The Washington herald., 1912-01-21
CIVIL INSURANCE
PROVES A SUCCESS
New Zealand Substitutes cOntribu-
tory Pensions After Straight
Gratuity Plan Fails.
BY CHARLES DICK.

Great Britain has tried various PLAN
for caring for her superannuated EN-
ployes. and the present law on the sub
ject was passed as late as 1903. New
South Wales has tried both the straight
pension plan and the contributory sys-
tenn. but discarded both OF them and sub
stituted compulsory endowment insur'
ance law
New Zealand has had an entirely diff.
ferent experience. The island was q
crown colony from 1870 TO 1853, and the
hrst popular assembly met in the latter
year. Real representative government did
not begin until 1856. and IN 1855 the first
general pension law was passed. Pen
sions were paid for incapacity after ten
years service. and varied from one-fourth
OF the salary to two-thirds, the latter
payable after forty-five years service.
In 1885 the rate OF pension paid was
changed TO one-sixtieth OF the average
salary for the last three years for each
years service. up TO torty-sixtieths pay
able for forty years service. The ex-
pense OF this pension system increasing
rapidly and the country suffering from
very hard times. a law was passed in
1S71 abolishing pensions for all who there
after entered the service.
First Contributory Scheme Failed.
From 1885 to 1899 a compulsory savings
scheme was in force, and 5 per cent
per annum was deducted from the sal
ary Of every employs in the civil serv-
lee to be repaid with interest when he
left the service. This ARRANGEMENT
proved inadequate. especially for EN-
ployes who lived any length Of time after
retirement.
In 1888 a civil service insurance law
was enacted applicable TO all employees
under forty entering the service after
that date. This was a compulsory saw
ings scheme, like the act Of 1855 but In
return for the per cen. deduction from
salary the government. through Its life
insurance department, gave a uniform
initial endowment insurance policy Of
100 pounds, increasing with tire sal
ary received until the age Of sixty
was reached. and paying after that date
an annuity varying with the age at entry
into the service. The government Hfe
insurance department was established in
1863 and does a very successful business
In the same way as ordinary life insur-
ance companies do.
This insurance scheme seems 10 have
been an Improvement on the compulsory
savings plan. but was still inadequate
and insufficient as a means for proyid-
Ing for superannuated employees. In a
great many cases the government helped
nut with a gratuity or compensation.
from one to twelve months SAL
airy. and amounting in some years 70 al
most as much as was paid out In pen
siOns under the old law Of 1856 From
time to time various branches OF the
civil service secured the enactment OF
straight pension bills, policemen In 1883.
government railway employees in 1s92, and
teachers in 1906.
Superannuated Law a sueces..
In 1907 a general approximation law
was passed. providing for men at the
age Of sixty-fve after forty years service
and for women at nifty five after thirty
years service. a pension Of one-sixtIeth
of the aversge salary for the last three
years for each year of service. All en-
.ering the service after that date are
to Join. and the contributions
vary from to 10 per cent Of the salary,
iependent on age at time OF entering
he service.
Liberal provision Is made for those
retired on account OF disability and for
dependents OF those who die in the serv-
&c. No compulsory age for retirement
$ fixed. Contributions may be with
irawn, but without interest
The scheme Is not intended to be self
and the government paws
whatever is necessary to meet the ex-
'ense. The plan was drawn up by an
Ictuary after ascertRining all the facts
Is TO the age and length OF service OF
Everybody in the government employ
nent, and is actuarilY sound. but pro-
'ision Is made for a careful investiga-
ion Of the fund every three years.
The new law promises TO be as sue
essful as II IS popular.