Evening star., 1952-04-20
ctor is that Govern

port:
THE current proposal to grant
probational indefinite status tt
employees appointed from a regis
ter has important retirement i'm
plications. Employees affected
quite naturally will ask: Do
stay under social security or do
go under civil service retirement
and where am I better off?
Under present regulations, the
emergency-indeflnite employee
whether or not appointed from 9
registers subject to social Sc.
curity. He pays a tax of 1R%
on his wages up to $4,000 per year
This tax rate is scheduled to in
crease to 90 in 1854, to 2R%
in 1860. to go in 1865, and finally
to 3A% in 1870. His Government
employment is combined with any
prior or subsequent employment
under social security to determine
eligibility for and amount of old
age and survivor benefits.
System Outlined.
An employee subject to civil
service retirement contributes SO
of his entire salary. This rate is
4 times the present social security
tax rate. but is less than twice the
ultimate rate. Moreover. it applies
to all salary instead of only the
first $500. There is no question
but that the employee contributes
more under civil service retire.
ment. Now let's see If he gets
his moneys worth.
I'm the first place. the civil
service contribution is an indi.
lvidual, guaranteed, savings fund
The employee or his survivors will
receive, in the form of annuitieS
lump-Sum payment. or a combina-
ton Of these, at least as much
as he has contributed, plus COM
pound interest. Nobody loses; the
worst you can do is break even.
ION the contrary, the social Sc
curity tax is just that-a tax. You
never get it back. You mayor
may not-get back benefits equal
to it. Persons who shift to en-
lployment not covered by social
security can lose every penny OF
taxes paid. Young women who
prior to marriage, work less than
10 years under social security &C.
quire no old-age benefit rights
unless they have subsequent
covered employment.
"Of course, this obvious ad-
vantage Of a guaranteed return
under civil service retirement isn't
the whole story by any means. In
the area Of providing income
when disability. death, or old-age
terminates earning capacity, civil
service retirement offers more tc
the long-service, career employe,
social security is better for the
older, Snort-Servlce employe.
Basic Differences Cited.
"This situation results from q
basic difference between the two
systems. Under civil service, an
nuity benefits are directly proper
tional to length of service. The
30-year employe receives twice the
annuity Of the 15-year employe
with an identical 5-year average
salary. and the same is true fo1
annuities to their widows. Under
social security. however, length OF
employment does not affect the
amount of benefit, except for the
reduction in average wage be-
cause Of non-covered periods. Fo1
example, it is possible to qualify
for social security benefits with as
little as 6 quarters of coverage
The benefits are precisely as much
as those to a person with the same
average wage who paid taxes for
IS years.
"For older employees who can
qualify for old-age benefits in q
relatively short time, social Sc
curity is generally a better bar
gain. For a $500 employe re-
firing at age of IS, the monthly
benefit is $50. There is an addi-
tional benefit of $40 to the wife
when she reaches age IS. Under
civil service, the monthly annuity
based on five years of service is
$25; on 10 years, $51; and on II
years, $76. However. the annuity
begins at age 81 instead Of IS
It is greater, Of course, for higher
salaries: on a $4,000 salary, the
monthly amounts for i've, 10. anc
81 y n 81