The Oregon state employee., May 01, 1950, Page 13, Image 13

A Discussion of Retirement
(Conclusion)
By JE R R Y S. SA Y LE R
Optional settlements at retirement
are closely B gged to r e te n tS iJn ser­
vice after retirement age. When a
member retires on pension there are
four different „plans for payment avail­
able to him. The unmodified form,
which is a straight-life annuity.
ing at the death of the annuitant and
does not include a - survivor. Under
this plan the annuitant receives the
largest amount possible.
O w n H i s a cash refund plan arid
while the annuitant receives slightly
less per month than under the un-
modified plan, he is guaranteed that
either he or his surviving lfeWBiwa|.y
will receive through annuity payments'
or cash refund at least as much as the
total of his own contributions.
Under option 2K B ^ ^ S u ita n t re-
ceives considerably less than under
■
S f f i n 1 or the unmodified form, but
if his named beneficiary survives him,
she will receive for life the same peri-
sion he received during his life. The
amount-of pension depends upon the
age of the benefgæ iM as well as that
of the member. When the survivor is
the spouse, a very rough general av­
erage would provide a pension ap­
proximately 30% to 35% less than”: the
unmodified form.
Option 3 is very similar to option
2 except that the survivor receiyes on­
ly one-half as much as the member
received during^jhis: lifetime. If the
surviving beneficiary is the spouse,
the average reduction from the amount
available on the unmodified form is
very roughly 20% to 25%.
When a member reaches retirement
age, his employer may recommend to
the retirement board that continued
service by the é m igy e W ^ n the pub­
lic interest'and if the retirement board
approves, the employe may be retained
for successive periods of one year, sô
long as thé employer and the retire-
men t board mutually agree that the
continued service
the public in­
terest. Retention of employes at S be­
yond retirementwage should be based
on consideration of the public inter-
est^^^/required by law, but equally
important, it seems to me j-’raxei the best
in ® |S t^ o f the member.
AlmosGLey^ryone, I think, would
agree that it is to the member’s inter­
est to be retained since he will con-
||||u2«t?o ¿receive fhis^ sW$HM®|ather than
a much lower pension and his^eiibipii-
will continue to grow. H o w g S . it
must be remembered that should Rfre
die on the job or in service, all his
beneficiary or his estate can recover
is the amount of his own net contri­
butions.
The options which we have been
discussing cannotS^Bspme effective
membla actually retires, is
eligible for pen^^™ and has selected
his option. In other words, the em-
ploye has not established for himself
and his survivor a vested right in the
employer’s contributions until he ac-
tually r e t « ' on pension.
One example will suffice. Wfe have a
member under/ retention who is 79
years of age and whose wife g 69.
Obviously, he will not be able to con-
'tinhe on the job for more than an-
other year or two at most, and his
salary is not large. Were he to retire
now, he could have between $80 and
$90 per month on the unmodified plan
or about $50 per month under option
2. These values capitalize for approx­
imately $7,000. The member has con-
tributed about $1100. At age 79 life
is.; very uncertain. If he dies imsepvice
we will refund to the widow $1100. If
he retires on pension, we will normal-
ly pay in pension to the member and
survivor an amount the present val­
ue of which is $7,000. Actually, if both
live out their expectancies, we will
pay considerably more, over*'the years,
than the $7,000.;IsBnis«.-member justi­
fied in gambling $7,000 against $1100