SUPERANNUATION.

Dominion, Volume 2, Issue 320, 6 October 1908, Page 7

SUPERANNUATION.

THE GOVERNMENT PROPOSALS. EXPLANATION BY AN ACTUARY. -TRIENNIAL REVALUATION NECESSARI ■ Tlio evidence of Mr. Morris Fox, actuary, before, the Public Accounts Committee on the Public Service Classification and Superannuation Bill, was to tlio effect that £7000 will bo tho annual subsidy required by the Teachers' Fund and £3000 by tho Police Fund. This, ho saysj will enable the polico and teachers to' participate in tho higher bene-.-fits provided' by tho Public Service Super-, aunuation. Fund, and will place the former funds in a similarly sound position. In reply to Mr. Jas. Allen; Mr. Fox stated that since lie made tlio estimate for the Teachers' Fund ho had adopted a different principle. On this subject tho evidence is interesting. Mr. Allen asked: Am I correct in stating it when I say that your principle is to make provision only for tho present and no provision is-made by the State for future services?. Witness: Yes, that is right. Mi 1 . Allen: Are you making any provision : now for- the responsibilities of the State in .regard t-o futuro benefits? Witness: If I understand the lion, gehtleman aright, the answer is: No. Fifty pounds of the £90 pension (ail instance previously quoted by witness) is purchased by the man's own contribution, but there is no I provision being made by tho Government at present for tho feuiaining £40. Mr. Jaines Allen: In what way is the Government to "provide in the futuro for these responsibilities? Witness: By tho amounts of £20,000, £7000, and £3000, which will bo increased probably each year automatically as tho necessity is shown bv' actuarial valuations. In all ■ probability they will increase from 5 to 10 per cent, yearly for some time. ' 'From further questions and answers it appears that there will need, under the present scheme, to be triennial valuations, and any balance needed at tho end of' each period to make the fund sound will have to be provided out of the Consolidated Fund. The readjustments will only bo with regard to back service, and not with regard to the responsibility of tho Government if tho future contributions arc not sufficient. Witness could not give' any idea of . what tlio probable increase will bo at tho-ond of the first tlireo years, because, as lie said, ho had so little 'data. In the case of the, Public Service Fund,- it might go up from £20,000 to ,£2o,ooo ; per annum. " Mr. Allen asked what would be the position in regard to a pension which would not come due for, say, thirty years after tho triennial .investigation, "Would there be," he asked, "any provision made by the State for "the three- years'- responsibility on account of a ponsion which is not duo for thirty years ?" Witness replied: None whatever. The provision is only made for those pensions which are to emerge during the next three years. Mr. Allen; Does the State make any provision for its responsibility in regard to a pension thirty years hence? Witness: No,-sir. Mr. Allen: And how is ,it intended that' the State shall make provision for that pension? " Witness; By increasing the subsidy. Mr.-Allen :-When?Witness: Every three years. In twentysevon years the State will make provision for the. ponsion due to emerge in thirty, years. ' . Mr. Allen:'Would it .-be an accumulating amount as the years go''by? • • Witness: Yes. I can see that for the next ten or fifteen years there is every probability of the £20,000 being increased. Mr. Allen: Will tho increasing amount be a Very large ono? . There will bo a continuous steady, increase up to a certain amount. ■"■ Mr. Allen: To what amount? . . Witness: I cannot say definitely, but I : ■ .think for the .Public Service Fund it will probably get up to ever £60,000. Sir Josoph Ward: Tho. difference between tlio" two is. this: In the one case there is one contribution from the State, and ■■.tho amount of; that we know, while in the ' otlior "case 'there Is an annually increasing contribution tho amount of which wo do not know? ' ■ -Witness.: ..That .is., so. _We cannot know until after each triennial investigation.