Page 61 - Group Insurance and Retirement Benefit IC 83 E- Book

interest and experience or on the rates used at the last valuation of the fund? Should the

new employer grant past service benefits which were equivalent in value to the amount of
the transfer values, or should they be based on the number of years of past service? Mr A.

Farncombe found it difficult to see why lump sums should be paid on retirement rather
than at any other milestone in a man's life; lump sums on marriage, for example, would

be socially more desirable. The cost of providing adequate pensions was proving an
almost intolerable burden on private employers, and to attempt to compete with public

superannuation funds, equipped with lump sum payments and widows'.

The Development of Public Superannuation Schemes 25

Pensions, was virtually impossible. It was very surprising that public bodies, which were
not usually over-generous to their active staff, should treat their pensioners so well, and it

was also odd that, with public pension funds leading the way in the matter of lump sums,

the Government should discriminate against lump sums in private pension funds by its
taxation policy.

He was not sure that he agreed with the author that local authorities were so fond of their
pension funds as to oppose bitterly their absorption in a national fund. Their experience

had been somewhat unfortunate since the appointed day in 1939, and valuation reports
had not made happy reading for the local finance committees. Many of them would

define a pension fund as something into which large contributions were paid every year,

and which produced a deficiency regularly every five years. In many cases the assets had
not been invested very remuneratively, and overworked borough treasurers must find the

administrative work very onerous. That state of affairs tended to react on private self-
administered funds, and there was a well-authenticated story of a broker who, on reading

in the newspapers of a deficiency in a local government fund, cut out the reference and

used it to frighten his clients into life assurance schemes. Local authorities might well,
therefore, feel a sense of relief if faced with the early loss of their pension funds, but,

given a reasonable period of stable salaries and hardening interest rates, coupled with a
realization that there were other outlets for the investment of funds besides a very narrow

range of gilt-edged securities and loans to the authority itself, it might well be that

pension funds would become a source of pride to the authority. Any scheme for the