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among the employees of municipalities, and of many large financial, commercial, and manufacturing institutions.

The best known old-age pension institutions for wage-earning employees of private industrial establishments are the miners' funds of the Polish mining and metallurgical industry, but these have already been described in connection with the topic of sickness insurance.

EFFORTS FOR REFORM.

EFFORTS OF THE SOCIETY FOR ENCOURAGEMENT OF RUSSIAN INDUSTRY AND COMMERCE.

Early in 1902 the question of labor insurance was raised in the Society for Encouragement of Russian Industry and Commerce, and three commissions were appointed for the consideration of the three main branches of labor insurance, all under the chairmanship of and in collaboration with important officials. One of these commissions undertook the study of the problem of old-age insurance; and when the committee of ministers, on December 24, 1904 (January 6, 1905), established, in conformance with the imperial ukase of December 12 (25), 1904, a labor insurance commission under the Ministry of Finance, the material collected by the society was turned over to that commission.

In the opinion of the commission, an old-age insurance system must include all classes of wage-workers, not excepting the agricultural laborers and domestic servants, and insurance against invalidity in addition to that against old age proper. In regard to the age at which the regular old-age insurance should begin, no unanimous decision was reached, but the majority of members of the commission were in favor of a 60 or 65 year age limit. The question of pensions for the widow and orphans was discussed. As was shown above, such pensions, within certain limitations, are an essential part of all the government employees' old-age insurance funds. But such pensions require an additional cost which would be considered excessive in the beginning, besides presenting many technical difficulties in view of the absence of necessary statistical data, and it was thought wiser to disregard the demand for widows' and orphans' pensions in the immediate agitation for old-age and invalidity insurance.

The system of percentage deductions from wages, with individual accounts, was not considered feasible in view of the very low standard of wages. Instead, a system of arbitrary weekly contributions was thought preferable. For the purposes of such contributions it was suggested that the wage-workers be divided into classes according to their earnings: (1) Those earning less than 60 rubles ($30.90) annually; (2) those earning from 60 to 120 rubles ($30.90 to $61.80); (3) from 120 to 180 rubles ($61.80 to $92.70); (4) 180 to 300 rubles ($92.70

to $154.50); (5) 300 to 480 rubles, ($154.50 to $247.20); and (6) 480 to 1,000 rubles ($247.20 to $515.00). Whether workers earning more than 1,000 rubles ($515) annually should be required to insure against old age and invalidity was not definitely decided. For each of the six classes enumerated, definite weekly dues are to be collected, with an equal contribution from the employer, while the state treasury should contribute at least one-third of the value of the pension, and even more when necessary to bring the pension up to the required minimum. To members of each group a definite pension is to be paid, either at the regular age or at the establishment of disability from invalidity, but in no case unless 200 weekly payments had been made.

While no definite scale of pensions was prepared by the commission, yet in a report to the commission by one of the members the proposed pensions for the six groups were 18, 30, 48, 72, 120, and 180 rubles per annum. ($9.27, $15.45, $24.72, $37.08, $61.80, and $92.70.)

It was freely admitted at the time that the almost entire absence of statistical data made a scientific adjustment of contributions and cost of the pension impossible, but the need for pensions was stated to be so great that it did not permit of a delay until such data could be completed. It was expected that in the beginning the cost to the treasury might be heavy, but a gradual adjustment through periodical revision of rates could meet that difficulty in time.

PLAN OF 1905 FOR A GENERAL OLD-AGE INSURANCE SYSTEM.

The first comprehensive governmental plan for old-age and invalidity insurance of workmen employed in private establishments was published in 1905 as a part of the general workmen's insurance plan, the other parts of which were analyzed in preceding sections of this chapter.

This plan was somewhat of a compromise between the pension funds for government, zemstvo, and railroad employees, described above, and the plan of the Society for Encouragement of Russian Industry and Commerce. The pensions are based upon the value of the individual accumulated accounts, which consist mainly of equal contributions by the employers and employees. Special pensions are also provided for in cases of invalidity for widows and children. The main differences between this plan and the existing pension funds are, on the one hand, the guarantee of a minimum pension; when the accumulations do not cover its cost, the difference must be paid from the reserve, and the state treasury is to meet the obligations of the reserve if its funds are exhausted. That is to a slight extent a direct subsidy of the state treasury to the old-age and invalidity insurance. On the other hand, the obligatory payments

of both employer and employee are much smaller than in the described pension funds. Where those payments equaled 9 to 12 per cent of the wages, besides many other important sources of revenues, fairly large pensions could be paid after comparatively short periods of service. The contributions according to this plan of 1905 are greater than those contemplated by the Society for Encouragement of Russian Industry and Commerce; yet they equal only 3 per cent from each side. As a consequence the pensions must be quite small, but larger than in the earlier plans; this is evident from the amounts of the guaranteed minimum. After 25 years of membership in the fund the guaranteed minimum is only 36 rubles ($18.54) per annum, or $1.55 per month; and for invalids after five years only 24 rubles ($12.36), or $1.03 per month. Widows' pensions are granted only if the workman dies while a member of a fund, but not after he has received a pension.

PLAN OF 1906.

A radical change in the attitude toward the problem of old-age insurance took place in the conferences which elaborated the insurance plans of 1906. While the desirability of such insurance was still recognized, grave doubts were expressed as to its feasibility for the immediate future. It was pointed out that even in Germany the introduction of accident and sickness insurance preceded that of oldage and invalidity insurance by many years, and that that was the natural sequence in all other countries gradually working their way toward a complete system of obligatory social insurance.

The greatest difficulty was found in the peculiarities of organization of Russian industry and commerce, with the predominence of small artisans' shops, hand trades, home industry, and other branches of semiindependent workers. The simultaneous extension of the oldage insurance system over the entire body of industrial, commercial, and transportation wage-earners was thought out of the question, and under such circumstances the shifting of the wage-earners from a class of service included in the old-age insurance scheme to another not so included would be a very frequent occurrence, and the retention of the contributions made by the employee to the fund would work an injustice.

As a matter of fact, almost all existing Russian old-age pension funds repay the contributions of the insured at separation from service after a very brief period of service (usually two years). The German system of nonrepayment of these contributions would meet very strong opposition, and, on the other hand, the practice of repayment would be so frequent as to make the payment of pensions exceptional and also very difficult. In this combination of circumstances the commission of 1906 saw a cause of an automatic breakdown of the old-age pension system. It therefore proposed that the plan for

introducing such a system be indefinitely postponed, and in its stead a system of savings funds for individual establishments was recommended. Such savings funds may be established either upon the initiative of the employer or by vote of the employees. Membership in the savings fund was to be voluntary unless at least three-fourths of the employees vote for its establishment; in that case the establishment of the fund is mandatory and membership obligatory for all wage-workers employed at the time or subsequently. Under the voluntary organization the amount of savings is left to the discretion of the employees, but in the obligatory funds the savings are regulated by the proposed law, which requires them to be not less than 2 per cent nor more than 4 per cent of the earnings. These obligatory funds are more than savings funds and may be termed savings and benefit funds, for the employers are required to add at least 25 per cent to the contributions made by the employees. The accumulations are paid to the employee at the time of leaving his employment, according to the following regulations: The individual savings unconditionally, and of the benefits contributed by the employer 30 per cent after 3 years of service and 10 per cent additional for each additional year of service. Besides the savings and benefit fund, a surplus fund is also established, into which those portions of the benefit fund are turned which have not been paid out because of premature separation from service, and this fund is to be used for granting benefits to families of deceased employees. The savings funds are also permitted to grant loans to the members. The administration of these funds is to be intrusted to the general members' meetings and a board of directors consisting of representatives of the employer and employees.

Only in a very indirect way are these planned funds connected with old-age insurance. The only element is the gradual acquisition by the employee of a right to the employers' contributions to the saving fund. These rights are fully acquired in ten years, but at best they have a small value. With the average earnings of about $100 per annum, the workmen's average contributions will be from $2 to $4 a year and the employers' average contribution to the benefit fund from $0.50 to $1.

PLAN OF 1907.

Notwithstanding the conclusions of the conference of 1906, which were discouraging to the idea of immediate organization of old-age and invalidity insurance, the Ministry of Commerce and Industry continued its work on the further elaboration of an old-age insurance plan, the results of which were published, together with much explanatory material, in May, 1907. This bill was not introduced in the Duma until June, 1908, together with the other insurance bills, and

so is evidently not considered a matter for immediate consideration; nevertheless the bill shows the gradual growth of the influence of the German insurance methods in Russia. While the plan of 1905 was based upon the system of personal accounts, thus following the existing pension funds for salaried employees, and the plan of 1906 had taken another step away from the pension principle toward simple saving, with a few slight benefit features, the plan of 1907, on the contrary, shows a strong tendency in the opposite direction. It is much nearer to the suggestions offered by the Society for Encouragement of Russian Industry and Commerce in 1902.

The bill was intended to establish obligatory old-age and invalidity insurance for all wage-workers and employees over 15 years of age in industrial, trade, commercial, and financial establishments. The central insurance office, to be established, shall have the right to extend this system of obligatory insurance to the following classes of persons either throughout the Empire or in definite regions: Domestic servants, independent artisans who do not employ any hired labor, persons belonging to "artels" (industrial cooperative groups), or performing work on order, even if they employ labor, but work together with their employees.

The following groups are excepted: (a) Agricultural laborers and employees of rural industrial establishments; (b) employees receiving no other compensation except subsistence; (c) privates in the army and navy performing industrial labor as a part of their duties; (d) aliens; and (e) persons over 60 years of age at the time of organization of this insurance system, or who had lost at least two-thirds of their working ability; also persons who at the time of adoption of the law hold membership in any pension fund granting old-age and invalidity pensions not inferior to those established by this act.

Furthermore, the following persons may be freed from the obligation of insurance if they so desire: Those who are not employed over twenty weeks throughout the year in establishments subject to compulsory insurance, and persons receiving pensions not inferior to the minimum pensions established by this bill, either from accident insurance or from any existing pension fund.

Thus the exceptions embrace a considerable class of wage-workers. The exception of agricultural laborers is perhaps the most important one. Next to it may be placed the group of persons employed not over twenty weeks per annum. That may include a great many persons in construction, building trades, and in such seasonal trades as sugar manufacturing and refining.

The amounts of old-age or invalidity pensions, funeral expenses, and also of weekly contributions depend upon the wages of the insured, who are classified for this purpose into five groups, as shown in the following tabular statement:

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