H.—26A.
7. The income and outgo of the Fund since the previous valuation were as follow:— Consolidated Revenue Account op the Public Service Superannuation Fund from the Ist April, 1930, to the 31st March, 1934. ... Income.. £ s. d. Outgo. £ g. d. Funds at Ist April, 1930 .. .. 2,882,504 111 Pensions to members .. „ . 1,626,570 1 5 Members contributions .. .. 914,524 10 3 Pensions to widows and children .. 145,807 6 5 Transfers from other funds .. .. 2,314 19 7 Contributions returned .. 172 868 4 4 Government subsidy .. .. 344,000 0 0 Transfers to other funds .. '689 12 2 Subsidy from Cook Islands and Samoa Loss on realization of securities .. 11 370 17 9 Administrations .. .. .. 2,851- 9 6 Salaries .. .. .. .. 9 515 9 1 Government subsidy under section 114, Public Trust Office commission .. 15' 189 18 2 Public Service Superannuation Act .. 64,428 2 5 Travelling and office expenses .. 7'162 18 11 Subsidy under Finance Acts, 1932 and Funds at 31st March. 1934 .. . 2 964'064 5 6 1933 .. .. .. .. 78,932 17 6 Interest on investments .. .. 655,355 4 4 Interest on arrears of contributions .. 1,599 13 0 Pines .. .. .. .. 1,653 17 3 Transfers from unclaimed contributions account .. .. .. .. 1,053 16 6 Other receipts .. .. .. 4,019 15 6 £4,953,238 13 9 £4,953,238 13 9 8. It will be noted that the funds given above differ from those shown in the annual reports of the Superannuation Fund Board by £64,500, which sum the Board regards as unearned subsidy, and therefore treats as a liability. In this connection I would point out that the accounts of a superannuation fund are obviously not designed to show the annual profit or loss of the fund, nor does the balance-sheet make any pretensions to show the real contingent liabilities of the fund in connection with pensions or other benefits. Under the circumstances, no good purpose is served by so understating the funds, and the Board is recommended to bring its accounting methods into line with the world-wide practice of financial institutions controlling life-assurance and other funds whose liabilities involve contingencies which cannot be measured by ordinary accountancy standards. 9. Income.—On the income side the chief item requiring comment is the Government subsidy. Compared with the annual subsidies reported as necessary in the last actuarial report, the subsidies paid in during the quadrennium exhibit a shortage of £905,067, apart from the loss of interest thereon. The effective rates of interest credited to the Fund during each year of the quadrennium are given below, together with those of the previous four years for the purpose of comparison. Pato Rate Year ' Per Cent. Year. Per Cent. £ s. d. £ a. ,1. 1926-27 . . . . 517 9 1930-31 .. . . 5 14 3 1927-28 . . . . 518 6 1931-32 . . .. 516 10 1928-29 . . . . 5 14 6 1932-33 .. 5 16 1 1929-30 .. .. 514 2 1933-34 . . ..5 9 0 In the last year of the quadrennium interest amounting to £4,747 17s. 7d. was written off by Court orders under the Mortgagors and Tenants Relief Act. 1933. As this amount represents an effective yield of 3s ; 3|d. per cent, of the invested funds, it accounts for approximately one-half of the fall in the yield measured by that of the two previous years. 10. Outgo. -Retiring-allowances are increasing, and will continue to do so for many years to come. It will be noted that the outgo for benefits during the quadrennium exceeds the total of the contribution income and the Government subsidy, and is about 95 per cent, of the combined income from contributions, interest, a.nd Government subsidy. As I have pointed out in previous valuation reports, these high percentages are somewhat disturbing, since the liabilities are essentially of a deferred nature, and at this stage funds should be increasingly rapidly. Data. 11. The preliminary particulars required for this examination have been obtained from cards supplied by the Secretary of the Public Service Superannuation Board, a separate card being compiled for each member who was in 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. 12. It is difficult to avoid the conclusion that sooner or later some reconstruction of the Fund is inevitable, and in order to be in a position to report expeditiously on any such proposals for reconstruction I decided to use Powers machines to punch special cards and tabulate the data in the form required for valuation. The Post and Telegraph Department very willingly placed its Powers machines at my disposal, and I am indebted to Mr. A. G Bowater for the supervision of the work and for many helpful suggestions. It is unnecessary to point out that the assembly of the data by means of such machines permits rapid resorting and tabulation in any number of groupings that may be desired, thereby curtailing the time involved in investigations into the cost of making any modifications of the benefits of the
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