PUBLIC SERVICE SUPERANNUATION FUND. ACTUARIAL EXAMINATION AS AT 31st MARCH, 1934.

Appendix to the Journals of the House of Representatives, 1936 Session I, H-26a

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1936. NEW ZEALAND.

PUBLIC SERVICE SUPERANNUATION FUND. ACTUARIAL EXAMINATION AS AT 31st MARCH, 1934.

Laid before Parliament in pursuance of Section 24 of the Finance Act (No. 2), 1935.

REPORT BY THE ACTUARY APPOINTED BY HIS EXCELLENCY THE GOVERNOR-GENERAL TO MAKE THE ACTUARIAL EXAMINATION OE THE PUBLIC SERVICE SUPERANNUATION FUND.

Government Actuary's Department, Wellington, 11th September, 1936. 1. I have the honour to submit the following report on the Public Service Superannuation Fund as at the 31st March, 1934, as required by section 49 of the Public Service Superannuation Act, 1927, as amended by section 24 of the Finance Act (No. 2), 1935. 2. The scheme, which came into operation on the Ist January, 1908, embraces, with the few exceptions set out in section 54 of the Act, all permanent public servants outside the Government Railways Superannuation Fund and Teachers' Superannuation Fund. Legislation. 3. Since the date of the last valuation important legislation affecting the Fund has been passed by Parliament. The amendments having a direct bearing on the actuarial position may be briefly summarized as follows: — (a) Section 39 of the Finance Act, 1930 (No. 2), conferred the right to a special pension in the event of compulsory retirement on officers of the Defence Department whose service fell short by less than five years of the time when they could exercise the option to retire, or could be retired by the Minister in Charge under the extended provisions of section 26 of the main Act. In lieu of his prior right to receive only a refund of contributions, such I—H. 26A.

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an officer became eligible to receive such retiring-allowance as was certified by the Government. Actuary to be the actuarial equivalent of a deferred pension commencing at the earliest date on which he would have been entitled to retire, such deferred pension being based on his continuous service at the date of compulsory retirement. (5) Section 14 of the Finance Act, 1931, as amended by section 42 of the Finance Act, 1931 (No. 4), extended to any existing contributor the benefit of an " actuarial " pension on compulsory retirement within five years of the date when the contributor would have been entitled to retire as of right, or with the consent or approval of the Minister in Charge of the Department in which he is employed. In such cases it is provided that " the allowance shall not in any case be of an amount greater than the maximum amount which the_ Government Actuary certifies can be granted by way of such retiring-allowance without imposing on the Superannuation Fund any additional liability by reason of such retiring-allowance being granted before the earliest date on which the contributor would have been entitled, as of right, to receive a retiring-allowance on his voluntary retirement." In other words, the " actuarial " pension is such immediate annuity as is the financial equivalent of the deferred annuity the Fund would become liable to pay in the event of the officer completing the necessary additional service and paying his contributions up to the normal date of retirement. There appears to be a lack of comprehension on the part of the average contributor that the Superannuation Fund neither gains nor loses bv such a method of providing for compulsory retirements. Prior to this valuable concession to contributors, the Fund made a material gain, as the benefit was limited to a return of contributions (with the addition of per cent, interest if the length of service exceeds twenty years). (c) Section 8 of the Finance Act, 1931, gave to all contributors whose salaries were " cut" in accordance with the general reductions the option to protect their superannuation rights by continuing to contribute and receive pensions based on not less than the pre-cut salaries, or, alternatively, to pay contributions and have pensions based on actual salaries, in which latter case contributions paid in the past on any salary in excess of the amount to which the salary was " cut" were in effect refunded to the contributor as they were applied, until exhausted, by the Superannuation Board in reduction of contributions thereafter becoming payable. This latter gesture was too generous, inasmuch as some deduction should have been made for the cost of covering the liability in respect of the contributor retiring medically unfit. (d) Section 9 of the National Expenditure Adjustment Act, 1932, as amended by sections 24 and 25 of the Finance Act, 1932-33 (No. 2), dealt with the position caused by the second salary " cuts " in a manner somewhat similar to (c) above, but introduced a new element as regards the contributions paid in the past on excess " salaries by those officers who elected to contribute in future on actual salary, as it was provided that such excess payments should be held by the Superannuation Board to the credit of the contributor, and paid to him on the date of his retirement or his earlier death. This provision is obviously a compromise, and, like most compromises, will not stand examination. In effect, it provides that the younger the contributor the more heavily is his refund subjected to the operation of discount. Actually the reverse should be the case, since there need be very little deduction (if any) in the case of the youngest contributors, as the risk to the Fund of having to provide a medically unfit benefit at'such ages is negligible, and is offset by the interest on the " excess " contributions. As the member's age increases, so does the risk of retiring medically unfit call for a larger deduction from the contributions, till an age is reached where the Fund is liable to make a loss if any portion of the " excess " contributions is refunded. In view of the protests and representations made by staff organizations that the refunds should be made immediately and applied in reduction of future contributions, and of precedents established in 1921 and 1931, I decided to make in the valuation a reserve for the full amount of such " refunds." This overstates the liability, but the amount involved is small compared to the total liability of the State. (e) Section 20 of the Finance Act, 1931 (No. 2), modified in respect of' any service after the Ist April, 1931, the existing rights of officers in the Cook Islands Public Service or in the Samoan Public Service to count a year and a half for each year's service, except in special cases approved by the Minister. This remedies a weakness, for, while the previous' method of. computing service was justifiable in respect of those who could not stand up to climatic conditions and were compelled to retire medically unfit, it was quite unreasonable that a physically fit officer with twenty-seven years' service should have the right to retire on the same rate of pension as an officer who had served forty years in New Zealand. (/) Section 16 of the Finance Act, 1932 (No. 2), provided that the subsidy in respect of the employees of the trading Departments should be additional to the statutory Government subsidy instead of being paid to the Consolidated Fund in reduction of the same. (g) The New Zealand Debt Conversion Act, 1932-33, and the Local Authorities Interest Reduction and Loans Conversion Act, 1932-33, had the effect of substantially reducing the interest yields on Government securities and local-body debentures as from the Ist April, 1933. It is gratifying to note, however, that, for the quadrennium under review, Treasury reimbursed the Fund to the extent of about £46,000 in respect, of reductions in the interest income from these classes of securities.

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Particulars of Valuation. 4. The contributions and the benefits provided by the Act, together with statements showing the progress of active membership, discontinuance of membership from various causes, and the progress of pensions for each year, will be found in Tables I to IY of the Appendix to this report. The ages of the contributors at the date of the valuation, together with their contributions and other particulars, are shown in Table V; and the pensions granted during the quadrennium, with the ages at which they were granted, in Table VI. Pensioners. 5. At the valuation date there were 2,248 pensioners with annual pensions of £449,174 25., and I submit hereunder an analysis of the pensions under four main headings, namely:— (a) Normal pensions payable in respect of officers who retired as of right on completion of the statutory period of service or attained the statutory retiring-age. (b) Medically unfit pensions, payable to those who broke down in service. (c) Actuarial pensions, payable in respect of those compulsorily retired within five years of normal retirement. (d) Pensions under the extended provisions of the Act. Annual Amount Number. of Pension. Males — £ s - d - Normal pension . . . . . . 858 225,191 6 5 Medically unfit pension . . .. 244 27,317 12 0 Actuarial pension . . . . . . 78 10,831 9 0 Extended provisions of Act . . .. 764 158,136 4 3 Total 1,944 £421,476 11 8 Females — Normal pension . . . . ■ ■ 198 20,843 5 0 Medically unfit pension . . . . 44 2,178 13 4 Actuarial pension . . . . . . 4 291 2 0 Extended provisions of Act . . .. 58 4,384 10 0 Total 304 £27,697 10 4 Grand total . . . • 2,248 £449,174 2 0 6. Section 26 of the Act sets out the conditions for normal retirement with the following proviso: " Provided that the Minister in Charge of the Department in which a contributor is employed may extend the provisions of this section to any case in which the age of a; male contributor is not less than sixty years, or to any case in which the age of a female contributor is not less than fifty vears, or to any case in which the age of a male contributor is not less than fifty-five years if his length of service is not less than thirty years, or to any case in which the length of service of a contributor is not less than thirty-five years; and in any of those cases the Minister may impose upon the retiring contributor such terms and conditions as to payments into the Fund or otherwise as the Minister thinks fit." It seems clear that the original intention of this proviso was to deal with special cases, and that accordingly the power was to be sparingly exercised. The serious aspect of these early retirements has been stressed <xd ticiuscwyyi in successive actuarial lepoits, and it must surely be self-evident that officers retiring at ages from fifty to fifty-five cause a heavy burden on the Fund not only from the! greater number of years during which pensions have to be paid, but also from the loss of contributions until normal retiring-age. Unfortunately for the finances of the Public Service Superannuation Fund, these warnings have been ignored, and the right to impose terms and conditions on retiring contributors has seldom, if ever, been exercised. An idea of the use made of the extended provisions of the Act may be gained from the above table, which discloses that of the 1,944 male pensioners existing at the valuation date no less than 764, or 39-3 per cent., failed to remain in the Service for the normal period or until attainment of the normal retiring-age. Reference to Table Vla of the Appendix (analysing pensioners _ retiring under the extended provisions of the Act according to length of service and attained age at date of retirement) shows that of the 764 males above referred to, 524 (69 per cent.) retired at or under age 60, 308 (40 per cent.) at or under-age 55, and 79 (10 per cent.) at or under age 50.

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7. The income and outgo of the Fund since the previous valuation were as follow:— Consolidated Revenue Account op the Public Service Superannuation Fund from the Ist April, 1930, to the 31st March, 1934. ... Income.. £ s. d. Outgo. £ g. d. Funds at Ist April, 1930 .. .. 2,882,504 111 Pensions to members .. „ . 1,626,570 1 5 Members contributions .. .. 914,524 10 3 Pensions to widows and children .. 145,807 6 5 Transfers from other funds .. .. 2,314 19 7 Contributions returned .. 172 868 4 4 Government subsidy .. .. 344,000 0 0 Transfers to other funds .. '689 12 2 Subsidy from Cook Islands and Samoa Loss on realization of securities .. 11 370 17 9 Administrations .. .. .. 2,851- 9 6 Salaries .. .. .. .. 9 515 9 1 Government subsidy under section 114, Public Trust Office commission .. 15' 189 18 2 Public Service Superannuation Act .. 64,428 2 5 Travelling and office expenses .. 7'162 18 11 Subsidy under Finance Acts, 1932 and Funds at 31st March. 1934 .. . 2 964'064 5 6 1933 .. .. .. .. 78,932 17 6 Interest on investments .. .. 655,355 4 4 Interest on arrears of contributions .. 1,599 13 0 Pines .. .. .. .. 1,653 17 3 Transfers from unclaimed contributions account .. .. .. .. 1,053 16 6 Other receipts .. .. .. 4,019 15 6 £4,953,238 13 9 £4,953,238 13 9 8. It will be noted that the funds given above differ from those shown in the annual reports of the Superannuation Fund Board by £64,500, which sum the Board regards as unearned subsidy, and therefore treats as a liability. In this connection I would point out that the accounts of a superannuation fund are obviously not designed to show the annual profit or loss of the fund, nor does the balance-sheet make any pretensions to show the real contingent liabilities of the fund in connection with pensions or other benefits. Under the circumstances, no good purpose is served by so understating the funds, and the Board is recommended to bring its accounting methods into line with the world-wide practice of financial institutions controlling life-assurance and other funds whose liabilities involve contingencies which cannot be measured by ordinary accountancy standards. 9. Income.—On the income side the chief item requiring comment is the Government subsidy. Compared with the annual subsidies reported as necessary in the last actuarial report, the subsidies paid in during the quadrennium exhibit a shortage of £905,067, apart from the loss of interest thereon. The effective rates of interest credited to the Fund during each year of the quadrennium are given below, together with those of the previous four years for the purpose of comparison. Pato Rate Year ' Per Cent. Year. Per Cent. £ s. d. £ a. ,1. 1926-27 . . . . 517 9 1930-31 .. . . 5 14 3 1927-28 . . . . 518 6 1931-32 . . .. 516 10 1928-29 . . . . 5 14 6 1932-33 .. 5 16 1 1929-30 .. .. 514 2 1933-34 . . ..5 9 0 In the last year of the quadrennium interest amounting to £4,747 17s. 7d. was written off by Court orders under the Mortgagors and Tenants Relief Act. 1933. As this amount represents an effective yield of 3s ; 3|d. per cent, of the invested funds, it accounts for approximately one-half of the fall in the yield measured by that of the two previous years. 10. Outgo. -Retiring-allowances are increasing, and will continue to do so for many years to come. It will be noted that the outgo for benefits during the quadrennium exceeds the total of the contribution income and the Government subsidy, and is about 95 per cent, of the combined income from contributions, interest, a.nd Government subsidy. As I have pointed out in previous valuation reports, these high percentages are somewhat disturbing, since the liabilities are essentially of a deferred nature, and at this stage funds should be increasingly rapidly. Data. 11. The preliminary particulars required for this examination have been obtained from cards supplied by the Secretary of the Public Service Superannuation Board, a separate card being compiled for each member who was in service at the valuation date or who had died or withdrawn since the inception of the fund, and these particulars form the main basis of this investigation and valuation. 12. It is difficult to avoid the conclusion that sooner or later some reconstruction of the Fund is inevitable, and in order to be in a position to report expeditiously on any such proposals for reconstruction I decided to use Powers machines to punch special cards and tabulate the data in the form required for valuation. The Post and Telegraph Department very willingly placed its Powers machines at my disposal, and I am indebted to Mr. A. G Bowater for the supervision of the work and for many helpful suggestions. It is unnecessary to point out that the assembly of the data by means of such machines permits rapid resorting and tabulation in any number of groupings that may be desired, thereby curtailing the time involved in investigations into the cost of making any modifications of the benefits of the

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Fund either for the whole Service or for certain Departments or for officers joining on or after any given date. Table Va of Ihe Appendix gives particulars of membership, &c arranged according to the various Departments of State. The Valuation. 13. The main object of an actuarial valuation is to ascertain whether the current funds, together with the present value of the future contributions, will be sufficient to meet the total liabilities. Before the valuation can be carried out it is necessary to make a careful estimate oi the various factors on which the payment of the benefits and contributions is dependent. These factors may be briefly summarized as follows:— (a) Rate of interest; (b) Mortality-rates of pensioners; (c) Average salary scales; (d) Mortality-rates of contributors; (e) Voluntary-withdrawal rates of contributors; (/) Retirement-rates of contributors; (g) Marriage-rates of contributors; (h) Probability of a member leaving children under fourteen years of age, and the average number of such children; (i) Remarriage-rates of members' widows. 14. The rate of interest used in valuing benefits and contributions was 44 per cent., as the Fund is State-guaranteed. 15. The mortality-rates adopted for pensioners were those used in the previous valuation, and were based on an investigation of the combined experience of the three Government Superannuation Funds (Public Service, Railways, and Teachers) for the period 1919—1927. 16. Average salary scales in respect of males and females separately had to be constructed for the year immediately following the valuation date. This presented considerable difficulty, as it was complicated by the salary cuts and the fact that there were two classes of officers, one contributing on hypothetical salaries—i.e., pre-cut salaries as far back in some cases as 1921—and the other on actual salaries. To have constructed average salary scales based on the heterogeneous contributory salaries, and applied the resulting ratios of increase from age to age to the contributory salary of each contributor as at the Ist April, 1934, would have considerably overestimated the pension liabilities, as, under normal circumstances, the average officer contributing on actual salary would not rise to the hypothetical salary scales, and pensions are based on final salaries. Even if actual salaries were used to obtain the ratios of increase from age to age, the prospective salaries would have been divorced from realities in view of the fact that a large number of officers would never by normal promotions bridge the gap between their actual salaries and the hypothetical salaries on which they were contributing. The problem would have been simplified had the options to pay on higher salary been exercised, as one would have expected, only by the older officers, or by those who had been at the top of the grade so long that they took a very conservative estimate of the possibilities of future promotion. In actual fact, out of the total of 17,369 contributors, no less than 3,239 elected to pay on the pre-cut salaries, and this included contributors from age twenty-four upwards, many of whom must, except under very exceptional circumstances, have recovered the amount of the salary " cuts " by promotion during the remainder of service. The tacit assumption made by each officer electing to contribute on his salary prior to the cuts was that his actual salary would not rise to the higher figure prior to retirement (normal or medically unfit), but even a brief glance at the two sets of salaries showed that at the younger ages the disparity between actual and hypothetical salaries was not wide enough to justify the assumption of valuing on the basis that future salary increases would not bridge the gap. If therefore became necessary not only to separate those contributing on actual and on hypothetical salaries, but also to make two valuations of those contributing on hypothetical salary to make the .necessary allowance for the fact that males under age forty-seven and females under age forty-four would, on the average, rise to a higher actual salary than the hypothetical salary on which they were contributing. In making these several valuations, it was essential to make some assumption as to an early restoration of portion of the remainder of the salary " cuts," and for this purpose I assumed that an immediate allround increase of 5 per cent, would be forthcoming as at Ist April, 1935. Actually a 7-jrper-cent. increase was subsequently granted in August, 1935, and all salary cuts were fully restored as from Ist July, 1936. 17. The actual deaths among male members during the quadrennium were 225, as against 251 expected by the tables used in the previous valuation, and this lighter mortality was in evidence for all age-groups. 18. The male withdrawals were 859, as against 1,530 expected. This appears to have been directly due to the economic depression, the difficulty of finding remunerative employment checking the former tendency of officers to leave the Service for private employment. 19. The number of male officers retiring was 790, as against 506 expected, and the excess was reflected in all age-groups from thirty-five onwards. In the last three actuarial reports stress has been laid on the serious financial consequences to the Fund of retiring, irrespective

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of age, a considerable number of officers with from thirty-five to forty years' service. During the quadrennium under review, the position was intensified, as the Fund appears to have been deliberately used to facilitate retrenchment. The total number of pensioners (exclusive of widows and children), which had increased from 1,563 in 1927 to 1,706 in 1930, grew to no less than 2,248 in 1934. 20. In view of the special influences operating during the quadrennium, the experience was clearly abnormal, and it was decided to adopt rates of mortality, withdrawal, and retirement based on the period 1919 to 1930 and used in the 1930 valuation. 21. Similar investigations were made into the actual experience of female contributors before adopting rates of mortality, withdrawal, and retirement in respect of such officers. 22. Details of the Experience Tables adopted and the Life and Service Tables deduced therefrom are given in Tables VII and VIII of the Appendix. 23. The factors necessary for the valuation of widows' and children's benefits were built up from population statistics combined with the experience of the Fund itself. Results of Valuation. 24. Section 49 (2) of the Act requires the actuarial report to be so prepared " as to show the state of the Fund at the close of the period, having regard to the prospective liabilities and assets." The valuation has been made accordingly, and the results are shown an Table X ot the Appendix, but they may be shortly summarized as follows: — £ £ Present value of existing pensions and allowances . . 4,471,373 Present value of prospective benefits . . • • 11,001,720 Less present value of members' contributions 2,761,470 8,240,250 Total net liabilities . . • • • • • • • • 12,711,623 Funds in hand . . . . • • • • • • • • 2,964,064 Present value of total liability of State . . . . • • 9,747,559 Less present value of present subsidies of £86,000 and £40,000 (if treated as a perpetuity) . . . . 2,800,000 And less present value of State subsidy under section 114 of the Act . . . • • • • • • • 625,839 Value of future subsidies to be provided for by the State over and above the present subsidy . . • • • • 6,321,720 25. The above statement shows a total State liability of £9,747,559, as compared with £7,871,439 at the last valuation, giving an increase of £1,876,120. It should, however, be pointed out that £625,839 of this increase is due to the inclusion of the special widows and children's subsidy under section 114 of the Act as a permanent liability. In the past this has been treated as a supplementary payment to widows and children, and confusion has at times arisen in endeavouring to reconcile statements made as to the amount of Government subsidies paid to the Fund. The balance of the increase is mainly due to the accumulation at interest of that part of the State's liability which is unprovided for and to the excessive number of retirements of comparatively young officers. 26 As regards the first-mentioned source of valuation loss, it is scarcely necessary to point out that if a fund is in deficiency at one valuation the amount of the deficiency at the succeeding valuation will, in the absence of profit and loss from other sources, increase at compound interest, since, in addition to the shortage in capital, the fund is depiived of the interest which that capital would have earned during the valuation period. Reference liEts been mcide in previous VcilucLtion reports to the seiions drain on the Piind. due to early retirements from causes other than medic.al unfitness. I have pointed out time after time that there is no particular virtue in forty years' service, and that retirement should be o- o verned only by age or physical unfitness. No attention has been paid to this advice nor has there been any abatement of the misuse by Ministers of the extended provisions of the Act to retire male officers after thirty-five years' service. From the inception of the Fund to the end of 1930 the number of retirements per annum averaged 126, with average annual pensions granted of £21,337. During the quadrennium under review the figures, which exclude widows' and children's allowances, show the following heavy Amount of Pensions Annual Pension, granted. £ Year ending 31st March, 1931 . . • • • • 134 o^'nof Year ending 31st March, 1932 . . . . • • 470 o!'!?oc Year ending 31st March, 1933 . . . . ■ • on'f^n Year ending 31st March, 1934 . . • • 97 20,369 1930-34 868 £169,802

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27. The importance of the ascertainment of the state of the Fund in the form given in paragraph 25 lies in the fact that the deficiency to be made good by the State —viz., £9,747,559 —is equivalent to an annual interest income (at per cent.) of £438,640. It follows that if any less annual sum than £438,640 is paid in by the State as subsidy the total deficiency will increase, and the subsidy must accordingly by way of compensation rise later on to a much higher figure than £438,640 per annum in respect of present contributors alone. If, however, any annual amount in excess of £438,640 is paid in, the Fund would, in respect of present members, attain solvency within a definite period of time. It should be clearly understood that this amount of £438,640 does not cease with the lifetime of the present members, but is a perpetuity. Furthermore, it does not include any subsidy to new entrants. Ascertainment of State Subsidy. 28. The Act, however, does not provide that the subsidy is to be determined from the foregoing actuarial ascertainment. It directs the Actuary to show in his report " the probable annual sums required by the Fund to provide the retiring and other allowances falling due within the ensuing three years without affecting or having recourse to the actuarial reserve appertaining to the contributors' contributions." I take this to mean that, as the contributions are insufficient to provide the full benefits for service after joining the Fund, the principle underlying the section is that the State shall postpone till it emerges the liability for pensions arising out of service before joining the Fund and for such part of the pensions arising out of subsequent service as is not covered by the contributors' contributions. I estimate the pensions falling due during the financial years 1934-35, 1935-36, and 1936-37, the amounts provided by the contributions, and the subsidies payable on the basis laid down by the Act to be as follow: — 1934-35. 1935-36. 1936-37. £ £ £ Estimated pensions . . . . .. 497,580 501,287 509,719 Amount provided by contributions . . 184,557 191,314 199,700 Amount due to be paid by the State in respect of the three years mentioned (but see also next paragraph) . . 313,023 309,973 310,019 29. The above figures would give for the years 1934-35, 1935-36, and 1936-37 an average subsidy of approximately £311,000 per annum, or £185,000 more per annum than the total of the present statutory subsidy of £86,000 and the trading Departments' subsidy of approximately £40,000. The following considerations, however, must be taken into account: — (a) The actuarial recommendations made in the past in pursuance of the Act have not been fully carried out, the actual subsidy payments into the Fund to the 31st March, 1934, as will be seen from Table XI of the Appendix, being short by £2,104,067 of the amounts recommended. After making allowance for interest, I consider that at least £102,000 per annum will require to be added to the future subsidies on this account. (b) The State subsidy should also provide year by year the amount charged to the Superannuation Fund in administration expenses, less possibly the amount of commission due in connection with investments, which might be regarded as a deduction from interest. The payment of expenses from the Fund is a definite departure from the original scope of the superannuation scheme, and my interpretation of section 49 (2) of the Act is that expenses amounting to, say, £5,000 per annum should form part of the subsidy. 30. I have, therefore, to report that in accordance with the system laid down by the Act the annual subsidy required for each year of the period ending 31st March, 1937, is as follows:— Subsidy now being paid by State (including trading £ Departments) .. . . • • • • • • 126,000 Further annual subsidy required— £ Paragraph 29 . . . . . . . . 185,000 Paragraph 29 (a) .. . . . . • . 102,000 Paragraph 29 (5) . . . . . . • ■ 5,000 292,000 Annual subsidy required for the years 1934-35, 1935-36, and 1936-37 . . • • • • ■ ■ • • • • 418,000

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31. I have indicated above that section 49 of the Act specifically sets out that an Actuary shall be appointed by the Governor-General to furnish " a report which shall be so prepared as to show . . . the probable annual sums required by the Fund to provide the retiring and other allowances falling due within the ensuing three years without affecting or having recourse to the actuarial reserve appertaining to the contributors' contributions." Section 50 reads—" In the month of January in every year the Minister of Finance shall pay into the Fund and out of the Consolidated Fund, without further appropriation than this Act, the sum. of eighty-six thousand pounds, together with such further amount (if any) as is deemed by the Governor-General in Council, in accordance with the aforesaid report of the Actuary, to be required to meet the charges on the Fund during the ensuing year." The only interpretation I can place on these two sections is that the responsibility devolves on the Actuary, and, unless the Governor-General in Council disagrees with the figures in the actuarial report, it is mandatory on the Minister of Finance to make the necessary payments. Up to 1919 the requirements of the Act as to Government subsidy were more or less complied with, the Act being duly amended from time to time to give effect to the actuarial recommendations, although payment of the increased subsidy was on the average two years late and no extra payment was made during the war period. From 1919 onwards, however, no action has been taken to give effect to any of the actuarial reports submitted, and for all practical purposes section 50 of the Public Service Superannuation Act is a dead letter. If the experience of the past fifteen years can be taken as an indication that Ministers of Finance have no intention of providing the statutory subsidies pursuant to the actuarial reports, it would be better for all concerned to dispense with the valuations. The work is highly specialized, additional staff and machines have to be borrowed from other Departments, and, to say the least, it is soul-destroving for the Actuary to know in advance that the time and thought spent in dealing with the problems which arise, together with the work of the staff, are, for all practical purposes, wasted effort. If Government considers the annual subsidy too big a price to pay for the benefits of a superannuation fund, it would be better to face up to the position and reconstruct the Fund in accordance with the State's ability to pay. Such a procedure would at least have the merit of letting public servants know where they stand, and of enabling them, if desired, to make alternative provision for their old age. 32. It is only one step from the refusal of the State to honour its full statutory obligations to discontinue the payment of any subsidy whatever, and, although such a contingency may appear remote, it is interesting and instructive to examine the resulting position of the Fund. For this purpose it is only necessary to submit the following figures as at 31st March, 1934.-— £ Amount of accumulated funds . . . . .. .. 2,964,064 Amount of contributions paid by contributors still in the Service 2,807,192 Capital value of pensions and allowances actually entered upon 4,471,373 It will be seen that, if the Fund were put into liquidation on the basis of treating existing pensioners, widows, &c., as preference shareholders with a prior right of having their claims satisfied before the existing contributors shared in the assets, the former would receive only 66-29 per cent. (13s. 3d. in the pound) of their pensions or allowances, thus suffering a cut of 33-71 per cent, (or 6s. 9d. in the pound), while contributors still in the Service would be unable to recover any contributions paid into the Fund. If, on the other hand, existing contributors were allowed to withdraw their contributions without interest before such liquidation of the Fund took place, the position would be that the existing pensioners could only be paid 3 51 per cent. (Bd. in the pound) of their pensions. If any doubt exists as to the retrogression of the Fund, it will be dispelled by comparing the above percentages with similar figures taken out in connection with the last statutory valuation, and shown on page 25 of the report of the parliamentary Committee set up in 1932 to consider the proposed Government Superannuation Funds Bill. The figures also make it clear how important it is that the Fund should receive an adequate subsidy in the future. 33. As this will probably be the last occasion on which I shall have the privilege of making an actuarial report on the Public Service Superannuation Fund, I submit in Table IX of the Appendix a consolidated Revenue Account of the Fund since its inception. I have also prepared the following concise summary of the position of the Fund at the successive dates of actuarial valuation. It will be seen that, for illustrative purposes, the accumulated funds have been regarded as applicable to a hypothetical Pensioners Account and the balance to a Contributors' Account. This strips the problem of all technicalities and throws the position of the Fund into clear perspective. The table should convince any thoughtful person that reconstruction is urgently needed, unless Government is able and willing to shoulder the enormous liability shown therein.

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Public Service Superannuation Fund.

2 —H. 26A.

9

And, if the Value of With Prospective There were With I Having existing Widows While the As, in (Dormant) Net The Net Pensioners Pensions I Capital and Urpnans Amount at T „ ■„ addition, there Liabilities (i.e., Value Result is a 0n on the amounting ! Value Allowances are Credit of the g were of Benefits less Deficiency Fund to of. added giving a. Fund was Contributors Contributions) of Total Current Liability of (1.) (2.) ! (3.) (4.) (5.) (6.) (7.) I (8.) (9.) £ j £ £ -£ £ £ £ 31/12/1910 .. .. 380 38,253 I 320,623 337,372 263,948 Dr. Bal. 73,424 8,371 | 1,658,684 I 1,732,108 31/12/1913 .. .. 539 56,744 464.919 502,303 537,914 Or. Bal. 35,611 10,809 2,417,077 j 2,381,466 Increase of . . .. | .. .. • • 164,931 273,966 Or. 109,035 .. 758,393 649,358 31/12/1916 . .. 710 80.343 660,139 727,366 896,568 Or. Bal. 169,202 13,313 3,176,283 3,007,081 ' Increase of .. .. | .. .. . . 225,063 358,654 Or. 133,591 .. 759,206 625,615 31/12/1919 . ..I 840 107,505 946,777 1,052,110 1,288.198 Or. Bal. 236,088 14,216 4,379,077 4,142,989 Increase of.. .. j .. .. .. 324,744 391,630 Or. 66,886 .. 1,202,794 1,135,908 31/3/1924 .. .. I 1,377 236.509 2,198,747 2,323,988 2,103,543 Dr. Bal. 220,445 15,021 5,313,728 5,534,173 Increase of.. .. .. .. .. 1,271,878 815,345 Dr. 456,533 .. 934,651 1,391,184 31/3/1927 . 1,563 299,504 2,779,977 2,924,825 2,493,790 Dr. Bal. 431,035 16,914 6,228,735 6,659,770 Increase of .. .. .. ■■ ■■ 600,837 390,247 Dr. 210,590 .. 915,007 1,125,597 31/3/1930 .. .. 1,706 338,009 3,079,044 3,375,540 2,882,504 Dr.Bal. 493,036 17,976 7,378,403 7,871,439 Increase of .. .. 450,715 388,714 Dr. 62,001 .. 1,149,668 1,211,669 31/3/1934 .. .. 2,248 449,174 4,127,622 1 4,471,373 2,964,064 Dr. Bal. 1,507,309 17,369 8,240,250 9,747,559 Increase of . ■■ ■ 1,095,833 81,560 Dr. 1,014,273 .. 861,847 1,876,120 J I !

H.—26a.

34. The causes of the present large deficiency in the Fund may briefly be summarized as follows:— (a) The accumulation at interest of the unredeemed amount of the initial deficiency caused by the gift, in respect of service prior to the inception of the Fund, of free pensions for each year of such " back service " at the same rate as for future contributory service. When the cost of the proposed scheme was originally investigated, it was estimated that the initial deficiency would be £1,816,220. It has to be pointed out, however, that this estimate was based on data supplied giving the number of persons eligible to join the proposed Superannuation Fund, whereas it was found subsequently that many of those eligible did not elect to join the Fund, while, on the other hand, a large number of Civil servants were afterwards brought within the scope of the Bill. It can safely be said, however, that the initial deficiency was not less than one and a half million sterling, and this amount would require to be increased in proportion to the increase of salary levels 011 retirement over and above the levels operating when the scheme was established. The State not only incurred this liability in making a gift of that portion of the pension based 011 service prior to the establishment of the Fund, but was also aware of the cost involved, and the obvious plan would have been to take steps to pay the full capital sum into the Fund, or, alternatively, to provide for its redemption within a reasonable period of from twenty to thirty years, and to make a small additional annual subsidy to assist the contributions of new entrants. (5) The failure of successive Governments since 1919 to honour their statutory obligations as to subsidy. The amount of the statutory annual subsidy has no relation to the actuarial position of the Fund, but is merely a proportion, actuarially calculated, of the pensions and allowances actually emerging. Pensions are, in effect, divided into two parts:— (i) That portion provided by the contributors; (ii) The balance, which is to be met by the State. It will be seen, therefore, that the principle underlying th& Act is that members are to contribute upon the basis of paying their share of the liabilities during their service, while the State is to defer payment of its share until officers are retired. It does not appear to be sufficiently appreciated that the longer a financial liability is deferred the greater is the amount of money that will ultimately have to be provided by reason of the operation of interest. It has also to be remembered that, under the plan of basing subsidies on pensions, the annual subsidies themselves tend to increase rapidly for a number of years by reason of the number of new pensioners annually coming on to the Fund. Reference to Table XI of the Appendix shows a shortage at 31st March, 1934, of £2,104,067 (exclusive of interest) in the subsidies actually paid by the State as compared with those prescribed by the Act. (c) The burden thrown on the Fund as the result of the practice followed, particularly from 1922 onwards, of compulsorily retiring men with forty years' service irrespective of their attained ages or their own wishes, and the extensive use of the extended provisions in the Act for retirement after thirty-five years, &c. The extent to which the extended provisions of the Act have been abused is shown by the fact previously referred to in this report that 39-3 per cent., or two out of every five existing male pensioners, have been granted their pensions without completing forty years' service or attaining age sixty-five. (d) The great increase in pension liability due to the effect of the war 011 salary levels and to the inclusion of house allowance as salary for the purpose of computing pensions. At the most a contributor would contribute on his increased salary only for his future service, whereas he would obtain the same pension benefit as if he had been in receipt of such a salary for the whole period of his service. Some idea of the increased pension liability can be obtained from the fact that between 1913 and 1927 the average salary of contributors aged fifty and over increased by £123 in respect of males and £127 in respect of females. (e) Additional concessions granted to contributors from time to time, as, for example the options to contribute on salaries prior to the cuts of 1921-22, 1931, and 1932, or to accept refunds of contributions on excess payments. (/) Inadequate contribution scales, particularly in respect of female officers. General Remarks. 35. It is not my function to comment on policy matters, but I would be lacking in my responsibility if I did not enunciate the general principle that any additional financial strain on the Superannuation Fund due to policy measures of Government should be a charge on the Consolidated Fund by way of special subsidy. Such a method, I may mention, is followed in the South African Public Service Superannuation scheme, where, if an officer is forced to retire on pension due to a retrenchment scheme or other policy measures, all pension payments up to the date of his attaining the normal pension age are paid out of public revenue, and not out of the Superannuation Fund.

10

Hi—26A,

The Commonwealth of Australia safeguards its Public Service Superannuation Fund by fixing age sixty-five as the normal pension age, with provision that if any officer is retired after age sixty, either compulsorily or of his own wish, he is granted a reduced pension actuarially calculated. It is important to note that, although the problem is approached from different angles, both Governments agree in recognizing that the Superannuation Fund should be financially safeguarded in the event of any departure from what might be termed its fundamental obligations to the contributors. 36. Actuarial Pensions. —There appears to be an impression in some quarters that an actuarial pension represents a curtailment of a contributor's rights. Actually it is a concession designed to provide that any officer who, as the result of a retrenchment policy or other causes, is compelled after long service to retire before attaining the_ specified age or length of service may elect to receive such pension as is the actuarial equivalent of the pension he would have received had he completed his full period of service and paid contributions till the date of normal retirement. Without any such provision for actuarial pensions, compulsorily retired contributors would be limited to accepting a refund of their contributions, with interest at 3-J per cent. In Australian Government Superannuation schemes actuarial pensions are limited to the cases of officers who retire between age sixty and sixty-five. In the New Zealand Public Service scheme, however, this is carried much further, as the right to an actuarial pension is granted to any male officer who is compulsorily retired for reasons other than misconduct at any age over fifty-five, or provided he has served at least thirty years, or provided he has attained age fifty after completing thirty years' service, or to any female officer who has attained age forty-five or has completed twenty-five years' service. It may appear somewhat inconsistent that an officer who is compulsorily retired at certain ages obtains better treatment than one who voluntarily retires. While actuarial pensions involve no financial strain on the Superannuation Fund, and it would not impair the stability of the Fund to bring the compulsory and voluntary retirements into_ line, _ one good reason for the differentiation is that a superannuation scheme has for one of its objects the retention of good men in the Service. To facilitate their retirement at comparatively early ages on any amount of pension however small would encourage them to seek more remunerative positions in private employment. 37. Medically Unfit Pensions.—This is probably one of the most difficult problems in the administration of a superannuation fund, as, on the one hand, some officers are classed " medically unfit" although they are quite competent to undertake work other than the particular work they have been performing in the Service, while, on the other hand, some officers totally unfit to engage in any occupation at all do not fall within the definition of " medically unfit" as interpreted by the Superannuation Fund in accordance with statute. It seems advisable to consider the desirability of creating a special class of " medically unfit for duty " officers, grading each such officer as 100 per cent., 90 per cent., &c., unfit to carry on his occupation. . An officer graded 100 per cent, medically unfit would, of course, receive a full pension based on length of service, an officer graded 50 per cent, medically unfit for duty might be allowed a pension half-way between a " length of service " pension and an " actuarial " pension, and all other grades be dealt with similarly. 38. Provision for Joint Life and Survivor Pensions.—There have from time to time been suggestions to increase the widow's pension, now standing at £31 per annum. The cost of making any material increase is too high to warrant any recommendation that it should be provided out of the Consolidated Fund, and, moreover, it may very well be argued that it is no duty of the State as employer to relieve the employee of his own obligation to provide for his widow by life assurance or other means. On the other hand, theref would be objections raised to any suggestion that all employees should be asked to pay an extra contribution for an increased widows' allowance, partly because of the high cost of such a benefit and partly because in the cases where a pensioner or contributor died as a bachelor or a widower he would have been paying a substantial contribution for no actual benefit. It would be possible, however, to meet the of any employee who would prefer to accept a smaller retiring-allowance on the understanding that his widow's allowance was increased by making provision in the Act for such an option on terms that would involve no increased strain on the Fund. One plan would be to allow such contributors the option to exchange their retirement pensions for a joint life and survivor pension payable so long •as either the husband or wife were alive. Alternatively, another rate of pension could be payable to the contributor on the basis of a reduction on his death to, say, half rates for his widow. _ The Fund's finances could be adequately protected by providing for such an option to be exercised by the contributor not less than five years prior to the date of retirement, this to obviate any adverse selection against the Fund by the contributor. In order to meet the case of present contributors who are now within five years of retirement, or even of any existing pensioners, provision might also be made for them to have an option to exchange their pensions for joint life and survivor pensions within a specified period, say, six months from the date of the passing of the amendment, subject to the furnishing of such evidence of medical fitness as is determined by the Superannuation Board.

11

H.—26a

39. Pension Limitation of £300 per Annum.—The National Expenditure Commission of 1932 made a strong' recommendation for the removal of the arbitrary pension limitation of £300 per annnum in respect of officers joining the Service after the 24th December, 1909, so as to bring them into line with officers joining the Service before that date. The injustice of this limitation has been stressed year by year by the Public Service Association in deputations to succeeding Prime Ministers. The principle of compelling officers to contribute to the Fund and at the same time limiting them to a pension of £300 irrespective of the value of their contributions is in no way different from compelling a body of men to place a specific portion of salary in a savingsbank on the understanding that in no case shall they receive back more than a uniform arbitrary amount determined by the directors of the savings-bank. The injustice of the proposal has never been seriously questioned, but it appears to have been erroneously considered that the problem could be deferred until about 1949—that is, on the assumption that the officers joining the Service after the 24th December, 1909, would not in general qualify for a pension until the completion of forty years' service. This assumption, however, ignores the cases of professional officers who are recruited late in life and reach age sixty-five after comparatively short service. Betirements with this arbitrary limitation of pension have already taken place, and it is clear that it is bound to be a burning question with many officers in the very near future. What is also important is that it immediately affects every officer joining after the 24th December, 1909, who is retii*ed. on an actuarial pension. It was surely never intended that of two men of the same age and service retired on actuarial pensions the one with the higher salary should receive the smaller actuarial pension, such anomalous result being entirely due to the fact that an actuarial pension must take account of the net liability, and it is obvious that, while the ultimate pension liability in respect of each officer is the same (£3OO per annum), the contributions based on the higher salary represent a greater asset to the Fund. It is also difficult to understand how any Government could grant free pensions to officers in respect of all service prior to the inception of the Fund without any restriction as to the amount of such free pension, and at the same time ask new officers to pay for their full service and accept an arbitrary cut. There is also the danger that, in connection with this £300 arbitrary limit, the aspect of grave injustice to the higher-paid officers—this has never been denied—may obscure the fundamental reasons for establishing a staff superannuation scheme —namely, to induce men of ability to join and continue in the Service, and to offer an adequate retiring-allowance to those who rise to high positions as the result of outstanding merit. A superannuation scheme is not established by an employer—whether a Government or a private firm —from philanthropic motives, but rather from motives of enlightened selfinterest. The State, in) common with any employer of labour, does not remunerate its officers on philanthropic grounds nor on the basis of levelling-down all salaries to a uniform amount irrespective of the work performed, and it is unreasonable to suppose that it has in mind an intention to depart suddenly from sound business principles just when some, of its employees reach old age. The object in stressing this aspect of the employer's motive is that, once the principle is admitted that the establishment of a superannuation scheme is from an enlightened self-interest, we are infallibly led to a certain line of reasoning regarding the relative benefits a superannuation fund should pay and the way the employer's subsidy should be allocated. The opinion of any competent critic on the Public Service Superannuation scheme with its maximum pension of £300 per annum, especially when considered side by side with the minimum pension of £300 provided by the Superannuation Fund of one of the old established New Zealand banks, would not only be unflattering to the State, but would also bring out prominently that those responsible for the 1909 amendment lost sight of the elementary principles of a staff superannuation scheme. Compared with the generally accepted idea that merit should be rewarded and an adequate subsidy paid on the contributions of all employees, the State is actually penalizing its future senior officers, and, in effect, allowing the Superannuation Funds to confiscate portion of their contributions and interest accretions. 40. In conclusion, I have to acknowledge the assistance of the small but efficient staff engaged in carrying out the heavy work of the valuation. C. Gostelow, Fellow of the Institute of Actuaries (London), Government Actuary.

12

H.—26A.

APPENDIX.

TABLE 1. ul estimate oi the various factors on which the payment of the benefits and contributions is dependent. These factors may be briefly summarized as follows:— (a) Rate of interest; (b) Mortality-rates of pensioners; (c) Average salary scales; (d) Mortality-rates of contributors; (e) Voluntary-withdrawal rates of contributors; (/) Retirement-rates of contributors; (g) Marriage-rates of contributors; (h) Probability of a member leaving children under fourteen years of age, and the average number of such children; (i) Remarriage-rates of members' widows. 14. The rate of interest used in valuing benefits and contributions was 44 per cent., as the Fund is State-guaranteed. 15. The mortality-rates adopted for pensioners were those used in the previous valuation, and were based on an investigation of the combined experience of the three Government Superannuation Funds (Public Service, Railways, and Teachers) for the period 1919—1927. 16. Average salary scales in respect of males and females separately had to be constructed for the year immediately following the valuation date. This presented considerable difficulty, as it was complicated by the salary cuts and the fact that there were two classes of officers, one contributing on hypothetical salaries—i.e., pre-cut salaries as far back in some cases as 1921—and the other on actual salaries. To have constructed average salary scales based on the heterogeneous contributory salaries, and applied the resulting ratios of increase from age to age to the contributory salary of each contributor as at the Ist April, 1934, would have considerably overestimated the pension liabilities, as, under normal circumstances, the average officer contributing on actual salary would not rise to the hypothetical salary scales, and pensions are based on final salaries. Even if actual salaries were used to obtain the ratios of increase from age to age, the prospective salaries would have been divorced from realities in view of the fact that a large number of officers would never by normal promotions bridge the gap between their actual salaries and the hypothetical salaries on which they were contributing. The problem would have been simplified had the options to pay on higher salary been exercised, as one would have expected, only by the older officers, or by those who had been at the top of the grade so long that they took a very conservative estimate of the possibilities of future promotion. In actual fact, out of the total of 17,369 contributors, no less than 3,239 elected to pay on the pre-cut salaries, and this included contributors from age twenty-four upwards, many of whom must, except under very exceptional circumstances, have recovered the amount of the salary " cuts " by promotion during the remainder of service. The tacit assumption made by each officer electing to contribute on his salary prior to the cuts was that his actual salary would not rise to the higher figure prior to retirement (normal or medically unfit), but even a brief glance at the two sets of salaries showed that at the younger ages the disparity between actual and hypothetical salaries was not wide enough to justify the assumption of valuing on the basis that future salary increases would not bridge the gap. If therefore became necessary not only to separate those contributing on actual and on hypothetical salaries, but also to make two valuations of those contributing on hypothetical salary to make the .necessary allowance for the fact that males under age forty-seven and females under age forty-four would, on the average, rise to a higher actual salary than the hypothetical salary on which they were contributing. In making these several valuations, it was essential to make some assumption as to an early restoration of portion of the remainder of the salary " cuts," and for this purpose I assumed that an immediate allround increase of 5 per cent, would be forthcoming as at Ist April, 1935. Actually a 7-jrper-cent. increase was subsequently granted in August, 1935, and all salary cuts were fully restored as from Ist July, 1936. 17. The actual deaths among male members during the quadrennium were 225, as against 251 expected by the tables used in the previous valuation, and this lighter mortality was in evidence for all age-groups. 18. The male withdrawals were 859, as against 1,530 expected. This appears to have been directly due to the economic depression, the difficulty of finding remunerative employment checking the former tendency of officers to leave the Service for private employment. 19. The number of male officers retiring was 790, as against 506 expected, and the excess was reflected in all age-groups from thirty-five onwards. In the last three actuarial reports stress has been laid on the serious financial consequences to the Fund of retiring, irrespective

TABLE II. Statement of Progress of Active Membership.*

13

New Members. Increase by Promotion. Discontinued. Total in Force at End of Year. Year. Annual Annual Annual Annual Number. Salaries. Contribu- Salaries. Contribu- Number. Salaries, Contribu- Number. Salaries. Contributions. tions. tions. tions. £ £ £ £ £ £ ££ 1908-11 11,036 1,529,468106,826 251,404 15,141 1,896 276,431 21,297 9,1401,504,441 100,670 1912-16 8,185 732,323 42,597 574,648 33,369 4,012 523,821 34,792 13,313 2,287,591 141,844 1917-21 9,401 1,181,356 68,762 1,906,126108,419 6,932 1,131,248 71,005 15,782 4,243,825 248,020 1922-23t 1,200 152,922 8,362 43,092 2,298 1,993 658,874 41,271 14,989 3,780,965 217,409 1923-24 1,219 159,496 8,917 139,589 7,369 1,187 257,682 16,003 15,0213,822,368 217,692 1924-25 1,921 278,898 16,035 228,471 12,140 1,160 248,856 15,264 15,782 4,080,881 230,603 1925-26 ],682 231,794 12,870 204,658 11,035 1,136 254,497 15,512 16,328 4,262,836 238,996 1926-27 1,518 193,451 10,487 157,749 8,328 932 204,675 12,176 16,9144,409,361 245,635 1927-28 1,000 150,212 8,298 146,611 7,585 912 207,138 12,496 17,002 4,499,046 249,022 1928-29 1,046 164,175 8,931 162,631 8,427 871 204,057 12,048 17,177 4,621,795 254,332 1929-30 1,665 215,032 11,737 174,518 9,031 866 203,199 11,716 17,976 4,808,146 263,384 1930-31 930 146,336 8,158 185,675 9,514 709 179,970 10,740 18,197 4,960,187 270,316 1931-32 317 35,677 1,856 51,217 2,588 998 561,630 32,794 17,516 4,485,451 241,966 1932-33 384 40,772 2,138 56,115 2,815 681 392,712 21,618 17,2194,189,626 225,301 1933-34.. 693 75,861 3,922 94,527 4,786 543 121,597 6,994 17,3694,238,417 227,015 Totals.. 42,197 5,287,773 319,896 4,377,031242,845 24,828 5,426,387 335,726 * Compiled from Annual Reports. t Fifteen months.

H.—26A.

TABLE III. Particulars of Discontinuance of Active Membership.

TABLE IV. Statement of Progress of Pensions.*

14

t> j i By Pensions. _ By Withdrawal By Transfer By Death. or 'Old Age or Length toother Total discontinued Dismissal. 0 f s erV j ce> Menically Unlit. Funds. Voor !h ® d 5 <£> 1 d Siid f-i j, • --I e8.fcj O ci.fcS O 'g3<£ 'oS 2 & o ftg Ph ftg ftg ® ft ftg ® ft ft to a> p, "83 f rt -g S3 §3 fl rt -s «5 S3 §3 -§S 83 I M 1 § I i«l I § a l -as 3 1 = 1 -is a §a I IflS -is | a° a §'« I a oS I a° a 1 a o ° g® I a° I a° a g-s £ £ £ £ £ £ £ £ £ £ 1908-11 .. 122 2,591 1,785 1,348 14,692 343 236 36,475 71 .. 6,211 12 501,896 17,569 44 471 1912-16 .. 37115,963 5,676 3,138 53,828 389 2,196 46,915 78 237 4,341 36 883 4,012 73,107 56,932 1917-21 .. 71942,530 7,863 5,618161,160 487 5,398 86,769 84 .. 6,353 24 862 6,932 209,950100,985 1922-23 .. 63 7,672 1,117 1,573 69,145 320 1,853 69,620 33 .. 2,405 4 2041,993 78,874 73,142 1923-24 .. 55 6,261 761 986 44,644 128 1,126 32,259 13 .. 1,380 5 681,187 52,099 34,400 1924-25 .. 55 5,499 1,220 992 54,465 91 .. 20,086 11 .. 1,085 11 2721,160 60,236 22,391 1925-26 .. 61 8,850 1,167 900 42,198 150 .. 40,793 16 .. 1,418 9 1851,136 51,233 43,378 1926-27 .. 68 8,496 1,473 739 36,092 98 .. 21,601 22 .. 1,865 5 28 932 44,616 24,939 1927-28 .. 6614,228 1,976 726 35,292 93 .. 18,734 24 .. 2,617 3 465 912 49,985 23 327 1928-29 .. 6510,074 2,003 656 32,945 115 .. 25,626 29 .. 2,805 6 516 871 43,535 30,434 1929-30 .. 7810,906 1,903 661 37,321 101 .. 24,997 23 .. 3,011 3 810 866 49,037 29,91] 1930-31 .. 6910,245 2,033 505 24,680 108 3,536 23,556 26 .. 2,427 1 47 709 38,508 28,016 1931-32 .. 6612,666 1,364 457 30,064 442 5,270 83,986 31 .. 3,038 2 385 998 48,385 88 388 1932-33 .. 56 8,385 2,055 459 33,425 135 3,153 32,650 29 .. 3,783 2 240 681 45,203 38 488 1933-34 .. 5610,498 1,337 389 23,406 61 1,678 15,400 36 .. 4,969 1 17 543 35,599 21,706 Totals .. 1,97017486433,733 19,147693,357 3,06124,446579,467 526 23747,708 124 5,032 24828 897,936 660,908

Attainment of Pension Age or Length of Service. x» „ T r /« ... (Section 26.) Retired Medically Unfit. (Section 32.) Year. Granted. Void by Death. In Force. Granted. Expiry^* 1 In Force. "be?" tension. Pension. Pension. Pension. Pension. Pension. ££££££ 1908—1 If .. 383 41,064 40 3,919 343 37,145 114 9,817 19 1,978 95 7 839 1912-16 .. 370 46,916 122 12.836 591 71,225 74 4,341 50 3,062 119 9 118 1917-21 .. 470 86,769 183 21,082 878 136,912 84 6,354 48 3,162 155 12,310 1922-23} .. 322 69,640 63 9,516 1,137 197,036 33 2,405 30 2,087 158 12,628 1923-24 .. 128 32,259 49 5,922 1,216 223,373 13 1,380 10 872 161 13,136 1924-25 .. 91 20,086 54 8,811 1,253 234,648 11 1,084 10 895 162 13,325 1925-26 .. 150 44,279 57 7,587 1,346 271,340 16 1,689 17 1,425 161 13,589 1926-27 .. 98 21,666 56 8,152 1,388 284,854 22 1,873 8 812 175 14,650 1927-28 .. 93 18,733 48 7,969 1,433 295,618 24 2,618 10 813 189 16,455 1928-29 .. 115 25,625 70 12,897 1,478 308,346 29 2,805 9 901 209 18 359 1929-30 .. 101 24,997 92 15,757 1,487 317,586 23 3.012 13 948 219 20,423 1930-31 .. 108 23,556 73 14,205 1,522 326,937 26 2,427 9 1,054 236 21,796 1931-32 .. 442 83,986 52 12,051 1,912 398,872 31 3,038 14 1,196 253 23 638 1932-33 .. 135 32,650 75 12,816 1,972 418,706 29 3,783 13 1,295 269 26,126 1933-34 .. 61 15,400 73 14,428 1,960 419,678 36 ,4,968 17 1,598 288 29,496 Totals .. 3,067 587,626 1,107 167,948 .. .. 565 51,594 277 22,098 Death of Contributor. Family Pension. _ . , (Section 42, <&c.) Total Pensions. Year. Granted. V °or In Force. Granted. Void. In Force. Pension. Pension. Pension. Pension Num- J Pension> Nurn- Penslon ££££££ 1908-1 If •• 157 2,466 21 313 136 2,153 654 53,347 80 6,210 574 47 137 1912-16 .. 481 7,258 94 1,362 523 8,049 925 58,515 266 17,260 1,233 88 392 1917-21 .. 663 9,979 270 3,895 916 14,133 1,217 103,102 501 28,139 1,949 163,355 1922-23} .. 132 2,001 85 1,200 963 14,934 487 74,046 178 12,803 2,258 224,598 1923-24 .. 93 1,464 71 1,013 985 15,385 234 35,103 130 7,807 2,362 251 894 1924-25 .. 134 2,032 88 1,244 1,031 16,173 236 23,202 152 10,950 2,446 264 146 1925-26 .. 80 15,718 96 2,606 1,015 29,285 246 61,686 170 11,618 2,522 314 214 1926-27 .. 116 3,336 78 2,123 1,053 30,498 236 26,875 142 11,087 2,616 330,002 1927-28 .. 106 3,046 101 2,736 1,058 30,808 223 24,397 159 11,518 2,680 342 881 1928-29 .. 125 3,605 74 2,034 1,109 32,379 269 32,036 153 15,833 2,796 359 084 1929-30 .. 152 4,417 97 2,667 1,164 34,129 276 32,425 202 19,371 2,870 372 138 1930-31 .. 125 3,635 94 2,574 1,195 35,190 259 29,618 176 17,833 2,953 383,923 1931-32 .. 105 3,040 86 2,306 1,214 35,924 578 90,064 152 15,553 3,379 458 434 1932-33 .. 144 4,149 84 2,314 1,274 37,759 308 40,582 172 16,425 3,515 482 591 1933-34 .. 115 3,355 79 2,214 1,310 38,900 212 23,723 169 18,240 3,558 488,074 Totals .. 2,728 69,501 1,418 30,601 .. .. 6,360 708,721 2,802 220,647 * Compiled from Annual Reports. t Includes pensioners transferred from Police Provident Fund. X Fifteen months.

H.—26A.

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

15

Salaries as at 1st April, 1934 (including the 5 per „ . Cent. Restoration). present Ammal Number. Contribution. , Age attained. Males. Females. attained Males. Females. Actual. Contributing. Actual. 3U " Males. Females. £ £ £ £ £ £ 17 .. .. 13 5 883 883 332 332 44 17 17 18 .. .. 48 27 3,351 3,351 1,996 1,996 168 100 18 19 .. .. 82 48 6,291 6,291 4,128 4,128 314 207 19 20 .. .. 199 73 19,538 19,538 7,036 7,036 977 353 20 21 .. .. 415 123 49,516 49,516 13,211 13,211 2,476 662 21 22 .. .. 531 .126 76,859 76,859 15,465 15,465 3,843 774 22 23 .. .. 622 120 110,198 110,198 16,017 16,017 5,512 802 23 24 .. .. 714 133 142,470 142,470 19,083 19,098 7,125 956 24 25 .. .. 655 150 141,892 141,905 21,744 21,753 7,097 1,089 25 26 .. .. 588 127 133,630 133,656 19,009 19,038 6,681 953 26 27 .. 498 82 118,495 118,495 12,599 12,654 5,925 633 27 28 .. .. 444 61 107,201 107,251 9,323 9,386 5,364 470 28 29 .. .. 437 81 107,839 107,896 12,945 13,097 5,392 656 29 30 .. .. 432 62 110,326 110,520 10,285 10,437 5,532 523 30 31 .. .. 420 78 107,110 107,594 13,600 13,992 5,385 700 31 32 .. .. 452 60 116,432 117,001 10,824 11,375 5,867 570 32 33 .. .. 440 65 113,645 114,141 12,345 12,836 5,726 647 33 34 .. .. 508 50 135,792 136,917 9,109 9,429 6,904 479 34 35 .. .. 498 61 134,093 135,261 11,281 11,699 6,838 602 35 36 .. .. 461 45 126,563 128,462 9,107 9,550 6,527 487 36 37 .. .. 409 45 111,247 112,705 8,332 8,792 5,745 451 37 38 .. .. 403 50 111,809 113,399 9,021 9,416 5,789 485 38 39 .. .. 361 48 101,835 103,736 9,046 9.484 5,388 500 39 40 .. .. 345 48 94,666 96,930 9,173 9,510 5,066 500 40 41 .. .. 343 44 97,475 99,540 8,234 8,725 5,206 482 41 42 .. .. 353 41 102,839 105.412 8,253 8,802 5,649 466 42 43 .. .. 388 26' 116.109 120,089 4,810 5,178 6,294 279 43 44 .. .. 317 . 39 93,660 97,563 7,820 8,280 5.226 457 44 45 .. .. 309 35 91,853 95,559 7,464 8,065 5,222 443 45 46 .. .. 306 31 91,813 95,372 6,309 6,822 5,258 382 46 47 .. .. 315 32 101,803 107,396 6,971 7,764 5,859 445 47 48 .. .. 327 29 100,513 106,825 6,283 6,911 5,873 401 48 49 .. .. 301 42 92,813 98,895 8,936 9,959 5,531 580 49 50 .. .. 285 33 88,375 93,891 6,986 7,720 5,436 464 50 51 .. .. 239 23 75,475 81,196 4,932 5,478 4,706 332 51 52 .. .. 240 17 79,687 86,769 3,481 3,754 5,041 240 52 53 .. .. 232 18 75,492 83,048 4,231 4,831 4,752 292 53 54 .. .. 198 17 65,693 71,522 4,149 4,628 4,250 295 54 55 .. .. 181 19 59,945 65,753 4,791 5,496 4,056 385 55 56 .. .. 168 7 56,627 63,336 1,606 1,880 3,846 128 56 57 .. .. 148 4 50,870 56,624 893 1,055 3,738 63 57 58 .. 103 4. 33,963 38,208 763 850 2,574 65 58 59 .. .. 82 7 25,417 29,098 1,442 1,690 1,976 130 59 60 .. .. 85 4 27,045 31,210 721 799 2,053 56 60 61 .. .. 60 1 20,305 23,442 179 200 1,627 18 61 62 .. .. 61 1 18,546 21,316 166 185 1,495 17 62 63 .. .. 43 1 16,997 19,752 159 180 1,453 14 63 64 .. .. 33 .. 12,160 14,174 .. .. 1,040 .. 64 65 .. .. 22 .. 7,915 9,307 .. .. 693 65 66 .. .. 3 .. 1,007 1,145 .. .. 98 66 67 .. .. 1 1 425 500 179 200 45 20 67 68 .. .. 2 .. 1,190 1,395 .. .. 112 68 69 .. . . . . .. . . • • • ■ • • ■ • ■ • 69 70 .. .. 2 .. 1,166 1,400 .. .. 115 70 71 . .. I 387 455 .. 36 71 72 .. . ■ • • ■ • • • ■ • • • 72 73 • ■ • • • • • • • ■ • ■ 73 74 , . .. .. •• •• ■ • ■ • •• • • • • 74 75 .. .. .. .. •• • ■ ■ ■ •• ■ • • • 75 76 .... 2 .. 1,694 2,100 .... 189 .. 76 Totals.. .. 15,125 2,244 3,890,940 4,017,267 364,769 379,183 215,134 20,070

H.—26A.

TABLE Va. Number of Contributors, Salaries, etc., analysed in Departments of State.

16

HonnrtTnor.t Number of Actual Contributing Annual Past ,, T S r^ „ -uepanmera. Officers. Salary. Salary. Contributions. Contributions. ( i 9 g 2) ' £ £ £ s. d. £ s. d. £ Agriculture .. .. .. 525 159,605 166,971 9,961 9 11 127,306 14 7 3,046 Audit .. .. .. 167 48,354 49,851 2,597 0 4 31,963 5 8 597 Customs .. .. .. 309 87,500 90,318 4,707 9 8 67,357 1 2 1,595 Defence .. .. .. 448 126,638 131,227 7,039 6 5 86,973 2 0 2,649 Education .. .. .. 177 42,555 43,926 2,450 12 7 29,937 10 9 782 External Affairs .. .. 90 23,542 24,237 1,348 17 3 12,318 3 10 122 Forestry .. .. .. 108 31,004 32,714 1,798 5 9 20,884 8 8 360 Eriendly Societies .. .. 42 8,850 9,234 473 17 7 5,493 0 0 74 Government Insurance .. 123 31,380 31,957 1,634 18 3 18,374 9 9 309 Health .. .. .. 402 99,673 102,952 5,977 19 3 54,938 9 2 1,177 High Commissioner .. .. 74 21,897 23,909 1,264 12 2 17,939 16 4 199 Internal Affairs .. .. 311 72,454 76,066 4,269 4 9 54,682 9 10 1,012 Justice .. .. .. 332 88,430 90,879 4,709 I 6 57,514 13 4 1,303 Labour .. .. .. 113 28,543 29,065 1,646 11 7 18,493 11 3 704 Land and Income Tax .. 190 44,210 45,254 2,292 17 5 20,536 14 7 275 Lands and Survey .. .. 610 160,342 166,700 8,876 7 5 108,099 8 0 1,947 Lands, Deeds, and Stamp .. 208 55,335 57,022 2.,940 11 10 35,533 18 7 691 Legislature .. .. .. 63 19,786 20,969 1,474 17 0 17,261 3 I 297 Marine .. .. .. 191 56,531 59,237 3,696 8 5 43,229 15 2 1,013 Mines .. .. .. 50 15,098 16,248 1,015 16 1 12,145 9 4 165 Native .. .. .. 108 28,137 29,221 1,573 0 6 20,217 6 4 474 Pensions .. .. .. 120 26,416 26,900 1,381 12 6 13,335 7 7 263 Police .. .. .. 1,153 323,422 335,048 17,280 6 10 221,957 II 6 8,068 Post and Telegraph .. .. 7,667 1,734,596 1,787,805 93,011 5 2 1,149,861 17 5 3-1,226 Printing .. .. .. 278 66,831 70,840 3,953 10 3 52,542 12 3 1,069 Prisons .. .. .. 219 50,974 52,615 3,114 14 3 35,029 12 0 1,251 Mental Hospitals .. .. 1,151 219,099 223,630 12,356 14 5 104,286 7 5 2,715 Public Trust . . .. .. 716 187,867 190,884 9,864 14 4 102,473 1 5 2,529 Public Works .. .. 678 196,604 202,993 11,348 2 8 135,717 5 10 3,329 Public Service Commissioner .. 9 3,778 4,351 225 13 0 3,292 2 1 11 Scientific and Industrial Research 59 19,974 20,571 1,124 8 9 13,118 7 3 360 State Advances .. .. 119 26,630 27,558 1,440 7 5 14,533 6 8 183 State Eire .. .. ,. 156 38,811 39,330 1,966 13 8 21,725 8 3 532 Tourist .. .. .. 178 43,081 44,877 2,471 0 5 27,717 14 2 689 Transport .. .. .. 14 4,371 4,371 218 11 0 2,580 1 0 86 Treasury .. .. .. 101 26,574 27,438 1,395 19 6 14,964 12 0 258 Valuation .. .. .. 78 25,472 27,578 1,637 9 3 24,129 6 3 347 Various (Native Trust, Crown 32 11,345 11,704 664 1 4 8,726 8 9 367 Law, Imperial Supplies) Totals .. .. .. 17,369 4,255,709 4,396,450 235,204 10 5 2,807,191 13 3 72,074

H.—26A.

TABLE VI. Classification of Pensions granted, showing the Ages at which they were granted, for Period from 1st April, 1930, to 31st March, 1934 (inclusive).*

3—H. 26A.

17

At OT^nath°of > Servicê Age lletired ūnflt - Total 260 (Sections 32 and 61.) (Se C c T 2 re^.) Age at which ~ Pension granted. Number. Number. a Z a' Number. Amount Amount M S-§ Amount of Pension. of Pension. S o a of Pension. M. If. M. F. g Sg M. F. Total. £ s. d. £ s. d. £ £ s. d. 85 .. .... .. 2 62 2 2 62 0 0 82 .. .. .... .. 1 31 1 1 31 0 0 81 .. .... . . 1 31 1 1 31 0 0 80 .... .. .... .. 1 31 .. 1 1 31 0 0 78 . . .... .. 3 93 3 3 93 0 0 77 . . .... .. 5 155 .. 5 5 155 0 0 76 .. .. 1 .. 216 13 0 ... . .. 5 155 1 5 6 371 13 0 75 ... .. .... .. 5 155 .. 5 5 155 0 0 74 .. .... . . 8 248 .. 8 8 248 0 0 73 .. .. 1 .. 105 11 0 .. .. .. 10 310 1 10 11 415 11 0 72 .. .. .... .. 7 217 ..7 7 217 0 0 71 2 664 14 0 .... . . 4 124 2 4 6 788 14 0 70 .. .. .... .. 10 310 .. 10 10 310 0 0 69 . 1 .. 600 0 0 .... .. 7 217 1 7 8 817 0 0 68 .. 2 .. 950 1 0 .. .. .. 5 155 2 5 7 1,105 1 0 67 .. ..6 1 820 14 0 ... . .. 5 150 6 6 12 975 14 0 66 17 2,787 2 0.... .. 7 217 17 7 24 3,004 2 0 65 .. .. 105 1 19,317 9 0 1 .. 200 18 0 11 341 106 12 118 19,859 7 0 64 . 41 . . 8,202 17 0 2 .. 574 2 0 10 310 43 10 53 9,086 19 0 63 .. 39 1 8,815 2 0 1 .. 190 10 0 6 186 40 7 47 9,191 12 0 62 .. .. 31 .. 6,299 1 0 4 .. 963 18 0 4 124 35 4 39 7,386 19 0 6] .. .. 29 2 5,690 18 0 1 . . 201 16 0 6 186 30 8 38 6,078 14 0 60 43 9 10,000 19 0 2 .. 226 7 0 6 186 45 15 60 10,413 6 0 59 .. .. 20 2 4,959 0 0.... .. 12 372 20 14 34 5,331 0 0 58 .. .. 26 5 8,107 12 0 6 .. 909 13 0 12 372 31 17 48 9,389 5 0 57 .. .. 27 3 6,760 18 0 5 .. 726 15 0 4 124 32 7 39 7,611 13 I» 56 .. .. 34 6 9,593 9 0 2 .. 499 17 0 10 310 36 16 52 10,403 6 0 55 .. 48 14 15,600 15 0 5 .. 557 12 0 7 217 53 21 74 16,375 7 0 54 .. 39 7 10,890 8 0 6.. 892 2 0 5 155 45 12 57 11,937 10 0 53 .. .. 40 6 10,334 1.1 0 4 1 878 18 0 6 186 44 13 57 11,399 9 0 52 .. .. 30 5 7,416 15 0 2.. 223 18 0 2 62 32 7 39 7,702 13 0 51 .. .. 29 8 6,919 3 0 4 .. 435 6 0 4 124 33 12 45 7,478 9 0 50 .. .. 14 10 3,618 7 0 2 1 284 1 0 9 279 16 20 36 4,181 8 0 49 .. .. 13 6 3,505 9 0 3 2 764 2 0 2 62 16 10 26 4,331 11 0 48 6 2 1,587 2 0 1 3 332 9 0 6 186 7 11 18 2,105 11 0 47 " ..3 4 1,066 8 0 2 1 325 17 0 4 124 5 9 14 1,516 5 0 46 .. ..1 3 360 6 0 2 1 407 7 0 4 124 3 8 11 891 13 0 45 2 284 12 0 6 .. 746 12 0 9 279 6 11 17 1,310 4 0 44 1 116 3 0 2 1 321 14 0 7 217 2 9 11 654 17 0 43 .. 5 .. 520 18 0 3 93 5 3 8 613 18 0 42 ' .. .... .. 4 124 .. 4 4 124 0 0 41 ' . . 4 2 514 11 0 7 217 4 9 13 731 11 0 40 .. . . 3 I 357 17 0 2 62 3 3 6 419 17 0 39 .. .. 3 262 19 0 6 186 3 6 9 448 19 0 38 . 1 .. 153 19 0 3 93 1 3 4 246 19 0 37 " 4 378 0 0 4 124 4 4 8 502 0 0 36 .. 3 1 303 15 0 4 124 3 5 8 427 15 0 35 .. 3 257 11 0 5 155 3 5 8 412 11 0 34 " ' .. 1 .. 94.13 0 .. .. 1 .. 1 94 13 0 33 1 . . 82 11 0 3 93 1 3 4 175 11 0 39 " 2 114 7 0 4 124 2 4 6 238 7 0 31 [ [ .. 1 1 112 12 0 3 93 1 4 5 205 12 0 30 .. • • .... • • • ■ • • 29 1 1 88 8 0 3 93 1 4 5 181 8 0 o 8 " 2 .. 105 .18 0 4 124 2 4 6 229 18 0 07 " 2 . 106 3 0 2 62 2 2 4 168 3 0 96 " 2 41 0 0 1 31 2 1 3 72 0 0 95 ' .... . . 1 31 .. 1 1 31 0 0 94 ' 2 1 33 9 0 1 31 2 2 4 64 9 0 o 2 . . 1 .. 11 10 0 .. .. 1 ■ . 1 11 10 0 90 . 1 .. 5 15 0 .. 1 .. 1 5 15 0 T 7 " ■ • • 1 31 .. 1 1 31 0 0 14 • • • ■ g 208] f 208 0 0 , 3 " " " . . 16 416 416 0 0 12 19 494 494 0 0 11 .. .. 14 364 364 0 0 lrt " ' .... 18 468 468 0 0 a . .. 14 364 364 0 0 O .. 11 286 286 0 0 7 " • • • • 19 494 !► 106 90 196 <( 494 0 0 g .. .. 16 416 416 0 0 5 11 286 286 0 0 4 " . . 8 208 208 0 0 o " 11 286 286 0 0 0 ' .. 13 338 338 0 0 1 " 12 312 312 0 0 0 !.'!!!! .. .... •• 6 156 J i 1.56 0 0 Totals .. 648 98 155,591 19 0 104 17 14,209 10 0 489 14,179 858 498 1,356 183,980 9 0 * Compiled from cards.

H.—26a.

TABLE VIa. Existing Pensioners (1st April, 1934) who retired under the Extended Provisions of the Act.

18

Year ol Service. Amount of Pension. Retoment. ° f Amount ol Pension. Males. £ 8. d. £ S. d. 5 .. .. 1 51 13 5 46 2 400 18 0 6 •• 1 16 13 0 47 5 831 6 0 7 .. 1 31 11 0 48 7 1,601 9 0 8 .. .. 2 81 0 0 49 30 6,410 4 0 9 .. 1 57 9 0 50 35 7,372 7 0 10 .. .. 3 222 14 0 51 41 9,987 9 0 11 .. .. 5 300 19 0 52 47 11,494 6 0 12 ,. .. 7 585 15 3 53 49 12,969 3 0 13 .. .. 10 683 14 0 54 37 10,339 19 0 14 .. .. 6 494 7 0 55 55 12,789 14 0 15 .. .. 5 352 15 0 56 42 10,629 3 0 16 .. .. 5 588 12 0 57 39 8,696 9 0 17 .. .. 18 1,957 3 0 58 40 8,993 14 0 18 .. .. 10 959 16 0 59 23 4,604 6 0 19 .. .. 11 1,256 2 0 60 72 11,650 4 10 20 .. .. 13 1,531 1 0 61 57 9,453 2 5 21 .. .. 12 1,985 3 0 62 47 6,893 7 0 22 .. .. 8 1,420 9 0 63 52 9,423 13 0 23 .. .. 16 2,195 2 0 64 51 8,177 5 0 24 .. .. 8 1,310 17 0 Over 64 33 5,418 5 0 25 .. .. 16 3,206 7 0 26 .. .. 6 947 10 0 27 .. .. 14 2,023 9 0 28 .. .. 14 2,113 14 0 29 .. .. 16 2,528 1 0 30 .. .. 27 5,400 6 7 31 .. .. 47 8,461 0 0 32 .. .. 35 7,168 3 0 33 .. . . 27 4,950 1 0 34 .. .. 24 5,367 5 0 35 .. .. 97 21,415 13 0 36 .. .. 82 19,294 15 0 37 .. .. 57 14,011 4 0 38 .. .. 59 17,574 4 0 39 .. .. 72 20,002 17 0 Over 39 .. .. 28 7,588 19 0 764 158,136 4 3 764 158,136 4 3 Females. 2 .. 1 7 6 0 50 12 939 3 0 3 •• 1 17 6 0 51 12 1,072 9 0 5 • • •. 1 14 0 0 52 7 567 6 0 7 •• 2 70 9 0 53 8 460 1 0 9 •• 3 123 17 0 54 15 1.081 3 0 10 .. . . 1 30 1 0 Over 54 4 264 8 0 11 .. .. 3 194 3 0 12 .. .. 3 214 17 0 13 .. .. 2 85 13 0 14 .. .. 3 143 1 0 15 .. .. 4 250 18 0 16 .. . . 6 359 9 0 17 .. .. 2 100 14 0 18 . . . . 1 48 16 0 19 .. .. 1 88 13 0 20 .. .. 1 96 14 0 21 . : .. 1 105 11 0 22 .. .. 1 91 1 0 23 .. .. 4 367 3 0 24 .. .. 2 180 18 0 25 .. .. 2 216 16 0 26 .. 27 .. .. 2 208 0 0 28 .. .. 1 101 10 0 29 .. .. 9 1,143 2 0 Over 29 .. , . 1 124 12 0 Totals .. 58 4,384 10 0 58 4,384 10 0

H.—26A.

TABLE VII. EXPERIENCE TABLE. Probabilities per Cent. per Annum of Withdrawal, Death, and Retirement used in the Calculation of Valuation Factors for the Public Service Superannuation Fund.

4'— H. 26A.

19

Contributing Members : Males. Contributing Members: Females. Probabilities of Withdrawal, Death, or Re- Probabilities of Withdrawal, Death, or Retirement, within a Year (expressed as a tirement within a Year (expressed as a Percentage of the Number existing in Percentage of the Number existing in Age. the Service at the Beginning of the Year). the Service at the Beginning of the Year). Age. Withdrawal. Death. Retirement. Withdrawal. Death. Retirement. Per Cent. Per Cent. Per Cent. Per Cent. Per Cent. Per Cent. 15 .. .. 5-50 0-17 .. 4-00 0-13 .. 15 16 .. .. 5-48 0-18 .. 4-80 0-13 .. 16 17 .. .. 5-40 0-18 .. 6-20 0-13 .. 17 18 .. .. 5-20 0-18 .. 8-00 0-13 .. 18 19 .. .. 4-90 0-18 .. 10-00 0-13 .. 19 20 .. .. 4-50 0-18 .. 12-10 0-13 .. 20 21 .. .. 4-14 0-19 .. 13-90 0-13 .. 21 22 .. .. 3-82 0-19 .. 15-20 0-13 .. 22 23 .. .. 3-54 0-19 0-08 15-90 0-13- .. 23 24 .. .. 3-30 0-19 0-08 16-10 0-14 .. 24 25 .. .. 3-10 0-20 0-09 16-10 0-15 .. 25 26 .. .. 2-94 0-20 0-09 15-90 0-16 .. 26 27 .. .. 2-81 0-20 0-09 15-50 0-17 .. 27 28 .. .. 2-70 0-21 0-09 14-90 0-18 .. 28 29 .. .. 2-60 0-22 0-10 14-10 0-19 0-10 29 30 .. .. 2-51 0-23 0-10 13-20 0-20 0-10 30 31 .. .. 2-43 0-24 0-10 12-30 0-21 0-11 31 32 .. .. 2-35 0-25 0-10 11-40 0-22 0-12 32 33 .. .. 2-28 0-26 0-10 10-50 0-23 0-13 33 34 .. .. 2-22 0-27 0-10 9-60 0-24 0-14 34 35 .. .. 2-16 0-28 0-10 8-70 0-25 0-15 35 36 .. .. 2-10 0-29 0-10 7-80 0-26 0-17 36 37 .. .. 2-04 0-30 0-10 6-90 0-27 0-19 37 38 .. .. 1-98 0-31 0-10 6-10 0-28 0-21 38 39 .. .. 1-92 0-32 0-10 5-40 0-29 0-23 39 40 .. .. 1-86 0-33 0-10 4-70 0-30 0-25 40 41 .. .. 1-80 0-35 0-10 4-10 0-31 0-28 41 42 .. .. 1-74 0-37 0-10 3-50 0-32 0-32 42 43 .. .. 1-67 0-39 0-11 3-00 0-33 0-38 43 44 .. .. 1-60 0-42 I 0-13 2-50 0-34 0-48 44 45 .. .. 1-53 0-46 0-15 2-00 0-35 0-72 45 46 .. .. 1-46 0-51 0-.19 1-50 0-37 1-45 46 47 .. .. 1-39 0-57 0-26 1-10 0-39 2-30 47 48 .. .. 1-32 0-64 0-52 0-70 0-41 3-20 48 49 .. .. 1-25 0-72 0-90 0-40 0-43 4-20 49 50 .. .. 1-17 0-81 1-46 0-20 0-46 5-30 50 51 .. .. 1-09 0-90 2-10 0-10 0-49 6-45 51 52 .. .. 1-01 0-99 2-86 .. 0-52 7-65 52 53 .. .. 0-93 1-08 3-60 .. 0-55 8-80 53 54 .. .. 0-85 1-17 4-30 .. 0-58 9-80 54 55 .. .. 0-76 1-26 4-90 .. 0-61 10-60 55 56 .. .. 0-66 1-35 5-46 .. 0-64 11-20 56 57 .. .. 0-55 1-45 6-00 .. 0-67 11-70 57 58 .. .. 0-42 1-55 6-46 .. 0-71 12-10 58 59 .. .. 0-27 1-65 6-84 .. 0-75 12-50 59 60 .. .. 0-10 1-75 7-14 .. .. 100-00 60 61 .. .. .. 1-85 7-34 62 .. .. .. 1-95 7-58 63 .. .. .. 2-05 8-30 64 .. .. .. 2-15 14-00 65 .. .. .. .. 100-00

H.—26A.

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

20

Males. Females. . Existing in With- Tenths Retire- Existing in With- Deaths Retire- , A S e - Service. drawals. deaths. mentg . Service. drawals. "earns. mentg> age. 15 .. .. 100,000 5,500 170 .. 100,000 4,000 130 .. 15 10 .. .. 94,330 5,169 170 .. 95,870 4,602 125 .. 16 17 .. .. 88,991 4,806 160 .. 91,143 5,651 118 .. 17 18 .. .. 84,025 4,369 151 .. 85,374 6,830 111 .. 18 19 .. .. 79,505 3,896 143 .. 78,433 7,843 .102 .. 19 20 .. .. 75,466 3,396 136 .. 70,488 8,529 92 .. 20 21 .. .. 71,934 2,978 137 .. 61,867 8,600 80 .. 21 22 .. .. 68,819 2,629 131 .. 53,187 8,084 69 .. 22 23 .. .. 66,059 2,338 126 53 45,034 7,160 59 .. 23 24 .. .. 63,542 2,097 121 51 37,815 6,088 53 .. 24 25 .. .. 61,273 1,899 123 55 31,674 5,100 48 .. 25 26 .. .. 59,196 1,740 118 53 26,526 4,218 42 .. 26 27 .. .. 57,285 1,610 115 52 22,266 3,451 38 .. 27 28 .. .. 55,508 1,499 117 50 18,777 2,798 34 .. 28 29 .. .. 53,842 1,400 118 54 15,945 2,248 30 16 29 30 .. .. 52,270 1,312 120 52 13,651 1,802 27 14 30 31 .. .. 50,786 1,234 122 51 11,808 1,452 25 13 31 32 .. .. 49,379 1,160 123 49 10,318 1,176 23 12 32 33 .. .. 48,047 1,095 125 48 9,107 956 21 12 33 34 .. .. 46,779 1,038 126 47 8,118 779 19 11 34 35 .. .. 45,568 984 128 46 7,309 636 18 11 35 36 .. .. 44,410 933 129 44 6,644 518 17 11 36 37 .. .. 43,304 883 130 43 6,098 421 16 12 37 38 .. .. 42,248 837 131 42 5,649 345 16 12 38 39 .. .. 41,238 792 132 41 5,276 285 15 12 39 40 .. .. 40,273 749 133 40 4,964 233 15 12 40 41 .. .. 39,351 708 138 39 4,704 193 15 13 41 42 .. .. 38,466 669 142 38 4,483 157 14 14 42 43 .. .. 37,617 628 147 41 4,298 129 14 16 43 44 .. .. 36,801 589 155 48 4,139 103 14 20 44 45 .. .. 36,009 551 166 54 4,002 80 14 29 45 46 .. .. 35,238 514 180 67 3,879 58 14 56 46 47 .. .. 34,477 479 197 90 3,751 41 15 86 47 48 .. .. 33,711 445 216 175 3,609 25 15 115 48 49 .. .. 32,875 411 237 296 3,454 14 15 145 49 50 .. .. 31,931 374 259 466 3,280 7 15 174 50 51 .. .. 30,832 336 277 647 3,084 3 15 199 51 52 .. .. 29,572 299 293 846 2,867 .. 15 219 52 53 .. .. 28,134 262 304 1,013 2,633 .. 14 232 53 54 .. .. 26,555 226 311 1,142 2,387 .. 14 234 54 55 .. .. 24,876 189 313 1.219 2,139 .. 13 227 55 56 .. .. 23,155 153 313 1,264 1,899 .. 12 213 56 57 .. .. 21,425 118 311 1,286 1,674 .. 11 196 57 58 .. .. 19,710 83 306 1,273 1,467 .. 10 178 58 59 .. .. 18,048 49 298 1,234 1,279 .. 10 160 59 60 .. .. 16,467 16 288 1,176 1,109 .. .. 1,109 60 61 .. .. 14,987 .. 277 1,100 62 .. .. 13,610 .. 265 1,032 63 .. .. 12,313 .. 252 1,022 64 .. .. 11,039 .. 237 1,545 65 .. .. 9,257 .. .. 9,257

H.—26A.

TABLE IX. Consolidated Revenue Account op the Public Service Superannuation Fund from the Ist January, 1908, to 31st March, 1934. Income. Expenditure. Funds at Ist January, 1908 — £ s. d. £ s. d. Members'contributions .. 4,801,462 5 6 Pensions to members .. .. 4,819,055 1 1 Police Provident Fund merged .. 32,785 15 4 Pensions to widows and children .. 437,853 4 3 Westport Harbour Board Fund merged 2,877 16 7 Contributions returned .. .. 914,126 8 3 Government subsidy .. .. 1,972,500 0 0 Compensation .. .. .. 21,547 11 5 Subsidy under Finance Acts, 1932 Transfers to other Funds .. .. 5,031 6 8 and 1933 .. .. .. 78,932 17 6 Salaries .. .. .. .. 44,786 16 8 Subsidy under section 114, Public Public Trust Office commission .. 53,431 10 11 Service Superannuation Act .. 133,802 15 6 Travelling and office expenses .. 21,734 5 11 Subsidy in respect of Defence Officers 20 ,000 0 0 Transfer to Magistrates' SuperannuaSubsidy from Cook Islands and . tion Fund .. .. .. 13,77718 Samoan Administrations .. 10,374 6 8 Loss on realization of securities .. 15,273 8 9 Interest on investments .. .. 2,224,342 12 7 Other payments .. .. .. 13 9 8 Interest on arrears of contributions.. 7,250 19 I Funds at 31st. March, 1934 .. .. 2,964,064 5 6 Transfers from other Funds .. 13,15111 8 Transfers from unclaimed contributions .. .. .. 3,053 16 6 Fines .. .. .. .. 8,718 11 3 Fees remitted .. .. .. 100 010 Other receipts .. .. .. 1,341 1 9 £9,310,694 10 9 £9,310,694 10 9 TABLE X. SUMMARY OF PUBLIC SERVICE SUPERANNUATION RESULTS. Valuation Balance-sheet as at 31st .March, 1934. Liabilities. Males— Value of — £ £ 1,944 pensions for £421,476 lis. Bd. per annum already granted .. .. 3,803,221 968 pensions for £30,008 per annum granted to widows of contributors or pensioners 311,891 342 pensions for £8,892 per annum granted to children of deceased contributors or pensioners .. .. .. .. .. .. .. .. 31,860 Prospective pensions for back service .. .. .. .. .. 4,930,815 Prospective pensions for future service .. .. .. .. .. 3,468,221 Prospective pensions to widows .. .. .. .. .. .. 919,456 Prospective pensions to children .. .. .. .. .. .. 187,076 Return of contributions on death .. .. .. . . .. . . 60,560 Return of contributions on withdrawal .. .. .. .. .. 599,129 Return of contributions under section 9 (2), National Expenditure Adjustment Act, 1932 .. .. .. .. .. .. .. .. 70,425 14,382,654 Females — Value of— 304 pensions for £27,697 10s. 4d. per annum already granted .. .. 324,401 Prospective pensions for back service .. .. .. .. .. 391,895 Prospective pensions for future service .. .. .. .. .. 280,916 Return of contributions on death .. .. .. .. .. .. 9,400 Return of contributions on withdrawal .. .. .. .. .. 82,178 Return of contributions under section 9 (2), National Expenditure Adjustment Act, 1932 .. .. .. .. .. .. .. .. 1,649 1,090,439 £15,473,093 Assets. £ Accumulated funds .. .. .. .. .. .. .. .. .. .. 2,964,064 Value of — Future contributions from males .. .. .. .. .. .. .. .. 2,610,820 Future contributions from females .. .. .. .. .. .. .. 150,650 Subsidy of £86,000 per annum now being paid .. .. .. .. .. .. 1,911,111 Subsidy under section 114, Public Service Superannuation Act .. .. .. .. 625,839 Subsidy under section 16, Finance Act, 1932 (No. 2), of £40,000 per annum .. .. . . 888,889 Future increases in subsidy to be provided .. .. .. .. .. .. 6,321,720 £15,473,093

21

H.—26a.

TABLE XI. Statement showing Subsidies paid as compared with Subsidies required under the System indicated in the Act.

Approximate Cost of Paper— Preparation, not given ; printing (2,094 copies), £38 10s.

By Authority: G. H. Loney, Government Printer, Wellington. —1936.

Price 9d.]

22

Year ended Subsidy required. Subsidy paid. Shortage. £ £ £ 31st December, 1908 . . .. .. (Say) 20,000 20,000 1909 .. .. .. 20,000 20,000 1910 .. .. . . 22,500 22,500 1911 48,000 23,000 25,000 1912 .. .. .. 48,000 23,000 25,000 1913 . . .. 48,000 48,000 1914 .. 66,000 48,000 18,000 1915 .. .. 66,000 48,000 18,000 1916 . . .. 66,000 48,000 18,000 1917 .. .. 86,000 48,000 38,000 1918 .. 86,000 48,000 38,000 1919 . . . . 86,000 : 86,000 1920 .. . . 125,000 86,000 39,000 1921 . . .. 125,000 ! 86,000 39,000 1922 .. .. .. 125,000 86,000 39,000 1923 .. .. . . 172,000 86,000 86,000 1st January to 31st March, 1924 .. 43,000 136,000 -(93,000) 31st March, 1925 .. .. . . 240,000 136,000 104,000 1926 • • •• •• •• 240,000 86,000 154,000 1927 .. .. .. 240,000 86,000 154,000 1928 .. .. .. .. 285,000 86,000 199,000 1929 .. .. .. .. 285,000 86,000 199,000 1930 .. .. .. .. 285,000 186,000 99,000 1931 .. .. .. .. 332,000 86,000 246,000 1932 .. .. .. . . 332,000 86,000 246,000 1933 .. .. .. .. 332,000 124,157 207,843 1934 .. .. .. .. 332,000 126,776 205,224 Total s •• •• •• •• 4,155,500 2,051,433 2,104,067