Evening star., 1924-01-20

ployes who make large contributions.
New Disability Allowance.
9. That the disability allowance be
changed in q manner similar to that
proposed for the service allowance
except that the allowance for dis
ability be made somewhat smaller
than that for service. The granting
Of disability allowance at 4 rate
slightly less than the service allow
ance rate has been proved advisable
by the experience Of other plans.
10. That the various classes Of pen
sions be abolished and the benefit be
graded according to the actual num-
ber of years and months of service
instead Of to the present three-year
steps. This change appears advisable
from the Administrative viewpoint
and Is fairer to the employe.
IL. That at retirement an employe
himself be permitted to make dennite
provision to share his allowance with
his wife or other-named beneficiary
and that the present provision for
lump sum payments an case OF early
death of a rensioner with no payment
abolished. : This provision Is less
costly to the government and better
for the employee
.12 That the dement's. OF the present
annuitants beVadjustFi according to
not Included IN. the bill proposed by
the board of actuaries last year,
and is included because the existing
situation appears 20 demand adjust
ment. q. ., .'. ..
+ No Change; in Glasses. b.,
+ The actuaries In their report to
Congress. emphasize that their bill
does not contemplate any change In
the class OF employees covered by the
proposed law, the contributions or
employees or the immediate appro-
priations by the Congress for the
payment Of benefits.
The demand for An amendment to
the law to permit retirement after
thirty years of service took concrete
form In a bill presented by Represent
ative Lehlbach to the Sixty-seventh
Congress. The board OF actuartes
gave consideration to this plan and
prepared a statement OF its cost.
In this current report the board
describes what will be accomplished
by the measure it has prepared and
cost the government. A description
is then given of the plan introduced
by Representative Lehlbach. which
is favored by employees. Lastly the
text of the measure recommended by
the board Is given together with
notes covering each OF the provisions
contained in the measure.
In explaining why it believes new
legislation Is required the board OF
actuaries gave these Ave reasons;
Reasons for New Law.
I The method OF administration
followed in the present measure Is
The liabilities of the government
are increasing annually without any
account being taken of the amount.
8. The records maintained are no.
ADEQUATE to furnish knowledge as 70
the condition of the fund OF 10 pfo-
tect 1t against abuse. 49,. ,rssent
4. The provisions of the present
system do not operate fairly as De-
tween employees.
S. Judged by the standards set oy
the retirement systems organized
unon a sound basis in this country
the United States civil service retise'
ment and disability plan is lnade-
quate. ...hoa
actuaries call the attention Of Con-
gress to the following:
Payments to Employe.
l.. Each employe pays into the
civil service retirement and disabllity
fund 2E per cent of salary. IL the
employe leaves the service be1ose pc
eligible for the penent, or
gether with per cent compound In
ferest. II the employe dies after re-
tirement before receiving the amount
of his contributions with interest, a
payment OF the balance is made TO MS
o The fund is, therefore. in the
nature of a trust fund which nolds
each employees contributions for his
g. AS q trust fund, careful account
should be made of the aggregate
amount SO held, with its interest, for
the benefit Of the employees.
4. Instead. these runds are peins
ent practice of charging against them
the annuities paid to the present an
uuitants The funds contributed for
one purpose are thus being disburSed
for another purpose. and no record
amounts contributed by the present
employees which should be considered
as q trust fund for their benefit The
practice of paying benefits under a
retirement plan to one group or en-
ployes from the contributions made
by. another group of employees has
regularly resulted ultimately In the
dissolution Of any retirement plan
that employed it
Calls 1t Bad Example.
s. BY permitting this condition to
continue the United States govern
ment is fostering q practice serving
as an unsound example to every gov
ernmental or industrial organization
that establishes retirement. fund.
It is most respectfully and emphati-
cally urged, the report states, that
the federal government discontinue
the practice.
6. The aggregate amount Of the en-
ployes' contributions. with interest,
which Is creditable to employees in
service on June 80. 1923, and. there
alone, is, as of that date. approx
mately $37,267.76s. The Treasury De-
partment reports but $25,510,26S to
the credit Of the retirement system
from this and all other sources. This
means that, altogether aside from the
governments liability for its own
contributions, the fund now stands in
deficit Of some $11,857,479 of its liza
bility merely to refund employees con-
tributionS with interest, and actual
accrued liability of the government of
s11.s57.47s on account, Of this item alone:
Discussing how the 1fabiltties of
nually without any account being
report call attention to the follow
ing: - i.
=. How Liabilities Accrue.
L. A calculation made as Of June
80, 1921. showed that annually the
government is permitting a liability
to accrue equal to 3.67 per cent of
Nf hAR o. Il.