332
PUBLIC RECORD OFFICE
Reference :-
885/26
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH—NOT TO
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his appointment, and he suggested Colonel A. G. McKendrick, Indian Medical Service (retired) as Colonel Hamerton's successor. The Committee approved the appointment of Colonel McKendrick.
5. The Director reported that he had received a request from Sir John McFadyean for copies of journals, of which the Bureau has duplicates, for the Library of the Royal Veterinary College. Dr. Bagshawe stated that when the request was first received he had thought that there would be no difficulty about this, but that Dr. Balfour, to whom he had mentioned the matter, had suggested that these duplicate volumes should be kept for the new Institute of Hygiene. Dr. Balfour stated that it was only journals which contained illustrations which he was anxious should be kept for the new Institute, and the Committee agreed that Dr. Bagshawe should send to Sir John McFadyean any journals which the Bureau did not want and which were not required for the new Institute of Hygiene.
Annexure to No. 30.
TROPICAL DISEASES BUREAU. DIRECTOR'S PENSION.
Introductory.
1. THE question of pension provision for the eventual retirement of Dr. Bagshawe was first raised at the Twenty-first Meeting of the Managing Com- mittee on 16th October, 1918,* when it was decided that £250 be set aside annually as a "Provident Fund 'to be devoted to such purposes as the Committee might think suitable."
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2. The question was again considered at the Twenty-seventh Meeting on 20th January, 1921,† when Sir Herbert Read contrasted Dr. Bagshawe's salary of £800 with that of the Director of the Imperial Bureau of Entomology who then received £850 a year with the Civil Service bonus, which brought his total up "to about £1,400 a year." The Committee decided to increase Dr. Bagshawe's salary to £1,000 a year, and informed him that the question of his pension would be gone into, and that if this was "found impracticable the Committee would consider the possibility of a further increase."
3. The next reference to the subject was made at the Thirty-first Meeting on 24th November, 1922, when the matter was referred to a sub-Committee§ appointed to review the financial position and prospects of the Bureau.
This sub- Committee met on 8th December, 1922. They decided to leave any definite recom- mendations until the result of an appeal for increased contributions for the Bureau was known, but they expressed the opinion that the figure to be aimed at in fixing a pension for Dr. Bagshawe at age 65 was £800.
4. The Managing Committee received the report of the sub-Committee on 26th January, 1923, and decided that before further consideration the Secretary should discuss the question with the Crown Agents for the Colonies.
5. On 8th February, 1924, the Secretary presented a memorandum embodying the results of his discussion with the Crown Agents. No decision was come to by the Committee, but Dr. Bagshawe was asked to ascertain from some good insurance company what premium would be necessary to produce the annuities set down in the Secretary's memorandum, which annuities are on the lines of those granted to Home Civil Servants.
These figures are:-
Annual pension.
Plus lump
sum payment.
£ s. d. 933 6 8
In
£ 8. d.
1924
280 0 0
1925
292 10
0
966 13
4.
1926
305 0 0
1000 0 0
1927
317 10 0
1033 6 8
1928
330 0 0
1066 13 4
1929
342 10
0
1100 0 0
1930
355 0 0
1133 6 8
* See No. 59 in Miscellaneous No. 321.
+ See No. 65 in Miscellaneous No. 821. I No. 24. The Sub-Committee consisted of Sir Herbert Read, Dr. Andrew Balfour, with the Director, and the Secretary of the Committee. || No. 25.
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Annual pension.
Plus lump sum payment.
£ s. d.
1166 13 4
In
£ 8. d.
1931
367 10 0
1932
380 0 0
1200 0 0
1933
392 10
0
1293 6 8
1934
1935
1936
417 10 430 0 0 Proposals.
405 0 0 0
1266 13 4 1300 0 0 1333 6 8
6. The Societies selected by Dr. Bagshawe for enquiry were (a), the Legal and General Life Assurance Society, Ltd., and (b) the Equitable Life Assurance Society, Both Societies are on the list of approved Societies selected after expert and independent actuarial enquiry in connexion with the Federated Superannuation System for Universities.
The Legal and General Assurance Society is a proprietary company paying interest (dividends of 184 per cent. free of income tax were paid in 1922 and 1923) to its shareholders; the Equitable Life Assurance Society is a Mutual Office, and the whole of the divisible profits are allotted to participating policy-holders. benefits offered by the former Company are to be regarded as definitive; in the case
The
of the latter the amounts of the annuities with return of premiums are the guaranteed minima for the premiums named and are likely to be larger.
7. The Societies were asked to quote rates, with and without return of
premiums, for securing Deferred Annuities
(a) of £367 10s. Od. at age 60, i.e. in 1931. (b) of £430 0s. Od. at age 65, i.e. in 1936. Their quotations are as follows:-
Legal and General Assurance Society. £ 8. d.
490 0 0*. 456 10 0
(a) Annuity of £367 10s. at age 60 with
return of premiums
do. without return of premiums
(b) Annuity of £430 at age 65 with return
of premiums
do. without return of premiums
Equitable Life Assurance Society. £ 8. d.
498 18 Ot
453 14 0§
271 1 0*
267 10 ot
221 12 01
219 0 0§
Legal and General.
Equitable Life.
£ S. d.
£ 8.
d.
9
4 2
The guaranteed rates of Annuity to be allowed for each £100 available on retirement are
At age 60 At age 65
9 8 4 10 13 0
10 16 4
8. With one exception, the annual premiums asked by the Equitable Life Assurance Society are lower than those asked by the Legal and General Assurance Society for comparable benefits, and in all cases the terms of the Equitable Society's proposals, in the event of death or surrender and in the matter of Cash Options, appear to be slightly more advantageous to the beneficiary. The preference seems, therefore, to lie with the Equitable Life Assurance Society.
9. To meet the requirements of the figures in the Secretary's Memorandum (see paragraph 5 above) for the Civil Service Superannuation provision, arrange- ments have to be made for
(A) the lump sum gratuity, equalling one thirtieth of the annual salary for each year of service up to a maximum of one and a half times the salary.
* The amount returnable in the event of death or surrender before the Deferred Age is equal to all the premiums paid with three per cent. compound interest.
The amount returnable in the event of death or surrender before the Deferred Age is equal to all the premiums paid with 31 per cent. compound interest.
There is no payment whatever in the event of death before the Deferred Age. In the event of sur- render of the policy a cash value of 50 per cent. of the premiums paid would be allowed, subject to medica examination; or a fully Paid-up Policy would be issued proportionata t the number of premiums paid, without medical examination. The Cash Option on maturity is conditional upon the Annuitant passing a satisfactory medical examination at the time.
There is no payment whatever in the event of death before the Deferred Age. In the event of the nurrender of the policy a cash value equivalent to the premiums paid accumulated at 3 per cent. would be allowed, subject to evidence of health, or a Paid-up Policy would be issued at least proportionate to the eumber of premiums paid. The Cash Option 'on maturity is payable without evidence of health either at maturity or after.
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(B) The annual pension, representing one eightieth of the annual salary for each year of service, less £70, the sum named in the Secretary's memorandum as the estimated value of Dr. Bagshawe's Uganda pension.
In regard to (A) it is proposed that the sum now in the Provident Fund account (£971 11s. 3d., plus a small amount of interest which will accrue) be paid to the Equitable Life Assurance Society as a single premium for a Deferred Annuity Policy with return of premiums. It will thus accumulate at a guaranteed 34 per cent. compound interest (possibly up to four per cent. if present conditions are maintained), and in addition to securing ample provision for the lump sum gratuity will produce a small surplus to help meet, if need be, the uncovered liabilities in the earlier years of the scheme.
In regard to (B) it has to be appreciated that under a Deferred Annuity Policy without return of premiums all money invested on Dr. Bagshawe's behalf would be lost in the event of his death before the Deferred Age.
10. The choice, therefore, seems to lie between (1) a Deferred Annuity Policy, with return of premiums, securing for seven annual payments of £498 18s. (total, £3,492 6s.) an annuity of £367 10s. in 1931, or (2) a similar Policy securing for twelve annual payments of £267 10s. (total, £3,210) an annuity of £430 in 1936.
The amount of the annual premium under (1) may be thought prohibitive, but otherwise this proposal offers the simpler means of providing for possible retirement in 1931. Should, moreover, retirement be deferred to age 65, the cash value of the policy accumulating after 1931 at compound interest would be more than that necessary to purchase an annuity of £430 in 1936.*
11. In view of the smaller annual payments and the longer period over which these are spread, the proposal under (2) perhaps seems the more desirable, and is the one recommended for adoption provided some means be devised of securing cover for the liabilities which would arise if Dr. Bagshawe retired before 1936.
To make provision for this liability it is suggested that a sum be set aside yearly for say seven years out of the ordinary income of the Bureau to form a reserve fund which could be drawn upon in the event of Dr. Bagshawe retiring before the above Policy matures, but which in the event of its not being required for this purpose could be devoted to such purposes as the Committee might think suit- able. This reserve fund, it is suggested, should be invested with the Crown Agents for the Colonies. If, say, £200 were set aside yearly for seven years at 4 per cent. it would provide sufficient cover for possible retirement in 1931; after 1931 this reserve fund could be gradually released for other purposes as the amount of cover provided under the Assurance Policy increased.
Conclusions.
12. If the above proposal be approved the scheme resolves itself into :- (A) The payment of the balance now standing to the credit of the Provident Fund Account to the Equitable Life Assurance Society as a single premium for a Deferred Annuity Policy on Dr. Bagshawe's life, with return of premiums, maturing in 1936, but surrenderable at any earlier date.†
(B) The payment of twelve annual premiums of £267 10s. to the Equitable Life Assurance Society for a Deferred Annuity Policy with return of premiums on the life of Dr. Bagshawe to provide an annuity of £430 in 1936.
(C) The setting aside out of the income of the Bureau annually for seven years for investment with the Crown Agents for the Colonies of a sum sufficient to provide an adequate reserve fund to be drawn upon in the discretion of the Managing Committee to supplement, if need be, the provision made above for Dr. Pagshawe's retirement. It is suggested that, say, £200 a year at 4 per cent. com- pound interest, free of income tax, would suffice, if such a rate of interest-could be arranged through the Crown Agents. This would provide, approximately, £1,579 in 1931.
The Policies under (A) and (B) above would be taken out in the name of the Chairman of the Managing Committee of the Bureau in order to bring them into line with the Policies held under the Federated Superannuation System for Universities for other members of the Bureau staff.
To secure the benefits outlined, the first payments would need to be made before 29th July, 1924.
* At 8 per cent. compound interest the cash value in 1936 would be about £4,668 equivalent to an annuity of approximately £504.
+ The amount returnable before 1986 would equal the single premium plus 3 per cent. compound interest to date of surrender.