20
years and getting paid back in 30
years.”
One way of taking care of .an in
crease in prior service credit with
out changing: .tM present prior ser
vice bookkeeping plan might .b j K |
credit the^fr£serve for annuities
granted- for the increased amounts-
required in
the employers’ aegmih^a with those
same amounts. This would transfer
not only all on deposit in the em
ployers’ accounts, to the reserve but
probably still more, and the em
ployers’ acc6untlpi\Vould be carried
on the books as accounts receivable
for B m e\ time. Although the em
ployers’ accounts would ^ ^ ^ in the
red for a time, the money would be
resting in the reserve and n o S r a
paid out of the system, so the prac
tice would be financially sound. This
artifice would treat prior service
pensions and current service annui
ties \alike and so would perhaps sim
plify the bookkeeping during the
present transition period. Interest
would have to H charged the ag l
M R ts receivable but. these interest
charges w&SwBdl go to the reserve
and would
service cost. oJ B hough financially
sound, this procedure of noSggaiig^
ing^^ ^ ^ i .pi^^w b o K k e liS IM p la n
would require a good deal of educa
tional work to avoid state-wide mis-
Binders t anding.
A Ampler and more realistic book
keeping plan would be to create a
prior service pension fund. It would
Receive theSa^^ S ^ ^ ^ h ie li
em-
ployers are now paying for prior
Krv^^-pension cost, and which equal
at present 40% of the employees’
current service contributions. That
part of retired employees’ annuities
which are prior service pensions
lyould be totaled each month and
charged against thisSraKM At first,
j|£hen much more SlK^mihgKiS^I) the
fund®rom employers than
out in prior service pensions, the
Later the
pensions would be paid out of the
fund faster thanemployers were pay
ing in. Certainly after the end of
the amortization period when the
employers stop contributinfflim w iaSa
ser vi ce p ensi on c os t, there would
have to be enough in the fund to
continue
ffiljEipT»Y C ^ e lig il^ ^ H m ^ ^ B e them;
have|||H ^H
In any case, there will have to
be some adjustments toward the end
of the amortization period and per
haps some very minor changes after
it ends. This prior service pension
fund method would seem to be a
simple and sound procedure. The
state would meet its prior service
pension costs each year with a safe
surplus always in the fund.
Valley Oil Company
Douglas McKay
Chevrolet Co.
Fuel Oil - Furnace Oil - Diesel Oil
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Standard Heating Oil
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14th & Hoyt Sts.
R B s alem. Ore.
Off. 2-3633. Nite 2-4086 Ben, 2-3254 Verne
The Newest Dictation and
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NEEDHAM'S
465 State Sth;
Salem, Ore.
CHEVROLET
C A D ILLA C
Telephone 3-3175
510 North Commercial Street
Salem, Oregon