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degree of governmental control, new constitutions embodying these changes were approved by the royal decree of August 2, 1902.
As the private operation of the railroads proved unsatisfactory, the Italian Government decided to take advantage of the twenty-year clause in the lease, and the operation of the main railroad system was assumed on July 1, 1906, in conformance with the law of April 22, 1905. New constitutions embodying only minor changes were approved by royal decree of March 17, 1907, for the pension funds and mutual benefits societies, as well as for the new provident institutions. By these acts the new and the old institutions were made more nearly uniform.
It soon developed, moreover, that in view of the consolidation of the railroads under the unified administration by the State, there was no necessity for three separate institutions of each of the three groups, and one week after the new constitutions were approved, the law of March 24, 1907, ordered their consolidation into one pension fund, one mutual benefit society, and one provident institution. Constitutions of these three unified institutions were approved by the royal decree of May 23, 1907.
The entire system was radically changed by the law of July 9, 1908, which aimed to reduce the differences of treatment of employees of different groups. The law prescribed a unified system of pensioning, which was worked out in a codification of the law with some of the provisions in the constitutions of the three consolidated institutions, published by royal decree of April 22, 1909. According to this law the three institutions ceased to exist on December 31, 1908, and the new system was introduced on January 1, 1909.
STATE RAILROAD PENSION FUND.
This institution is the most important of the three because the principles of its organization were closely followed in elaborating the details of the existing pension system, in which the membership of all the three institutions was merged.
The purpose and scope of the pension fund was the granting of oldage and invalidity pensions to its members, pensions to widows and orphans of deceased members, lump-sum benefits to members or widows and orphans in cases in which a right to a pension had not been acquired, and in addition the fund assumed the administration of accident insurance in compliance with the general laws governing such insurance.
The fund was specially designed for the employees of the state railway system; within that system is included the actual operating force and the clerical force, but not the working force of the railroad shops.
Membership in the fund was restricted to such persons as held membership in one of the three pension funds on December 31, 1896, including, as was explained above, mainly salaried employees and such persons who were on that date members of a mutual benefit society and later became entitled to membership in the pension fund by promotion to a higher position.
The pension fund took care of ordinary superannuation, as well as of ordinary invalidity at an early age, providing special benefits for invalidity due to occupational diseases or to miasmatic fevers; it granted pensions to survivors in case of death of either a member or a pensioner.
Regular superannuation pensions were payable to members who retired from the service, either by their own request or by the decision of the administration, after attaining 60 years of age and after 30 years of membership in the fund, in case of sedentary occupations, or after attaining 55 years of age and after 25 years of membership in case of so-called active occupations, which include in general the train service, yard service, and station service. Employees of either group may demand a pension at the age of 55 and after 25
of membership, provided they have had 15 years of actual service.
Invalidity pensions were payable at any age, when such invalidity had been established, provided it was preceded by 10 years of membership in the fund. This condition was waived when invalidity was due to an injury or other lesion acquired through the service, or to some miasmatic fever, caught in consequence of the service in an infected locality.
If members of 10 years standing were separated from the service by the railroad administration without any fault of their own, they may be permitted by the administration of the fund to retain their membership in the fund, contributing according to the last salary, the railroad making the regular 8 per cent contribution. In such cases families retain the same rights as if the person had been in the service.
In addition to the pensions to members, pensions were paid to widows and children of deceased members or pensioners as explained below.
As was pointed out above, the chief characteristic of these pension funds was the absence of any strict dependence between a member's accumulated contributions and his pensions.
Normal pensions, which may be termed plain superannuation pensions, were liquidated on a basis of 3 per cent of the accumulated earnings of the members from whom deductions were made, to which are added one-twelfth of each increase in salary during the time. The actual annual pension was equal to nine-tentlis of this computed amount, with a minimum of 300 lire ($57.90) and a maximum of 8,000 lire ($1,544). This, in case of a complete 25 years' membership, would give a pension of over 75 per cent of the average annual salary. In case of premature invalidity due to some injury or disease received in the service, or to a miasmatic fever, the pension fund was even more liberal. In such cases the pension was computed on a basis of 25 years of membership, no matter how long or short it actually was, and for such purposes the last year's salary was assumed for all missing years.
The amount of pensions to widows and orphans depended upon the amount of the pension which the deceased member was receiving, or to which he would have been entitled if he had left the service on the day of his death.
The amounts of these pensions were proportionately very high, namely, 50 per cent of the original pension if the widow alone survived; 65 per cent if she had any minor children; if in addition minor children of the deceased by a previous marriage survived, the 65 per cent was divided among all the survivors, giving the widow two shares, and not less than 25 per cent. The widow's pension was paid until remarriage, and the children's pension until they were of age, or in case of female children until marriage, if that took place before they became of age.
If a member of the fund was forced to give up his position, either because of invalidity or of the abolition of his position before he had acquired the right to a pension, he received a benefit in the nature of one payment equal to 3 per cent of his total salary. A proportionate amount according to the pension regulations was granted to the widow and children of a deceased member who died before acquiring the right to a pension. If minor children, but no widow, survived, they received 50 per cent of the computed amount divided equally among all those surviving or still entitled to a pension because of their minority. If only one minor child remained he received 25 per cent of the computed amount.
Thus, with a few minor exceptions, the pension fund provided very high pensions for those who reached the superannuation age and for invalids of the service.
But in view of the fact that the pension system was a contributory one (the contributions being very high as will appear in the following section) it seemed to be somewhat of a drawback that the pension rights were lost altogether by resignation or dismissal from the service, except in the cases of persons in the employ of railroads subsequently acquired by the State, who lost their position at the time of the purchase of that road, and who might retain membership in the pension fund.
The loss of the right to a pension because of resignation carried with it a corresponding total loss to the widow and children, while in
case of dismissal the wife and minor children were treated under the same rules as in case of death of the employee.
While all invalidity, whether or not due to industrial accidents, gave the right to a pension, a certain number of the employees insured in the fund come under the provisions of the accident compensation law, and therefore special provisions were included in the constitution for the purpose of adjusting these two rights and preventing double compensation for accidents. In general these provisions may be summarized as follows: That in so far as the railroad administration had not otherwise provided for their accident insurance, the pension fund acted as the agent of the railroad administration for payment of compensation; of the two amounts, that due to him as a member of the pension fund and that due under the accident compensation law, the larger was paid to the injured employee or to his survivors, the distribution being made according to the provisions of the accident law; on the other hand the railroad administration was required to pay to the pension fund the amount of compensation due under the accident law.
SOURCES OF INCOME.
All of the assets of the three pension funds were transferred to the State Railroad Pension Fund. The current revenues of the fund may be divided into three main groups: (a) The periodical contributions of the members; (b) the periodical contributions of the railroad administration as an employer; and (c) a special source of income created by the law of March 29, 1900. The contributions paid by the private operating companies before the assumption of the railroad business by the Government were then made by the State, but as before from the operating accounts.
In addition, donations and legacies might be received by the fund, and the income from investments of the funds on hand were added to the revenue.
Under the constitutions of January 1, 1890, for the three individual pension funds monthly deductions of 4.5 per cent were made from the salaries and other accessory payments made to the employees. By the constitution of 1902 these were increased to 5.5 per cent on October 21, 1902. In case of an increase of the annual salary, one-twelfth of the increase was retained during the first month after the increase went into effect. In other words, the actual increase of the salary was retained for one month.
If the salary was reduced because of suspension, leave, sickness, or transfer to a waiting list, the deductions were made as if no such decrease of salary had taken place. If the salary was entirely discontinued for a time, the employee must make the deferred payments on return to the active service.
From January 1, 1890, until October 21, 1902, the railroad administration paid to the pension fund 5 per cent, and since that date 8 per cent, of the salaries subject to the deductions, and in case of a promotion one-twelfth of the increase in the annual salary.
In case of temporary reduction or discontinuance of the salary the administration met its obligations at the same time that the employee did.
A special source of income was created for the fund by the law of March 29, 1900, act 3, in turning into the fund the proceeds of the sale of tickets of admission to railroad stations.
The pension fund was intrusted to an administrative committee of 12 members, of whom 6 were nominated by the state railroad administration and 3 were selected by the members in active service. Of these 9 members all but one of the administration's representatives must be employees in active service. The other 3 members were required to be representatives of other governmental departments, one of the Ministry of Agriculture, Industry, and Commerce and the other two financial experts from the Ministry of the Treasury. Several other high officials were mentioned as consultative members of the committee.
The committee elected its own president, vice-president, and secretary, who were not to be the above-mentioned representatives of government departments. Various provisions were contained in the constitution concerning the investment of the funds and the auditing and reporting of the financial affairs. The entire cost of the administration was assumed by the railroad administration.
MEMBERSHIP.—The movement in the membership and the number of pensioners in all the three funds is shown in the following table. The rapid decline in the membership since 1897 is easily explained by the organization of the new provident institutes. But even before that the membership appeared to be decreasing, though, as was shown in the table on page 1936, the number of employees of the Italian railroads was growing. But it seems to have been the policy to increase the number of temporary appointees rather than of permanent employees. Thus while the number of permanent employees has actually decreased within the decade 1891 to 1901 from 89,723 to 88,995, the number of temporary employees increased from 8,457 to 19,695.