5
The Public Employee Retirement
Plan, to achieve its objective, concerns
itself with the interests of the regular
continuous workers who remain in the
same employment for a long period of
years. The retirement plan must re
main flexible to meet special needs and
changing circumstances. It must facil
itate the removal of superannuated em
ployees from active service without
hardship or resistance from the em
ployee. It must assist in attracting and
retaining well qualified new employ
ees. It must be adaptable and must
meet the needs of the individual em
ployee members.
Mr. St. John’s conclusion is that the
two plans supplement each other and
that each plan separately achieves its
individual objectives, but that neither
employer nor employees should expect
one plan to accomplish the objectives
of the other.
The inadequacy of the Federal plan
alone to meet the needs of a State is
ably pointed out in an article in the
same magazine by A. G. Gabriel, Ac
tuarial Consultant of Detroit, Michi
gan, as follows:
“ Com pulsory Retirement. Relieving the
payrolls of superannuated employes, who
have become hidden pensioners, is one
of the important reasons why the Fed
eral Government, as an employer, the
several states, cities, and other poltical
sub-divisions have adopted retirement
plans for their employes. These plans
usually provide for the compulsory re
tirement of an employe at age 60, 65, or
70, depending upon the nature of his
work or profession. Voluntary retirement
is usually permitted prior to the time
when retirement becomes compulsory.
“ The old-age and survivors insurance
program of the Social Security A ct does
not provide for the compulsory retire
ment of employes. Beginning at age 65,
it provides retirement benefits only in
case the employe quits working in em
ployment covered by the Social Security
A ct. If public employes are brought un
der the provisions of the Social Security
A ct, it is quite likely that when an em
ploye attains age 65 he will compare the
amount of his weekly pay check with
the amount of Social Security benefits
to which he would be entitled if he re
tired and he will decide in favor of his
weekly pay check. The end result will
be that a city or a state will find that,
in addition to paying social security
taxes to the Federal Government, it will
continue to have the superannuated em
ployes on its active payrolls, as hidden
pensioners, receiving full pay, long after
they have attained retirement age. The
situation will be particularly serious in
the police and fire organizations of cities
and states where conditions require a
force of physically able young men. There
are not enough desk jobs in any police
department or fire department to ac
commodate men past age 60. And men
past age 55 are no more able to perform
active police and fire duty in metropoli
tan cities than men past age 40 are able
to perform active line duty in our Arm y
and Navy. Certainly there are excep
tions, but there aren’t enough exceptions
to protect property and maintain law
and order.”
Mr. Gabriel continues to describe the
personalized individual treatm ent given
employees by a local retirement system
and the contribution of a public retire
ment plan towards efficient govern
ment as follows:
“ Benefits of Retirement Plans. Public
employe retirement plans provide retire
ment allowances for public employes who
attain retirement age, or who complete a
minimum number of years of service
in the employ of the governmental unit.
“ A ll these benefits are administered at
home, usually by a board made up of
elective or appointive officials who are
ex-officio members of the board, and
employe members who are selected by
the employes themselves. The board
members who administer the public em
ploye retirement plan are men and wo
men who work with the employes and
are available to them. This close rela
tionship between the management of a
public employe retirement plan and the
participating employes enables a local
plan to render personalized service which
cannot possibly be performed on a na
tional scale. The employes share equal
responsibility with the employing gov
ernment unit for the proper operation of
the retirement plan, and out of that
sharing of the responsibility comes a
proper regard as to what is reasonable
and what is unreasonable in the nature
of benefits to be granted by the plan.
Another recognized authority in this
field Rainard B. Robbins, Vice-Presi
dent and Secretary, Teachers Insurance
and A nnuity Association of New York
in a paper presented at the 1944 A n
nual Conference of the Municipal Fi
nance Officer’s Association discussed
the coordination of individual retire
ment plans with the Federal Social Se
curity Act arriving at the following
conclusion:
(Continued on page 26)
IF You Would Have Them