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Charles A. (Charles Allen) Prosser.

The teacher and old age online

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way to get good teachers is to make it impossi-
ble for poor ones to obtain positions. A state re-
tirement system should raise the general level of
teaching efficiency throughout a state, and expe-
rience has demonstrated that before teachers are
intrenched in their positions by a pension system
and tenure law, the quality of service should be
safeguarded by an adequate certification plan.
The great strength of the retirement system for
state employees in Massachusetts lies in the fact
that it combines with the retirement allowance an
entrance examination to a position which elimi-
nates the incompetent and sets up a civil ser\dce
that insures a permanent tenure of position.

Legislation providing teachers' annuities should
be supplemented by a law authorizing a system
of certification for all the teachers protected by
the retirement system, and the measure should
be drawn in such terms as to leave the state edu-
cational authorities free, not only to change their
standards through the years to meet the chang-
ing conditions, but to adapt their standards of
requirements from time to time to the different
kinds and character of teaching positions to be
filled.

Some form of legal tenure of position for every
teacher must be guaranteed in some way in order

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THE TEACHER AND OLD AGE

to secure the full benefit of a retirement system.
What form such a tenure law should take is still
a debatable issue. New Jersey is the only state
having a tenure-of-office law guaranteeing per-
manence of position during good behavior and
efficiency. In his report on the East Orange
schools, Professor E. C. Moore comments on the
workings of the New Jersey tenure-of-office law
as follows: *' There is one other feature which
does not yet, but will in time, tend to lower the
efficiency of the schools. I refer to the state ten-
ure-of-office law. Security in office during good
and efiicient service is something which all in-
terested in the public schools pray earnestly for,
but lodgment in office for life is quite another
matter. It is practically impossible to prove pro-
fessional incompetency in court; and places
where teachers can appeal to the courts for final
review of adverse action against them by boards
of education, and are practically never dismissed,
have poor schools. Such tenure of office is good
for the clerk, but bad for the work. They should,
of course, have the right to demand a public
hearing, but it should be conducted by the
board of education, not by a court. The best
kind of tenure of office is that which an enlight-
ened public demands and insists upon for its

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RETIREMENT ALLOWANCES

teachers. Both teachers and people are unfor-
tunate in having any other kind."

On the other hand, there can be no doubt that
there are many places where the tenure of posi-
tion of the teacher is uncertain and dependent
upon the fortunes of politics, or the caprice or
prejudice of one kind or another of school au-
thorities and of the public. In such places, it is
useless to expect annuities to work for the better-
ment of the service and the welfare of the pro-
fession. The conclusion is that some form of ten-
ure must be provided that will safeguard the
interests of both the pupils and the teachers. It
seems probable that a public conscience, awake
to the necessities of a retirement system for
teachers, would develop a public sentiment that
would support the principle of tenure during efl5-
ciency and good behavior, and then find a way
to guarantee the efficiency. The highest success
of a retirement system requires standards of cer-
tification, approval of work performed, and cer-
tainty of continued employment.

State and not local support should he given

State and not local support should be given the
retirement allowance. It seems to be admitted
without debate that public support and manage-

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THE TEACHER AND OLD AGE

ment of teachers' annuity ventures are necessary
to their success. The debatable question, if any,
is whether the pubHc should deal with the retire-
ment problem through the state or through the
cities and towns operating the schools in which
the beneficiaries are employed. For the state to
carry on a system of annuities for the benefit of
those who are not directly employed by it, but by
local communities, is a departure from the trend
of the steps already taken by some of the states,
in deahng with teachers' pensions and annuities.
Fifteen states permit towns and cities to pension
teachers. Why should these states and the states
having no laws for teachers' pensions be urged
to maintain a state system of annuities for the
teachers employed by local communities, and how
shall the proposal be justified ?

While it is probably possible to grant allow-
ances to teachers out of the treasury of a large
city in such a way as to serve the best interests
of its schools, municipal systems of pensions or
annuities have never succeeded in meeting a
state-wide need. In Massachusetts, for example,
the present law permitting towns and cities to
pension their teachers has not been a successful
solution of the problem. Though the act has
been in force about five years, only eleven out
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RETIREMENT ALLOWANCES

of three hundred and fifty-four cities and towns
have accepted its provisions. There is no indica-
tion that any considerable portion of the teach-
ers of the state would ever receive the benefit of
the statute.

Where allowances have been made under mu-
nicipal systems, they have usually been so small
as to afford an inadequate competence for old
age, thus defeating in large measure all the pur-
poses of the legislation. The main intent usually
is to give school committees a more satisfactory
way out in retiring old teachers. It is possible
that the moral and social effect of the gratui-
ties or concessions granted may not be for the
final welfare of the individual or the permanent
good of the profession. Such schemes are not
based on sound principles of social insurance, and
at best can only be regarded as a temporary ex-
pedient and a forerunner of a more comprehen-
sive plan.

Even if a city here and there should grant
an adequate pension to the superannuated in-
structor, the educational benefit to the state as a
whole would be small if not questionable, since
the result would probably be simply to enable
the schools concerned to attract and to hold a
few desirable teachers, as against other cities

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THE TEACHER AND OLD AGE

and towns. Were every community required to
grant retirement allowances, supported entirely
out of the local treasury, to those who have by
long years of faithful service acquired some claim
to its bounty, teachers would practically be
obliged to spend their lives in one school system
in order to profit by the gratuity, thus destroying
the mobility of the teaching profession, which
has been one of the largest, if not the largest
source of initiative and growth. It is equally
true that under present conditions, owing to the
mobility of teachers, their insecurity of tenure,
and other circumstances that need not be dis-
cussed here, a retirement system maintained out
of public funds, in whole or in p>art contributed
by the locality, can be effective only in the larger
cities.

With the recognition of the soundness of the
principles of contribution and withdrawal equi-
ties as features of retirement allowance systems,
local pension systems for all the cities and towns
of the state become at once impracticable, and
a state system becomes necessary as the only
proper way to deal with the question. With joint
support on the part of the teacher and the com-
munity, every town and city in a state would be
required to carry on a savings-bank account with
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RETIREMENT ALLOWANCES

each member of the teaching force, to invest his
earnings profitably and yet safely, and to guaran-
tee his accumulated savings ; a service which it is
certain that, generally speaking, only the state,
dealing with the problem on a larger scale and
equipped with the larger resources for invest-
ment furnished by a state- wide teaching force
and, possibly, by legislative appropriations,
would be able to render to the best advantage.

There is a large measure of truth in the claim
that although teachers may be paid their salaries
out of local funds, yet both in law and in fact
they are, in more senses than one, state employ-
ees. There is no other local enterprise which the
state has attempted to regulate by legislation
so much as the public schools. From whatever
source they are paid, the state looks to teach-
ers as their agents to fit the children of every
city, hamlet, and remote country place for useful
and intelUgent citizenship. The mobility of the
teaching profession shifting from one position to
another, the interchange of pupils between local-
ities, the interest of every community in the re-
sults of the education given in every other place
as well as by its own schools, make the ques-
tion of the efi&ciency of the teacher a matter of
state-wide concern, and justify the state in doing

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THE TEACHER AND OLD AGE

anything necessary for the betterment of the pro-
fession which cities and towns are unable to do
properly.

Recognizing the semi-state character of the
service of the teacher, all the Western Common-
wealths have from the first used the income from
the large permanent common-school funds which
they are so fortunate as to possess, to pay a large
part of the salaries of the men and women serv-
ing in local public schools. It seems clear that all
over the country it will be necessary for the state
in the future, with its large resources as a wider
taxing unit, to give larger financial aid to the
cause of education; adjusting inequalities in local
burdens; aiding struggling communities; stimu-
lating new forms of education like industrial
training, household arts, and agricultural train-
ing; doing the things which the local community
is unable to do; doing things for the betterment
of the teaching profession and the work of the
schools, like the certification and retirement of
teachers: all of which require a larger outlook,
collective action, and also central administration
of a kind which only the state and not the local
community can bring to bear.



60



RETIREMENT ALLOWANCES

Cost of the proposed plan

The cost of any proposed plan for retirement
allowances, in view of the far-reaching financial
responsibilities involved, should be known within
reasonable limits before it is adopted. Teachers
who are required to become members upon en-
tering the profession should know definitely both
the amount of the dues which they are required
to pay, and the return which they are to receive
from the investment made and from the pension
contributed by the state. This is more necessary
in a scheme for the employees of the public schools
than in the case of the present retirement sys-
tem for state employees. The membership will,
finally at least, be larger, more widely scattered,
and in the employ of cities and towns rather than
that of the state operating the venture.

In order that the prospective members of the
retirement allowance scheme may have this in-
formation, tables should be prepared showing by
years the cost to the members according to their
salaries, the present worth of accumulated sav-
ings, the amount of the annuity and] the amount
of an equal pension to which the beneficiary is
entitled upon withdrawal for disability or at the
close of the full period of service required. The
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THE TEACHER AND OLD AGE

effect of this will be to put teachers in possession
of as much, if not more, information before en-
tering this compulsory insurance venture than
they would have in taking out a poHcy with any
standard insurance company.

The state should bear the cost of the adminis-
tration of the venture. A state retirement fund
board, to serve without pay, ought to have an
executive secretary to carry out its ruHngs. A
man competent to do this work properly should
certainly receive a salary of not less than thirty-
five hundred dollars per year. In addition, there
would probably be ofl&ce rent, certainly office
expenses, and the cost of clerical and actuarial
service.

An important and difficult question is the prob-
able cost to the state of any retirement system
it may undertake. The state is entitled to know
this roughly, at least, before any law is enacted.
Obviously only an approximation can be given.
The number of teachers in different age groups
can be ascertained, but it cannot be predicted in
the present state of our statistical knowledge
how many of them will remain in the work of
teaching long enough to become pensionable.
We can say there are so many teachers in the
state between seventy and sixty years of age, so
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RETIREMENT ALLOWANCES

many between sixty years and fifty, and so on;
if the ratio continues as it has in the past, the
cost in any given period will be a certain maxi-
mum sum that can be roughly worked out. The
cost for a period twenty or thirty years hence
cannot be so well predicted. Nobody can fore-
tell the economic development of any state, how
many children then will be in school, or the num-
ber of teachers required to teach them.

It is certain, however, that if past experience
is duplicated by future developments, the initial
cost will be the smallest, and will gradually in-
crease, reaching a maximum at the time those
teachers compelled to enter the retirement sys-
tem reach the age of retirement, from thirty to
forty years after the date of the inauguration of
the system. The Report of the Massachusetts
Board of Education on Teachers' Retirement
Allowances (1913) suggests a fairly satisfactory
method of approaching this problem.

It is difficult to estimate the amount of the
cost at that time. We do not know what the
population of any state will be, or the number of
school children, or the number of teachers. It is
impossible to predict the industrial and economic
conditions upon which the matter of teachers
remaining or not in the service may so largely
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THE TEACHER AND OLD AGE

depend. It is impossible to forecast the effect of
the retirement system in holding teachers in the
work.

It must be remembered, as has already been
pointed out, that there is every probability that
the contribution by the public to the support of
the teachers' retirement allowance is, after all,
only a deferred payment and, therefore, a part of
the teacher's total wage. Many believe, as has
also been shown, that this concession on the part
of the public plays a part in each new wage read-
justment with the teacher, and in this way be-
comes an actual though deferred part of the com-
pensation. To the extent to which this is true
the cost of teachers' retirement ventures is in the
long run no real burden upon the public. The
effect would be simply to shift the expense of a
part of the teacher's salary from the local to the
state treasury.

For reasons that have already been discussed,
if the contributions of the public represent, as de-
ferred payments, an increase in wage, then the
state has simply come to the aid of the commu-
nity by adding to the wage paid out of the local
treasury an extra bonus or gratuity justifiable
as being necessary for the good of the teaching
profession, and as a good business proposition,
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RETIREMENT ALLOWANCES

because it will probably yield better returns in
making the teacher's position attractive than the
same amount of money spent in any other way
for the same purpose. To this must be added the
social returns to the state through the encourage-
ment of thrift, the enforcement of saving, and
the protection of a group of workers against
the two great risks of life, old age and incapac-
ity, that have always been such a large social
burden.

Conclusion as regards teachers hereafter entering
the service

A. Retirement allowances for teachers are a
wise investment of pubHc funds, because
they make possible improvement in the
service not generally obtainable without
them by —

1. Opening the way to retiring incapaci-
tated teachers without hardship.

2. Making it possible to —

(a) Attract better talent into the serv-
ice.

(&) Hold the best that enter the serv-
ice.

(c) Encourage those in the service to
more efficient work.

65



THE TEACHER AND OLD AGE

B. Retirement allowances for teachers admin-
istered as social insurance are a wise invest-
ment of public funds because —

(a) They tend to promote thrift.

(b) They tend to make employment more
stable.

(c) They free the state from the possibility
of supporting a number of indigent,
superannuated people.

C. A retirement allowance for teachers yet to
enter the service should carry with it cer-
tain obligations on the prospective bene-
ficiaries. Among these are compulsory par-
ticipation, compulsory withdrawal age,
acceptance of the principle of certification,
and some form of legal tenure of position.
The obligations on the state are, to con-
tribute at least one half the retirement
allowance, to safeguard the savings of the
teacher by limitation of investment, to
guarantee to pay established withdrawal
equities, and to pay definitely ascertained
annuities.

D. In a complete system of retirement, old age
should be recognized as a cause for per-
manent retirement; disability should be
recognized as a cause for temporary retire-

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RETIREMENT ALLOWANCES

ment; invalidism should be recognized as
a cause for temporary or permanent retire-
ment. An equitable plan for insurance
against these risks of life should be worked
out.
E. The administration of the retirement sys-
tem should rest jointly upon the teachers
and designated state officials.

Conclusions as regards teachers now in service

Every argument for retirement allowances for
teachers yet to enter the service applies with
equal, if not greater, force to teachers already in
service. In the administration of a plan for re-
tirement, however, certain departures from the
principles heretofore laid down must be made if
justice is to be done to all. For example, par-
ticipation should be voluntary rather than com-
pulsory, and the age limit of service should not
be forced upon teachers not desiring to avail
themselves of the benefits of the system. Further-
more, while the state may well enforce an assess-
ment that will produce one half the retirement
allowance in the case of teachers yet to enter the
service, such an assessment would be unjust if
applied to many teachers now in the service.

In the administration of a plan for teachers

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THE TEACHER AND OLD AGE

now in service, applying sound insurance princi-
ples so far as possible, three groups of teachers
appear for special consideration : —

1. Teachers under thirty years of age might
well enter the retirement system on the
same terms as teachers yet to enter the serv-
ice, as it is possible for them to make suffi-
cient contributions to pay one half of a re-
spectable retirement allowance at age sixty
and beyond.

2. Teachers sixty years of age and upwards
can make very little contribution to a re-
tirement system. It should be expected
that the state would virtually" pay these
people a straight pension, and a minimum
sum should be fixed by law.

3. Between these groups lies the group, ages
thirty to sixty, and they present a great
variety of problems. Those nearest thirty
can make contributions which will produce
substantially one half of an equitable retire-
ment allowance. Those teachers nearest
sixty can make less. It would seem just,
therefore, that these teachers should be as-
sessed a definitely fixed percentage of their
salary and allow these contributions at com-
pound interest to purchase at retirement

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RETIREMENT ALLOWANCES

whatever annuity they will. Then the state
should contribute enough to make up a de-
finitely guaranteed retirement allowance on
the basis of a pension for service prior to the
time when the law went into effect.



IV



CHARACTERISTICS OF A MODEL RETIREMENT
LAW

The Seventh Annual Report of the Carnegie
Foundation (19 13) enumerates certain essential
and fundamental principles in an equitable
teachers' pension system, as follows : —

(a) Compulsory participation and contribu-
tion on the part of all who enter the service.

(b) Retirement annuity earned by the contri-
bution plus an equal pension from the
state.

(c) Withdrawal equity in case of death, or
permanent withdrawal.

(d) A central unpaid administrative board
with a paid executive.

The suggestions for an old-age retirement law
hereafter made conform to these principles.

In the same report, the Carnegie Foundation
proposes a method of payment of annuities for
disabihty with which we cannot agree. It says:
"There is one modification of this simple scheme
which would add little to the expense, but which
would cover practically all that a pension system
70



A MODEL RETIREMENT LAW

for public-school teachers should at this time at-
tempt to do, that is, the payment of a propor-
tionate pension for a given length of service in
case of disability. For example, a state might
well afford to pay, after fifteen years of service
and of contribution, an agreed-upon proportion-
ate pension to the teacher who had broken down
in its service."

An examination of the financial aspects of the
situation demonstrates that such a scheme is both
inadequate and hazardous. The report says the
average salary of a teacher in the United States is
slightly less than five hundred dollars ; and, fur-
ther, that the old-age retiring allowance should
probably be about fifty per cent of the salary at
time of retirement. This gives us two hundred
and fifty dollars as an average retiring allowance
at age sixty. Now assume that the teacher retires
after fifteen years' service on a "proportionate
part" of this allowance, and we arrive at the pos-
sibility of retiring allowances of one hundred and
twenty-five dollars or less per annum.

If disability includes (as it should) invaHdism
and disabling accidents, temporary and perma-
nent, no further discussion is needed to show that
such an amount is hopelessly inadequate to meet
the needs; and it should be perfectly obvious that

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THE TEACHER AND OLD AGE

the solution is to be found in compulsory disability
insurance, adjusted to the occupational risks of
teaching, and charging a sufi&cient premium to
guarantee reasonable protection. Disability due
to old age and disability for invalidism and acci-
dent are two separate propositions, and to deal
with them in one measure in such inadequate
financial terms is inviting '' guesswork legisla-
tion" that will jeopardize the whole plan of old-
age insurance.

In the following suggestions regarding a retire-
ment law, the scope of that law is limited entirely
to an old-age measure. Before passing to that
discussion, it might be well to indicate certain
facts regarding disability insurance and a method
of determining the occupational risk of teaching.

We are assured by actuaries that no statistics
are available to determine with any degree of
accuracy the occupational risk of teaching. It is
evident that this risk, while it may be greater
or less than some other occupations, differs. For
example, teaching school offers a different sort of
risk from that of working with high-speed ma-
chinery. We are also told that the premium rate
charged for health and accident insurance by
commercial companies is greater than probably
needs to be charged for such occupations as that of
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A MODEL RETIREMENT LAW

teaching. This, however, is largely guesswork.
No one has yet made an investigation to deter-
mine the occupational risk, and it would be
highly desirable for some organization having
funds at its disposal to undertake such a study.

The average teaching life in the United States
has been computed to be between six and seven
years. As this period of employment is usually
during young womanhood and manhood, the
total health risk should be less than for other
occupations that attract people for longer years
of service. One actuary estimates that a small
annual premium, perhaps five dollars, paid by all
teachers in a state on a mutual insurance basis,
would enable such a body of teachers to pay
very satisfactory annuities for totally disabling
sickness or temporary or permanent disability
due to accident. If such be the case, statistics


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Online LibraryCharles A. (Charles Allen) ProsserThe teacher and old age → online text (page 4 of 8)