TEACHERS' SUPERANNUATION.

Otago Witness, Issue 2652, 11 January 1905, Page 30

TEACHERS' SUPERANNUATION.

THE PRESIDENTIAL ADDRESS.

In his presidential address to the New Zealand Educational Institute at Wanganui Mr J. Jeffery said: — No -superannuation scheme which does not make allowances to widows and children will meet the requirements of any public service. Teachers are not, and will never be, too, well paid. Under average conditions young ra&n will be 30 or more before they have any prospect of getting, on the average, a 'salary in excess of the average artisan. But it is -in ,the- interests of the State that, before they reach that age, they , should assume the full responsibilities of citizenship; apart from that, however, it is to the interests_ of all concerned tliat as iarge a, proportion as possible of our male teachers should be married men. As | teachers have to keep up an appearance, and as they are continually at their own expense, adding to their libraries the latest educational works^ and probably subscribe to three or four educational journals, it is almost impossible for them in their earlier years" of teaching to fulfil their duties satisfactorily and to assume the responsibilities *of -married life. If,^however, these responsibilities are" assumed' "it "becomes,, difficult on such small salaries- as are' given, or i •will likely be given, for these teachers 'jto j •pay the_ insurance" premiums "to" jprovide' for • _ xhe futiibe ; but allowing .it "can be done,; ; and (Kat at death", say, at 30 or 35, a" teacher" dies "leaving, say, £250 to his widow and children, would it- riot be infinitely better „ that 'she should have" a yearly allowance, and the children the same, as in the /railway superannuation scheme.? Year by year the income is certain, but a lump sum may disappear under mismanagement or misfortune. I'he defect of a superannuation and disablement scheme is this: 1 Widows and children are not provided JE or : and ordinary insurance, makes no provision for disablement which will ,in many tases decrease the amount of < ither endowment or death policies, nor does it provide an annuity except under very unfavourable conditions. &he .railway superannuation- fund provides for all contingencies, and is almost ideally perfect in that respect. I know that it has been stated that we cannot hope for equal benefits on the game terms. Why not? The fund is , reported as in a satisfactory position, - not by the actuary; certainly, but" by the Minister of Railways, arid the liabilities of the fund 'are to be further increased by counting provincial service". But let me say ,with as much emphas's as I can that we are mot asking for railway benefits on the^same t terms as railway employees receive theirs, and because we are willing to pay on a. 66 2-,3 _ per cent. Higher J>asis and .to see lailway men draw 11 per cent, higher maximum annuities. Great differences, surely. Xow, I regret to say that in criticising the actuarial report, and actuarial conservatism considerable warmth has been , expressed. Thi&. executive exists to "do its best, for teachers, and to forward "the policy outr- ! •lined- at the annual meetings; and if the'j ihembers of the executive' are not whole- j "hearted ladvoeates of" ""the policy' of the i institute, then they should resign. To what ! extent the executive has tried to voice* tlie j opinion of the institute and- has-been "in_ sympathy wifeh it during the last three years . is -a matter of . opinion,- and what' mine is I shall not say. But Idp ask 'this.: " What was done in '02 and '03 to gather statistics or other matter to fortify ""our position? We are to find the money, shouldn't we be in possession of all possible detail ' to justify our" demands? and if the Government actuary has overstated his case isn't if" our j 1 duty to show him "where his conclusions are ; not justifiable or are problematical? I may j say that during . the year we asked to be j allowed to confer with the actuary,' but this request was- refused. - • -• 1. He calculates interest on 3£ per cent. The' last balance sheets of the A.M.P. show a return of £4 8s lOd per cent; ; of ' the Australian .Teachers' Fund, £4 9s 4d; the New Zealand Government Insurance, £4 8s sd ; the National Mutual Life Assurance, £4 15s lOd. Some of our funds were invested this year at 5£ per cent. — from 27 4o over 57 per cent, more than actuary provides for. The difference between these xatss^ alone and 3£ per cent, will wipe oiit perhaps £80,000 to £100,000" of the actuary's i - deficiency. • ""• ' j 2. The actuary assumes immediate retire- j irontof all over 60 (males) and 50- (females), j Tlie experience of other funds where salary ceases when"- annuities commence is* that •fully; 25 per ' cent. ,' of the annuities are/uuf claimed through ,J-Jate, J -Jate retirement, and the annuities drawn 'decreased by the same" \ amojint. The "50 years' .experience' of the I/ondon and" NorthVWestern Railway and , the results of the New Zealand Police Fund \ ishow that not 60], but between. 63 and -64 V is the' average retiring age/ The higher the «alary— the . later the - 'V 3. -The actuary,, however, goes further : he "provides for retirements as soon as the* 36 payments are- made; j,nd appears to assume that all will retire immediately on "the annuity becoming dve — that is, possibly at 56 or even less for men. Now, these three unnecessarily conservative estimates very materially decrease the actuarial deficiency. But there are modifications, some of which •will probably be agreed to by teachers ; come of them I append, for they may assist you. I. Annuities to be Calculated on Average Salary, not on Salary for Last Term of Year 3, which is Generally the Highest. — Type: Five years at average of £100 per year; five at £125; five at £150, five at '£175r~five at £200; five at £225,; five at £250. give an average "of £175. Maximum annuity" asked for, three-fifths of £175, or '£105 Railway men get two-thirds of £250, or £166 13 W." .or nearly 59 per cent., though paying 40. per cent, less in premiums. If railway, -men get £166 13s 4d on a 3 per cent basis, teachers on" a 5 per. cent, basis ought proportionately* to get £278, or 165 -per ; cent.' more than they Are willing to take. " Take recent case/ in Otago. Payment on averag-e salary, while easmg BnT~'insuranbe~fund, -is also more equitable. When an annuity is* granted on the- average for the last -term of years, then, if the last- term "g-iyes a higher average than, the general average, an annuity is being given which has not been paid for, " and to the extent it has not been paid for the annuitant profits at the expense of those who do not make an equal advance in sa.avy. 11. Annuities to be Calculated on Sixtieths until, say. £90 (or £78) Annuity is Reached, then on 120ths.— A similar prmBiole obtains elsewhere. Accordins' to " The Making of a Citizen: A Study in-Compara-

tive Education," a recent volue of the Con- 1 temporary Science series, the first 10 years' ' service in Germany give 15-60ths of salary as annuity, whereas after years add sixtieths — that is, 50 per cent, more for each of the first 10 years than for successive years. In South Australia an annuity of £52 is obtained after five years' service, but each additional year adds only £1 17s 6d. Type : An average salary of £420 will reach £90 (or £78) in 13 years, leaving 23 years (or more) to contribute, and annuity to accumulate in 120ths, giving an additional j £804. making £170£ Comparisons: Sixtieths ! for full time (36 years) is equal to £252; GOths, £189: 60ths and 120fchs. £170£. Eightieths give 11 per cent., and 60ths 48 per cent, more than the sliding scales. This will ease the fund by limiting annuities payable to high-salaried teachers, even more than the Government proposal of 80ths ; but, at the ,same time, it will secure a reasonable annuity to low-salaried teachers, who are, and always will be, the backbone : of the service. It will also provide a j higher retiring allowance ' than SOths for aIH who break down, early in their career. This modification will probably be objected to by many as inequitable. Is it? If so, to what extent? I propose that those leaving the service^ forfeit a percentage of the premiums paid. These forfeitures, plus interest on forfeited and withdrawn sums, oan be applied without injustice to maintaining the 60ths up to the limit indicated. • Low salaries will be subsidised by these naoneys, but, not the larger, which will overdraw to the extent their annuities are based on 6Qths. but will underdraw to the extent the-.'annuities are based on ■120ths ; ."- * , ' ' ' ■' 111. Annuity for service to those now teaching" to" be limited to a maximum of £90 {or £78),' which"' is not;' to be increased untjil that amount is- earned' through pay-, menfc of premiums. Type : Teachers now 60 years of age, , with an average salary of £240 "for 36 years, if ~ service alone, wereconsidered, would' be entitled on 60ths to £144; but, as these teachers have paid nothing, ,£9O (or £78), really a compassionate annuity, is as much" as the fund should be called upon to pay on their behalf. In^ the two funds established full service counts — indeed, low as the railway rates of payment are,- provincial service has actually been padded. This service basis is a source of weakness., and neither a 5- percent, nor a 5 per cent, "basis has a fair trial on this account. The result is high annuities are being paid to men. who have contributed nothing, or next to nothing, for what they aro receiving. IV. Minimum Age of Retirement to be 60 Years. — The Government actuary, in his adverse report; allows for"retirements after 36 years' service, j In many cases this would allow retirements at 56 and even under that age. V. Premiums to be Paid up to Time of Retirement, or at Least up to 60 Y^ars of Age; — These two modifications will very materially .-strengthen the fund. (1) The>-e will be up to 14 per cent., or more, premiums paid, which will accumulate at compound interests (2)^<During the years between 56, 00rr r even under, and ( the - time .of ~ retirement (which experience has proved to be, on an " average, v "over 63 years) no auunity is being paid, and the money that would .have. been, drawn will be accumulating''also, together "with the continued pre,miums. (3) In the interim there will be the percentage of deaths, which will be a decided relief to "the fund. ~ JFI. 'Next Year to be Limited to Those Who are Over 65; in 1907, to Those Now 64; in 1908, to Those Now 63; And So On Until 1911.— Those 60 now, and ' under 65, .to purchase from one to five years' contributing status, to qualify for immediate retirement, each year's premiums to add a year's increment to service annuity, which is not to exceed, say, the £90 (or £78) already- mentioned. VIL Service Previous' to 1877 Not To Count Towards Annuity for Service. — VI and VH will give immediate and also permanent relief to the fund because- many who are to come 'upon the fund immediately, or in the immediate future, are drawing large salaries. I, 111,, VI, VII, all aim at keeping down large annuities for which nothing has been, and little will be, ' paid. VIII. Forfeiture of a Percentage of Premiums When Contributors Leave the Service For Other Walks of Life.— As, the fund is running r.-sks'for contributors, it is only .reasonable that something more than interest should remain in the fund. Retiring before 10 years' service may qualify for 50 per cent, withdrawal of premiums; over 10 years' service, say, 75 per cent. IX. Part of- Scale , 2, "advocated as a j permanent contribution.— The- ' Government agreed to give Sbale~2.on conditions '.which have 'obtained. Committees have received 9d -of- the 2s 6d, and another 9d could be devoted to raising salaries of second assistants . and country teachers. . This more or 4ess has (been allocated, but more has to bs done. The remaining £6000, more or leas, would, represent, interest on -£171,000 (more or 'less) at 3i per j cent. • To this couid be aSded perhaps £40.000" of Scale 2, unallotted in 1902, 1903,- and 1904, making a capital of over £200,000. This amount alone would place the fund in an unassailable position, though it may not meet actuarial requirements. Taken, however, with some of the modifications I have suggested, actuarial requirements are approximately met. , Taking the Police Fund as a guide, the adoption of some of these modifications will give an ampie income to meet annuities of teachers, the £30 annuity to widows, and the 5s a week to orphans until 16 years of age is reached.

I X. Raise retiring age of women to 55. At 50 a woman reasonably anticipates living, say, 20 years; at 60 a man looks forward to 13 years. This, however, is a modification I do not lilce. I much prefer that separate funds should be established, seeing the conditions of service and benefits suggested to be> derived differ so widely. These modifications may or may not bf* worth considering — I think they are. And if my opinion is worth anything, and if the I Government really desires to help us, then the least that the Government can do is to see to what extent some of these modifications will overcome objections sufficiently to give us a reasonable scheme. There is another aspect of this question which is worth looking into. Competitive .companies are under expenses and outlays not required by a system of compulsory insurance such a* ours would be. The last balance sheet of the Government Instirance Department shows an expenditure of about £30,000 in tha way of expenses and bonuses. This has -to ba provided for out of income, and must necessaiily be provided for originally lluough premiums. Or take the last i balance sheet of the A.M.P. For 1903 the sum of was distiibuted as a cash

bonus, and the statement is made that since the establishment of the society nearly £11,000,000 has been distributed, providing a reversionary bonus of £22,000,000, though during the same time the society has had to pay in death and other matured claims some amount between £14,000,000 and £15,000,000. In a scheme such as ours we do not want to provide for large salaries and heavy advertising expenses, nor do we want a system of bonuses.

But we and the general public want educating on these and other questions cf professional, and therefore of edticational, interest. How can we accomplish our object? Organise! We live in an age of combinations, and no object affecting a body is achieved without a thorough organisation. Are we united? During the last year much has been done that has made for concerted action ; but we must be organised and educated more still before we can achieve our objects. There ie one factor which is helping us towards success, and that is the sympathetic action of the press towards us. At the present moment there is hardly a paper of repute that isn't standing by i- u s. 'But, good as the leading newspapers are, as they represent so many varied interests they cannot specialise on educational more than on any other subject, so it seem-5 to me that if we wish to have a highly efficient organisation we must have an educational journal entirely under our own control. —To do our work as an institute- as it ought to be done we must control a journal financially as well as editorially. In 1902 I went to considerable t'roiible .to get' estimates and tabulated results for the information of district institutes, but the executive in its wisdom gave no consideration to what I drew up, nor were institutes supplied^ with the information specially prepared ior them. As a result of my investigation I am convinced that a journal need -.not cost members more than 2s a year, and that in two or three years the advertising revenue would reduce the cost to Is 6d a year, or even less. This may' appear a small sum, but I have submitted the estimates to business men, who say that my figures ' are sound and may be taken as reliable. Our present position with regard to the educational journals is, to say the least, unsatisfactory, and it will remain so until we assume financial responsibility. With a printer simply fulfilling a contract, and an editor bound down to advocate the policy of the institute through thick and thin, wo shouldv and would, be able to brinpr pressure to bear upon public opinion which experience is proving simply requires to be enlightened. You will see that there are three- proposals before you concerning an official organ : Mine to establish a journal of our own ; another to bind ourselves to the proprietors of the Journal of Education; and the third to make th« Schoolmaster the official organ; to these. I would add a fourth, if my suggestion is not adopted: supply both existing journals with official information when thought necessary, but diselaijn all liability for editorial pronouncements. If the institute cannot see its way to establish an organ of its own, an organ which many of us would take an interest in making an effective educational aid, it should certainly not place a fictitious value uj>on a journal which many deem far inferior to its • rival issued at considerably less cost. I am speaking, __ of course, purely from a business* and- educational point of view. These journals are established as much for commereial^as for educational purposes. I have said' that an organ controlled by tihe institute is an indispensable adjunct to its effective workir-g.