Volume 2 - ElectricCanadian.com

APPENDIX VIII.THE PENSION FUND.It is generally recognized that the rate of return on aninvestment depends largely on the assurance with which theinvestor can depend upon receiving that which is due to him,both capital and income, at the stated time; in other words,the safer the investment, the lower the return. The sameprinciple applies to occupations. Those occupations, theincome from which is a fixed sum, payable at stated intervals,and not directly dependent upon the success and activity ofthe business from which it is derived, return a lower rate ofremuneration to those engaged in them than do others whichare more hazardous. The salaried employee of a governmentor large corporation isunlikely, therefore, to earn as much onthe average as the professional man or proprietor of a business.He finds part of his reward in the certainty with which he candepend upon receiving his stipulated income. The differencebetween the rates of remuneration in two such occupationswill tend to approximate to the value placed upon thiscertainty by the average man, after he has taken into accountthe difficulty of changing from one occupation to another.Somewhat for this reason, however, the average salaried manfinds more difficulty in providing against adversity or old age, orfor those dependent on him, than does the individual engagedin such other employment; and hence has arisen the idea of apension, devised to assist him to make such provision. Hisinterest in the matter is obvious; that of his employer is scarcelyless so.It enables the employer to reduce the turnover of hisstaff, thus lessening the expense of training new employees,and at the same time aids him in retaining the services of hisolder and well-trained employees.In addition, the existence