Los Angeles herald., 1905-12-09

Frank A. Vauderlip, vice president of
the National City bank of New York,
publishes an able article In the De
cember number of the North American
Review on Insurance for Working
men," I'm which he says.
"As a rule, those American corpora
tions which have adopted the old-age
pension system have treated the matter
in the light of deferred wages, the cor
poration bearing the entire expense of
the pension requirements. The method
of the Pennsylvania railroad Is typical
of this form.
an word. the Pennsylvania rail-
road retres upon Il pension all officers
and employees compulsorily at the age
of 20, and It may retire them between
the ages of Go and 70, provided they
have been thirty years in the service.
"The amount of the pension varies
with the years of service, and with the
average monthly pay for ten years pre-
ceding retirement. The average month
ly pay for the ten years is the basis
and the pension is 1 per cent of that
amount for each year of service. The
company reserves the right to alter
this basis whenever the allowance
made under it shall demand an annual
expenditure in excess of $390,000.
when the Pennsylvania officials
were examining the subject they found
that nearl. every important railroad
system in the world, outside of Amer
lea, had provided In some form for the
retirement of old employees. The basis
of the plans adopted by all the foreign
corporations and governments conten-
plated contributions on the part of the
men. That was not in accordance with
the ideas of the Pennsylvania officials.
In that case, the company wished to
assume all the expenses involved; and,
in that respect. the practice of the
Pennsylvania company and of most
other American corporations is at vari-
ance with the accepted practice else
where in the world. Another method,
of which a typical example is that of
the First National bank of Chicago,
provides for contributions to the pen
sion fund by both employer and en-
ploye.
"In respect to the age of retirement,
there is a fair amount of unanimity in
all plans. The majority of the schemes
fix the age at 65. A number of them,
the Pennsylvania railroad being an ex-
ample, give some play to the judgment
of employing officers so far as the re-
tention of employees between the ages
of 65 and 70 is concerned. The Carnegie
company retires men at the age of &C
and the rand Trunk railway of
Canada at the age of So.
"As general rule, in the plans thus
y,
length Of service is required as a con-
dition precedent to obtaining a pension.
The Canadian Pacific, Illinois Central
and Baltimore & Ohio railroads have
fixed that term of service at ten years.
The Carnegie company and the First
National bank of Chicago fixed it at
fifteen. The Southern Pacific and its
allied lines make it twenty years, while
the Pennsylvania railroad and a num-
ber of eastern roads make it necessary
for an employe to have been thirty
years in their service. On the other
hand. the Philadelphia & Reading has
adopted a very broad plan. On that
railroad, any faithful employe, ire
spective of age or Of length of service.
who is injured in the performance of
duty, or becomes incapacitated through
sickness, may be awarded such a pen
sion as the president of the company
determines.
Practically without exception those
American railroads which have adopted
the pension system provide the entire
fund out of which pension allowances
are paid The Grand Trunk railway
requires contribution of 21a per cent
of the monthly wages. The First Ma
tional bank of Chicago requires con-
tribution of 8 per cent While the en-
ploye contributes to the fund, provi-
sion is always made for the return of
ms payments in case he sewers his con-
nection with the service.
The reasons why institutions in the
United States are beginning to adopt
old-age pension schemes, embrace such
considerations as these:
THE pension attaches the employee
to the service, and thus decreases the
liability to strike. 1t makes more GER
tain continuance of efficient men in
the lines of work with which they are
perfectly familiar. OF quite as much
Importance is the fact that a pension
system enables employers ito dispense
with the elderly and Inefficient and
thus gives constant encouragement to
good effort on the part of younger
men hoping for promotion. When en-
ployes realize that unsatisfactory con-
duct may at any time lose them, not
only their present positions, a loss
which, in such labor market as ours.
might be easily made good-but that
it entails further the loss of a very
valuable asset, the employees right to
pension, the incentive to good conduct
is greatly increased. 1t operates espe-
cially as a means to retain men be-
tween the ages of 10 and so. when they
have acquired the experience and skill
which make them specially valuable
and prevents their being tempted away
by slightly increased wages for a tenn
1nnrin5