B.—4a

issued by the Government Insurance Department provided for payment of a lump sum at death before reaching sixty years of age, or an annuity on reaching that age. Next came the Government Railway Superannuation Fund Act, 1902, the Teachers' Superannuation Act, 1905, and the Public Service Classification and Superannuation Act, 1907, whereby the present Superannuation Funds were inaugurated. 1394. Before proceeding to a brief historical review of the last-mentioned Act, it is as well to state that all contributors to the Superannuation Fund were relieved of any obligation to contribute further to any other Fund, but their existing rights were preserved. Compensation rights under the Act of 1871 were not affected, but were made cumulative with the contributor's right to payment from the Superannuation Fund. On joining the Fund the compensation of the contributor was calculated up to the date of joining, the amount becoming a contingent asset of the contributor until retirement on superannuation. On qualifying for retirement, contributors had the option of accepting an annuity from the Fund, or they could elect to accept their accrued compensation, together with a refund of their total contributions to the Fund without interest. The Consolidated Fund was accordingly relieved of a considerable liability for accrued compensation, and the amount of State liability from the initiation of the Fund is approximately £560,000 (vide the annual report of the Public Service Superannuation Board for the year ended 31st March, 1931). This matter of compensation is important and should be remembered in considering the liability of the Government to the Superannuation Fund. 1395. It will thus be seen that before the present Superannuation Acts were placed on the statute-book, the Government of New Zealand had tried various other schemes. 1396. It is desirable that we should now give a brief history of the three Funds, taking the Public Service Fund as a fair example; but before doing so we would refer to the apparently common misconception that it is only by the generosity of the State that the public servants of New Zealand are able to enjoy the benefits of superannuation schemes. That this is a fallacy is proved by the following table, showing the contributions of employees and the State respectively to the various Funds up to the 31st March, 1931.

1397. We give hereunder a brief history of the Public Service Fund. There is no radical difference between the three Funds, but any special points of interest in regard to the Teachers' Fund and the Government Railways Fund will be specially mentioned later. Public Service Superannuation Fund, History of. 1398. The Fund was established on the Ist January, 1908. The contributors to the Fund are of two classes —" original " and " new." In the first class are those who— (a) On the Ist day of January, 1908 (being the date of the coming into operation of the Public Service Superannuation Act, 1907) were permanently employed in any capacity in the Public Service ; or who (b) On that date were employed in any Department and had then been continuously employed in any one or more Departments for a period of five years or more. 1399. From the date of election these were deemed to be original contributors entitled to all the benefits of the Fund. 1400. The second class —i.e., all oflicers who have been permanently appointed since the Ist day of January, 1908 —are compulsory contributors. 1401. Contributions are based on age at last birthday at the date of joining the Fund. The scale of payments is as follows :— . t • • Rate of Contribution. Age on Joining. Per Cent. Under 30 years .. .. .. .. 5 30 years and under 35 years .. .. .. 6 35 years and under 40 years .. .. .. 7 40 years and under 45 years .. .. .. 8 45 years and under 50 years .. .. .. 9 50 years and over .. .. ... ~ 10 1402. The Police Provident Fund was merged in the Public Service Fund on the Ist April, 1910, by the Public Service Classification and Superannuation Amendment Act, 1909, which provided that the contributors to the Police Provident Fund should become contributors to the Public Service Superannuation Fund, and that the money belonging to the first-mentioned Fund should be transferred to and the annuities payable from the latter Fund. Under this arrangement 773 members of the Police Force, contributing £7,829 per annum, were taken over ; also 85 ex-members and two widows, drawing an aggregate annual allowance of £8,231 ; while the Funds transferred amounted to £32,786. The Government subsidy to the Public Service Fund was increased by £3,000 per annum owing to the inclusion of the Police Provident Fund.

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Public Service. Teachers. Railways. Totals. £ £ £ £ State contributions .. .. 1,819,000 990,000 1,874,000 4,683,000 Employees' contributions .. 4,213,000 1,967,000 2,760,000 8,940,000 6,032,000 2,957,000 4,634,000 13,623,000