H—l7a

4. All contributions paid by contributors —with minor exceptions noted in paragraphs 7 and B—attract a 25-per-cent. State subsidy, and, in addition, the State meets all 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. 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. During the quinquennium under review, independent superannuation funds established by the Wellington and Auckland Harbour Boards were taken over by the Local Authorities' Section ; the funds transferred in respect of liabilities accrued at the date of merger amounted to £513,609. 5. The average annual rates of interest credited to the accumulated funds for each year of the quinquennium were as follows : Year Ended Average Rate 31st December, of Interest, Per Cent. £ S. d. 1943 .. .. .. .. .. 3 14 10 1944 .. .. .. .. .. 3 13 6 1945 .. .. .. .. .. 3 12 4 1946 .. .. .. .. .. 3 10 5 1947 .. .. .. .. ..372 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. In 1937 and 1942 the Fund was valued using 3| per cent, interest. The above yields indicate obviously that a lower rate must be used for this valuation ; and 3£ per cent, has been adopted accordingly. MAIN FUND 6. Any resident of New Zealand who is over sixteen and under fifty years of age may become a contributor to the Main Fund. The benefits granted are : (i) A pension commencing at age sixty of 10s., 205., 305., or 40s. per week, as the contributor may elect. (ii) The first 10s. of any such pension carries with it the right to the following subsidiary benefits: — (а) An allowance of 10s. per week for each child under the age of sixteen years, and 10s. per week for the contributor's widow, payable from the date of his death, provided he has contributed to the Fund for five years. The widow's allowance is payable only so long as a child's allowance is payable. (б) An allowance of 10s. per week for each child under the age of sixteen years, payable during the fourth and subsequent months of the contributor's total incapacity to work while he is under sixty years of age, and provided that he became incapacitated after contributing to the Fund for five years. The total weekly allowance so payable is not to exceed the contributor's pecuniary loss, and is reduced by Is. a week for every shilling by which the contributor's income from other sources exceeds £5 per week. Contributions cease while such allowances are payable. (iii) On the termination of the contract through any event a return to him or to his beneficiaries of all contributions paid less any benefits received.

2