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(2)
at ten times the amount of the annual pension. The advantages which would accrue to this Government and that of India in the saving of administrative labour in distribution and accounting and in the absence of all opportunity of cheating, are sufficiently obvious. It remains to consider (1) whether the scheme would result in a pecuniary saving to the Government or the reverse, and (2) whether it would prove acceptable to the man, and its effect on recruiting. With regard to (1) it must be remembered that in giving a lump sum the Government also gives up the interest on that sum.
Assuming the rate of interest which the Government can obtain for its credit balances to be 5%, the grant of a lump sum of ten times the annual pension would be equivalent to paying the amount of the pension annually to the pensioner or his heirs for about 14 years (to be exact 14.2 years). The question therefore is whether a pensioner may be expected to survive his retirement by 14 years. If he may, the Government would gain by commuting, if not it would lose by so doing. Now so far as actual facts go an examination of Blue Books shows that out of 134 men pensioned upwards of 14 years back 96 are still drawing pensions, and 38 are dead; but of those 38 men 19 lived to draw their pensions for 14 years or longer; so that out of a total of 134 only 19 have died within 14 years of their retirement.
It must not however be forgotten that until recently men could take their pensions very young and could therefore expect to enjoy them a great number of years. Under the present rules a man cannot take his pension until he is 45, so the question revolves itself into the probability of his living to the age of 59. Now "Whittaker's Almanac" gives the expectation of life of a male inhabitant of Great Britain who has reached the age of 45 as being a further period of 22 years. In other words a man of 45 may on the average expect to live to 67. I cannot of course say to what extent the rule would