The Oregon state employee., November 01, 1947, Page 7, Image 7

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contributions per year. Let us assume
that we earned 2 per cent of our funds.
■Assuming that a member contributes
I $100.00 per year, if w e deduct $2.00
■for expenses, there'is $98.00 at 2 per
■cent interest for the first year. During
this first year, true enough, the inter-
iest earnings and the expenses would
just about offset each other. ‘However,
the second year there would he $198.00
at interest, b u tIstill only the same $2.00
; for expenses. In ten years there would
-be approximately $ 1,000.00 earning 2
per cent interest, or $20.00, but in the
10th year the expense would still be
l$2.00. These figures, are. not accurate
'since our interest earning assumption is
2% Per cent and our expenses, for op­
e ra tio n will be whatever they actually
are. But it exemplifies the principle.
Obviously, if we assume that we are to
earn 2% per cent interest on pur in­
vestm ents and then actually only earn,
I say, 1 per cent, Unless we could over-
come ¿hjsfyshrinkage in interest earn-
ings by saying^ in.' expenses, then over
the long pulí certainly the employee
would not reecive as large a pension as.
he had anticipated. '
they are faced with expenses which
they cannot avoid which, due to the
nature of our business, we do hot have
to contend with. This is not to saÿ,,
however, that an employee should fore­
go purchasing private annuities from
private^ companies in order to supple­
ment whatever pension he may bè able
to secure through the retirement Sys­
tem. So far as I am concerned, the
mpre pension we can build up for our­
selves by whatever means, the better.
That $2400 Contribution Basis
And for the complaint regarding the
big deductions on the first $2400.00
per years o f earnings, these will dimin­
ish during the latter months o f each
fiscal year when those employees who
have limited their contributions to the
first $2400.00 will have ho contribu­
tions whatever to make. You must re­
member that this new provision affects
only those employees who receive more
than $2400.00 per year who have elect­
ed to limit their contributions to that
amount. If-one is receiving more than
$2400.00 per year and has elected to
pay on all of hi's. salary,-it affects him
not at stiff, The same is true of an em­
Employees Encouraged to Buy Annuities
ployee receiving $2400.00 per.; yêâjf, pr
As for the wisdom of an employee less,: because he is required to contribute
contributing on that portion of his on all of his salary. As a matter of fact,
salary in excess of that portion on w high ' the new provision affects a minority of
his contributions! will be matched by our membership.
the employer, may I say that personally Few Over-age Employees Retained
I contribute on all of myf Salary and
We are expecting to process approxi­
having been in the life insurance busi-
mately 1200 to 150Q pension . appli'eh-
iness all of my life, I; would not do. so
tio n sa t the end of the year. While we
■if it did not appear to me to be a sound
are receiving quite a large number of
investment. You must remember that
recommendations' for retention of over­
¡even on the member’s excéss co n trib u í
age employees, the number is not as
tion on which he is not receiving any
large as might have been -expected.
| matching contribution from the em-
Sincerely, .
ployer, he- is still providing himself
je r r y ’ s ., sayler ,
additional annuity without being sub­
Executive. Secretary
j e c t to expense for acquisition cost,
I taxes, and numerous other expenses with
I which a private c'pmpany is conf ronted.
He who would pass his* declining
■This is no reflection on' the splendid in­ years with honor and comfort, should,
surance companies of our country who when young, consider that he may one
are doing a grand job, both ih various day. Become old, and remember when,
fforms of life-insurance and modes of he is old, tM t he has once been ypung.
^ E B A ddison
contracts, but the fact remains that