GOVERNMENT RAILWAYS SUPERANNUATION FUND. REPORT BY THE GOVERNMENT ACTUARY, SHOWING THE RESULTS OF AN INVESTIGATION INTO THE POSITION OF THE FUND AS AT THE 31st MARCH, 1927.

Appendix to the Journals of the House of Representatives, 1932 Session I-II, D-05a

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1932. NEW ZEALAND.

GOVERNMENT RAILWAYS SUPERANNUATION FUND. REPORT BY THE GOVERNMENT ACTUARY, SHOWING THE RESULTS OF AN INVESTIGATION INTO THE POSITION OF THE FUND AS AT THE 31st MARCH, 1927.

Laid on the Table of the House of Representatives by Leave.

REPORT.

Government Actuary's Department, Wellington, 15th July, 1929. 1. In accordance with the instructions of the Hon. the Minister of Railways I have made an actuarial investigation of the Government Eailways Superannuation Fund as at the 31st March, 1927, and have the honour to submit the following report. 2. The Fund, which was established on the Ist January, 1903, gave existing employees of the Railway Department the option to become contributors, but compulsorily brought within its scope all subsequent permanent employees. Those employees taken over with the Manawatu Railway, however, were given the option of becoming contributors. The Fund is administered by a Board consisting of nine members—namely, the Minister of Railways, the Solicitor-General, the Public Trustee, the Chairman of the Government Railways Board, and five contributors' representatives, two of whom are elected from the First Division and three from the Second Division. 3. The Fund, which was the first of the three existing Funds to be established for the superannuation of Government servants, differs somewhat from the other two. For example, the contributions of members who joined prior to 1908 (including employees of the Manawatu Railway Co.), at ages under 50, are lower by 2 per cent, per annum of salary than those in the other schemes, and furthermore, any contributor may retire at age 60 instead of age 65. On the other hand, the Fund becomes liable for the widow's and children's allowances only if the contributor dies while in service, whereas the other funds extend the benefits to the widow and children of a deceased pensioner. Again there is no provision for a statutory triennial actuarial valuation as in the other funds. 4. The Government Railways Superannuation Fund also differs from the other Government Superannuation Funds in that there is no statutory subsidy by the State, as employer. The original Act contained a guarantee to the effect that " in the event of the Fund at any time being unable to meet the charges upon it," the deficiency would be met by the Consolidated Fund. The obvious deficiency created by the free gift of that portion of the pension allowed for each year of service prior to the establishment of the Fund, together with the assessment of the contributions of the original members at rates inadequate to provide even for future service, was left entirely to the future, and the Fund proceeded to pay the pensions of the older members from the accumulations of the younger men instead of following the sound practice of keeping intact these accumulations, together with the interest earned thereon, to meet, as they matured, the pensions they were designed to furnish. 5. In 1911—after the scheme had been in operation for seven years—an annual subsidy of £25 000 was commenced. When the first actuarial examination of the Fund was made as at the 31st March, 1912, it was pointed out that an annual subsidy of £50,000 was necessary in respect merely of pensions and allowances in possession or accruing within the ensuing three years. No effect was given to the recommendation made, although the increased subsidy was paid for one year, 1915. As the result of the second actuarial investigation, made as at the 31st March, 1919, a recommendation was made that the future annual subsidy be increased to £170,000. The annual subsidy was, however, only raised from £25,000 to £75,000 with additional amounts of £50,000 in 1924 and £30,000 in 1925,' and it was not until 1926 that the full amount recommended (£170,000) was commenced. 6. The contributions and the benefits provided by the Act, together with statements showing the progress of active membership, and of pensions for each year, will be found in Tables I to 111 of the Appendix to this report. The number of contributors at the date of the valuation, together with their ages, salaries, and contributions, and the pensions granted during the valuation period, with the ages at which they were granted, are shown in Tables IV and V of the Appendix.

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7. The income and outgo of the Fund since the previous valuation, were as follow:— Consolidated Revenue Account op the Government Railways Superannuation Fund from Ist April, 1919, to the 31st March, 1927. Income. £ s. d. Outgo. £ s. d. Funds at Ist April, 1919 .. .. 363,804 4 4 Pensions to members .. .. 1,223,892 13 2 Members'contributions .. .. 1,079,917 9 2 Allowances to widows and children .. 138,589 8 7 Government subsidy .. .. 870,000 0 0 Refund of contributions and compenAdditional subsidy on account of widows sation .. .. .. 231,812 10 4 and children .. .. .. 25,073 13 10 Transfers to other funds .. .. 1,140 16 5 Subsidy from Amalgamated Society of Public Trust commission .. .. 4,318 14 10 Railway Servants .. .. 214 13 4 Travelling-expenses .. .. 414 19 0 Interest'.. .. .. .. 248,753 611 Pine remitted .. .. .. 15 0 Fines .. .. .. .. 3,162 2 6 Interest remitted .. .. .. 47 9 3 Donations .. .. .. 30 0 0 Audit fees .. .. ... 250 0 0 Other receipts .. .. .. 15 15 6 Office expenses .. .. .. 4,674 19 0 11. *'.•' ■ ' *.! ' ; Funds at 31st March, 1927 .. '..'. 985,828 4 0 £2,590,971 5 7 £2,590,971 5 7 8. Income. —On the income side, the chief items of importance are the average annual increases of about £58,600 and £16,500 in the contribution income and the interest earnings respectively as compared with the previous valuation period. The net effective rate of interest credited to the Fund each year for the period under review is as follows:— £ s. d. £ s. d. s £ s. d. 1919-20 .. 4 12 8 1922-23 .. 4 15 1 1925-26 .. 5 12 9 1920-21 ..533 1923-24 .. 4 13 1 1926-27 .. 5 12 10 1921-22 .. 4 14 1 1924-25 .. 5 7 11 These interest rates are on the average over \ per cent, per annum greater than those earned during the previous valuation period, a feature of great importance to the Fund, as a good margin between the rate of interest earned and that assumed in the valuation tends to counteract the adverse effect of any fall in the estimated mortality rates above the pension age. 9. Outgo. —The average annual outgo for pensions to members has increased by approximately £79,000 compared with the previous valuation period. The causes of this increased outgo are an increased number of pensioners, due partly to the normal experience of a Superannuation Fund in its early years, and partly to a number of enforced early retirements, and higher average pensions, resulting largely from the post-war rise in salaries. The cumulative effect is shown in the following figures in respect of new pensions granted (excluding those to contributors retired medically unfit).

10. The Consolidated Revenue Account shows that the funds have increased by over £600,000 during the period under review, but whether or not this is evidence of progress can be determined only by actuarial valuation of the liabilities, and noting if the increase in funds is keeping pace with the increase in net liabilities. As this aspect appears to cause a certain amount of confusion in the minds of otherwise well-informed persons, who regard increasing funds as a sign of prosperity or that money is being saved up for posterity, I have compiled the following table showing for specimen age groups the Fund's average net liability per contributor in the Eailway service at the valuation date :—

The table shows, for example, that at the valuation date, while in respect of each contributor in the First Division, aged 20-24, the Fund should have in hand an average sum of £207 in order, with the assistance of his future contributions and the interest earnings of the Fund, to be able to pay his

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Valuation Period. Number of Annual Pensions- Average .Retirements. Pension. £ £ 1912-1919 .. .. .. .. 435 48,282 111 1919-1927 .. .. .. .. 719 158,452 220

Average Net Liability per Member. Age Group. First Division. Second Division. . £ £ 20-24 .. .. .. 207 40 30-34 .. .. .. 564 169 40-44 .. .. .. 1,289 469 50-54 .. .. .. 2,204 928 60-64 .. .. .. 2,353 1,272

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pension on retirement or other subsidiary benefits, it requires £1,289 in respect of each First Division contributor aged 40-44 and no less than £2,353 for each First Division contributor aged 60-64 to effect the same purpose. The net liability for each member in a given age group will necessarily vary somewhat from valuation to valuation, according to the incidence of average salary, length of service, &c, but the figures clearly emphasize the danger of trenching on the accumulated contributions of members of any age group for other than their own pensions. It would be possible, though very laborious, to ascertain what might be termed the " share " of each individual member in the total Fund, and proceed to deduce by how much such amount held.in the Fund on his behalf was, on the average, insufficient or over-sufficient to provide his benefits. This when applied to all members, contributors, and pensioners, would give the same results as 1 are achieved by the more direct process of actuarial valuation of the Fund, Data. 11. The preliminary particulars required for this actuarial examination have been obtained from cards supplied by the Chief Accountant of the Eailway Department—a separate card being compiled for each member who was in the service at the valuation date or who had died or withdrawn since the inception of the Fund—and these particulars form the main basis of this investigation and valuation. The Valuation. 12. The main object of an actuarial valuation is to ascertain whether the current funds, together with the present value of the future contributions, will be sufficient to meet the future liabilities. Before the valuation can be carried out it is necessary to make a careful estimate of the various factors on which the payment of the benefits and contributions is dependent. These factors may be briefly summarized as follow :— (a) Rate of interest. (b) Mortality-rates of pensioners. (c) Average salary scales. (d) Mortality-rates of contributors. (e) Voluntary-withdrawal rates of contributors. (/) Retirement-rates of contributors. (g) Marriage-rates of contributors. (h) Probability of a member leaving children under fourteen years of age, and the average number of children. (i) Remarriage-rates of members' widows. 13. The rate of interest used in valuing benefits and contributions is 4f per cent, throughout. As this constitutes a departure from previous valuations, I deem it desirable to point out that the change must not be interpreted as questioning the wisdom of making previous valuations at 4 per cent., since I am fully in accord with the interest basis previously adopted. Compared with the previous valuation period, however, the average annual interest rate earned has increased by more than J per cent., and moreover, judging by the investment results of the other Government Superannuation Funds, the limit of the earning-capacity of the Government Railways Superannuation Fund has not been reached. I accordingly decided that the nature and circumstances of the Fund warranted the valuation being made on a financial basis of 4| per cent. This must not be construed as an assumption that the present rates —or even 4| per cent. —will continue to be earned indefinitely, as it must be remembered that pension-fund membership covers a long period, in some cases over eighty years. My main justification in adopting a 4| per cent, valuation basis is that the Fund is State-guaranteed and is receiving an annual subsidy, and it will be many years before any additional subsidy will be required to cover interest earnings short of 4| per cent. 14. The mortality-rates adopted for pensioners were based on an investigation of the combined experience of the three Government Superannuation Funds (Public Service, Railways, and Teachers) for the period 1919-1927, and supplemented where necessary by the earlier experience of the Funds. From a careful study of the figures, combined with the results of concurrent investigations into similar funds and in the general population, it is clear that there is an improvement in vitality which has been progressive over a long period of time, and accordingly it has been deemed advisable in fixing the valuation bases to make some allowance for probable future improvements in the vitality of pensioners. 15. The next factors which entered into the calculations were the scales of average salaries in respect of the First and the Second Divisions for the year immediately following the valuation date. The salary scales constructed from the current experience of the Fund were not themselves assumed in making the valuation, but the ratios of increase from age to age were applied to the actual salary of each contributor as at the Ist April, 1927. 16. The rates, of mortality, withdrawal, and retirement of contributors used in the valuation were based on an examination of the Fund's experience since the previous valuation, the First and the Second Divisions again being investigated separately. Details of the experience tables adopted and the life and service tables deduced therefrom are given in Tables VI and VII of the Appendix. The only feature calling for special comment was the great increase in the number of retirements from

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ages 50 to 59, further reference to which will be made later in this report. As it is now apparently the fixed practice to retire a considerable number of officers after forty years' service, irrespective of age, I felt compelled to make the valuation bases reflect this policy change. 17. The factors necessary for the valuation of widows' and children's benefits were calculated from population statistics combined with the experience of the Fund itself. Results of Valuation. 18. Valuation of the Fund has been made on the bases above mentioned, and the Valuation Balance-sheet is given in detail in Table VIII of the Appendix. The results may be shortly summarized as follow : —- Present value of existing pensions and allowances (£2,257,446), less the value of the subsidy from Working Railways Account in respect of increased allowances to existing widows and £ children (£97,567) .. .. .. .. .. .. 2,159,879 Present value of prospective benefits (£7,519,396), less the value of subsidies from Working Railways Account in respect of increased £ allowances to future widows and children (£144,669) .. .. 7,374,727 Less present value of members'contributions .. .. 1,738,574 5,636,153 Total net liabilities .. .. .. .. .. 7,796,032 Funds in hand .. .. .. .. .. .. 985,828 Present value of total liability of the State .. .. .. .. 6,810,204 Less present value of existing annual subsidy of £170,000 (if treated as a perpetuity) .. . . .. .. . . 3,777,778 Value of future subsidies to be provided for by the State over and above the present subsidy of £170,000 .. .. .. .. £3,032,426 19. The above statement shows a total State liability of £6,810,204, as compared with £3,959,455 at the last valuation, giving an increase of £2,850,749. This increase, which would have been still greater had the valuation been made at 4 per cent, as on the previous occasion, is due in some degree to the normal expansion of the Service, but the two main causes are the economic effect of the late war on salary levels and the. policy of retiring officers with long service, irrespective of age. 20. In order to give some idea of the effect of the first of the causes above mentioned, I submit the following table showing the average salaries paid to contributors at the three valuation dates : —

The table, besides demonstrating the general nature of the salary increases, gives a clear indication of the increase in the estimated value of pensions as compared with the preceding valuations. For example, a Second Division contributor with forty years' service retiring now at age 60 has an expectation of sixteen years of life and will accordingly draw on the average approximately £500 more from the Superannuation Fund than a similar contributor retiring in 1919, and approximately double that amount more than a similar contributor retiring in 1912. The effect of the increased pensions, when applied to the large body of contributors, need not be stressed. It should be borne in mind in estimating the effect on the Fund of the increased salary scale, that pensions are based on the salary at retirement, and accordingly each employee now in the Service reaps for his whole period of service the full benefit of the increase, whereas the effect of the increased salary scale on contributions is limited only to his future service. It will be apparent that the longer the back service of the contributor at the time the salary is increased the smaller will be the proportion of the increase in pension liability which the increase in his contributions is able to meet. This lack of correlation between the value of contributions and pensions is not confined to the Government Railways Superannuation Fund, but is common to nearly all pension schemes based on terminal salary, and supplies one of the reasons why an employer's subsidy to such a scheme is essential. In individual cases large salary increases during the later years of service give pensions out of all proportion to contributions, but they are too few in number to be of material moment as regards extra subsidy. If, however, through economic inflation or other causes, there is a general increase in the salaries of practically the whole Service, the necessity for a substantial subsidy, particularly in respect of the service prior to the increase, becomes apparent.

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First Division. Second Division. Ages. Average Salaries. Average Salaries. Increase of Increase of 1927 over 1912 —. 1927 over 1912 1912. 1919. 1927. LeYel - 1912. 1919. I 1927. Leve1 . - i I £££ £'££■£ £ Under 40 .. .. 150 198 241 91 141 196 232 91 40-49 ..' .. 253 349 389 136 164 214 265 101 50 and over .. 304 397 429 125 164 216 264 100 Total .. 182 240 291 109 147 202 . 243 96

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21. As regards the second great factor in the increase of the State's liability during the valuation period under review—namely, the retirement of men with forty years' service, irrespective of age — the following table is illuminating : —

Table showing for each of the Three Valuation Periods the Age Incidence of the Pensions granted (excluding Retirements Medically Unfit).

The table shows that in the first valuation period no contributors were retired under age 55, while in the second period 1-4 per cent, of the total retirements took place before this age, and in the valuation period under review no less than 7-1 per cent, of the total retirements were at ages under 55. It also shows that while for the period 1903-1912 the retirements under age 60 were less than \ per cent, and from 1912-1919 a little under 8 per cent, of the total retirements, in the period 1919-1927 the percentage of such retirements under age 60 to the total retirements was in excess of 35 per cent. If, on account of the special circumstances following the inception of the Superannuation Fund, the first period is ignored, and the experience of the second valuation period is taken as an indication of the extent to which contributors voluntarily elect to retire after forty years' service, the difference between the percentages in the last two columns of the above table gives a rough measure of the effect of the policy adopted by the Railway Department during the period of compulsorily retiring men after forty years of service irrespective of age. 22. The Government Railways Superannuation Fund certainly gives a contributor the right to elect to retire after forty years' service, but there is a vast difference between providing pensions for the small proportion of contributors who will be in a financial position so to retire and exercise their right, and bearing the burden of wholesale enforced retirements. It is not my function to comment on policy matters, but I would be lacking in my responsibility if I did not point out the financial effect on the Superannuation Fund of any policy changes, and enunciate the general principle that any additional financial strain due to policy measures of the Railway Department should be a charge not on the Superannuation Fund, but on the Department, by way of special subsidy. Such a method, I may mention, is followed in the South African Public Service Superannuation Scheme, where, if an officer is forced to retire on pension due to a retrenchment scheme or other policy measures, all pension payments up to the date of his attaining the normal pension age are paid out of public revenue, and not out of the Superannuation Fund. The Commonwealth of Australia safeguards its Public Service Superannuation Fund by fixing age 65 as the normal pension age, with provision that if any officer is retired after age 60, either compulsorily or of his own wish, he is granted a reduced pension actuarially calculated. It 'is important to note that although the problem is approached from different angles, both Governments agree in recognizing that the Superannuation Fund must be financially safeguarded against any departure from what might be termed, its fundamental obligations to the contributors. 23. The importance of the ascertainment of the state of the Fund in the form given in paragraph 18 lies in the fact that the shortage in the Fund to be made good by the State —viz., £6,810,204 —is equivalent to an annual interest income (at 4| per cent.) of £306,459. It follows that if any less sum than £306,459 is paid in by the State as subsidy the present deficiency will increase, and the subsidy must accordingly by way of compensation rise later on to a much higher figure than £306,459 per annum in respect of present contributors alone. If, however, any annual amount in excess of £306,459 is paid in, the Fund would, in respect of present members, attain solvency within a definite period of time. It should be clearly understood that this amount of £306,459 is a perpetuity, and does not cease with the lifetime of the present members, nor does it include any subsidy to new entrants. Recommendations. 24. Section 119 of the Government Railways Act, 1926, as amended in 1927, provides as follows : — " In the event of the Fund at any time being unable to meet the charges upon it, and as often as such occurs, the following special provisions shall apply :— " (a) The Board shall forthwith report the fact to the Minister of Finance, setting forth the amount of deficiency and the causes thereof. " (b) If the Minister of Finance is satisfied that the deficiency exists, and that provision should be made therefor, there shall, without further appropriation than this section, be paid into the Fund out of the Working Railways Account, a sum sufficient to meet the deficiency."

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Number of Contributors retiring as Number of Retirements at each Age the Result of attaining Pension Age, or Age Group expressed as a Per- . or Length of Service. centaee of Total Retirements. Ages. 6 B 1903-1912. 1912-1919. 1919-1927. 1903-1912. 1912-1919. ; 1919-1927. I l 1 Per Cent. Per Cent. Per Cent. Under 55 . . .. .. I .. 6 51 .. 1-4 7-1 55 .. .. .. j 1 2 41 -1 -4 5-7 56 .. .. .. .. 7 49 .. 1-6 6-8 57 i .. 3 48 .. -7 6-7 58-59 .. .. .-1 2 16 65 -3 3-7 9-0 60 .. .. .. 232 166 124 30-5 38-2 17-3 61 .. .. .. 110 98 134 14-5 22-5 18-6 62-65 .. .. .. 245 123 151 32-2 28-3 21-0 Over 65 .. .. .. 170 14 56 22-4 3-2 7-8 760 435 719 100-0 100-0 100-0 I

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25. I have shown above that to keep the Fund solvent the annual State subsidy must be fixed at some amount greater than £306,459, exclusive of such additional amount as is necessary to cover salaries and expenses charged to the Superannuation Fund. I also made it clear that this minimum amount only represents interest, and accordingly will not redeem the deficiency, but merely prevents it from increasing, nor does it include any subsidy in respect of new entrants. It will therefore be apparent that subject to future salary and other conditions remaining as at present, the payment of such minimum subsidy will mean that at each succeeding valuation of the Fund an increase in the annual subsidy will be required by reason of the number of new employees enrolled in the Fund at rates of contributions which in general are less than adequate to provide the benefits. In order to avoid large increases in the subsidy at intervals of, say, seven or eight years, it would be advisable to adopt an automatic basis that will provide a gradually increasing subsidy and reflect salary fluctuations, and accordingly I recommend for consideration an annual subsidy of 10 per cent., of the salary roll, which would give a commencing subsidy of about £340,000 per annum. 26. It may be asked whether, judged by ordinary commercial standards, this is too high a price for the State as employer to pay for the advantages it derives from the existence of a Staff Superannuation Fund. In order to enable comparisons to be made, I cannot do better than to quote the following extract from the report of a Commission on the Pension Funds of the City of New York : — " The Commission has made a broad review of existing pension systems in operation, both in the United States and abroad, on which it was able to secure information. This inquiry has brought out the fact that the development of pension measures as a result of an experience of over a hundred years is in the direction of equal division of cost between the employer and the employed, and that this tendency applies equally to systems for public employees and for industrial workers." My recommendation for the future State subsidy to be 10 per cent, of the salary roll does not differ very much from apportioning the cost equally between the employer and the employee when account is taken of the initial deficiency created in the Fund by the free gift of back service in calculating the pensions payable to employees in the service when the Fund was established, and the very considerable amount by which, past subsidies have fallen short of the contributions paid by employees. 27. I have previously stated that, on account of the large deficiency in the Fund, the subsidy is in the nature of a perpetuity, and consequently my recommendation of an automatic subsidy equal to 10 per cent, of the pay roll will require modification if at any time the present constitution of the Fund is altered, as for example, by refusing or even making voluntary the enrolment in the Fund of new employees. 28. In recommending that the amount of the automatic subsidy be fixed at 10 per cent, of the pay roll I have endeavoured not only to place the Fund on a firmer footing, but also to keep the cost to the State as low as is reasonably possible. The valuation bases have been fixed after very careful consideration, but it is impossible that they will exactly coincide with the actual future experience of the Fund, since many of the factors involved are affected by social and economic conditions which can only be estimated approximately. In order to counteract any possible adverse fluctuations, it is essential that every endeavour should continue to be made to invest the funds at the most remunerative rate consistent with safety. 29. Should it be desired to go further than I have indicated, so as to more rapidly redeem the deficiency, a higher subsidy than 10 per cent, could be fixed, or alternatively the Fund could be strengthened by suitable amendments to the Government Railways Act. For example, the following alterations in the scheme would considerably lessen the liabilities of the Fund without unduly prejudicing contributors : — (a) Abolish the employee's right to retire after forty years' service, and substitute a provision that any employee compulsorily retired after forty years' service for any reason other than his own misconduct, shall be entitled to a pension ; but in such case all pension payments between the date of retirement and the attainment of age 60 shall be paid out of the Working Railwaj's Account, and not out of the Superannuation Fund. Many officers join the Service round about age 15—the average entry age of the whole First Division is a little under 17—and I have already indicated that it is very costly to cause, or even allow, them to retire on the maximum rate of pension at as early an age as 55. To make the early retirement rates of the valuation period under review—l 2-8 per" cent, of the total retirements took place at or before age 55 —a permanent feature of the Fund's experience will bankrupt the Fund, short of a prohibitive subsidy. Quite apart from the financial strain on the Fund, many of the officers so retired are, by their ability and experience, at their maximum of usefulness to the State, and it is one of the objects of a good superannuation scheme to retain men of outstanding ability. It is important to recognize that such a modification affecting the employee's right of voluntarily retiring would in no way lessen the power of the Railway Department to decide that an employee was to be retired in the interests of efficiency, but it is only right in such a case that the Superannuation Fund should not have to foot the entire bill. I have suggested above that in such cases the Railway Department relieve the Superannuation Fund of pension payments prior to age 60, but the Department might prefer the alternative method of the Fund paying reduced pensions to those compulsorily retired on pension before age 60. In the case of new employees joining the service after, say the Ist January, 1930, at ages under 20, the right to retire after forty years' service could be automatically abolished by the simple expedient of deferring membership of the Superannuation Fund until the attainment of age 20. Such a plan not only makes it impossible for the maximum rate of pension to enure before the attainment of age 60,

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but also removes any grievance of members under age 20 that for the same rate of contribution and pension benefit at age 60, they are called upon to pay contributions for a longer period than those entering at age 20. (b) Increase by 2 per cent, of salary in respect of their future service the contributions of contributors who joined prior to the Ist January, 1908, at ages under 50. It may be pointed out that as compared with contributors who joined the scheme on or after the , Ist January, 1908, the class of contributors under review received a free gift of that portion of their pension based on service prior to the establishment of the Fund, and they have the further advantage, as compared with those joining the Service after 24th December, 1909, of not being subject to the arbitrary pension limitation of £300 per annum on retirement. Accordingly, it is anomalous that for a greater benefit they should be paying 2 per cent, less on salary by way of contributions. As the suggestion is to charge these contributors only the same rates of contribution as are paid by their fellow-officers and further, is not made retrospective, but only in respect of their future service, no reasonable objection could be raised by the contributors concerned. (c) Increase the present contribution scale by 1 per cent, of salary in respect of all new employees between, ages 25 and 50 joining the Service on or after, say, the Ist January, 1930. This would not only help the finances of the Fund, but would give a much better graduated scale than is now in force. General Remarks. 30. No report on the Government Railways Superannuation Fund would be complete without reference to the arbitrary pension limitation of £300 per annum imposed on contributors joining the Service after the 24th December, 1909. Arbitrary pension limitations, which to the best of my knowledge are quite unknown in the pension schemes of other Governments or of large commercial institutions, have no justification in theory, and in practice lead to many contributors being called upon to pay more in contributions than their pensions are worth. No staff pension scheme carrying an employer's subsidy can be considered a good one if every member does not get, at the very least, full value for his own payments. Of far greater importance, however, than the injustice to individual State employees is the fact that the imposition of an arbitrary limitation of £300 on pensions undermines the very purpose for which a staff pension scheme is usually established —namely, to assist in securing the highest efficiency in the Service. A good superannuation scheme not only attracts and retains the best type of officer, but also helps to keep clear the lanes of promotion by facilitating the retirement of the older officers on a pension in some way commensurate with the degree of comfort previously enjoyed by them. 31. It is quite clear that neither of these aids to efficiency is secured if able officers now joining the Service can only be offered the prospect, after attaining the highest administrative positions in the Railway Service, including that of General Manager, of being compelled to retire on an annual pension of £300, approximately equivalent to the salary paid to the average junior clerical officer after completing ten years of service. The position regarding the retirement of high officials on small pensions cannot be more forcibly stated than in the following extract from the evidence given before the Imperial Board of Trade Commission on Railway Superannuation Funds by Mr. George King, F.1.A., F.F.A., probably the greatest living authority on pension funds :— " With such a man, either the Railway Administration would be constrained to keep him in the Service when perhaps his health was such as to unfit him for duty, and they would have to pay some one else to do his work ; or they would be obliged to retire him on a small pension and supplement it from other sources ; or they would be obliged to retire him on a small pension without supplementing it, and leave a valued officer in comparative penury in his old age. A man of that calibre could do much better for himself in other walks of life and with such a poor prospect before him he would leave the Service in the early years on realizing his own powers and the Service and the public would suffer." 32. Up to the present the position has been masked by the fact that those who have already retired were not subject to any pension limitation, since it only applies to officers joining less than twenty years ago. Obviously the bulk of these are many years short of the retiring-age and of the balance joining the Service late in life, none of those who have retired on salaries up to £900 per annum could possibly have been affected by the restriction. I am strongly of opinion that the abolition of the present arbitrary pension limitation would be in the best interests of the Railway Department. 33. In conclusion, I have to acknowledge the assistance of the small but efficient staff engaged in carrying out the heavy work of the valuation. C. Gostelow, Fellow of the Institute of Actuaries (London), Government Actuary.

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D.—sa.

APPENDIX.

TABLE I. The Benefits and Contributions provided foe by the Act. The contributions vary according to the age at the time when the first contribution becomes payable, and are as follows :— f For contributors who joined prior to the Ist January, 1908— Age 30 and under . . .. .. 3 per cent, of pay. Over 30 and not exceeding 35 .. .. 4 ~ „35 „ 40 .. ..5 „ 40 „ 45 .. ..6 „ 45 „ 50 .. ..7 Contributions \ „ age 50 .. .. .. .. 10 For contributors who joined the scheme on or after the Ist January, 1908— Age 30 and under .. .. . . 5 per cent, of pay. Over 30 and not exceeding 35 .. .. 6 ~ „35 „ 40 .. .. 7 „40 „ 45 .. ..8 „45 „ 50 .. ..9 „ age 50 .. •• •• •■ 10 I. On attainment of Pension Age 60, or after Forty Years' Service. (1) A pension of one-sixtieth of yearly salary for each year's service, with a limit of forty-sixtieths (two-thirds) of salary. Maximum pension for entrants after 24th December, 1909, £300. (2) Or the option, in lieu thereof, of a return of contributions, together with any compensation the contributor may be entitled to under section 76 of the Government Bail ways Act, 1887. With the consent of the Minister a contributor may retire after thirty-five years' service. 11. On retirement before Pension Age (on the Grounds of being Medically unfit for Future Duty). (1) A pension of one-sixtieth of yearly salary for every year of service, limited to forty-sixtieths. In the case of entrants after 24th December, 1909, maximum pension £300. (2) Or the option, in lieu thereof, of a return of contributions, together with any compensation the contributor may be entitled to under section 76 of the Government Bailways Act, 1887. Benefits .. -{ 111. On Retirement before Pension Age (on other Grounds than Medical Unfitness). (1) On voluntary retirement or dismissal for any other reason than misconduct, a return of contributions, together with any compensation the contributor may be entitled to under section 76 of the Government Railways Act, 1887. (2) On dismissal for misconduct, return of contributions. IV. At Death, before becoming entitled to a Retiring-allowance. (1) Leaving no widow or children : A return of contributions, together with any compensation the contributor is entitled to under section 76 of the Government Railways Act, 1887. (2) Leaving a widow : — (a) £31 per annum during widowhood, or, if she so elects, (b) A return of such portion of the contributions and of the compensation to which the contributor was entitled as the Board, having regard to the rights of the children, thinks fit.. (3) Leaving children : 10s. weekly to each child until age 14. V. At Death, after becoming entitled to a Pension. Return of the contributions and compensation (if any) less any sums received from Fund. Pensions are payable by monthly instalments, and are computed on the final salary, unless the contributor has during the previous three years served in any inferior grade to that held at the time of retirement, in which case the average salary for the last three years, or the final salary he was receiving prior to such promotion (whichever is the greater) is taken.

8

D.—sa.

TABLE II. Statement of Progress of Active Membership.

2—D. sa.

9

New Members. Discontinued. ~ '~~~iJE£ By By Pensions. B Conte «™ M Scheme 8 from I*. 0 iaAg.«tajU. IftiWy Mte fi of Financial Year. scneme. other or Dismissal. 0 f Service. Unfit. Funds. tmue(1 ' Funds. M F M m. F. M. M. F. Total. m. m. M. F. Total. Part 1903.. .. 3,425 1 .. 3,426 6.. 7 8 .. 8 5 .. . 26 3,399 1 3,400 1903-04 .. .. 3,452 3 .. 3,455 42 .. 212 156 ..156 28 .. . 438 6,413 4 6,417 10.04-05 708 .. .. 708 34 .. 205 99 1 100 15 .. 354 6,/68 3 6,/71 905-06 " " 663 . 663 36 .. 231 57 ..57 12 .. 336 7,095 3 7,098 906-07 " " 841 841 37 .. 343 58 ..58 12 .. I 450 7,486 3 7,489 1907-08 " " 1,174 2 .. 1,176 33 .. 413 73 .. 73 14 .. 533 8,127 5 8,132 908-09 1 325* . .. 1 325 39 .. 406 56 ..56 9 .. 510 8,942 5 8,947 909-10 " " 554 2 556 42 .. 394 123 .. 123 6 .. 565 8,933 5 8,938 910-1 " 733 .. 3 736 37 .. 504 77 .. 77 17 7 642 9,027 5 9,032 19U-2 857 .. 4 861 32 .. 539 52 .. 52 14 8 645 9,243 5 9,248 9Li :: :: all .. 2 1,390 38 .. 577 8 i .. si i 6 2 713 9,920 5 w ,0,3,4 1 223 . 3 1,226 46 .. 580 75 .. 75 10 3 714 10,432 5 10,43/ 1914-15 " " .. 1 1,299 34 .. 550 83 .. 83 15 1 683 11,048 5 11,053 i ,5-16 1 450 5 1 455 87 .. 805 59 .. 59 27 12 990 11,513 5 11,518 9 6-7 " " M67 4 1 271 160 .. 895 69 .. 69 25 2 1,151 11,633 5 11,638 1017-18 632 .. 2 634 197 1 1,000 39 .. 39 31 2 1,270 10,698 4 11,002 1918 19 " 716 .. 3 719 241 1 773 29 ..29 19 1 1,064 10,654 3 10,657 1919-20 " .. 1,044 .. 1 1,045 24 .. l,213f 95 .. 95 35 5 1,372 10,328 2 10,330 920-21 : 1 660 .. 3 1 663 25 .. 1,080 77 . . 77 26 3 1,211 10,780 2 0,782 1Q21-22 1329 1 1330 26 .. 566 90 .. 90 28| .. 710 11,401 1 11,402 922 23 " 864 " 865 30.. 475 80 .. 80 31 2 618 11,648 1 11,649 923 24 " 1426 4 1,430 33.. 698 74 .. 74 32 1 838 12,240 1 12,241 92I25 :: :: I'S :: t i 8« 26 .. 620 ne .. ne 22 2 12 m 1 12,768 925-26 1 216 7 1,223 36 .. 609 70 .. 70 26 4 745 13,245 1 13,246 J!!" :: :: ill :: I 37 .. 3 86 in .. in 19 3 56 213,306 1 13,307 Adjustments to agree -16 .. .. -16 +149 .. -166 .. •■ ■■ ..-■ -2 -19 + 3 -J__t—_-, with cards supplied „„ -,„ ™„ Totals .. 31,156 6 55 31,217 1,527 2] 13,915 1,913. 11,914 493 j 56 17,907 .. .. .. * Includes 335 ex-employees of Wellington and Manawatu Hallway Co. f Includes one female.

D.— sa.

TABLE III. Statement of Progress of Pensions.

10

Attainment ol Pension Age or Length of Service. Retired Medically Unfit. Year. Granted. Void by Death. In Force. Granted. Void by Death or In Force. Number. Pension. Number. Pension. Number. Pension. Number. Pension. Number. Pension. Number. Pension. £ £ £ £ £ £ 1903-04 .. .. 161 9,950 1 66 160 9,884 33 1,700 5 256 28 1,444 1904-05 .. .. 100 5,848 8 425 252 15,307 15 1,046 4 483 39 2 007 1905-06 .. .. , 56 3,788 10 672 298 18,422 12 632 3 135 48 2 503 1906-07 .. .. 59 3,911 17 1,020 340 21,314 12 712 9 466 51 2 750 1907-08 .. .. 74 5,626 12 683 402 26,257 14 852 8 416 57 3'l85 1908-09 .. .. 53 4,816 18 1,233 437 29,840 8 485 8 444 57 3*226 1909-10 .. .. 123 10,066 9 502 551 39,404 7 420 2 130 62 3 517 1910-11 .. .. 80 6,305 27 1,598 604 44,111 17 1,325 8 421 71 4'421 19I1 ~ 12 •• •• 54 5,229 24 1,666 634 47,674 14 605 5 237 80 4*789 1912-13 .. .. 81 7,650 30 2,766 685 52,558 15 903 10 450 85 5*242 1913-14 •• •■ 74 7,958 27 1,926 732 58,590 9 790 4 148 90 5884 1914 ~ 15 •• •• 84 9,344 26 1,668 790 66,266 15 1,314 7 396 98 6*802 1915-16 .. .. 59 6,823 30 2,448 819 70,641 27 1,945 10 603 115 s'l44 1916-17 •• •• 69 7,977 34 2,806 854 75,812 25 1,862 10 498 130 9*508 1917-18 •• •• 39 4,440 34 2,927 859 77,325 32 1,885 10 506 152 10*887 1918-19 .. .. 29 4,090 46 3,841 842 77,574 19 1,659 12 805 159 11 741 1919 -20 •• •• 9 5 16,262 53 4,356 884 89,480 35 2,998 14 928 180 13 811 1920-21 .. .. 77 15,614 50 3,998 911 101,096 26 2,969 14 1,684 192 15*096 I 92 !- 22 •• ■• 90 18,686 38 3,611 963 116,171 28 3,228 9 485 21] 17 839 1922-23 .. .. 80 17,342 55 5,916 988 127,597 31 4,204 4 415 238 21*628 1923-24 .. .. 74 16,827 54 5,019 1,008 139,405 32 3,016 10 1.032 1 260 23 612 192425 •• •• 116 32,401 57 6,207 1,067 165,599 22 3,044 9 1,089 273 25 567 1925-26 .. .. 68 17,357 46 5,390 1,089 177,566 26 3,283 I 14 1 105 ' : 285 27*745 l 92 6-27 .. .. 119 23,614 72 7,405 1,136 193,775 19 2,089 ! 15 1,370 i 289 28*464 Adjustments to agree with .. .. 3 801 1,133 192,974 .. .. 5 -84 284 28*548 cards supplied 1 ; T ° tals •■ 1,914 261,924 781 j 68,950 .. .. 493 42,966 1 209 14,418 Death of Contributor. Family Pension. Total Pensions. Year. Granted. 3 " 1 In Force. Granted. Void. In Force. Number. | Pension. Number. Pension. Number. Pension. Number. Pension. Number. Pension. Number. Pension. £ £ £ £ £ £ 1903-04 .. .. 80 1,190 6 78 74 1,112 274 12,840 12 400 262 12 440 1904-05 .. .. 68 989 6 78 136 2,023 183 7,883 18 986 427 19*337 1905-06 .. .. 55 815 11 143 180 2,695 123 5,235 24 950 526 23*620 1906-07 .. .. 61 893 16 218 225 3,370 132 5,516 42 1,704 616 27*434 1907-08 .. .. 57 836 12 176 270 4.030 145 7,314 32 1,275 729 33*472 1908-09 .. .. 62 916 25 355 307 4,591 123 6,217 51 2,032 801 37*657 1909-10 .. .. 91 1,313 25 365 373 5,539 221 11,799 36 997 986 48 460 1910-11 .. .. 66 983 30 410 409 6,112 163 8,613 65 2,429 1.084 54*644 19H-1 2 ■• •• 4 3 644 21 293 431 6,463 111 6,478 50 2,196 1145 58 926 1912-13 .. .. 40 605 37 521 434 6,547 136 9,158 77 3 737 1 204 64*347 1913-14 .. .. 88 1,279 38 564 484 7,262 171 10,027 69 2,638 1306 7l'736 1914-15 .. .. 50 735 46 643 488 7,354 149 11,393 79 2,707 1 376 80*422 1915-16 .. .. 57 856 46 643 499 7,567 143 9,624 86 3,694 1433 86 352 1916-17 .. .. 118 1,744 53 734 564 8,577 212 11,583 97 4 038 1548 93*897 1917 -1 8 •• •■ 114 1,707 49 672 629 9,612 185 8,032 .93 4,105 1*640 97*824 1918-19 •• ■• 314 4,602 52 746 891 13,468 362 10.351 110 5,392 1892 102 783 1919-20 .. .. 55 830 54 747 892 13,551 185 20,090 121 6,031 1 956 116*842 1920-21 .. .. 92 1,316 72 1,036 912 13,831 195 19,899 136 6,718 2*015 130^23 92 1- 22 •• ■• " 1,136 59 862 930 14,105 195 23,050 . 106 4,958 2,104 148,115 1922-23 .. .. 85 1,245 83 1,184 932 14,166 196 22,791 142 7,515 2 158 163 391 1923-24 .. .. 98 1,429 62 901 968 14,694 204 21,272 126 6 952 2 236 177*711 1924-25 .. .. 65 965 88 1,224 945 14,435 203 36,410 154 8,520 2*285 205*601 1925-26 .. .. 104 2.869 81 2,201 968 15,103 198 23,509 141 8,696 2 342 220414 1926-27 .. . 93 2,578 94 2,529 967 15,152 231. 28,281 181 11,304 2,392 237*391 Adjustments to agree with .. 12,191* 4 .. 963 27,343* .. 12,191 12 717 2 380 *248 865 cards supplied Totals.. .. 2,033 44,666 1,070 17,323 j .. .. 4,440 349,556 2,060 100,691 " .. * Includes additional allowances paid to widows and children out of Working Railways Account,

D.-SA.

TABLE IV. Present Annual Pay and Contributions of Officers now in Service.*

11

First Division. Second Division. Age ' . attained A » c Number. »™"S Number. , **<*?$ Present Annual attained ' Annual r'ay. Contributions. Annual Pay. Contributions. , i ( £ £ £ £ 15 3 240 12 2 177 9 15 16 29 2,395 120 25 2,298 115 16 17 125 11,790 589 96 9,110 456 1.7 18 " 156 16,320 816 156 17,800 890 18 19 133 16,040 802 193 27,573 1,379 19 20 116 16,015 801 234 40,375 2,019 20 21 77 12,510 625 333 75,806 3,790 21 22 73 14,860 743 313 74,342 3,717 22 23 71 15,765 788 355 82,226 4 111 23 24 79 21,630 1,081 327 76,378 3,819 24 25 85 24,945 1,247 357 83,406 4,171 25 26 130 38,180 1,909 327 77,370 3,868 26 27 143 42,360 2,118 355 85,335 4,267 27 28 113 33,500 1,675 316 75,881 3,794 28 29 91 27,080 1,354 391 95,035 4,752 29 30 96 28,878 1,444 354 85,745 4,287 30 31 74 21,850 1,092 325 78,870 3,972 31 32 58 18,235 912 323 79,498 4,054 32 33 46 13,900 695 315 77,800 4,058 33 34 45 15,100 765 300 74,520 3,913 34 35 74 23,490 1,070 276 68,655 3,554 35 36 74 24,090 982 303 76,488 3,919 36 37 56 18,260 630 299 75,962 3,995 37 38 48 17,530 602 285 72,770 3,671 38 39 54 18,660 593 332 86,271 4,147 39 40 46 17,390 595 308 79,370 3,883 40 41 50 19,030 602 281 73,848 3,445 41 42 59 21,643 686 260 69,229 3 136 4" 43 76 29,355 977 243 64,709 2,972 43 44 57 22,115 687 248 67,725 2 876 44 45 43 16,600 522 231 61,095 45 46. 47 18,005 597 219 58,258 2,588 46 47 37 15,340 470 220 58,776 2,464 47 48 20 8,420 263 186 48,502 2,048 48 49 40 ■ 16,990 565 175 45,765 1,889 49 50 37 17,205 548 151 39,208 1,567 50 51 42 17,650 543 159 41,345 1,678 51 52 64 26,745 833 148 39,250 1,590 52 53 70 32,345 991 112 29,730 1,121 53 54 48 20,995 690 105 27,445 1,075 54 55 35 13,835 563 96 25,847 1 107 55 56 40 15,945 638 70 18,669 800 56 57 15 5,900 243 77 20,652 872 57 58 12 4,820 193 66 17,593 749 58 59 16 . 6,750 303 53 13,879 638 59 60 5 2,075 104 42 11,130 574 60 ' 61 7 3,040 156 18 4,771 244 61 62 1 615 31 6 1,590 82 62 63 5 2,425 121 7 1,937 97 63 64 .. .. 3 657 40 64 65 3 1,350 81 3 796 48 65 66 .. .. 3 815 49 66 67 .. . . 1 289 17 67 68 1 410 25 1 289 17 68 69 •• .. .. .. .. .. 69 70 •• .. 1 275 19 70 Totals 2,925 850,616 35,492 10,385 2,523,135 121,078 * Compiled from cards.

D.—sa.

TABLE V. Classification of Pensions granted, showing the Ages at which they were granted for Period from 1st April, 1919, to 31st March, 1927, inclusive.*

12

Attainment of Pension -r, ,. A **-„/» „„n„ tt„«+ Widows and Aw , or Length of Service Ghildmn Total, which (Section 102). (Section 111). (Section 113, &c). Pension granted. N ,, mhpr Amount of w llm h P r Amount of w, lm ber Am0UIlt ol Number Amount of Number. p ension . . Number. Pension. «nmDer. Penaion JNumoer. Pension. . m. £ s. d. M. £ s. d. £ m. F. Total. £ s. d. 72 1 108 3 0 .. .. .. .. J .. 1 108 3 0 71 1 167 7 0 .. .. .. .. 1 .. 1 167 7 0 70 69 1 103 13 0 .. ... .. .. 1 .. 1 103 13 0 68 2 356 5 0 .. .. .. .. 2 .. 2 356 5 0 67 .. 13 2,008 3 0.. .. .. .. 13 .. 13 2,008 3 0 66 .. 38 7,014 0 0 .. .. .. .. 38 38 7,044 0 0 65 .. 51 9,929 19 0 .. .. .. .. 51 .. 51 9,929 19 0 64 32 7,742 3 0 .. .. .. .. 32 .. 32 7,742 3 0 63 29 5.583 7 0 1 124 9 0 .. .. 30 .. 30 5,707 16 0 62 .. 39 7,885 5 0.. .. 2 62 39 2 41 7,947 5 0 61 .. 134 24,698 10 0 2 263 2 0 .. .. 136 .. 136 24,961 12 0 60 .. 124 23,614 10 0 8 1,133 1 0 1 31 132 1 133 24,778 11 0 59 35 10,271 13 0 13 2,730 14 0 .. .. 48 .. 48 13.002 7 0 58 30 8,391 0 0 16 2,240 12 0 1 31 46 1 47 10,662 12 0 57 48 14,602 2 0 12 1,668 17 0 3 93 60 3 63 16,363 19 0 56 49 12,852 "2 0 11 1.714 9 0 2 62 60 2 62 14,628 11 0 55 .. 41 11,085 2 0 10 1,988 12 0 5 155 51 5 56 13,228 14 0 54 .. 21 4,984 16 0 7 1,273 10 0 3 93 28 3 31 6,351 6 0 53 .. 17 3,776 0 0 8 1,360 10 1 31 25 1 26 5,167 1 0 52 8 2,159 19 0 9 1,241 12 0 3 93 17 3 20 3,494 11 0 51 5 1,088 2 0 8 897 13 0 6 186 13 6 19 2,171 15 0 50 .. 5 552 5 0 3 93 5 3 8 645 5 0 49 .. 8 901 7 0 4 124 8 4 12 1,025 7 0 48 .. 5 603 0 0 5 155 5 5 10 758 0 0 47 .. .. 4 544 17 0 5 155 4 5 9 699 17 0 46 .. .. 6 690 4 0 6 186 6 6 12 876 4 0 45 .. .. 5 313 7 0 9 279 5 9 14 592 7 0 44 .. 4 391 2 0 2 62 4 2 6 453 2 0 43 .. .. 2 296 5 0 10 310 2 10 12 606 5 0 42 .. .. 6 588 2 0 6 186 6 6 12 774 2 0 41 .. .. 3 257 10 0 .9 279 3 9 12 536 10 0 40 .. .. .. 5 471 18 0 ! 8 248 5 8 13 719 18 0 39 .. 2 129 18 0 j 4 124 2 4 6 253 18 0 38 .. ■ .. 8 578 4 0 6 186 8 6 14 764 4 0 37 .. .. 5 357 6 0 10 310 5 10 15 667 6 0 36 .. .. 2 59 14 0 10 310 2 10 12 369 14 0 35 .. .. 3 167 18 0 9 279 I 3 9 12 446 18 0 34 .. .. 3 226 14 0 13 403 3 13 16 629 14 0 33 .. .. 4 163 8 0 5 155 I 4 5 9 318 8 0 32 .. 1 6 15 0 9 279 1 9 10 285 15 0 31 .. .. 4 150 9 0 11 341 4 11 15 491 9 0 30 .. .. 3 172 19 0 10 310 3 10 13 482 19 0 29 .. 5 197 2 0 6 186 5 6 11 383 2 0 28 .. .. 1 17 12 0 8 248 ! 1 8 9 265 12 0 27 .. 1 37 13 0 7 217 1 7 8 254 13 0 26 ... . .. 2 33 10 0 2 62 2 2 4 95 10 0 25 .... . . 2 43 1 0 3 93 2 3 5 136 1 0 24 .. 6 95 13 0 7 217 6 7 13 312 13 0 23 .. 1 19 10 0 6 186 1 6 7 205 10 0 22 .. .. 3 27 15 0 1 31 3 1 4 58 15 0 21 .. .. .. 1 31 1 1 31 0 0 20 .. .. 5 41 6 0 .. .. 5 .. 5 41 6 0 19 .. .. .. 1 31 1 1 31 0 0 14 .. .. .. 11 286 1 f 286 0 0 13 .... . . .. .. 28 728 728 0 0 12 .. .. .. 25 650 650 0 0 11 .... . , .. .. 37 962 962 0 0 10 .... . . .. .. 35 910 910 0 0 9 .. .. . . .. . . 33 858 858 0 0 8 .. .. . . .. .. 30 780 780 0 0 7 .. . . .. .. 27 702 }- 233 207 440 i 702 0 0 6 . . .. .. 33 858 858 0 0 5 .. .. .. .. .. 41 1,066 1,066 0 0 4 .. .. . . .. 28 728 728 0 0 3 .. .. . . 32 832 832 0 0 2 .. . . .. 27 702 702 0 0 1 .. .. .. 35 910 910 0 0 0 .. . . .. 18 468 j I 468 0 0 Totals 719 158,452 1 0 219 24,772 16 0 663 18,353 1,171 430 1,601 201,577 17 0 * Compiled from cards.

D.— sa.

TABLE VI. EXPERIENCE TABLE.

13

Contributing Members, First Division. Probabilities of Withdrawal. Death or Retirement within a Year (expressed as a Percentage of the Number existing in the Service at Beginning of the Age. Year). Withdrawal. Death. Retirement. 15 7-60 0-18 16 7-50 0-18 17 7-20 0-18 18 6-55 0-18 19 5-90 0-18 20 5-25 0-19 21 4-60 0-19 22 4-00 0-19 23 3-30 0-19 24 3-10 0-19 25 2-80 0-19 26 2-60 0-19 27 2-44 0-20 28 2-30 0-21 0-10 29 2-17 0-22 0-10 30 2-04 0-23 0-10 31 1-91 0-24 0-10 32 1-78 0-25 0-10 33 1-65 0-26 0-10 34 1-52 0-27 0-10 35 1-40 0-28 0-10 36 1-28 0-29 0-10 37 1-16 0-30 0-10 38 1-05 0-31 0-10 39 0-94 0-32 0-10 40 0-83 0-33 0-11 41 0-73 0-34 0-12 42 0-63 0-35 0-13 43 0-53 0-36 0-14 44 0-43 0-38 0-15 45 0-34 0-40 0-17 46 0-26 0-42 0-22 47 0-19 0-44 0-30 48 0-14 0-46 0-42 49 0-11 0-48 0-60 50 0-09 0-51 0-90 51 0-07 0-54 1-40 52 0-05 0-57 2-20 53 0-03 0-61 3-30 54 0-01 0-65 4-70 55 .. 0-70 6-50 56 .. 0-76 9'00 57 .. 0-83 12-50 58 .. 0-91 17-50 59 .. 1-00 25-00 60 .. 1-11 40-00 61 .. 1-24 40-00 62 .. ]-40 40-00 63 .. 1-60 40-00 64 .. 1-85 40-00 65 .. 100-00

Contributing Members, Second Division. Probabilities of Withdrawal. Death or Retirement within a Year (expressed as a Percentage of the Number existing in the Service at Beginning of the Year). Age. Withdrawal. Death. Retirement. 11-00 0-19 .. 15 10-95 0-19 .. 16 10-90 0-19 .. 17 10-80 0-19 .. 18 10-60 0-19 .. 19 10-30 0-20 .. 20 9-90 0-21 .. 21 9-40 0-22 .. 22 8-85 0-23 0-10 23 8-35 0-24 0-10 24 7-85 0-25 0-10 25 7-35 0-26 0-10 26 6-87 0-27 0-10 27 6-41 0-28 0-10 28 5-98 0-29 0-10 29 5-58 0-30 0-10 30 5-21 0-31 0-10 31 4-86 0-32 0-11 32 4-53 0-33 0-11 33 4-22 0-34 0-11 34 3-93 0-35 0-11 35 3-66 0-36 0-12 36 3-41 0-37 0-12 37 3-18 0-38 0-12 38 2-97 0-39 0-13 39 2-77 0-41 0-13 40 2-57 0-43 0-13 41 2-38 0-45 0-14 42 2-20 0-47 0-15 43 2-02 0-50 0-17 44 1-84 0-53 0-20 45 1-67 0-57 0-25 46 1-51 0-61 0-33 47 1-36 0-66 0-45 48 1-22 0-71 0-62 49 1-08 0-76 0-84 50 0-95 0-82 1-12 51 0-82 0-88 1-47 52 0-70 0-94 1-90 53 0-58 1-00 2-40 54 0-46 1-07 3-00 55 0-34 1-14 4-00 56 0-22 1-22 5-50 57 0-11 1-30 7-50 58 1-39 10-00 59 1-48 50-00 60 1-58 32-50 61 1-68 30-00 62 1-79 30-00 63 1-90 32-50 64 100-00 65

D.—sa.

TABLE VII. LIFE AND SERVICE TABLE. Based upon the Rates per Cent. per Annum of Withdrawals, Mortalities, and Retirements given in Table VI applied to 100,000 Entrants at Age 15.

14

First Division. Age. Service' 11 Withdrawals. Deaths. Retirements. ' , ! 15 100,000 7,600 180 16 92,220 6,917 166 17 85,137 6,130 153 18 78,854 5,165 142 19 73,547 4,339 132 20 69,076 3,626 131 21 65,319 3,005 124 22 62,190 2,488 118 23 59,584 2,085 113 24 57,386 1,779 109 25 55,498 1,554 105 26 53,839 1,400 102 27 52,337 1,277 105 28 50,955 1,172 107 51 29 49,625 1,077 109 50 30 48,389 987 111 48 31 47,243 902 113 47 32 46,181 822 115 46 33 45,198 746 118 45 34 44,289 673 120 44 35 43,452 608 122 43 36 42,679 546 124 43 37 41,966 487 126 42 38 41,311 434 128 41 39 40,708 383 130 41 40 40,154 333 133 44 41 39,644 289 135 48 42 39,172 247 137 51 43 38,737 205 139 54 44 38,339 165 146 58 45 37,970 129 152 65 46 37,624 98 158 83 47 37,285 71 164 112 48 36,938 52 170 155 49 36,561 40 175 219 50 36,127 33 184 325 51 35,585 25 192 498 52 34,870 17 199 767 53 33,887 10 207 1,118 54 32,552 3 212 1,530 55 30,807 .. 216 2,002 56 28,589 .. 217 2,573 57 25,799 .. 214 3,224 58 22,361 .. 203 3,913 59 18,245 .. 182 4,561 60 13,502 .. 150 5,401 61 7,951 .. 99 3,180 62 4,672 .. 65 1,869 63 2,738 .. 44 1,095 64 1,599 .. 30 640 65 929 .. .. 929

Second Division. 11 j Withdrawals. Deaths. Retirements. 100,000 11,000 190 .. 15 88,810 9,725 169 .. 16 78,916 8,602 150 .. 17 70,164 7,578 133 .. 18 62,453 6,620 119 .. 19 55,714 5,739 111 .. 20 49,864 4,937 105 .. 21 44,822 4,213 99 .. 22 40,510 3,585 93 41 23 36,791 3,072 88 37 24 33,594 2,637 84 34 25 30,839 2,267 80 3] 26 28,461 1,955 77 28 27 26.401 1,692 74 26 28 24,609 1,472 71 25 29 23,041 1,286 69 23 30 21,663 1,129 67 22 31 20,445 994 65 22 32 19.364 877 64 21 33 18.402 777 63 20 34 17,542 689 61 19 35 16,773 614 60 20 36 16,079 548 59 19 37 15.453 491 59 19 38 14,884 442 58 19 39 14.365 398 59 19 40 13,889 357 60 18 41 13.454 320 61 19 42 13,054 287 61 20 43 12,686 256 63 22 44 12,345 227 65 25 45 12,028 201 69 30 46 11,728 177 72 39 47 11,440 156 76 51 48 11,157 136 79 69 49 10,873 117 83 91 50 10,582 101 87 119 51 10,275 84 90 151 52 9,950 70 94 189 53 9,597 56 96 230 54 9,215 42 99 277 55 8,797 30 100 352 56 8,315 18 101 457 57 7,739 9 101 580 58 7,049 .. 98 705 59 6,246 .. 92 3,123 60 3,031 .. 48 985 61 1,998 .. 34 599 62 1,365 .. 24 409 63 932 .. 18 303 64 611 .. .. 611 65

D.—sa

TABLE VIII. SUMMARY OF GOVERNMENT RAILWAYS SUPERANNUATION RESULTS. Valuation Balance-sheet as at 31st March, 1927. Liabilities. Value of—■ £ 1,417 pensions for £221,521 13s. 4d. per annum already granted .. .. 2,034,431 461 pensions for £14,291 per annum granted to widows of deceased contributors .. 172'852 502 pensions for £13,052 per annum granted to children of deceased contributors .. 50' 163 Prospective pensions for back service .. .. .. .. ..3 883'914 Prospective pensions for future service .. .. .. .. .. 2' 853' 882 Prospective pensions for widows .. .. .. .. 221 771 Prospective pensions for children .. .. .. .. [ \ " 103'336 Return of contributions on death .. .. .. .. . _ '' 27' 976 Return of contributions on withdrawal .. .. .. " 428'517 £9,776,842 Assets. £ Accumulated funds .. .. .. .. ggg gr,g Value of— '' '' ' Euture contributions .. .. .. .. . _ _ _ 2 g74 Additional subsidy on account of widows and children .. .. .. 242 236 Subsidy of £170,000 per annum now being paid .. .. .. ..3 777*778 I uture increases in subsidy to be provided .. .. .. ~ 3' 032' 42(3 £9,776,842

Approximate Cost of Paper.—Preparation, not given; printing (950 copics), £20 10s.

By Authority : W. A. G. Skinner, Government Printer, Wellington.— 1932.

Price 6d.J

15