TABLE XXXI.—Showing total and comparative cost to the Government of establishing plan for retiring employees, etc.—Continued.

CHART SHOWING COMPARATIVE COST TO THE GOVERNMENT OF ESTABLISHING THE SAVINGS AND ANNUITY PLAN EMBODIED IN THE PERKINS (S. 1944)
AND GILLETT (H. R. 22013) BILLS.

Perkins and Gillett bills is graphically illustrated by the following The difference in cost to the Government between establishing the

chart:

The number and per cent of the total number of employees whose annuities under the Perkins bill would be reduced by the $600 limit provided under the Gillett bill are shown in the following table:

TABLE XXXII.—Showing, by classes, the per cent of employees whose annuities would be reduced by the $600 limit provided by the Gillett bill (H. R. 22013).

CALCULATION OF MAXIMUM COST FOR SERVICE IN THE DISTRICT OF

COLUMBIA.

The maximum cost, the first year, of putting the plan into operation in the District of Columbia alone would be much less than if extended to the employees throughout the country, and at the same time those branches of the service where superannuation is greatest and the need of a retirement measure most keenly felt would be benefited immediately. The cost of paying annuities for back services to employees in the District of Columbia is shown in Table XXXIII to be about $400,000 [$396,060] for the first year.

TABLE XXXIII.-Showing estimate of the maximum cost the first year of annuities equal to 1.5 per cent of salary for each year of service for employees in the District of Columbia.

NOTE. The annuities shown in column (f) are equal to 1.5 per cent of salary for each year of service: bx1.5xd

100

This table is less accurate than the other tables given in this report, but its lesser accuracy is a point in favor of its conservatism. It is based on Table 72 in Census Bulletin 94, which shows the employees in the executive civil service in the District of Columbia classified by compensation, age, and period of service. The lesser accuracy of Table XXXIII is due to the fact that Table 72 includes unclassified as well as classified employees, the total number of employees in the District being given as 25,351 as against 23,254 classified employees. The employees shown in Table 72 are given in five-year age groups, which also makes the result somewhat less accurate than if the number at each age had been stated. The sum of $400,000 would, however, seem to be a safe maximum figure, considering all the allowances that must be made for the inclusion of unclassified members of the service, the overestimation due to computations based on present rather than average salaries, and the retention of numerous individuals in the service past the age of retirement.

This approximate figure of $400,000 as the maximum annual cost of inaugurating a retirement measure in the District of Columbia is interesting, since it has been estimated that the loss to the Government by reason of superannuation in the District is approximately $400,000 a year. In a report on superannuation in the civil service, made by a special committee of the National Civil Service Reform League in 1906, the Civil Service Commission is quoted as authority for the statement that those over 70 years of age do about threequarters of the maximum quantity of work performed by a thoroughly efficient employee, and that the loss to the Government through superannuation in the departments at Washington amounts therefore to about $400,000 a year.1

HOW THE COST OF PUTTING PLAN INTO OPERATION MAY BE MET.

Two ways of paying annuities on services rendered prior to the adoption of the plan have been suggested. The first two bills introduced into Congress covering this plan provided that annuities payable for services rendered prior to the passage of the bill should be paid by the Secretary of the Treasury from any money in the Treasury not otherwise appropriated. The third bill makes provision for payment of annuities for back services out of a fund created by deductions from the salaries of new entrants and the salaries of those promoted, but this provision has been discarded by the House committee as unfair to the younger employees, and is no longer proposed. The bill discussed in this report provides for the payment of annu

1 See Special Report of United States Civil Service Commission to the President, p. 3.

ities for back services by the Government.

follows:

Section 11 reads as

SEC. 11. That beginning with the first day of July next following the passage of this act every employee to whom this act applies shall be entitled, on reaching the retirement age, or having already passed that age, to retire from the service under the provisions hereinbefore contained, and also, in addition to the annuity herein provided for by his own contributions from his salary, to receive from the United States during the remainder of his life an annuity equal to one and one-half per centum of his total compensation during service prior to the taking effect of this act; and the Secretary of the Treasury is hereby authorized and directed to pay such annuity quarterly, upon proper certification of the retirement of such employee by the appointing officer under whom he last served. Annuities from the United States for the period of service prior to the passage of this act shall be payable only on condition that the employee remains in the service until he reaches the age of retirement: Provided, however, That employees of group one may receive the annuity granted by this section on retirement at the age of sixty years or thereafter. On the death of the employee the payment of annuities provided for by this section shall cease and determine. Annuities payable by the United States on salaries in excess of two thousand five hundred dollars per annum shall be based upon an annual salary of two thousand five hundred dollars.

This is followed by a section which makes provision for reckoning the period of service prior to the passage of the bill. Section 12 reads as follows:

SEC. 12. That the period of service upon which the annuity to be paid by the United States is based shall be computed from original employment, whether as a classified or unclassified employee, and shall include periods of service at different times and service in one or more departments, branches, or independent offices of the Government, the Signal Corps prior to July first, eighteen hundred and ninety-one, and the general service in or under the War Department prior to May sixth, eighteen hundred and ninety-six.

PLAN CAN BE PUT INTO OPERATION WITHOUT ADDITIONAL APPROPRIATION BY GOVERNMENT.

The study and discussion which have been given to the subject in recent years seem to have convinced those interested that the only way to put the plan into operation is by means of appropriations from the Government. The following arguments have been used to discredit the suggestion that the annuities for back services should be paid by any form of taxation on the employees.

(1) That the plan is constructed primarily for the benefit of the public service. The removal of superannuated employees is more to the interest of the Government than to the interest of the clerks as a body.

(2) That the Government was the beneficiary of all services rendered prior to the adoption of the plan, and if anyone is charged for such services it should be the beneficiary.