1.—15.

Commission's Incomplete Statement of State's Liability.—The Commission mentions (paragraph 1394) that the State's liability to the Public Service Superannuation Fund for accrued compensation incurred prior to the fund's initiation was £560,000, and (paragraph 1415) that its " actuarial " liability in regard to back service was £1,816,719. The Commission does not give similar figures for the Railways Fund. This is information which should have been contained in the report had it been as thoroughly prepared as the importance of the subject warranted. It is information which is essential to any true estimate of the position. Its absence supplies another reason for further time to examine the measures proposed. In regard to the Teachers' Fund, the Commission shows (paragraph 1419) that the fund commenced with an initial deficiency of £800,000, due to back service, or an actuarial deficiency at the present time of £2,595,313. It is obvious, of course, that had no fund been inaugurated these actuarial liabilities would never have been projected, as they are now, to make scare headings for newspapers, and to produce panic legislation that " out-Langs " Lang. The Railway Department's liability on account of back service, although omitted from the Commission's report, has been calculated at £600,000, or an actuarial liability of approximately £1,816,719. The Effect of Actuarial Distortion. —From this it will be seen that the total actuarial liability placed by the State on the three funds from the day they were brought into existence was £6,212,032. These facts are recapitulated here to show the absurdity of introducing questions of actuarial liabilities in regard to State superannuation or pensions funds. The total amount contributed to the three Superannuation Funds—Public Service, Teachers', and Railways —by the State for the year ended 31st March, 1932, was £411,000. The total of pensions paid on a non-contributory basis administered by the Pensions Department for the year ended 31st March, 1932, was £3,088,536. Supposing a fund were instituted to cover these noncontributory pensions, its immediate actuarial liability would be £68,634,133, for this is the capital sum at 4J per cent, (the Actuary's interest rate) which would be required to meet these noncontributory pensions yearly. These comparisons are made for the purpose of showing into what astonishingly fanciful figures of actuarial liability the country's annual liabilities can be made to mount, and to discount completely the demands made by the Commission for an actuarial basis to be applied to contributory State Superannuation Funds. Other Discrepancies revealed.—ln paragraph 1396 the Commission shows that whilst employees have contributed £8,940,000 to the various funds, the State has contributed only £4,683,000. The accuracy of these figures may have to be challenged, because in stating the amount contributed by the State to the Railways Superannuation Fund the Commission's figures differ by £50,000 from those supplied to this society by the Department. If the general reliability of the Commission's statements is open to question in this way, it is most important that the Government should have them checked, or it may be grossly misled in regard to the fund. It is worthy of note that at paragraph 1429 the Commission quotes series of figures indicating the alleged actuarial deficiencies of the various funds up to the date of the last published actuarial valuation. Surely it would have been reasonable to await the completion of an up-to-date actuarial investigation before rushing through a statement which was influenced obviously by figures at least five years out of date. Radical Difference between Railway and other Funds. —At paragraph 1397 the Commission states " there is no radical difference between the three funds." This is quite inaccurate. The Railways Superannuation Fund was started long before the others, and on a totally different basis. It has had thirty years of operation on a non-actuarial basis, and has proved its soundness, for practical purposes, throughout that period. Despite the enormous strain placed upon it last year by the retirements of a great number of employees up to ten years before they would normally have retired, the Chairman of the Government Railways Superannuation Fund Board states in D.-5, 1932, that the balance of income over expenditure for the year ended 31st March, 1932, amounted to £5,656 19s. Id. It is quite unfair to the Railway contributors and superannuitants that the report upon their fund by the Commission should have been so inadequate, and that facts in regard to it should have been misstated in order to bring it under the general conditions suggested for the Public Service Superannuation Funds. The £300 Limit: Commission's Inconsistency.—Paragraph 1414 of the Commission's report refers to the amendment of 1909 containing provision that no person joining after that year should be entitled to retire on an allowance exceeding £300 per annum. This also applied to the Railway Fund. This provision of the Act was clearly intended by the Legislature to safeguard the funds at the time when they would reach the period of maximum liability. Hence it is most astounding to find the Commission recommending that this safeguarding clause should now be deleted. Quite clearly it is an effort to introduce a type of class favouritism into the present proposed adjustment to the Act. The Commission states in the same paragraph, " The effect of this amendment is well understood, particularly by professional men who are appointed to the Public Service at relatively high salaries on which they contribute to the fund in full." Each of these officers knows the conditions under which he joined, and accepted those conditions. There is, therefore, no injustice done by the £300 limit, because if the conditions did not suit such officers they were under no obligation to accept the positions. The extraordinary attitude of the Commission is revealed in the fact that at a time when they claim the funds to be £23,000,000 short on an " actuarial " basis, they should advocate the removal of one of the main stabilizing and protective amendments to the Act. How glaring this inconsistency is can be understood from the Commission's complaint that the present £300 limit would act unfairly in the case of an officer who averaged £750 per annum over the whole

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