1.—14,

78

Memorandum by the Government Actuary explaining the Method of dealing with the Data respecting Teachers' Salaries. Wellington, 16th September, 1905. In order that there may be no possible doubt about this matter, it may be as well to explain somewhat minutely the method adopted. The salaries were deduced from data supplied by the Education Department, showing the average salaries in quinquennial groups. These were graduated to obtain the average salaries at intermediate ages and to show a gradual increase as the age advanced until a maximum was reached. The number of teachers at each age, and the ages at which they entered the service, were also supplied by the Department. Service prior to the Education Act of 1877 was not included, and teachers entering before that date were assumed to enter the service at salaries corresponding to their age at the time the Act came into force. In calculating the pensions for back service, teachers of, say, forty-three years of age with twenty years back service were assumed to have received on the average the same salary at entry as men now aged twenty-three are receiving—viz., £122 8s. —and the next year to have received on the average the same amount as is now being paid to men aged twenty-four—viz., £126 Bs. —and so on. The whole of these salaries for twenty years, being added together and divided by 120, gives the pension for back service. The salaries for males were practically constant at £204 at about age forty, and, assuming the teacher in the previous example to retire at age sixty-three, twenty' years salary at £204 per annum was divided by 60, giving a pension lot future service of £68. The two added together give the total pension. In dealing with younger lives their pensions were calculated in a similar way, viz.—on the assumption that they received on the average the same salaries at entry as men of corresponding age are now receiving, and that in future they will obtain for every age the same salaries as the average now being paid to those at that particular age. The following are a few illustrations of how the pensions have been calculated, assuming the age at entry to be twenty-three and the age at retirement sixty-three : —

Compound interest at 3-J- per cent, and a death-rate corresponding with that of the healthy districts of England were used (as in the other calculations) to obtain the present value of these pensions. In my opinion the capital value of the liability in the amended Bill for existing members (based on the staff returns of 1903) may, for practical purposes, be considered to be £404,000. Mobeis Fox, Government Actuary. Approximate Cost of Paper.— Preparation, not given; printing (3,950 copies, exclusive of diagram), £82 17s. 6d.

By Authority : John Mackay, Government Printer, Wellington.—l9os. Price Is. 6d.]

1. Age on entering Service. 2. Present Age. 3. Total Salary from Age 23 to Present! Time. 4. Pension for Back Service jfo of 3. 5. 6. Total Salary Pension for 7. :from Present Timei Future Service i Total Penaion. to Age 63. s i 0 of 5. I 23 23 23 43 33 23 & s. d. 3,490 16 0 1,502 10 0 Nil. £ b. d. 29 1 10 12 10 5 Nil. £ s. a. 4,080 0 0 6,068 6 0 7,570 16 0 £ s. d. i 68 0 0 101 2 9 126 3 7 £ s. d. 97 1 10 113 13 2 126 3 7