Following the Civil Servants Scheme a number of metropolitan boroughs introduced pension arrangements at the beginning of the last century, but here Manchester was in the forefront in that the City of Manchester Thrift Fund was introduced in 1891. The Scheme provided that any employee of the Corporation earning a salary or wage at a rate of not less than 30 shillings a week should contribute and pay to the Thrift Fund an amount of 33/4% of such salary or wage. The amounts contributed were invested in trust securities as then defined, which in the event were fixed interest, and the Corporation guaranteed an overall rate of interest of 4%. The prescribed age was 65 and on survival to that date the total amount standing to the member's credit was available to be paid out. Any member leaving the service or dying before age 65 received the total contributions and interest at the time of leaving the service or dying. It was probably anticipated at the time the Thrift Fund was established, that it would facilitate the superannuation of persons in the service at or soon after age 65.

In fact, because the amounts accumulated by individuals in the Thrift Fund were so small retirement rarely took place at age 65, but service continued until breakdown in health had occurred. The Fund was therefore more in the nature of a savings bank than a superannuation scheme. This was recognised by the City in 1913, when the Corporation considered bringing in a superannuation scheme and decided to call in an actuary to advise on this proposal. Mr Duncan C Fraser, MA, FIA, who was the actuary of the Royal Insurance Company, was invited to act and his report was presented to the Corporation in August 1913. There was, however, some opposition to the proposals and then, because of the outbreak of the First World War in 1914, the whole matter was postponed.

A very important and also generous feature was that all employees who had previously contributed to the Thrift Fund were given the option to transfer their contributions to the new Fund and count all past service for pension purposes.

Troops going to war, Albert Square, Manchester

As a result of the counting of back service for those members of the Thrift Fund who elected to transfer and because the total contribution rate of 10% of salary was only sufficient to meet future benefits, a considerable liability of £793,478 fell on the Corporation. It was proposed that this be met by equal annual payments of £34,990 for a period of 60 years. The Scheme was then implemented by the Manchester Corporation (Superannuation) Act 1920.

The Scheme was funded from the start (as opposed to pay as you go), and provided for an actuarial valuation every five years. The first was on 31 March 1926 when the fund had reached a figure of £1,676,201, and disclosed a surplus of £58,957. This was carried forward unappropriated. The investments of the fund were limited to trustee securities as then defined, which in the event restricted the investments to fixed interest securities. A summary at the date of subsequent valuations is given in Appendix A.

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