305
15. The proposed return of the interest each year as bonus obviously annuls accumula- tion at compound interest and thus effectively prevents the final satisfaction of the obligations. Compound interest is as essential in all Funds with prospective liabilities as appropriate rates of mortality, and the very pensions incorporated in the arithmetical illustration assume the operation of compound interest as the indispensable condition of their maintenance.
16. It is stated by the Directors that we expressed a judgment that at the end of two lecades the Ceylon Fund will have reached its maximum of pension expenditure. No such opinion has been submitted by us. If the admission of new contributors ceased it would be possible to estimate approximately the date at which the pension payments might be expected to attain a maximum amount, but the Ceylon Fund is constantly recruited by new entrants in numbers that vary considerably from year to year, and the total membership has largely increased as will be seen from the following figures :-
No. of contributors at end of 1884....
1889.
1894..
1899..
1903....
.1,075
.2.195
.3,078
.4,039
.4,592
It is obvious that each increase of membership tends to defer the date at which the various items of the Fund's accounts will attain a position of stable equilibrium. As explained in parapraph 12 above, the average perio:l of membership of the present con- tributors cannot be very great.
17. Referring to the calculations in paragraph 13 of the Directors' Report, where au annual increase in the pension payments of Rs 7,000 is assumed which gives an increase over a period of 10 years of Rs 385,000, it may be well to point out that by doubling this last amount and allowing for an increase of Rs 770,000 during the following 10 years, the annual increase during the second period is not Rs 14,000 as might be supposed from a hasty perusal of the Report. This is evident from the following stateinent :-
Approximate pensions for year 1903 according to new Tables......
Pensions for year 1904 if increase be Rs 7,000.......
Do.
1905
do.
Do
1906
do.
Do.
1907
do.
Do.
1908
do.
Do.
1909
do.
Do.
1910
do.
Do.
1911
do.
Do.
1912
do.
Do.
1913
do.
Total for 10 years 1904-13
Rs. 104,000
"
111,000
118,000
125,000
>>
132,000
139,000
146,000
153,000
160,000
21
167,000
174,000
Rs 1,425,000
Pensions for year 1914 if increase be Rs 14,000..
R$
Do.
1915
do.
188,000 202,000
99
Do.
1916
lo.
216,000
Do.
1917
do.
230,000
Do.
1918
do.
244,000
Do.
1919
do.
258,000
>>
Do.
1920
do.
272,000
Do.
1921
do.
286,000
Do.
1922
do.
**
300,000
Do.
1923
do.
314,000
Total for 10 years 1914-23
The total for the second decade is greater by
Rs 2,510,000
""
1,085,000
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