PUBLIC TRUST OFFICE.

Manawatu Standard, Volume XLIX, Issue 243, 12 September 1929, Page 7

PUBLIC TRUST OFFICE.

INVESTMENT OF FUNDS. (By Telegraph—Special to Standard.) WELLINGTON, Sept. 11. In the House of Representatives today Mr Kyle (Riccarton) asked whether it is a fact that beneficiaries under the will of a deceased person whose estate is administered by the Public Trust Office, and who are entitled to interest on trust moneys invested by the Public Trust Office, received a less rate of interest than that received by the 1 üblic Trustee in respect to such moneys invested by him and so the Public liustee makes a substantial profit. Sir Joseph Ward’s reply was as follows: — (1) The facts are not quite as stated. The position is that anyone placing an estate in the Public Trust Office can direct, that the funds be invested either (a) in the common fund, or (b) outside the common fund. (2) If the directions are to invest the funds of an estate in the common fund they bear interest immediately at a fixed rate of 5J per cent, per annum free of all charges. The Public Trustee investing the whole of the moneys forming the common fund nt rates running up to 6 per cent., the average rate earned is appreciably less than 6 per cent. The difference goes to provide for (a) the State guarantee of principal and interest, (b) the cost of collection and management, (c) the risk of broken periods of investment, (d) the liquidity of the common fund. (3) If tba directions are to invest outside the common fund, the estate receives the full rate of interest earned, less the usual commission, but takes the risk of any loss on realisation of security and any loss owing to non-invest-ment of the funds immediately and of broken periods of investment. These conditions- are the same as with a private trustee. (4) By reason of the advantages of the common fund the great majority of people placing their affairs in the 1 üblic Trust Office prefer that system of investment, but they can ask for investment of their moneys outside it if they so desire. The whole position is explained to them in the beginning and the relative merits of both systems are pointed out to them.