Evening star., 1937-02-28
PR|VATEPENS|0NS
SPUR|SP[ANNED
Clark Will Urge Congress to
Encourage Their Re-
tentiOn.
RY ]. A. O'LEARY.

Renewed efforts to have Congress
consider the problem Of encouraging
retention of private pension systems
in industry, in connection with the
Federal social security program, are
being planned by Senator Clark,
Democrat, of Missouri, he indicated
yesterday.
The Senate Finance Committee
paved the way a few days ago for
creation of an advisory council Of
experts to delve into the proposal of
Senator Vandenberg, Republican. of
Michigan to adopt a pay-aS-you-go
reserve system of financing the Fed
eral retirement plan in place Of the
large accumulated reserve fund con-
templated by the present social Sc
curity tax schedule.
While the Vandenberg proposal is
entirely separate from the question
of preserving private pension sys-
TENS voluntarily established by in
dustries, Senator Clark said yester-
day he thought both questions could
be studied by the same group of ex-
perts. He said he expects to discuss
this possibility with Chairman Harri-
son of the Finance Committee.
U. S. System Compulsory.
In addition, the Missourian said he
would bring up the question of pri-
vate pension systems in connection
with any legislation that may be
drafted during the present session to
amend other features of the social
security act.
While the original social security
law does not prevent operation of
voluntary private retirement plans, it
requires employers and employees to be
in the Federal system and meet the
payroll taxes called for in that law,
irrespective Of any voluntary system
an industry may operate.
During the last two sessions of Con-
greSS efforts have been made in COM
mittee to work out some amendment
to encourage preservation of voluntary
retirement benefits, but none of the
proposals has gone beyond the stage
of committee consideration.
Personnel of the export advisory
council to take up the Vandenberg
old-age reserve issue is expected to be
named soon, following consultation
between the Social Security Board
and a subcommittee of the Senate
Finance Committee, composed of Sem
ators Harrison, Vandenberg and Byrd.
Holds Huge Reserve Unneeded.
Se.ator Vandenberg's main conten-
ton is that the $4,000, 100000 old-age
reserve, which it is estimated will have
been built up by 1880 under the pres
ent law, is unnecessary in a Govern
ment-controlled pension system and
would create a fiscal and economic
menace" To meet this reserve the
original law contemplates graduated
increase in the payroll taxes from the
present rate of l per cent each from
employer and employe, until maxi
mum rate of per cent from each
group is reached in 1949.
In advocating substitution of pay
as-you-go system, Vandenberg would
keep the payroll taxes at the present
/ per cent level from each group for
at least years, and thereafter until
Congress finds an increase necessary
to meet requirements and maintain
q reasonable contingency reserve. AS
the law now stands. the payroll taxes
will begin to go up gradually at the
end of three years.
Seeks to Extend Benefits.
Vandenberg's plan also seeks to ex-
tend the benefits of the Federal old
age retirement plan to large groups
now excluded, such as domestic SER
wants and farmers. His plan further
seeks to have payment of retirement
benefits start in 1889, instead of in
1912 as provided for in existing law.
1t was developed at the Senate
finance hearing a few days ago that
the Social Security Board is studying
extension of the act to these excluded
groups, but officials predicted it will
take year or two to work out worth
while recommendations. They indi-
Gated it was largely problem of
working out an administrative process
and tax collection plan for the large
groups now excluded from the act.
In the hearing an official Of the
board took the view that any change
''to a pay-as-you-go plan should be
after we have inclusive coverage,
rather than before we have inclusive
coverage."