In order to cover all the ground, I think it will be best if I try to give you my line of thought in dealing with a large Industrial Company desirous of establishing a Contributory Pension Fund, but in this connection I shall not discuss formulae or the construction of Valuation Factors.

I do not propose to dwell at length on Schemes under what is known as the “Money Purchase Plan” or, in other words, a series of deferred Annuities, where each Contribution purchases a definite amount of deferred Annuity. Except in the case of a very small Staff or a group of small Staffs where the numbers are few and where the salaries cover a wide range, such a Scheme does not meet the needs of the Staff and moreover, it is very inflexible. In fact, it is impossible to form a Scheme on this basis where the Pensions are to be calculated as a percentage of the retiring salary or wages or an average of the salary or wages received during the five or seven years prior to retirement. Further, no provision is made for Incapacity Pensions and, if Contributions are fixed, no definite relation can be established between Pension and retiring Salary or Wages.