Page 73 - Group Insurance and Retirement Benefit IC 83 E- Book

As an example of the tendency in the non-funding direction, he mentioned that

discussions were going on with a view to the dismantling of the Fire Service funds and
substituting an unfunded scheme. As an individual, he felt that it was pleasant to have a

fund to look at, and for contributors to be able to say 'That is our money', but in practice
there were objections to it, and, even with a fund, in a scheme relating pensions to pay it

was never possible to provide for the unexpected liability due to an increase in pay. It
was necessary for employers when negotiating pay changes to have in mind that they had

that deferred liability overhanging them.

Mr J. K. Scholey, referring to the advantages of unification of funds set out in paragraph
10 of the paper, said that some was shown as leading to corresponding disadvantages in

paragraph II and all were minor in character. The two main factors to take into account

were both disadvantages and were given under headings (1) and (2) of paragraph 11.
Under heading (3) of paragraph 10 the author spoke of the ' Possibility of unified

valuation, with simplified allocation to authorities (e.g. on basis of salary rolls or rateable
values—-although both are objectionable in certain respects).' Personally, he felt that they

were objectionable in many respects. Where an actuary was called upon to allocate
liabilities between two financial entities (unless those financial entities were small and

closely related, when perhaps some ad hoc division might be reasonably justified) it was

necessary in fairness to both authorities to have a complete valuation of each set of
liabilities. That meant that it was not proper to have a unified scheme of the type dealt

with in the paper, which would involve rolling everybody in together and sorting out the
liabilities on some general basis.

He thought that there was a misapprehension about the nationalized boards, which, in
paragraph 13, were classed with the public services. In his view, the nationalized boards

were not ' public services ' in the sense that the other classes in that paragraph were. They

were independent companies of which the community held the capital; they were trading
companies, as the opener had so accurately put it. They were to pay their way, but they

could not properly be said to do so unless they knew what their superannuation costs

were, and that meant that they must have their own separate schemes.
Equity apart, even, it was the easier course for them. In addition to maintaining their own

superannuation schemes, they must ' fund ' those schemes. The word ' funding ' had been