37
Factors Involved in Pension Legislation
For Governmental Employees
(Continued from page 11)
tributions and include with the refund
interest on the accumulated contribu
tions of the employee.
In Illinois where the governmental
unit contributes sums in lieu of salary
deductions for employees disabled in
Une of duty, these amounts are refunded
along with the employees’ contributions.
This means a r e f u n d of the total
amounts paid by the employee plus
certain contributions made on his be
half by the employing unit, and while
the latter payment is made only in a
limited contingency, it has been con
sidered by some to be not in accord
with soundest pension provisions. The
Department of Insurance has recom
mended that these acts be amended so
as to limit refunds at all times to the
amounts actually paid by the employee
himself.
The justification for refunds arises
out of the general acceptance and prac
tice of making membership in a re
tirement system compulsory. Illinois
pension plans accept compulsory mem
bership as an essential feature of a fi
nancially sound and administratively
defensible retirement plan. The failure
to provide for a refund of contribu
tions, or some equivalent, would under
such circumstances appear to penalize
those who have contributed on a com
pulsory basis and are dismissed or have
an opportunity for transfer before the
retirement age is reached.
The chief objective raised to the pay
ment of refunds upon resignation or
dismissal from the service are that (1)
it prevents the retirement system from
having the desired effect in retaining
men in the service, (2) it may actually
encourage employees to resign when in
need of funds, (3) it weakens the dis
ciplinary powers of the superior officers
and (4) it greatly increases the cost
(Continued on page 38)
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