The Washington herald., 1912-05-07
PRESIDENT PLANS
RETIREMENT FUND
Loss Due to Inefiicisncy Of
Euperannuated Clerks Costs
More Than Pensions.
MESSAGE TO CONGRESS

for superannuated clerks in the exec
utive departments in Washington at
the age OF seventy as a measure OF
economy to the government. president
Taft yesterday transmitted to Congress
a message heartily indorsing the rec
concentrations Of the economy commits
sion.
Presidents Message.
The Presidents message. in part. fol-
lows:
.To the plan proposed IN this report.
and set forth IN detail IN the accom-
panying draft OF a bill ] give my un-
qualified approval. because I believe IL
to be sound In principle and just both
10 the government and 10 its employees.
TT Is unnecessary at this time to dis
cuss at length the necessity for adopt
ing some plan by which the service
may be relieved OF the loss from the
the retention on the rolls. after long
and faithful service. OF those who have
passed the age when they can perform
a full days work
Under present conditions the loss to
the government will continue TO increase
Some method other than the summary
discharge Of employees when they become
inefneient on account OF age must be
1 adopted.
II invite particular attention TO the
fact that the plan provides that each
/ person hereafter entering the service
shall pay the entire expense OF his own
retirement by contributions from his
salary. so that when he reaches the
age OF seventy years the fund he has
accumulated VIII provide his retire
ment allowance. In such a case the
only contributions Of the government.
II any, will be the difference between
the interest earned by his savings de-
posted IN the Treasury and invested
by the government and the rate OF 4
this class Of persons, there certainly
can be no reasonable objection to the
plan. and ! doubt II any plan more
beneficial both to the government and
to the employe could be devised.
Must Divide Expense.
1T is evident that the application OF
the plan only to those who hereafter
enter the service would not relieve the
present condition due to superannuation
nor save the government from the con-
/ stantly increasing loss from that cause.
II is not practicable for those now sew
enty years OF age, or for those nearing
that age, to provide the cost OF retire
ment entirely at their own expense. To
meet the existing situation and to put
a retirement plan into effect Immediately
| there must be some contribution by the
government. This contribution need be
little more in the aggregate than is now
| the governments loss from ineficieney |
due to superannuation. After a compare 1
lively short period Of years the annual |
payments made by the government win |
be less than the loss II would sustain IL
no plan were adopted
IT Is proposed that an empioye now |
In the service who has reached the age
OF seventy years shah be retired and be |
paid by the United States an annuity |
equal to one-half Of his average annual /
pay for the last five years. but no such |
annuity 10 exceed y5O9 AS 10 an en-
ploye less than seventy years OF age. Il |
Is proposed that ne shall be retired |
when he reaches seventy on an annuity |
equal 10 one-naIr or MS average pay Tor /
the entire period OF his service tho /
annuity to exceed $500; and that there
shall be deducted from his pay until ne /
reaches seventy years sucn an amount,
not exceeding per cent OF his pay, as,
with per cent interest. Will purchase
his annuity. In the case OF an employe
who has but a rev years to serve oerore
reaching seventy, some contribution by
the government Will De necessary 10
supplement his savings IN order 10 pro-
vide an annuity or a reasonable amount
Means 10 an End.
"a retirement plan is only a means TO
ar end. and that end is an increase Of
efficiency in the public service. The gov
ernment is not required to take chances
OF an employees finances. nor is II justi-
fed In doing SO, except so far as 1t is
necessary to protect the government
against the ineficiency Of the employe
due to superannuation. It is my opinion,
therefore. that a plan OF retirement
should be so adjusted as TO make the
least possible demand upon the govern
ment and at the same time draw from
kis personal control as little Of an en-
ploye's money as possible. The proposed
plan meets these requirements.
while the maximum annuity Of $500
Is not sufficient TO provide the luxuries
OF life, IL is enough to insure an en-
ploye against want, even II he has been
SO unfortunate as 20 have made no other
provision for his declining years 1t is
sufficient also to render Intellectual the
appeals so often made to the sympathy
OF administrative officers when they at
tempt to remove from once an employe
who has become inefhcient through old
age At the same time, the amount with
held from an employees salary in order
to provide his annuity is not SUFFICIENT TO
justify the thrifty in complaining that
they are being deprived Of an excessive /
portion Of their income, which they could
invest more prontaDly. u
In any compulsory saving plan Il is
but Just that the government should
guarantee a reasonable rate Of interest
TO its employees -Four per cent Is the
rate now paid by the government on de- !
posfts Of enlisted men Of the army and !
navy, and II Is the rate paid by many
savings banks. The plan recommended
by the commission contemplRtes the In +.
yestment of the savings Of employees In
the highest class Of securities, and that ,
the United States shall contribute such !
amount, If any, as may be needed 20 m
sure the employees receiving 4 per cent
per annum.
am convinced that the application of /.
the plan should be limited for the pres I.
ent TO the classified civil service in the !.
executive departments and oflces al
Washington, where the loss from SUPER
is the greatest. While any :
plan is In its experimental stage II should | ?
be kept within narrow limits. If sue
cessful in operation in Washington, il 1
can be extended as the needs OF the fe
service require.
Tt being conceded that no immediate I
benefit to the government could accrue :