The Wyandotte herald. (Wyandotte, Mich.) 1879-1943, 1939-03-31

Resolved, by the City Council of the
City Of WyandOCte. that
Whereas, at the April 3. 1889 cleo
ton there Is TO be submitted to the
qualified electors Of the City Of Wy
andOtte an ordinance to provide for a
system % Pensions and Retirements
for the benefit of members OF the PO-
lice and Fire Departments, and for the
widows and children of such members,
and
Whereas, said ordinance was sub
mitted to the City Council by the mem
bers of the Police and Fire Depart
ments by initiatOry petition signed by
approximately 1000 voters, making it
mandatory that same be placed upon
the ballot, and
Whereas, it has come to the atten-
ton OF this Body that the Pension
Committee Of the Policemen and Fire
men have circulated a letter to the
voters OF the city requesting their sup
port on said Pension Ordinance, aud
Whereas, this letter contains the
following paragraph:
THE BILL PROPOSED Is SELF
SUPPORTING. The fund will be ac-
cumulated and maintained through a
levy Of go upon each mans salary.
Awards which policemen or firemen
may receive and penalties which may
he imposed against them, will likewise
be placed in the fund These sources
OF revenue will be adequate TO take
care of the ordinary needs Of the pen
sion plan. In cases where funds are
not sufficient to cover all pension pay
ments, the bill provides that the City
Council shall appropriate sum to
make up the deficiencies until such
time as the reserve is restored"
Whereas, this paragraph is both
contradictory and contains gross mis-
statements of facts concerning the ul-
innate cost of the proposed Pension
system to the taxpayers, and
Whereas, this Body engaged the ser
vices OF Mr.. John s. Rae, Consulting
Actuary, to make an analysis of said
Pension plan and advise as to the
ultimate cost of same to the taxpayers
and
Whereas, Mr. Rae has reported as
follows:
The proposed Ordinance prescribeS
that contribution of $50 of the sal
aside in pension fund and used for
no other purpose. Ii also prescribed
that this money be invested in certain
types of securities. Under the prOyi-
siOns Of the Ordinance, no pension can
he paid for three years after its adop-
ton. During this period there will be
AN accumulation of approximately
Si,44O.OO a year which with interest
will amount to about $13,6OO.O0 in
three years. First pension payments
will probably be made in 1872 when )
men become eligible for retirement.
The cost of pensions in that year viii
amount TO $5,5JO.O0 and can he financ-
Ell out OF the contributions of the mem
bers of the departments as can pay
ments in 1913 and 1914 In 1915 the
fund would be exhausted and the City
would have to supplement- contribu-
tiOns by members Of the departments
with tax money. The amount neces-
sary in 1915 would approximate ST.,
5000 Thereafter the cost from taxes
would increase annually for about ten
years when it would approximate
$45.OOOOO per year If there were no
changes in the size of the departments
due 10 the growth of the City or other
causes, the cost would remain at about
that level
Under the provisions of this amend
nItht a man entering the service at 22
could retire at the age of AZ. At that
time he would have contributed ST.
$1,000. According To the American NOR
tality table this man would draw a
pension for about 23 years or about
Sd, 10000. The difference between
S23, 10000 and $1,530OO or 81, $4,000
would have to be borne by the tax
payer. Similarly man entering the
service at 80, the maximum age at
which "A fireman or policeman may
enter the service, would be eligible for
retirement at -. He would have con-
tributed 81 $1,000 and would draw
ST. $1,000 in pension payments.
The danger of enacting a pension
system so costly that it can not be
financed by the City is greater to the
contributor than to the taxpayer. A
man entering the service now may con-
tribute percentage of his salary an
nually to Il fund only to find that when
he is ready To retire there Is no money
in the fund and no prospects of any.
Lut TAX llIultdtlOn INV uldy udht uD
adequate appropriation for pension i'm
possible without reduction of. salaries
or other essential expense. In this con-
nectiOn. ii must be remembered that
most taxpayers can not look forward
to substantial pension at any age
and may be reluctant to bear over
1850 OF the cost of financing q system
for public employees who are, in addi-
tion, earning larger sums than The ay-
erage taxpayer.
I'm addition to benefits TO be paid
under the proposed Ordinance, iii case
of death in line Of duty, the widow or
children would receive compensation
in the gross amount Of $5.6O00O. This
amount is Also paid from tax mOLey.'
Whereas, ii is incOnceivable by any
stretch Of the imagination that any
pension plan to which an average EN-
plOyee contributes $1,5OO.OO and the
taxpayers contribute 100000 can be
termed 'Self-supporting" as claimed
Nv the proponents thereof. and
Whereas. In the light of actuarial
analysis. the proposed Police and Fire