Image provided by: SEIU Local 503; Salem, OR
About The Oregon state employee. (Salem, Oregon.) 1944-195? | View Entire Issue (April 1, 1951)
18 and at best to a complete readjustment of living habits. Effects of Inflation: It is well known that those who rely on receiving a fixed number of dollars for their livelihood are hard hit by rising living costs. Our $2.50 per month prior service allowance set in 1945 and our present increased $4.00 allowance starting Ju ly 1, 1951, are practically the same amount in buying power; from the receiver’s stand point .there is no actual gain to him; infla tion soaked up that extra $1.50 per month! The retirement allowance built up during current service since Ju ly 1, 1946 (maximum of $18.32) has not in creased and never will, even if the cost of living should increase another 80% or so. The retired employee has experienced a steady decrease in the buying power of his retirement allow ance, initially pitifully small and in adequate. Such conditions explain in part why many retired employees are working those 600 hours per year of emergency employment for the State, why some are on old age assistance, while others* are being supported by their families or friends. Also, these inflationary trends explain in part the demands to the legislature by varied interests for modifications in the Retirement Law such as: higher retirement age, easing, up the employment reinstatement con ditions, increasing the maximum SaM ary on which contributions and State matching may be made, permitting in vestment of the Fund in higher yields, ing stocks, bonds, et cetera. They are also responsible in large measure for employee requests for more liberal benefits, more State matching funds, permissible retirement after 30 years of service regardless of age, larger death benefits'^ better disability pro tection, and in one way or another, simply “more dollars.” Far Short of the Objective As stated before, it is intended that retired employees are to receive, a half-pay retirement allowance after 30 years of current service at age 65. We have seen that the maximum allow ance as of Ju n e 30, 1951 is $98, for 25 or more years of service, and in an other 5 years could be as much as $119. It will be December of 1957, at pres ent rates and limitations, before any one can draw a retirement allowance of $125 per month which is the present maximum allowance payable (exclus ive of prior service) under the present system. This is because prior service credit is limited to a maximum of 20 years, and current H ^ ^ ce retirement allowance (for 30 years or more of service?)^ is limited to a maximum of $125 per month, based on contribu tions being made on maximumf salary of $3,000 per year. Thesejftwo limita tions were placed in th'e^Law to save the State from putting in the money originally intended and necessary to meet the objective of the Act. Practically every change made in the .la w S n c e 1945 and practically every request for change^ lias- I been due to orie or the other of the twb main de ficiencies in the Law;' viz: inadequate provision for those retired during the early years and the State’s limitation on the amount it will match. It might be said, also.; .that the pres ent A ct-is somewhat dfefici’ent regard ing death benefits as compared with msfi^yfother sound- systems. Some Proposed Remedies: It is necessary that Oregon’s Retire ment System remain on ¡ay sound fin ancial basis. A t present we are .on^an “ actuarially” ¿ sound financial basis. There is difference. The federal social Security program is financially sound as the government takes from 'the public what money is necessary to make promised payments as due. It can dig up the money at any time and as needed. In an “ actuarially” -H u n d prograni|j the probabilities of income and demand . $re calculated and the money has to bejgBoliecte'd in advance: payments are made only to the extent of the funds so provided. It is said that social security is a welfare and insurance program; whereas retire ment systems such as ours are com pensation and/j^HHg|s programs. As nronw ld l remedy might be suggested that a- Stale “ welfare.: and insurance” program could be integrat ed with our present system to thus provide a larger measure of'protection to retired State employees.
