12
Retirement System— Questions and Answers
1. Q. What will be done with the
con tribu tion o f the m em ber a fte r it is
paid into the Retirement Fund?
A. The member’s individual account
which will be established at the time
of his entrance into the System, will be
credited with the amount of the con
tribution, and the contribution, togeth
er with the contributions from the em
ployer, will be invested in high-grade
securities. Interest earnings shall be
added to and expenses deducted from
all employee and employer accounts an
nually on the basis of the balance in
each account and the amount of an
nual contributions.
2. Q. Who will control the invest
ment of the funds?
A. The State Bond Commission with
the approval of the Retirement Board.
The State Treasurer is the. custodian
of the Retirement Fund.
3. Q. How will I receive the interest?
A. It will be credited to your individ
ual account in the office of the Retire
ment System, the same as your contri
butions.
4. Q. Why is it necessary to invest
the contributions?
A. In order to provide larger retire
ment income than could be done by
contributions alone.
î. Q. Am I correct, then, in under
standing that every one of the mem
bers of the Retirement System will have
an individual account in the Retire
ment Office showing the total of all
the contributions he has made, plus in
terest compounded annually and minus
his share of the expenses of administer
ing, the System?
A. That is correct.
6. Q. Am I also correct in under
standing that for every member,
whether his individual account will to
tal $2 5 or $1,225, bonds or cash in an
amount equal to the total in his indi
vidual account will be held in the
State Treasury?
A. That is correct, also. And, in ad j
dition, for each member there will be
in the State Treasury, in the form of
cash or bonds, another amount equal
to the contributions made by the State
for service of each member after July
1, 1946.
7. Q. We have spoken only of con
tributions that will be made jointly by
the members and the employer for ser
vice after July 1, 1946. What will be
the liability assumed by the employer
for prior service?
A. A portion of this liability will
also be paid into the State Treasury by
the employer as provided in the Act
after July 1, 1947 at intervals desig
nated by the Retirement Board. It is
provided that the entire liability will
be liquidated within 30 years.
J
8. Q. Are contributions made on
overtime payments?
A. A member’s contribution is cal
culated on the total amount he earns
each month and it makes no difference
if he worked "straight time” or "over
time” to earn it.
9. Q. Rates of contribution are said
to be higher than other governmental
retirement systems?
A. The contribution rates were
adopted by the Retirement Board on
the basis of recommendation of the
consulting actuary who made a thor
ough study of the liabilities the system
will incur. Some of the factors influ
encing these contributions rates were:
1. The low interest rates prevailing to
day on sound investments (2 % % to-,
day against 4 % of 15 years ago ); 2.
A changing mortality table (people
are now living longer and herlce will
draw retirement pay longer) ; 3. The
age, sex and other factors were all con
sidered.
(Continued on page 13)