Evening star., 1926-03-29
REPORT OF RETIREMENT FUND
SHOWS 388, ,622 TAKING PART

Referring to the fact that the previ-
Gus reports of the board have de-
scribed in detail the chief weaknesses
of the existing retiring plan, the
board presents a brief summary of
reasons why the provisions of the
present law should be amended.
Reasons for Amending.
This summary follows:
The act discriminates between va
rious classes of employees by making
employees whose salaries are in ex-
cess of $1,000 pay more than their
proportionate share of the benefits.
The higher the employees salary the
more unfair is the discrimination,
yet the lower salaried employees do
not benefit by the injustice of the
measure.
The annuities are graded some
what according to the number of the
employees years of service, but the
plan of using multiples of three years
as a basis for difference, rather
than the exact number of years of
service does not save money for the
fund and does not work fairly for
the employees.
The benefits are not based upon
the same salary as that on which
the contributions are paid so that
in some cases higher salaried en-
ployes may actually contribute more
to the fund than they can possibly
draw out in the form of an annuity.
Retirement Age Too High.
The ages OF retirement are set too
high to make the retirement system
OF the greatest value to either the
employe or the Government in
eliminating those who are superan-
nuated under age of 10.
The benefits provided are so low
for employees in responsible positions
that they can not afford to give up
their positions in favor of younger
or more competent employees, so that
superannuated employees in super
visory positions who might properly
be retired for the good of the service
cannot be easily eliminated.
Employees contributions are credit
ed in bulk to a single account with
out adequate provision for the main
tenance of individual accounts, al
though every employe is entitled TO
receive the total amount of his indi-
vidual contribution with compound
interest
Because of the lack of adequate
records, the liability of the Govern
ment to repay these contributions is
not being properly accounted for,
and as a consequence, the funds,
which are in the nature of trust
funds, are being dissipated by their
use in making payments to other
employees already retired, and the
interest accumulations to which the
employees are entitled are not being
earned or credited
L. S. Held to be Borrowing.
BY reason of the failure to account
properly for the liability against en-
ployes' money, the employees and the
pubic are tending to look upon the
employees contributions remaining in
the fund as surplus, and to use this
as an argument to increase the liza
bilities OF the Government, which is
already liable to make good the deficit
in the fund on account of the en-
ployes' contributions, which have al
ready been used for purposes other
than as a return to the employees who
made them.
The Government is making no pro-
vision whatever to cover the liabili-
ties of the fund, which are not COW
cred by employees contributions. and
is not making any provision what
ever to liquidate the accrued liability
for annuities on account of the serv-
| ice of employees which was rendered
prior to the establishment of the re-
| tirement fund.
BY reason of this failure to recog-
nize and make provision for it's accru-
ing liability, the Government Is ac-
tually borrowing from the employees
| fund moneys to cover the actual ac-
cruing liabilities of the Government
| on account of current service of en-
| ployeS.
Puts Payment i'm Future.
BY continuing the practice now fol-
| lowed under the existing law, the Gov
ernment Is in the position of actually
| borrowing money to pay it's current
expenses, and expecting a future gen
! Grafton to repay the amount borrowed
| The actual cost of the services of the
! 3SS, 1922. Governmental employees COW
cred by the system is really the
amount of their yearly salary plus
the amount which, if paid to the re-
tirement fund, would exactly offset
the ultimate pensions for which the
| Government will be liable for the
| years service. The Government is
| making no appropriation whatever
| and is permitting the pensions to be
paid by loans from the contributions
of employees. Since under the law
the Government must return every
cent so borrowed with compound in.
| terest, it is evident that future gen
Grafton will be faced with his debt
| The practice is not only economically
| unsound but it will have a tendency
actually to increase the liabilities OF
| the Government.
+ The liabilities of the Government
are likely to be unreasonably increas-
ed if the present practice is con-
| tinued, because so long as the Gov
| ernment takes no account of It's liza
| bilities there is a constant tendency
| to increase the benefits beyond the
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