H.—l7A

1943 NEW ZEALAND

ACTUARY'S REPORT ON THE VALUATION OF THE NATIONAL PROVIDENT FUND AS AT 31st DECEMBER 1942

Laid before Parliament in pursuance of Section 73 of the National Provident Fund Act, 1926

Wellington, 3rd December, 1943. 1. In accordance with the provisions of section 73-of the National Provident Fund Act, 1926, as amended by section 8 of the National Provident Fund Amendment Act, 1942, I have the honour to submit the following report on the National Provident Fund as at 31st December, 1942. 2. The Fund is divided broadly into two sections —the Main Fund, established in 1911 toenable individuals to purchase pensions commencing at age sixty, and the Local Authorities' Section, established in 1917 to provide pension facilities for employees of local authorities. In the former, membership is voluntary, new members being enrolled by representatives of the Department appointed for the purpose, while in the latter membership as contributors on behalf of their employees is compulsory in respect of Hospital Boards and optional for other local authorities. Employers other than local authorities are accepted as contributors on behalf of their employees under both the Main Fund and the Local Authorities' Section. The published accounts of the Department relate to the whole Fund, and in consequence the financial positions of the two sections cannot be viewed separately. 3. The receipts and expenditure of the Fund for the quinquennium Ist January, 1938, to 31st December, 1942, were as follows : — Consolidated Revenue Account, Ist January, 1938, T-"i 31st December, 1942 Income. £ Outgo £ Amount of Fund at Ist January, 1938 .. 4,992,587 Maternity claims— Contributions .. .. .. .. 1,598,826 National Provident Fund members .. 0,328 Interest, less investment expenses .. 1,108,355 Approved friendly-society members .. 63,338 Fines .. .. .. .. 1,962 Refund of contributions on lapse, withdrawal, &c. 510,992: State subsidies .. .. .. .. 392,370 Incapacity allowances .. .. .. 40,801 Refund of maternity claims by State .. 69.631 Death claims— Benefits refunded on exit.. .. .. 83,668 Refund of contributions.. .. .. 170,745' Miscellaneous receipts .. .. .. 21 Widows'and children's allowances .. 63,325 Refunds unclaimed .. .. .. 4,517 Retirement allowances .. .. .. 447,941 Premiums on conversion . . .. .. 5,751 Investment Fluctuation Account .. .. 76,000 Amount of Fund at 31st December, 1942 . . 6,802,358 £8,252,888 £8,252,888 4. All contributions paid by contributors —with minor exceptions noted in paragraphs 7 and 8— attract a 25-per-cent. State subsidy, and, in addition, expenses other than, the charges by the Public Trustee for his administration of the assets of the Fund and legal charges incurred in connection with investments are met by the State. The Public Trustee's charges and legal expenses have been regarded as investment expenses and deducted from interest in the Consolidated Revenue Account. The State also guarantees the solvency of the Fund. Prior to 1939 members of the Fund received, subject to certain limitations as to income and duration of membership, a payment of £6 on the birth of a child or children. Members of approved friendly societies attracted a like benefit, the payments being made through the National Provident Fund. In both cases the sums so paid were recovered from the State. The benefit is payable now only in cases where a full maternity benefit has not been paid under the Social Security Scheme. Payments under this heading have fallen from £40,602 in 1938 to £74 in 1942. 5. The average annual rates of interest credited to the accumulated funds for each year of the quinquennium were as follows : — Year ended Average Kate 31st December, of Interest, per Cent. £ s. d. 1938 .. .. .. .. .. .. .. 3 18 9 1939 .. .. .. .. .. .. .. .. 3 19 3 1940 .. .. .. .. .. .. .. ..31811 1941 .. .. .. .. .. .. .. 3 18 0 1942 .. .. .. .. .. .. .. .. 3 10 0 In calculating the above rates investment expenses have been deducted from interest, and allowance has been made for the fact that the State subsidy taken credit for in the accounts of any year) is not received until some months later.