H.—2

4

A far less satisfactory scale has been registered by Sanctuary Star of Canterbury of the Ancient Order of Shepherds. It is as follows: — Age Monthly Contributions last Birthday. to Benefit Fund. Benefits. s. d. 18-20 ... ... 03 ... ... ""I 6s. per week during the first 21-23 ... ... 04 ... ... 6 mouths of sickness, 24-26 ... ... 0 6 ... ... and 3s. per week during 27-29 ... ... 08 ... ... i continued sickness after 30-32 ... ... 010 ... ... 'the above - mentioned 33-35 ... ... 10 ... ... period; £6 on the death 36-37 ... ... 1 2 ... ... of a member; £4 on the 38-40 ... ... 14 ... ... J death of a member's wife. The inadequacy of this scale is most glaring for members entering at the youngest ages. In fact, while the scale is inadequate throughout, the process of graduation according to age has been carried too far. This is specially unfortunate, as it is precisely in the case of young members that an actuarially inadequate contribution is most dangerous, because there is a likelihood of less compensation through the excess of interest earned over that assumed in the actuarial computation. At whatever period and by whatever stages a fall of interest takes place in the colony, the older members will clearly be the ones in respect of whom societies will proportionately gain most by the temporary high level of the interest-rate. On the other hand, the profits from secession will be greater in respect of members admitted young ; but this is probably in most cases a smaller, and certainly a less reliable, source of profit than that arising from excess of interest where the funds are well invested. lII.—VALUATIONS. The only societies valued during the year 1881 were the Nelson District of the Manchester Unity of Odd Fellows, with its several lodges, and Court Pride of Parui.ll of the Ancient Order of Foresters, situated at the Thames. The result of the first-named valuation was to show that the District, as a whole, and all its lodges, are, from an actuarial point of view, utterly insolvent. A summary of the results, so far as the individual lodges are concerned, will be found in Schedule 11. to this report, and the valuation report on the District Widow and Orphan Fund is appended as Schedule 111. The valuation of Court Pride of Parnell, A.0.F., resulted in the declaration of a nominal balance in favour of the court, but, no valuation of the District Funeral Fund having been made, it is impossible as yet to ascertain how far the said surplus is a real one. The valuation of a lodge or court is, in fact, necessarily incomplete and inconclusive, owing to the interdependence of the lodges in respect of their funeral liabilities, unless a valuation of all the other lodges or courts in the District and of the District Funeral Fund is made simultaneously. It will be seen that the Nelson District of Odd Fellows, valued as on the 31st December, 1880, comprised 5 lodges and 624 members, aged, on an average, 35 _ years, 383 of whom were married. The benefits assured to these members were: 20s. per week for the first 12 months of sickness; 10s. per week during the next 6 months of continuous sickness ; 7s. 6d. per week for any sickness after a continuous sickness of 18 months ; £15 on the death of a member, and £12 on the death of a member's wife; an annuity of 12s. per calendar month to the widow of every deceased member for the first 6 years of widowhood; an annuity of 3s. per calendar month to each child under 12 years of age of every deceased member till it reaches that age. The contributions paid to meet these benefits are : 6d. per week, or 265. per annum,* to the Sick and Funeral Funds of the lodges, and sd. per lunar month, or ss. sd. per annum, to the District Widow and Orphan Fund. The present value of the sickness benefits, estimated on the basis of the Manchester Unity Sickness and Mortality Experience of 1866-70 (4 per cent.) was £22,962 lis. 6d., or £36 16s. per member ; that of the funeral benefits, estimated according to the Manchester Unity Mortality Experience of 1866-70 (4 per cent.), was £4,564 14s. 5d., or £7 6s. 4d. per member ; that of the widows' annuities, estimated by using the Manchester Unity and Institute of Actuaries' Hm Mortality tables (4 per cent.), was £5,453 Is., or £8 14s. 9d. per member; while that of the children's annuities, estimated according to Professor Pell's New South Wales (Females) and the Institute of Actuaries' Hm Mortality tables (4 per cent.), was £1,517 15s. 9d., or £2 Bs. Bd. per member. Thus the aggregate present value of all the liabilities was £34,498 2s. Bd., or £55 ss. 9d. per member. The present value of the contributions receivable on account of sick and funeral benefits, estimated by the Manchester Unity Mortality Experience (4 per cent.), was £13,350 16s. 7d., or £21 7s. lid. per member ; while the present value of those receivable on account of widow and orphan benefits, estimated on the same basis, was £2,66S ss. Bd., or £4 ss. 6d. per member. The total present value of future contributions was thus £16,019 2s. 3d., or £25 13s. sd. per member. Deducting the present value of contributions from the present value of benefits, it is found that the net liability of the district as at the date of valuation was £18,479 Os. 5d., or £29 12s. 4d. per member. This, therefore, is the amount to which the District and lodge benefit funds ought in the aggregate to have amounted in order that the District as a whole might be actuarially in a solvent position. It is seen, however, that the aggregate Benefit Funds of the five lodges amounted to £7,987 17s. Id., or £12 16s. per member; the District Funeral Fund to £104 15s. 4d., or 3s. 4d. per member ; and the District Widow and Orphan Fund to £1,177 16s. 10d., or £1 17s. 9d. per member: in all, £9,270 9s. 3d., or £14 17s. Id. per member. The accumulated funds of the District and all its lodges are therefore barely more than one-half of what they ought by this time to have been, and the total actuarial deficiency is seen to be £9,208 lis. 2d., or £14 15s. 3d. per member. This result must be regarded as eminently unsatisfactory, more especially when it is considered that not only is the District as a whole unsound, but that each separate lodge and each separate benefit fund is thoroughly insolvent. The Valuers have investigated very fully the causes of this alarming

* With a small extra annual contribution in the case of one of the lodges.