 4 0 045 9 0 381 15 0 578 18 0 230 1 0 359 10 0 264 14 0 244 15 0 82 11 0 128 18 0 420 14 0 437 0 0 196 9 0 241 8 0 107 6 0 277 12 0 210 2 0 238 8 0 382 19 0 514 14 0 371 11 0 237 3 0 355 7 0 258 7 0 280 19 0 307 2 0 322 19 0 274 II 0 240 I 0 126 0 0 1.44 0 0 120 0 0 72 0 0 54 6 0 18 0 0 18 0 0 30 17 0 104 0 0 234. 0 0 390 0 0 286 0 0 442 0 0 429 0 0 559 0 0 546 0 0 546 0 0 468 0 0 533 0 0 546 0 0 585 0 0 455 0 0 455 0 0 M. " I 107 5 0 I "18 I I 5 12 10 4 9 10 9 3 4 7 I 3 2 1 2 3 4 I 2 2 2 1 I 4 0 3 2 1 2 4 1 3 ;} 2 138 4 0 127 8 0 505 18 0 1,145 12 0 1,087 7 0 328 0 0 952 10 0 931 7 0 722 1 0 336 16 0 327 15 0 524 18 0 194 I 0 269 10 0 192 14 0 136 15 0 28 11 0 92 18 0 258 14 0 293 0 0 52 9 0 115 8 0 95 6 0 97 12 0 66 2 0 76 8 0 202 19 0 280 14 0 83 11 0 75 3 0 49 7 0 96 7 0 82 19 0 37 2 0 106 19 0 76 11 0 42 I 0 I I 18 18 2 3 I 30 54 18 .. .. 5 4 3 3 2 5 4 0 3 2 9 8 8 7 4 10 8 9 10 13 10 9 17 9 11 15 12 11 11 7 8 7 4 2 1 I 2 8 18 30 22 34 33 43 42 42 36 41 42 45 35 35 90 72 54 54 30 90 72 108 54 30 162 144 144 126 72 180 144 162 180 234 288 162 306 162 198 270 216 198 198 126 144 126 72 36 18 18 36 104 234 390 286 442 429 559 546 546 468 533 546 585 455 455 .. 3 IS 6 0 i 0 17 0 239 267 506 Totals 435 48,281 18 2 142 10,357 17 0 781 11,528 810 542 1,358 70,167 15 2 J L_

I),—sa.

TABLE VI. Classification of Pensions is Force at 31st March, 1919, showing the Ages at which they were granted.

8

Attainment of Pension Age |{,,fi„,,l Meilieallv Unlit ,.„„ or Length of Service. H'tll, I M I ii.il yl) llltt. at-widen (Section 80, <J.B. Act.) (Sectior.81.) Pension granted ' Number. Ainnunfc of Numb( , r j Amount Of Pension. iviinkhi. _J JL Wide Chi (Sectioi lows and hililren. ion 82, Ac.) Amount ir. of Pension. Number. Total. Number. Amount of Pension. M. F. £ s. d. m £ s. d. 77 1 .. 133 6 8 73 2 .. 151 0 8 71 2 1 182 14 I 70 6 .. 408 13 09 5 .. 362 15 1. I 37 I I 2 68 7 .. 453 3 9 67 21. .. 1,403 4 0 00 30 .. 3,019 10 2 | .. 65 87 .. 7,357 4 7 64 39 .. 3,255 15 4 63 51 .. 4,770 10 6 62 75 .. 6,895 16 3 1 138 4 0 61 163 .. 15,218 17 1 2 222 8 0 60 317 .. 27,736 6 4 6 552 18 0 59 12- .. 1,629 18 8 II 1,047 7 8 58 5 .. 555 6 0 12 1,229 3 1 57 3 . . 504 4 0 7 59118 0 56 7 .. 1,335 16 0 II 1,072 17 3 55 3 .. 683 6 4 17 1,513 5 0 54 4 .. 079 15 0 ! 15 1,084 0 3 53 1 .. 230 13 0 4 411 2 9 52 .... .. 3 251 14 11 51 .... .. 7 507 14 I 50 .. ! .. . . 3 208 10 0 49 .... .. 4 257 13 4 48 .... .. 4 247 15 8 47 .... ., 1 9150 40 .... . . ■ 40 .... 45 .... .. 1 29 13 0 44 .... .. 4 304 4 0 43 .... .. 4 I 293 0 0 42 .... .. 1 52 9 0 41 .... .. 2 115 8 0 40 .... .. 3 128 3 4 39 .... .. 2 97 12 0 38 .... .. 3 200 I 5 77 73 71 70 69 68 67 00 05 04 63 62 61 60 59 58 57 56 54 53 52 51 50 49 48 47 46 45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 17 14 13 12 II 10 9 8 7 6 5 4 3 9 i o 1 1 1 3 1 3 4 7 3 1 ''I! 6 i 3 i 6 8 9 11 3 7 15 11 14 II 8 II 10 14 15 18 19 12 18 It) 13 20 II II 14 0 8 7 4 2 2 2 4 13 II 24 27 40 41, 44 41 52 52 57 51 55 £ M. J 2 '.'. 2 0 6 7 21 30 18 87 18 39 18 51 54 76 18 165 54 323 72 23 126 17 54 10 18 18 20 198 19 72 5 108 3 54 7 108 3 144 4 162 4 198 1 54 126 1 270 4 1.98 4 252 I 198 2 144 3 198 2 180 3 252 270 6 324 4 342 1 216 2 324 1 180 1 234 3 360 I 198 2 198 3 252 1 108 1 144 126 72 36 3 36 I 26 52 169 143 312 351 520 533 \. 251 572 ■ 533 676 676 741 663 715 F. I "l I 1 3 1 3 4 7 3 I II 4 6 3 6 8 9 II 3 7 15 II 14 11 8 II 10 14 15 18 19 12 18 10 13 20 II I I 14 6 8 7 4 2 2 203 Total. I 2 3 6 6 7 21 30 88 40 52 79 166 326 27 24 13 19 20 30 9 9 10 9 12 13 12 3 s 19 15 15 13 II 13 1.8 14 21 22 20 14 19 11 16 21 13 14 15 7 8 7 4 5 3 514 ■ £ s. d. 133 6 8 1,51 0 8 182 14 1 408 1 3 400 6 3 453 3 9 1,403 4 0 3,619 16 2 7,375 4 7 3,273 15 4 4,788 16 6 7,088 0 3 15,459 5 I 28,343 4 4 2,749 6 4 1,910 9 I 1,150 2 0 2,426 13 3 2,196 II 4 I.962 1 3 719 15 9 359 14 11 561 14 I 316 10 0 401 13 4 409 15 8 289 5 0 54 0 0 155 13 0 574 4 0 491 0 0 304 9 0 313 8 0 272 3 4 295 12 0 386 I 5 252 0 0 599 12 4 473 16 0 387 1 0 333 9 0 373 7 0 232 5 0 288 10 0 390 0 0 281 10 0 274 11 0 272 17 0 127 10 0 144 0 0 120 0 0 72 0 0 54 0 0 36 17 0 f 20 0 0 52 0 0 169 0 0 143 0 0 312 0 0 351 0 0 520 0 0 J 533 0 0 572 0 0 583 0 0 070 0 0 676 0 0 711 0 0 663 0 0 I ' 715 0 0 37 .... 30 .... . . 6 329 12 4 35 .... .. 4 149 16 0 34 .... .. 1 45 1 0 33 .... .. 2 117 9 0 32 .... .. 1 49 7 0 31 .... .. 1 52 5 0 30 .... .. 3 54 10 0 29 ..• .. .. 1 30 0 0 28 .... .. 2 83 10 0 27 .... .. 8 70 I I 0 26 .... .. 1 20 17 0 25 .... .. 1 19 16 6 24 .. .. i 23 .... 22 .... 21 .... .. 3 18 6 0 17 .... .. I 0 17 0 14 .... 13 .. .. 12 .. .. II .... 10 .... 9 .... 8 .... 0 .... - 251 203 514 5 .... 4 .... 3 .. .. (1 - I . . 1 .. ..! 1,251 0 .... Totals 841 1 77,573 16 9 159 11,740 14 9 'otals 1 11,740 14 9 891 13,468 1,251 641 1 641 1,892 ,892 102.782 II 6

D.—sa

TABLE VII. Statement op 'run Statistical Basis upon which the Valuation has been made. 1. The proportions of contributors dying, withdrawing, and retiring at each age were got from the experience of the fund itself to the 31st March., 1912. These factors are set out in Table VIII. Owing to the disturbing effect of the war ii would have been misleading to have used factors derived from later years. '2. Salaries of contributors were taken as at the Ist April, 1919, so as to include the increased salary scale which came into force as from that date, and a scale of average salaries was constructed for each of the two divisions separately. These salary scales were not themselves assumed in making the valuation, but the raiios of increase derived therefrom were applied to the actual galary of each memlier at the Ist April, 1919. ,'). The mortality of pensioners was taken according to the experience of the Public Service, Teachers', and Railway Superannuation Funds combined, up to 1919. 4. Widows' and children's benefits Were valued upon the same basis as on the last occasion— namely. New Zealand population statistics, combined with Farr's Healthy English Females Mortality,

TABLE VIII. EXPERIENCE TABLE. Rates per Cent. per Annum of Withdrawal, Mortality, Retirement, and Increase of Salary.

2—l). sa.

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First Division. Second Division. Combined Divisions. Age. li-lte r,f B^te 0f Rate of *■* Withdrawal. ln °™ Rate of Increase of Salary. Rate of Mortality. I Rate of Retirement. .15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 16 47 48 49 50 51 52 53 54 55 56 57 58 59 lil) li! 62 li.-! li! 6-40 6-45 6-43 6-30 600 6-50 4-80 400 330 2-70 2-30 2-20 2-20 2-30 2-34 2-34 2-25 210 1-90 1-65 1 50 1-35 1-20 105 0-95 0-85 0-85 0-85 0-85 0-83 0-74 0-64 0-50 0-35 0 30 0-30 0-30 0-30 0-30 0-30 0-30 0-30 0-30 0-30 0-23 £ 4-27 6-99 9-34 10-76 11 02 10-56 10-68 9-59 891 713 5-95 4-27 3-50 2-48 2-88 2-69 2-47 213 1-65 1-52 1-43 1-41 1-36 1-34 1-32 1-33 1-32 1 30 1-28 1-30 1-45 1-43 1-41 1 39 1-51 1-60 1-62 1-63 1 60 1-57 1-55 1-45 1-36 1-32 090 0-58 0-28 0-23 005 i 8-61 9-9-61 13 10-11 16-10-25 161025 13-9-41 9801 7-6-91 3611 1556 1-5-51 1-5-61 0 5-71 0 5-69 0-5-51 0516 0-4-81 0-4-46 0-4-16 0-3-86 0-3-56 0331 0 306 0-2-86 0-2-65 0-2-45 0-: 2-26 0-: 206 0" 1-91 | Oi 1-79 0: 1-66 0-: 1-56 o-: 1-4.6 0-1 1-36 01 130 121 115 110 106 105 101 0-99 0-95 0-81 0-61 £ 9-37 1375 16-25 16-79 13-43 9-46 7-23 3-62 1-80 151 1 13 0-71 065 0-55 0-50 0-54 0-39 0-39 0-49 0-48 0-48 0-43 0-43 0-38 0-43 0-28 0-38 042 009 0-28 0-23 0-28 009 005 0-20 023 0-25 0-27 0-28 0-28 0-28 0-29 0-33 0-37 0-40 0-40 0 37 0-34 0 30 0-28 0-26 0-27 0-28 0-30 0-33 0-38 0-42 0-45 0-47 0-50 0-50 0-50 0-50 0-50 051 0-53 0-55 0-60 0-65 0-71 0-80 0-90 100 110 117 1-23 1-28 1-30 1-30 1-85 1-46 173 1-90 200 ] 0-10 010 010 010 010 010 010 0 10 0-10 0 10 013 0-20 0-30 0-35 0-39 0-40 0-40 0-40 0-40 0-44 0-80 1-40 2-40 600 9-92 13-60 17-40 2100 24-80 29-32

I).—sa.

TABLE IX. LIFE AND SERVICE TABLE. Based upon the Rates per Cent. per Annum of Withdrawal, Mortality, and Retirement given in Table VIII applied to 100,000 Entrants at Age 15.

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First Division. Second I livision. , Existing in With- - » Service. drawn Is. Deaths. ! Bctirc. ments. Average Salary (graduated). I Existing in Service. Withdrawals. Deaths. Bctirc- j *W molrts - (graduSd). Age. | I £ ~" 96-0 1001 107-1 117-1 129-7 144-0 159-2 176-2 193-1 210-3 225-3 238-7 248-9 257-6 264-0 271 -6 278-9 285-8 291-9 290-7 301-2 305-5 309-8 314-0 ■ 318-2 322-4 I 320-7 331-0 335-3 339-0 344-0 349-0 354-0 359-0 304-0 309-5 375-4 381-5 387-7 393-9 400-1 400-3 412-2 417-8 423-3 427-1 429-6 430-8 431-8 432-0 4320 81-1 88-7 100-9 117-3 137-0 155-4 170-1 182-4 189-0 192-4 195-3 197-5 < 198-9 200-2 201-3 202-3 203-4 204-2 205-0 200-0 23 : 207-0 22 : 208-0 21 208-9 21 209-8 20 210-0 19 211-5 19 212-1 18 : 212-9 17 213-8 17 2140 22 214-6 33 215-1 48 : 215-7 54 : 215-9 59 216-0 59 216-0 58 210-0 57 210-0 55 210-0 60 216-0 105 216-0 179 2160 295 2160 703 216-0 1,068 216-0 1,291 216-0 1,404 216-0 1,376 216-0 1,255 216-0 1,088 210-0 2,548 216-0 ! 15 100,000 i 6,400 16 ! 93,401 ! 6,025 17 ! 87,161 ! 5,605 .18 81,337 I 5,124 19 75,994 j 4,560 20 71,221 I 3,917 21 67,104 ! 3,220 22 63,696 j 2,547 23 60,964 2,012 24 58,750 1,586 25 56,947 1,310 26 55,409 - 1,219 27 53,968 j 1,187 28 52,581 1,209 29 51,193 I 1,198 30 49,841 1,166 31 48,536 : 1,092 32 47,317 993 38 46,196 878 34 45,189 j 746 .35 44,308 I 665 36 43,453 i 587 37 42.658 ] 512 ,38 41,925 ! 440 39 41,254 392 40 40,627 845 41 40,039 341 42 39,458 ! 335 43 38,887 331 44 38,323 i 318 45 37,775 : 279 46 37,254 238 47 36.743 ] 183 48 36,248 127 49 35,777 I 107 50 35,297 j 106 51 34,799 104 52 34.278 103 53 33,730 101 54 33,156 100 :>r> 32,545 98 56 31,807 95 57 30,875 93 ■58 29,646 89 59 27,393 63 60 24,257 61 20,630 62 16,739 63 12,935 64 9.481 65 0,512 199 215 219 219 213 200 188 185 202 217 228 222 200 179 154 139 127 128 129 135 146 165 179 189 194 203 200 197 194 192 193 198 202 217 233 251 278 308 337 365 380 391 395 385 356 328 301 289 246 189 44 43 42 42 41 40 40 39 39 38 49 75 111) 127 140 141 1.39 137 136 146 260 446 741 1,779 2,717 3,299 3,590 3,515 3,208 2,780 6,512 100,000 91,191 82,217 73,699 65,946 59,002 53,286 48,869 45,350 42,430 39,914 37,554 35,297 33,151 31,152 29,342 27,746 26,339 25,093 23,979 22,982 22,065 21,229 20,469 19,771 1.9,135 18,551 18,021 17,541 17,101 10,092 10,308 15,935 15,506 15,207 14,851 14,507 14,166 13,826 1.3,486 13,136 12,745 12,283 11,715 10,765 9,491 8,072 6,550 5,061 3,710 2,548 8,610 8,763 8,312 7,554 6,759 5,551 4,268 3,377 2,771 2,359 2,200 2,107 2,015 1,886 1,716 1,514 1,335 1,175 I .044 925 818 730 650 585 523 469 418 372 335 306 277 254 233 212 198 180 167 156 147 142 133 126 116 95 66 199 211 206 199 185 165 149 142 149 157 160 150 131 113 94 82 72 71 70 72 70 84 89 92 93 90 93 90 88 80 85 86 88 93 99 105 116 127 138 148 153 157 157 152 140 128 118 113 96 74 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65

D.-5a

TABLE X. ■Consolidated Revenue Account op the Government Railways Superannuation Fund from the Ist April, 191.2, to the 81st March, 1919. Ineo me. £ s. d. Funds at the Ist April, 1912 .. .. .. .. .. .. 233,457 8 6 Members' contributions .. .. .. .. .. .. .. .. 534,794 13 0 •Government contributions .. .. .. .. .. .. .. .. 200,000 0 0 Interest .. .. .. .. .. .. .. .. .. .. 102,245 14 2 Fines .. .. .. .. .. .. .. .. .. .. 2,854 5 6 From New Zealand Railway Transvaal War Belief Fund . . . . .. .. 316 16 0 Miscellaneous .. .. .. .. .. .. .. .. .. .. 66 0 0 £1,073,734 17 2 Outgo. £ s. d. Pensions to members .. . . . . .. . . . . . . .. 519,645 15 7 Pensions to widows and ohildren ■ . .. .. .. .. . • . . 56,650 5 1 ■Contributions returned, together with compensation paid at death or withdrawal .. .. 1.30,623 11 4 Transfers to other funds . . . . .. . . . . . . . . . . 907 15 5 Public Trust Office commission .. .. .. .. .. .. .. .. 1,809 1] 5 Travelling-expenses .. . . . . . . .. . . . . . . .. 253 4 0 Pines refunded . . .. . . .. .. . . . . .. . . 40 10 0 Funds at the 31st March, 1919 .. .. .. .. .. .. .. 363,804 4 4 1,073,734 17 2 TABLE XI. SUMMARY OF VALUATION RESULTS. Valuation Balance-sheet as at 31st March, 1919. Liabilities. £ 'Value of 1,001 pensions for £89,314 lis, 6<l. per annum already granted .. .. .. .. 756,663 ~ 377 pensions for £6,786 per annum granted to widows.. .. .. .. .. 70,815 „ 514 pensions for £0,682 per annum granted to children .. .. .. .. 34,340 „ prospective pensions for buck servioe .. .. .. .. .. .. .. 2,313,070 ~ ~ for future service .. .. .. .. .. .. 1,918,119 „ „ to widows .. .. ..' .. .. .. .. 136,192 (■<> children . . .. .. .'. . . 53,232 ~ return of contributions on death .. .. .. .. .. . . . . 23,457 on withdrawal .. .. .. .. .. .. .. 270,618 £5.582,506 Assets. £ .Accumulated funds .. .. .. .. .. .. .. .. .. .. 363,804 Value of contributions receivable .. .. .. .. .. .. 1,259,247 ~ total future subsidies to be provided .. .. .. .. .. .. .. 3.959,455 £5,582,506

Approximate Cost of Paper, —Preparation, not given ; printing (650 copies), £30.

Authority : MARfrus F. Marks, Government Printer, Wellington.—1920.

Price 6d.}

11