Evening star., 1949-03-13
Roberts
Continued From Page C-1.)

now pay u1S pdIt VI VIC Sooo AAA eAiS
form of that l per cent pay deduc-
ton. up to the first $4,000 of
wages or salary they earn in each
year. This is not deductable from
income tax. for example, on the
theory that you will eventually
get it back. That is generally, but
not always, true.
The law now says that, even
when you reach the age OF IS. you
cannot 60 on working-if you earn
s15 month or over that is work
ing'-and draw the pension. The
new administration plan is to
raise this minimum to $50
month. However, you can draw
interest on investments, go into
farming or some other business
not covered in the pension sys-
tenn and still draw your pension.
In that the system is grossly un-
fair.
This retirement test grew out
OF a feeling when the original
law was enacted that the pension
plan should be means of en-
coufaging elderly workers to with
draw from the labor market and
make more jobs for younger per-
sons.
The Advisory Council in con-
sidering the retirement test
theory, concluded thai such a
work clause" should not be used
to take people away from work.
Council Draws the Line
The chief purpose, the coun-
Gil added, should be to prevent
the payment of benefits to persons
VINO continue working for wages
al or near the level Of those
earned during much of their work
ing lives; such persons have not
suffered the loss of earnings
against which the system insures.
In general, the council favors
system of contributory social
insurance-which we now have
with benefits related to prior
earnings and awarded without a
needs test"
The new proposal is to deduct
per cent from the first $4,000
earned each year instead OF the
first $4,000 and to raise the de-
duction to ~ per cent for those
now covered and to 2 per cent
for those 100000 who would
be added to the system for the
first time. Employers. now and
In the future plans. are required
to make contributions equal to
the amount deducted from the
employees pay envelope.
Balance in Few Years
Because it takes so many years
to get huge pension system into
operation. much more money Is
being collected than is being paid
out. But as time goes on and
more insured workers reach the
retirement age, outgo will reach
and eventually pass the income
of the fund. The council suggests
that when a balance is reached
the Government itself make a
contribution to the fund.
The reserves built up over the
years have been invested in Gov
ernment bonds-the Government
spends the money for current
operating costs, gives the fund
bonds in exchange and pays in
terest on the bonds. Although
there has been criticism of this
procedure, the Government
advisory group declared such in
vestment is as reasonable and
proper as is the investment by
life insurance companies of their
own reserve funds in Government
securities"
From all this, one thing is
clear: This Nation has embarked
and now is about to go deeper into
a vast social security system of
1ar-reaching Importance. Yet in
both benefits and coverage it still
is in very preliminary stage.
Now is the time for Congress to
check it's history thus far and
make certain that no such scheme
as the veterans pension bill puts it
out of balance.