Forty Years a Liberal

Sun (Auckland), Volume III, Issue 634, 10 April 1929, Page 2

Forty Years a Liberal

LIFE STORY OF SIR JOSEPH WARD

From Telegraph Messenger to Prime Minister

By R. A. LOUGHNAN (Copyright— Sun Feature Service) ENTERING Parliament ill 1887, i?ir Joseph Ward is * veteran among contemporary statesmen and his career is traced and described in this series of articles by It. A. Loughnan for readers of The Sun. No. XV

The same. Sir Joseph declared, could be said of the L. and N.W. Railway scheme. “Judged after 47 years, afte rmaking contributions to every claim upon it, it has over a million pounds sterling of accumulated funds, which, invested, largely meets the annual outgoing, in every direction. He explained this relerenee to these cases to call attention to the fact that it is not so much upon the amount of accumulated capital they have to draw upon that such schemes should he judged, as on what is at the back of them. It is the creation of a system which builds Itself up, and while it is being built up has the support and assistance of the credit of the institution behind the proposal—in this case a contribution from the colony itself, in addition to that of the employees—which it will be admitted establishes the credit of and strengthens the superannuation fund from its inception. In the case of the I-.N.W.R. Company, the fact of the company giving its contribution of 2J per cent, was a large guarantee on the side of the company which would ensure that provision of capital which is looked to as the basis upon which to rest the structure; and when the State is behind such a scheme as this, I do not think there are any hon. members w’-o will assert that that fact would not to some extent take the place of what is generally looked upon to mn ; - the scheme actuarially sound.” He jd.

resulted in the substitution by tj,. committee of, for the uniform scale contributions by the employees i sliding scale according to age. whlej increased the aggregate of the contri. butions from £ 15,009 a year to £33,000. This was the chief amendment made in committee. It was agreed to after some hesitation in accepting the sibility of practical soundness versuj actuarial perfection. Other objections were few minor, except one which found fault with the contributions as too larg p These made no difference, howeTer and the Bill was read a third time. COUNCIL AMENDMENTS lii the Council the Bill was receive! sympathetically, but several amend, ments were made. The chief o£ these was an alteration iu the sliding siala of contribution reducing the aggregate by £3,000; an addition of one to the board, giving- three to the employees' representative and increasing the total from four to five; and the in. elusion of the provision giving equal status under the scheme to employees of any railway company that might bq acquired by the State. Some of these were refused by the House, and the Council insisted. Rather than jeopardise so valuable and so urgently necessary a Bill, the House, on the motion of the Acting. Premier, agreed, and on September 13 the Bill was through Parliament. The quarter-century that has passed since has not justified the opinions of its soundness expressed by Sir Joseph Ward, but has proved the beneficial character of the measure. The extension of the system to the whole Civil Service, and the establishment of similar schemes of superannuation by various local bodies, are a good body of corroborative evidence. This series of superannuations which have gives security and comfort to thousands of persons stands to the credit ot Sir Joseph Ward. If there were no other proof of his capacity as a political leader of courage, sagacity and pru. dence, they alone would establish his claim to such a title. HISTORY OF THE FUND

■ ... - --Mness: “I know the idea that lies in the mind of any person is as to whether or not we are undertak l ' — <». scheme that may be termed actuarially sound. All I can say is that unless you provide a huge capital iu the first instance really to provide a friendly society schc of a superannuation fund you won. from the point of view of most people, conclude that you would never have a scheme such as instituted by the I,Railway Company, or one such as is proposed in this Bill.” All this handling of the subject was included evidently to show that under the surrounding conditions the urg-ncy of the N"w Zealand railwaymen’s case was imperative, and that the case could quite well he met by the proposal before Parliament, that r~"posal being not actuarially sound, but quite sound enough for all practical purposes.

The subsequent history of this rail, way superannuation to date is very interesting, as show-ing the effect ot changes in environment and improvements in benefit. At the outset, when the scheme was before Parliament in 1902, the main criticism made upon it was that the basis —the wages and State contribution —was too small tor soundness of working. The history of the fund's working makes it unnecessary to follow that point ot ditto encs, because it is a history of alterations of circumstance. Additions to the benefit list and increases of wages with proportionate retirement amounts have necessitated increased annual contribution from both wages and the Consolidated Fund. A brief history of the fund, with some explanation of its present benefits and contributor' basis, is necessary for the understanding both of this great institution and a proper appreciation of the fine pan played by its founder. The Railway Superannuation Fund was brought into operation in 1903 at the instigation of the Rt. Hon. Sir Joseph Ward, at that time Minister of Railways. The main features of the fund were that members in the railway service could join the fund on payment of an annual contribution from their pay at a given percentage of their wages, according to age at the date of entry. Upon attaining the age of 60 years the contributor was entitled to retire on a superannuation allowance equivalent to one-sixtieth of his then annual rate of pay for every year of serviceor alternatively he could retire on conclusion of forty years of service on two-thirds of his pay at date of re tirement. The Act provided that all new entrants must join the Superannuation Fund. As a matter of fact the benefits offered were so liberal that very few of those in the service at the inception of the Act declined to comply with its provision. RATES AND SUBSIDY

The State, one sees in the underlay of this argument, must make good in case tks scheme fails, make good by supplementing Its contribution, if and when necessary, but is strongly safeguarded by the practical soundness of the scheme proposed; and the danger of any failure being reduced to a minimum —almost negligible—proved all that in the case of the scheme used as an example. SOME OBJECTIONS

The Bill was debated at some length, and generally approved, but some objections were taken. Preference was expressed for a sliding scale of contributions after the manner of the Police Superannuation Act, which varies by degrees of contribution of employees from 5 to 10 per cent., and the Minister justified by pointing out the great difference between 700 men on one side and 8,000 on the other, by objecting that the Government contribution would have to be increased accordingly, and urging the greater variety of the circumstances.

A strange, perhaps characteristic, objection twitted the Minister with not having informed the House that the L. and N.W. Company had agreed to contribute to their scheme in order to avoid the liability under the Workers’ Compensation Act. The Minister replied that the agreement to contribute was made by the company in 1853, whereas the Compensation Act aforesaid was only passed in 1894. And the objection was swept away without another word.

Although the rate of superannuated payable by new entrants was fixed at that time at 3 per cent, of their annual wages or salaries, it became evident later that the fund would requira materially strengthening, so that no* the percentage rate paid by new e» trants to the service is 5 per cent, of their rate of pay. At the same tiw it was found necessary to increase the annual subsidy front the ConsolidateFund, which in recent years b 35 reached £IOO,OOO and over.

Several objections were founded on the allegation that insufficient provision was made for the case of the older men who could not get full ad- ge. The Minister made it appear that due provision for this purpose made in the Bill had not been understood. This gave opportunity to one speaker to declare that some previous speakers had not read the Bill.

Here, with regard to the initial di.ference about the contributory M 3 subsidiary basis of the fund, it ■ be borne in mind that, since the fit s '- fixing of the contributions, there hav« been great changes in general mote tary valuations. These have orougtabout substantial increases In the P - of railwaymen and proportionate -- creases of withdrawals on retirist allowance account. Moreover, then have been additions to the list of benefits, and the fund has beeactuarily sound. Among other such benefits is £ allowance for widows of members wtmay die while in the railway service It is fixed at £lB a year. And childrsof fathers so dying are. while and* fourteen years, entitled to draw a bfefit of 5s a week each. These alterations of conditions nF essary to maintain the soundness c. the scheme, required additional co tributions from members and from t Consolidated Fund. , But subsequent alterations have ns materially altered the main prinelP which was to ensure for retiring waymen superannuation commensurate with the value they n a given to the department. (0 Some effort has been made change the scale of benefits obts able under the fund, in the dire f ‘ of making substantially better P sion for the widows and childre ■ employees dying after going on Superannuation Fund. (To be continued datiy-i

Another objector declared that the delay in bringing forward the Bill had been caused by serious differences in the Cabinet. This was denied, and reaffirmed, with some reference to actuarial considerations. To this the Minister of Public Works, who denied the allegation of Cabinet differences, said that at all events there had be-n discussion of actuarial need, that : iarlal Investigation had been made, and “there was the Bill.” r-Jhir,!? si absel ? ce of knowledge of Cabinet discussions, one can only surmise, in consequence of the pointed ln the Acting-Premier’s second reading speech, to the impossibility on the one hand of getting actuarial >?c e b»™ tIOn ; and the soun, lness of the delwhad hf Ua , rially Perfect, that the delay had been due to some hesitation in accepting the possibility of practical soundness versus actuarial perfection. The latter view had, however prevailed in the end. now ever, contribution .° bJectio “ Wo s that the contributions were too small. This