Charles A. (Charles Allen) Prosser.

The teacher and old age online

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and may levy therefore taxes not exceeding one
tenth of a mill.

In addition to these there are local pension
funds in twenty of the leading cities. Some of
these, authorized by law, are supported entirely
by the public, some jointly by the state and the
teaching force, but most of them principally, if
not entirely, by the assessments of teachers for
their own mutual aid associations.

These annuity schemes present the same wide
differences as to methods of support, the amount
of premium and annuity, and the conditions of
retirement and participation which characterize
the state pension systems already described. The



assessments paid by the teachers range from one
to three per cent; the annuity in most cases is
small, being usually from two hundred to three
hundred dollars; the number of years the teacher
must spend in the work is usually large, thirty
to thirty-five years; and the age at which retire-
ment upon the pension may take place, high,
sixty-five to seventy years. Teachers leaving the
service before retirement are usually not given
a return of any part of the amount which they
have contributed as dues.

General character of present schemes for the
insurance of teachers in America

We have not had teachers' retirement allow-
ances in this country long enough to be able to
estimate, in any conclusive way, at least, their
results upon the work of the schools and the pro-
fession. The progress which the movement has
made would seem to indicate that the American
people are being rapidly committed to the idea.
While this is true, it must at the same time be
acknowledged that not only are the present
schemes of teachers' insurance experimental and
imperfect, but they have frequently been the
outcome of hasty and ill-considered action. It
is doubtful whether many of them will result



in the best good of education and of the teachers

Most of these retirement systems have been
entered into without any accurate knowledge as
to what the insurance would cost and whether
the support provided would float the venture
properly so as to safeguard contributions and
insure the expectancies of members and the
claims of beneficiaries. In only a very few in-
stances has the expert advice of the actuary been
secured as to whether a plan was sound and sol-
vent before its adoption. Some of the schemes
established within the last five years have al-
ready been declared by actuaries of repute to be
insolvent, and therefore unable to meet the claims
upon them certain to come. The result will be in
such cases that, unless additional legislation is
enacted, many teachers will fail to receive the
protection which they expect, and in the contrib-
utory ventures will lose the benefit of the dues
or savings they have been required to invest.

In all the American schemes, both old and
new teachers have been provided for in the same
law and fund, a practice which has resulted in
retirement systems not properly adapted to the
conditions of either, and therefore not produc-
tive of the best good to the schools in which they



serve. The dominant purpose has usually been
to make arrangements for the immediate retire-
ment, upon some kind of an allowance, of those
who, through age or incapacity, were no longer
able to discharge properly the duties of the class-
room, thus affording, through a gratuity more
or less meager, a means whereby school authori-
ties could without embarrassment and criticism
retire old and faithful employees on superannua-
tion allowances.

Where the retirement fund is supported in part
by the contributions of the teacher, it has been
customary so to arrange the plan that teachers
already in the service receive full annuities, but
pay dues, usually at the same rate as new teach-
ers, only for the time they remain in the service
after the adoption of the scheme; while at the
same time young teachers withdrawing from the
service to take up other work are made to pay
for the protection of those remaining in it, by
forfeiting all the assessments they have contrib-

Where the contributory principle has been
recognized, assessments have usually been made
upon the teacher for the avowed purpose of help-
ing to pay the expense of the venture and not as
a vital feature of a plan of social insurance. The


idea of compulsory saving is seldom mentioned,
and even less frequently followed out consist-
ently. There is no logical relation in most in-
stances between what the teacher pays and what
he receives.

Nowhere is there, as in the Massachusetts
retirement system for state employees (1910)
and in the Massachusetts retirement system for
teachers (19 13), a return to the teacher of an
annuity purchased by his own accumulated sav-
ings which the state has withheld as dues and
an additional pension given by the state as a
reward for thrift, exactly equal in amount to the
annuity. On the contrary, payments by the
teacher are practically everywhere regarded not
as deferred payments of salary invested for his
benefit by the public as employer, but as pre-
miums in an insurance benefit to be received by
him in case he remains faithful to the service for
a required time, to be forfeited entirely by death
or by withdrawal for any cause.

Taking all the American attempts to deal with
the question of teachers' allowances, it may be
said, however, that their evolution, their ten-
dency, as is shown more especially in the later
schemes, is toward joint support by public and
teacher; state rather than local maintenance and



support; compulsory saving on the part of the
beneficiary; the recognition, to some extent at
least, of the right of the member to a return of
his own contributions; dues graduated, within
certain limits at least, according to salary; an-
nuities, up to a reasonable point at least, given
in proportion to dues; public support in encour-
agement of individual saving; and in the con-
tributory schemes joint control and management
by the public and the members. Nowhere else
has there been any American system for the re-
tirement of pubHc-school teachers based squarely
on accepted principles of compulsory social in-
surance such as have been carried out in the
Massachusetts retirement system for state em-
ployees and in the Massachusetts retirement
system for teachers (1913)-



The cause of teachers' pensions has of late
years gained additional support from the grow-
ing recognition that, after all, they are only one
phase of the world-wide movement toward the
social insurance of all workers against the great
risks of life. Here again the Old World has
blazed the way. Practically every European na-
tion has passed some legislation safeguarding a
part of its workers at least against one or more of
the risks of sickness, accident, disability, old age,
and death. In every one of these countries, with
the single exception of Holland, which as yet has
only adopted the idea of compulsory insurance
of industrial workers against sickness, teachers'
annuities of one kind or another have in most
instances preceded, as a forerunner or entering
wedge, a wider social program of legislation for
the protection of other and larger groups of
workers; while in other instances insurance for
the teacher has paralleled similar legislation for
other classes of citizens.


Almost everywhere in Europe voluntary insur-
ance, designed primarily for the benefit of wage-
earners, but open to every one, is made safe and
cheap by public management and subvention,
being sustained by the premiums of the insured
and grants from the state. Its counterpart would
occur here, should a state offer to receive and in-
vest contributions from its citizens, supplement
these with small appropriations from the legisla-
ture, and guarantee a certain annuity when in-
firmity, old age, or death overtook the insured.

In the early schemes for the protection of
teachers in many European nations, as has al-
ready been pointed out, straight pensions were
given as a gratuity or bonus by the state without
the payment of any dues or assessments, whereas
all the later ventures provide for the joint sup-
port by the pubHc and the schoolmaster. This is
the pronounced drift on the other side in all re-
cent laws relating to old-age or disabihty insur-
ance. Even Germany, after having granted pen-
sions to teachers entirely at pubhc expense, has
in recent years based her entire program of social
insurance upon the idea of the compulsory as-
sessment of all who were to be protected by the
numerous successive and progressive laws which
have been adopted.



Five out of the eleven leading European coun-
tries have set up compulsory and, of course, con-
tributory insurance schemes for large numbers
of wage-earners, and three others are soon to
adopt the same idea; whereas, on the other hand,
only three countries have adopted old-age pen-
sions supported entirely by public funds, and
these have not only limited the benefits to a
mere pittance, but restricted their enjoyment to
the needy, the crippled, and the diseased. We
shall probably witness a spread of old-age pen-
sions, as a new and wise form of protection for
the indigent, to other lands on both sides of the
Atlantic, but probably not for self-supporting
classes of our citizenship, whether employed in
private or public service. In all European coun-
tries the pension or annuity scheme of the teacher
is carried on as an enterprise by the state as em-
ployer, separate and apart from the compulsory
insurance systems for the protection of other
classes of workers.

The membership of the insurance schemes
against old age and invalidism varies in differ-
ent countries. Austria protects office employees
and minors; France, seamen, minors, all working-
men and salaried employees ; Germany, all wage-
earners and employees with yearly wages up to


five hundred dollars, and small employees and
houseworkers ; Norway is now considering a
plan covering all working men and women, irre-
spective of income. This is the pronounced drift
in all European legislation on the subject.

The spirit and the tendency of European so-
cial insurance are best shown in the complete
system for the protection of workers which Ger-
many has worked out, by assessing employers for
the entire support of the annuities for accident
and for the partial support of those for old age
and disability. The principles are asserted, both
that the cost of these risks is a legitimate over-
head charge against the business, the same as
insurance against fire and repairs for wear and
tear upon plant and machinery, and that a busi-
ness profits indirectly by the moral effect of these
safeguards upon the wage-earner.

By assessing wage-earners for the support of
the fund protecting them against old age and
incapacity, the principle is asserted that work-
ingmen, for the sake of their own welfare,
should be required to protect themselves against
the uncertainties of life and provide for their
failing years. By making it possible to retire
the aged worker when he has outlived his effi-
ciency, the principle has been asserted that the



state must in some equitable way make provi-
sion for his retirement when, after he has passed
the Hmit of efi&ciency, his retention in industry
means an economic waste to society and a handi-
cap to the industry in which he is employed.
By requiring all classes of wage-workers to pay
something to the support of their own protec-
tion, the principle is asserted that the state, in
order to promote the thrift of its people and
preserve itself from the burden of the indigent,
must encourage thrift, stimulate and safeguard
savings, and secure continuous faithful service
to industry and to the nation.

No American state thus far has established
any general system of old-age pensions or annu-
ities. There are in operation in several states
special pension schemes for certain classes of
public employees, chiefly pohcemen, firemen,
and school-teachers. There is no scheme, now in
existence or in prospect, making general provi-
sion for old-age pensions or insurance. Indeed,
Massachusetts is the first state to authorize a
comprehensive investigation into the pension
and insurance question through a state commis-
sion, which reported to the legislature on the ist
of January three years ago. In the United States
the question of retirement allowances has hardly



as yet received any serious attention from legis-
lation, while in Europe it has been the subject of
repeated investigation and extensive legislation.
At the same time there has been a steady de-
velopment of industrial insurance. The frater-
nal organizations and the trade unions have con-
tributed also some share toward the solution of
this problem. The pension systems for certain
branches of pubHc service, to which reference has
already been made, have assisted further toward
this end.

The essential difference between the United
States and countries in which compulsory insur-
ance has obtained a foothold has been the ab-
sence in this country of recognition of any need
for this form of protection for its inhabitants, and
particularly for those nearest to the border-line
between economic independence and economic
dependence. In certain instances, however, we
have adopted the compulsory principle in our
own legislation. Laws are daily being enacted,
miscalled socialistic or paternal, which on closer
analysis are found to be no more than an expres-
sion of intention on the part of the state to safe-
guard the welfare of all citizens, irrespective of
their economic status.

Fundamentally, no more than this has been



done in Germany and other European countries
which have introduced compulsory insurance.
These have recognized that there are risks in hfe
common to all workingmen, against which it is
impossible for the individual alone to make pro-
vision. Only by the transfer of this risk from the
shoulders of the one to the backs of the many
and by placing the burden of cost where it should
rest, even though this involve the industry itself,
can equilibrium be maintained. Where we, after
an observation of a century, and England, of
several centuries, have grudgingly admitted the
desirability of protection through insurance and
through legislation and have permitted individ-
uals to avail themselves of the benefits of it,
Europe, as typified by Germany and her sister
states, has boldly declared the urgent need of
this protection, not for the few but for all of its
working population, and by legislation has re-
quired its workingmen to partake of it and its
employers to bear their just share of the cost.

What Massachusetts has done with social

Massachusetts has been one of the first of the
states to deal with the protection of workers
against the risks of life in various ways. The



Report of the Massachusetts Commission on Old-
Age Pensions, in 1910, pointed out that previous
laws had already opened the way for pensions
for various public employees. By referendum
vote, any city or town may pension firemen for
permanent disability incurred in the service ; any
fireman who has served twenty years and who is
sixty-five years of age or who is incapacitated for
service may be pensioned; poHcemen disabled in
the discharge of their duty may be retired on
half-pay, and twenty years of service with dis-
ablement for any cause entitles them to pension,
regardless of age.

Widows and children of firemen and police-
men killed in the service receive pensions to the
amount of not more than three hundred dollars
per year. Any judge, who has reached the age
of sixty years, has served fifteen years, and is
incapacitated for further service, may retire on
one-half salary; veterans of the Civil War, no
longer able after ten years in the public service
to discharge their duties, may be retired on half-
pay; any prison officer may be retired on one
half the last rate of compensation paid him when
he is sixty-five years of age and has served twenty
years, or when he is disabled in the service, or
has rendered thirty years of faithful service.


In 1908, by chapter 498 of Acts and Resolves,
cities and towns were authorized to establish pen-
sion funds for teachers in the pubhc schools. Any
city or town accepting its provisions shall estab-
lish a fund for retiring teachers, made up of such
revenues as may be diverted to that purpose.
The school committee may retire any teacher of
sixty years of age, incapacitated for service, on a
pension not to exceed one half of his last com-
pensation, and in any case not exceeding five hun-
dred dollars. In the same year a pension system
for teachers in the public day schools of Boston
was established by chapter 589, under which the
school committee o,f Boston was required to es-
tablish immediately a permanent school pension

An appropriation of five cents for each one
thousand dollars of the valuation of the city is
authorized to meet the expenses of the scheme.
Any teacher who is incapacitated for efficient
service may be retired at any time; those who
have reached the age of sixty-five years or who
have been in the service for thirty years, twenty
of which have been in the pubhc day schools
of Boston, receive a pension of one hundred
and eighty dollars, the amount of the pension
for those of lower age and shorter service being


proportionately less. In 1913 the General Court
enacted a state compulsory insurance act for
teachers, which is later discussed in detail.

By the Savings Insurance Act of 1907, Massa-
chusetts is definitely committed to an experiment
with voluntary insurance under public adminis-

Upon the recommendation of the Commission
on Old-Age Pensions, made in 1910, the legisla-
ture passed an act providing compulsory instruc-
tion in thrift in the public schools of the com-
monwealth ; authorized employers and employees
to carry on cooperative retirement annuity or
pension systems; permitted cities and towns to
set up retirement schemes for their own em-
ployees; and established a retirement plan for
the employees of the commonwealth ; and in addi-
tion to this, passed a Workingmen's Compensa-
tion Act to take the place of the old Employers'
Liability Law.

The retirement system now in operation for
state employees contemplates practically that
the beneficiary shall make certain contribu-
tions, which invested at compound interest shall
after a certain period make available an an-
nuity, and that the state shall come in to sup-
plement this with a pension of equal amount.


Under these circumstances, therefore, the retire-
ment allowance practically amounts to the pro-
ceeds of a system of compulsory insurance
against old age or incapacity to which the state
contributes as much as the beneficiary, and the
retirement allowances themselves are graduated
largely according to the salaries paid beneficia-
ries, and therefore according to the contributions
which each makes to the support of his own an-

It is significant that Massachusetts, which has
placed practically all its employees under civil
service provisions with a permanent tenure of
position, is the only state which has yet estab-
lished an annuity plan for them.





In view of the trend of legislation and the
growth of public sentiment in this country for
social insurance, it seems clear that retirement
allowances here should not be dealt with merely
as an effort to provide protection against the
risks of life for the members of a worthy profes-
sion or for a group of employees in the public serv-
ice, but as one phase of a widening program of
insurance for all workers. No state is now ready
for such a program in its larger aspects, but it is
evident that retirement allowances are here and
now demanded for the teaching service by an
increasing number of the friends of the public
schools. We are now facing the question: Shall
a state-wide system of annuities for teachers be
established ?

In considering the idea of teachers' retirement

allowances, three different interests or points of

view need to be kept in mind. There is, first, the

attitude of the teacher interested in the question



whether pensions or annuities of this, that, or
the other kind will be for the good of the profes-
sion to which he belongs. The public, as an em-
ployer anxious for the welfare of its schools, is
asked to support a retirement system on the plea
that it will better the work of the schools. The
state should look upon the idea of pensions or
annuities for educators as one form of social
insurance which, whatever else it does, must
encourage saving, promote thrift, and insure
adequate protection against old age and disa-

If the teachers of any state advocate any sys-
tem whereby the state or the community is ex-
pected to make contributions to a retirement
system, they will do so primarily with the ulti-
mate good of the profession in view. The ulti-
mate good of the teaching profession is governed
almost wholly by considerations of the efficiency
of that profession in performing its services to
society; consequently nearly all of the problems
affecting teachers' retirement allowances come
back ultimately to the fundamental one: How
and in what ways will a particular proposal react
upon the efficiency of the profession as a whole?
For this reason it is advisable that the prob-
lem of providing retirement allowances for new



teachers hereafter entering the profession and for
those already in the service should be considered
separately and be met by different measures. In
this way it is possible to lay aside temporarily
special considerations that arise with reference
to teachers who have already given many years
of service to the schools.

The state could easily insist on a retirement
system for teachers hereafter entering the serv-
ice, but it would be inexpedient to make such
provision compulsory with regard to teachers
now in the service. A contributory feature in a
retirement system would not work a hardship
to teachers hereafter beginning work, since they
would face such an assessment at the time of
employment; but it might in some cases operate
as a hardship to teachers who have already for
many years been employed in public schools.
Sound policy would require that teachers here-
after entering the service and expecting to share
in the benefits of a retirement system should not
only be certificated by the state, but the gen-
eral character of their work from time to time
should be passed upon by state authorities. It
is much easier to deal with legislation affecting
tenure in the case of new teachers than in that of
old. All of these problems are exceedingly com-


plex as applied to teachers now in the service, but
relatively simple if considered in connection with

those who may hereafter elect to enter the pro-
fession of teaching.

Principles upon u'liich a retirement allowance
should be based

Whatever may be the claims advanced by
those who favor retirement allowances for them,
teachers as a class have come to realize that the
only argument which will avail with the public
and secure legislation in their behalf, is that the
protection given the teacher through annuities
will better the work of the pubhc schools. It
goes without saying that an overwhelming ma-
jority of the teachers of the country view the
question from a professional standpoint and de-
sire only such legislation as will be for the good
of the profession and the improvement of the
service. In what specific ways may we expect the
operation of a retirement system to improve the
efficiency of teachers? By attracting and hold-
ing more desirable men and v/omen in the profes-
sion; by guaranteeing in a way the future of those

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Online LibraryCharles A. (Charles Allen) ProsserThe teacher and old age → online text (page 2 of 8)