SOCIAL INSURANCE.

Taranaki Daily News, 11 December 1916, Page 6

SOCIAL INSURANCE.

A STATE PROJECT. PROVISIONS EXPLAINED. In the Good Templar Hull on Thursday evening Mr. R. E. Hayes, Registrar o'i Friendly Societies and Superintendent of the National Provident Fund, explained in the course of an interesting sddress. the provisions of the Finance Act of last sessions, relating the social insurance, to 30 representatives of the various Friendly Societies in New Plymouth Mr C. E. Bellringer presided. The Nntional Provident Fund, said MiHayes, was primarily and essentially on annuity system. The other benefits comprised in it were merely adjuncts. The contribution paid by contributors was almost wholly required for the purpose of the pension allowance a> the age of GO, and subsidies were provided in the National Provident Fund by the Government. PROV7DINIG FOR OLD AGE. Apart from the National Provident Fund the annuity system had a particular interest for friendly societies whose past history, not only in New Zealand but elsewhere, showed that the contribu tion rates in vogue, based on expected •sickness after the age of CO, were in fact used to meet what was practically an old-age pension. The burden of old age sickness had been for years advanced as one of the principal difficulties in connection with the finar.ee of Friendly Societies, and the problem of arranging a pension to meet old-age sickness had been regarded as one of the great objects to be attained by them. The Government now offered a scheme that provided a solution to the problem. The annuities offered to Friendly Societies under the Finance Act, proceeded Mr. Hayes, were 10s, 20s, 30s, and 40s per week! payable on the contributor reaching the age of GO. Any member of a society whose income was-less than £250 per annum, and who was under 45 years of age could become a contributor' THE CONTRIBUTION RATE. I Coming to the matter of the contribution rate, Mr. Hayes said a Fricndh Society contributor to the most populai annuity, 10s per week, on joining th. frnd at the age of 21, would be require} to pay fid per week. The payment of that sum, accumulated at compound in tc-rest, amounted to £lls odd. All the time the contributor would be paying that amount, the State would be paying 50 pei cent of it into his- account, that is h 3d per week. This amount accumulated at compound interest totalled £57 odd, making from the two sources £172 towards £3OO, the approximate actuarial value of the allowance at the age of 00. When the contributor reached the age of 00, the Act proposed that the sick fund of the lodge he belonged to should transfer to the National Provident Fund the value of his future sickness, at rates to decided in the regulations. The Society would be relieved of paying sick allowances after, the member reached the age of 00, and the member would receive in lieu of the sick rates 10s per week The Tiineral and other benefits were not affected. The actuarial value of the sick alowances quoted was £55 12s Od. On the transfer of that amount to (he National Fund the State would pay in also 50 per cent, that is £27 odd. From the four sources referred to £250 would be derived. The remaining £SO would come from what was called the benefit of survivorship.

BENEFITS OF FUND. Continuing, Mr. Hayes said the Act provided as a concession to present mem bcrs of Friendly Societies that the income restriction of £250 should not ■operate during 1917, and also that tyie age at which present member.-: might join should be raised to 55 on payment according to the table provided for in the regulations. On a member of a Friendly Society withdrawing his membership as an annuitant, lie would on giving 12 months' notice to that effect, be entitled to receive back his contributions through his society in addition to the ordinary funeral benefit. At his death the amount of such contributions so accrued would be paid through his society in addition to the ordinary funeral benefit. If lie died after the age of 60 when the pension had commenced to be paid, his representatives would be entitled to receive 01 contributions back, plus the amount of £55 12s transferred from the society, less any pensions paid to him. The refunds were payable through the society and constituted a valuable addition to the society's death benefit. Mr. Haye3 said as maternity allowance of £4 was also payable to a member of the fund under the Act. Model rules were being prepared, and would be submitted to Friendly Societies for their consideration AN ADVANTAGEOUS METHOD. Concluding, Mr. Hayes said the scheme from an annuity standpoint offered to members of Friendly Societies a most advantageous method of securing for themselves an independent provision in old age, and this had only been made possible by the liberal subsidies provided under the Act. The importance of the annuity side of the system could not be ovei-estimated, and the speaker hoped that Societies would ''do their best to assist in promoting a form of thrift which was difficult to establish, but which must be of inestimable value to the State and the people.