Evening star., 1926-04-26
Make Retirement
Benefits Optional
To the Editor Of The Star:

To the Editor OF The Star:
I would like to know whether there
Is any good reason why a provision
should not he inserted into the retire
ment bill for Federal employees which
would give the employe the privilege
Of keeping his full salary by renounc-
ing his right to any Of the so-cailed
benefits. II the scheme were thus
made optional, 1t seems to me tnat
then no employe would have any COM
plaint to make regarding any kind OF
bill Congress cared to pass. IL IT were
not to his advantage. he could decline
to participate. I. for one, wouin h''
Voluntarily become party to any
scheme that / have heard proposed 80
far
The present law. II Is true. dement's
a lot of old employees, but II works IN
Injustice to the younger employes.
will show by few representative ex-
amples lust how unjust the law is In
some cases.
7 shall make computations on
ba sis Of G per cent interest. kno"
that we are allowed only per cent on
the amounts that are taken from ns
each nav day, but why should we gel
only 4 per cent when we could get b
per cent by investing this money our
selves?
In the particular section in which
work are four men. or these, three
owe money borrowed on life insurance
policies. on which S per cent interest
Is paid. Moreover, two of us are try
ing to buy houses. We pay between
and per cent on the money we owe
on our houses-about per cent on
first trusts and about 10 per cent on
second trusts when discounts are fg-
| uredl Why should we borrow money
on which we must pay per cent or
more and be forced to loan this TO the
Government at 4 per cent? shall
therefore. make computations on the
ba sis of per cent.
Case | is that Of a friend OF mine
| who Is 80 years old. but who already
has $500 in this retirement fund. BY
! consulting an interest table. nno
| that 81 will amount. at per cent IN
| ferest. compounded annually. to $3.50
in 81 years. Therefore. when this
| man is 20 the $500 he has already paid
| in will amount TO $4,320. The maxi
mum annuity he can receive Is $oo per
month. At the age of 20, where. ac-
cording TO the American experience
table OF mortality, the average future
| lifetime Is s48 years. $50 per month
| for life annuity Is worth $3.50. again
| figuring per cent interest. There
| fore. IL this man should pay In only
about $40 more and AZ the age of "a
receive $50 per month annuity. ne
, would he getting nothing that he mao
not fully paid for. Yet the Govern.
| ment proposes TO take 2l7 per cent of
his salary. or 500 per year. for the
| next Al years over and above what Is
| necessary TO pay for his annuity. III
this mans salary increases, me
amount will he more.
Case . Is that OF young man OF
"a whose larry IL $1,000. He has
been in the Government service nVe
wears. and has had about $3.50 taken
from his nav. At the age Of 20 this
$3.50 will amount, at per cent. to
| So. $50. -or almost enough TO pay for
his annuity. II this employe never
gets raise and remains in the serv-
ice until 20 wears of age. the $50 per
annum TO be taken from his salary
will amount at that time 10 $l4.4oo.
Then the Government will have more
than $3.50 Of this mans money. for
which they propose to give him an
annuity worth less than $4,000. Ac-
cordinS to the Government figures,
thev will have only 50, 800 biased on 4
per cent INTEREST,". Any increase in
salary for this employe will, Of course,
make the injustice done him all the
greater. since it increases the deduc-
lions without increasing the benefits.
The two cases ! have cited are not
at all unusual. In fact. both were
taken from the small group Of four
men who are in the same section that
7 am in In this group the maximum
age Is 35, and practically the same
figures apply TO us all. Not one OF us
will ever get back as much as one-half
of the value Of what we pay In under
any retirement plan that has been
seriously put forward.
l do not believe the average Govern
ment employe is looking for something
for nothing. On the other hand. he
should be given the privilege of indi-
vidually staying out of any scheme
which is to his disadva ntage.
II. Il. WENSEL.