E.—9

2

of the common fund of the Public Trust Office. In accordance with the regulations under the Public Trust Office Act interest is paid to the fund on daily balances in the hands of the Public Trustee —4|- per cent, on the first £6,000 and 4j per cent, on the balance. No charge is made for investment. In addition, the fund received in 1916 from the Public Trustee a bonus of £1,385 19s. 5d., being 10 per cent, of the interest earned by the fund during the period Ist April, 1915, to 31st March, 1916, this bonus being paid under a recent legislative provision authorizing the distribution pro rata among the estates in the common fund of the Public Trust Office of a certain portion of the profits of that Office. This raised the rate of interest to over per cent. As intimated last year, the Teachers' Superannuation Board is of opinion that a higher rate of interest should be earned, either by an increased rate from the Public Trustee or by the Board making its own investments as in the case of the Public Service Superannuation Fund. Legislation is necessary, however, before any alteration can be made in the method of investment. On arrears outstanding from contributors 5 per cent, interest is charged. Provision has been made for the payment by the Government of the contributions of contributors to the fund who have joined the Expeditionary Forces engaged in the war, until the release of the contributors from military duties. The amount paid by the Government on this account in 1916 was £2,723, making the total to date £4,074. The number of contributors who had joined the Expeditionary Force up to the 31st December, 1916, was 346, of whom thirty-two have been killed in action or died of wounds or disease, and twenty-two have returned to New Zealand and have resumed their duties in the Education service. In terms of section 38 of the Public Service Classification and Superannuation Amendment Act, 1908, the Actuary appointed by the Governor for the purpose will this year make the triennial investigation of the fund for the years, 1914, 1915, and 1916. In his previous report the Actuary recommended an increase in the annual Government subsidy from £17,000 to £33,000, but in view of the special circumstances existing it was decided, as in the case of other funds, that the former rate of subsidy be continued. Consideration has been given during the year to the question of early retirements under the extended provisions of section 12 of the Public Service Classification and Superannuation Amendment Act, 1908 (as amended in 1909). The schedules of deductions from allowances previously approved by the Minister of Education and the Teachers' Superannuation Board under this section have been cancelled, and each application is now considered on its merits. The deductions in all future cases will be substantially heavier. During the period of the present war the Board has decided that no application under this section of the Act will be favourably considered, except in any case where it is deemed desirable for the efficiency of the service that the retirement should be allowed. Hitherto practically the whole of the administration expenses of the fund have been borne by the Education Department. It is considered that the fair cost of administration should be borne by the fund, and accordingly it has been debited with the expenses for the year 1916, amounting to £502. A number of necessary amendments in the Acts relating to the fund have been considered, but in view of the Government's decision to legislate only on war matters these amendments have had to stand over for the time being. Certain conditions arising out of the war, however, rendered certain legislative provisions necessary, and these were included in the War Legislation Amendment Act, 1916. These provisions arc as follows : (1.) A. certificated or licensed teacher appointed, temporarily by an Education Board under the Act referred to may elect to become a contributor to the fund if he continues in the service of the Education Board for more than three months. (2.) Any person having been a contributor to the fund on the 4th August, 1914, who voluntarily retired from the Education service for the purpose of joining the Expeditionary Forces, and obtained a refund of his contributions to the fund, may regain his former status in the fund if he again re-enters the Education service and there are repaid to the fund his former contributions and the amount he would have had to pay as contributions had he been on leave of