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HON. COLONIAL SECRETARY,-After ascertaining the views of the Contributors to the Widows and Orphans' Pension Fund on the proposal that the Government should take over the Fund we find:
That a large majority of members is strongly opposed to the Fund being taken over by the Government.
2. With regard to this finding it is argued that the valuation of the Fund as it existed on 31st December, 1900, showed that the gross liabilities of the Fund then amounted to $232,337, that there was a surplus of between 4 per cent and 5 per cent of the liabilities and that therefore the Fund was so far in a sound financial position: that although the present liabilities of the Fund could not be determined until a further valuation took place. the balance to credit of the Fund on 31st December, 1906, amounting to $272,022 appeared to indicate that the Fund was maintaining a position of solvency: that the financial position of the Fund as disclosed by the next valuation or by some future valuation might justify an increase in the benefits derived from the Fund and that the benefits now offered were not sufficient compensation for the sacrifice of possible prospective benefits and for the loss of management.
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3. As regards the contention that the Government made in effect a large contribution to the Fund by agreeing to pay interest at the high rate of 6 per cent on the monies belonging to the Fund deposited with it' we would point out that the rate of interest charged on loans against first class security by the Hongkong and Shanghai Banking Corporation since 1891 has been:
To the Governinent.
51% per an.
per an.
To the Public.
From 1.1.91-31.8.91
7% per an.
1.9.91-30.9.92
6% per au.
1.10.92-30.9.95
?'
7% per an
6% per an.
% per an. % per an.
From 1.1.91-date
2% per au.
1.10.95-date
and on current account :—
From these figures it is evident that the monies belonging to the Fund deposited with the Government have possessed a value to the Government of 2%-5% varying with the state of its banking account. And it is within our knowledge that for some years past and for periods varying in length the Government's account with the Bank has been overdrawn as a result of currency transactions.
It is also evident from the figures that the monies belonging to the Fund have possessed a marketable value during the whole period equal to and during part of the period exceeding the Government's contribution.
Further, we have made enquiries and are informed on good authority that the Fund could be lent out on mortgage at the present time at as much as 8% -9% and that this form of investment would offer the very best security to the Contributors.
4. We would suggest therefore as a means of relieving itself of the burden of paying 6% on surpluses that the Government might itself invest or appoint trustees to invest the monies belonging to the Fund in approved local securities.
5. In conclusion we would respectfully submit that the large majority of the Contribu- tors, in view of the fact that they are never likely to be transferred, cannot be regarded as being affected by the argument for the Fund being taken over by the Government and for the introduction of the Ceylon Tables that "it is very desirable that the pension rates in Hongkong, the Straits Settlements and the Federated Malay States should be the same, especially as for some purposes the three administrations are manned by a joint service". The very small section of Contributors who are eligible for transfer have presumably no other advantage to gain, the pension funds of the three administrations being distinct. than that they would not on transfer find themselves possibly compelled to subscribe to a Fund at a higher rate than that to which they have been accustomed.
S. B. C. Ross. FRANCIS CLARK, E. H. D'AQUINO. R. CROFTON,
Directors.
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