STATE PENSION PLAN

Wairarapa Times-Age, 7 April 1938, Page 8

STATE PENSION PLAN

EFFECT ON EXISTING SCHEMES POSITION OF OIL COMPANY EMPLOYEES. WOULD NOT BENEFIT UNDER PROPOSALS. By Telegraph.—Press Association. WELLINGTON, This Day. The possible effect of the Government’s proposed superannuation scheme on workers already contributing to pension schemes was placed before the Parliamentary Committee by representatives of the Shell Oil Company, for whom Mr A. G. Johnston appeared. With Mr Johnston was Mr A. P. Corry as legal adviser. Mr Johnston outlined the provision already made for Shell employees and said that if they had to contribute to a State scheme on which they could have no claim it would mean a forced reduction in their income. A Provident Fund had been established by the combined petroleum companies at the Hague in. 1912, and was administered by a board. Each staff member of his company who joined the fund contributed ten per cent sterling (about 12J per cent New Zealand) of his salary or wages, and the company made an equal contribution. From time to time earned interest was added to the fund and in the past the companies had made extra contributions as a bonus from time to time. The Provident Fund accumulations would go on until a member’s account reached £lO,OOO sterling. ■Whatever the amount was, it could be drawn in one sum when the member or resigned from the company, but only the member’s contribution, plus interest, was paid if his service was under five years. In conjunction with the Provident Fund, there was in operation a scheme from which employees could obtain the benefit of life or endowment insurance, and in addition a - pension scheme had recently been established. This scheme was non-contributory as far as the employee was concerned and applied to men only. This pension scheme replaced uncertain “bonus” contributions. Benefits became available at the age of sixty or at fifty-five in tropical countries. Mr Johnston said the pension payable was forty per cent of the average salary during the last five years of service, less four per cent on the company’s contributions to the Provident Fund, with a maximum of £1,200 a year. The pension was in addition to the Provident Fund, which was drawn in a lump sum on retirement.. “It is desired that the committee should know of the contributions made by the staff to these funds, so that this can be taken into account when considering any further compulsory contribution lessening the spending power of members of the company’s staff.” said Mr Johnston.

Mr. Johnston said it seemed certain that members of the company s staff, by reason of the provisions made for them by their employers, would not obtain superannuation benefits under the Government scheme, because of the non-contribu-tory pension provided for them when they reached the age of sixty, and in addition they would have the income earned by their own contributions and those made by the company to the Provident Fund. Mr Johnston said that of the company’s 850 employees in New Zealand, over six hundred were contributors to the fund, which was purely for superannuation. There were no medical benefits.