19 01 odfy 2 JK 791 .ns 1907 Copy 2 United States Civil Service Retirement Association, Washington, D. C. August 9, 1907. The accompanying draft of a pr®p;^j|ed bill for the retirement of civil service employees, which was drafted by the Sub-Com- mittee on Personnel of the Committee on Department Methods, and report with which such draft was submitted to the whole committee, are printed and distributed for the information of those interested in the subject thereof. Pickens NeageE, President. U^Y 1- 17 1513 Ki'^ AS" !1-^ ^T^ A BILL For the Retirement of Employees in the Classifie,d Civil Service of the Government. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That begin- ning with the first day of July next following the passage of this Act there shall be deducted and withheld from the monthly salary, pay or compensation of every officer or employee of the United States to whom this Act applies, an amount which will be suffi- cient, with interest thereon at four per cent per annum com- pounded annually, to purchase from the United States under the provisions of this Act, an annuity for every such employee on arrival at the age of retirement as hereinafter provided, equal to one and one-half per cent of his annual salary, pay or com- pensation for every full year of service, or major fraction thereof, between the date of the passage of this Act and the arrival of the employee at the age of retirement. The annuity hereby pro- vided shall be based on such annuity table as the Secretary of the Treasury may direct, and interest at the rate of four per cent per annum. Sec. 2. That the amounts so deducted and withheld from the salary, pay or compensation of each employee shall be deposited in the Treasury of the United States and shall be credited, to- gether with interest at four per cent per annum compounded an- nually, to an account of the employee from whose salary, pay or compensation the deduction is made, and the moneys so deducted, together with the interest added thereto, shall be held and used by the United States until paid out as herein provided. The interest hereby provided shall be paid out of any money in the Treasury not otherwise appropriated. Sec. 3. That upon retiring at the age of retirement the em- ployee may withdraw his savings with the increment of interest as herein provided, under one of the following options : Option I. In one sum. Option 11. In an annuity payable quarterly throughout life. Option III. In an annuity payable quarterly throughout life, with the provision that in case of the death of the annuitant before he has received in annuities the amount of his savings, plus the interest credited thereon, the balance shall be paid to his estate. In determining, at his death, the amount due to his estate no account shall be taken of the annuities paid to him by the United States, as hereinafter provided. Option IV. In an annuity certain for a limited term of years, payable quarterly. If after retirement the employee does not avail himself of one of the foregoing options, but leaves the amount due him on deposit, interest at the rate of two per cent per annum on the original sum so left on deposit on retirement, shall be credited thereto for a period not exceeding twenty years, and if not then withdrawn the money so left on deposit and the interest credited thereon shall be covered into the Treasury as a miscellaneous receipt. Sec. 4. That upon absolute separation from the civil service prior to the retirement age, and only upon such separation, the employee may withdraw his savings with the increment of in- terest credited thereon in one sum, or, in case his savings amount to at least one thousand dollars, and he has been in the service not less than twenty years, he may withdraw the same under any one of the foregoing options computed on the basis of his attained age. In case of the death of an employee while in the service, the amount of his savings together with the interest credited thereon shall be paid to his estate. Se;c. 5. That in case of reinstatement in the classified civil ser- vice of any person who at the time of his separation therefrom received a refund under Section 4 of this Act, his period of ser- vice for the purpose of retirement and of making the monthly deduction from his salary shall be computed from the date of such reinstatement, unless he shall within ninety days after re- instatement pay to the Secretary of the Treasury the amount re- funded to him, in which case the same shall be replaced to the credit of his account, and the former period of service shall also be counted. Sec. 6. The retirement age herein referred to, shall be sixty years for Group i, sixty-five years for Group 2, and seventy years for Group 3. And the President of the United States shall designate the branches of the service to be included in each group. Sec. 7. That every employee to whom this Act applies shall be entitled on reaching the retirement age to retire from the ser- vice under the provisions hereinbefore contained, and also in addition to the annuity therein provided for, to receive from the United States during the remainder of his life an annuity equal to one per cent for Group i, one and one- fourth per cent for Group 2, and one and one-half per cent for Group 3, of his average salary, pay or compensation during the last ten years of service, for every year that he shall have been in the service prior to the passage of this Act, and the Secretary of the Treas- ury is hereby authorized and directed to pay such annuity quarterly from any money in the Treasury not otherwise appro- priated, upon proper certification of the retirement of such em- ployee by the appointing officer under whom he last served. An- nuities 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, or after having served the United States twenty years he is retired by reason of disability not due to vicious habits, or by reason of exigencies of service, but without fault or delin- quency on his part. On the death of the employee the payment of annuities pro- vided for by this section shall cease and determine. Annuities payable by the United States under this section on salaries in excess of twenty-five hundred dollars per annum shall be based upon an annual salary of twenty-five hundred dollars. Se;c. 8. 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 em- ployee, and may include service in one or more departments, branches or independent offices of the Government, and periods of service at different times. Se:c. 9. That none of the moneys mentioned in this Act shall be assignable either in law or equity or be subject to execution or levy by attachment, garnishment, or other legal process. Se;c. 10. The Secretary of the Treasury shall prepare and keep all needful tables, records and accounts required for carry- ing out the provisions of this Act. The records to be kept shall include data showing the mortality experience of the employees in the various branches of the service and in different localities throughout the country, and the rate of withdrawal from the classified service, and any other similar information that may be of value and may serve as a guide for future valuations and adjustments of the plan for the retirement of employees. SiSC. II. Within thirty days after the arrival of an employee at the age of retirement, the head of the Department or Independent Office in which he is employed shall certify to the Secretary of the Treasury regarding the efficiency of such employee, with state- ment as to whether the public interest requires the continuance of such employee in the service, or his retirement, and such certificate and statement shall be conclusive. If by reason of the efficiency of an employee who has reached the retirement age, and is willing to remain in the service, his continuance therein would be in the opinion of the head of the Department or proper appointing officer advantageous to the public service, such em- ployee may be retained for a term not exceeding two years ; and at the end of the two years, he may by similar certification be continued for an additional term of two years, and so on. Upon the failure of the head of the Department or proper appointing officer to make the above described certificate, it shall be the duty of the Secretary of the Treasury to place such employee upon the retired list in accordance with the provisions of this Act. Se;c. 12. The provisions of this Act shall apply only to the Classified Civil Service, which is hereby defined to include all officers and employees in the Executive Civil Service of the United States, except persons appointed by the President and confirmed by the Senate, and mere unskilled laborers. No per- son serving in a position excepted from examination as defined in the Civil Service rules shall be included within the provisions of this Act unless he has served in a competitive position for at least one year. Whenever any person becomes separated from the classified service by reason of appointment in the unclassified service, such separation shall not operate to take him out of the provisions of this Act. The President shall have power, in his discretion, to exclude from the operations of this Act, any groups of employees whose tenure of office is necessarily inter- mittent or of uncertain duration. Skc 13. For the purpose of paying for clerical and other work and expenses necessary in carrying out the provisions of this Act. during the fiscal year 190 , including salaries and rent in the city of Washington, there is hereby appropriated the sum of Fifty Thousand Dollars, and for all payments authorized by this Act the necessary moneys are hereby appropriated, out of any moneys in the Treasury not otherwise appropriated. Sec. 14. That the Secretary of the Treasury is hereby au- thorized to perform or cause to be performed any and all acts, and to make such rules and regulations as may be necessary and proper, for the purpose of carrying the provisions of this Act into full force and effect. Washington, June 21, 1907. The Committee on Departm^ent Methods. Gentlemen : Your Sub-Committee on Personnel has the honor to submit the following report on the question of superannuation. Suitable provision for the retirement of aged civil employees of the Government is desirable on two grounds : (i) As a means of improving the public service, since the Government necessarily suffers considerable loss through the progressive inefficiency of aged employees. (2) As an act of justice to faithful employees, whose salaries are seldom sufficient to enable them to lay aside anything for old age, especially in Washington where the expenses of living are now out of all proportion to their compensation. The average salary paid by the Government is $1,072, according to Census Bulletin No. 12. Many efforts have been made to devise a measure which would afford the necessary relief at once to the service and the em- ployees, and scores of bills on the subject have been introduced in Congress. None has succeeded because each and every one shows on analysis that it is unfair either to the employees or the tax-payer, or else that it discriminates unjustly between different classes of employees. The bills that have been presented may be divided into two classes : (i) Those proposing that annuities be paid out of the Federal Treasury. (2) Those providing for a uniform deduction of a given per cent from all salaries, for the creation of a general fund from which all employees, on retiring at the age of 70, shall receive annuities, payments to begin a certain number of years from the passage of the bill. These bills generally provide that an employee must serve for at least ten years before he may be entitled to an annuity on retirement. Some provide for a uniform deduction of a given per cent from all pay, and the payment of annuities based on length of service. In view of the public sentiment against a civil pension list, bills of the first class are not here discussed. Those of the second class are open to the serious objection that they are unjust to the younger employees, since they require them to set aside a much larger per cent of their salaries in order to create a fund for the older men than would be necessary to provide annuities for themselves alone. The defect in all such plans is apparent to every student of the subject, and is very clearly explained in the report of the National Civil Service Reform League above referred to, as follows : "In general, any plan of uniform, or 'flat rate' assessment, to begin practically at once to take care of the aged, is a great injustice to the younger employees. The old will receive sup- port after they have paid but a few years, and can pay but a few years more, even if assessments are continued on the retirement receipts. The young will have to pay a much larger sum from their salaries than would be required, for their old age alone. If, by any chance, the fund should prove to be too small, that would transpire only many years hence, when those now aged would have received their full allowances and passed from the stage. The others, the present younger employees, who would have borne the great brunt of expensive assessments, would thus be the ones to suffer, unless the Government made up the de- ficiency. This argument is sound. It follows then that any plan for the retirement of superannuated civil service employees for which the approval of employees themselves and the public alike is de- sired, should contain the following provisions : (i) The funds necessary for the payment of the annuities should be furnished by the employees themselves without ex- pense to the Government, other than the payment by the Gov- ernment of a reasonable rate of interest on the money held by it, and the payment of salaries to the clerical force required to keep the accounts and distribute the funds ; (2) Each employee should contribute the amount necessary to create his own annuity, without regard to payments by others, so that each employee may receive full return on the money contributed by him ; (3) The annuities to be paid employees on retirement should be graduated according to length of service, and in such manner that the monthly contributions required from employees for the creation of such annuities shall be in no case excessive. The plan recommended ultimately meets these conditions. It is founded on well-established principles, but they are applied in a new way. The general idea is that each individual shall provide the necessary fund for his own retirement. In presenting the plan it is well to divide the exposition into two parts : The first part makes provision for those whose service begins after the enact- ment of the law. The second part makes provision for those who are in the civil service at the time of the passage of the law. It is proposed to pay every employee in the civil service on arriving at the age of 70 years an annuity equal to 1.5 per cent of his pay for every year of service. For the purpose of iUustra- tion, assume that an employee entered the service at 20 years of age, and received a salary of $1,200 per annum through 50 years, when he reached the retiring age of 70. One and one-half per cent of $1,200 is $18. This amount ($18) multipHed by his years of service (50) gives $900, which would be the amount of his annuity for the remainder of his life. In actual practice, the employee's compensation is usually increased from time to time, or may be reduced, but this does not interfere with the operation of the plan, for the deductions from his salary are increased or diminished in such amount that the annuity upon retirement will still be 1.5 per cent of his salary for each year of service, regard- less of changes in salary or when they are made. This is a simple calculation, easily understood, and is further simplified by reducing the deductions from various salaries to a set of tables. In order to provide the fund from which to pay the proposed annuity of 1.5 per cent of the employee's salary for each year of service, a deduction should be made from the monthly salary of the employee, which will be sufificient, with interest at four per cent, to purchase such annuity on arrival of the employee at the age of 70. This sounds complex when stated in the abstract, but in practice the operation is simple. In the above illustration it was found that the annuity to be provided for at 70 was $900 per year for the remainder of the employee's life. The next step is to ascertain the cost of an annuity of $900 for life beginning at the age of 70. The cost of an annuity is based on the probable length of life from a given age, and interest at a given rate on the purchase price. The amount charged by insurance companies for an annuity of $100 on the non-participating plan, beginning at 70, is $742. Therefore, the annuity of $900 desired in this illustration would cost 9 times $742, or $6,678. The cost of this annuity being ascertained, the next step is to determine what sum must be set aside monthly to accumulate, with four per cent interest, $6,678 during the employee's 50 years of service from 20 to 70. By reference to an interest table it will be seen that a deposit of $1 per month for 50 years, with interest com- pounded annually at four per cent, amounts to $1,871.48. The number of dollars per month that would be necessary to accumu- late $6,678 is ascertained by dividing $6,678 by $1,871.48. This gives $3.57 as the amount to be deducted from a salary of $100 per month for a service of 50 years, in order to accumulate $6,678, which is sufficient to purchase an annuity of $900 per annum beginning at the age of 70 years. The amounts deducted from salaries will vary with the age of entering the service, and with the amount of the salary. Deductions do not increase with age, but only with the increase of salary. They will in no sense be an "assessment," unjustly burdening the younger employees for the benefit of the older. Instead, they are sums set aside as savings in the United States Treasury by each individual employee for his own ultimate benefit, or that of his family, and with the knowledge that under the operation of compound interest, the total will at the age of 70 years be sufficient to pur- chase a reasonable annuity. He will in no way contribute to the retirement of other employees, nor will the savings of other employees be diverted to his use. A man entering the service, aged 45 years, at $100 a mxonth, would have to put aside $6.53 a month in order to accumulate at four per cent compound interest, $3,339, which is the cost of an annuity of $450 a year beginning at the age of 70. It will be observed that this annuity is also 1.5 per cent of his pay for each year of service, the length of service in this case having been 25 years. These illustrations show that the annuity accruing to' the benefit of the employee who gives many years of his life to the Government service is proportionately larger than that accumu- lated by the one who comes in at the same salary but too late in life to render long service. The plan contemplates four methods of settlement for the em- ployee on arrival at the age of retirement. He may convert his savings with the increment of interest into one of the following options : (i) One cash sum. (2) An annuity payable throughout life. (3) An annuity payable throughout life, with the provision that in case of death of the annuitant before he has received in annuities the amount of his savings with interest, the balance shall be paid to his estate. (4) An annuity for a limited term of years. These options are advisable, because the circumstances of employees vary so greatly that a settlement which would be de- sirable for one might not be wise for another. But a further alternative is given. A man need not necessarly convert his fund immediately upon retirement ; but may leave it on deposit after separation from the service at any age, bearing interest at the rate of two per cent per annum for a period not exceeding twenty years. If not withdrawn within that time the money so left on deposit will be covered into the Treasury as a miscellaneous receipt. It is not merely the employee that remains in the service until he reaches the age of retirement who will benefit by this plan. A person separated from the service in any manner before that age will have to his credit a sum of money which he will be free to withdraw. If it amounts to $1,000, and he has been in the service not less than 20 years, he may withdraw it under any 10 one of the foregoing options at his attained age. In case of his death in the service, the amount of his savings with interest will be paid to his estate. The argument that "any retirement scheme which provides for refunds is objectionable, because it puts a cash premium upon resignation," is predicated upon the theory of the flat as- sessment of 5 per cent, or some such rate, upon all salaries, and has no applicability to the plan of accumulated individual savings here described. This brings out another advantage to the service. Under present conditions sentiments ©f humanity make the civil service rules difficult of enforcement in many cases. It is not the super- annuated only who become inefficient. A rigid enforcement of rules would result in the elimination of many from the service, who are retained because they would be penniless save for their monthly stipend. On the other hand, a provision for retirement would un- doubtedly be an additional hold on many of the Government's most valuable men. There are men of attainment, especially in scientific lines, who would like to work for the Government if they could afford to. The universities tempt them away, how- ever, not merely with offers of larger salaries, but with the promise of some provision for old age. A university professor may possibly be a beneficiary of two retirement funds, that es- tablished by the university itself and that founded by Mr. Car- negie, whereas a Government official has no such prospect. Still another way in which the personnel of the service would undoubtedly be improved is through the retirement, under these conditions, of many employees before the age of 70. They would prefer to accept less annuity and be relieved from the cares of office at an earlier day, and in many cases the service would be improved by their retirement. It is also provided that when an employee has received a re- fund on retirement and is afterward reinstated, his period of service shall be computed from the date of such reinstatement, unless he shall repay within 90 days the amount which he with- drew on retiring, in which case the former period of service shall also be counted. It may not always be desirable to retire employees at the age of 70. Their services may be of great value to the Nation and they themselves may be averse to retiring. Therefore, the arbitrary retirement of all who have reached the age of 70 is not contemplated, but provision is made for con- sidering the cases of those who are competent and who wish to remain in the service after that age. This finishes the first part of the plan, the basis on which all Government employees will be retired after about 50 years, when practically all now in office will have passed away. If this were all it would be open to criticism as unjust to the older employees, 11 who are too advanced in years to provide funds for their own retirement. If aged employees are entitled to any assistance at all in con- sideration of their past services, or if the services would be im- proved by their retirement, the Government should provide the funds for their annuities. Proceeding on this premise, a scheme is proposed which contemplates the treatment of all employees alike that are now in the classified service, in proportion to their years of service, by giving every employee, at Government ex- pense, an annuity, on arrival at the age of 70, equal to 1.5 per cent of his average salary during the last ten years of service, for every year of service up to the enactment of this retirement measure, provided he remains in the service until he reaches that age. To illustrate : An employee now 70 years of age, who had been in the service 50 years, would be entitled to retire at once on an annuity equal to 1.5 per cent of his average pay during the last ten years of service multiplied by his total years of service^ or 75 per cent of such average pay. An employee 40 years of age, who has been in the service 15 years at the time of the enactment of this plan into law would on retirement 30 years hence, be entitled to receive an annuity from the Government of 1.5 per cent of his pay for each year of service up to the passage of such a law, or 22.5 per cent, plus the amount of his own savings from the time the law went into effect until his retirement, after 30 years, at the age of 70. Sup- pose that this employee receive a salary of $1,200 per annum throughout the whole term of his service. On retiring at the age of 70, he would be entitled to an annuity of $810 for the remainder of his life, $270 from the Government, as 1.5 per cent of his salary for the fifteen years he served prior to the passage of the retirement law, and $540 as the annuity from his own savings, that is, 1.5 per cent of his salary for every year of service after the passage of the law. The annuity from the Government (the $270) would have no cash surrender value. It could be taken only as an annuity — never in a lump sum — and could be obtained in case the employee remained in the ser- vice until he reached the age of 70. The $540 on tlje other hand, which represents his own savings, plus interest, could be converted into the cash sum necessary to buy that annuity ($4,007). He can always, on leaving the service, withdraw his own money, but the contribution by the Government for services rendered prior to the passage of this act must always be taken in the form of an annuity. None of these funds, whether the savings of the employee or the contribution of the Government, should be subject to attachment or any other legal process. It is not contemplated that the Government annuities payable under the second part of this plan shall be based on salaries 12 above $2,500 per annum. All salaries above that sum shall be reckoned as salaries of $2,500. The amount deducted henceforth from each salary to accumulate each employee's own retirement fund, would, however, be based on the full amount of his salary. In view of the more strenuous demands made on their physical strength, it is proper to make the Government annuities due rail- way postal clerks for previous service, available at the age of 60 rather than 70. It is also proposed to make the Government annuities due letter carriers available at the age of 65 rather than 70. The annuities paid in these cases would be relatively smaller than those given other employees at 70. Similar treatment will also be granted to other classes of employees whose work makes the earlier ages of retirement desirable. The plan provides that the period of service upon which the annuity to be paid by the Government is based shall be com- puted from the original employment, whether as a classified or unclassified employee. This may include service in one or more departments of the Government, and periods of service at differ- ent times. The question naturally arises, how much will the adoption of this plan cost the Government? From the time of the passage of such a law all employees would begin to provide for them- selves, so that ultimately the plan would be no expense to the Government beyond the payment of salaries to the necessary clerical force to handle the accounts, and the payment of inter- est for the use of the funds. In the meantime, however, the Government would have to take care of the old employees as they reach retiring age, for services rendered prior to the adop- tion of the plan, until about 50 years from now when the last one would have been paid off. The sum required to do this annually would gradually increase for a few years, reaching its maximum about 30 years after the passage of the law. From the twenty-fifth to the thirty-second year after the adoption of the plan the amount each year is about the same. After the thirty-third year the amount each year drops off very rapidly until in 50 years the plan would be self-sustaining, and there would be no more need of making appropriations for the super- annuated. In 1904 the Bureau of the Census made a report on the execu- tive departments which is the latest authoritative information that we have regarding the personnel of the civil service. It is known as Bulletin 12, and covers the service as of July i, 1903. In order to ascertain definitely the maximum amount of money that the Government would have to pay during the next 50 years or so, if this plan of retirement should be adopted, tables, based on Bulletin 12, were prepared for all ages at which people are employed in the classified civil service, showing the annuities payable the year of the adoption of the plan and each year there- 13 after until all present employees are dead, and their sum total, or what it would cost the Government to put the plan in opera- tion and carry it through to completion as follows : Maximum amount of annual appropriation by the Federal Government necessary to provide a monthly annuity to each per- son in its Classified Civil Service July i, 1903, upon attaining the retirement age of 70 years. The amount of annuity to be 1.5 per cent of the employee's salary July i, 1903, for each year of service completed prior to that date. Amount of Amount of Amount of Year. Appropriation. Year. Appropriation. Year.' Appropriation. 1907 $725,110 1929 $1,617,302 1952 $572,770 1908 811,840 1930 1,663,981 1953 484,069 1909 908,188 1931 1,699,374 1954 403,305 1910 1.025,293 1932 1,713,035 1955 331,677 1911 1,157,181 1933 1,724,385 1956 269,380 1912 1,258,725 1934 1,734,603 1957 216,046 1913 1,370.710 1935 1,736,047 1958 170,947 1914 1 ,466,424 1936 1,744,512 1959 133,347 1915 1,526,551 1937 1,746,561 i960 102,450 1916 1,570,768 1938 1,736,974 1961 77,434 1917 1,579,132 1939 1,718,542 1962 57,499 1918 1,564,974 1940 1,684,723 1963 41,884 1919 1,550,742 1941 1,635,423 1964 29,877 1920 1,534,636 1942 1,568,188 1965 20,829 1921 1,531,851 1943 1,492,830 1966 14,152 1922 1,512,159 1944 1,406,199 1967 9,354 1923 1,554,679 1945 1,314,000 1968 5,971 1924 1,546,866 1946 1,211,839 1969 3,697 1925 1,550,718 1947 1,103,182 1970 2,199 1926 1,555,588 1948 990,583 1971 1,251 1927 1,571,682 1949 889,324 1972 679 1928 1,589,167 1950 772,735 1973 346 1951 669,126 1974 163 It should not be forgotten that this is a maximum cost, and that the real cost will probably be greatly less, since many em- ployees who enter into this computation will leave the service before reaching the age of 70. Compare this maximum cost of considerably less than two millions of dollars annually for a term of forty years with that of any other plan ever proposed, and it will be seen how little is asked of the Government. Having explained the plan proposed, it is interesting to turn to the conclusions set forth in the very careful report of the National Civil Service Reform League mentioned above. They are stated in the following paragraph: 14 "We therefore recommend that, if any enforced provision for superannuation be deemed advisable, it take the Australian form of a deferred annuity policy, which candidates for office should be required to take out in some company before final appoint- ment. As this would not apply to those who are at present in the service, we recommend that a record be kept of the amount of work done by employees over sixty-five years of age, and that their salary be reduced in proportion to the amount by which their work falls short of that of a thoroughly efficient employee. This would be at once fair to the Government, and humane to the office-holder." This shows that while their reasoning is good as far as it goes, the members of the Committee of the National Civil Service Reform League have not gone far enough. They have con- sidered civil pension systems and uniform assessment systems as the only possibilities. The plan here proposed, which is neither, brings to the employee and the Government all the benefits which might result from compulsory insurance in some m.utual insurance company, as suggested by the above-mentioned committee, and it has in addition one great advantage ; it avoids forcing employees to purchase annuities from insurance com- panies under arbitrary conditions, and at prices that might be extortionate. In this connection it is interesting to note that one of the valuable features of the plan is the array of reliable statistics concerning a large body of representative people, that will grad- ually be collected if this retirement plan is adopted. In handling the accounts of the employees under this plan, records will neces- sarily be kept showing the mortality experience of the employees in the various branches of the service and in different localities throughout the country, the rate of v/ithdrawal from the classi- fied civil service, and much similar information that may be of value and service as a guide in future valuations and adjustments of any retirement plan, and in reducing the cost not only to the employees but to the Government as well. The records will eventually become of great interest to every individual in the United States who contemplates taking out a life insurance policy, for the Government experience will prove conclusively whether the rates charged by insurance companies are reasonable. At present it is impossible to say absolutely. They are usually based on a table known as the American Experience Table of Mortality, compiled by the Mutual Life Insurance Company of New York, which was made up from observation of about 60,000 selected lives. The proposed retirement plan for Government employees will secure a record of at least twice that many lives at once, and probably three times that number before long, under various but classified conditions. The value of such an authori- 15 tative record would in itself justify the expenditure of the mod- erate sum necessary for the conduct of such an ofHce. In conclusion, we beg leave to say that your Committee has taken pains not only to study the details of this plan, as well as many others, but to submit it to the examination of recognized actuaries, Messrs. Hiram Messenger and Benedict D. Flynn of The Travelers Insurance Company of Hartford, and to have the necessary computations made so that nothing may be left to the imagination. The details have been thoroughly worked out, and are embodied in the accompanying bill, in proper form for sub- mission to Congress. Very respectfully, A. P. Davis, Chairman; Chari.e;s Lyman, Treasury Department ; John C. ScofieivD, War Department ; Bayard Wyman, Postoffice Department; J. W. HOLCOMBE, Interior Department; A. Zappone, Department of Agriculture; Georges W. Leadeey, Department of Commerce and Labor; George R. Waees, Civil Service Commission. LIBRARY OF CONGRESS 012 228 LIBRARY OF CONGRESS 012 228 147 4 HoUinger Corp.