The Washington herald., 1907-10-20
PENSIONS FOR THE. AGED.

At the meeting Of the Actuarial Society
OF America. held In Toronto on October
I'D. paper was read by Benedict D
Flynn assistant actuary Of the Travellers
Insurance Company, entitled staff pen-
sion funds. with special reference to q
retirement plan for United States Civil
Service employees"
1t was essentially an exposition and in
dorsemeHt from the actuarial viewpoint
of the scheme devised by Herbert d.
Brown formerly a special examiner for
the Bureau OF Corporations Of the De-
partment Of Commerce and Labor. 10 III
the conditions peculiar 10 the United
States government service. This plan is
the one accepted and recommended by
the committee on department methods.
recently detailed in The Washington Her
aid
Mr. Flynn FIRST called attention to the
fact that the idea of providing for the
aged and faithful employe has not vet
seriously taken hold Of the American peo-
pie, but is beginning to occupy public at
tenion. and declared that the interest
which has been taken In the retirement
scheme worked out by Air. Brown for
United States civil service employees in
cate that the time IS not far distant
when the question Of national old age
pensions will be fully discussed and the
justice and advantages Of staff pensions
viii be more clearly understood
FavOFs Savings Bank Plan.
Practically an compulsory pension
schemes which depend IN any degree upon
the contributions Of their members con-
tain in their rules the privilege OF return
OF the wnc!e or part Of the contributions.
with or without interest. in case of with
drawal or death before the age of retire
ment IS reached.
In view Of these facts" continued Mr.
Flynn, the question which naturally
arises is why there should be any neces-
sity for introducing the clements Of NOR
tality and withdrawal and Of the erec-
ton Of this elaborate statistical structure
Why not eliminate these assumptions en-
tirely, in so far as active members are
concerned. and simply accumulate the
contributions at compound interest? This
saving bank idea. although referred TO at
various times throughout the discussion
of staf pension funds, has never been
given the consideration that would seem
TO be its due
An account could be kept for each
member and the proper return upon
death or withdrawal or the amount Of
pension upon retirement could be de-
termined with accuracy. The contribu-
tors 10 such q scheme would without
doubt be treated equitably, and the af-
fairs of the plan would always be In a
clear condition. There would still be
fund created by miscellaneous gains, such
as savings because of return Of contrs-
buttons upon withdrawal at less than tho
rate Of interest allowed in the accumu-
latiou, and from excess interest earnings,
which could be added to or drawn upon.
accordingly as the experience upon the
pensioners was heavier or lighter than
expected The size Of this fund, how
ever. would be insignificant as compared
with the one based upon rates OF with
drawal or death
Federal scheme an Example.
The advantages and adaptabllity OF
this method can best be shown In detail
by considering a plan which has been
proposed recently for the retirement of
the employees of the classified branch of
the United States civil service devised
by Mr.. Brown, to fit the conditions pc
culiar TO the United states government
service. and the writer was later con-
suited especially in regard TO the actua-
rial problems involved
THE classified civil service of the
United States is made up of about 10000
employees in many different lines of work.
situated in various parts Of the country
and subject to widely varying conditions.
Railway postal clerks. for instance. al
though required to pass a rigid physical
examination upon entrance. are subjected
TO special hazards and conditions incident
70 their work, which places them in class
by themselves. Various other branches.
such as city letter carriers, because of
the requirements Of the work. axpe-
rience rates OF mortality and withdrawal
greatly from the average for
the whole service. Again, about S per
cent Of the whole number Of employees
are femaleS-a most disturbing element
in a fund and one which is most diff
cult TO deal with. II can be seen. there
fore. that the establishment Of 9 fund in
which the contributions and benefits Of
these widely differing classes are figured
upon the same basis with regard to rate
Of mortality. withdrawal, and increase Of
salary would be manifestly unwise and
unjust. II might be possible TO subd-
vide the whole service into small horao-