Image provided by: SEIU Local 503; Salem, OR
About The Oregon state employee. (Salem, Oregon.) 1944-195? | View Entire Issue (Dec. 1, 1944)
4 Public Employees Retirement Plan and the Social Security Act I. A. D e FRANCE service. Furthermore, the man whose In the February, 1944, issue of the wages have been $100 a month receives, in addition to his basic benefit of $25, magazine Municipal Finance, John B. only 1% of this amount for each year of St. John, Chief Actuarial Section Bur membership in the system. If his mem bership in the plan lasts 40 years, he can eau of Old Age and Survivors Insur only increase the amount of his benefit by $10, .that is, to $35. The average amount ance, compared the objectives, meth of monthly benefit currently payable for ods and benefits of the Federal Old a single man is about $23.” Age and Survivors Insurance and Pub Mr. St. John compares the objectives lic Employee Retirement Plans, show of the two plans saying: “ Old age and survivors insurance is ing that the benefits of both types of concerned primarily with the provision of systems are needed to provide adequate a subsistance income which will enable the recipient to avoid destitution.” protection for both employees and em The accomplishment of the above ployer. objective by the public employee re It is because of major differences that the two types of plans each have tirement plan is incidental or secondary a part to play in the furnishing of ap to the major purpose of such plans which Mr. St. John describes as fol propriate retirement benefits to all em lows: ployees of State and local governments. “Most formal retirement plans . . . are more concerned with the interests of the Mr. St. John compares the benefits of employer in maintaining an efficient em the two systems as follows: ploye organization than with the inter “Public employe retirement plans pro vide amounts of retirement income char acteristically related closely to the em ploye’s wages and his length of service or to the amount of his contributions. Two retiring employes, whose lengths of service have been the same, may expect to receive amounts of benefit which dif fer proportionately with their respective wages or salary earned. Two retiring em ployes, whose wages have been the same but whose lengths of service have been different, may expect to receive amounts of benefit which differ proportionately with their respective lengths of service. “Benefits are characteristically substan tial in amount when considered in rela tion to the worker’s wage or salary— 50% to 75% of pay.' The average amount of monthly benefit payable, according to a recent release by the Bureau of the Census, is about $77. “In Contrast, old-age and survivors in surance provides retirement benefits in tended, first, to provide a minimum sub sistence income and only secondarily re lated to length of service and amount of wages. The basic benefit for a regular worker whose wages have been $100 a month is $25 a month. Another regular worker, whose earnings have been only half as much, or $50 a month, has a basic benefit of $20 or 80% as much as the $100 man. A third worker, whose earnings have been three times as great, or $300 a month, receives only 60% more bene fit. or $40 a month. The benefit formula is heavily weighted to secure for the ma jority of regular workers a benefit of $20-$30 a month, regardless of length of ests of individual superannuated employ es. An employe retirement system may have a number of other purposes . . . may be a measure of economy to remove superannuated employes from the pay roll and substitute younger, more vigor ous workers . . . may be a measure to secure general efficiency by removing older less efficient workers from posi tions in which they obstruct the progress of younger more productive workers.” Mr. St. John compares the methods or technique of the two systems, point ing out that the Federal system, to achieve its objective, is adapted to meet the needs of the typical or aver age wage earner, keeping records for nearly 40 million current contributors as well as for many others not current ly contributing; which job requires a large administrative organization. Re finements or options in the benefit provisions would add much to the task of administration, so that simplicity of provisions and of administration seems certain to remain a basic characteristic of the Federal system. This simplicity results in the treatment of individuals in ways which often seem arbitrary. Patronize Your Advertisers!
