Page 33 - Group Insurance and Retirement Benefit IC 83 E- Book

(5) Disappearance of any financial strain to employing authority on admission of

employee with previous service, and consequent increase in fluidity of staff. (This strain
now results from admission in such circumstances that no transfer value is receivable, i.e.

after a 'disqualifying break', or where the transfer value is calculated by reference to a
part only of previous service, i.e. in the case of certain former local-Act contributors.)

6 The Development of Public Superannuation Schemes
(6) Facility of suspension of superannuation allowances during periods of subsequent

employment with any local authorities—a common provision in many present schemes,

but difficult to apply in practice.
(7) Disappearance of certain tax inconsistencies due to differing degrees of approval of

funds under Section 32 of the Finance Act, 1921, etc. 11. Against these can be adduced

the following disadvantages.
(1) Mortality rates differ significantly in different parts of the country. With a unified

fund and a single valuation, some authorities would gain at the expense of others. It may
be noted that this objection did not prevent the introduction of a centrally financed

scheme for teachers.
(2) Local conditions and practices have a significant effect upon the cost of

superannuation, e.g. salary scales (where the national scales are not in force), staff

structure (i.e. the proportion of highly salaried officers), policy as to recruitment and
promotions (e.g. whether permitted at late ages), classes of staff admitted to the scheme,

stringency of medical examination before appointment and before retirement on account
of ill-health, etc. Authorities might tend to become less vigilant as to cost where they are

not directly concerned in the resultant liability,
(3) Any attempt to control factors as in (2) would lead to further interference with

existing powers of local authorities.

(4) If account were taken of variations in mortality, etc., sectionalized valuations would
be necessary, i.e. gain in administrative simplicity and economy would be reduced.

(5) Superannuation funds can at present be used for internal investment by authorities

(e.g. for financing capital expenditure). Any compensating power of borrowing from a
central fund would involve some measure of control by an external body.