Ordinarily no particular part of the funds of the union is devoted to the payment of beneficiary claims. The unions paying insurance, however, are exceptional in this respect. In such cases the funds of the insurance departments are separate from the general funds of the brotherhoods, and the dues for maintaining the insurance departments are levied as assessments distinct from the general levies. Nearly all the grand lodges have made provision in their constitutions against encroachments upon the beneficiary funds by the grand officers for the benefit of other departments. The Trainmen and the Switchmen provide that the beneficiary fund shall be used exclusively in paying death and disability claims.[[212]] The Telegraphers provide that no part of the mortuary fund shall be paid out, loaned or diverted for any purpose except for the payment of approved death claims.[[213]] The Firemen pay out of their beneficiary fund "all expenses for the proper conducting of the beneficiary departments."[[214]] The position of the Conductors on this point is not so explicit. The Order, however, holds in reserve a fund of $300,000, from which the grand officers may draw, in case the assessments levied for beneficiary purposes are insufficient to pay legal claims and the surplus in the beneficiary fund is not sufficient to cover the deficit.[[215]] The Engineers and the Maintenance-of-Way Employees have no specific regulation of this kind; but the implication is that similar protection is furnished their funds. The Letter Carriers provide that the beneficiary fund shall be used exclusively for paying insurance claims.
Only a few of the unions paying benefits as distinguished from insurance make any such provisions. The Boot and Shoe Workers provide that the "sick and death benefit fund shall not be drawn upon for any purpose except for payment of sick and death benefits;" the Painters, that "no money received for a specific purpose shall be otherwise used;" and the Tobacco Workers, that "none of the funds shall be transferable one to another."[[216]] The Cigar Makers and the unions which follow its methods go quite to the other extreme.[[217]] All the moneys of the union are kept in a single fund and are drawn upon for the payment of benefits, organizing expenses, or strike pay, as need requires. In the great majority of unions, however, a nominal allocation of funds is practised. Thus, the Typographical Union in 1906 apportioned its monthly dues as follows: five cents to the general fund; five cents to the special defense fund; seven and one half cents to the defense fund; seven and one half cents to the burial fund; and ten cents to the endowment fund of the Union Printers' Home. Similarly, the Iron Molders, the Boot and Shoe Workers, Painters, Pattern Makers, Barbers and many others apportion their dues in fixed ratios to specific objects. But such apportionments are mere book-keeping devices. None of these unions hesitate in an emergency to transfer money from one fund to another. The Iron Molders and the Printers, for example, give their executive board or council power to transfer money from one fund to another whenever occasion demands.[[218]] In the other unions there is an implied power. In 1899 the Executive Board of the Iron Molders transferred $10,000 from the surplus in the out-of-work fund to other funds, as follows: $3000 to the strike fund; $5000 to the expense fund, and $2000 to the monthly fund.[[219]] Similarly, the Typographical Union, from 1897 to 1902, transferred $24,174.64 from the burial fund to the general fund.[[220]] Although the Brotherhood of Carpenters do not make provision for the transfer of money from one fund to another, it has been found necessary to borrow from one fund in order to meet claims on another. In 1896 the Executive Board borrowed seven thousand dollars from the "protective fund" and twelve thousand from the " organization fund" with which to pay benefit claims.[[221]]
Efficient financial administration requires in the case of certain benefits an apportionment of revenue between the national union and its subordinate unions. The funds for the payment of death and disability benefits or of old age pensions can be held at national headquarters, since the administration of such benefits can be centralized and immediate payment is not essential. In the railway unions and in the great number of unions, such as the Brotherhood of Carpenters and the Typographical Union, which have developed only death benefits, the dues for beneficiary purposes are collected by the local unions and paid over to the national treasury. In those national unions which have introduced sick, out-of-work, or travelling benefits, national funds are ordinarily held by the local unions, for the reason that it is desirable that payment of claims should be made immediately. The unions which pay such benefits are divisible into two classes according to the extent to which they have entrusted the funds of the national union to the local unions. The Cigar Makers, the Typographia, the Piano and Organ Workers and the Plumbers intrust to the local unions all the funds of the national organization. A more numerous class of unions apportion the dues between the local unions and the national organization. The Iron Molders, for example, collect twenty-five cents per week from every member. This amount is applied as follows: ten cents per week per member is transferred to the International treasurer, of which sixteen per cent. is placed to the credit of the death and disability fund, twenty-six per cent. to the monthly fund, and fifty-eight per cent. to the strike fund; eight cents per week per member is held by the local unions as a credit to the benefit fund out of which are paid sick and out-of-work benefits; and the remainder, seven cents per member, is held by the local unions as a fund for local expenditures.
The adjudication of claims is naturally the most important administrative task connected with a system of benefits. In all cases the national officials rely upon the local unions and their officers for a certain amount of coöperation and aid in preventing fraud, but the amount of this dependence varies with the character of the benefit. In death and disability benefits the national union can prevent fraud almost without any coöperation on the part of the local unions. A certificate of death or disability, properly signed, is in the great majority of cases an indisputable evidence of the fact it purports to attest. A union may in like manner administer an old age pension directly from its head office. But in the case of sick, travelling and out-of-work benefits, the local unions become an essential part of the administrative machinery of the national union. No national union attempts to determine whether a member of a local union is entitled to the out-of-work benefit except through the local union. The administrative systems fall thus into two great classes according as the benefit administered can be guarded against fraud by means of certificates and sworn statements, or according as it must be administered partly by persons in contact with the claimant. In both cases the national officers administer the benefits; but in the one they act directly and the mediation of the local union is formal and dispensable, while in the other the aim of national administration is to supervise and control the local administration.
The administration of the death benefit or of a system of insurance against death presents relatively few difficult problems. The local union reports the death to the national officials and certifies to the good standing of the deceased member in his local union. If the reports of national and local unions correspond and the deceased member is clear on the records of both local and national unions, the claim is approved by the national officers and payment is made to the designated beneficiary, or the legal heirs of the deceased. The report of the subordinate union to the national union, covering the case in point, contains a certificate validating the claim, sworn to before a notary public or commissioner by the president and the financial secretary, together with all documents upon which the local authorities based their decision or prayer for the payment of the claim. Upon receipt of an application for a claim the general secretary-treasurer, the general president, or both, examine it and, if satisfied as to its validity, order immediate payment; if the claim is questionable it is referred to the general executive board for final adjustment.[[222]]
The adjudication of disability claims is more difficult than that of death claims. Of the unions that pay disability insurance or benefits the Locomotive Engineers, the Railway Conductors, the Locomotive Firemen, the Railroad Trainmen, the Switchmen, the Maintenance-of-Way Employees, the Iron Molders, the Brotherhood of Carpenters, the Painters, and the Glass Workers specify the disabilities that constitute "total or permanent disability," while the Wood-Workers and Metal Workers define disability simply by the resultant disqualification for "following the trade,"[[223]] In the latter group of unions the administrative officers have large discretionary power. The lack of more specific rules in such cases causes unsatisfactory administration and this in turn gives rise to general complaint.[[224]]
All claims for disability benefits are filed with the local officers of the disabled members' union for their examination and approval or rejection. In case of approval the claims are forwarded to the central office of the national union with all necessary papers concerning its validity. If the claim is approved, payment is made through the local union to the legal claimants.[[225]] The majority of the unions paying disability benefits, as a precautionary measure specify the time within which claims for disability must be filed. The Conductors and the Carpenters require claims to be filed within one year from date of disability,[[226]] the Firemen and the Switchmen, within six months,[[227]] and the Trainmen "promptly" after injury;[[228]] while the Engineers and the Maintenance-of-Way Employees fix no specific time for filing claims. The Carpenters and the Painters require that notice of a claim for disability must be given to the general secretary-treasurer within sixty days after disability occurs.
The disability claim must be accompanied, under the rules of practically all the unions, by the sworn certificates of the attending physicians.[[229]] The Firemen provide that the national officials may, when they consider it necessary, appoint a physician to pass upon the validity of a claim; the Maintenance-of-Way Employees require subordinate lodges to appoint a special committee to report on the nature and cause of the disability. The Engineers exercise special care in passing upon a claim for loss of sight. In such cases they require a certificate signed by two experienced oculists; and in case the eyes have not been removed the claim remains on file for one year, when additional certificates from two experienced oculists, certifying to total or permanent blindness, must be furnished.[[230]]
A member whose claim for a death or disability benefit has been rejected may appeal from the decision of the official authorized to pass upon claims. The provisions of the Trainmen are typical. Every claim rejected by the secretary-treasurer is referred to the Beneficiary Board, consisting of the grand master, the assistant grand master and the secretary-treasurer. If rejected also by the Board the claimant may appeal to the Grand Lodge "at its next succeeding session, but not afterward." The appellant must give a written notice to the grand secretary-treasurer of his intention to appeal.[[231]]
The unions paying the sick benefit fall into two classes according as they administer the benefit directly from the offices of the national union with the aid of the local union or as they intrust the administration of the benefit to the local union and leave to the national officers only a general supervision. The Boot and Shoe Workers, the Barbers and the Tobacco Workers are in the former class, while in the latter are the Cigar Makers, Iron Molders, Typographia, Plumbers, Leather Workers on Horse Goods and the Garment Workers.