RAILWAY INQUIRY

Dominion, Volume 13, Issue 115, 9 February 1920, Page 6

RAILWAY INQUIRY

PROCEEDINGS TERMINATED

WHEN SHOULD A MAN

RETIRE ?

INCIDENCE OF SUPERANNUATION

Finality was reached on Saturday morning in connection with tho sittings of the New Zealand Railway Servants' .Inquiry Board. His Honour Mr. Jus-, tico Stringer presided, and the assessors .were Mr. H. W. Monatt, for' tho Railway Department, and Mr. W. J. Mack for tho A.S.R.S. Mr. J. Mac Donald, the Assistant General Manager, represented the Department as advocate, and Mr. R. Hampton appeared for tho A.S.R.S. The board sat to hear argument relative to the question of superannuation in respect to which improvements were advocated by the A.S.R.S. i In outlining tho views of tho A.S.R.S. Mr. Hampton said that when a man had completed forty years of service and had reached sixty years of age, and was entitled to superannuation of at least <£250 per''annum, he should retire. Viewing the question from the standpoint of principle and its effect on the general efficiency on the service, he said it appeared to the society that Parliament had intended that railway servants should retire on completion of forty years of service. becanso it had made provision on completion of such a period that superannuation -could not be improved. The ■unfortunate part of the situation was this, that a man was entitled to retire on two-thirds of his salary after attaining forty years' service, but if his falnry w.as raised after that time he was still entitled to draw two-thirds of the new ealarv. Such a contingency was an incentivo to a man to remain in the servyice after completing forty years' of service. If a man coiild do that it was bad business.

In all. Mr. Hampton said he could quote the cases of seventeen men of over fortv years' service whoso salaries represented an increase of ,£I3BO on what ha<l previously been drawn, and nn additional burden of .£920 every year on the Superannuation Fund. Some years after the original Act had been passed Parliament saw that pensions of .£BOO and ,£IOOO were really salaries, and had amended the Act, limiting the amount of superannuation any particular individual could • draw, to a : maximum .of .£3OO a year;' This would not come into effect for some time, as Parliament could not break a contract entered into with the existine contributors. The Act was passed about eight years ago in a consolidating measure, and would take about thirty years to woA out.

"Hangers-on,"

His Honour interjected that with ,£3OO as tho maximum pension there would be a still-creator inducement to hang on.

Mr. Hampton continued that if a man had been'forty years in the service and could draw a pension of .£3OO, he ought not to be "down on his uppers" at that timer of life. Parliament had surely , never anticiapted that men would hang ■ on after they were duo to'retire. The proposal was meant to enhance the efficiency of the service by a fair way to , get rid of the,older men, who tended to Rot into a rut. Mr. Hampton went on to quote instances of officers in the service who retained. their positions, though entitled bv length of service to retire. The Chief Traffic Manager, with a salary of .£1250, had forty-four years and seven months service, according to the D 3 of last April.- and he was entitled to retire at anv time on .£733 6s. Bd., two-thirds of ,61100. Assuming that he paid .£75 per year superannuation contribution, one could see he was holding the position really for. about .£3OO a year. A man in such a position could hardly feel tho same .responsibility as men in less independent positions, and the tendency was to "mark time." Similarly, the Assistant Traffic Manager, with forty-six > ■vears ten months' service, and a salary i of .£SGO per annum, could retire on wC533 ; fis: .8d:-' This' meant that ho was practically filling -an ,£BOO position for .£2lO 13s. 4d.< In another case quoted an official .entitled.t<? retire on <£46G 13s. 4d. was holding a .£7OO job for .£lB4 6s. Bd. Continuing, Mr. Hanipton said that the. same thine obtained in the districts. As i a mater of fact, in every district but one j the traffic manager had completed forty vears'.of service, and was eligible for retirement..,. , The tendency Was for men with really -nothing to lose to take up an irresponsible attitudo. Not a One Man's Job. Thev had as General Manager an earnest, capable, hard-working man, and he should have around him brainy and '■ active men ready to carry on the busi-1 ness of tho Department. No one man, however capable, could carry the whole Irarden 'On his back, and that appeared to bo tho position to-day. ' In striking contrast tho Department , set the age-limit for certain positions at | fifty, bridge inspectors and foremen of | works, for instance. . If such a principle : prevailed in subordinate positions, why . should it not obtain in tho higher ' sphere? As a result of the present state of. affairs it. was impossible for a man to i calculate liis prospects of promotion, and tho Department might lose many a man deserving of .every encouragement in conseauence. A man might find himself .■Within' five years of his retirement before he got a chance, owing to this svstem of. Ranging on. This meant a "blow acainst ambition. Mr. Hampton wont on to say that it was very awkward ■for the General Manager to have to discriminate. There might bo some _ men ho desired to retain for their efficiency after they were due to retire, but there ■were others whom the Department did pot want. He believed that some of the men who were hanging on had been given a pretty plain hint that they were hot wanted, but it had to bo borne in mind that hints in some cases dul not suffice. To his mind, the General Manager would hesitate to tell a man no must actually retire, because tho principle applied all lound might be injurious in some cases. The society s view was that there should bo a general rule, so that men would know where they were. Passing on, Mr. Hampton said that thev could not accept the opinion expressed bv ilr. Harries that it_\vus not the business of the A.S.R.S. The men believed that if tho "head were not right the bodv would be suro to suffer, and thev had put forward then- views m the Aonest belief that they would tend to promote tho efficiency of the service.

Mr. Mac Donald in Reply. Replying to Mr. Hampton, Mr. Mac- j Donald emoliasised that there was 110 I unanimity o"n the point at issue amongst ] the societies representing the jnonibew of the service. The Officers Institute did not agree to the age limit suggested by tho A.S.R.S., and put forward 40 years of service and GO years of age, instead of 40 years of service or GO years of nge. The .remaining division -had not expressed its voice on the mutter. Mr. Mac Donald went oil to point out that tlio proposal that retirement should be made compulsory of members who had forty years of service or who had attained GO years of age and who. in either case, were entitled to a pension on sucti retirement of not less than .£250 per annum, aft'ecied only those in tho upper grades of the First Division. It did Jjot apply to tho other ■ members of tho service, as their retiring allowance would in no case amount to per annum. Members of the First Division commenced their service with the Department as cadets between 15 and 17 yews of ago. They would, therefore, be compelled to retire as early as 55 years of age, and not later than 57 years. Between these ages the average man had all Jiw mental vigour still unimpaired. In. fact, in the professions which essentially called ■for a high degree of intellectual pwet» men did not as a rule reach the zenith of their career until at least 55 years ot age, and in some cases later in lite still. Age a Relative Term. Ago was after all a relative term, and one man mitfht bo more alert and vigorous at 60 tfcan another at 40. riiero could be no hard and fast rulo in respect of these differences that anybody would recogniße in ordinary life. His Honour: I understand Mr. Hampton to say that when a man ias_ attained an ago when he is able to retire with

j a large proportion of his income, 110 is j not likely to have the initiative a man would have who was not in that position.

Mr. Mac Donald then quoted a few instances of appointments lately made to highly responsible positions in the railways in England. The ages in tlio cases quoted ranged from 43 to 4G years, including several general managers and two traffic superintendents. A month, or two ago, also, Mr. W. 31. Shannon was appointed third railway commissioner in Victoria for seven years, after having served in the Railway Department of that Stale for 3S years. These examples sufficed to show "(hat those responsible for the running of the railways in England and Victoria at least did not subscribe to the view that a man ought to be retired at 55 years of age, or with 10 years of service. In fact, it jvas impossible to hold that it could be laid down as a general proposition that a man was no further use after 55 years of age. The necessity for adhering to a hard and fast rule such as was -sought to 1m laid down would prematurely deprive the country of the service? of men whom those responsible considered well fitted to fill their respective positions—otherwise, of course, they would not have been appointed thereto or retained therein—and of whoso experience in railway working and management the country was entitled' to the benefit. Mr. Hampton pointed out that he referred to men in "a position to draw-two-thirds of their salary for nothing. He never contended for one moment that a man was incompetent at 55. but he did contend that a man depending nn the whole of his salary would be irorc ale''t than a man who could draw two-thirds for nothing.

The Underlying Principle. Tho principle underlying the establishment of superannuation funds was, said Mr. Mac Donald, that of benefit-to the community and to the contributors, and to use the fund as a vehicle for the injury of both was a total subversion of this principle. The economic less to the* country was twofold. Firstly, there was the loss of the service of a man in the 6phere in which he conld be most useful, and, secondly, there was an extra burden cast on the superannuation fund which was subsidised by the State. The man himself also suffered a loss in that he was deprived of the right to engage in the work at which he coiild secure the maximum return for- his labour, and had thus to accept a smaller income. What justification was there for inflicting these losses on tho community and the individual? The other side said that the present system was blocking promotion and stifling 'ambition, and that the change would make for progress. How was it blocking promotion? Was the introduction of such a provision as was desired going to : hasten promotion? Was it going to open up new positions to w-hich youn| men could aspiro? In both cases, no. A number of men who would retire nnder sjich a provision would, of course, result in a number of officers being promoted to fill their positions. But with the promotions entailed by these retirements the advantages would bo practically exhausted. At present a member was required to retire at 65; and by shifting l the ago back to 60 or 55 it would certainly benefit a few who received promotion at the time of the change, but the relative positions of the men in regard to promotion were unaffected. The only result was that the successors of those eompulsorily retired attained to the advanced positions five years sooner, but they in their turn bad to retire five years sooner. Each holder of an office would, therefore, hold the office for the same period as he would have held it under the present arrangement. The only difference was that he obtained the office five years earlier and when he had had five years' less experience. Thore would be no new avenues of promotion; the offices would not bccomo vacant any more rapidly, and the relative positions of the m«n would be unchanged. It was not clear, therefore, how the proposed arrangement was going to remove the blocking of promotion and tho stifling of ambition which, it was averred, were the especial sins of the present system.

Overloading of the Fund. Another very potent reason why earlier retirement should not be mado compulsory was that the superannuation fund iras already overloaded,, and tho effect of the proposed alteration would be to, greatly- accentuate this trouble. There was, however, another .objection to this proposal, and, it was submitted, a fatal one. That was, that there existed between the State and the contributors a contract embodied in tho_ Act whereby in exchange for certain contributions the contributors had become entitled to certain benefits. Now, there was no mention in this contract of compulsory retirement as now proposed, and the introduction, of such a provision at this timo wnttld constitute a

'.t ■ of I'ii'.' original contract. It had also been expressly provided that subsequent amendments increasing the contributions and limiting the maximum pension to .£3OO a year should not apply to existing contributors at the time of the amendments. Sins of Classification.

The position as to present contributors was that tlio amendment proposed could not be made, as eonsituting the variation of the contract which the Legislature, when sanctioning the making of the contraot, declared should no be varied. As to present and future [ contributors, the change was .lot jus- | tilled', las involving economic loss to 1 both tho country and the contributor , and a heavy burden on the superamiua- | tion fund, while at tho some time con- I ferrftig no substantial compensating ad- \ vantage on tho staff. j Concluding, Mr. Mac Donald said that the Department recognised that every assistance should be giveu to .younger men to rise. The fact that tho tendency | of the age in the service was to pso i was duo to the system of classication. : The sins charged by Mr. Hampton on I the Department wero due to the system I of classification, not to superannuation. The classification had a benumbing effect, and tended to deprive the men of incentive. This system had been in existence in the Railway ( Department longer than in any other State Depart- ' raent. His Honour, in remarking that the inquiry was now at an end. said ho. had been very glad to hear the views expressed by both sides. The problem was fraught with great difficulties, rnd he could quite see that classification was i the "lion in the path," but what could be substituted for classification was a still more difficult thing. However, he would give tlio question his best consideration. After Mr. Mac Donald and Mr. Hanip* ton had both returned thanks to His Honour for the indulgence allowed them. His Honour, in Teply, to Mr. Hampton, said that he could not name a dato when tlio report would b<* submitted to tho Government. He would lose no time v'l'- Ms advisory a&iessor* of tho various branches, but this would talro some time. Ho would endeavour to table the full report, or at least an i interim report as soon as possible. The proceedings of the board veto then brought to a close.