Pensions were initially intended as extra compensation meant to entice people to enlist into the military. As early as 1636, before the colonies were united as the U.S., the Plymouth colony offered a pension for those who were disabled as a result of defending the colony from the Indians (Native Americans).1 During the Revolutionary War, the promise of extra compensation was solidified with the first pension law. Though the states were responsible for making payments, they fulfilled their obligation to only 3,000 disabled veterans.1,2
In 1789, the U.S. federal government passed legislation assuming full responsibility for making the pension payments to disabled veterans. From then on, the federal government passed further legislation increasing benefits for veterans and their families as the country grew ever more prosperous. In 1818, benefits expanded to all veterans for life. Before that, pensions were only offered for a few years.
In the 19th century, public pensions were implemented for two reasons:
- To give non-military federal employees an incentive to convert from patron to a permanent civil servant
- To succumb to workers’ groups demands for creating a more extensive welfare state like that of Europe.3
In this period, the vast majority of U.S. federal employees served at the leisure of a government official. Those that receive a pension were chosen on a case-by-case basis. As the number of federal employees grew, the costs of serving a government official eventually outweighed the benefits derived from it. At the same time, Europe was undergoing a growth in their welfare state where public pension plans were being offered to their public servants.3 In the U.S., the trend of providing public pension plans was seen as a step towards a better society.
After a decade of worker’s groups trying to introduce bills in Congress that would ensure pensions for non-military federal workers, in 1920, the U.S. federal government began to offer pensions to all federal workers. The pension was offered under the Civil Service Retirement System (CSRS) as a defined benefit program.3
As time went on, pensions were used to entice private sector workers in economic boom times. Pensions became the most popular during World War II. During this period, workers were signing up for the draft instead of signing up for jobs. At the same time, the National War Labor Board froze wages in order to prevent inflation from getting out of control.4,5 This caused a massive labor shortage because there were less workers available and no means of offering increased compensation except through fringe benefits like the defined benefit pension plan.
Those in the military serve one of the most important function for a country, and how they are treated reflects on those in poser. If you’ve served, thank you.