Evening star., 1926-03-29
Submits Actuaries' Report
Containing Six PIans-0per-
alton of Fund Scored.
BOARD PROTESTS LACK
OF FEDERAL PAYMENTS
Annual Cost to Government Under
Proposals Varies From $780,
529,491 to $76,717,437.

fifth annual report of the board of
actuaries, which estimates the annual
cost of retirement under six different
plans. varying from the lowest, $36,-
529 ,491 for the present law. up to
S76,717,437, and which charges the
employees trust funds now in the
hands of the Government ARE being
dissipated." Secretary of the Interior
Work today took issue with the board
over several questions, including the
charges of dissipation, but declared
that definite legislated increase of
annuities is due to retired Govern
ment servants"
The principal point of difference be
tween Secretary Work and the board
is over participation. of the Govern
ment. The board takes the position
that the Government should contrib
ute it's share in the cost of retire
ment from the beginning, charges
that every cent so far paid out TO re
tiring employees has come out of the
pockets of employees themselves and
that because of a lack of adequate
records the liability of the Govern
ment to repay these contributions is
not being properly accounted for"
As a consequence" the board de-
clared, "the funds, which are in the
nature of trust funds. are being dissi-
pated by their use in making pay
ments to other employees. already re
tired. and the interest accumulations
TO which the employees are entitled are
not being earned or credited"
U. S. Guarantees Fund.
Differing with the actuaries, Secre-
tary Work declared that the depart
Sc
theory that the Government should
make an appropriation to the retire
ment fund in advance of actual needs.
The Government is in the position OF
guarantOr of the fund, and being the
foundation of our economic structure
DOES not need TO give bond or make
deposit TO insure specific performance
of its obligations.
at should be remembered said
the Secretary, that this retirement
fund was not intended to be a gratuity
or a charity to ex-employes in want.
but, instead. as having been held in
trust against final separation from the
service. That the Government should
eventually be called upon to contribute
any part of this annuity is, l believe,
unfortunate.
THE salaries of it's employees should
warrant deductions sufficient to re-
pearaace of a beneficence-a policy
akin to that of industrial insurance.
Prepare Own Bill.
"The implication in the report"
said DIR. Work. that by paying an
nuities from employees contributions
the fund has not been administered
in accordance with the statutes, or
as intended by Congress after ex-
tended discussion prior to the en-
actment of the present retirement
law, is without foundation"
The report of the board, transmit
ted by Secretary Work to the chair
men of the Senate and House COM
mittees on civil service. present fig
ures which will be used as a basis
for consideration of several bills
pending for liberalization of the re-
tirement law.
Six sets of figures were prepared
by the board for Congress. present
ing first. valuation of the retire
ment fund as it exists at present;
second. figures showing the cost of
four different bills pending in Con
gresS, and, lastly. a new bill prepared
by the actuaries themselves. based
on their theory of a fiat contribution
by the Federal Government to be
added to by contributions from the
employees themselves.
Use 3O-Year Basis.
All calculations of the board are
based on contributions by both the
Government and the employees on
30-year basis.
The most costly plan of retirement,
which would entail an annual ex-
penditure of S76,717 .437. the board
said, was a plan which fixes the mini
mum superannuation retirement age
at So for postal employees and me-
chanics and 60 for other employees,
showing a total cost, on basis OF
40 for each year of service, amount
ing to S1.224, ,236 ,691.
The next most costly plans are out
lined in detail down to the least eN-
pensive, which is the present system
in force.
The other plans would cost the
Government and the employees an
nually S7O,0S0.976, 69,371,190, $685.
97d. .291. 500 ,546.27S and $36,529 ,+91.
The new plan of the board itself,
under which practically every employe
would receive q fiat $500 from the
Government and everything he had
contributed to the fund himself, at
interest, ranked fourth in the list as
to cost.
Based on uaJd SdtneTeu Dy lHe
Civil Service Commission from thou
sands of cards. the board gives
complete tabulation of the member
ship of the retirement fund. This
shows that there were 3SS,622 Gov
ernment employees under civil service
participating in the fund, as of June
80. 1925, with an annual pay roll OF
S,542,430. Retired members draw
ing annuities from the fund total H.
$50, the total paid to them amount
ing to $6.3sS.9s3.
Text of Works Letter.
Elanetary Works letter transmitting
the report was as follows:
II am transmitting herewith the
fifth annual report of the board of
actuaries of the civil service retire
ment and disability fund, dated March
"a. 1926, containing a valuation or
the present fund, based on actuarial
data compiled during the past few
months: the cost of certain proposed
plans amending the existing system,
and a plan recommended by the ac-
tuaries to correct what they believe to
he defects in the present system. This
is the first report based upon what
1Continued on Page 2. Column u
Digest of report Of board Of &c