Pension Scheme.

Timaru Herald, Volume XIIC, Issue 13650, 18 July 1908, Page 2 (Supplement)

Pension Scheme.

The British House of Commons has finany decivk-d that me. new , Uul Age I'eiißiuhs .'.Dill shad not. be contributory, Mr Harold Cox s ' amendment, proposing to make personal contributions a leatuie of the sclicme having )>L-en litgathed by 417 votes to 29. 'llie German contribu-' iGiy .sciicmme, to.winch the. Prime Mm- . is'ier iMr Asquitli) alluded in his Buclgvt showed that he was not very well jjrimecl in his subject. He said that, in Germany in 19jZ not- more than' •126,0JJ pennons out of a population of 50,000,000 were in • receipt of old age peusioiiii. But he forgot to mention tne not immaterial fact that the German system includes provision for infirmity as well, as for oid age, and 'that the infirmity peiJt>ioi.ts arc upon a higher scale? than the old age. pensions, aim, are subject to no-age limit. As a matter of tact, in addiuon to the 126,000 old ags pensioners mentioned- by him • there were in Germany in 1907 no fewer than 837,000 infirmity pensioners; and, imthermoie, the benefits of the German contributory 1 scheme, came into actual' enjoyment' immediately the scheme has received Imperial sanction. Incidentally it may be'obseived that the German ligurts dispone of the notion held in some quarters that it is only in old age that the worker requires help. The cases of sickness throughout ihe Empire relieved during 1907 reached the astounding numbt-r of 4,848,000, as against 134,055 who during the same- period became entitled to "infirmity" pensions. Admitting, for the sake of argument, that an individual may constitute more than one case of sickness during the twelve months, the figures are eloquent of the far-reaching, benefits of the law. Nor must it be forgotten that this " infirmity " pension operates aa soon as the infirmity is experienced. Evidently, Mr. Deakiu has taken his infirmity pension notion from Germany, and he "ha* fixed .1 he startingpoint at sixteem years—a moat humane proposition, lor it is quite . ccme«.-ivab:c that- a youth just apprenticed to his trade may be permanently' injured on the very threshold of his industrial career. What it. has. accomplished in Germany may be gathered from the single fact that the" total number of "infirmity." pensioners at the end of . 1907 was 837,000, against 124,000 drawing old age pensions proper which began at seventy years. A 6hort restatement of the German measure may not be inopportune. The policy of German old age pensions really dates" from the year 1881, and the credit for its inception must be given to Prince Von Bismarck. It was explained in -the Speech from the Throne—which, as the Emperor was unable to be present, became an Imperial Message—that the help of the. Reichstag was being -asked for " healing social evils by means of legislation. . . - -'based on the moral foun-

datiou of Christianity." Compui.-.ory insurance, the creation of corporate unions among working men, under the protection of the State, and the introduction of indirect taxes were the chief elements of reform. The first step was the reestablishment of the trade guilds, and the law of 1881, while it left membership voluntary, gave to them many Uuiks w a public nature, especially that of arbitration between master aricNmen. These were extended by a lurther law in lbß4. The way was now paved for the formation . of the scheme of a great Imperial system, wherebv all working men and women should be provided for in case of sickne.-s, accident, or old age. Bismarck hoped by these means to relieve the parishes of the burden of the poorrates, which would be transferred to the empire; at tlie same time the power of the Government would bo much extended. The first proposal, in March, 1881, was for compulsory insurance against accident. " Every person employed upon railways, in mines, and in factories was to be "insured. at an Imperial office. The premium was to be divided equally between masters, workmen, and the State. The scheme was bitterly opposed by the Liberals, and eventually withdrawn:, by. the Government. after it had passed its third reading. la 1882 there wae laid

jefore-the newly-elected -Reichstag,a fresh,' ■-! scheme,.dealing with the insurance-against ; , ) icciderit and against sickness, and it found 1 its way , into the Statute. Book in the I following year. . The law • was based' upon an old Prussian principle. Insurance' was made compulsory, but iu--tead of doing; the work itself, the Stale recognised the existing friendly and other societies, which -were allowed to enjoy .heir corporate existence and (separate administration, but they were placed under •State control, j For this purpose an Imperial Insurance-Department was created in the office-of .the Secretary of State for Ihe Interior. Uniform regulations were to be followed in all trades and districts. One-third of. the premiums Mas paid by the employer, and two-thirds by his workmen. . - Progressive legislation on the.se linos continued, but it was not -unail 1889 that the great- innovation —that, of insur-. anee against old age —was carried. The obligation to insure lvjits upon all who da not earn more than £2 a week. Half the premium, which is upon a sliding scale, as per lvigfs received, is paid by the employer. -. The pension begir.fi at the age of seventy, the amount varying by very complicated rules, but the Stale pays a fixed sum of £2 10s annually in addition to the pension., These measures have worked well, being now regarded with satisfaction by-masters and men alike. Alterations'have been made in detail, and. further alterations ate dsmanded, but the laws have established' themselves in practice, and the large amount of administration has prevented undue increase of bureaucratic power. The co-operation of masters and men in the administration of the societies has had a good effect on the relations of the. classes. The expense of administration, however, is considerable, and the existence of the separate funds cars b much waste of money and -labour. The latest, proposals-are for ■ simplification by. establishing, a. .common administration of the sick funds and.-old age'pensions, and abol-, ishing the separate .administration of the dillVrent. trade benefit societies. An time goes on, the administration will douht-le--i> fall more completely into, the hands of the State and the 'authority of the Imperial Insurance Department will absorb the older.securities. But that old age pensions will be other than.of a contributory nature in Germany,', at least, for many years, is extremely improbable. The essential characteristic of the German svstem is the payment of pensions for infirmity, and that. disbursement begins -as soon as the infirmity, " invalid;} t' overtakes the injured person. The common contention that such a scheme is only possible, in. Germany because-, "of the German military syrdem must be regarded as a.' fiction' of an uninquiring British mind.—(Exchange). ■ •