The Morris County chronicle. [volume] (Morristown, N.J.) 1877-1915, 1907-07-09
WASHINGTON LETTER
Tspecial correspondence.1


the executive departments, formed a
year ago by the keep committee
on department methods, has completed
| a report on the retirement of aged atld
incapacitated employees of the govern
ment, accompanied with draft of a
bill in proper form for submission to
congress. The committee disapproves
any proposal that pensions be paid to
retired employees wholly out of the
federal treasury and all measures pro-
viding for a uniform deduction of a
given per cent or fat rate assessment
on salaries, all such proving on analy-
sis unfair either to taxpayers or en-
ployees.
In reference to the plan recommend
ed by them, the members of the com
mittee say they have taken pains not
only to study the details of this plan,
| as well as many others, but to submit
it to the criticism of several expert
professional actuaries and to have COM
| putations made so that all necessary
| data may be at hand. The general
| idea of their measure is that each in
dividual shall provide the necessary
| fund for his own retirement.
| Annuity on Reaching Seventy.
1t is proposed to pay every employee
in the civil service on retiring at the
| age of seventy years or upward an
annuity equal to Is per cent of his pay
| for every year of service. To Illus
trate, take an employee who entered
1 y, OF nv of a 90 q
received a salary of $1,000 a year
| through fifty years and retired at sew
enty One and one-fifth per cent of
| 200 is SIS. This amount multiplied
| by fifty (his years of service gives
5000, the amount of his annuity for the
remainder of his life. To provide the
| fund from which to pay this annuity
deduction will be made from the
monthly salary of the employee of such
amount as will be sufficient, with 4 per
cent compound interest, to purchase
such annuity on the arrival of the en-
ployee at the age of seventy years
Calculating Monthly Reduction.
From accepted calculations of insur
ance companies it is found that $6,67S
is the sum which must be accumulated
to purchase an annuity of 5000 for life
for person seventy years of age. The
next step Is to determine what sum
must be set aside monthly to accumu-
late at per cent interest $6,678 during
the employees fifty years of service.
A deposit of 81 per month for fifty
years, with interest compounded at 4
per cent, amounts to $1,S71.48. The
number of dollars per month necessary
to accumulate $6,67S is obtained by
dividing 6,67S by 1,9714S. This gives
1857 to be deducted from salary of
500 a month to provide the annuity
of 5000.
The arithmetical process above IL
Illustrated applied to all rates of salary
and all terms of service will result in
an annuity for each person proper
toned to the amount of his salary and
the number OF years he has served the
government
Retirement Not Compulsory.
Proper provision is made for the
withdrawal of the employees accumu-
lated savings with interest In case he
leaves the service before reaching the
age of retirement. While the age of
retirement Is fixed at seventy general
ly, yet in certain lines it is recommend
ed that it be made sixty-fiye and sixty
years. Retirement is not altogether
compulsory as competent persons may
be retained as long as they wish to
remain and can render adequate serv-
ice.
To provide for the retirement of en-
ployees who are in the service when
the bill Is passed it Is proposed that
the government shall contribute the
amount necessary to represent their
accumulations from the time they en-
tered the service. From the passage
of the bill they WILL of course. make
their own contributions upon the ba-
sis above described.
Government to Aid.
The sum contributed by the govern
ment to make up the purchase money
for the annuity of each employee can
not be withdrawn by the employee on
leaving the service before retirement,
nor can it be taken In cash upon re-
tirement, but is to be used only for the
purpose of his annuity, payable quar-
terly during life. A table based on
careful calculations shows that the to-
tai amount the government would con-
tribute the first year is about $725,-
600. This increases gradually from
year to year till sthe thirtieth year,
when 1t is $1.746,561, from which point
it gradually diminishes to zero, and the
system becomes self supporting
New Blue Book.
Director North of the census bureau
is sending out circulars to the heads of
the government departments asking
for data which will be used in the
publication of the governments blue
book.
This book in recent years has grown
to enormous proportions. Before the
volume is issued a vast amount Of in
formation, comprising the names, sal
aries and other facts about government
clerks and officials, is collected and
compiled by experts.
Water Front Improvements.
Probably because so many more peo-
| pie come into Washington from the
north than from the south few of the
average tourists see and appreciate
the great change which has been work
/ cd on tho ffuar Front NV tho oonnlo-