H.—-16b

2

Consolidated Revenue Account.

The Valuation. 6. The foregoing Consolidated Revenue Account shows that the Fund possesses a balance in hand, or accumulated fund, of £67,121; but in order to ascertain the state of the Fund by an actuarial examination as demanded by the Act it is necessary to make a valuation of the assets and liabilities. This valuation is required to determine whether the accumulated fund of £27,121 is sufficient, together with the future receipts from interest and from members' contributions, to discharge the various claims as they arise, so far as existing members are concerned. 7. The net results of the valuation are summarised in the following valuation balance-sheet, which contains — (1.) On the left-hand side, the discounted liabilities—viz., the sums expected to be paid, less interest for the time it is estimated they will be deferred; (2.) On the right-hand side, the discounted contributions—viz., the amounts expected to be received, less interest for the time until they fall due. Valuation Balance-sheet as at 31st March, 1906. Liabilities. £ j Assets. £ Value of 57 peneions already granted, for < Accumulated funds at 31st March, 1906 .. 27,121 £5,037 per annum .. .. .. 50,120 Value of future contributions .. .. 87,868 Value of 651 prospective pensions, for £73,548 Deficiency .. .. .. .. 214,168 per annum, to offioers in the service (including thirty-three over age 60, who are entitled at any time to pensions already accrued, amounting to £3,115 per annum) 256,227 Value of return of contributions at death .. 22,810 £329,157 I £329,157 8. The balance-sheet reveals that the accumulated funds should amount to £241,289 to be sufficient for the purpose explained in paragraph 6, thus showing a deficiency of £214,168. 9. Nothing very definite can be reported about the Fund in reference to " its expectant state at the close of the next ensuing triennial period, having reference to the prospective receipts and charges during such period," quoting from the Act. The utmost I can do is to make an estimate of the income and outgo for the current trienniuin, and this is given in the Account shown in paragraph 5. Therefrom it will be seen, as might be expected, that the income from contributions increases very slowly while the outgo for pensions and allowances increases very rapidly. The following table shows the past yearly increases in the fund, and the estimated increases during the next three years : —

Income. Outgo. Actual. Estimated. Act La). Estimated, 1900-3. 1903-6. 1906-9. 1900-3. 1903-6. 1906-9. Fund at beginning of period Contributions Miscellaneous ... Interest £ 3,257 18,418 £ 27,121 Pensions and other allowances Commission Fund at end of period £ 5,322 £ 13,273 £ 21,800 19,272 109 1,207 19,341 169 2,567 20,080 240 3,884 105 18,418 101 27,121 105 29,420 23,845 40,495 51,325 23,845 40,495 51,325

Year ending. Funds at End of Year. Yearly Increase in Funds. Percentage of Increase on Funds of Previous Year. £ 3,257 9,186 14,579 18,418 21,794 24,876 27,121 £ 5,929 5,393 3,839 3,376 3,082 2,245 Per Cent. list March, 1900 1901 1902 1903 1904 1905 1906 1820 58-7 26-3 18-8 14-1 9-0 Actual. 1907 1908 1909 28,726 29,470 29,420 1,605 744 - 50 59 2-6 Estimated. Decrease