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Superannuation Funds. Notes on Some Post-War Problems, together with an Account of a Pensioners' Mortality Experience (Civil Service Pensioners, 1904–1914)

Published online by Cambridge University Press:  18 August 2016

G. S. W. Epps
G. S. W. Epps
Affiliation:
Government Actuary's Department
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Extract

The ordinary member of a pension fund, if asked whether there is any connection between the high cost of living at present oppressing him and the security of the pension to which he looks forward to support him in his old age many years hence, would probably fail to discover that the one is related to the other. The financial position of pension funds is, however, fundamentally affected by the sudden drop in the purchasing power of the sovereign during the last few years and more directly by the enhanced scales of salaries or wages which have resulted from the change in the value of money, and it is to be feared that in many funds a very serious position has to be faced. The actuary who is called upon to advise as to the situation and to formulate remedies by which equilibrium may be restored has not only difficult professional problems to grapple with, but, having made up his mind as to the course to be recommended, he has to carry with him the responsible officers of the fund, who in their turn have to secure the co-operation of the employer and also the assent of the " ordinary member " of the fund, to whom I have referred above, to the remedies put forward.

Type
Research Article
Information
Journal of the Institute of Actuaries , Volume 52 , Issue 4 , October 1921 , pp. 405 - 453
Copyright
Copyright © Institute and Faculty of Actuaries 1921

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References

page 407 note * Special articles on this subject will be found in the Labour Gazette for November 1919 and December 1920.

page 411 note * * Royal Commission on the Income Tax; Appx. 48(a) of the Seventh Instalment of the Minutes of Evidence (Parl. Paper, Cmd. 288–7).

page 411 note † Parl. Paper, Cmd. 615 of 1920.

page 412 note * Since the paper was read the law has been amended by Section 32 of the Finance Act, 1921. Subject to regulations to be made by the Commissioners of Inland Revenue the income of superannuation funds will not in future be liable to income tax.

page 426 note * Report (Cmd. 329).

page 427 note * The approximate balance of “minimum” contributions and future service liabilities is to a certain extent fortuitous, being due to the decrease in the rate of contribution for several ages above the youngest age.

page 429 note * The financial year in the case of Estimates runs from 1 April to 31 March: the pension year from 1 December to 30 November.

page 433 note * Report on Superannuation of Teachers, 1914 (Cmd. 7364).

page 440 note * Initial contributions, whether of the employer or of the employee, made in order that an employee with several years' service may come into the fund on a satisfactory footing are disallowed as being in the nature of capital expenditure.

page 441 note * Where a fund has deducted tax from a pension at the full rate, the pensioner can of course claim any repayment to which he may be entitled by reference to the amount of his total income. In order to save separate claims for repayment by the individual pensioners, the Inland Revenue Department has made an arrangement with many pension funds under which the fund deducts tax from the pensions only to the extent of the pensioner's net liability, the amount of which is notified by the Department to the fund. The Department subsequently repays or allows to the fund an amount representing the difference between the tax at the full rate of the amount of taxed income distributed in pensions and the aggregate liability of the pensioners in respect of their pensions.

page 442 note * The only bodies to which a similar relief (i.e., a relief by reference to total income) is granted are unregistered Friendly Societies. There is a specific exemption in favour of such societies, where their income does not exceed £160.