Facing old age

Dear Sir: In view of the fact that your services are of little value to the office, due to your impaired efficiency, on account of advanced age and physical infirmities, I regret having to inform you that your name is under consideration for separation from the service. Any statement which you may desire to make in the premises will receive careful consideration if submitted within five days after the receipt of this letter.

To Mr. Praeger’s communication Mr. Lerch made the following reply:

Dear Sir: Yours received, and in reply I have to say that by the recommendation of Abraham Lincoln, President of the United States, I was appointed a clerk in this office April 1, 1865.

It is not my place to defend my ability to do my work; for this you please must inquire of my superior officers.

I am 81 years old, but my record will show how little time I have lost on account of sickness in all these years, and I firmly believe that I am still able to perform work to the satisfaction of those over me. Furthermore, I have to inform you that, through misfortune, I am penniless, my wife having been a helpless invalid for the last 15 years.

One thing is sure, if I have to go out of this office I do so with a clear conscience that in all my service I have done my duty faithfully.

Another post office clerk, in San Francisco, noticed the following item in the Union Postal Clerk:

“Rodney, a faithful Army horse, who has served the Government steadily for 20 years is to be retired from active duty and cared for by Uncle Sam for the rest of his life. This will be done on recommendation of Capt. C. D. Mortimer, Third Field Artillery. Rodney was never sick a day, rendered signal battle service in the Spanish-American War, was sold at auction as too old for service, was bought by a member of the Third Field Artillery for $107, rendered hard service at Fort Myers, and is now pensioned.”

And he writes to the Secretary-Treasurer of his Union:

My dear Mr. Flaherty: I see by the February number of the Union Postal Clerk that after many years’ service the Government has pensioned an old horse. All I can say is “Lucky old horse,” and for the purpose of drawing a pension it would have been better had I been born a horse than a human being. I have been a “wheel horse” for the Government for the past 50 years and can not get a pension.

And Mr. Flaherty adds some information, and comments:

“After 50 years a clerk in the San Francisco Post Office, entering the service in 1861, and on the very day he completed his golden anniversary of 50 years’ service he was told he was inefficient and would have to take indefinite leave of absence, without pay of course, and now he is unable to get back in the service. He is 80 years of age, has devoted 50 years, 50 productive years of his life, all this time devoted to the perfection and management of the Postal Service. Only in the ranks, unknown and unheard of, a minor cog; but I know that it is men like Perry who made our Postal Service what it is today—the most efficient mechanically of any government institution, and I emphasize mechanically. It is not humanely efficient. It has not yet developed any system whereby the dismissal of these old men can be eliminated.”

The reports in regard to the effects and the working out of the recent Sterling-Lehlbach Act of Congress providing for the retirement of employés in the classified civil service, are expected to yield some very valuable data on the problem of Old Age Pensions. As these lines are written, however, the law has just become operative and predictions in this respect would be of no value. The law provides for the compulsory retirement on a pension of all employés in the classified civil service of the United States who have reached the age of 70 years and have rendered 15 years’ service. Mechanics, letter carriers and post office clerks are eligible for retirement at 65, while railway postal clerks may retire at 62 years of age after they have rendered at least 15 years of service. An employé, if he so desires, may, at the discretion of the head of his department and approval by the Civil Service Commission, be continued in his position beyond the retirement age for a period of two years and at the end of that period may be continued for another two years and so on until ten years after the act has become effective when it is provided that no employé shall be continued in the service for more than four years beyond the age of retirement.

The Pension Law just enacted provides for a compulsory-contributory system of retirement. All employés are made to contribute two and one-half per cent. of their income, which is deducted from their monthly salaries or wages, by the Treasury Department, and which goes to help make up “the civil service retirement and disability fund.” This contribution, it is estimated, will cover about one-third of the expenses of the act. The remaining two-thirds will be paid by the government as its contribution. The entire cost of this retirement provision was estimated by Senator Smoot to probably amount to over $2,000,000 for the first year increasing steadily to amount to more than $18,500,000 in the 77th year of its operation.

The amount of the pension is generally based upon two per cent. of the average annual salary multiplied by the number of years of service. Thus Class A after thirty years of service receive a pension amounting to sixty per cent. of their yearly salary; Class B, twenty-seven years of service fifty-four per cent. of salary; Class C, twenty-four years of service forty-eight per cent. of salary, etc. The maximum amount of pension, however, is set at $720 which is sixty per cent. of an annual salary of $1,200 and which means that while the higher paid men contribute proportionately more for their annuities, they can receive no pension on salaries above $1,200 per year. There was little objection to this on the part of the higher priced men as they were glad to forego larger annuities for the sake of getting the needed pension system adopted. The minimum pension is set at $180 per year.

The Sterling-Lehlbach Act also provides benefits for those who become disabled before reaching the retiring age. This must be preceded by proper medical examination certifying that the disability is “not due to vicious habits, intemperance, or wilful misconduct.” The amount of the pension is computed in the same manner as provided for the regular pension. No benefits are paid for less than fifteen years’ service.

In the case of withdrawal from the government’s service, or death before the pensionable age, or if an annuitant dies before he has received benefits equivalent to his contributions and accumulated interest, his contributions or the difference in his contributions is to be returned to him or his legal heirs in a lump sum, together with four per cent. compound interest. The Commissioner of Pensions under the Secretary of Interior is charged with the administration of the Act. In case of a complaint an appeal may be taken from the Commissioner of Pensions to the Secretary of Interior.

MILITARY PENSIONS OF THE U. S.

In contrast with the, until recently, lamentably deficient provisions for old age assistance, and the total neglect by the government of its permanent and peace time employés, must be considered the exceedingly generous care the government has taken of those who had given it temporary service during times of war.

“After all,” says Dr. Rubinow, “it is idle to speak of a popular system of old age pensions as a radical departure from American traditions, when our pension roll numbers several thousand more names than that of Great Britain. It is preposterous to claim that the cost of such a pension would be excessive, when the cost of our pensions is over $160,000,000, or more than three times as great as of the British pension system. In the face of such a cost, it is childish to consider the system of war pensions as a sentimental problem only, and to speak of the millions spent for war pensions as the cost of the ‘Civil War’. We are clearly dealing here with an economic measure which aims to solve the problem of dependent aged and widowhood. No state legislator will claim, unless it be in a peroration to a fourth of July outburst of oratory, that the constant pressure for extension of war pension benefits, and the systematic political work which creates such pressure, which neither party has had the courage to resist—is all the result of patriotic enthusiasm only. It is necessary to face the situation frankly, and apply to the system of war pensions the ordinary standard by which any piece of legislation is judged, inquire how far it meets the problems, how efficiently, economically, and justly it may work for their solution.”^[216]

The amounts spent on war pensions in the United States are startling. Since the end of the civil war—1866 to June 30, 1818—the total amount paid out in pensions, exclusive of the cost of maintenance of the Pension Bureau, was $5,521,074,858.16. In 1866 there were 126,722 pensioners and the annual expenditures on pensions amounted to $15,450,548.88. The number of pensioners was highest in 1802 when it reached almost the million mark. Since that time the number has been steadily declining. The total number of pensioners in 1818 was only 624,427. The total amount paid out in pensions, however, has risen from year to year. In 1802 when there were 888,446 pensioners the amount paid out in pensions was only $137,504,267.88, but in 1818 the total amounted to $222,158,282.70. Furthermore, although there were 22,368 pensioners less at the end of the fiscal year of 1818 as compared with the previous year, the amount paid out as pensions increased from $178,835,328.75 in 1818 to $222,158,282.70 in 1818, which is an increase of $42,323,863.85 in one year.

Practically every Congress sees some new War Pension legislation enacted, whether by the passage of general or of special acts. At the close of the fiscal year ended June 30, 1818, the number of pensioners in each class under the general pension law and special acts of Congress was as follows:

During the same year the following pension amounts were paid out on account of the different wars:

The average amount of the pension of the different wars during the fiscal year 1818 was as follows: Civil War, $373.38; War with Spain, $137.28; War of 1812, $218.57; War with Mexico, $256.48; Indian Wars, $285.84; Regular Establishment, $182.62. The average amount for all pensions was $355.78 per year. In 1820, Congress further increased the pensions of civil war veterans to $50 monthly and those of widows of veterans to $30 per month. This was estimated to add about $65,250,000 to the present pension budget. Veterans of the World War are cared for by the War Risk Insurance Bureau which is expected to prevent the burden of war pensions from falling as heavily upon the taxpayers as in previous wars.

That Congress in passing war pension legislation has practically never taken cognizance of the economic necessity of such pensions has been demonstrated so frequently and is so generally known that there is little need for its lengthy discussion here. The best indictment against the Congressional policy with regard to war pensions is brought by Dr. Rubinow, who comes to the conclusion that: “the most singular feature of the American System is that it primarily rebounds to the advantage of a class least in need of old age pensions.” He states:

“The extensions (of war pensions) were based primarily upon a more lenient attitude towards the requirement of past services and records rather than upon any effort to adjust this annual distribution of enormous sums to economic need. As a result the preposterous situation is created that various sized portions of this official melon are given to thousands of people who may not at all require it. No satisfactory statistics on this point exist, but it is a matter of common knowledge not only that pensions are obtained upon fraudulent representation of past services, forged records, fictitious marriage certificates, etc.,—an aspect of the problem sufficiently important in itself, which need not be discussed here at any length however,—but what is economically much more important, a large proportion of this amount goes to individuals who have no economic need whatsoever of financial assistance.”^[217]

It is a fact known to all that but few of those who are now receiving United States Pensions are really in need of them; nor do those who receive pensions represent the most needy class. The present war pension schemes reach largely the native aged who are generally representative of the middle class of this nation. The great bulk of wage-earners, which is made up largely of the foreign born Negroes, benefit little or nothing from such pensions. War pensions as a method of relief in old age for the great mass of aged wage-earners, despite their tremendous cost, are obviously inadequate and ineffective. As pointed out by Rubinow in conclusion:

“The economic effects of the war pensions have been so carelessly treated in the pension legislation that it surprises no one to find a war veteran drawing a substantial salary as a public employé (after having obtained the appointment under privileged conditions), and at the same time his war pension for disability; and perhaps the most striking and ludicrous example of this was the well-known case of a prominent veteran, who some years ago received one month a high pension especially voted by Congress because of total and permanent incapacity, and immediately after that an important and responsible position in the Federal Civil Service, which carried with it a salary of $3,500 per annum.”^[218]

PENSIONS FOR STATE EMPLOYÉS

Massachusetts is practically the only State in the Union which has established (since 1812) a system for the retirement of State employés exclusive of employés of counties and municipalities. A number of States, namely, Louisiana, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Rhode Island, and Pennsylvania, have had pension systems for State judges of the Supreme, Superior and other courts, as well as for certain limited classes of State employés, for some time. The New York provision for judges’ pensions applies also to all employés of the supreme court of the first, second and ninth districts. The latter also requires a contribution of one per cent. of the annual salary of the employés. All the other state pension provisions are non-contributory and the amounts of the pensions vary from one-half to the full salary of the pensioner. Most plans set the retirement age at 70 years but in case of disability retirement is generally permitted at an earlier age.

The Massachusetts Retirement Plan for state employés enacted in 1811 represents a compromise between the contributory and non-contributory principles. In the Bay State system both the State and the employés share the expense of the retirement system equally between them. The employés are required to contribute regularly from their wages or salaries in accordance with the rate set by the administering board. It is provided, however, that this is to be not less than one per cent. nor more than five per cent. of the annual salary or wage.

The voluntary retirement age is set at 60, and at 70 years the retirement is compulsory. An employé may also retire after 35 years of continuous service, regardless of age. The annuity is computed as follows; First, he receives an annuity of such amount as his own contributions have earned for him, and, secondly, a pension from the State which is equivalent to his own annuity. The total amount of the retirement allowance including the annuity and pension cannot be less than $200 nor to exceed one-third of the annual salary.

The system is administered by a board of three members which includes the State Treasurer, a second member elected by the employés and a third chosen by the former two. Participation in the plan was made compulsory for all employés who entered the service after the fund had been established, but was left voluntary for employés who were in the service at the time the law was enacted. More than half of the latter class of employés, however, joined the fund when the act went into effect.

The Massachusetts Retirement Act also provides that the contributions of employés be refunded upon leaving the service of the State before the pensionable age. Since the establishment of this system, it is claimed by reliable authorities, it has worked to the satisfaction of both employés and administrative officials. It is stated^[219] that it has brought about an improvement in the efficiency of the service through the retirement of inefficient employés and has created a feeling of greater well-being and security on the part of employés of the State.

MUNICIPAL EMPLOYÉS’ PENSIONS

The movement for the pensioning of municipal employés, such as policemen and firemen, although it came later in the United States than in European Cities, has nevertheless, preceded the entire campaign of old age retirement provisions for all other classes of workers. In the United States this movement is about fifty years old. Municipal employés’ pensions being the earliest to be adopted in this country, it is therefore, not surprising to find these funds the most haphazard and unsystematic of pension experiments. In reviewing these numerous pension funds one fails to detect any consistency with regard to either general principle, system, or standard, and excepting the very recent ones, practically none have given much thought or consideration to actuarial principles. Almost every pension scheme in operation is the product of a long process of amendments and modification which it has undergone since its original establishment. To cite a few instances: the Pittsburgh Firemen’s and Policemen’s funds were amended a number of times since their establishment in 1883 and new amendments are further considered. In Cleveland, before the establishment of the city’s present Police Fund, the latter was operated under three different plans, with a total of ten amendments. In New York City the Firemen’s Pension and Benefit systems were amended forty times before the general consolidation with the funds of other boroughs took place a few years ago. In October, 1820, a new law went into effect creating the New York City Employés’ Retirement System, dividing the municipal employés into three classes: labourers and unskilled workers, mechanical and skilled workers, and clerical, administrative, professional and technical workers, including heads of departments.

No less confusing and chaotic are the administration and the classes of workers protected by these municipal funds. Some of these are administered in connection with State or County funds, while others are administered by the city alone. Again, certain classes of city employés are well taken care of and others neglected by some cities, while other cities act vice versa. Only very few cities, however, make provisions for the general municipal employés exclusive of firemen, policemen and teachers. There is also a great difference to be found in regard to the principles of contributory and non-contributory schemes, and where contributions are provided, they generally range from one to three and one-half per cent. of the salary. The annuity paid also varies from one-half to three-fourths of the salary at time of retirement. The retirement age is not specified in many funds, depending largely on the years of service. Where age provisions are made they range from 55 to 70 years, and where the length of service necessary for retirement is stipulated it is usually about twenty years. In a number of cases benefits are also provided for widows and dependents.

In one-third of the 167 firemen’s and policemen’s funds analyzed by the United States Bureau of Labour in 1810 the annuity was an entirely gratuitous gift of the municipality, while in the other two-thirds the funds were made up in part by the municipality and in part by contributions from the employés.

In the funds studied by the above Bureau it was found that in about 40 per cent. of these the sole qualification for pensions, on the part of firemen and policemen, was permanent disability incurred while in the performance of duty regardless of age or service. The other 60 per cent. usually specified the length of service at about 20 years, coupled in one-third of the funds with qualifications of age 50, 55, 60 or 65 years.

In only about 40 per cent. of these funds were the employés found to have representation in the management of the foundations. Twenty funds were also found to pay benefits for temporary disability; 36 paid a lump sum death benefit and 113 paid annuities to widows or to other dependents. Where payment was allowed for temporary disability it was generally half of the permanent annuity. Aside from these municipal funds there are also to be found in most localities mutual benefit associations which pay temporary and death benefits and to which the majority of firemen and policemen contribute.

In addition to the regular contributions to these funds made by the municipalities and employés, there is also a miscellaneous source of revenue such as: “fines on policemen” or “fines on firemen,” which include not only fines imposed for violation of duty or regulations but also deductions made from pay for lost time, etc. Other revenues are such as “unclaimed property” and “unclaimed money” which include lost, stolen, or abandoned property in the possession of the police department. Many municipalities provide also that the city’s or State’s contributions to these funds shall be secured from a special revenue such as taxes on excise, insurance companies, etc.

Complete municipal pension systems including policemen, firemen, teachers and all municipal employés are in operation in the following cities:

Pensions for policemen, firemen and teachers only, exclusive of other municipal employés, exist in the following cities:

The following cities have pension schemes for only one class of municipal employés, i. e., either that of teachers, policemen, firemen, or other municipal employés:

Pensions for teachers and firemen or teachers and policemen only are to be found in these cities:

The following cities have pensions for policemen and firemen only:

The cities of Memphis and Dallas have authorized the establishment of retirement funds, but did not establish such in the period studied. San Antonio had neither established nor authorized one when this investigation was made.

As seen in the preceding enumeration, every one of the eighteen cities in the United States with a population of more than 300,000 inhabitants, in 1810, has a pension fund for its policemen and firemen. The six cities with 200,000 to 300,000 inhabitants also pension their policemen and firemen. Nearly all the cities with populations between 100,000 and 200,000 have some form of pensions for one class or another of municipal employés. In addition, many of the smaller cities also provide one form or another of retirement for particular groups of their employés. Thus thirty-nine of the fifty-four cities with populations from 50,000 to 100,000 have some sort of pension plan, thirty-one of them pensioning both policemen and firemen. Of the one hundred and twenty cities whose population in 1810 ranged from 25,000 to 50,000, only 68 have any definite pension plan. Fifty-eight cities whose population according to the thirteenth census was less than 25,000 also have either established municipal pension funds or have been authorized to do so. While policemen and firemen are thus fairly well protected in their old age, only a few of the bigger cities—New York, Chicago, Philadelphia, Boston, Pittsburgh, and Minneapolis—have thus far made provisions for their other municipal employés, who constitute the great bulk of city servants.

TEACHERS’ RETIREMENT FUNDS

The two primary functions of old age retirement systems are: First, the protection of individuals and their dependents against the contingencies of old age and disability. Secondly, the provision of a means of improving the efficiency and raising the standard of the services rendered, by eliminating from the service the superannuated and disabled who are no longer efficient, and by attracting better ability into the particular service. It is hardly necessary to point out, that nowhere are these functions of greater significance than in our educational system. It is of paramount importance that the best available talent and ability, and that superior men and women should be attracted to our schools for the development of the moral character and ideals of our children. It is further evident, moreover, that teachers living continuously in the dread of old age are not the most desirable persons for the instruction and inspiration of our younger generation. To provide our teachers—the moulders of the future generation—against the day when they are no longer able to provide for themselves, becomes thus not only a matter of justice but an essential factor in the welfare and high standard of our school system. In the case of teachers the problem of relief from superannuation is even more aggravated. It is an admitted fact that our teachers form one of the most inadequately remunerated classes. In many instances, indeed, although their wages are on par with the lowest compensated groups in the particular community, a comparatively high standard of living is required of them. Sufficient saving for old age under the circumstances is thus out of the question. To this must be added the obvious fact that many in the teaching profession—especially is this the case with women teachers—remain unmarried, and ordinarily, have no one to depend upon in old age, which aggravates their problem of superannuation.

According to Mr. Studensky,^[220] the history of the movement for teachers’ retirement pensions in the United States may be divided into three distinct periods. (1) The period from 1868 in which there first began the establishment of teachers’ insurance and mutual aid associations. (2) The period from 1884 until approximately 1815. This was a period of retirement legislation without regard to sound principles and is still not altogether a matter of the past. (3) The movement just beginning, tending to the reorganization and remodeling of pension systems on a more sound actuarial basis. In the first two periods the government and the public remained indifferent to the voluntary funds established by the teachers themselves. The funds were regarded as private teachers’ associations in which the public had no concern. Since 1815, however, the government has taken an active and intelligent participation in the protection of teachers in their old age, as it has begun to recognize the value of such provisions both for the welfare of our educational system as well as for the protection of the teachers.

In the beginning, teachers’ protective associations were formed largely for the purposes of securing burial or death benefits. These loosely established organizations required no regular assessments, but assessed their members from fifty cents to a dollar whenever necessary. Permanent capital they considered unnecessary and therefore had none. Later these burial and death benefit associations branched out to include also sick benefits for a limited period. This resulted in the introduction of a regular system of dues payments which ranged from one to seven dollars per year. As they progressed they were still further extended to provide for old age and disability annuities, and regular contributions based upon one or two per cent. of the annual salary were introduced. The teachers’ contributions were generally swelled by donations from charitable agencies and incomes from “benefit entertainments” arranged for the funds.

Government participation in teachers’ retirement systems first began in 1884. By this time the teachers realized the failure of their voluntary associations and requested the assistance of the city government. They were encouraged and stimulated to ask for this help by the fact that the city had already established pensions for other municipal employés, such as policemen and firemen. They justly called attention to the benefits derived from such systems in removing the dead wood of the school system, as well as increasing the efficiency of teachers, which would result in such a plan. As a result of this campaign the New York Legislature in 1884 provided for the establishment of a teachers’ retirement fund. The resources of this fund were to come, on the part of the teachers themselves, only from deductions made from the pay because of absence. The teachers were not required to make direct contributions. In the following year or two, similar funds which, however, required contributions from teachers, were established in Brooklyn, Detroit, Chicago, St. Louis, San Francisco, Buffalo, Cincinnati and the State of New Jersey. Most of these plans were compulsory in character and the teachers’ contributions amounted to one per cent. of their salary.

As practically none of these plans took any account of actuarial principles of insurance, it soon became evident that the teachers’ contributions alone were not sufficient. It did not take long to discover that in practically all of these systems no provision was made for permanent capital, and the funds needed to meet obligations as they arose “were provided only by hopes.” The teachers then began to ask for direct contributions from the cities or states, pointing out the benefits to be derived from such provisions by the school system and to the fact that other funds of municipal employés were already helped along by these cities or states. These arguments were so successful, that for more than two decades afterwards the government’s contributions continued to rise steadily while the teachers’ contributions in most instances remained stationary. Furthermore, from 1884 to 1817, according to Mr. Studensky,^[221] no less than six cities and five states adopted teachers’ pension schemes in which the government bears the entire expense of the fund. During the same period sixty-four cities and fourteen states established systems of joint contributions by the government and the teachers.

These funds, excepting those established more recently in Connecticut, Massachusetts, New York and Pennsylvania, and which are organized in accordance with sound actuarial principles are, says Mr. Studensky:

“Insolvent in so far as they have failed to provide for adequate reserves with which to meet accrued liabilities as well as liabilities incurred through service rendered since the establishment of the system. It matters not that most of these systems are still able to make payments, still have unexpended cash on hand, and are and will for a few years continue to be able to meet their payments. They are no less insolvent than the systems which are already bankrupt. Only by shifting their huge deficiencies ahead year by year do they continue their existence. By doing so they increase of course these deficiencies because of the continued failure to discount future liabilities. The longer they operate, therefore, the greater are the deficiencies and the more insolvent the funds become.”^[222]

The main features of these funds may be summarized as follows:

Retirement age.—The retirement age is not specified in the case of many funds, the former being dependent entirely upon the number of years of service. Where provision is made for the age of pensioning it is generally 60 years. In some cases also it is set at 60 for men and 55 for women. The period of service required before one can qualify for a pension, ranges from 25 to 30 years, except in a few instances where only 20 years or less, or 35 or more years of service are required. In many systems the age attained and the number of years of service are alternate conditions for retirement, i. e., a teacher may retire upon completing a fixed period of service regardless of age or, having reached the maximum age, may be pensioned even though he or she has been in the service a smaller number of years. In considering service years, credit is usually given—except in the newer systems—for teaching experience in other states or localities.

Pension amount.—The amount of the pension is usually set either at a fixed sum of $500 or less per year, or is determined by the number of years of service; or as provided in some funds is entirely dependent upon the average salary received. The annuity in these cases is based approximately upon one-half of the salary of the last few years or upon both salary and length of service. In the new funds it is generally provided that the benefit is divided into an annuity and a pension. The first is based upon the contributions and age of the pensioner while the pension equals that of the annuity and is given by the government.

Contributions.—The contributions to the funds in most cases are derived from three general sources. The contributions of the teachers themselves; appropriations from the different school boards; and whatever is derived from accrued interest, donations, legacies, bequests, and so forth. In most systems the teachers’ contributions to the funds amount to from one to three per cent. of their annual salaries. These are usually graded in accordance with the number of years in the service, the contribution being highest for those longest in the service. In the new systems the contributions of each teacher depend upon the age at which he begins to contribute and upon the number of years of prior service. The “pension” is fixed at a certain proportion of the teacher’s salary and increases with each year of service up to 35 years, when it ceases to increase.

In case of mental or physical incapacity partial annuities are generally provided in most funds. These are computed by taking a percentage or fraction of a percentage of the yearly salary multiplied by the number of years of service. A minimum period of service is usually required even for the granting of partial annuities. This latter period varies from five years in most city funds to twenty-five years in a few others. In practically all retirement systems, provision is made for both compulsory and optional retirement age periods. The latter is usually determined at the discretion of the Board of School Directors, and may precede the compulsory retirement age period by about five years.

Of the 24 systems analyzed in detail by Mr. Studensky, it was found that while 18 of these exact contributions from the teachers, only eight provide refunds in case of death. Of the latter a few provide for the refund of one-half of the contributions without interest; in others, especially the newer ones, the entire accumulation with compound interest is returned. In case of dismissal or resignation most systems provide for the return of all contributions, although a number make no such provision.

In 1817 there were in existence in the United States 84 teachers’ retirement systems; 22 of which were State systems and 74 local systems. These covered a total of 332,554 teachers. Fifty-seven of the 84 systems have been in existence only since the last decade. The extent to which these funds may be expected to take care of the superannuated teachers may be appreciated from Professor W. F. Willoughby’s summary in his introduction to Mr. Studensky’s book. To quote Prof. Willoughby:

“Of the nearly one hundred teachers’ retirement systems now in operation in the United States, only a few can escape total collapse unless fundamentally altered. Some of these systems include ten, fifteen, or even twenty thousand teachers each. Twenty-two of them are state-wide in their operation. They apply to over three hundred thousand public school teachers, i. e., to nearly one-half of the total number of teachers in the United States and they have liabilities in the neighbourhood of half a billion dollars, for the discharge of which, in large part, there are no assured assets. Besides the necessity for putting these systems upon an equitable and sound financial basis, there is need for the establishment of retirement allowance systems in those states and localities which as yet have none. At present seventeen states have neither state nor local pension systems for their public school teachers, and in twelve of the remaining states there are only a few local systems. Approximately one-half of all the public school teachers in this country are not covered by any pension provision.”^[223]