The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1910-06-10

may be established IN the beginning. as
Il was in England, as a pure gratuity.
but Il comes in time 20 be taken Into ac-
count In fixing salaries. The pensionable
employe in England has been proved &c
receive less compensation than the non
pensionable. Not ali employees live 70
pensionable age; In fact, statistics show
that only one out OF seven IN the English
service lives and remains in the service
TO pensionable age. During the years
that the pensiona bic employee is working
for less than the market wage his family
has Just so much less 10 live on than they
would have were he a non-pensionable
empIoye, and II he dies or leaves the
service before reaching pensionable age
his family has absolutely no return Tor
all those years OK deprivation. Under a
compulsory savings scheme the tendency
would be to effect an increase In his
salary In the first place. and In case OF
death or separation from the service a
full return of his savings IS made to his
family. In the first case. there is the
oretical Though TO less read contriou-
ton. which is never returned. in the sec
ond place, there is an actual conuiDu-
ton which IS always returned.
I feel sure that II the wife Of the
department employe really understood
the proposed plan, she would become
one OF its advocates instead OF its OPP
ponent. That she does not understand
its chief provisions is clear from some
Of her statements She evidently be-
iieves that the plan provides for a pool
ing Of funds and for forfeiture or con-
ributions-practices I have always op-
posed Numerous conTibutOry retire
ment plans have been tried that are
shown to be unsound or inequitable,
but I believe that this one will meet
every test The report which I have
prepared for the committees in Con-
gress, and which has not yet been pub
lished explains every detail in the SIM
plest language I can command, and sets
forth the principles on which each one
Of those details is based. 1 regret that
the lady writing TO The Herald has not
given her name, for I should like to send
her O copy Of that report when il Is
available, and other reports concerning
the experience Of foreign countries, so
that she may Judge for herself how mis-
taken she has been. She says, for IN
stance: IF a $500 clerk is making time
payments of $50 per month on his home
and the compulsory plan deducts ap-
proximately SIS per month from his pres
ent salary, how will he meet his pay
ments?''
1 90 not know where she gets her
! figures. for at no age below sixty-nine
would a deduction Of SIS a month be
made from a salary Of sl33.93 a month
/ Only at the highest possible age, that Of
| sixty-nine, would the rate OF deduction
/ be 1l.2 per cent OF salary, which would
amount to SASS month on a salary of
/ 8, 800 a year. That deduction would be
+ exaeted, however. for only one year. In
| consideration for that deduction, the en-
ploye would then be able to retire, under
/ Senate bill 1914 (the Perkins bilD, which
/ is the form of my plan that I consider
most just to the old employees, on an an
nuity of S720, IL he had been in the serv-
/ ice thirty years, an annuity Of $3.50
/ IL he had been in the service
| forty years, and so on. In other
words, in consideration Of his saving $3.50
| for one year. the government would pay
I him 400 per cent a year on that saving
/ for the rest OF his life. provided he had
been thirty years in the service or 5S3
/ per cent year If he had been en-
ployed forty years. It would be hard 70
find at age sixty-nine better investment
for twelve monthly installments OF SIS
| each. Under the Gillett bill, the maxi
mum annuity to which the government
| WOuiu COHliioute - COW, Inc eulpiOye
would then receive $500 a year for the
rest of his life In return for the $50
contributed. Even with that Limitation
his contribution would yield him q re-
turn OF 1888 per cent a year for the rest
OF his life.
OF course. comparatively few OF the
employees are sixty-nine years OF age.
The great majority are under forty years
| of age. Between the ages Of twenty and
forty the rate Of deduction from salary
ranges from 4.S to SO per cent, or on a
salary of $500 from s5.73 TO $685.