Evening star., 1926-04-04
LIBERAL RETIREMENT BILL
BIG CONGRESS PROBLEM
CooIidge's Attitude, Conflicting Demands,
Cost and Other Factors Badly
Muddle Legislators.

! question will bring the bill up for
passage in the House.
The House civil service committee
intends to report a bill in day or
two, and will fully discuss in its
report accompanying the bill the
various figures, tables and estimates
submitted by the actuaries, particu-
larly with relation of such total and
ultimate cost estimates to the pres
| ent situation.
The actuaries' report contains
series OF figures highly technical In
| character, dealing in very large
| amounts, viewing the subject from
different angles, and having no nee
| esSary relation to the cost of retire
ment, either at present, in the i'm
mediate future, or at any given time
in the future. These figures will be
considered and dealt with, and their
| application to the present problem
discussed in the forthcoming report
| of the committee.
The actuarieS in their report make
valuation of the cost of the re-
| tirement system as ii exists and upon
various proposed plans that were
! submitted to them some time ago,
| but none of which are in exactly the
form the committee is apt to report
| in its bill. They at least serve the
purpose of making approximations.
McCOys Comment Enigma.
| The House committee on the civil
| service, at an informal meeting
Thursday, had before it Joseph S.
Mccoy, Government actuary, and one
of the Board of Actuaries, on the
civil service retirement and disabil-
ity fund. Mr.. Mccoy was asked
about the tables which purport to be
assets and liabilities of the civil serv-
! ice retirement fund as of June 30,
| 1925. This table shows the liabilities
| of the fund $626 ,492 1926, and that the
| fund in hand and contributions to be
| received from employees amounts TO
| $26460I,173, leaving to be appropriat-
ed eventually by the Government
1851, ,S91 ,463.
Mr.. Mccoy said that was a valua-
| ton of the fund without any time
| limit as a continuing proposition. The
same sort of a valuation on a basis
| of a minimum retirement age of go
| would make the total Of liabilities
| $l012,779,S71. But just what Mr..
| Mccoy meant is still an enigma to
the committee. They think he meant
| that taking the present pay roll of
| 3SS, 900 persons. and seeing the whole
| proposition. through till they had re-
| tired under the present law, would
cost the Government 1851 .S91 ,463.
| But if the actuaries' figuring is so
| intricate and problematical that the
committee cannot digest and under
stand it. how will the rank and file
of Congress make accurate conclu-
sions, and how will the Government
clerk who Is 10 receive a small an
nuity after maybe two score years
of service make heads or tails OF It?
There seems to be some justification
for the suspicion that the actuaries'
report has been purpoSely made in
tricate and confusing and has put
the costs unfairly high.
Actuaries Offered Own Bill.
The actuaries disapproved the bills
proposed and suggested one of their
own. While the civil service COM
mittee and Congress must give full
faith and credit to those figures as
an actuarial estimate. yet when it
comes to the question of what q re-
tirement bill should provide, and who
should benefit, the committee feels
1t is a matter on which the actuaries
have no more SacrosanCt conviction
than the committee itself.
The actuaries' criticisms of the
proposed bill apply substantially to
any modification of the existing plan
the committee would report. The
first criticism Is that those whose
salary is more than 200 pay a
larger proportionate share towards
their retirement annuity than those
whose salary Is $1,000 or less. They
insist that this is an unfair discrim-
ination and that it does not benefit
the lower -salaried employees.
The answer to that is that the
n 10 01C nj fhnSn
pay larger proportionate share will
have to contribute q smaller share
towards the annuity. The principle
underlying this is that the Govern
ment should be called upon to assist
in their old age only those who
need it. The actuaries seem to con-
slider that the Government Is engaged
in the business of selling annuities
at less than cost, and that all en-
ployes should profit equally from the
conduct of this business.
How Plan Would Work.
The bill the actuaries propose pro-
vides for the following method of
computing annuities: One per cent
of the average annual salary with
no limit, multiplied by the number
of years Of service with no limit. To
this, as a "Sweetener," Is added an
annuity of $40 per year for each
year of service up to 80 years, which
amounts to 5000. But they provide
that no annuity shall exceed rs per
cent of the average salary. AS
result, a clerk with an average sal
airy of $1,000, after 40 years of serv-
ice, would get $3.50 plus the $500
"sweetener," or an annuity of 1880.
But. in order to limit the salary to
5000, $3.50 would be deducted from
this $500 "sweetener" On the other
hand, a $1,000 employee with 40 years
of service would receive $4,000 plus
the 5000 "sweetener," or $4,000. In
this case he would retain the whole
$500 arbitrary "sweetener," while
from the 81 200 clerk and his trifiing
annuity would be deducted $3.50 from
the "sweetener."
The civil service committee be-
lieves that merely to state this prop
osition is to make clear why it is
| elected.
The actuaries point out that in
some cases highly salaried employees
with a 81 200 limit on their annuities
actually may contribute more than
such annuity is worth. Their obvious
recourse Is that when their time for
ending their service comes, instead
of retiring on that annuity, they can
retire, draw down their contributions,
with accumulated interest, and pur-
chase in the market such annuity as
their savings will provide.
Another point-the actuaries state
| in their report with respect to sepa-
ration at the ages in the existing law,
and which are retained in the bill
to be reported-a straight-out super
annuation retirement without any op-
tional feature-that every person ar
riving at the retirement age will re-
! tire. ignoring completely the oppor-
| tunity for two years extension in
active service, IL efficient and COM
| petent AS a matter of fact, during
| the five wears the retirement law has