Imperial Valley press. (El Centro, Calif.) 1907-current, 1935-12-25
Neav Social Security Act
NO. 4.
PENSION FEATURES

This is the fourth of six articles explaining
the new federal social security act, which will go
into effect Jan. 1.
Written For The Press
BY DALE cox
Financial Writer of Cleveland Plain Dealer
1t is estimated that around 25,OOO0OO en-
ployes will qualify at the outset for the old age
pension plan of the Social Security act. In 1887
these 25,OOO000 employees and their employers
will pay into the federal treasury around $780,
100000 in taxes. BY 1949 they will be paying
three times that amount, or 1900 100000, assum-
ing as many employees are then paying under the
act
Naturally, many administrative problems
to mind II is provided in the act that wages
do net necessarily mean money wages. Other
means of payment, such grocery orders, fac
tory houses payment in the stock of the
company, are to count as wages fer purposes of
the act and someone must appraiSe the value of
these wages in terms of money.
An elaborate and complicated arrangement
is provided in case an employee dies while con-
tributing toward an cid age annuity and before
he reaches 65. In that case his estate is paid
percentage of the total wage he has been paid
from the time he began making old age pension
contributions up until the time of his death.
FORCES RETIREMENT AT IS
The act is deliberately framed to force the
retirement of all workers at the age of IS. If a
man reaches 65 and continues to work, under
the act he loses one month of the pension due
him for each month he continues working after
reaching IS
Naturally, as the years go by, an enormous
will be assembled under this act from the
contributions of employees and employers. The
size of the sum- of course, depends upon many
uncertain factors But it has been estimated that
the sum, known as the Old Age Reserve Account
will be from S500000 900 to $4,000 900 by
$780, assuming, of course that the act is not
peaed or changed fer something else before that
time. The act requires that the secretary of the
treasury invest all the reserve funds of this
account. in interest bearing obligations of the
United States on terms yielding not less than
per cent per annum.
INVESTMENT DIFFICULT
Inasmuch as the total national debt of the
nation is now around $4,000 100000, it can be
seen how difficult it will be to invest S50,000,-
100000 more in government bonds by $780, The
fund might be large enough to swallow all the
obligations of the government In that case, the
reserve fund would be nothing more than the
financial stability of the government itself
Financial men declare that the very existence of
this huge reserve fund greater than all the
reserve funds of the private insurance companies
would be one of the greatest financial dangers
the nation ever faced.
This old age pension feature of the Social
Security act is federal controlled. All collections
of the tax will be made by the federal employees.
All record-keeping will be done in Washington
All payments and disbursals to benefciaries will
be made from a central bureau at Washington
THOUSANDS OF EMPLOYEES NEEDED
When it is considered that payments will be
made under the act by 25000,000 different in
divduals, and by tens Of thousands of employers
it may be seen how many thousands of employ
es it will require in Washington to administer
the machinery of the old age pension section
of the act. Assuming that one federal employee
could take of all the records necessary for
1000 employees under the act-probably too high
a figure-it would require $4,000 additional fed
eral employees in Washington to administer the
old age pension section alone. 1t looks as if the
trek of workers to the nations capital had only
started.
So much for the old age pension section of
the Social Security act
Next: Unemployment Insurance