—[ 
 
 TESTIMONY 
 
 with respect to the 
 
 OPERATION OF THE RETIREMENT ACT 
 
 with 
 
 Comments by the Commission 
 
 Washington 
 
 U. S. Civil Service Commission 
 
 1922 
 

:rK'^ 
 
 UNITED STATES CIVIL SERVICE COMMISSION 
 Washington, D. C. 
 
 <\ I 
 
 hA August, 1922. 
 
 TESTIMONY WITH RESPECT TO TIE OPERATION OF THE RETIRE1.EI1T ACT 
 
 On March 20, 1922, the Conmission called upon the Departments for tes- 
 timony by the following letter: 
 
 "In his last annual report, the Secretary of the Treasury states 
 (page 128) that the Retirement Act has 'already proved helpful and 
 has resulted in improved efficiency and economy in the transaction 
 of the public business." He suggests for consideration of the 
 Congress 
 
 1. The possibility that the age limit for retirement might be 
 lov/ered from 70 to not more than 68 years, and 
 
 2. Vilhether the amount of annuity under the Act might not be 
 somewhat increased. 
 
 He believes that, if the retiretient age be lov/ered and, at the 
 same time, further restrictions be placed upon more than one ex- 
 tension of service after the retirement age, the public service 
 would receive still further benefits from the retirement plan, tut 
 that this should not be done until increased annuities are granted. 
 He adds: 'At the present time the annuities under the Act appear 
 to be small, particularly if one takes into consideration the pre- 
 vailing prices of the necessaries of life and the further fact 
 that, in the rcajority of cases, it is rarely possible, at the av- 
 erage salary paid by the Government, for employees to lay aside, 
 while in the service, an amount of savings sufficient to cover any 
 deficiencies in the annuity.' 
 
 "Several bills are pending in Congress for the amendment of the 
 Act, and it v/ould seem desirable that a survey be made respecting 
 its workings, its effect in improving efficiency and economy, and, 
 since the Act needs amendment, in what particulars amendment should 
 be made. In this connection, attention is invited to the report 
 of the Commissioner of Pensions and the report of the Board of Ac- 
 tuaries. 
 
 "It has been suggested that the Commission ascertain the effect 
 of the retirement system, and, while it may not be possible to make 
 an estimate of the financial saving, valuable testimony on the sub- 
 ject can undoubtedly be given. 
 
 "The chief points of inquiry appear to be: 
 
 1. To v/hat degree has the retirement system had a stabilizing 
 effect on the service? The turnover has, of recent years, 
 been extensive, but this is now a good deal less, and it 
 nay be possible to estimate the economic value of the re- 
 tirement system in producing stability and promoting a gen- 
 eral sense of security and contentment. 
 
 2. Upon the retirement of each employee, a careful survey is, 
 no doubt, made of the need of filling the position either 
 by original appointment or promotion. To what extent has a 
 saving been effected in this regard? 
 
3. Prior to the retirement system, there was an inevitable 
 tendency to keep employees on the payroll long past their 
 productive period. The evil consequences of retaining em- 
 ployees in important positions after they have become in- 
 competent cannot be readily estimated in money, but is 
 likely to be several times the cost of their superannua- 
 tion in causing stagnation and operating against effective 
 service. 
 
 4, The effect of the system in affording increased opportunity 
 for promotion and aiding in the retention of employees of 
 initiative and force. 
 
 "The Commission would appreciate any testimony, especially as to 
 the savings effected, that can be obtained to serve as a basis for 
 improved legislation and administration of the system." 
 
 The executive departments, except one (the Treasury Department), many 
 of the bureaus of the larger departments, and nearly all the independent es- 
 tablishments responded freely. 
 
 The replies generally expressed belief that the Retirement Act has been 
 beneficial as a measure of economy and in improving the morale of the per- 
 sonnel, but because of abnonnal conditions and the short period the act has 
 been in effect definite statements have been avoided. The replies are rath- 
 er a record of sentiment than that the operation of the act has brought out 
 a definite record of accomplishment* 
 
 Taking the hint from the report of the Secretary of the Treasury, many 
 of the officials took occasion to make suggestions for legislation to make 
 the act more equitable and just through an increase of annuities to afford a 
 tolerable existence ixnder conditions which have changed greatly since the 
 scale of annuities was first worked out. Sentiment appears to be general 
 that the higher-paid employees should either ^ecei^re larger annuities than 
 now provided, or that their contributions should be decreased. 
 
 Expressions respecting the lowering of the retirement age are pretty 
 well divided. The reports are too voluminous to quote in full. 
 
 The departments and bureaus which pleaded that they were unable to speak 
 definitely will, perhaps, pardon the omission of their replies. The prerog- 
 ative of elimisaating matter in the interest of brevity has been exercised, 
 but so far as possible the language of the replies has been preserved, and 
 this article is, therefore, made up of indirect quotations. 
 
 STABILIZING EFFECT AND ITS ECONOMIC VALUE 
 
 The Secretary of War explains that the department has been so continuous- 
 ly engaged in reducing its force of civilian employees, the force having been 
 reduced since the enactment of the Retirement Act from 130,000 to about 45,000, 
 that the effects of the act have been so obscured as to make it impossible to 
 pass upon the questions presented by the Commission from practical experience 
 and observations of the workings of the law. Copies of reports from the 
 chiefs of bureaus and services were presented. 
 
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The office of the Quartermaster General made a careful and comprehen- 
 sive survey and received" detailed reports from quartermasters in charge in 
 the field. ' They have expressed their opinions candidly' as to the operation 
 of the Retirement Act, and it may be stated that, due to the many mandatory 
 reductions made in the civilian force" since the cessation of hostilities in- 
 cident to the World War, it has been' practically impossible to note the sta- 
 bilizing effect on the service as a result of the Retirement Act. 
 
 The Chief of Ordnance states that the testimony of the largest arsenals 
 and plants under the jurisdiction of his- department is that the Retirement 
 Act has not had a stabilizing effect up to the present time, due to abnormal 
 conditions on account of forced reductions. The opinion is expressed that 
 the act would have a stabilizing effect under normal conditions and would in- 
 crease the spirit of contentment of employees by reducing the feeling of an- 
 xiety and uncertainty as to the future. For the same reasons, it has not 
 been possible to gauge the effect of the act upon the turnover in employees. 
 
 According to the Adjutant General, the large and continued reduction in 
 the clerical force of his office during the period the Retirement Act has 
 been in effect makes it impracticable to state from experience as to whether 
 or not the system has had a stabilizing effect on the service, or to estimate 
 its value in promoting a general sense of security and contentment among the 
 employees. 
 
 The Chief of Finance states that the act has had no noticeably stabil- 
 izing effect up to this time, the causes of this failure being that insuffi- 
 cient time has elapsed for improvement of this nature to reflect itself, the 
 turnover due to other causes has been so great as to discredit any stabiliz- 
 ing effect the act might have had, and the inducements in the way of annui- 
 ties are too low to hold the younger employees if opportunity arises for em- 
 ployment in commercial concerns. 
 
 The Inspector General expresses the view that the Retirement system has 
 proven of great economic value in producing stability and promoting a gener- 
 al sense of security and contentment among Government employees and there is 
 no doubt but that it has increased the efficiency of the employees. The 
 salary of the Government employees has been such that little if anything 
 could be put by for a "rainy day", and prior to the passage of the Retire- 
 ment Act there was a feeling among employees that when they had grown old in 
 the service there was nothing to look forward to but being dropped and 
 thrown upon the charity of others to support « 
 
 The Chief of Engineers refers to conditions described by other offi- 
 ciEils of the War Department and which were common to the bureaus of that de- 
 partment. The abnormal conditions have made the number of changes in the 
 service so very great that the older employees appointed prior to the World 
 War and who wish to remain in the service do not have a pleasing outlook, as 
 the annuity is not sufficient te provide for the necessities of life and the 
 comforts of old age. 
 
 The circumstances in the office »f the Surgeon General, which have re- 
 quired a reduction of the civilian personnel from a maximum of 1617 in 1918 
 to 183 at present, preclude any categorical report on whether the retirement 
 system has had a stabilizing effect on the service. As to whether it pro- 
 motes a general sense of security and contentment, may be considered debat- 
 able. A material percentage of those retired do not relish retirement on the 
 annuity provided. 
 
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ft: 
 
The Retirement Act has had thus far a very slight effect on the office 
 of the Judge Advocate General, Only three clerks have been retired, all as 
 soon as the law went into effect. At the time of their retirement the office 
 force was being gradually reduced and the positions were not filled. 
 
 The Postmaster General states that the decreased number of resignations 
 received is in a measure due to the clerks' greater desire to continue in the 
 Government service because of the retirement system, but it has not had that 
 stabilizing effect that might hf.vs been expected by reason of the fact that 
 the maximum amount of annuity is so low as tc be entirely inadequate to pro- 
 vide for the necessities of the annuitant and those dependent upon him for 
 support. 
 
 The Secretary of the Interior believes that the precise degree to which 
 the retirement system has had a stabilizing effect on the service is imprac- 
 ticable of determination. Much of the turnover is due to inequalities of com- 
 pensation in the different departments and bureaus in Washington, which causes 
 employees to obtain transfers or appointments to bureaus and departments v/here 
 higher salaries are paid for the same class of work. He is convinced, how- 
 ever, that as to the vast number of employees v/ho have served long periods, 
 thus virtually making of the public service a life-career, the expectation of 
 the reward which awaits them upon reaching the age of retirement has had the 
 effect of keeping many in the service who otherwise would not have remained, 
 and the consequent decrease in turnover has been noticeable. 
 
 The Bureau of Pensions has not suffered from an abnormal turnover during 
 recent years. There was a slightly increased turnover during the war period, 
 but it was a noteworthy fact that employees served for long periods, and, in 
 many instances, begin and end their careers in the Government service within 
 the Pension Bureau. It is difficult to state with any degree of posit iveness 
 that the retirement system has had a stabilizing effect. Students of retire- 
 ment have, however, universally contended that a retirement system makes for 
 contentment and is an inducement for employees to remain in the service, and 
 this view of the question is accepted. 
 
 The Commissioner of the General Land Office wished to be of record in a 
 general way of not being in sympathy v/ith any scheme of retirement based on 
 eleemosynary cons ide rati ons. He is, however, in favor of retirement with 
 annuities therefor which reflect in some real measure appreciation of the 
 value of the service rendered by the retiring employee. That the present Re- 
 tirement Law is considered in the light of a charity is indicated by the lim- 
 itation placed upon the annuities provided, in that any employee whose spe- 
 cial qualifications, ability and efficiency have placed him in a position of 
 the greatest responsibility and trust during a service of thirty or more 
 years, gets no more consideration on retirement than the employee who has 
 none of these qualifications and has been incapable of holding positions of 
 large responsibility and trust, but rather has managed to retain an inferior 
 position at $1200 per annum during the last ten years of his service. The 
 passage of the Retirement Act has, no doubt, been received and accepted by all 
 employees who have not yet nearly reached retirement age as a step in the 
 right direction, but in the General Land Office the majority of those reaching 
 retirement age wish to remain for at least two years more- They urge that 
 they have not been able to save much, often nothing, from their meager salar- 
 ies, and the small, annuity will compel them to seek other employment, and 
 probably without success because of their age. For the great majority, how- 
 ever, the law has a stabilizing effect, and after being amended to secure more 
 
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equitable application there is little doubt' that the knowledge that retire- 
 ment is coming surely, will tend to make employees more contented. The pre- 
 sent schedule of annuities can furnish no such stimulus to those in the high- 
 er grades. Annuities based on small actual earning need not be extravagant 
 in character but they should, comparatively speaking, be equitable. 
 
 The Chief Clerk of the Patent Office, speaking for the Commissioner, 
 states that the retirement system has had a notable effect in stabilizing the 
 service, although it is difficult to estimate the benefit in numerical terms, 
 but it is appreciable enough to appraise its benefits as highly favorable. 
 
 In the Indian Service there are approximately 260 employees in vfeshing- 
 ton and more than 5000 located in the field- The turnover during the past 
 year has been much less than it v/as during, or immediately succeeding, the 
 World War. The Commissioner of Indian Affairs attributes this increased sta- 
 bility to present economic conditions rather than to the retirement system, 
 although undoubtedly this system has had a stabilizing effect. 
 
 The Administrative Assistant of St. Elizabeths Hospital believes that the 
 retirement system has had a very material and beneficial effect upon the serv- 
 ice. The turnover, whether due to the effect of the Retirement Lav/ or to eco- 
 nomic conditions, has decreased very materially during the past year. The 
 possibility of being taken care of after reaching the age where they are no 
 longer able to take care of themselves has the effect of retaining in the 
 service a desirable class of employees. 
 
 The Secretarj^ of Agriculture has no doubt that the Retirement Act has had 
 a helpful and thoroughly stabilizing effect upon the personnel of the Depart- 
 ment. The direct result has been to dispel, to an appreciable degree, the un- 
 easiness and uncertainty which formerly existed in the minds of employees who 
 had been accustomed to look fonvard with the greatest misgivings to the per- 
 iod of decreased usefulness, possibly loss of position, and lack of provision, 
 in a great majority of cases, of any competency for maintaining themselves in 
 their declining years. 
 
 In the opinion of the Secretary of Commerce the Retirement Act has 
 doubtless effected economy both directly and indirectly; directly by reducing 
 the number of employees in the service and by bringing about a liigher degree 
 of efficiency; and indirectly by improved morale resulting from increased op- 
 portunities for promotion and a better outlook for the future. The retire- 
 ment of employees by reason of age and disabilities enabled the department to 
 secure qualified persons and permitted redistribution of the work so that it 
 could be done more economically. While during the first year's operation of 
 the law the ultimate vacazicy resulting from retirement must remain unfilled, 
 the department was able in a fev/ cases to dispense virith the position. The 
 turnover among employees decreased fifty per cent, but it is not claimed 
 that it was all due to the Retirement Act. 
 
 The Secretary of Labor states that during the readjustment period follow- 
 ing the v;ar the turnover in the department has been very great and it has been 
 impossible to estimate the economic value of the retirement system in produc- 
 ing stability and promoting a general sense of security and contentment. The 
 younger portion of the personnel do not welcome deductions from their salar- 
 ies for the retirement fund as they do not expect to rema.in in the service 
 thirty, forty, or fifty years necessary to secure annuity. The act undoubted- 
 ly has a stabilizing effect upon the older clerks and officials who look upon 
 the Government service as their life work. 
 
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SAVING EFFECTED 
 
 The Quartermaster General reported that up to Jvme 2, 1922, 179 em- 
 ployees had been retired on account of age er total disability, six of them 
 employees of the department and 173 employees' of the Quartermaster Corps at 
 Large, Only 20 of the resulting vacancies v/ere filled by promotion of em- 
 ployees in the service or by new appointees. A saving of approximately 
 $150,000 has been effected by such retirement. 
 
 The Chief of Ordnance states that no estimate can be made of the saving 
 effected because of the fact that when retirement has occurred it has simply 
 meant one person less in the establishment, and the vacancy so created has 
 not ordinarily been filled. These retirements have really covered a part of 
 the forced reduction still in effect. 
 
 In the Adjutant General's Office none of the pos itions which became va- 
 cant bj' reason of retirement have been filled by original appointment, the 
 resulting vacancies in all except the loivest grades have been filled by pro- 
 motion. Because of the reduction in force going on, fev; of the vacancies in 
 the lower grades have been filled and the saving effected under the retire- 
 ment system may properly be said to be the salaries of 77 employees at |1200 
 per annum and 10 at $720 per annum, a total of $99,500. 
 
 The Inspector General reported that but one employee has been retired 
 and because of the fact that the force is small it was necessary fo fill the 
 position by promotion, and the ultimate vacancy by appointment. 
 
 The Chief of Engineers reports that four employees on the departmental 
 rolls have been retired, three for age and one for disability. Three of 
 these employees had been of ver^/ little ser\''ice for some time. The other 
 person had rendered good service and the position was filled at once. The 
 savings effected were the difference betvreen the salaries the persons would 
 have received and the amount of aniiuities which they receive, $1496. 
 
 In the Engineer Department at Large 164 employees were retired, 25 of 
 whom were of educational grade. Their retirement permitted of a net reduc- 
 tion in force in educational positions of 18, and a net saving of $28,819.92. 
 
 The Surgeon General states that retirements constituted a very small 
 portion of the separations that were necessary to reduce the force from a war 
 to a peace basis. Surveys to determine the need of refilling the positions 
 vacated by retirement were not on the program, and no reliable figures can 
 be reported as to what actual savings in payroll expenditures may be attri- 
 buted to retirements. 
 
 The Postmaster General states that upon retirement of an employee the 
 vacancy thus created is promptly filled unless it is found that the position 
 can be dispensed Y/ith, which is not often the case. The filling of a vacan- 
 cy, T/hile not effecting financial saving to the department, results in 
 largely increased efficiency by reason of the promotion of a younger, more 
 vigorous and mentally competent man. 
 
 The Acting Secretary of the Interior states that it is not practicable 
 to estimate the amount of money saving which has resulted from retirements as 
 vacancies have usually been filled by promotion. In many instances, however, 
 vacancies have remained unfilled for varying periods until the needs of the 
 
 -6- 
 
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service required that appointments be made thereto and there is no doubt 
 that the lapsed salaries from this source have amounted to a considerable 
 sum in the aggregate. 
 
 The Commissioner of Pensions explains that because of extraordinary 
 conditions the bureau has been compelled to fill practically all vacancies 
 caused by retirement. Increased pensions to Civil V/ar veterans and to Span- 
 ish War veterans, and the Retirement Act itself, have all imposed extra du- 
 tie-s-upon the bureau without increased appropriations to meet this extraor- 
 dinary condition, with the exception of a small appropriation for use in 
 connection with the administration of the Retirement Act. 
 
 The Commissioner of the General Land Office reports that vacancies 
 created by the Retirement Act have been filled by promotion in all but the 
 lower grades, and in these by new appointments or transfers from other serv- 
 ices* The only saving in funds was that due to delay in filling vacancies, 
 vAen unused statutory appropriations have reverted to the Treasury Depart- 
 ment . 
 
 In the Patent Office the work has increased to such a tremendous ex- 
 tent during the last several years that every vacancy, no matter how occur- 
 ring, is required to be filled in order to have the office function. Any 
 saving effected has been in the direction of making an improved appointment 
 in place of the employee retired- 
 
 The Commissioner of Indian Affairs reports that it has been found ne- 
 cessary to fill the majority of positions made vacant by retirement. In 
 Washington promotions were made to the positions above the entrance grade. 
 The same was true as to most of the vacancies arising in the field. 
 
 The Administrative Assistant of St. Elizabeths Hospital states that 
 the hospital has been able to get along without filling the places of three 
 employees v/ho were retired, and the saving amounts to about $3750 per an- 
 num. 
 
 The Secretary of Agriculture states that upon retirement of each em^ 
 ployee a careful survey is made of the need of filling the position either 
 by promotion or original appointment. Wherever possible, vacancies are fil- 
 led by the promotion of employees occupying the highest positions on the ef- 
 ficiency registers. In exceptional cases, such as those where peculiar 
 qualifications are demanded which cannot be satisfied by the existing per- 
 sonnel, the positions are filled by original appointment. Places made va- 
 cant through the retirement of employees are filled only v/hen the needs of 
 the service so require, but it is not possible to estimate to what extent a 
 saving has been effected in this regard. 
 
 The Secretary of Labor states that upon retirement of an employee a 
 survey is alv/ays made to determine whether the position should be filled by- 
 original appointment or by promotion. Usually a retired employee received 
 a salary \uhich made promotion possible, and original appointments have been 
 made to the lower grades. No great saving has been accomplished because the 
 force of the Department is small, but advantage has resulted through secur- 
 ing a younger and more active employee than the one retired. 
 
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EFFECT ON PRACTICE OF RETAINING E1*1PL0YEES OF ADVANCED AGE 
 
 Comparatively few employees in the Quartermaster Corps of retirement 
 age were found holding' important administrative and executive positions v/ith 
 high salaries commensurate with such duties, for it has been the policy of 
 this service' to reassign employees, and those of advanced age are not re- 
 tained on important assignments v/hen they' are found unable to continue to 
 satisfactorily and efficiently assume responsible positions. 
 
 The Chief of Ordnance believes that the Retirement Act will correct the 
 tendency to retain employees when their efficiency and productiveness has 
 lowered, and that the cost of annuity would be more than covered by the in- 
 creased efficiency and amount of work produced by the younger employees, who 
 might be promoted or appointed to fill the places of those retired. 
 
 The Adjutant General recognizes the tendency, prior to the retirement 
 system, to retain employees on the payroll after they had passed their pro- 
 ductive period. He states that the replacement of these employees, under the 
 retirement system, by younger and more competent employees has undoubtedly 
 resulted in an improvement in the service. He believes that the resulting 
 gain to the Government is many times the amount of the annuities paid to re- 
 tired employees. 
 
 The Chief of Engineers does not believe that the tendency to keep em^ 
 ployees on the payrolls long past their productive period" has not been over- 
 come by the operation of the Retirement Act. Old and faithful employees hav- 
 ing others dependent upon them and not being able to inake ends meet on the 
 meager annuity allowed have, no doubt, been retained past the retirement age 
 in every department although no longer as efficient as wrhen younger. 
 
 The Surgeon General states that the experience of his office shows that 
 the general belief that enployees are kept on the payroll long past their 
 productive period is much exaggerated. Many of the most valuable employees 
 the office has ever had have performed most excellent service long after they 
 were 68 years of age. It would be unfortunate to the service and no advan- 
 tage to the individuals to compel their separation while still capable of, 
 and actually performing, valuable work. He does not believe the provision of 
 the present law with regard to age of retirement and for continuation in the 
 service beyond retirement age should be disturbed. 
 
 The Judge Advocate General expresses the opinion that the law has oper- 
 ated advantageously in overcoming the tendency to keep superannuated employ- 
 ees on the roll. Of the three retired in the office, one was retired on ac- 
 count of physical disability, and the others were persons who had rendered 
 excellent service in earlier days but whose efficiency had become somewhat 
 impaired. 
 
 The Postmaster General states that one of the best results of the Re- 
 tirement Act has been the clearing from the Government service the superannu- 
 ated employees who were no longer able to perform their duties, but who had 
 been retained on .the principle that it would be unjust and inhuman to turn 
 them adrift without means of support. 
 
 The Assistant Secretary of the Navy refers to the relief which the Re- 
 tirement Act affords by ridding the service of superannuates who are unable to 
 
 -8- 
 
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render full return for salaries received but who, prior to the Retirement 
 Act, had been retained through sentimental reasons. The removal" of superan- 
 nuates provides vacancies which roay be filled by promotion, and promotion is 
 an incentive to younger men and women to render more efficient service, in 
 the hope of recognition for advancement. Vacancies are also afforded to 
 which persons may be appointed early in life.j thereby infusing new blood in- 
 to the service. 
 
 The Acting Secretary of the Interior recognizes the indisputable fact 
 that prior to the establishment of the retirement system there was an inevit- 
 able tendency to keep employees on the payroll, in many instances ^without re- 
 duction in salary, long past their most productive period of service. The 
 benefit v/hich the Government has derived through the operation of the Retire- 
 ment Act, in correcting this condition, is, doubtless, one of the most impor- 
 tant results achieved. 
 
 The Commissioner of Pensions gives a quotation from a close student of 
 the principles governing retirement, who states that it is beyond the prov- 
 ince of statistics to measure the loss that results to a government when a 
 superannuated employee is retained in a position of responsibility, conse- 
 quently, the good effect cannot be readily estimated in money value. 
 
 The Com^idssioner of the General Land Office refers to the records of his 
 office, which show that during the last fifteen years at least employees who 
 had passed their productive period have been reduced in salary, sometimes 
 more than once, in order that the higher salaries could be paid to more effi- 
 cient, younger employees. None of them was reduced to anyv/here near the 
 amount provided by the highest annuity under the retirement law. The wide 
 practice of retaining employees doubtless resulted in great cost to the Gov- 
 ernment and cost much more than the annuities later provided by the Retire- 
 ment Act . 
 
 The Chief Clerk of the Patent Office refers to the lessened necessity of 
 keeping employees on the payroll beyond their productive period and to the 
 increased opportunity of promotion, which results in retention of employees 
 of value to the office. 
 
 The Commissioner of Indian Affairs expresses the opinion that the most 
 important benefit arising to the Indian Service from the Retirement Act is 
 the retirement of superannuated employees, v/hich has unquestionably speeded 
 up the work of the bureau. 
 
 The Administrative Assistant of St. Elizabeths Hospital states that it 
 is difficult to estimate in money the savings on account of the former ten- 
 dency to keep ec^jloyees on the payroll long past their productive period. 
 This is rendered more difficult by reason of the fact that the hospital has 
 been growing fast, and while many additional employees have been necessary, 
 aside from those retired, it was due to increased amount of work. He states 
 that by the promotion of younger employees in the places of older ones since 
 retired, more work has been accomplished at the same rate of pay. 
 
 The Secretary of Labor recognizes the fact that there v/as a tendency to 
 keep employees on the payroll past their productive period, and states that 
 the provision for compulsory retirement at a certain age, unless the employee 
 is certified as being competent to remain, has been helpful in the adminis- 
 tration of the department. 
 
 -9- 
 
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The Superintendent of the State, War and Na^/y Departments Building states 
 that before the Retirement Act went into effect employees were kept on the 
 rolls long past their lOO/o productive period, which involved expense, stopped 
 deserved promotion, tended to impair the morale, and operated against effi- 
 cient service. 
 
 EFFECT OF INCREASED OPPORTUNITY AFFORDED FOR PROMOTION 
 
 The effect of the act on prom.otions in the Ordnance Department at Large 
 has not been apparent as the rates of pay at the various field establishments 
 are fixed by wage- boards, according to the rate of pay prevailing in the dis- 
 trict outside the Government service. It does not, therefore, follow that a 
 retirement would result in the promotion of some other employee to the posi- 
 tion. 
 
 In the Adjutairt General's office vacancies in the higher grades result- 
 ing from the retirement system have been filled by promotion, and to that ex- 
 tent the system has afforded increased opportunities for the advancement of 
 deserving employees. 
 
 As yet, the retirement system has had no noticeable effect in the Finance 
 Department by affording increased opportunity for promotion or aiding in the 
 retention of employees of initiative and force. It is considered, however, 
 that after a definite policy has been decided upon as to the number of em- 
 ployees v/ho will be retained in the service, the retirement system will have ^ 
 a very beneficial effect along these lines, provided also the amount of annui- 
 ty should be increased. 
 
 The Inspector General believes the Retirement Act has increased the effi- 
 ciency of the Government service and has relieved, to a great extent, the 
 stagnation in promotion in the higher grades. 
 
 In the office of the Chief of Engineers the effect of the system in af- 
 fording increased opportunity for promotion has been negligible. Because of 
 contemplated cuts in the appropriations for civilian employees, positions made 
 vacant by retirement will probably ha.ve to be left unfilled to meet the reduc- 
 tion. Nearly all promotions on the rolls of the office result from resigna- 
 tions of enployees v/ho leave to accept more attractive positions elsewhere. 
 
 The Surgeon General accepts as a matter of course the effect of the Re- 
 tirement Act in increasing the flow of promotion, and the'tendency, in some 
 degree, to encourage junior employees of initiative and force to continue in 
 the service; hov/ever, seniors may, and often do, also have initiative and 
 force in addition to resourcefulness and skill from long experience, and 
 their displacement, merely to make way for their juniors and to increase the 
 rapidity of promotionj would not promote the public interest. The retention 
 of energetic and ambitious calls for the modernizing of the^alaries of all 
 civilian employees to apprcxiixate the present cost of living, and to yield an 
 adequate rev/ard for those who have made their way to the top, rather than for 
 the displacement of the latter v/hile still effective and capable. 
 
 The Postmaster General expresses the view that the retirement system has 
 doubtless been of benefit in affording increased opportunity of promotion and 
 in aiding in the retention of employees of initiative and force. 
 
 -10- 
 
■J 1 t.','.- 
 
 ■'' -O.: 
 
The Secretary of the Interior refers to the effect of the retirement 
 system in affording increased opporUinity for promotion and aiding in the 
 retention of capable and efficient employees as being self-evident. There 
 are, doubtless, employees in nearly' every large office operating under stat- 
 utory salaries to whom it has been possible to give salaries more nearly 
 commensurate v/ith their duties only by the retirement of their associates in 
 higher grades . 
 
 Valuable testimony comes from the office of the Commissioner of pen- 
 sions,- He states that the effect of the retirement system has unquestionably 
 resulted in increased opportunity for promotion, and because of this oppor- 
 tunity there now exists a new spirit, a spirit of hopefulness among the young- 
 er and middle aged employees which has taken the place of the lethargy which 
 permeated many branches of the service before the retirement lav/ became effec- 
 tive. This bureau affords a concrete example in this respect « As soon as 
 the law became operative on August 21, 1920, about 140 employees of the bu- 
 reau v/ere retired. These employees virere in receipt of salaries ranging be- 
 tween |720 and §22 50 per annum. Their retirement was followed by pr^)motion of 
 a large number of employees, many of whom had theretofore received no promo- 
 tion for a great number of years. The beneficial effect upon morale in the 
 bureau v/as immediately noticeable. Since that time other employees have re- 
 tired, and, as a result, promotion of one or more employees has followed in 
 each instance. These promotions undoubtedly have had a stimulating effect 
 upon the employees generally, many of v/hom, before the Retirement Act became 
 effective, were in despair and they were constantly seeking to be transferred 
 to other branches of the service where there would be better opportunity for 
 advancement. It is hardly necessary to dv/ell upon the beneficiaJ. effects 
 derived from bringing younger employees into the bureau as the result of re- 
 tiring the superannuated employees and of promoting others. It need only be 
 stated briefly that this bureau has experienced a rejuvenation since the Re- 
 tirement Act v/ent into operation. 
 
 The Commissioner of the General Land Office refers to increased oppor- 
 tunity for promotion, due to retirement, as a natural effect of a retirement 
 system, from which the public service will greatly benefit when promotions 
 are based upon earning capacity alone. 
 
 The Commissioner of Indian Affairs believes that the retirement system 
 affords increa.sed opport 'unity for promotion and aids in the retention of em- 
 ployees of initiative and ability. 
 
 At St. Elizabeths Hospital the retirement of superannuated employees 
 gives opportunit,y for promotion of competent employees and helps to retain 
 them in the service. These employees are then put on their ovm initiative, 
 and the hospital has the benefit of nev/ ideas, new thoughts, greater effi- 
 ciency, and more comprehensive schemes of work. 
 
 The Secretary of Agriculture states that the opportunity for promotion 
 made possible through the Retirement Act has undoubtedly tended to greater 
 satisfaction on the part of the continuing personnel and greater incentive 
 to put forth the best effort, by reason of more rapid advancement during the 
 period of active service, v/ith the prospect of ultimate provision for old age. 
 These ber^efits are likely to become more apparent as time goes on and oppor- 
 tunity has been afforded to test the operation of the retirement system in 
 a thorough v/ay . 
 
 -11- 
 

The Secretary of Labor thinks there is no doubt that the retirement' of 
 the older and higher salaried employees affords increased opportunity for 
 promotion and aids in retaining valuable employees. 
 
 LOWERING THE AGE LD£ET FOR RETIREIiENT 
 
 The Quartermaster General believes that, taking the average employee, 
 the maximum age limit for retirement should be reduced from 70 to 68 years 
 of age, with a provision for contijiuation of not more than two periods of 
 tv/o years each. In only exceptional cases does the efficiency of an employee 
 justify his continued employment after reaching the age of 68 years. 
 
 It is the opinion of the Chief of Ordnance that the retirement age 
 should either be made the same for all other classes of employees or the age 
 limit should be reduced from 65-70 year basis to a 60-65 year basis. This 
 would enable a department to use its discretion in recommending the continu- 
 ance in the service of those who have reached retirement age but who are 
 still useful and efficient, and, on the other hand, to remove from the serv- 
 ice employees whose services v/ere no longer desired, due to their age and de- 
 creased ability. This would also tend to raise the general standard of the 
 service. 
 
 The Chief of Finance believes in a further reduction of the retirement 
 age below 68, as suggested by the Secretary of the Treasury. Recommendation 
 is made that 65 years be made the age limit because it has been found that 
 in a great majority of cases an employee when he has reached the age of 65 
 years becomes less efficient and his services are no longer an asset but a 
 detriment to the efficient and prompt conduct of business. 
 
 The Judge Advocate General is of the opinion that if the age limit for 
 retirement were lov/ered to 68 years it would be of decided advantage to the 
 service. 
 
 The Commissioner of Pensions believes that the age limit of 65 years, 
 as proposed in the earlier retirement bills, is preferable. It is believed 
 that the bill as originally introduced, in respect to optional age for re- 
 tirement at 65 with extension privileges during the first ten years under the 
 operation of the law, was far better than the bill finally enacted. The bu- 
 reau believes that the optional age for retirement of employees in the so- 
 called departmental service should be 55 years, and that after July 1, 1925, 
 the compulsory age for retirement for this group of employees should be 70 
 years, and that continuation in the service for any period between the ages 
 of 65 and 70 years should be by mutual arrangement betv/een the employee and 
 the head of the department or independent establishment concenned. 
 
 The experience of the General Land Office appears to be opposed to any 
 reduction of the age limit below 70 years, unless earlier retirement were 
 made conditionally optional to the employee; the same to be based upon a pro- 
 per showing that the character of his service did not warrant his retention 
 longer at his present compensation. Under the present retirement law, the 
 office would prefer a reduction, of course, provided it did not take the em- 
 ployee belov/ ^1200, the limitation governing the highest annuity. Reduction 
 of employees below §1200 will always be a serious matter as the reduction 
 would seriously affect the annuity. 
 
 -12- 
 
The Director of the Geological Survey states that he fails to see^ 
 strong reasons why any definite age should be set as essential for retire- 
 ment, and that for a field' force, such as that of the Geological Survey, he 
 thinks the placing of the retirement age at 70 years is most harmful to the 
 interests of the Government and of the individual. The proper performance 
 of the strenuous duties of the geologists, topographers and engineers in the 
 field service requires a robustness and physical ability not demanded by the 
 usual sedentary office pursuits. He judges that these field men ought to be 
 eligible for retirement at the same age as army and navy officers, postal 
 mail clerks, mechanics, or other Government employees whose physical fitness 
 is essential for the proper performance of routine duties. He would, hov/- 
 ever, not desire reduction of the age limit to 62 years set for scientific 
 and technical men because many of them have amassed a great store of mater- 
 ial which can be worked up in the office or utilized after the men are no 
 longer able to take any part in active field investigations. 
 
 The Commissioner of Indian Affairs states that the retirement age for 
 certain employees in the Indian Service, especially the classroom teachers, 
 should be lowered. He is also of the opinion that an increase in the amount 
 of annuity would not be improper. 
 
 The Commissioner of Education is of the opinion that the age limit for 
 retirement should be lowered and that voluntary retirement, with' allowance, 
 should be made possible for persons who have served the Government for a 
 long period of years, as is provided for the militaiy and naval services. 
 
 The Secretary of Commerce believes it advisable to fix a lower age, say 
 55 years, for voluntary retirement. He also believes that the time element 
 in' fixing the amount of annuity should be in years of service instead of 
 three-year periods, as now fixed. 
 
 The Secretary of Labor agrees with the Secretary of the Trea-sury that 
 the retirement age should be reduced from 70 to 68 years, although it might 
 possibly be better to reduce it to 65 years, with the privilege of continu- 
 ance in the service if the employee is in full possession of his faculties 
 and is able to perform the duties of his position. 
 
 The Superintendent of the State, War and Navy Departments Building 
 states that if a substantial increase in the retirement allowance is made, 
 employees would be willing to go out, and the retiring age might be slightly 
 reduced. His office concurs in the views of the Secretary of the Treasury 
 that unless the allowance is increased the retiring age should remain as it 
 is at present. To maintain the age at 70 years tends very materially to 
 keep down the expense of the Retirement Act, and also gives the Government 
 the fullest benefit of experience and judgment of qualified employees who 
 are still active mentally and physically. 
 
 ADJUSTMENT OF ANNUITIES ON AN EQUITABLE AND JUST BASIS 
 
 The Secretary of War, speaking generally on the subject, says that while 
 a retirement system v/ith annuities tends naturally to stabilize a force he 
 doubts that any appreciable measure of stabilization is being effected under 
 the present retirement law, with its maximum annuity allowance of $720 per 
 annum, which maximum is only allowed after thirty years of service and when 
 an employee, other than in the postal service, or a mechanic reaches 70 years 
 of age. For the same reason, he does not believe that the present law oper- 
 ates as an inducement for entrance into the Government service. 
 
 -13- 
 
The Secretar/ of War repeated a reply which he nade to an_ 3.nq:;_^:ry -r. 
 relation to a bill v/hich proposed, amons oths- things mcreasm- tr.e -=c....e 
 cf anuui-Liss with a limit in any case of C-1200, as follows: 
 
 "I have noted that the existing law provides that 0^20 per annum 
 shall he the mximutn annuity in any case of ret.Trement . Where 
 this sum in effect retii'es an annuitant at as much as half-pay, 
 let us say, it would peihaps be aif ficult to justify an increase, 
 however inadeouate the annuity might be at price levels whxch seem 
 likely to continue for some years above former prxce levels, bux 
 in the case of annuitants for whom it represents one- quarter pay 
 or less, the §720 per annum is of course utterly madeqimte, ana 
 especially so in the case of employees who have made the Govern- 
 ment service their life career and have risen to positions oi re- 
 sponsibility. 
 
 "I am informed that there will be very few cases wnere the pro- 
 posed bill will give an annuity higher than the present maximum, 
 $720 per annum, until after thirty years' service. I think in 
 such cases the 0^200 annuity might well be provided for the few 
 remainp^ng years of life. Certainly as large compensation should 
 be paid to retired civilian employees of the Government as the 
 amount cf funds that have been collected will ^varrant, based upon 
 competent actuarial consideration of the subject." 
 
 The Quartermaster General states that the annuities provided by the Re- 
 tirement Act appear to be small, and he believes that tne act should be _ 
 amended so as to provide for annuities somewhat larger than those now being 
 ^a^d. Mary quartermasters report that dissatisfaction on the part of em- 
 ployees receiving high salaries exists in regard to the present ^l^t deduc- 
 tion of 2M of basic salary or compensation. An employee receiving _ ^iJUU^ 
 per annum is reouired to make a m.uch larger contribution to tne re.iremeno 
 fund than an emplo^'ee receiving 012OO per annum, and upon retirement, under 
 the present provision of the act, the $1200 employee' will receive the same 
 maximum annuity of 0^20 per annum received by the employee who contributes 
 on the basis of a salary of 03OOO. It is considered that the contrxbu.ion 
 should be graduated and that annuities should, to a certain extent, be 
 more in proportion to the contribution made to the retirement fund. 
 
 The Chief of Ordnance states that it is generally recoramended by all_^ 
 those who have watched the operation of the act that the schedule of annui.y 
 is too low and is not sufficient to enable the employee to live comfortably 
 under present conditions. 
 
 The Adjutant General refers to the pronounced sentirient among all the 
 employees that the annuities provided are wholly inadequate and that they 
 should be materially increased. This sentiment has resulted m requests lor 
 retention from practically all employees about to be retired, evidently _ 
 based upon the inadequacy of the annuities to support themselves and their 
 dependents. In order to secure any stabilizing effects on the service and a 
 general sense of security and contentment, it is believed that the act will 
 have to be amended so as to make more adequate provision for the payment ot 
 varying amounts graduated according to the salary of the employee and tak- 
 ing into consideration the length of service rendered by them. The present 
 law makes no difference whatever in the amount of annuity paid to employees 
 whose salaries may vary considerably and who, because of tnat variance, con- 
 tribute different amounts to the retirement fund, and yet are retired w^xn 
 
 -14- 
 
the same annuity. As a matter of information, the Adjutant General referred 
 to a petition sig;:aed by about 90% of the er.ployees of the office. This pe- 
 tiiioii urgr?.d chanzring the Retirement Act to' pernjf optional retirement after 
 tMr';y years'' se^-^'ice, v.otn a range of arnunties from' $9 00 to $1500, on the 
 busis of salary for the ten years preceding the date of retirement, but not 
 to exceed '7% of S'j.ch avera'ge salary, and that annuities to those with 
 shorter services should be proport.ionally increased. It was claimed that 
 the maximum annuity new authorized is net suflicient to maintain properly 
 any one person, and in the case of an annuitant v/ith dependents it is v/oeful- 
 ly inadeauatB,' and age prevents the annuitant from obtaining gainful employ- 
 ment, and not many are able to save because little, if anything, is left for 
 saving after living expenses have been met . 
 
 The Inspector General expresses his approval of bills providing for in- 
 crease of annuities, based on average salary and length of service. 
 
 The Assistant Secretary of the Navy states that the cost of living at 
 present, and which will probably never return to a pre-war level, is such 
 that the annuities granted i;nder the present act are insufficient to support 
 annuitants in even the mcst modest manner. It is the excerjtion v/hen Govern- 
 ment employees are able to lay aside sufficient amounts to provide them with 
 even a small income in 'the later years of their lives. The present scheme 
 of assessment is not equitable, as the employee with the larger salary pays 
 a greater rate in return for an annuity that he receives at the age of re- 
 tirement than xhe les'rer paid employee. Suggestion is ma.de that the lav/ 
 should be revised to provide an equitable assessment,-> although this might have 
 the effect of increasing the cost of retirement, it is believed that the ad- 
 vantage to the employee and to the Governratsnt vrould v/arrant it and that the 
 employee would not object if the age limit is lowered - 
 
 The Commissioner of Pensions is in sympathy with the idea that the annu- 
 ity should be increased and approves the plan suggested by the Board of Actu- 
 aries. However, he believes that it would be more expedient to advocate a 
 maximum annuity of ^\200 per annum rather than an unlimited maximum, as pro- 
 vided by the Actuaries' report. 
 
 The Commissioner of the General Land Office illustrates the inequalities 
 in annuities by citing the case of a man with thirty years of service who may 
 
 have served for twenty years at |650 per annum but have received ^1200 for 
 the last ten years of service, which would give him an annuity of ^720 per an- 
 num, or 80/S of his average salary; v/hereas, a more indispensable administra- 
 tive or technical employee who may hsjve entered the ses-vice at $1200 per an- 
 num and gradually arose to 05OCO per annum, and whose average salary during 
 the last ten years of service vras, perhaps, $3000, and v/hose avex'age salary 
 during the entire service vras §2000, m.ust retire on $720 per annum. This^ 
 plan places a premiioia on mediocrity and on retirement day penalizes all who 
 have been chiefly instr^amental in keeping the Government macuineiy oiled and 
 in working condition. If this theory of retirement of a civil service em- 
 ployee is correct, why should a major general receive greater axmuity and 
 more privileges than a sergeant or a private, or an admiral more than a boat- 
 sv/ain or a sailor before the mast- He emphasizes the fact that although the 
 higher paid grades of employees may, and do, save part cf their salaries, 
 their contribution to the retirement fund is not measured by the aniroity they 
 will receive on retirement, and nothing is more cerf;ain than that the higher 
 salaried employees, because of the responsible positions they hold, are un- 
 able to limit their monthly expenditures to the purchase of a bare existence. 
 
 -15- 
 
A high grade emplovee who has qualified himself for the duties possibly oi 
 a great land lav/yer, technologist, aduinistrative officer, or other equally 
 necessary official, earning and rsceiving coir.pensation in sone measure conw 
 mensurate with his responsibilities and efficiency, may not after thirty 
 years of service be equitably roti-red wi+.h the annuity granted a simple 
 clerical employee having no qualifications other than those needed to enable 
 him to cling to a job paying ^1200 per annum during his last ten years of 
 service. He suggests increases v/hich are not based strictly upon recogni- 
 tion of character of vrork, but which he believes would provide more equitable 
 annuities than the existing law because the high grade employees will receive 
 recognition not now given. 
 
 The Director of the Geological Survey records his emphatic disapproval 
 of the present rate of annuities. The retention of 2^o of salary, whether it 
 be 012OO or 012,000 a year, results in the same annuity, irrespective of de- 
 ductions, is so obviously unfair that it seems scarcely to merit discussion, 
 and he cannot believe that Congress will continue this practice when the mat- 
 ter is called to its attention. 
 
 The Administrative Assistant of St. Elizabeths Hospital agrees with the 
 suggestion that the amount of annuity should be increased somewhat. When 
 the Retirement Act v/as first under consideration and the cost of living was 
 nothing like as high as at present, and while the cost of living' may be some- 
 what lowered, the present annuity is too low for an employee to take care of 
 himself. 
 
 The Secretary of Commerce states that statistics have shown that the 
 cost of the retirement system is much less than was anticipated, and that 
 this might be good ground for considering a general increase of the annuity 
 rates. Opportunity should be taken to eliminate v/hat is nov/ an unfair provi- 
 sion of the system; namely, while the maximum, annuity is that which might be 
 earned by a $1200 clerk the same deduction is made from all salaries, ?/hether 
 012OO or §3000, the deduction from the higher salary amounting to several 
 times that of the lower, although the higher paid employee cannot earn a 
 greater annuity than the lower. 
 
 The Secretary of Labor believes that the annuities paid are very small 
 and that it is almost impossible for an employee to exist on the amount set 
 aside for that purpose. A relatively small percentage of the employees are 
 able to lay aside from their salaries a sufficient sum to augment the annuity, 
 and the experience of the department is that persons reaching the retirement 
 age look with horror upon the necessity of living on the small axQOimt allowed, 
 and use every effort to be retained in the service, whether or not competent 
 to perform their duties. 
 
 RETIRELEMT ON LENGTH OF SERVICE 
 
 The Chief of Ordnance believes there should be some provision whereby 
 an employee who has served thirty or thirty-five years in the Government 
 should be permitted to retire, irrespective of the fact that he has not reach- 
 ed retirement age. 
 
 GENERA!. EFFECT 
 
 The Chief of the Bureau of Insular Affairs believes there should be a 
 fixed age for retirement and thus relieve the administrative officers of the 
 
 -16- 
 
.S -0 
 
burden of determinins whether or not an employee should be granted an exten- 
 sion- This would seem only fair considering that' the younger element v,'hi.-;h 
 in the end will pay by deduction from his salary a great deal more than the 
 others, is debarred from promotion which compulsory retirement would bring 
 about. 
 
 The result of the operation of the Retirement Act in the Engineer De- 
 partment at Large is believed to have been moderately beneficent. Formerly, 
 this office was in the dilemma of retaining on the rolls an employee who had 
 become inefficient through age or of turning him out without any means of 
 support whatever. The adoption oi the x-etirement provisions has given em- 
 ployees something other than the poorhouse to look foward to and has in 
 this v/ay, to a certain extent, improved their morale. It is, therefore, be- 
 lieved that a slightly greater average efficiency in the service has been 
 attained- 
 
 The Acting Secretary of the Department of the Interior states that the 
 department is thoroughly convinced that the effect of the Retirement Act has 
 been, and will be, highly beneficial upon the morale of the service, and that 
 its result will undoubtedly be fewer resignations, less turnover, more inter- 
 est in the service, and greater effort on the part of the employees to ren- 
 der faithful and efficient service, and to keep their records good in order 
 that they may ultimately share in the benefits of the Retirement Act. 
 
 COIvDvENTS ON THE FOREGOING REPORTS 
 
 The criticisms most strongly implied by the testimony are that annuities 
 are inadequate and that the contributions required of the higher paid employ- 
 ees are unjust and inequitable* In considering these criticisms it is essen- 
 tial to bear in mind the fact that beneficiaries for a number of years will 
 receive annuities greatly out of proportion to their contributions and that 
 every cent they receive above the amount of their contributions creates an 
 obligation upon the Government. There is no general fund but a m.ultiplicity 
 of funds, and the Government will have to foot the bill in the case of all 
 employees who receive annuities in excess of their contributions. Deductions 
 for the retirement fund are assessments only in the sense that they may be 
 involuntary; they are rather in the nature of savings accounts, with liberal 
 interest, v/hich the beneficiaries or their estates v/ill receive in full. Full 
 realization of this fact ought to a large extent dissipate the opposition of 
 the younger employees. 
 
 The Retirement Act was drafted when the cost of living was much lower 
 than now, and perhaps at the time of its passage it v/as anticipated that such 
 cost would soon be much lower. To produce stability and promote a general 
 sense of security and contentment, annuities should at least be sufficient 
 to so supplement the savings during thirty years of the average Government 
 employee as to make it possible for him to spend his few remaining years af- 
 ter retirement in comfort. This is what Congress doubtless intended, ajnd the 
 changed condition should be met. Undoubtedly, in years to come, when each 
 person shall have been in the service sufficiently long to contribute a con- 
 siderable amount toward his annuity, annuities will be increased. 
 
 The criticism that the higher paid employees do not receive justice does 
 not seem wholly justified at this time. The annuities were naturally made 
 
 -17- 
 
ri.I. 
 
lo^jy to reduce the future obligations of the Government. Salaries were so 
 low that' it v/ould have been impossible to require large contributions. 
 A large proportion of those' retired upon annuity' for many years to come will 
 have contributed a comparatively small part to\vard the annuities they re- ^ 
 ceive. ViThen the time comes that the higher salaried' employees have contri- 
 buted a sufficient amount' to more than purchase annuity as now provided, 
 some adjustment will' doubtless be made. At present all annuitants receive 
 benefits out of all propoition to the amounts they have contributed, and the 
 Government is relieved to the extent that the larger contributions of the 
 higher paid employees leave less for it to pay. In ether irords, the Gov- 
 ernn-ient calls upon' those best able to bear the burden to cont-^ibute ].arger 
 sums than the lower paid employees, in some inBtannes probably laiger than 
 are required to purchase the same annuities from insurance companies. 
 
 -18-