The Waterbury Democrat., 1945-06-27
Taxpayers Urging
 Pension Adoption
(Continued from Page D

(Conttnued of the allowance. The bill as passed will save money, as compared with the original bill, in the age of re- tirement for firemen and the omis- sion of nonservice connected dis ability.
 The unsatisfactory parts of the new act are: D its continuance of the unnecessary $500 pension to teachers, although its omission of costly provision for teachers not now members of the teachers re- tirement syestem is an improve ment over the original bill CD the service requirement. of 20 years for general employees; and (3) the pro- visions for meeting the cost of the pension system.
 City Deficit Predicted
 '"The original bill, as recommended by the commission, provided for setting up a full actuarial reserve covering the city's liability in re- spect of both prior and future serv- ice. We understand that the com- missions actuary has estimated that | if the city's liability under the act as passed were to be financed on such basis, the annual cost to the city would be $309,000 in re spect of prior service and $228, 900 in respect of future service, or total of $537 ,000 year. This would have necessitated an increase in the tax rate, and the city administra- tion asked at the hearing on the bill for 8 modification of this fea- ture.
 As finally passed the bill pro- vides for the payment into the pen sion fund by the city of an annual sum sufficient to cover it's liability | in respect of future service, or the actual amount of pensions due in the year, whichever is greater. The actual pension payments for the current year, we understand, are already only little short of $2O0 ,OOO If the city's liability in respect of future service is only $228, 900, it is obvious that in the course of very few years the amount of pensions to be paid will be the greater. From that time on, for perhaps a quarter of a century, the citw will be meet HE 1lS DNLlSlOll obllS oOIO1AS ol1 oAAN same cash disbursement basis as at present, except that the contrlbu- tions of employees, amounting to about $110,000 a year, would accum- ulate in the fund. The inevitable result will be very heavy deficit in the reserve to cover the cityS lia- bility in respect of future service.
 "The accumulations in this re- serve will be equivalent only to the payments into the fund by employees plus whatever trifling difference there may be during the next two or three years between the city's payments on account of future Serv- ice and the actual pension outgo. In other words, the city will be starting out to dig itself into an- other pension hole not quite so deep as the one it has dug itself into under the present extravagant re- tirement provisions, but still a good deep hole
 Urges Bills Adoption
 Fortunately the bill as passed carries a section specifically reServ- ing the right of the legislature to amend it as to contributions, bene- fits and other matters. Under these circumstances you may well be justl- fled in asking the Governor to sign the bill. It would be too had to have to fight over again the battles with the employees involved in this years. legislation. At the same time definite steps should be taken looking to- ward the amendment of the bill at the first available opportunity. The teacher pension should be def initely abolished as to all future entrants into the school system II it is impossible to overcome opposi- ton to eliminating it for present teachers. The service requirement for general employees should be in- creased from 20 to 25 years. On general principle the contribution of general employees should be raised to five per cent of salary. This, how ever, cannot equitably be done as long as the policemen's and fire mems contributions remain at five per cent. The benefits, including death and disability benefits, of the latter are greatly in excess of those of general employees.
 Determine Future First
 Most important of all, the pro- visions for contributions by the city to the pension fund should be strengthened The safest course would be the establishment of & full actuarial reserve. This would involve, as We have seen, heavy present expenditure It is the only method which will smooth out the city's expense over the period dur ing which the liability for past service is being worked out. There is some weight, however, to be at tached to the argument of the city administration that current ex- pendiure for pensions should be kept down during the reconversion period and that permanent pension financing should wait until we know more definitely the extent of the other financial problems which must be faced. Concessions in this direc- tion, hofever, should not go fur ther than to permit the city to meet its liability in respect of prior serv- ice on cash disbursement basis for the time being. This is only stop-gap. The relief obtained will not last long, for in few years cash outgo on this basis will ex- ceed the sums which would have