The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-12-28
English Employees Find
Scheme Unsatisfactory,
Says DR.. Jordan.
PENSIONED WORKERS
GET LITTLE SALARY
Would Have Contributory Plar
Whereby Clerks Would Benefit
Before Retirement.
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the employees and the government
II was found on examination Of the
actual workings OF the civil pension SyS-
TEN OF that country that parliament IN
variably took into account the amount
Of the prospective pension benefit in
fixing the wage scale Of the employees
proposed to be benefited by such super
annuation allowances.
II was shown BY conclusive evidence
that IN all cases where the emplOye was
given a DensiOna-ble status, that his
salary was invariably lower than If he
were IN the GOn-peusiOnable class II
was further shown that the actual cost
&c the British government 10 support
this system was approximately from 10
TO 20 Per cent of the active pay roll, and
II some bureaus and departments the
cost was 81 per cent.
Cost EmpiOye More
Il was further proven that the amount
which the government was thus with
holding from the full market wage or
pay Of the emplOye was greatly in ex
cess Of what IL would have been had
the emplOEe been paid his full market
wage and had then been compelled, IN
der q plan OF equitable contributions. TO
create his own retirement fund with the
aid OF the factor Of compound interest
When the employees OF England real
lied that such q pension system actual
y benefited only one person in seven
and those only VINO reached the TeIiT-
ing age while all were compelled 10
work fer lower wages, and that IN many
cases TanllcS were leIt N QeSuCuuOns
they properly demanded that where an
eInpiOye voluntarily left the service or
died before reaching the age Of retire
ment. that a COmmuted or cash sur
render value Of such Withheld or de-
ferred pay should be actuarially COM
puted and rSuurned TO the beneficiary or
his estate
This view was vigorously pressed up
on a number Of royal commissions from
1874 until lis recognition BY parliament.
and Ih- amendment OF the law OF 1853,
by the uaSsage Of the act Of September
&C 1869. which had the effect of con
veTti1E VEzat was known as q straight
civil ps11ion system or plan into a con-
tributOTy one.
More Satisfactory.
Il cannot be denied that the plan now
IN vogue In England is more satisfac-
tory, and perhaps more equitable than
the straight civil pension OF 1859. though
II probably viii be admitted that the
modified plan = not wholly ideal, and
could only become so by paying the
employees their fun market wage and
then instiCuIing system OF COmpUI-
sory savings on 2 graduated scale, where
the individual contributions are funded
contributor and where such cOntT1bu-
TONS with the help Of compound inter
est, would result IN the accumulation o.
substantial sum for old age
Il should not be Inferred from what
has been stated that all COnJTIbutOTy
plans are equitable, and Il may be
stated. without fear OF contradiction,
that no COutrlbutOry plan is equitable,
either as between the employees them
selves or IS between the employees and
the Government, which does not provide
for the absolute return OF the COntribu-
tons, with interest, TO the individual
employe or 10 his benefciaries. and
therefore. any COnTibutOTy plan which
contenplates tue communicating Of as
sets with beBedts 70 those who survive
only, is not only vicious in principle.
but is unjust and ineouitable, and this
explains why The 1rSu COuLrIbUuOTy plan
adopted in Canada was unsuccessfulB
and which was followed by 2 compulsory
savings arrangement under which each
emplOye contributes > per cent OF his
salary. which is placed TO his individ
credit and bears interest at the rate OF
per cent compounded seni-annually-
If therefore. the emplOye must uIti-
mateIy pay for his own pension, must
he dc II through the medium OF a
straight civil pension, with a lowered
wage scale. and which pension beneht
he nav not live 10 obtain, or shall he
do Il with the understanding that he Is
10 be laid his full market wage, and
that out Of such compensation he IS to
provide his own retirement fund, which
remains absolutely and at ali times his
property. and which VII! either uIti-
mate1v benefit him OF his estate, and
which Is never cOndSCatod. forfeited or
pension scheme but is only withheld
under the guardianship Of the Federal
Government 70 provide against old
age2
The President Of the United States, in
his annual message 10 Congress Of De-
cember G. 1910. states:
A civil pension Is bound to become an
enormous, continuous, and increasing tax
On the public eXcheQuer. Il IS demoraliz-
inS 70 the service, since It makes difficult
the dismissal Of incompetent employees
after they have partly earned their pen
sion. and that serious objections TO a
civil pension payable ouC ~ the public
treasury may Be brought against 4 by the
taxpayers the administrative officeTs o.
the government. and the employees them
selves.
The presidents, therefore, makes It
plain IN his recommen datton TO Con-
gres in opposition TO the creation OF q
straight civil pension payable wholly out
OF the public treasury, that the simplest
and most independent solution OF the
problem both for the emplOye and the
Government, Is e compulsory savings
erranEement, which has been worked
our in the Gillett bill
II has been wei stated that an equi-
table contEbutOry plan Of retirement,
operating under a satisfactory wage
strongly the Independence and the self
respect Of the individual, while, on the
contrary, a pension paid out OF the pub
lie funds, dependent Tor its realization
main in the service until reaching 2
retiring age EOuld necessarily have the
opposite effect. and would tend 10 de-
stroy the independence Of the eTnplOye-
Besides, such q system Of civil pen
siOus would seriously interfere with the
removal Of the young or niddle-aged
employees who might be Incompetent or
Inefficient, because Of the forfeiture not
only. Of present salary, but OF a prospect
I've pension partly earned
Abuses Under Straight Civil Pensions.
Under our form Of government It is
certain that the cost Of such pension
roll would be greatly increased and
serious abuses result because Of the i'm
port5Inities OF favored individuals or
OrgautZat iOns Of employees urging upon
Congress increased benefits. and the ex-
tension OF the law 10 new classes OF
civil employees
II has been estimated that the civil
pension list Of England, with a civil
service about one-hslf the size Of our
present civil service, is costing 50 500, 900
annually. or from Is TO p per cent OF the
active pay roll Figured on that basis,
with our Government pay r0B OF 600
Co 600 q year pension system in this
country similar TO EnEiand-s would cost
from S30.0co. coo TO S40,05o,oo0 q year, and
under the Goullen bill Mould be vastly