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350
BOARD OF GOVERNORS
OF THE
S-7
FEDERAL RESERVE SYSTEM
WASHINGTON
ADDREBB DF"F"ICIAL CDRREBPDNDENCE
TD THE BDARD
June 24, 1937 •
.l
Dear Sir:
The amendment to subsection 2 of Section 3 of the Rules e.nd
ReguJ.ations of the Retirement System of the Federal Reserve Banks
rGducing the minimum age for retirement on a special service retirement allowance to SO, and eliminating the reduction in the pension
of 5 percent for each year a pensioner lacks of having attained age
60 on retirement, necessitates some modification of tho authorit,r
given in the Board's letters X-9405 of December 27, 1935, X-9541 of
April 6, 1936, and X-9707 of September 28, 1936, to pay dismissal
wages to employees involuntarily separated from the service or to
make special contributions to the Retirement System for their benefit.
te~s
Accordingly, the authorit,r granted by the above mentioned lotis rescinded.
,.
If, on the separation of an employee from the service of the
bank., your directors are oi' the opinion that a contribution by the
bank in the form of a dismissal wage or otherwise is advisable and
should be made, either to him or to the Retirement System for his
benefit, your bank is authorized:
(a)
To pay an amount equal to not more than 10 percent of
termi.nal salary for each year of service up to five
.351
S-7
-2-
in the case of any employee separated from the service, with or without a retir~ment allowance, including those retired for disability. Such payment may
be made to the Rptircm~nt S,ystem for tho purpose of
supplementing tho immediate or deferred retirement
allowanco, if any, to which the employee is entitled,
or, except in the case of an employee 65 years of age
or more, IDF~ be paid to the employe$ in cash, either
in a lump sum or in not to exceed six monthly payments; provided, however, that no more than an amount
equal to th~oo months' s~lary may bo paid in cn~h to
an employee who is to rccoive a pension, immediate
or deferred. In addition to tho above, where an employee not entitled to receive a ponsion loavus his
accumu.lated contributions with the Retirei!lent B--.rstom
for tho purpose of purchasing an ruu1uity to begin at
or after ugc 50 a further payment may bo me.de to the
Retirement System, for tho purpose of supplcm~nting
such annuit,y, equal to 3 percent of terminal ~alar.y
for each year of service rendered in excess of five.
Or
(b)
To pay to the Retirement System, in lieu of any payments authorized in paragraph (a), for the benefit
of an employee separated from survicc after attaining
age 50 (including those retired for disability), a
special contribution sufficient to increase tho regular retirement allownncu to which tho employee is
entitled to n retirement Ci.llowance on a str'light
lifo basis equal to $4.50 for each month of service
up to 15 years, or to the actuarial equivalent thereof under any option offered by the .Retirement System
that the employee m~y select. Such retirement allowance in the case of an employee under age 65 shall be
deferred to age 65, or be converted into a rr..:tiremont allowance of equal actuarial value beginning at
an earlier age.
r
-
In applying the above any salary in excess of $12,000 per
annum shall be treated as a salary of $12,000, and in computing
length of service all seTVice to date of retirement may be counted,
even though a portion of such service may not be
crcdit~ble
service
352
S-7
-5a~
defined in Section 1 of the Rules and Regulations of the Retire-
ment System.
Very truly yours,
Chester Morrill,
Secretary.
TO ALL
PRE~·I'IDEN':{'S
@FedFRASER