38
Factors Involved in Pension Legislation
For Governmental Employees
(Continued from page 37)
of the benefits since the sums refunded
could otherwise have been used to pay
benefits to other employees. Another
point that may be noted is that an
employee may dissipate his refund, so
that the sums set aside over a period of
years will not be used to provide eco
nomic security in old age.
These various objections to cash re
funds have resulted in a discernible
tendency to effect a compromise be
tween cash refunds and the withholding
of the contributions without benefit
to the employee separated from the
service. Current pension theory seems
to be away from cash refunds and to
wards the use of the accumulated con
tributions to furnish such annuities as
can be paid therewith, with payment to
commence when the former employee
reaches a specified age. Under this pro
cedure, unlike that of cash refunds, it
is generally conceded that the employ
er’s contributions be treated just as are
the contributions of the employee, that
is, used to provide a deferred annuity.
This is now the rule with some private
pension plans. Under the new Illinois
local government employees’ pension
act no cash refunds will be made if the
AUTHORIZED AGENTS FOR
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accumulated credits of the employee
are adequate to pay an annuity of at
least $10 per month beginning with
age 63.
A conspicuous advantage of uniform
ity in pension laws as between various
governmental units a n d as between
various branches of the service within
one governmental unit, is that trans
fers without loss of pension rights are
facilitated.
Administration of Pension Systems
Adequate provision for- sound ad
ministration is one of the important
considerations in regard to p e n s i o n
plans, because upon those who adminis
ter the system rests a large part of the
responsibility for the success or the
failure of the pension plan. The most
important considerations in administer
ing pension systems are: (1) Adequate
provision for a supervisory board with
authority to determine questions of
policy, promulgate rules and regula
tions within the terms of the pension
statute, and to supervise the work of
actuaries, secretaries and other employ
ees of the board. (2) Provision for the
hiring of actuaries, executive officers
and other employees as are necessary
to make the actuarial studies upon
which questions of pension policy are
determined, and as are necessary to
keep adequate records. (3) A fair dis
tribution of employer and employee
representation in questions of adminis
tration. (5) Adequate control of the
D
R
Central Pharmacy DRUGS
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Qnisenberry's
Salem, Oregon
410 State