(2) that if the employee is disabled permanently through illness or accident before he arrives at the retiring age, he shall receive a proportional pension; (3) that if the employee dies before arriving at the age of retirement, his estate shall receive his contributions, with interest; (4) that if the employee retires, but dies before the total of his pension receipt equals the total of his contributions, his estate shall receive the difference, with interest.
The difficulties of maintaining a non-contributory pension system for a very large class of beneficiaries are also serious. No such system has been in existence long enough to afford much useful experience, and the estimates of experts are so affected by the lengthening of life in civilized countries, by the unforeseeable growth of the class to come under the pension system, and by that curious tendency for the average age in a community or a class to rise as the community or the class grows, that such a pension fund is liable to sudden and unexpected strains unless there are provisions for its increase from some large source—for example, government appropriations, or a supporting fund.
The difficulties of either of these systems are not insuperable. The doctrine of law which protects the contributor to a pension fund protects him only against what the law regards as arbitrary action and is difficult chiefly because it requires the management of the fund to proceed in all cases with a regard for legal precedent which laymen are apt to regard as excessive and which at times interferes with efficient management. If, however, justice and the necessary procedure of the law are adhered to, the compulsory contributory feature need not cause embarrassment.
The objection to the non-contributory scheme may be also obviated by economy, by a careful study of the laws of vital statistics of the class affected, by the general observance of just and fair management with the funds at the disposal of the managing agency and by the cooperation of beneficiaries themselves.
The practical question which faces those who are considering pension systems is, therefore, the relative advantages of the compulsory contributive type and of the non-contributory type. Both of these are immensely preferable to the unfair and inhumane system which they are intended to displace. Secretary MacVeagh has most clearly pointed out that, except with employers of peculiar hardness, all governments and institutions conduct their operations really on an imperfect pension system. The secretary writes in his report for 1909: "The service is blocked in many instances by the unwillingness of the officials in charge to throw out of place worthy men and women who have given the best of their lives to the work of the government. So that, in a very imperfect and wholly unsatisfactory manner, a pension system is, and long has been, in operation." Every college officer appreciates the fact that the colleges are also maintaining, in this imperfect sense, a pension