| MONTHLY COST OF $100 ANNUITY IN THE LETTER CARRIERS.[[57]] | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Age at Entry | Age at which Annuity Begins. | ||||||||
| 30 | 35 | 40 | 45 | 50 | 55 | 60 | 65 | 70 | |
| 20 | $13.47 | $ 7.66 | $ 4.83 | $ 3.19 | $ 2.16 | $ 1.47 | $ .99 | $ .66 | $ .45 |
| 30 | 28.31 | 11.97 | 6.63 | 4.05 | 2.59 | 1.68 | 1.08 | .72 | |
| 40 | 24.50 | 10.06 | 5.37 | 3.16 | 1.91 | 1.21 | |||
| 50 | 19.83 | 7.79 | 3.98 | 2.27 | |||||
| 60 | 14.62 | 5.62 | |||||||
| 65 | 12.46 | ||||||||
The new system differs in two important respects from the old. In the first place, the rates are graded according to age, and secondly, the new system provides that a member may retire five years after entrance, or thereafter at any successive period of five years up to seventy, and that his premiums shall be fixed according to the time of retirement and the period of his expectancy.
The disability certificates provide for an indemnity of eight dollars per week for loss of time resulting from disability caused by accident or sickness, a maximum of twenty weeks' disability during any one year.[[58]] However, should a member, after entrance into the association, become disabled permanently by "tuberculosis, paralysis, locomotor ataxia, dropsy, cancer, diabetes, sciatica, chronic rheumatism, chronic kidney or mental disease, or any other chronic disease," not especially named in the constitution, that may, in the judgment of the board of directors, cause permanent drain upon the funds of the Association, the said member shall receive the disability allowance for twenty weeks, after which all payments shall cease and his certificate shall be cancelled.[[59]] The disability insurance is thus really sick insurance.
To aid members who are too old to take advantage of the plan offered for securing annuities by their own financial efforts, the Association, in convention at Portland, September, 1905, endorsed an "extended leave of absence retirement plan."[[60]] The Post Office Department of the United States was requested to grant an extended leave of absence to "superannuated or permanently impaired" carriers on condition that they accept 40 per cent. of their regular salary, while retired, and that they pay the remaining 60 per cent. to the senior substitute in their office. Under the conditions of this plan, the applicant for retirement must submit himself to the board of examiners, who shall, after a physical examination by the physician of the board, determine his eligibility. The results of this plan would be two-fold: first, to relieve the detrimental effect of superannuation upon the efficiency of the service, and, secondly, to remove the fear of those who look for more drastic measures of relief. Aside from a regular pension grant by the Government this plan is considered the most efficient method of securing adequate protection for the superannuated who are too old to avail themselves of the opportunities offered under the system of annuities.[[61]]
The principal obstacle to the successful operation of disability insurance has been the difficulty experienced in its administration—largely on account of the impracticability of closely defining permanent or total disability. With almost every revision of the constitutions changes were made in the definition of the term "disability." Strict construction of the law by the executive officials led to dissatisfaction and often to appeals from their decisions to the insurance committees, or to the boards of trustees.[[62]] During the early years disability claims were often presented through subordinate officials, who were either unable to interpret the laws aright, or were unwilling to assume the responsibility of pronouncing the claims illegal. The Engineers, after a period of thirty-two years, in 1898 adopted a satisfactory definition of total disability: "Any member of this Association losing by amputation a hand at or above the wrist joint; a foot at or above the ankle joint; or sustaining the total and permanent loss of sight in one eye or both eyes, shall receive the full amount of his insurance."[[63]] Similar definitions of disability have been worked out by the other railway organizations. The Conductors add to this "total loss of the sense of hearing." The Switchmen include "the loss of four fingers of one hand, at or above the second joint." Disability, as defined by the Letter Carriers, means inability, because of sickness or accident, to perform the regular duties of a letter carrier.[[64]]
The most important development in the insurance systems of the railway unions has been the change in the amount paid from an uncertain to a fixed amount. This evolution is best illustrated in the history of the older organizations. In the period from 1868 to 1884 the amount paid was the sum collected by levying upon each member a certain assessment for each death or disability. The amount of the benefit therefore varied with the number of members. In the first stage, the Engineers paid one dollar per member upon each death and fifty cents in each case of disability, the Conductors paid one dollar per member upon each death or case of disability, while the Firemen paid fifty cents upon each death or case of disability.[[65]] The membership was small and the assessments were largely regarded as benevolent contributions. This phase is well illustrated by the early history of the benefit among the Conductors. The first benefit, paid in December, 1871, amounted to $48. During the first thirteen years of the department's activity 19 claims were paid. The last was $70, and the average amount paid was $88.[[66]] This system continued until 1881-1884, when a general revision of constitutions in these three brotherhoods limited the amount of insurance paid, and laid the foundation for issuing insurance certificates in fixed sums. In the second period, from 1883 to 1890, the number of assessments remained undetermined; but the amount of the benefit was limited to a fixed sum and all surpluses were placed in reserve. The Conductors and the Firemen took the initiative in this change and in the constitution of 1881 fixed the maximum amount for death or disability at $2000 and $1000, respectively; the Engineers, in the constitution of 1884, placed this maximum at $3000.
The Brotherhood of Railroad Trainmen, the Order of Railroad Telegraphers, the Switchmen's Union, and the Maintenance-of-Way Employees did not pass through the first period of development, but were organized during the second stage when the amount of insurance was limited. The Trainmen, the Telegraphers, and the Switchmen, in their first constitutions of 1883, 1887 and 1886, respectively, and the Trackmen (Maintenance-of-Way Employees) in 1892 fixed the amount paid at the definite sums of $300, $1000, $500 and $1000, respectively.[[67]] The Letter Carriers, although organized after the railway unions had fixed at a definite sum the amount of insurance to be paid, for several years paid only a sum equivalent to one assessment, at the regular rates, upon all the certificates in force at the time of the death of the insured.[[68]] The amounts paid on the second death, March 22, 1892, and on the third death, July 28, 1893, were $599.16 and $596.12, respectively.[[69]] Finally, in the third period, from 1890 to the present, the number of assessments was also fixed.
Another important change in the method of conducting these insurance systems was made in the decade from 1890 to 1900. The organizations with two exceptions have not adopted the policy of the insurance companies in varying the charge with the age of the insured. The device they have commonly used is the differentiation in the amount of insurance which may be taken in such a way that the older members may insure themselves only for a smaller amount. As early as 1886 the Firemen provided that only members under forty-five years of age might take insurance,[[70]] and in 1887 the Telegraphers adopted an age limit of fifty years.[[71]] The Conductors, under the constitution of 1890, provided that any member between the ages of fifteen and fifty might take $2500 of insurance against death or disability, and any member between the ages of fifty and sixty might take $1000 against death and $500 against disability.[[72]] In 1892 the Engineers introduced an age limit of fifty, and in 1894 further differentiated applicants so that those under forty years of age might secure $4500, those under forty-five years of age might obtain $3000, and all over forty-five and under fifty years of age, $1500.[[73]] Even now the Switchmen and the Trainmen offer equal amounts to members of all ages at the same rate.
The Maintenance-of-Way Employees and the Letter Carriers not only limit the age of the insured but also grade the charge per $1000 according to age. In the case of the former, members from eighteen to thirty-five years of age pay $1 monthly per $1000 of insurance; those from thirty-five to forty, $1.25; from forty to fifty, $1.50. Insurance rates in the Letter Carriers' Mutual Benefit Department have, with the exception of the first year of operation, been graded according to age. The minimum and maximum age limits are twenty-one and fifty-five years. The monthly rates vary according to age from 77 cents per $1000 of insurance at twenty-one years to $2.06 at fifty years.