Evening star., 1926-03-29
HIGHER ANNUITIES
ARE DUE EMPLOYEES
OF u. S., SAYS WORK


Continued from First PageO
appears to be accurate actuarial data
that the board has submitted.
In viewing the conclusions of the
actuaries it would seem apparent that
they are based upon several hv-
potheses so closely connected with
administrative policy that the rule OF
expediency, as well as mathematics,
should be considered in determining
the future of civil retirement
The actuaries base their estimates
upon an annual increase in the pay
roll of per cent, or about 100 per
cent in 80 years, which is problem
atiCal.
Estimates Now Difficult.
The mortality tables are those
used when retirement was established
in 1920. and il is probable that the
system has not been in operation
long enough to determine, their au-
thenticity as basis for accurate
future estimates.
so long as the optional retirement
feature is maintained. it is apparent
that there is no way of ascertaining
definitely the number of annultantS
who will be added to the roll annual
ly a fixed age of retirement is
necessary to accuracy.
The aCtuarieS apparently base in
terest aCCruals upon / per cent COM
pounded annually, whereas the eX-
perience in the past six years has
shown that Il little more than 414
per cent has been realized, and 1t IS
understood that insurance companies
and other private fiscal agencies Sc
cure even greater return. The
basis of per cent obviously in
creases the expense 10 the Govern
ment and TO the employees and is
factor in considering the share of
the Governments eventual participa-
tion.
Withdrawals Half of Payments.
MANY who would liberaliZe retire
ment legislation believe that the fund
should be maintained on a mutual
basis-that is, that the contributions
of employees should be used as at pres
ent. in paying annuities, with the Gov
ernment in the background as guar
antor of the solvency of the fund. 1t
is only the part OF wisdom for the
Government TO sense its liabilities
under such an arrangement and the
probable time when it will be called
upon to contribute TO any deficiency.
The experience of the past six years,
In accounting the fund has demon
strated that changed conditions can
alter the most careful forecasts as
to how long it may be when the Gov
ernment must participate.
IS AT the present time there is over
sS53 600 900 on hand in the retirement
fund.- having been deducted from en-
Sbloyes' salaries. AcCruals now av-
fserage about 81, 500 900 per month, and
drafts upon the fund TO pay annui-
SAINTS and other expenses are about
$3.50 900 a month, or practically half
of the funds income.
= "Estimated aCcretiOns to the fund,
before the passage of the present law,
have been greatly augmented by in
eSrea sed. salaries to postal employees;
4ncreASes under the reclasSitiCation act;
4he decision of the Attorney General
bringing within the scope of the law
those with a civil-service status hold
ing Excepted positions; and the origi-
snal assumption by the actuaries that
practically every participant would
become q beneficiary upon reaching
the retirement ages prescribed in the
iaw. The time when Federal appropri-
stion may become necessary to supple
ment the fund has accordingly been
greatly extended.
y Defends Payment From Fund.
In making it's valuation of the
present plan. the aCtuaries do not
state the period during which the
fund will probably be self-supporting
sand the approaching time when 1t
lWould probably be necessary for the
Government to appropriate to this
fund. This period has been variously
sand unofficially estimated in the past
SO be anywhere from 10 to % years.
Sit was hoped that in making it's ap-
5praiSal of the present fund, the board
would be willing to state "A definite
opinion on this subject, point around
which many controversies have waged
by proponents and opponents of a
more liberal retirement system.
THE actuarieS seem to conclude
that the Government has been evading
sits responsibility and has been 'disSi.
zpating the contributions of the EN-.
ployes.
ANY implication in the report that
by paying annuities from employees
contributions the fund has not been
administered in accordance with the
statutes, or as intended by Congress
after extended discussion prior to the
enactment of the present retirement
law, is without foundation. The act
directly provides that the fund shall
be supported by the employees them
selves, so far as possible, from their
contributions. and implies that the
Government, if and when the time ar
rives. shall make up any deficiency by
appropriations from the general Treas.
urv. To this extent Congress did not
adopt the theory propounded by the
Rctuaries in this report that appro-
priations should be made by the Gov.
ernment simultaneously with Contri.
buttons by the emriOEeS.
In determining the status Of the
present fund the sctuaries propose
that the Government shall henceforth
make annual appropriations in ad-
vance of the actual needs Of the fund,
to place 1t upon a permanently self
supporting basis. They further in
clude this plan of annual appropria-
tions by the Government in their esti-
mates of the cost Of systems proposed
by Congress and themselves. / may
say that the department is unwilling
to subscribe to the theory that the
Ts II.