The Washington times., 1912-01-21
THINKS INSURANCE
|CONCERNS SHOULD
/ HANDLE PENSIONS
Dean Caldwell, Expert,
| Gives Suggestion for Ad-
ministering Funds.

{petter handle the subject of retirement
pensions for employees by turning the
5fdministrative work over to established
<oid-hne insurance companies is the suR-
Sestion made in letter addressed to
president Taft and members of his
sCabinet by Dean Caldwell, an insur-
lance writer.
The letter was written In a spirit of
INQUIRY and investigation. The question
Is asked whether the Government.
without equipment and experience, can
nandle pensions for employees as we'll
sss private organization that has spent
~ century IN creating an organization.
MI. Caldwell says that II the Govern
ment were to look favorably on his
ssusgest1on 1t would require the con-
'certed EFFORT of many large insurance
property security to the Government.
His Proposal.
A proposal that the companies be
permitted to bid for the pension busi-
ness Is made, that portion of Mr.. Cald-
wells letter following:
when the Government has deter
mined upon the amount of pension for
each clerk and the age of retirement
for the various classes, let the old
line life insurance companies bid on
the proposal.
THE preliminary requirements having
been complied with by all companies
bidding, the Government can divide the
amount to be invested among the stable
companies which bid the lowest 1t is
conceded that old line life Insurance
companies, because Of their widely dis
tr1buted and carefully guarded invest
ments, next to the Government, are
financially stronger than any other or
ganization whose business is to invest
and improve the peoples money
His Long Study.
In speaking Of his letter, Mr.. Cald-
well said that 1t was submitted after
q year Of study of pension systems
abroad, and after consultation with a
number Of prominent actuaries. He
regards It as an inquiry and a sugges-
ton. and not as q definite proposal, as
serting that no insurance company is
in position to contract to take the
work off tn hands Of the Government,
as the essential facts are not available.
The insurance companies have the
machinery !, for handling annuities or
pensions, which the Government would
have to build up" said Mr.. Caldwell.
advantage the. pension fund must be
carefully administered. The Govern
ment will not pay the salary that will
get the best men. -
"under the ordinary scheme Of Gov
eminent expenditure. enough money
Will be appropriated each year to meet
the pension roll, when q retirement pen
sion has been instituted. If an insur-
ance company were to take over the
expectancy cf every pensioner and
would undertake the risk Of paying an
annuity after a certain age. The prob
lem that employees are Interested In so
familiar with" ".5
Different Methods. " ~
It a retirement pension at the age of
seventy were to become Immediately
available. 1t Is said that about 1000
employees would drop out of the serv-
ice. Under usual practice the Govern
ment would appropriate a sum Of money
each year sufficient to pay these claims.
An insurance company would consult its
mortality. tables. determine how long
iorfer for lump sum to pay the annuity
during the rest of the life Of the PEN
s1oner.
For those employees who are not near
would be involved.
ANY Individual eorty years old can get
an insurance company. to promise to
paw him 800 year until death after he
IL, ii
the Intervening thirty years. the :n-
sured will pay premium of S9.35 a
year. Insurance companies might be
able to do this same thing for Gov
einment employees, either the Govern
ment or the employe paying the pre-
MUM.
ably received. said Mr.. Caldwell. lit
would mean the most careful scrutiny
of insurance companies by the Govern
ment. Only the institutions that are
really sound and healthy could stand
Mr.. Caldwell spent fifteen minutes
with Secretary Hilles yesterday. ex-
planning the proposal He expects later
to call on the various members of the
Cabinet to whom the letters have been
addressed.
AS between the straight pension plan
proposed in the Hamill and other bills
and the various contributory pension
bills that have been introduced in Con-
middle ground must be sought, ap-
parently favoring an increase in salary
for employees, together with the install
lation Of q contrtbutory pension.
II attention were given this plan it
would require much hard work from
actuaries. The 100000 and more FeS-
eral employees would be classified as to
ment. and percentage of pension. For
each class the actuaries would figure
out the premium that must be paid to
insure the annuity to the pensioner when
placed on the retired list. Until all Of
these figures are collected the insurance
companies will not be ready to bid for
the big piece of business that will be
plan Is finally agreed upon in Congress.