Evening star., 1936-09-06
KING WILL PUSH
PENSION REVISION
Favors Amendment to Sc.
curity Law to Protect
Private Benefits.
BY J. A. O'LEARY,

A new move to try to work out an
amendment to the social security law
to encourage preservation Of private
pension plans in industry will be made
this Fall by Senator King, Democrat,
Of Utah, chairman Of special joint
congressional subcommittee on the
subject, he indicated yesterday.
Senator King said he plans to con-
fer with Senator Clark, Democrat, Of
Missouri, author Of the original pri-
vate pension amendment, as loon as
the latter returns to Washington, with
a view to arranging for another meet
ing Of the subcommittee. Clark is not
expected back in Washington until
after the November elections, but
there would still be nearly two months
before the convening Of Congress.
Although House and Senate rem-
bers were unable to agree upon an
amendment at the last session, Scna-
tor King still believes there Is merit
in the general objective, il satisfac-
tory method Of handling the problem
can be found.
Would Exempt Tax.
The original Clark amendment,
which the Senate added to the social
security bill, would have exempted
employees and employers from the pay
roll taxes called for in connection
with the Federal old-age annuity sys-
tenn, II their industry had pension
plan of its own, equal to or greater in
benefits than the proposed Govern
ment system.
Administration forces in Congress
mainly in the House, objected to the
plan, and it went out Of the bill in
conference, last year, with Gn agree
ment to set up the joint subcommittee
to delve further into the problem.
To meet the objection that a tax
exemption might weaken the con-
stitutionality Of the law, a new pro-
posal was put forward in March OF
this year, under which all industries
and all employees would pay the tax
with authority vested in the Social
Security Board to make repayments
In the form Of grants, to industries
having private plans. Toward the
close Of the last session the question
had to be sidetracked because most
Of the members of the special sub
committee also were conferees on the
administration tax bill. which re-
quired all Of their time.
Tax Begins on January l..
The old-age retirement feature oi
the social security law will be more
in the public mind by the end of this
year, because the payroll taxes relat-
ing to that part of the security pro-
gram begin in January, 1887. They
are called an income tax on en-
ployes and an excise tax on employ
ers, but both are based on pay rolls
For the first three years the en-
ploye and the employer each will pay
q tax Of l per cent. The rate then
goes up gradually every third veal
until it reaches q maximum of
per cent from each in 1949 and
thereafter. Benefit payments to those
retiring at the age of IS start in 1912
A considerable number Of industries
have voluntarily established old-age
retirement systems, some of which
have been In operation for many
years. Supporters in Congress Of the
Clark amendment, or some similar
proposal, were seeking to encourage
retention Of such plans where the
BENEFITS are equivalent to or greater
than the Federal system calls for.
The Federal annuity system for
which the payroll taxes start in
January is entirely separate from the
gratuities already being paid to needy
aged persons by the Federal Govern
ment in cooperation with States that
have old-age assistance laws under
another section Of the social security
law.