I.—ll

The Registrar, Friendly Societies, to the Chairman, Old-age Pensions Committee. Sir, — Friendly Societies Registry Office, Wellington, 10th July, 1894. In reply to your inquiry as to the bearing of a scheme for providing old-age pensions of small amounts upon the operations of friendly societies, I have the honour to point out that, unless the principle of the scheme be defined, it would be difficult to say whether the establishment of a pension fund would interfere with the thrift of friendly-society members. 1. Is it proposed that the pension shall be provided out of (a) general taxation, (b) contributions of individuals, (c) partly taxation and partly contribution ? I think that a voluntary-pension scheme may be dismissed from consideration, because the number who would take advantage of an optional insurance benefit, however attractive it might be made, would be few, and, in such case, special legislation would not seem necessary. The possible objection of members of friendly societies to a compulsory-pension scheme is that it might prevent many members from joining who were unable to contribute for both insurances. This view appears to prevail among friendly societies in England. I do not think that this objection would apply so forcibly in New Zealand, at least in respect of workers in constant employment. 2. The first question having been decided, is it proposed to grant the pension to all, or to those only who are in need ? The members of friendly societies, and the thrifty classes generally, would probably disapprove of the latter principle. I respectfully suggest that the opinions of leading members of friendly societies be taken, as I do not feel entitled to speak from their point of view. If the scheme is to be based on the principle of encouragement to thrift, perhaps it might be thought well to grant the pension to members of friendly societies under certain conditions. This proposal is put forward by the Grand Master of the Manchester Unity of Oddfellows in England ; but I should add that the majority of the leaders of English friendly societies appear to object to State help in any form. In order to give you some idea of the cost, I submit the following figures: At age 60 the present value of £1 a year for life, payable quarterly, calculated on a New Zealand mortality table at 4 per.cent., per annum, is £10-33. At that age, therefore, the present value of a life annuity of £26 (10s. a week) is £268. At the census in 1891, the number of persons aged sixty and upwards was 26,374. The present number of such persons may be put at 30,000. In order, therefore, to provide a life annuity of £26 to each person above sixty years of age, immediate additional taxation would be required to the amount of £780,000 per annum. As the percentage of persons above sixty years of age is rapidly increasing, it may be reasonably assumed that, when the population of the colony reaches one million, more than 8 per cent, will be above that age. On this assumption, the annual charge for pensions would then exceed £2,080,000. Ultimately the ratio of pensioners to the total population will probably rise as high as 15 per cent. Moreover, unless sufficient safeguards are provided, the normal ratio of pensioners to population will be exceeded. Also, should population increase in greater ratio than taxable values, a tax whose amount varies as the population tends to become more and more burdensome. The above figures do not include cost of management or collection of tax. I have, &c, Edmund Mason, Registrar Friendly Societies. W. Hutchison, Esq., M.H.R., Chairman Old-age Pensions Committee. Approximate Cost of Paper.— Preparation, not given; printing (1,500 copies), £8 12s.

Authority : Samuel Costall, Government Printer, Wellington.—lB94.

JPrict ed.]

11