CHAPTER XIV

COMPULSORY-CONTRIBUTORY OLD AGE INSURANCE

AUSTRIA

A system of old age insurance for salaried persons and several other classes, was advocated in Austria as early as 1888, about the time the German Old Age Insurance plan was adopted. The first bill providing for such insurance, however, was not introduced until 1801. The first law enacted went into effect on January 1st, 1808. This act provided a limited system of contributory old age and invalidity insurance, restricted to certain classes of salaried employés. On June 25, 1814, the law was’ amended in essential respects by an Imperial decree, which was to become effective on the first of October, 1814. On account of the declaration of war, an order dated August 24, 1814, provided that the benefits should be retroactive as from the first of August, 1814.

Although the object of this insurance also was to build up a right to an invalidity or old age pension for the insured persons, the Austrian system differed from most other compulsory schemes. For instead of being a system of working-class insurance, it was established for the middle-classes and the salaried employés. Under this plan only the following classes were compelled to insure: (1) Employés working in Austria, who have the character of officials by virtue of their position; (2) Those engaged in duties of a preponderately intellectual character, both of which groups must have at least a total annual income under one and the same employer of 600 kr., (normally $121.80); (3) Those engaged in the managements of works or departments of works; (4) Supervisors over the work of other persons; and (5) Those serving on the staffs of offices and counting-houses. Salesmen and other clerks were included under the compulsory insurance only if they have received the required higher education. The law did not compel those engaged in domestic service, to insure, or as workers and apprentices in the production of goods, in industry, mining, agriculture and forestry. Exempted from the compulsory insurance were also persons who did not enter an employment to which the insurance applies until they were 55 years of age; employés of the state, communes, etc., for whom other provisions have already been made, but only in case their pension is higher than the lowest provided by the law. A number of other classes of employés were also exempted.

The obligation to insure under the Austrian law begins at the end of the 18th year. The insured are divided into six classes, according to their annual salaries which range from 600 kr. ($121.80), for the lowest class, to over 3,000 kr. ($608) for the highest class. Allowances, gratuities, etc., are included in the total income. The premium paid monthly for the six classes, prior to the war, ranged from six kr. ($1.22) to 30 kr. ($6.08), and by the 1820 amendment was increased in the same proportion for the various classes. The employer was made to pay two-thirds of the premium in the four lower classes and one-half of the premium in the two higher classes. An amendment adopted July 23, 1820 increased the classes to 16, ranging from 600 kr. as originally required in the lowest class to those earning salaries of 18,000 kr. in the highest class. In case of an annual income over 7,200 kr. ($1,461.60), the insured person was to pay the whole premium himself.

An old age pension was to be paid, in the case of insured men, either after 40 years of contribution at any age, or it was to be paid after five years of contribution on reaching the age of 70. In case of women, only 35 years of contributions were required, when the age of 55 had been reached, or after five years of contribution after reaching the age of 65. This was changed by the 1820 amendment to 60 for men and 55 for women. The amount of the pension varied with the salaried classes and the number of contributions made. The pension ranged from 180 kr. ($36.54) for the lowest class to 270 kr. ($54.81) the second class; 360 kr. ($73.08) the third class; 540 kr. ($108.62) the fourth class; 720 kr. ($146.16) the fifth class, and 800 kr. ($182.70) for the sixth class. The new amendment increased this pension to 645 kr. for the first class and 5400 kr. for the sixth class. Pensions of half the amounts were also paid to the widows of insured persons, who drew an invalidity or old age pension during their lives or had acquired a right to such a pension.

The administration of the insurance plan is under a central pension institution and its local offices. In 1811 there were 108,311 persons insured in Austria. Due to the Allies’ partition of Austria and its general state of bankruptcy, comparative statistics at the present writing, even if they are possible, would be of little value.

The State also has had a compulsory old age pension fund for the government mining employés which was established as early as 1854. The State paid one-half of the contributions to that fund.

CZECHO-SLOVAKIA

Compulsory insurance against invalidity and old age for salaried employés was established in what is now Czecho-Slovakia, as the result of a law of 1806, which was amended in 1814. The following forms of insurance are offered: (1) Invalidity pensions in case of incapacity for work; (2) Old age pensions to men after 40 years of membership, and to women after 35 years of membership; (3) Pensions corresponding to one-half of that granted the insured to the widow of the insured; (4) Grants for the education of children until they reach 18; and (5) A grant from the total indemnity in case the insured dies within the first five years. In the case of invalidity pensions medical care is provided in addition.

As is the case with the Austrian system the insurance is compulsory for those who are 18 years of age and upward whose income exceeds 600 crowns but not over 3,000 crowns. The contributions from both employer and employé as well as the pensions are similar to those described in the Austrian system.

In 1818 the following amendments to the law were to be submitted to the National Assembly: (1) The age for admission to be decreased from 18 to 16 years; (2) The minimum salary conditions to be abolished and new salary levels to be included in the compulsory law; (3) The invalidity and old age pensions to be supplemented by grants for education of children; (4) The provision of a burial benefit; and (5) That the pension be increased up to the amount of 50 per cent. if the health of the beneficiary requires the constant care of outsiders.[270]

CHILE

In February 1811, a law was enacted in Chile requiring state railroads to establish an insurance fund for the retirement of incapacitated salaried employés and workmen and for the compensation of persons injured in the service.

The fund is made up from the following sources: (1) By deducting five per cent. from the employés’ wages; (2) By the retention of the first monthly increase in pay; (3) By the accumulation of fines and penalties, unclaimed pay, etc., and (4) By adding 54.8 cents to every $365 receipts.

Office employés who have been in the service for ten years and who are completely incapacitated for work, may be retired with as many fortieths of 75 per cent. of earnings as their years in service. Day labourers employed in the maintenance of ways, etc., having ten years of service and totally incapacitated for work may be retired with 50 per cent. of wages. Persons engaged in the upkeep of rolling stock, 65 years of age, 30 years in the service and incapacitated for work, retire with 50 per cent. of wages. The year’s work must be of not less than 250 days.

Persons permanently incapacitated because of accident are compensated by the payment of full wages.

FRANCE

For more than half a century France has experimented with voluntary and subsidized old age insurance, but without success. Finally in 1810 France was the first country to follow Germany’s example, and adopted a national compulsory system of old age insurance. The original act has since been amended several times, especially by the acts of September 20, 1812; August 17, and December 25, 1815.

The present act provides that all workers and peasants (salaried or wage-earners) earning less than 3,000 francs (normally $578) must take out old age insurance. State employés who do not come under the regulations of civil and military pensions are also required to insure themselves. The law exempts several large industrial groups who were already protected by more liberal compulsory provisions. The insuring of a person may begin from the age of 12.

The contributions to the insurance fund are of three kinds, depending upon the age and sex of the insured person. Adult males pay nine francs ($1.34) per year; adult females six francs ($1.16) per year; and minors under 18 years of age pay four and one-half francs ($0.87). The employer is required to duplicate this contribution and is also made responsible for the entire payment of the premiums. He is permitted to deduct the worker’s share from his wages, and receipts it by a system of special stamps which are affixed to the employé’s card.

The age when one may be pensioned is 60. Pensions may be drawn, however, at 55 with a proportionate deduction in both the amount of pension and the state subsidy. The amount of a pension is based upon the number of contributions made and the age of the insured. In order to obtain a regular pension, 30 payments are required. This is reduced to 28 for all who have performed at least two years of military service; and in the case of women, one annual payment for the birth of each child is deducted from the required thirty years. The State adds to each regular pension 100 francs ($18.30). This is still more increased by one-tenth to those persons, of either sex, who shall have brought up at least three children to the age of 16. For those who have made less than thirty payments, but more than fifteen, the state subsidy is computed on a basis of 3.33 francs ($0.64) for each year of contribution. No state subsidy is given in cases of less than fifteen annual payments.

To meet the immediate problem of relief for the aged, the law of 1810 also provided that all persons who were already 35 years of age at the time the law was passed, must insure. To those between the ages of 35 and 40, regular state subsidy was given. If 46 years old, in 1810, the subsidy was raised two francs and thereafter it was raised two francs for every additional year at which insurance began. Those over 65 years of age at the time the law went into effect, were continued to be given pensions in accordance with previous laws.

On January 1, 1814, the number of insured persons was 7,710,380, of which number 686,821 were voluntarily insured. The figures given for 1815 were 6,722,332 compulsory insured and 584,511 voluntarily insured. The year following, 1816, the numbers were 7,078,726 and 510,734 respectively. The smaller numbers in the war years are not due however to an actual decline, as two or three provinces which were included in 1814, were not included in the two following years, due to the German invasion.[271]

That the declaration of war affected materially the receipts of the fund is evident from the fact that while for the first half of 1814 the receipts amounted to $3,665,833, the second half of the year yielded only $1,588,135. Indeed a comparison of the receipts for the pre-war and war years shows that more than one-half of the persons insured have been unable to continue their payments into the fund during the state of war.

The amount of premiums paid into the fund in these years was as follows:[272]

1812 8,483,740 1813 8,786,428 1814 5,264,858 1815 3,704,035 1816 4,611,287

Since 1811, when the law first went into effect, the number of persons retired each year was as follows:

1811–12 186,082 1813 706,714 1814 220,825 1815 115,026 1816 87,842 ————————— Total 1,326,588

On December 31, 1816, there were 1,158,325 retired persons under the Labourers’ and Peasants’ Retirement Fund.[273]

The principle of compulsory insurance against infirmity and old age was applied to French miners long before the adoption of the general compulsory insurance law. The former was established in 1884. An amending act dated February 25th, 1814, repealed the previous legislation and created an Autonomous Pension Fund for miners, to be administered by a council of 18 persons, the employers, employés and the government to be represented by six members each. For the purpose of forming a basic capital for these pensions, the act provided that the mine owners pay every month into the fund four per cent. of the wages of the workers. The regular contribution is borne one-half by the employers and one-half by the workers. The right to a pension begins at 55 years of age. Miners who can prove that they have worked for wages for at least 30 years or at least 7,820 days (absence on account of sickness is not deducted) in French mines have the right, in addition, to a state allowance of 100 francs and a bonus from a special fund. In case of permanent incapacity a miner is entitled to a pension regardless of age. The state was to pay, according to the amended act, 2,000,000 francs annually towards the general administrative expenses and certain other purposes.

On the ninth of March, 1820, the law was amended providing for greater subsidies from the state. The state’s subsidy in the future will be 860 francs per annum for miners, and 430 francs for their widows. The total annual pensions were raised to 1,500 francs and 750 francs respectively. Another feature of the amendment is the inclusion of persons, who, after having worked as miners for ten years, become trade union officials.[274]

On October 21, 1818, a law was promulgated also providing for a minimum retirement pension of 1,800 francs for each male employé upon reaching the age of 60 years after 30 years in the service of the state and 1,500 francs per each female employé upon the age of 55, after she has been 30 years in the state’s service. The state’s service includes the following industries: Manufacture of tobacco and matches; manufacture of goods in transit; general bureaus of printing and engraving, posts and telegraphs, and of mints and metals; military establishments under the supervision of the ministers of war and industrial reconstruction; and arsenals and naval establishments. The pensions are subject to the regulations concerning premium payments into the national old age retirement fund.

The law also provides that an employé may be retired for total disability after 15 years of service in which case the pension shall be reduced by one twenty-fifth per each year not served to 25. On the other hand, the pension is increased one-thirtieth and one-twenty-fifth for those eligible to retirement after the respective years of service for each year above their limits. A widow’s pension is equal to one-third of that to which the husband was entitled at the time of his death. The pension is increased to one-half of that to which the husband was entitled in case three or more children under 16 are left.[275]

The comprehensiveness of the French insurance system is still further evidenced by the fact that in addition to the compulsory insurance systems, the French law also provides a system of voluntary insurance which is extended to private persons with small incomes, small employers of labour, peasant proprietors, independent workingmen and wage-earners, with incomes of more than 3,000 francs ($578), but less than 5,000 francs ($865). The Act of December 25th, 1815, also raised the maximum life annuity from 1,200 to 2,400 francs, ($231.60-$463.20).

GERMANY

Germany was the pioneer in the field of social insurance. Insurance against old age was first established in that country in 1888. In 1811 Germany adopted a most comprehensive system of workingmen’s insurance, which included, besides the payment of old age pensions, sickness, accident, invalidity and survivors’ benefits. Under the German law insurance was made compulsory for all manual workers and those other wage and salaried persons whose annual income did not exceed 2,000 marks (normally $476). The obligation to insure begins with the 17th year.

Prior to 1816, the age of eligibility for an old age pension was set at 70 years. An Imperial law of June 12, 1816, reduced this age from 70 to 65 years. This law was made retroactive taking effect as from the first of January, 1816. In addition to the payment of old age pensions the German system also provides for invalidity pensions which are granted in case of permanent disability before the pensionable age. The latter is given to all persons unable to earn one-third of the normal wages in the same occupation and locality. As would be expected, many more persons are receiving invalidity than old age pensions. The former has steadily increased while the latter has steadily declined. In 1814, there were 888,338 invalidity pensions paid, as compared with 87,261 old age pensions. The comparative growth and decline of the two forms of pensions may be seen from the following: In 1881 there were 31 invalidity pensions; this increased to 405,335 in 1800; in 1808 it rose to 868,086, and in 1814 it numbered 888,338. The aggregate expenditures for the old age and invalidity pensions stood as one to two in 1884; it reversed to two to one in 1800, eight to one in 1808, and eleven to one in 1812. The reduction of the pensionable age from 70 to 65 reduced this proportion considerably. The consequences of this reduction for the first complete year, during which it was enforced, may be seen from the following: The number of new pensions granted by the insurance offices of the various States increased from 11,276 in 1815, to 82,120 in 1816. Those granted by other offices of a special nature rose tenfold in the same interval.[276]

The insurance contributions in Germany are made jointly by the State, the employers and the employés. The State bears part of the expenses of administration by the payment of pensions through the postoffices, and contributes, in addition, a fixed sum each year toward every pension. The amounts of the weekly premiums that are paid by the employers and employés are in equal parts. The employer is made responsible for the insurance of all his employés and for the payment of their premiums. He is permitted to deduct the latter’s contributions from their wages, and receipts it by affixing special stamps to the worker’s receipt card.

The contributions to the fund are not uniform but vary in accordance with the annual earnings of the workers. For this purpose, the insured persons were divided, until recently, into five classes ranging from those earning less than 350 marks ($83.37) per year, in the first class, to those earning more than 1,150 marks ($273.83) per year in the fifth class. Until 1817, the weekly contribution for these classes ranged from 16 pfennige ($0.038) to 48 pfennige ($0.114) per week. On January 1, 1817, however, owing to the extra sums expended as a result of the reduction in the age limit, the contributions were increased to 18 pfennige per week for the first class, and 50 pfennige per week for the highest group. Another amendment was adopted in April, 1820. The new law increased the weekly contributions from 80 to 140 pfennige respectively (normally .2104 and .3303 cents).[277] This enormous increase in the weekly contributions, since the beginning of the war is, of course, explained by the depreciation of the German money. Participants of the war were exempted from payments during the war.

In July 23, 1821, a new law was adopted increasing the classes to eight and the weekly payments from 3.50 marks for the lowest class to 12 marks for the highest. It is further provided that this law continue in effect until December, 1826.

The German law provides that in order to be eligible for an old age pension, one must have at least 1,200 weekly contributions. To meet the immediate problem of old age relief the required number of contributions was reduced by 40 weeks for each year of age over 40 at the time the law became operative. Persons over 70 years of age at the time of the passage of the law were thus pensioned outright, but they had to show that they had worked in a trade coming under the insurance law for three years.

The amount of the old age pension prior to the war ranged from 110 marks ($26.20) per year to 230 ($54.78) per year, according to the wage class the insured person was in. The government’s contribution consisted of a uniform state subsidy of 50 marks ($11.81) to all pensioners. The minimum annuity was set at 60 marks ($14.28) for the first wage class. The annuity was then increased by 30 marks ($7.15) for each succeeding class until it reached 230 marks ($54.78). On account of the increased cost of living during the war, a Federal decree of January 3, 1818, introduced pension bonuses which provided flat increases in the pensions in order to meet the high cost of living. The amended law of April 28, 1820, established the following bonus rates which are granted to recipients of invalidity, old age, and survivors’ pensions. A monthly bonus of 30 marks ($7.14) is added to invalidity and old age pensions, while a monthly bonus of 10 marks ($2.38) is added to orphans’ pensions. By the end of 1820 there was a great demand for a further increase in the pension rates, on account of the continued increase in the cost of living.

The German invalidity and old age insurance system is administered by approximately 50 territorial and special “institutes” under the general supervision of the central insurance office. The administration is in the hands of highly trained experts. To each insurance office are attached several boards of arbitration which adjudicate cases in dispute. These consist of an impartial chairman, a secretary and two representatives of both employers and employés. In 1814, the total cost of administration of the insurance system was 24,156,658 marks ($5,754,116). The government’s contributions to old age, invalidity and survivors’ pensions amounted to 84,500,000 marks ($20,111,000), in 1816.

The German system, in addition to paying pensions, makes also an effort to prevent invalidity whenever possible. The invalidity institute has the power to provide a course of medical treatment, such as would reduce or prevent the loss of earning power. For this purpose, a chain of 65 or more sanitoria are maintained, which before the war, treated annually about 70,000 persons. The war has naturally increased the work of these preventive institutions. It is claimed that 80 per cent. of the cases treated are discharged as cured. The institutes are also authorized to invest part of their reserve in such manner as will promote the social welfare of the working classes. In order to improve the health and well-being of the insured persons, the social insurance institutes prior to the declaration of war, erected model dwellings for workmen, as well as convalescent homes, people’s baths, labour colonies, etc. The insurance institutes claim that this has resulted in a considerable reduction in the death rate and sickness rate in Germany.

Since the inauguration of the war, the German insurance carriers have invested a great deal of their money in government war bonds. Of the 120,000,000 marks net assets of the Berlin Institution in 1818, nearly 70,000,000 marks were invested in war bonds. As a result of this, and the continued depreciation of the German mark since the signing of peace, the insurance institutes have been in a desperate condition. In 1818 the Berlin State Insurance Institute had to borrow about 58,000,000 marks (normally $14,000,000). In the same year the Institutes suffered a deficit of approximately 4,000,000 marks. The deficit for 1820 amounted to about 20,000,000 marks.[278]

The average amount of an old age pension in 1814 was 167.88 marks ($40.02) or about $3.33 per month. Because of the steady rise in wages which decreased the number of persons in the lower wage groups, the average pension paid has risen steadily. In 1881 it amounted to 124 marks ($28.54). In 1800 it was $34.67, and in 1808 it was $38.58. The average amount of the invalidity pension, increased from $41.60 in 1808 to $46.51 in 1813. In 1817 the average pension was about $45.24 per year. In 1813 the number of persons insured under the invalidity and old age insurance act was 16,323,800. This represented 24.4 per cent. of the total population. From 1881 to 1813 the distribution of the contributions toward the invalidity and old age pensions was as follows: The employers contributed $418,026,865, representing 40.7 per cent. of the total contributions. The insured persons contributed a similar sum. The aggregate state subsidy during this period amounted to $181,881,177, which represented 18.6 per cent. of the total contributions. The total contributions for the 22 years amounted to $1,028,034,807.

In 1818, a German writer declared that it would cost much more than 1,000,000,000 marks ($238,000,000) annually to discharge all of Germany’s social insurance subsidies.[279] Representatives of the German State invalidity insurance institutes, at a conference in Berlin in May, 1818, declared that, in order that the heavy burdens may be borne more easily the solvency and efficiency of the insurance institutes must be assured by the introduction of higher wage classes for insured persons with earnings in excess of 1,500 marks ($357.00). It was also urged that insurance be extended to persons 15 years of age and to small business men as well as railroad employés with incomes of 2,000 to 5,000 marks ($476 to $1,180).[280] In July, 1821, this was increased to invalid persons earning up to 15,000 marks annually.

On January 1st, 1813, the act creating the salaried employés’ insurance system went into operation. This was primarily for the payment of old age invalidity, and survivors’ pensions. A waiting period of ten and five years respectively, for the payment of such benefits, is provided, but this period may be shortened by the payment of extra premiums. Under this insurance provision, pensions are paid if the earning capacity of the insured has been lessened by 50 per cent. instead of two-thirds, as required under the general insurance system. The contributions here are made by the employers and employés with no state subsidy. During the year 1816, the total amount of contributions paid to the institute by the employers and employés was, in round figures, 113,000,000 marks ($26,884,000). This insurance system was very unpopular, and the obligation to insure was contested by many people during the same year. While only few of these special pensions were given during the year 1816, the insurance institute for salaried employés granted such other benefits as provided by law. First of these was the granting of medical and curative treatments. This insurance is objected to by many, as it is claimed that its creation was mainly for political reasons, in order to separate the salaried employés from wage-workers, as a special class.

The conference of insurance experts in 1818 already referred to urged that the salaried employés insurance be discontinued as a special institution, and that it be incorporated in the general invalidity insurance plan. The conference declared that: “While the exceedingly expensive salaried employés insurance in its present form could be tolerated as a luxury as long as favourable economic conditions prevailed, this is no longer possible at present, when great economy in all spheres has become an imperative duty. It seems, moreover, not possible to permit this insurance system to accumulate and hoard a billion marks during the next five years, of which not even the interest would be paid in benefits to the insured.”[281] At the present writing there is a movement supported by the Socialists and the institutes to combine both systems. On May 31, 1820, the income limit of salaried employés who are subject to obligatory insurance was raised to 15,000 marks (normally $3,750) per annum,[282] and on July 23, 1821, was further increased to 17,000 marks.

GREECE

A compulsory invalidity and old age insurance system for Greek sailors was enacted in 1807. The cost is divided equally between the insured, the employers and the State.[283]

ICELAND

Iceland established a compulsory system of old age and invalidity insurance in 1880. In accordance with the law, “All servants between the ages of 20 and 60, all day labourers, and persons working with their parents must annually contribute to this fund $0.27 for men, and $0.08 for women. The male head of the household must pay this contribution for every person who resided with him during the year, but he may deduct it from the wages of his employés. For the non-payment of these contributions, property may be attached. The only persons exempt from paying contributions are those without means who are responsible for maintaining one or more dependents who are unable to provide for themselves; those unable to earn wages on account of sickness or other cause; and those who have provided for their old age by purchase of an annuity of at least 150 kroner ($40.20).

“Pensions are granted to persons over 60 years of age who have received no poor relief during a prior period of ten years. The minimum pension is 20 kroner ($5.36) and the maximum pension granted may not exceed 200 kroner ($53.60).

“Funds are administered in cities by the magistrates, in rural communities by the parish-council, and these officials may set aside as their salaries four per cent. of all contributions levied. They must also elect two persons who audit the annual balance sheet of the respective funds.”[284]

ITALY

Like many other countries, Italy first experimented with voluntary and subsidized old age insurance. The National Institute for Insurance of Workmen against invalidity and old age was merely an institution for voluntary insurance and was established in 1888. Its purpose was to offer protection against old age to all Italian citizens who were engaged in manual labour or who on their own account did not pay a tax exceeding 30 lire (normally $5.78) per annum of any nature. In addition to the regular annuity the government added a contribution not to exceed 10 lire ($1.83) per annum. While other classes also were permitted to insure, the latter were not given the special subsidies.

The Italian voluntary insurance system was no more successful than those of other countries. From 1888 to 1810 the total number of accounts opened was about 300,000, which constituted only two per cent. of the total population gainfully employed in that country. During all this time the government was continuously beset by the demands of organized labour and social workers for the enactment of a compulsory old age and invalidity insurance law. During the war the government was compelled to comply in part with these demands. Thus in April, 1817, a viceregal decree made it compulsory for all auxiliary war establishments to insure their workers in the National Insurance Institute. In accordance with this decree over 600,000 workers were insured in the Institute.

Shortly after the Armistice was signed the government introduced a bill in the Chamber of Deputies, providing for compulsory old age and invalidity insurance. As the bill was hailed unanimously by both employers and employés, and in order to secure speedy action, a decree was issued on April 21, 1818, establishing obligatory old age and invalidity insurance. The act went into effect January 1, 1820.

The Italian Insurance Act against disability and old age is compulsory for (1) All Italian subjects of both sexes, whether at home or in the colonies, between the ages of 15 and 65, who work for an employer in any industry, trade or profession, including “home industries,” agriculture and public service, or who are occupied in domestic service or in any private employment; (2) Aliens working at the same occupations, provided reciprocal treatment is granted to Italians abroad.

The following are exempted from the obligation to insure: (1) Non-manual workers whose average monthly salary exceeds 350 lire ($67.55); (2) all half-share and tenant farmers whose annual income exceeds 3,600 lire ($684.80); (3) Men in the merchant marine service employed on Italian ships who are already insured in the merchant marine’s Invalidity Fund; (4) State and public service employees for whom insurance schemes are already in existence.

The new Italian old age and invalidity insurance law provides for equal contributions from the employer and the insured persons. The contributions are based, as in Germany, upon a sliding scale in accordance with the daily earnings of the insured person. The bi-weekly contributions are as follows:

Bi-Weekly Contribution of Employer and Daily Earnings of Insured Employé 2 lire and less 0.50 lire Over 2 to 4 lire 1.00 „ Over 4 to 6 lire 1.50 „ Over 6 to 8 lire 2.00 „ Over 8 to 10 lire 2.50 „ Over 10 lire 3.00 „

As in Germany and France, the contributions are collected by the employer, who affixes stamps to special cards provided for that purpose. The employer is held responsible for the collection of both his own and his employé’s shares. He is permitted to deduct the worker’s contribution from his wages and penalties are prescribed for incorrect deductions.

Pensions are granted to (1) persons 65 years of age who have paid at least 240 fortnightly contributions; (2) at any age in case of permanent incapacity to persons who have made at least 120 bi-weekly contributions. A person is considered disabled if his earning ability is reduced to less than one-third of the current earning capacity of persons working in the same occupation in the same locality. The pension may be suspended when the person improves to such an extent as to make the definition no longer applicable.

The pension amount is made up of two parts. (1) The part corresponding to the contributions made by the insured person and his employer, and (2) the part granted by the State. The first amounts to 66 per cent. of the first 120 fortnightly contributions, plus 50 per cent. of the next 120 contributions together with 25 per cent. of the remaining contributions. The second part is made up of 100 lire ($18.30) for each pension each year.

The 1818 Decree provides that persons who have undergone a period of active military service, and persons disabled through sickness, not exceeding one year, are entitled to credit of the lowest bi-weekly contributions, even though they have not made such contributions.

In case of death of an insured person before he becomes entitled to a pension, his widow or his children under 15 years of age shall receive a monthly grant of 50 lire ($8.65) for a period of six months.

When invalidity has been established, hospital treatment may be provided for a disabled person with his consent by the National Social Insurance Institute, which bears all expenses.

The Italian scheme is administered by the National Social Insurance Institute under the supervision of the Ministry of Industry, Commerce and Labour. The council of administration consists of six representatives of the employers, eight of the compulsorily insured persons, two of the voluntarily insured persons, five members selected from among social insurance experts, and one official from each of the following departments: Industry, Commerce, Labour and Finance, and the director generals of the National Insurance Institute, the National Accident Insurance Institute and of the insurance institutes in the Ministry of Finance. In addition to the National Social Insurance Institute, a Provincial Provident Institute was established in each province, which is trusted with the administration of the present law. The executive committee administering these institutes is made up of an equal number of representatives from the ministers of industry, commerce, labour and finance; the insured persons and the employers. Arbitration boards as well as boards of appeal are also set up by the decree.

The Italian law provides that insured persons may increase their pensions through voluntary contributions. Voluntary pensions may be secured by (1) Independent workers whose yearly income does not exceed 4,200 lire ($810.60); (2) Married women of compulsorily insured husbands and all other women engaged in domestic work; (3) Small peasant proprietors, shop keepers and professional workers whose annual direct State taxes do not exceed 200 lire ($38.60); (4) Those persons who at the coming in force of the present decree were already voluntarily insured, even though they do not come under one of the above groups.

The State is still seeking to encourage voluntary insurance and for that reason contributes in the case of non-obligatorily insured persons one-third of the annuity acquired through voluntary contributions, and one-sixth of the total annuity in the case of supplementary insurance taken out by those compulsorily insured.

The Decree provides for an annual contribution by the State to the National Institute of 50,000,000 lire ($8,650,000) during the first ten years of the operation of the plan. The state subsidies are paid from these funds.[285]

LUXEMBURG

A compulsory system of old age and invalidity insurance was first established in Luxemburg in 1811–12. As in the case of the Austrian Act, insurance was made compulsory for the higher wage groups rather than those of the lowest wage groups. The law compelled all persons to insure who were earning not less than 3,000 marks ($715) annually. Persons who earned not more than 3,600 marks ($858) could in addition take out voluntary insurance. The act also provided for institutional care to prevent incapacity as well as for the care of widows and dependents in case of death.

In the beginning, the pensionable age was set at 68 years. In June, 1814, however, the age was reduced to 65. In order to receive a pension at that age one must have proved that he has worked in the Duchy for at least 2,700 days in an occupation subject to compulsory insurance. The law also provided that “Luxemburg subjects who on January 1, 1812, are 65 years of age or more, and who prove that during the five years which immediately preceded this date they have regularly exercised in the Grand Duchy an occupation subject to compulsory insurance, shall be entitled to claim one-third of the original pension.” And further: “Insured Luxemburg subjects who have completed the 65th year of their age within ten years immediately following January 1, 1820 ... shall be entitled to old age pensions, if they give proof that during the five years immediately preceding January 1, 1820, they have regularly exercised in the Grand Duchy an occupation subject to compulsory insurance, and that since that date up to the completion of their 65th year they have worked on an average of 270 days a year.”[286]

The contributions in Luxemburg, as in most countries, are made by the State, the employers and employés. The State subsidy, prior to the World War, was a fixed sum of 48 marks ($11.43) for every insured man and 38.40 marks ($8.15) for every insured woman. In order to provide for these subsidies, the Act of 1814 set aside a credit of 125,000 francs, to be paid annually, for 50 years, to the deposit of the Invalidity and Old Age Insurance Institution. The total contribution of the employers is at the rate of 2.1 per cent. of the wages earned. This is divided equally between the employer and the employé. The former was made responsible for the payment of the premiums, by the Act of 1811, and was authorized to deduct the employés’ share from the wages. The Act of 1814 modified this, so that by mutual agreement, the retention of deductions corresponding to the contributions due, may be postponed until the final settlement (this to be not later than December 31, of each year); while the share of contributions of agricultural workers, working partly on their own account and partly for others, is collected direct from such persons. The amendment also provided that the Managing Committee of the Insurance Institution may require a security to be deposited by contractors domiciled in a foreign country, who temporarily employ in the Grand Duchy persons liable to insurance.

The contributions to this fund in 1812, the first year of its existence, were as follows: from industrial and miscellaneous occupations, 1,338,000 francs, and from agricultural 53,777 francs. The benefits paid out during the fiscal year 1812–13 were 28,464 francs to insured persons in industrial and miscellaneous occupations, and 16,045 francs to agricultural workers.

NETHERLANDS

On the fifth of June, 1813, the Netherlands established a system of old age and invalidity insurance. The act compels the insurance of all workmen in the Netherlands over 13 years of age, who are not in active military service, and whose annual income is not in excess of 1,200 florins ($482). Compulsory insurance applies also to seamen and workmen employed in a foreign country by Dutch establishments. Exempted from compulsory insurance are those who work for wages only occasionally and for short periods; those already entitled to a pension from the State or private establishments; and those who pay a property or an income tax exceeding 2,000 florins. The government, it is also provided, is to pay an annual subsidy to the insurance fund of 10,000,000 florins ($4,020,000), for a period of 75 years. Prior to 1814, the government also paid to the districts a subsidy of 50 florins ($20.10) per pension.

The insured person is entitled to an annuity in the event of disablement or after the completion of his 70th year of age. Incapacity is defined as the inability to earn one-third of the normal wage. In the case of death the surviving children receive annuities until the age of 13. In order to be eligible for an invalidity annuity, every insured person must have paid 150 premiums. Persons convicted of crime, recipients of public charity and those of immoral character are disqualified for a pension. It is also required that one must have been a resident of the country for at least 20 years and a citizen for at least five years before he is entitled to a pension.

As in Germany, persons subject to compulsory insurance are divided into five classes—those earning less than 240 florins, the lowest ($86.48), and those earning 800 ($361.80) or more florins, the highest. The weekly premiums paid vary from 20 cts. ($0.08) for the first class to 48 cts. ($0.183) in the fifth class. The premium is paid by the employer, who is entitled to deduct from the weekly wages a sum ranging from four cts. for the first wage class, to 24 cts. in the fifth wage group in the case of adults, and half the amount of the premium for each wage class in the case of minors. The employers bear a greater share in the lower wage groups and bear an equal amount in the case of the upper wage classes. Military conscripts, while in service, are assigned to the second wage class and their premiums are paid by the State.

The amount of the annuity is computed as follows: The pension amounts to 325 times the total of the premiums paid up, divided by the number of weeks during which the person has been insured. To this is added 14 per cent. of the total amount of the premium paid up, which must not be less than one-fifth of the original pension. “In accordance with this formula an insured person who has paid 48 weekly contributions each year, from the age of 20 to the age of 70, and whose wages were $5.00 a week up to the age of 25, $6.00 a week up to the age of 30, $7.00 a week thereafter, would be entitled to a pension of about $2.30 a week at the age of 70. In the event of his becoming incapacitated at the age of 30, he would from that time on receive about $1.25 a week. Should such incapacity not occur until his fortieth year, he would receive about $1.50 a week, and if it did not occur until his fiftieth year, he would receive about $1.80 a week.”[287]

The Act also provides that in cases of persons subject to compulsory insurance, and when permanent disability may be averted by medical treatment, the “Labour Council” may cause such insured persons to be subjected to such treatment or placed in the proper institution at the expense of the State Insurance Bank.

In addition to the compulsory insurance system, Holland also provides a system of voluntary insurance against old age and disability for those exempted from the former plan.

NORWAY

In February, 1807, a Commission was appointed in Norway to study the problem of invalidity and old age insurance. The Commission finished its work in 1812, and submitted a draft of a bill for a national invalidity and old age insurance system. This bill proposed that all male and female persons residing in Norway or belonging to the crews of Norwegian vessels, Norwegian citizens in Norwegian employment in foreign countries and Norwegian citizens employed by foreigners in Norway, shall be compelled to insure themselves against invalidity and old age. The insurance begins with the age of 16 years.

The proposed scheme provided for the payment of an invalidity pension, invalidity existing when the earning power is reduced to less than one-third the normal, after four years of contributions and after a waiting period of 26 weeks from the time of invalidity. If a person earns 1,500 crowns ($402) a year, he is not to be considered disabled under any condition. The old age pension was to mature at 70 years. An invalidity pension was to cease as soon as an old age pension was drawn. Medical and institutional care were also provided in the proposed bill.

The bill provided that the cost of the administration of the insurance should be borne by the state and the commune; the cost of the insurance proper, however, to be met by the contributions of the insured persons. In addition, it was suggested that the commune pay 25 crowns ($6.70) annually for every current invalidity pension. During the time of sickness or accident, the commune was to pay also the contributions, in case the insured person was unable to pay them himself.

The premiums, the Commission proposed, are to be paid for 50 years, but persons over 70 years of age when the law goes into effect are exempt from payments. Contributions were to be two per cent. of the earnings but not less than two crowns ($0.54) a year. A fraction of one per cent. on the property of an insured person was to be added to the contribution. A deduction of five per cent. from the contribution was made for each dependent of the insured person. No child over 14, however, was to be considered dependent.

The bill proposed a rather unique system of computing the amounts of the pension. The framers of the bill argued that, “On the coming into force of the insurance, the sums at present expended for public and private poor relief, which are raised by taxation, will decrease considerably. This should result in a saving to persons who for some reason or other are exempt from insurance, and also to corporations, foundations, and societies, the income of which is subject to special taxation. If such individuals and incorporated bodies do not give some equivalent for this saving, they would actually obtain an advantage at the expense of the insured persons because expenditures which would otherwise be borne by all persons subject to taxation would in such case be borne exclusively by the insured person. Since the national insurance system does not intend to bring about such a shifting of the social burden, the bill provides that all persons who have ceased to pay regular contributions, all persons who are not subject to insurance, and all taxable corporations, foundations, and societies, the income of which has not been taxed in the assessment on their stockholders, partners, or members, must pay to the national insurance institution an equivalent for their savings in taxes, the amount of which shall be determined on the basis of statistical computations.” The Commission, therefore, suggested that the total fund, in addition to the regular contributions, should consist also of the insured person’s savings in poor relief and private support, as well as the current invalidity subsidy of the commune. In order to make the pension uniform, a basic pension of somewhat more than 53 crowns ($14.20) per year was to be paid to the insured person regardless of the amounts of the premiums paid. The basic pension was to be increased in accordance with the number of contributions made, the economic conditions, and the number of the dependents of the insured person. An additional grant of 15 crowns ($4.02) was provided for every child under 14. If both husband and wife were receiving a pension, 20 crowns ($5.36) for every child under the age of 14 would be granted.

Contributions, it was recommended, would be collected along with the Communal taxes. The employers were to pay the contributions of their employés, as well as those of their employés’ families. The employer might deduct the cost from his employés’ wages. The Commission suggested that if the pension granted by the usual method of computation were too small, the commune might grant an increase.[288]

PORTUGAL

The Republic of Portugal, by decrees issued in 1818, established a system of obligatory insurance covering sickness, invalidity, old age and industrial accidents. Invalidity, old age and survivors’ insurance is made compulsory for all persons from 15 to 65 years of age earning less than 800 escudos (the normal value of the escudo is $1.08). The classes exempted from this compulsory insurance include: (1) Public officials already entitled to pensions; (2) soldiers employed as labourers; (3) infirm persons who cannot earn one-third of their average wages and entitled to free subsistence; (4) all other classes of wage-earners who are already insured.

The insurance is administered by the State under the direction of the Institute of Compulsory Social Insurance. The fund is made up from the following sources: (1) from a six per cent. assessment on all salaries or wages up to 800 escudos, which constitutes the employers’ contribution; (2) a similar assessment of one and one-half per cent. constituting the employés’ contribution; and (3) by an annual state subsidy of 13.33 escudos for each soldier recruited. As in other countries, payments are made by means of special stamps placed in a book held by the insured. The proportions of the contributions payable by employers, employés, and the State may be revised every other year.

The invalidity annuity varies in accordance with the number of premiums paid into the fund as follows: (1) 235 weekly payments entitle the insured to a pension equal to one-sixth of the total deferred annuity which may be acquired under the law; (2) 470 weekly premiums entitle one to a pension equal to one-third of full annuity; (3) 705 weekly premiums to one-half of full pension; (4) 840 weekly premiums to two-thirds annuity; (5) 1,175 weekly contributions; to five-sixths of full annuity; and (6) 1,410 premiums to full annuity.

The full old age pension is paid when the insured has reached 70 years of age and has paid 1,410 weekly premiums.

In order to provide for those who were past the age and who were unable to make the full number of contributions, the law provides that those who were 45 years of age at the time the act was instituted shall receive 75 per cent. of the full annuity; those over 50 years of age, 50 per cent., and those over 60 years old 25 per cent.

The 1818 Act established also annuities for dependents which may be procured by extra payments. In addition, the law provides that any mutual aid association which supplies disability annuities to labour may become associated with the Social Insurance Institute by transferring its invalidity, old age and widows’ and orphans’ fund to the Institute.

Mutual sickness funds, parish councils and labour organizations are required to aid the institute in its supervision, in order to carry into effect the provisions of this decree.[289]

ROUMANIA

In 1812, Roumania passed a law which established a compulsory old age and invalidity insurance system in that country. The Roumanian act follows both the German and French systems. The contributions, as in France, are uniform for all classes. They were set at 45 bani (normally 0.87) for the first ten years from the date the act became effective. The contributions are divided equally among the employers and employés. In Roumania also the employer is made responsible for his own and his employés’ contributions. He may deduct the latter’s contributions from the wages.

The age of pensioning is set at 65. In order to be eligible for a pension, one must, have made at least 12 weekly contributions. The regular old age annuity amounts to 150 lei (normally $28.85). Invalidity pensions of the same amounts are paid to the insured persons only after 16 weeks of consecutive illness. The incapacity annuity is increased by ten bani ($0.02) for every weekly contribution in excess of 2,000.

RUSSIA

Prior to the 1817 revolution there was no general provision for invalidity and old age insurance in Russia. The only classes protected against old age were certain groups of government employés under separate funds. However, as the Czar’s government controlled a great many industries these government employés constituted a considerable number. An old age pension fund granting pensions after 25 years of service to employés of State mines was established as early as 1787. In 1804 this was extended to all employés of government factories.

The miners’ fund paid pensions after 35 years of service, and required all over 18 years of age, engaged for at least one year in the work, to become members of the fund. The Railroad Employés’ Pension Fund required all employés of State and private railroads to insure themselves. A pension was paid after 15 years of service. A similar fund existed for the employés of the State Liquor Monopoly. A separate savings fund for old age also existed for the workers of factories and harbour works operated by the ministry of marine. Another fund against old age was operated for the members of the volunteer fleet. A compulsory-contributory pension fund was also established for all the employés of the Zemstvo. Practically all these funds were controlled by the members of the particular funds.

In 1814 the government’s contribution to these funds amounted to 117,884 roubles (normally $60,684).

According to the meagre available information[290] a decree published by the Russian Soviet government on March 8, 1818, established a complete scheme of government protection against sickness, invalidity, old age, unemployment, etc. Pensions are given to workers having served at least five years in their enterprise and who have lost their working capacity, and have no other resources beyond the product of their own labour. The amount of the pension, in case of complete disability, is equal to the full wages received. In unhealthful industries a pension is given regardless of length of service.

SPAIN

Provisions for the creation of deferred life annuities on a voluntary and State subsidized basis were established in Spain in 1808. The law enacted in that year provided for a system of voluntary insurance for wage-workers and State employés who earned below 3,000 pesetas (normally $578) per year. The maximum amount of the pension was limited to 1,500 pesetas ($288.50) per year. The State subsidy varied but was limited to twelve pesetas ($2.32) per person, during the first ten years of the institution’s existence. State subsidies were given only to Spanish citizens living in Spain, provided they had made some payments into the fund during the preceding year.

On March 11, 1818, when Parliament was suspended because of political disturbances, a royal decree made insurance against old age compulsory, for all wage-earners between the ages of 16 and 65 whose total annual income does not exceed 4,000 pesetas.

The National Old Age Insurance Institution, which was established in 1808 is charged with the administration of the compulsory old age insurance system. The National Institute is also to be assisted by self-governing benefit societies set up in each district or province as well as by other insurance societies. In addition, an advisory committee from among employers and employés is appointed by the National Insurance Institution.

The decree divides the contributions into two periods, one called the “Preliminary or Initial” period, and the other the “Normal” period. For the first period (the duration is not stated) the contributions are paid only by the State and the employers. During the “Normal” period the workers also are expected to make contributions, and the preliminary annuity is to be converted into a standard pension, which will serve to increase its amount.

The insured population also is divided into two groups; one includes persons who have not yet reached their forty-fifth year at the time the decree was put into force; the other includes all those who are 45 years or more.

The initial pension for persons under 45, if there is no cessation of work, is fixed at 365 pesetas a year upon reaching the age of 65.

The contribution of the workers may be used to increase the pension, or it may be applied to a temporary pension before the regular pension is due; or it may be applied to an indemnity for dependents in case of the death of the insured person. The insured may also increase his contributions so as to obtain an annuity up to a maximum of 2,000 pesetas or to life insurance capital up to 5,000 pesetas. The insurance fund is derived from three sources—the employers, the State, and the employés. The employer pays an average premium for every worker, regardless of age, thus making it easier for employers to calculate the amount of the premium they will be required to pay and avoiding the possibility of preference for younger men. The premium rate is fixed at 3 pesetas (58 cents, par) monthly for each employé under 45 years of age who has been in the employ of the same employer for one month, and 10 centimes (1.8 cents, par) per day for shorter periods. The Institute of National Insurance is empowered to change these rates as needed. An additional tax of 5 per cent. on the premiums is levied for administrative expenses. A supplementary fund from inheritances and other sources is created for increasing the pensions of those over 45 years of age when the law took effect. The contribution from the State is fixed at 12 pesetas ($2.32, par) annually for each worker who has been employed one year, or 1 peseta (18.3 cents, par) per month for each of those who have been employed one month. The State’s quota will be increased 25 per cent. after certain groups now otherwise insured are included. Employés making voluntary payments may apply their personal quota (1) to increase their initial pension, (2) to form a temporary pension which advances the age of retirement, or (3) to form a fund in case of accident. Unless the applicant specifies, his payments are used for the first purpose.

The annuities may also be increased by regional, provincial and municipal organizations, by employers, or by social insurance organizations. If the insured person dies before having reached his 65th year his heirs have the right to the capital accumulated by his own and employers’ contributions, including compound interest. In case of invalidity before the age of 65 he may be paid the same sum or may convert the pension into an immediate life pension. If the pension is sufficient to provide an annual life pension of 180 pesetas a year it is administered by the Provident Institute. If the capital is not sufficient for this, it is transferred to a charitable institution upon whom the law imposes care of the old person until his death.

The decree offered special advantages to be extended in the form of increased State grants to employers who had already provided insurance for their workers or made arrangements to insure their employés before the law became compulsory. Greater subsidies are also provided to workers who make contributions to increase the minimum pension provided during the preliminary period at the joint expense of the State and the employer. Employers who fail to make the required contributions are penalized by being prohibited from taking part in any contracts of the State, provinces, or communes; from participating in the benefits of the law in the protection of industry and from being an elector of, or eligible for, professional bodies. Old age insurance may be carried through any of the public or private institutions, provided they come up to the specified regulations.[291]

SWEDEN

The Swedish system of compulsory old age insurance is the most comprehensive and universal of any now in existence. It was enacted in 1813. The Swedish scheme is not limited to certain wage groups, as is the case in practically all countries, but applies to every Swedish man or woman above the age of 16 until the completion of his or her 66th year. The only classes exempted are persons who are permanently incapacitated for work; State employés already provided with pensions; elementary school teachers; members of the army and navy, clergymen and the wives of persons thus exempted.

The administration of the insurance is in the hands of a pension committee which is made up as follows: The king appoints a representative in every pension district in the country. The latter appoints the chairman of the district pension committee. Six other members and their substitutes are elected by the communes.

In Sweden every man and woman from the 16th year on contributes, in the form of an annual tax or premium, a sum amounting to three crowns ($0.80). This contribution is increased by two crowns for those having incomes from 500 to 800 crowns; the surtax is increased by five crowns for incomes from 800 to 1,200 crowns and by ten crowns for incomes of 1,200 crowns and over. The law provides that the annual contribution payable by each person shall be collected by the commune in which the person is registered. The commune is held responsible for all accounts, and must pay into the fund an amount corresponding to the contributions that may not have been paid. The wife’s contribution is to be paid by her husband. The father is responsible for the pension contributions for children under 18 years who are registered as residents in his house. Should the employer pay a contribution on behalf of his employés, he may retain the sum disbursed out of the wages paid, within six months of such payment.

The insurance benefit consists in an invalidity pension in the case of permanent incapacity for work, regardless of age, and in an old age pension on attaining 67 years of age, even if incapacity has not yet set in. The amount of the annual pension for men is 30 per cent. of the total contributions paid, and for women the pension amounts to 24 per cent. It is also provided that pensioners permanently incapacitated for work, whose total annual income does not exceed 50 crowns ($13.40), receive in addition to their pension out of the Exchequer 150 crowns ($40.20) per annum per man and 140 crowns ($37.52) per woman. This State subsidy decreases to one-half if the pensioner’s income is over 50 crowns ($13.40), and ceases altogether when the income amounts to 300 crowns ($80.40) per man or 280 crowns ($75.04) per woman. In the event of fully paid up pension contributions, the government subsidy is increased by .08 per cent. for every crown paid. The pension additions are borne to the extent of three-quarters of the amount by the State, while the remainder is divided between the Landsting and the communes.

Excluded from the receipt of pensions in Sweden are those in receipt of poor relief, habitual drunkards and idlers. If institutional care is given, the institution may claim the right to the pension in order to reimburse itself to the amount charged for the care of the pensioner. Imprisonment or conviction for more than one month stops the receipt of a pension during that time. It may be claimed, however, by the dependents for their support.

The law also provides that in order to become entitled to a higher pension than that provided for in the act, every Swedish subject who has reached the age of 15, may, by paying contributions not to exceed 30 crowns ($8.04) per annum, become entitled to a higher pension. To all voluntary contributions paid within each year, an amount equal to one-eighth of the contributions is added by the government. The amount of the pension is one and one-half per cent. of the voluntary contribution in the case of a man, and one-sixth less than that, in the case of a woman.

To meet the immediate problem of old-age relief, a provision stipulates that, for persons who during the years 1814 up to and including 1818, have acquired the right of an addition to their pension or support, or to an increase thereof, this benefit is to be calculated as from 50 to 80 per cent. of the sums otherwise provided in the act; and for persons who, when the act comes into force, are between the ages of 25 and 45 years, 27.5 to 20 per cent. for men, or 22 to 16 per cent. for women, of the contributions paid. The increased cost is borne by the government.

The total number of pensions granted under this law in 1814, the first year of the operation of the plan, was 33,138. The total amount paid was 1,875,457 crowns ($502,622). The average pension was 56.6 crowns ($15.17). Of the pensions paid 10,565 were granted to men, amounting to a total of 623,120 crowns ($166,886), or 58.88 crowns ($15.81) per man; 22,573 pensions were granted to women, amounting to 1,252,336 crowns ($335,625), or 55.48 crowns ($14.87) per woman. In the same year the total number of persons insured under this act was 3,225,700. The contributions of the pensioners amounted to a total of 14,571,000 crowns ($3,805,028), more than seven times the amount disbursed during the same period. The number of voluntary cases insured in 1814 was 628.

SWITZERLAND

A system of obligatory state old age and invalidity insurance was introduced in the Swiss Canton of Glarus by an act passed in May, 1816. The system is very similar to the one in operation in Sweden. This act made it obligatory for all persons between the ages of 17 and 50 who have their legal residence in the Canton to insure themselves against the contingencies of invalidity and old age. In case of removal to another Canton insured persons may retain their insurance by paying an increased annual contribution. Persons who reside abroad leave the insurance, but in case they return to Switzerland within four years they may re-enter the insurance, by paying an increased contribution for the period of their absence.

The insurance contributions in Canton Glarus are made up from the following sources: (1) By an annual contribution from the Canton of 85,000 francs, and the interest derived from the Old Age and Invalidity Insurance Fund and other associations; (2) By an annual contribution from the Communes of one frc. per head of the population; (3) By an annual contribution of six frcs. from each insured person. The annual contributions may be commuted by making a single payment ranging from 125 frcs. at the age of 17 to 470 frcs. at the age of 48. Invalidity pensions are payable to persons who, having been insured for five years, become incapable of work on account of illness or other infirmities for at least one year, regardless of their age. Old Age pensions are payable from the age of 65. Before one can draw an old age pension to the full amount, however, he must have paid altogether at least 400 frcs. (i.e. 33 years’ contributions plus interest). Otherwise, the pension is reduced accordingly.

The amount of the annual invalidity pension begins at 150 frcs. and increases annually by ten frcs. up to a maximum of 300 frcs. for men and 250 frcs. for women. The amount of the annual old age pension is:

Men Women At the beginning of the 66th year 180 frcs. 140 frcs. At the beginning of the 67th year 210 frcs. 160 frcs. At the beginning of the 68th year 240 frcs. 180 frcs. At the beginning of the 68th year 270 frcs. 210 frcs. At the beginning of the 70th year and upward 300 frcs. 250 frcs.

A claim to a pension is considered lapsed if the insured person takes up his residence abroad after he had began to draw his annuity; in this case the person concerned may demand the reimbursement, without interest, of the contributions he had paid. The insurance is administered through the State Old Age and Invalidity Institution. Special provisions regulate voluntary insurance, to which persons of from one to 17 years of age may be admitted.[292]

There are also in Switzerland a large number of special government funds with definitely restricted membership, such as the employés of the federal railways and of the postoffice department. Membership in these funds is made compulsory. The contributions are borne jointly by the insured persons and the federal government. The plan suggested by a recent Commission of experts for a Federal Compulsory old age and invalidity insurance system has been discussed in the preceding chapter.