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It is now proposed that the Government should continue to use the money but should cease to pay interest upon it, on the ground that the Government will eventually be called upon to pay in pensions and expenses of management a sum equivalent to the total present capital together with future annual contributions with 3% compound interest added.
4. The Fund has at the present time a credit on 31st December 1902 of $220,000, which at the rate of interest guaranteed by the Government, and with the addition of a year's contributions, estimated at $29,000, would at the close of 1903 be increased to a total of $282,300. The pensions payable in 1907 are estimated at a sum of $45,475 and the expenses of management during that period would probably not exceed the sum of $2,500; so that at the beginning of 1907 there would be a total capital sum of $254,285 which would continue to increase at compound interest.
The Government is apparently of the opinion that the annual expenditure in respect of pensions and cost of management will ultimately equal if not exceed the sum of the annual contributions together with interest on the capital calculated at 2%. The Civil Service Contributors on the other hand anticipate that the capital of the Fund will increase so largely as to make it possible at some future date to revise and to increase the rates of pension; and they are prepared to undertake for themselves the risk that the Government now proposes to undertake, namely that the expenditure may eventually exceed the income.
5. With regard to the second of the Committee's findings it is urged by a majority of the contributors that each officer is in natural justice entitled to the eventual return with interest of that portion of his salary which he has been compelled to surrender. They suggest in place of the existing scheme a scheme of compulsory...