18
Social Security and the
Public Employee
By O. C. POGGE
Director of the Bureau of Old Age and Survivors’ Insurance,
Baltimore, Maryland
(Editor’s Note: The question of Old Age and Survivors Insurance coverage
for public employees is one in which every member of OSEA should be
interested. We will endeavor to present both sides of the question and as
much information as is possible for your enlightenment. Publication does
not necessarily reflect the position of the directors or the executive sec
retary. The source of information will be given in each instance. It must
be remembered that there is just as much propaganda on one side of the
fence as there is on the other.)
The tables showing benefits whichlwould be payablé^^Ker H. R. 6000 have
not been worked out in the same detail as tables under the present law. The
encloséd Tables 1 and 2 however, are good examples. TheyslOŒS the principle,
essential in a social insurance system, that,¿while benefits should be reOWao|
to wages and contributions; persons whose earnings are low should receive a
somewhat greater return for their contributions. The man vSroseWverage month
ly wage was $200 will receive more in benefits than the man who averaged
$100 a month, but not twice as much.
To avoid building up an excessively large ^t^st fund before the program has
matured, (whatever that means!—Ed. Note.) the maximum contribution rate
for individuals and employers will not be applicable until 1970. This means
lower costs for those who come into the system at this time. The eniffl^S Table
3 shows the annual contribution for selected wagev! leÆ ^M ^B ^ f the workers
coming under the program at this time would have another
The
system is designed to provide adequat(g|benefits for those who, because they
were older when the system began, can be under theisystem for
short time before retiring. Since the contribution rate does not vary with the
age of the individual, workers whO'etire in the earlier years of the program
receive greater benefits in proportion to their coiB ïÈutiÔM However, even
for those who will pay the maximum rate for their full working life-time, the
actuarial value of the benefits will be more than the contributions. Because
of basic dissimilarifes, it would be very' difficult^ make any comparisons be
tween the cost of old-age, survivors and disability^ surancelberSS^ and the
cost of the benefits purchased from private insurance firm s .
The Social Security Administration has recommended that employees under
retirement systems be covered in the same way as thosW g t under such systems.
We believe that the existing retirement systems could be adjusted so as to pro
vide greater total protection for the employees than could be orBi&ed by either
system alone.
TÀBLE 1. Illustrative monthly benefits for retired workers under H. R. 6000.
Retirement Benefits
Average Monthly Wage
Single*
Married#
Insured Worker Covered for 5 Years
$150.00
$56
$85
$200.00
62
92
$250.00
67
100
$300.00
72
108
Insured Worker Covered for 10 Years
$150.00
$58
$87
$200.00
63
94
$250.00
68
102
$300.00
74
no
Insured Worker Covered for 20 Years
$150.00
$60
$91