Page 75 - Group Insurance and Retirement Benefit IC 83 E- Book

ways in which, by altering and simplifying the rules governing transfer values, a good

deal of help could be given to those who were saddled with the administration of funds.
Mr K. G. Smith wished to make it clear, in view of the doubt there seemed to be on the

point, that the public boards which had been set up recently as a result of nationalization
had separate funds and had made provision for valuation of their liabilities and for

making deficiency payments to make their funds self-sufficient. It had already been
pointed out that the information given in the appendices to the paper was incomplete in

one particular, and that was that in the public board with which he himself was associated

the independent schemes existing at the date when the board took over were not being
continued. It was a similar problem to the one which was to be found in the paper as a

whole, but on a smaller scale. There were 200 schemes at the vesting date, and the

problem was whether they should be continued or wound up. The board decided to wind
them up. The actual machinery was interesting, because it might be an example for a

larger amalgamation. Each scheme was considered, and an offer was made to each
member, not necessarily an offer of a year for a year. There were two simple devices

which made it much easier to equate benefits. One was to offer a proportion of a year in
the board's scheme for each year in the old scheme, and the other, in those schemes

which were money-purchase schemes or insurance schemes and which did not relate their

benefits to salary at retirement, to grant a year with a fixed pensionable ceiling instead of
one related to the pension at retirement. It was possible by those two methods to allow

satisfactory terms to the vast majority of people who were transferred.
There would always be exceptions, and special steps had to be taken to safeguard their

rights, including the guarantee of benefits on the scale of their old scheme but limited by
certain notional increases of salary, and taking into account any future difference in

contributions. It was then possible for the Minister fairly and equitably to issue an order

winding up the scheme, and the scheme then ceased to exist, the assets being transferred.
He was surprised that one point had not been mentioned in the paper. Most people were

agreed that freedom of transfer between the various public boards was a good thing. He

was equally convinced that free transfer between public boards and private enterprise was
an even better thing, and it seemed to him that an immediate practical approach would be