Evening star., 1921-12-19
WOULD IMPROVE OPERATION
OF RETIREMENT ACT FUND
Commissioner of Pensions Submits Find
ings of Board of Actuaries Seeking
New Business Methods.

For economic and efficient operation
Of the civil service retirement and dis
i ability act the establishment of ac-
counts which will show at all times
| the liability of the fund and the es-
| tablishment of the individual records
of each active participant is Of primary
Importance. according to the board Of ac-
| tuaries. directed In the law itself,
to make recommendations regarding
changes necessary to protect the public
| interest and maintain the system upon
a sound financial basis.
AS the most important steps to be
taken for the welfare Of the fund, both
| from the standpoint Of the employe or
beneficiary and the standpoint Of the
government, the first annual report on
the actual operation of the retirement
act, which has just been sent to Congress
by the commissioner of pensions, recon-
| mends as follows:
Recommendations in Report.
The board of actuaries assumes that
employees Of the government. and and
the government itself, will not desire
to maintain the retirement and disabil-
ity fund without definite knowledge Of
the liabilities and Of the provisions
which is being made to meet these
liza bilities. An ideal operation of the
system would call for definite annual
appropriations from the government to
cover the governments share of tle nor
NAL and deficiency contributions and
for the accumulation Of these appro-
priations in the fund at interest in the
same way as the unexpended contrbu-
lions of employees are now accumulated
If this were done the cost of the
J 4 nc
| it accrued and the benefits would be
provided for at the time when the
service which established the claims
for benefits was rendered. Under
these conditions, if the present
scheme of the benefits were kept and
the employees contributed at ESQ per
cent of salaries, the government
would be required to put aside 2.31
per cent OF the pay roll for the retire
ment benefits of employees for about
thirty years. after which time LOG
per cent of salaries of employees would
be sufficient to support the fund.
From time to time the annual con-
tributions required of the government
would be checked by means of ac-
tuarial valuations and any changes
necessary in the rate to maintain the
fund in permanently solvent con-
dition might be made.
Considered Best Plan.
The board or actuarleS recommends
this plan Of support as the one which
will most strongly protect the fund
and under which employees will have
the most definite assurance of their
benefits. Furthermore. it would ap-
pear the more logical method of sup
port for the government to follow
from an economic standpoint. mas
much as it places the responsibility
for retirement benefits upon the tax
poyers who are receiving the benefit
of the service of the employees to be
retired.
II this suggestion is not followed by
Congress the board urges that Con-
gress authorize the opening of an
account on the books of the Treasury
Department to which will be trans
ferred each year credit of the
amount due the fund on this basis.
together with interest on the balance
Of the amount, and that this amount
be carried as q general liability of the
government. Under this plan, which
is the plan followed by the Canadian
government, subsidiary accounts may
be opened showing the liability of
the government on account of past
service and the liabilities on account
of current service. If the government
desires to know the total cost which
it is mourning foi personal service it
may turn to the accounts showing the
annual accruing liability on account