SUMMARYHISTORYOFTHEWELFARESTATEINNEWZEALAND

PaulCarpinter

11September2012

PaulCarpinterpreparedthisreportasaconsultanttotheTreasuryaspartoftheworkonthe
LongTermFiscalStatement.Paulisaformerseniorpublicservantwhohasworkedinthe
centralagenciesformostofhiscareer.HewasCEOoftheMinistryofCommerceandthe
MinistryofEconomicDevelopmentbetween1996and2001.

ThereportdrawsheavilyonthemuchmoredetailedpaperspreparedbyMichaelBelgrave,
BernardCadogan,andBrianEaston.However,thereportpresentstheauthorsviewsandall
errorsandomissionsarehisresponsibility.Inparticular,thisreportdoesnotpurportto
representtheviewsoftheTreasury.

Treasury:2445581v11

Introduction

ThispaperbrieflysummarisesthehistoryofNewZealandssocialwelfaresystem,and
comparesNewZealandsexperiencewithothersimilarsocieties.Italsotouchesonthemajor
demographicchangesthathavealreadyoccurredandthatwillcontinueintotheforeseeable
future.Themainissueitattemptstoresolveisthecapabilityofourinstitutions,broadly
defined,tocopewiththechallengesthatourchangingdemographicspose.Ourageing
populationisageing,anditsstructureischangingquickly.

Theconclusionsitreachesare;

1) NewZealandhassuccessfullydealtwithmajorchallengesoveritshistorytodate,
andthereseemstobenoreasonwhyitcannotdealwiththechallengeposedby
demographicchanges;and

2)Majorchangeintheeconomyandinsocietywillremainaconstant.

NewZealandsHistory

Economicsisultimatelyabouthowchoicesaremade.Thispapersetsouttoprovidean
accountofthechoicesNewZealandhasmadeovertime.Thetermwelfarestateisassumed
tocoverhealth,educationandwelfare.Althoughthemajorfocusonsocialwelfareinthelast
fewdecadeshasbeenonincomemaintenance,similarissuesariseinallthreeareas.The
amountsspentonhealthandeducationweremuchhigherthantheamountsspentonincome
supportandmaintenancetillcomparativelyrecently.

1850s1890s

Fromthe1850stothe1890s,NewZealanddevelopedasacolonyofGreatBritain,butwitha
societythatwasdeliberatelymoreegalitarianthanGreatBritainswas.Althoughits
underlyingphilosophywasbasedonthethencurrentideasofindividualresponsibilityand
capitalism,theGovernmentitselfdeliberatelyplayedamajorroleineconomicandsocial
development.InstitutionssuchastheGovernmentLifeInsuranceDepartmentwerecreatedto
mobiliselocalsavingsandtoprovideincomesupportlaterinlife.Landwasseizedfrommajor
landholdersandbrokenupintosmallerholdingsformoreintensivefarming.TheGovernment
borrowedheavilytofundtheconstructionofrailwaysandotherinfrastructure,apolicywhich
eventuallyranintoseriousfinancialdifficulties,partlyasaresultofthecollapseoftheCity
BankofGlasgow.

ThisperiodalsosawseriousconflictbetweenMoriandPakehasettlers,especiallyoverland
ownershipandcontrol.Theresultsofthisconflictarestillverymuchasubjectofpolitical
interestanddecisionnow.

1898sawthecreationofthefirstpubliclyprovidedpensionforpersonsofgoodcharacter
aged65andover.Althoughthepensionwasmeanstestedandincometested,additional
incomefrominsuranceproductsfromthelikesofGovernmentwasallowed.Itwasseenat
thetimeasabetterandfaireralternativethantheexistingcivillist,whichreliedheavilyon
graceandfavour.Comparativelyfewwereexpectedtoreceivethepension,andthetakeup

Treasury:2445581v12

rateamongstthetargetgroupwasreportedtobelessthan40%.Oneoftheotherreasons
advancedforthisreformwastorecognisetheservicebythosewhoparticipatedintheland
warsbothPakehaandMori.Thepensionitselfwaswellbelowaverageincomes.Itwas
administeredthroughtheCourtsandthePostOffice.ThelocalMagistratedecidedifan
applicantqualified,andthePostOfficehandledthepayments.

Overthiscolonialperiod,HealthandEducationweregenerallydeliveredatprovinciallevels,
andoftenthroughtheprivatesector,religiousorganisationsandNGOs.Therolesforcentral
Governmentwerelimitedtooversightandfundingoftheexistingprivateorprovincial
systems.TheinitialHealthMinistrywasactuallytheDepartmentofPublicHealth,andlocal
EducationBoardsranthepublicschoolsystem.

ForMori,whanauremainedthetraditionalmeansofsupportfortheelderly.Whilethe1898
pensionwasavailabletoMori,inpracticefewMorireceivedit,partlyduetodifficultiesin
provingtheirageandincome.ThoseMoriwhodidreceivethepensionoftenreceiveditata
lowerratethantheirPakehacounterparts.

1900s1940s

Fromthe1900stothe1940s,NewZealandenduredthesamecataclysmsastherestofthe
developedworldWorldWar1,theSpanishflu(amajorpublichealthdisaster),andthe
GreatDepressionofthe1930s.ThecentralGovernmentsrolesinHealthandEducationgrew
inscope,frommerelyPublicHealthtoallHealth,andfromcentralsupporttotheprovisionof
schooling.Incomesupportcontinuedtobebasedonthethoughtofmutualobligation.In
particular,receiptoftheunemploymentbenefitrequiredtherecipienttobeavailablefor
work.ThisincludedPublicWorksintheearlytomid1930s,thesocalledSugarBagyears.

Thereformsof1935to1938startedtoreducetheconditionalityofbenefitpayments,inan
attempttosoftentheimpactonfamiliesandindividualsoftheexistingsystems.Awiderange
ofnewincomesupportprogrammeswerealsointroduced.Theseincludedthecreationofa
twotierpensionregime.ThefirsttierwastheOldAgeBenefit,whichstartedatage60.This
wasmeansand/orincometested,andwasintendedtorecognisethosewhohadworkedin
difficultworksinceleavingschool,oftenatage13.ThesecondtierwasUniversal
Superannuation,whichwasnotmeansorincometestedandwasavailabletoallNew
Zealandersat65.UniversalSuperannuationstartedatalowerpaymentratethantheAge
Benefit,butthisgraduallyincreasedtillparitywasreached.Itwasintendedthatatax
surchargeof5%ofincome(actuallyoneshillinginthepound,laterrisingto1/6inthepound)
wouldfundmostofthesechanges.

Itwouldbeamistaketoseethe1930sreformsassimplybeingaboutincomesupport.There
wasalsoastrongemphasisonemploymentandeconomicdevelopment.Thereweremajor
changesinthetradeandlabourmarkets,withincreasinglytightquantitativecontrolson
importsalongsideamuchmorecentralisedwagefixingregime.Together,theseaimedat
improvingtheabilityofincomefromemploymenttoprovideadequateincomefortheworking
manandhisfamilywelfarebyothermeansaswellasfosteringthegrowthofthe
industrialsectors.

Thesechanges,alongsidefallsinexportreceipts,contributedtoseriousdifficultiesinraising
debtinLondoncapitalmarketsin1938and1939.

Treasury:2445581v13

1942wasnotablefortheUnitedKingdomsBeveridgereport,whichprovidedasolidsupport
forthegrowthofthewelfarestateafterWorldWar2intheUnitedKingdomandbyextension,
inNewZealand.Insomeways,BeveridgefollowedNewZealandslead.Thiswasamongstthe
firstreportssuggestingthatthestatehadanobligationtosupportitscitizensincopingwith
seriousproblemsatthetimeperhapsasaformofquidproquofortheeffortsofallclassesin
successivewars.Italsosuggestedrelyingoninsuranceprinciplestofundnewerprogrammes.
Inotherwords,fundedschemeswerefavouredoverthealternativeofpayasyougo.Inthe
event,mostgovernmentshavefavouredpayasyougoschemesforpensionpayments,but
fundedschemeswhereinsuranceprinciplesareappropriate(asforACCnowinNewZealand).

1950s1970s

The1950stothe1970swereaverydifferentworldforNewZealand.Fullemploymentwas
probablythehighestpriorityforsuccessivegovernments.NewZealandwascomparatively
undamagedbyWorldWar2,andincomesremainedrelativelyhigh.Thepostwarbabyboom
ledtogrowthinhousingandeducationspending,andthepreferentialaccesstotheUK
marketsprovidedsolidsupportforrisingincomes.Itisalsonotablethatalthoughtherewere
generouswelfarepensionsforreturningveterans,relativelyfewusedthem.Thesameistrue
forunemployment.Gainingtheunemploymentbenefitrequiredregistration,andsurprisingly
fewdidso.Therewasnormalchurninthelabourmarket,butmostseemedtofindother
employmentwithoutlookingtoGovernmentsupport.Thereisananecdotefromthetimethat
inoneparticularmonth,thereweretworegisteredunemployedinAuckland,andtheMinister
ofLabourknewbothofthem.

Attheendof1972,NewZealandwasanetcreditornation,anditsGDPperheadwasabout
thesameasthatofAustralia.The1972RoyalCommissiononSocialWelfarerecommended
thatthewelfaresystemshouldensurethateveryoneisabletoenjoyastandardofliving
muchliketherestofthecommunity,andisthusabletofeelasenseofparticipationinand
belongingtothecommunity.Thisisasubstantiallydifferentideatothethinkingbehindthe
initial1898pensionsystem.

MajorwelfareinnovationsoverthisperiodweretheintroductionofACC,andtheDomestic
PurposesBenefit.Bothhadlimitedaims,buttheircoverageandimpacthasbeensubstantially
greaterthanthearchitectsmayhaveassumed.Attheendof1975,NewZealandvotedforthe
choiceoftherelativelygenerouspayasyougo(60%at60)NationalSuperannuationscheme,
insteadoftheoptionofaveryrecentlyintroducedfundedpersonalisedsuperannuation
scheme.

The1970ssawthestartofamajorincreaseinworkingagebenefitreceipt:fromaround2%in
theearly1970sandpeakingatcloseto16%inthe1990s.

1980s2010

Fromthemid1980s,NewZealandfacedthetriplechallengeofabsorbingtheeffectsofthe
UKsentryintoEurope,theresultingneedtomovetowardsmoremainstreamOECDstyle
economicpoliciesandtheneedtoreacttochangingoilprices.Majorreformswerecarriedout
inmanysectors,fromtheoperationofmonetarypolicytothewaysinwhichtheGovernment
itselfwasorganised.Welfarebyothermeanswasdismantledaslabourmarketinstitutions
andobjectiveschanged,andasfamilystructureschanged.ThequalifyingageforNational

Treasury:2445581v14

Superannuationwasprogressivelyraisedoveranumberofyearstostandat65,whichhadthe
effectofloweringtherelativelivingstandardsofthosewhomighthavepreviouslyretiredat
age60andmettheincomeandmeanstestfortheAgeBenefit.Thedefinedbenefitpublic
sectorsuperannuationschemes,suchastheGovernmentSuperannuationFund,wereclosed
tonewmembersasthelongtermcostoftheschemebecameapparent.Itwasreplacedby
theStateSectorRetirementSavingsScheme,whichwasinturnreplacedbyKiwiSaver.

Othermajorchangesincludedinthe1980sincludedtheexpansionoftheWaitangiTribunals
initiallymodestremitintoanexpansivemandatetoexaminehistoricTreatyofWaitangi
claims.Bytheendoftheperiod,somemajoriwihadusedtheirsettlementstobecome
substantialplayersinthedomesticandexporteconomies,andhadalsoplayedasubstantial
roleinfundingeducationfortheirtamarikiandmokopuna.Ontheotherhand,Moriarestill
substantiallyoverrepresentedinthepoorergroupsofsociety.

Inthelatteryearsofthisperiod,NewZealandintroducedsomeprefundingoffuture
retirementincomeprovisionthroughtheestablishmentoftheNewZealandSuperannuation
FundandthroughthecreationofKiwiSaver.Thisrepresentedaninitialmovementtoprefund
someofthefuturecostofstatepensions,andtoreintroduceinsuranceprinciplestothe
provisionofprivateretirementincomeprovision,ashadbeenbrieflyattemptedinthe1970s
andrecommendedbyLordBeveridgein1942.

Thisperiodalsosawsubstantialchangeintherespectivesocietalrolesofwomenandmen.As
notedabove,the1930sparadigmwasbasedontheideaofsufficientincomeforaworking
mantosupporthiswifeandchildren.Familystructuresarenowoftenmuchmorecomplex.
Womenhavesoughtandgainedtheabilitytoparticipateintheworkforceonequalterms
withmen(althoughtheremaystillbesomewaytogobeforeequalityisfullyreached).Asfar
aspensionsareconcerned,womenstilllivelongerthanmenonaverage.

Lifeexpectancieshavecontinuedtorisethroughoutthelast160years,atfirstbecauseofthe
reductionsindeathratesfortheveryyoung,andmorerecentlybecauseofotherlifestyle
changesandmedicaldevelopments.Familystructuresarealsochanging,fromhorizontalto
vertical.Greatgrandparentsarebecomingmorecommon,whiletheaveragenumberof
childrenperfamilyhasreducedsubstantially.

Alengthyperiodinretirementisalsoarelativelyrecentconcept.Qualifyingagesforstate
providedpensionswereusuallyaroundorbelowtheaveragelifeexpectancyofpeopleinitially
qualifyingforthematthetimethattheywereintroduced.Thenotableexceptiontothisis
NationalSuperannuationin1976.

Recenttrendsinlabourforceparticipationforthoseover65suggestthereareverygood
reasons,quiteapartfromfiscalconsiderations,forstayinginvolvedintheworkforce.These
includephysicalandmentalhealthbenefits,andastrongersenseofbelongingand
contributingtosocietyfactorswhichenhancebotheconomicpotentialandsocialoutcomes.

Finally,stateprovisionofeducationandhealthserviceshasbecomedominant.NewZealand
consistentlyrateswellinternationallyinoutcomesinbotheducationandhealth,withthe
notableexceptionofsomeofthepoorestgroupsinsociety.

Majorthemesfromallofthisare;

Treasury:2445581v15

Aswithmostothercountries,NewZealandhashadtomeetandabsorbenormous
internalandexternalchallenges.
Majorchangehasbeenaconstant,butinstitutionshavegenerallyprovedflexible
enoughtocope.Newinstitutionshaveemergedtodealwithparticularissues.
Viewsontherightsandobligationsofcitizenshavesubstantiallychanged,inlinewith
changesintheviewsoftherolesofthestate.Muchofthisisreasonablyrecent
manymoreintargetgroupsnowaccessstatesupportasamatterofroutine,
comparedwithearlierexperience.

Onewayofchartingthelast160yearsisthatNewZealand,alongwithmanyothercountries,
hasbeensearchingforanoptimalbalancebetweenpublic/stateandprivateprovisionof
importantservices.NewZealandnowhasamaturewelfarestatethestatusquoagainst
whichchallengeswillnodoubtarise.

TheOECDhasrecentlydescribedrecentperiodsasthegoldenageofpensionsforitsmember
countrieslownumbersofpensionerscomparedwiththoseintheworkforce,andalong
periodofsustainedgrowthallowingforhigherlivingstandardsforallcitizens,including
pensioners.AllOECDmembersfacethekindofchangingenvironmentthatNewZealand
does,andsomehaveconsiderablybiggerchallengesthanNewZealandhas.

QuestionsforthePanelDoesthisadequatelydescribeNewZealandshistory?Isthe
conclusionthatNewZealandsinstitutionareflexibleandrobustenoughtocopewiththe
challengesoftheLongTermFiscalenvironment?

InternationalPerspective

Supportingandhonouringtheelderlyhasbeencentralinsocietiesandinstitutionsacross
historyandreligions.InNewZealandbothPakehaandMorihavestrongviewsabout
recognisingthecontributionsmadebyoldergenerations.

Itispossibletofindtheequivalentsofincomesupportandtransferpaymentsinmuchearlier
times.Jerusalemmaintainedfoodstocksfordistributiontoinhabitants.InRome,somebasic
fooditemsweresubsidised.Thetargetgroupswereinitiallyquitesmallinnumber,butover
timeamuchgreaterproportionofcitizensqualified.Itisalsopossibletofindevidencethat
difficultiesinfundingfoodsubsidiescontributedtothedeclineofRome.Fiscalconsolidation
isnotanewproblem.

Moregenerally,therewasapatterninRomantimesthatwasrepeatedlateracrossEurope.
Settlersfollowinginvadingarmiesweregivenlandatverylowcost;greatertradeand
specialisationledtothegrowthoftowns;thosewholivedintownstendedtohavehigher
incomesthanthoseinvillagesandthoseworkingdirectlyontheland;thosewhowereslaves
orservantsintownscouldbecomefreemen,whilethesameoptionwasrarelyavailable
elsewhere.Careoftherelativelyelderlywastheresponsibilityoftheirfamilies.

Religionsinitiallyemphasisedthegeneralbenefitsofcharityandtheworthofworkingwiththe
pooranddisadvantaged.LaterEuropeanthoughtparalleledthegrowthincivilsociety,and

Treasury:2445581v16

focusedmoreonthedutiesandobligationsofindividuals.Overtime,mutualobligations
becamemoreimportant.Atthesametime,theideaofdeservingpoorfoundsomesupport.
LocalandcentralGovernmentsgraduallytookmoreresponsibilityfortheorganisationand
affairsofsupportforcitizens,withreligiousorganisationsandothernongovernment
organisationsprovidingless.

MedievaltimessawthedevelopmentoftheEnglishjusticesystemovertime,throughthe
codificationoftheexistingcommonlawandestablishingtheprinciples,ifnotthepractice,of
anindependentjudiciaryandthejurysystem.Earlierconflictbetweenthekingandnoblesled
totheMagnaCarta,andlatertothedevelopmentoftheconceptofhabeascorpus.The
importanceofthesestepswasnotobviousatthetime(atleastpartlybecausetherewere
relativelyfewfreemen),butthethinkingbehindthemhascontributedsignificantlyto
todayssocieties,includingourown.

Themodernwelfarestatecanbetracedbacktotheseearlyfoundations,eveniftheactual
systemsinmanycountriesdiffersignificantly.

OttovonBismarcksGermanywasthefirsttoofferwidelyavailablepublicpensions,butthe
qualifyingageforthesewasslightlyabovethethenlifeexpectancy.Itcouldbesaidthatthe
pensionwasmorearewardforlongevityandmilitaryserviceratherthantheprovisionof
retirementincomeovermanyyears.Bismarcksawthepensionaspartofanoverallstrategy
tomoderniseanduniteGermany,withastrongleadfromthecentre.

FollowingGermanyslead,acommonapproachacrossstateswastocreatepensionstoreward
thosewhofoughtforthestate.Statesalsostartedtoprovidepensionsforthoseinpublic
service,perhapstorecognisethatthesepeoplemayhavefoundithardtouseprivate
providerssuchasinsurancecompanies,andperhapsaspartoftheoverallagreementabout
howthepublicserviceshouldoperate(asinNewZealandspublicsectorreformsin1912).The
rewardforbeingloyalanddiscreetservinggovernmentsofallcolourswasapensionthat
allowedforamodestretirement.

Moststateshavegreatlyincreasedthecoverageofpensionandotherincomemaintenance
provisionsforalltheircitizensoverthelastcentury.Itisfairtosay,astheOECDhas,that
manystatesincomemaintenance/welfareschemespeakedinthe1970sand1980s.Sincethen
governmentshavestartedtolookforotherwaystomeettheirsocialpolicyobjectives,andto
retrenchtheprovisionofpensions.

Itispossibletocategorisecountriesdependingonthekindsofapproachestheyhavefollowed.
Thefollowingbreakdownhasbeenuseful;

1/theBismarckianWelfareState.
2/theLiberalWelfareState.
3/theSocialDemocratWelfareState.
4/theMediterraneanWelfareState.

Thesearereasonablyselfexplanatory,andprovideforusefulcategorisationforthegeneral
directionsfollowedbydifferentstates.Butitisimportanttonotethatcountrieswithsimilar
backgroundshavefolloweddifferentapproaches.Australiaspensionarrangementsarequite
differenttoNewZealands,andCanadaisnotableforbeingalatemovertowardsincome
maintenanceideasandanearlymoverawayfromthem.AsfarastheUKisconcerned,the

Treasury:2445581v17

centrepieceofitssocialwelfarsystemistheNHS,ratherthanincomemaintenanceorpension
schemes.

Manystateshavediscoveredorrediscoveredpermanentintergenerationalpoverty,which
providesacritiqueoftheevolutionofwelfarepolicies.Ifoneoftheoriginalobjectivesofthe
modernwelfarestatewastoreachdownandprovidegreaterequalityofopportunity,freedom
fromwant,andparticipationinsociety,thenthedesignandimplementationofwelfare
systemshavebeenatleastpartiallyunsuccessful.

TheGFCandthemorerecentproblemsinEuropehaveledtoamuchsharperfocusonlonger
termfiscalobligations.Thereisnowanalmostuniversalmovetoraisetheageofentitlement
topensionsto67oraboveamongsttheOECDcountries.

Finally,itisinterestingtonotetheprogressbyrapidlydevelopingAsiancountriestotheirown
formofwelfarestateandincomemaintenance.Althoughsafetynetsarespreadingand
becomingmorerobust,theratesofsupportarenothigh.Therealsoseemstobeastrong
senseofmutualobligationinreturnforthissupport,citizensareexpectingtobelookingfor
waysbackintothelabourforce.PerhapsthisiswherethemaindebateforNewZealandwill
bewhatisthenatureofmutualobligationwewouldliketoseeinourwelfaresystemover
thefuture?

QuestionsforthePanelDoesthisprovideenoughbackgroundofinternational
developmentstobeuseful?Arethereissuesthatneedmorecoverage?

EquityandFairness

Centraltoalldiscussionsaboutincomemaintenanceandpensionsareconceptsofequityand
fairness.Tobeenduring,policyregimesmusthavemajoritysupportfromcitizens,and
gainingthatsupportrequiresexplicitorimplicitagreementofwhatfairnessandequitymean
intheirsociety.Thisisnotatrivialpoint.

Thereisaseparatelongerpaperontheevolutionofthinkingaboutequityandfairness.The
followingprovidesashortsummaryofwhateconomicscansayabouttheseconsiderations.
Economiststalkofhorizontalandverticalequity.Thefirstmeansthatthosefacingthesame
issuesshouldbetreatedthesame.ThiscanbetracedbacktotheMagnaCarta,andperhaps
totheGospel.Thesecondmeansthatthosewithhigherincomescanbeexpectedtopay
proportionallymoretaxesthanthoseonlowerincomes.Thistooisrelativelyuncontroversial.
However,fairnessideasdochangewithgenerationsandcircumstances,asalreadynotedin
thediscussionaboutthe1898pensionandthe1972RoyalCommission.Overtime,ideas
aboutindividualandfamilyresponsibilitymovedtosharedresponsibilitywithrestofsociety,
andarenowperhapsheadingbacktowardsindividualsandfamilies.

Asfarasintertemporalequity/fairnessisconcerned,citizenstendtohonourthepast(war
heroes,thosewhohavegonebeforeus)andwantbetterfortheirchildrenthantheymayhave
achievedforthemselves.

Treasury:2445581v18

Fromfirstprinciples,itispossibletoarguethatindividualsowenothingtothepast,since
previousgenerationspresumablyoperatedintheirownbestinterests.Inturn,thiswould
implythatthereisnoparticularobligationforindividualstocareaboutthefutureaftertheir
owndeaths.

Thereissomesupportforthisfromeconomics.Adiscountrateof6%,basedonthesafest
investmentsavailable,impliescitizensseelittlevalueinassetsorliabilitiesbecomingdue50or
60yearshence.Citizensmightcareabouttheimmediateprecedinggenerationand
immediatelyfollowinggenerations,butnotmuchmorethanthis.

Thishasimportantimplicationsfordecisionsaboutprefundingandwhetheritispossibleor
desirabletodecidenowonthedetailsofwhatmightbethefinalstageofevolutionofpension
andperhapshealthpolicies.

Prefundinghastwomajorsourcesofideas.Thefirstisfromeconomics,andsuggeststhatitis
moreefficienttosmoothtaxratechangesratherthanhavelargediscreetchanges.The
secondcomesfrompublicfinanceandsuggeststhatthosewhobenefitfromchangesshould
bearsomeofthecostsofthosechanges.Thosewhocanexpecttolivefor15totwentyyears
longerthantheirgrandparentsshouldbepreparedtobesomeofthecostsinvolved.The
majorconcernaboutprefundingcouldbetheperformanceofthefundsthatarebuiltup,and
aboutthefairnessoftheparticularschemechosen.

Asaconcreteexampleoftheimportanceoffairness,thereseemedtohavebeenabroad
consensusinsocietyin1975thatthegenerationthathadlivedthroughtheGreatDepression
andWorldWar2hadearnedthegratitudeofcitizensanddeservedahigherrateofpension.
Butlifeexpectancyhaschangedsomuchsincethenthatcitizensretiringnowcanexpectmany
moreyearsofretirementthanthoseretiringin1975.Itisalsonoteworthythattodays
retireesexperiencednothingasdevastatingasaworldwaroraworldwidedepression.Does
thisremainafairbargain?

QuestionforthePanelAretheseaccuratereflectionsofthewayideasaboutfairnesshave
playedoutinvariouscases?

Treasury:2445581v19