College Plans for Retirement Income 9780231879941

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COLLEGE

PLANS

FOR R E T I R E M E N T

INCOME

C O L L E G E PLANS FOR RETIREMENT INCOME BY R A I N A R D B. ROBBINS

TAS-: .7541893

NEW COLUMBIA

YORK

UNIVERSITY 1940

PRESS

COPYRIGHT COLUMBIA

1940

UNIVERSITY PRESS, N E W

YORK

AGENTS: O X F O R D U N I V E R S I T Y P R E S S , Humphrey Milford, Amen House, London, E.C. 4, England, AND Β. I. Building, Nicol Road, Bombay, India; M A R U Z E N C O M P A N Y , L T D . , 6 Nihonbashi, Tori-Nichome, Tokyo, Japan FOREIGN

M A N U F A C T U R E D I N T H E U N I T E D STATES OF AMERICA

P R E F A C E

THIS IS a timely book. It does not pretend to deal with the whole field of "social security," but it does cover thoroughly one section of the field wherein a quarter century of experience has taught valuable lessons and where fresh problems are now coming into view. We seem to be entering upon a new phase in the development of retirement provisions for college and university staff members. One reason for this is that the effect of the Federal Social Security Act is beginning to be felt in several ways. This law, which provides benefits for persons engaged in most occupations other than agriculture and domestic service, excludes from coverage persons who are employed by educational, religious, and charitable institutions, even though they may be doing just the same kind of work their relatives and neighbors are doing for nonexempt employers. If colleges and universities continue to be excluded from the scope of the law, they will find themselves pressed (1) to inaugurate pension systems if they haven't already done so and (2) to extend pension systems that as yet provide for faculty members only, so as to provide also for their nonacademic employees. If, on the other hand, efforts to amend the Social Security Act succeed in extending its coverage to college employees, then all present college retirement plans will have to be revamped. A monograph review of retirement plans for college faculties compiled by Mr. Robbins was printed by Teachers Insurance and Annuity Association in 1934. For three or four years the demand for this publication showed that something of the kind was needed and proved that the monograph was useful. Later it became clear that the 1934 study should be brought up to date and very considerably extended. Mr. Robbins has done this in the present volume. He has here abstracted all obtainable information regarding retirement plans of colleges and universities in the United States and Canada. Although a number of colleges have failed to furnish information,

PREFACE

vi

it is probable that most of the delinquents had no plans and no information to supply. The study may, therefore, be regarded as a reasonably complete and comprehensive survey carried up to the close of the year 1939. The book is timely because it facilitates the discussion of problems that now face many college officers, and it should be welcomed because it presents material which, so far as I am aware, has not been so fully assembled in any other publication. But it is more than a mere synoptic display of factual material. Mr. Robbins has been a student of pension systems both inside and outside the college for a number of years and has had exceptional opportunities in his work for the Teachers Insurance and Annuity Association to observe the virtues and defects of the existing college systems. His discussion (to be found in Part I I ) of various questions of policy and expediency that arise when a college inaugurates a new retirement plan or during the course of its administration should prove to be not the least interesting and useful portion of the book. I should like to repeat what I said in 1934 when Mr. Robbins published his first monograph. It is the essence of a pension system that it sets in motion processes which thenceforth lead automatically to very large results. An excellent system produces beneficent results not only for the institution but also for ever-increasing numbers of its servants. Similarly, the consequences of a defective system may become truly formidable. We are far from having reached the stage at which we can afford to neglect the constant scrutiny of the still imperfect body of experience and doctrine that is at our disposal. New York August 15, 1940

HENRY JAMES

President, Teachers Insurance and Annuity Association

CONTENTS Preface, by Henry James Part I:

ν The Status of

College Plans for Retirement

Income

Outline and Statistical Summary Contributory Plans Using Retirement Annuity of T.I.A.A

3 Contracts 6

Classes of Staff Members Covered Maintenance Employees (6)

6

Required and Voluntary Participation

7

Waiting Period

7

Contributions

8

Retirement Age

9

Prior Service Benefits

9

Carnegie Foundation Retiring Allowances

11

T.I.A.A. Retirement Annuity Contracts Contractual provisions (12); Additional premiums (12); Death benefit (13); Change in maturity date (13); No forfeiture; no penalties (13); Property of staff member (13); A specialpurpose contract (14)

11

Draft of Retirement Resolution Participation (14); Retirement ( I S ) ; Extension of service ( I S ) ; Contributions ( I S ) ; Leave of absence (16); Contracts (16); Supplementary benefits (16); Amendment (16); Effective date (17)

14

viü

CONTENTS T.I.A.A. as a College Life Insurance Company

17

Contributory Plans Using Contracts of Other Life Insurance Companies

18

Contributory Plans Which Accumulate Their Own Funds . . . .

19

Plans Included in Broader Retirement Systems for Public Employees and Religious Workers Coverage (20); Withdrawal benefits (21)

19

Retirement Plans for Religious Workers

21

Noncontributory Plans

22

Carnegie Pensions Only

23

The Carnegie Foundation for the Advancement of Teaching

23

Present Rules

23

Historical Sketch Rules of 1906 (25); Amendments of 1909 (26); Amendments of 1918 (27); Amendments of 1922 (28); Amendments of 1929 (28)

24

Carnegie Corporation Annuities

29

Descriptions of Retirement Plans Part II:

29 Evolution

of

College Plans for Retirement

Income

Early Developments

137

Carnegie Pensions

137

Teachers Insurance and Annuity Association

139

Desirable Provisions of Retirement Plans

141

Purpose of a Retirement Plan

141

Source of Support

143

Responsibility for Retirement Planning

144

Participation

145

Preliminary Service Period

147

CONTENTS

ix

Optional or Compulsory Participation

148

Retirement Age

149

Contributions, Benefits, and Methods of Funding Relation of contributions and benefits (154); Self-funded plans (157); Nonfunded plans (158)

152

Past Service Benefits

159

Withdrawal, Death, and Settlement Provisions Settlement provisions (161); Withdrawal provisions (162); Withdrawal provisions of public retirement plans (165)

161

Restricted Withdrawal Benefits in Private Plans

170

Death Benefits While in Service

171

Widows' Benefits

172

Disability Retirement

172

Attitude toward Retirement Plan of Social Security Act

173

Summary

179 Appendices

I. Synoptic Schedule of Teachers Insurance and Annuity Association Plans II. Educational Institutions Having Contributory Plans Using Contracts of Other Insurance Companies . . . . III. Educational Institutions Having Contributory Plans Which Accumulate Their Own Funds IV. Plans Included in Broader Retirement Systems for Public Employees and Religious Workers

183 226 226 227

V. Noncontributory Plans

230

VI. Carnegie Pensions Only

230

VII. No Plan

231

VIII. No Information

235 Index,

239

PART I THE

STATUS

FOR

OF

COLLEGE

R E T I R E M E N T

PLANS

INCOME

O U T L I N E AND S T A T I S T I C A L S U M M A R Y the beginning of the century much thought has been given to systematic provision of retirement income for college faculties. A few institutions took initial steps in this direction even earlier. With the cooperation of college officers the writer has undertaken to gather the facts regarding college plans for retirement income in effect at the close of the year 1939. These are set down in the pages that follow, along with historical notes regarding those plans that have had distinctive evolutions. Because the words "college" and "university" have been used rather loosely, it was necessary at the inception of this study to determine the classes of institutions to be covered. It seemed desirable to include only institutions authorized to grant degrees equivalent to at least the bachelor of arts degree upon the completion of a fouryear course of study. We finally decided to include institutions, other than teachers' colleges, that are listed as colleges and universities in the World Almanac, those approved by any of the five regional accrediting associations in the United States, those accredited by the Association of American Universities, and those with similar standards in the provinces of Canada. A few other institutions of college grade that use contracts of Teachers Insurance and Annuity Association were included. Only those teachers' colleges were included that make use of T.I.A.A. contracts or are covered by plans that extend to other colleges and universities and are accredited by the American Association of Teachers Colleges. Teachers' colleges as such were omitted, because they are usually associated with public school teachers, so far as provisions for retirement income are concerned, rather than with colleges or universities. These provisions have been carefully reviewed repeatedly by the Research Division of the National Education Association of the United States, its latest analysis having appeared in January, 1939. SINCE

4

OUTLINE

AND

STATISTICAL

SUMMARY

We recognize that this determination of institutions to be covered is open to criticism; however, it avoids even more arbitrary decisions. A number of institutions operated by religious organizations are listed as having no provisions for retirement income. Yet many of their staff members look forward to care in old age through payments in kind. Borderline cases have been encountered that are difficult to classify. Many colleges that have no formal arrangements for retirement income deal individually with staff members who must be relieved of all or part of their regular duties because of age. Similar treatment of successive cases has established a precedent in some institutions. Others have arranged part-time work with part pay for elderly staff members. For such cases we have tried to state the facts; but our information is incomplete on this point. S T A T I S T I C A L S U M M A R Y OF COLLEGE PLANS FOR R E T I R E M E N T INCOME (United States, Canada, and Newfoundland, Dec. 31, 1939) CLASSIFICATION

INSTITUTIONS

TEACHEKS (Approximate number)

Contributory plans using retirement annuity contracts of T.I.A.A.

188

35,820

Contributory plans using contracts of other life insurance companies (three covering maintenance employees only)

24

7,050

Contributory plans which accumulate their own funds (two covering maintenance employees only)

6

3,800

Plans included in broader retirement plans for public employees and religious workers

96

15,780

Noncontributory plans (one covering maintenance employees only)

37

6,200

8

1,470

No plan

Carnegie pensions only

290

19,000

No information Deduct for duplications

128 22

6,200 10,820

755

84,500

O U T L I N E AND S T A T I S T I C A L SUMMARY

5

The extent of this study is indicated in the statistical summary of present conditions on page 4. In the year 1934 T.I.A.A. published a review, somewhat similar to this study, entitled Retirement Plans for College Faculties (now out of print), which began with a tabulation resembling this one in many respects. However, the figures in these tabulations are not closely comparable, because the studies were not identical in scope. For this reason the earlier figures are not reproduced here, but we can deduce that during the past 6 years at least 83 colleges and universities have adopted T.I.A.A. contracts, while 19 institutions have inaugurated retirement plans that use contracts of other life insurance companies. Of the 14 institutions at which Carnegie pensions only were expected in 1934, 6 have inaugurated retirement plans. With respect to college plans included in broader retirement systems the figures in the 1934 tabulation and the present one are not comparable, because the current study includes many teachers' colleges and some other institutions which may have been covered by such plans in 1934, but which were not included in the earlier study. Institutions coming under each of the classifications shown in the above tabulation are listed in appendices under appropriate headings. Some institutions are on more than one list. The list of institutions that make use of contracts of T.I.A.A. appears as a synoptic schedule which tabulates variations of the plans at different institutions with respect to some half dozen items of common interest. Brief descriptions are given of all plans other than those making use of T.I.A.A. contracts and of plans in this latter group that have unusual characteristics or histories. These descriptions are arranged by the names of the institutions in alphabetic order. Whenever information was available, we covered in this study provision for retirement for all classes of workers. We have tried to use the words "employees," "staff members," and "workers" interchangeably for teachers, administrative officers, and maintenance employees, but in writing descriptions and constructing items for the synoptic schedule we have occasionally yielded to the desire of a correspondent by adopting a more specialized use of these terms. We trust that the context may lead the reader aright in these cases.

Τ.I.A.A.

6

PLANS

While we have tried to cover retirement provisions for all classes of employees, we have probably not been completely successful, especially with respect to tax-supported institutions; but it is hoped that any omissions in this respect are minor. C O N T R I B U T O R Y PLANS USING R E T I R E M E N T A N N U I T Y C O N T R A C T S OF T.I.A.A. T H E S E PLANS have much in common because many features that would otherwise require attention in their formulation are determined by provisions of the retirement annuity contracts that are purchased for the funding of prospective benefits. Features of most common interest that vary from plan to plan are described briefly by statements in the synoptic schedule, Appendix I. These statements were necessarily abbreviated to keep the schedule within manageable length, and some general comments may be helpful. CLASSES OF STAFF MEMBERS

COVERED

Inspection of the schedule will show at once that, of the various classes of staff members, faculty groups are most generally covered. Administrative officers are usually classed with faculty members in provisions for retirement. Administrative staff members who do not rank as officers are sometimes classed with officers and sometimes with maintenance employees. Retirement resolutions of many institutions designate by title the members of the administrative staff to be covered, and a number of them empower the president to extend coverage to other individuals from time to time. In many institutions administrative officers rank as faculty members and are thus covered by retirement resolutions that are worded to apply only to faculty members. In some institutions instructors are not members of the faculty. Many retirement plans apply only to teachers above the rank of instructor; others include instructors after a preliminary service period, while perhaps a growing proportion of institutions make no distinction between instructors and teachers of higher rank. is difficult to tell from the information available just how much attention is being given to maintenance employees so far as retirement benefits are concerned. A number Maintenance

employees.—It

Τ.I.A.A. PLANS

7

of retirement plans seem to extend participation to all "employees" or to all "staff members," but when participation is voluntary many nonfaculty employees fail to take advantage of the opportunities offered. Furthermore, qualification requirements are often more stringent for maintenance employees than for others. Of the institutions using T.I.A.A. contracts, 27 provide old-age income for maintenance employees, and perhaps the majority of T.I.A.A. plans cover some nonacademic employees holding key positions.1 REQUIRED

AND VOLUNTARY

PARTICIPATION

The synoptic schedule shows that in 68 institutions participation in the contributory plan is voluntary for all eligible staff members and in 116 institutions participation is required of some classes of staff members. It seems significant that obligatory participation is characteristic of most of the plans established in recent years and that a number of larger institutions required the participation of staff members who were already in service when the plans were inaugurated. WAITING

PERIOD

Perhaps these plans vary more with respect to the preliminary service period than in any other way. An individual may not be required to participate in a plan until he has completed a specified period of service, even though the employing institution may be ready to share with him in making contributions earlier. On the other hand, the completion of a period of service may be a condition precedent to contributions by the institution for the credit of the individual. After the completion of a preliminary service period participation may be either required or optional. In a number of institutions waiting periods are required of instructors only. Some institutions make joint participation optional to 1

T h e wording of the retirement plans of 53 institutions in other classifications indicates coverage of maintenance employees; 33 of these institutions are publicly administered; 7 have noncontributory plans. Coverage for maintenance employees is clearly more general in publicly than in privately administered institutions. At least 5 privately administered institutions other than those using Τ.ΙΛ-Α. contracts have separate carefully constructed retirement plans for maintenance employees. We do not know just how nearly complete this coverage is in plans of other privately administered institutions.

8

Τ.I.A.A.

PLANS

members after a short period of service, but compulsory after a longer period. A number of plans waive the waiting period with respect to anyone who comes from another institution where he has participated in a similar plan. This is not mentioned in the schedule items. CONTRIBUTIONS

A large majority of these plans require each participant to contribute 5 percent of his salary and provide for equal contributions from the employing institution. A number of plans place an upper limit on the institution's contributions, these limits usually ranging from $200 to $400 a year. Under some other plans which place no limit on the regular annual contribution, institutional contributions cease when the benefit already purchased reaches a certain amount, usually ranging from $1,500 to $4,000 a year. A few "matching" plans call for contributions of less than S percent, and some plans require the contributions needed to purchase a predetermined annuity. A few institutions are convinced of the inadequacy of contributions of 5 percent matched. Among these, as may be noted from the schedule, are Babson Institute and Union Theological Seminary. Some others are considering what they can do, with budget difficulties what they are, to bolster retirement benefits. Several publicly administered institutions are barred by statute restrictions or legal rulings from contributing along with staff members toward the purchase of retirement annuity contracts. Occasionally an institution has made increases in salary at the inauguration of a retirement plan with the understanding that each recipient shall contribute 10 percent of salary toward the purchase of a retirement annuity. In such cases newcomers understand that the whole of the contribution for retirement benefits is to come from their salaries. A number of the voluntary plans inaugurated some years ago provide that the institution shall match contributions of the participant "up to S percent of salary." Under such a plan contributions can apparently be anything up to 5 percent of salary; but in actual practice they are nearly always the maximum in such cases. Many plans provide that during leave of absence on part pay the institution will make contributions in full providing the participant does likewise.

Τ . I . A . A . PLANS RETIREMENT

9

AGE

Retirement age under T.I.A.A. plans usually ranges from 65 to 70 years. A few make retirement optional at 60; a few provide retirement for women at an earlier age than for men. By far the most common arrangement is a "normal retirement age" of 65 years, with provision that upon special vote of the governing body service may be continued one year at a time after the end of the academic year in which age 65 is attained. Of the 188 institutions using T.I.A.A. contracts, 95 have chosen 65 years as the normal retirement age and 21 have chosen 70 years; at least 33 institutions require retirement at age 70; a few make clear that retirement is required at age 65, while 23 do not even state a retirement age. In a number of retirement plans normal retirement age is 70 years for those who were nearing retirement when the plans were inaugurated and 65 years for newcomers, with a gradual scaling of this figure from 70 to 65. It should be noted that when T.I.A.A. contracts are used an age of optional retirement is of little importance so far as individual choice is concerned unless supplementary benefits in recognition of services prior to the establishment of the plan are involved. A member may retire at his pleasure, without regard to the retirement age stated by the plan, and have annuity payments to him begin at once if he so desires. Of course, an early beginning of annuity payments involves substantial sacrifice in the size of payments. To the institution, normal retirement age is important as the age beyond which continuation of service is not automatic. Only by special action of the governing body will service be continued beyond this age, and each case of continued service will usually be subject to reconsideration annually. PRIOR SERVICE

BENEFITS

Many retirement plans provide special benefits in recognition of service at the institution prior to the inauguration of the plan. Whenever these can be stated briefly and with essential accuracy, they have been recorded in the synoptic schedule. In other cases separate descriptions are included in the text. The absence of reference to a provision for supplementary benefits in the synoptic schedule

10

Τ . I . A . A . PLANS

means that the formal statement of the retirement plan contains no such provision. However, the college may have a separate formal method of recognizing service prior to the inauguration of the contributory plan, or it may make special provision for individuals who were advanced in years when the contributory plan was inaugurated. Supplementary benefits of this type are usually paid periodically by the college from current revenues. A number of institutions have special funds for this purpose, and a few have purchased retirement annuity contracts either by periodic premiums or single premiums. Budgetary difficulties have made this method seem impossible or inadvisable in most cases, so that a number of institutions look forward to comparatively heavy drains on current revenues in payment of pensions—these to continue for a number of years. Some years ago the tendency was to supplement the annuity purchased with regular joint contributions to such an extent that the total retirement benefit should be half of final salary or of an average salary. Another method was to supplement the annuity, if necessary, so that the total benefit should be a fixed amount, such as $1,200, $1,500, or $2,400 a year. These additional benefits were offered only to those in service when the plan was inaugurated so that under both of the methods just stated there might be a substantial difference in treatment in years to come between those who were engaged before and those who were engaged after inauguration of the plan. Furthermore, neither arrangement takes account of length of service prior to the inauguration of the plan, and the second plan ignores salary. Many plans inaugurated in recent years have provided a supplementary benefit consisting of a fixed percentage of salary when the plan was inaugurated for each year of service prior to the inauguration of the plan. With the thought that such supplementary benefits are to make retirement practicable, rather than to pay close attention to possible equity, a number of plans count only those years of service after attaining age 30, 35, or 45, and a limiting provision is frequently included that the supplementary benefit shall not operate to make the total retirement benefit more than a stated sum each year or a fixed percentage of salary.

Τ.I.A.A. CARNEGIE

FOUNDATION

RETIRING

PLANS

11

ALLOWANCES

The adoption of contributory retirement plans making use of T.I.A.A. contracts was suggested and encouraged by the Carnegie Foundation for the Advancement of Teaching, and the retiring allowances furnished by this foundation facilitated the adoption of such plans. In many cases these allowances served as supplementary benefits in recognition of past service and thus made contributory plans attractive to older staff members. No study of provisions for retirement benefits by colleges and universities would be complete without a description of the Carnegie Foundation allowances, and furthermore it is difficult to understand some of the peculiarities of the plans of particular institutions until these are related to the foundation's allowances. Such a description is therefore incorporated in this study (see page 23). T.I.A.A.

RETIREMENT

ANNUITY

CONTRACTS

We return now to the common characteristic of retirement plans of this group—brought about by the fact that contributions are in all cases applied as premiums for retirement annuity contracts that have identical provisions. Many provisions of the plans that would otherwise require explicit statement are determined by the nature of these contracts with a third party, so that neither the college nor the staff member has power to vary them. Each participant owns an individual contract with the insurance company. The employing institution is not a party to these contracts; T.I.A.A. has no contract with any college or university. The retirement plan is an agreement between the college and its staff members. This document should cover all details of the arrangement that are not determined by the retirement annuity contract, including the statement that contributions shall be applied as premiums for such contracts. As already pointed out, the college usually shares in premium payments for these retirement annuity contracts despite the fact that it is not a party to the contracts. It is interested in doing this in order to facilitate its parting with superannuated staff members. College officials have learned to their sorrow how difficult it is to free themselves from superannuated workers unless these workers can look

12

Τ.I.A.A.

PLANS

forward to at least modest incomes. They are also conscious of the dangers inherent in the payment of retirement benefits out of current college funds. Hence they favor the annuity method of eliminating the problem of providing retirement income by contributing during working years to help make the staff member independent in retirement. When retirement age is reached, employment merely ceases; the college has no further responsibility; and the income of the individual is shifted from compensations for college service to annuity payments from the life insurance company. Part of what has just been said applies to various methods of providing retirement income. T.I.A.A. contracts are almost unique in that they provide nothing for the staff member himself except annuity payments. The absence of provisions for lump sum settlement to the staff member at any time and the absence of provision for borrowing with the contract as security assure the college that it can contribute toward the purchase of annuity benefits with no danger that the staff member will thwart its purpose by mortgaging or liquidating the contract. On the other hand, the staff member has a contract that does not even mention his employer. All of his rights under this contract are independent of whether or not he continues with the college. Contractual provisions.—This annuity contract recites that in consideration of the payment of designated premiums T.I.A.A. will make stated annuity payments to the staff member, called the "annuitant," beginning when he reaches a stated age and continuing until his death. Until annuity payments begin, premiums are accumulated at compound interest and this accumulation is the basis of all benefits provided by the contract. The interest rate is 4 percent for contracts issued prior to January 1, 1928, 3^2 percent for those issued thereafter until January 1, 1936, 3 percent for those issued between this date and December 1, 1938, and 2 l / 2 percent for contracts now being issued. Under contracts issued prior to January 1, 1936, the whole of each premium is accumulated; under those issued since that date 96 percent of each premium is accumulated. Accumulation begins on the due date of each premium. Additional premiums.—The annuitant has the right to increase regular premiums or to pay additional premiums of $100 or more,

Τ.I.A.A.

PLANS

13

with the restriction in recently issued contracts that the total benefit under all contracts with T.I.A.A. shall not be more than $500 a month as a single life annuity beginning at age 65. Policies issued since April, 1932, provide that additional premiums and increases in regular premiums shall purchase at the rates current for new contracts at the time the additional premium or the first of the increased premiums is paid. Death benefit.—If the annuitant should die before his annuity payments begin, the full accumulation to the credit of the contract is the basis of a benefit payable to a named beneficiary or to the estate. The annuitant may choose between a number of different income methods of settlement or leave this choice to be made by the beneficiary. Change in maturity date.—If the annuitant prefers a date different from that stated in the contract for the beginning of annuity payments, he may have the contract changed accordingly, with the limitation that he may not be permitted to delay settlement beyond age 70. He may choose a single life annuity, a joint and survivor annuity, or an installment refund annuity, and he may make this choice at any time before annuity payments begin. Upon death of the annuitant after annuity payments begin, the settlement, if any, depends, of course, upon the form of settlement that was chosen by the annuitant. No forfeiture; no penalties.—If payment of premiums is discontinued at any time, the rights and privileges of the annuitant are exactly the same in kind as they would have been had premium payments been continued, and all benefits are based on the full accumulation with respect to premiums already paid. There is no penalty for discontinuing premium payments except that, if it is desired to resume payments, the intervening premiums must be paid with interest from their various due dates to the date of payment. Property of staff member.—As already stated, the contract belongs to the staff member, so that if his employment relations are broken he carries his contract with him and may continue premium payments "on his own," or he may induce a subsequent employer to share in these payments. And, even if misfortune necessitates discontinuance of premium payments, as stated above, the nature of

14

Τ.I.A.A.

PLANS

the contract remains the same and no loss is entailed witn reference to the accumulation created by premiums already paid. A special-purpose contract.—This form of contract was devised when T.I.A.A. was organized in 1918 for the particular purpose which it now serves—the funding of college retirement plans—and it is worthy of note that after 20 years of experience with it no essential changes in its general outline have seemed desirable. It takes the colleges out of the retirement income business and does so with assurance to the college that its objectives will not be thwarted and with assurance to the staff member that his provision for retirement income is independent of the fortunes of his employer. It improves our educational standards by providing for the withdrawal of superannuated staff members and does so in such a way as to facilitate the free interchange of professional talent between different colleges. DRAFT

OF RETIREMENT

RESOLUTION

Because retirement plans making use of T.I.A.A. contracts usually follow a single pattern, it is possible to draft a resolution for the inauguration of such a plan, which may suggest to the reader many of the problems that should be faced if best results are to be obtained. T.I.A.A. has published such a draft in a pamphlet entitled Planning a Retirement System, along with a discussion of various problems that come up for consideration in formulating a retirement plan. With slight modifications this draft is reproduced below because it is, in a sense, a composite of the legislation adopted by college governing bodies in inaugurating nearly 200 retirement plans. I. Participation.—A retirement plan is hereby established which shall apply to (The eligible group may be defined as desired.) Participation shall be required of eligible persons employed after the effective date of this plan upon the completion of years of service and shall be optional upon completion of years of service; for an employee who comes from an institution where he has participated in a similar plan and who has a retirement annuity contract in force, participation shall be optional from the beginning of service and required as indicated above.

IS

Τ . I . A . A . PLANS

Eligible persons who have completed years of service on the effective date of this plan shall participate immediately; other eligible persons employed on the effective date of this plan shall participate upon the completion of years of total service, participation by them being optional upon the completion of years of service.® II. Retirement.—Except as provided in Section III, all staff members, whether participants in this retirement plan or not, who have attained age 70 at the end of the academic year 1940-41®, shall retire at that time and all others shall retire at the end of the academic year in which they attain normal retirement age as herein defined. R E T I R E M E N T A G E R E L A T E D TO A G E W H E N P L A N IS I N A U G U R A T E D ACE

LAST

BIRTHDAY ON

JULY

1,

1941

NORMAL 4

(INCLUSIVE)

67-70 64-66 61-63 58-60 55-57 54 or less

RETIREMENT ACE

70 69 68 67 66 65

III. Extension of service.—By special vote of [the body that has the power to make appointments] extensions of service beyond normal retirement age may be made for definite periods, but no such extensions shall postpone retirement beyond the end of the academic year in which age is attained. IV. Contributions.—Each participant in the retirement plan shall contribute, to the nearest dollar, % of his monthly compensation as premium for a retirement annuity contract 2

It may or may not be desirable to distinguish between those employed before and those newly employed after the plan is inaugurated, and to require participation of those in the former class who have completed the preliminary service period only if and when their salaries are increased. Distinctions may be desirable between professional and nonprofessional employees. 3

Adjust to year retirement plan is inaugurated.

4

Adjust to year retirement plan is inaugurated.

Τ . I . A . A . PLANS

16

issued by Teachers Insurance and Annuity Association on his life; shall deduct such contributions from Name of Institution

salary payments, add equal amounts as its contribution and forward these combined sums to Teachers Insurance and Annuity Association as premiums on the above-mentioned retirement annuity contract. V. Leave of absence.—During leave of absence on part pay will continue contributions on the Name of Imtitution

basis of full salary providing the participant does likewise. VI. Contracts.—Each retirement annuity contract written in accordance with this plan will be the property of the individual participant; the contract is between the participant and the insurance company. VII. Supplementary benefits.—Upon retirement at normal retirement age of a participant who had passed age on the effective date of this plan plans but does not Name of Institution

promise to supplement the annuity supported by contributions provided in Section IV hereof by monthly payments to the participant of percent of salary on the effective date of this plan for each year of service after the college year in which age was attained and prior to the effective date of this plan, or to age 70 if earlier [less any payments that may be available from the Carnegie Foundation for the Advancement of Teaching or may be purchased by the Carnegie Corporation of New York] 6 ; but no such supplementary benefit shall result in a total retirement allowance, including annuity payments from contracts provided in Section IV, of more than $ a year. VIII. Amendment.—Except as may be otherwise provided in its contracts with individuals, reserves Name of Institution

the right to discontinue its contributions toward retirement annuity premiums at any time. 6 To be added where some of stafi are entitled to benefits from the Carnegie Foundation.

17

Τ.I.A.A. PLANS

IX. Eßective date.—The effective date of this retirement plan shall be July 1, 1941." T.I.A.A.

AS A COLLEGE

LIFE

INSURANCE

COMPANY

Because T.I.A.A. was brought into existence to develop the contractual provision of retirement income for college staff members and because this company has been more effective in this field than all other life insurance companies in the United States together, it seems appropriate to describe it briefly at this point. T.I.A.A. was clearly a philanthropic venture of Andrew Carnegie, made possible by a gift of $1,000,000 from the Carnegie Corporation of New York, to place the provision of retirement income for college faculties on a contractual basis supported by joint contributions of colleges and their staff members. Its historic background is described more fully on page 139. T.I.A.A. is a life insurance company incorporated in the State of New York. It has no soliciting agents, but sells life insurance and annuity contracts largely by use of the mails. With the exception of a collective insurance plan, its policies are available to individuals without reference to any institutional plan of action. Yet a large majority of its retirement annuity contracts are issued in connection with plans for retirement income that are supported in half by the employing colleges and universities. Until the year 1936 overhead expenses of T.I.A.A. were paid from the income on the original gift of $1,000,000 and from additional gifts made year after year by the Carnegie Foundation or by the Carnegie Corporation. Policies were issued with the understanding that policyholders would be called upon to pay no part of overhead expenses. Since 1936 T.I.A.A. has received a further gift of $6,700,000 from the Carnegie Corporation, and there is no longer any expectation that further support will come from this source. No change has occurred and none is contemplated in the association's method of doing business or in the clientele which it serves. It is, as it has been from the beginning, an instrumentality for the contractual funding of college retirement plans and any other service a life insurance company may render to a college and its staff members. 6

Adjust to year retirement plan is inaugurated.

18

PLANS

OF O T H E R

COMPANIES

C O N T R I B U T O R Y PLANS U S I N G C O N T R A C T S OF OTHER L I F E INSURANCE COMPANIES A FEW or THE COLLEGES that use annuity contracts of commercial companies in the funding of their plans for retirement income permit staff members to choose their own companies within broad limits. Others limit contracts to a single company or to only a few companies. Further details appear in the descriptions of these plans and the institutions of this group are listed in Appendix II. It is important to distinguish between the plans making use of individual retirement annuity contracts and those that are funded through group annuity contracts. The plans using individual retirement annuity contracts usually follow the same general outlines as those with T.I.A.A. contracts. When a group annuity contract is used, practically the whole of the retirement plan is incorporated in the contract, which is between the college and the insurance company. This method is much less flexible than the use of individual contracts. When a staff member withdraws from service, he usually has no choice but to accept a settlement in the form of cash, although occasionally an annuity is available. The individual cannot carry on alone or continue his coverage through a new employer. On the other hand, premiums are discontinued during breaks in compensation payment and resumed without reference to the break when employment is resumed, while this is not usually permissible if individual contracts are involved. Perhaps it should be pointed out here that a number of institutions using contracts of T.I.A.A. make occasional exceptions for special reasons by sharing with staff members in the purchase of individual contracts with commercial companies. It has not been feasible to mention this fact consistently in the schedule of information regarding T.I.A.A. plans. The more general statement is probably justified—that in the operation of many of these plans involving individual contracts exceptions of one kind or another are made, and the flexibility thus introduced is advantageous if kept under control.

PLANS IN BROADER

SYSTEMS

C O N T R I B U T O R Y PLANS W H I C H

19

ACCUMULATE

T H E I R OWN F U N D S of this group of institutions have been substantially thinned in recent years. At present only 6 remain, as listed in Appendix III. Among the institutions that have abandoned this method, at least for new appointees, are Harvard, Yale, Wellesley, and Simmons, all of which have turned to contracts of T.I.A.A. THE

RANKS

PLANS I N C L U D E D IN BROADER SYSTEMS FOR PUBLIC

RETIREMENT

EMPLOYEES

AND RELIGIOUS WORKERS EXCEPTION of religious workers and public employees from the coverage of the Social Security Act has increased interest in state, municipal, and institutional retirement plans. A growing number of these plans cover employees of colleges and universities. Several are merely pension plans requiring no contributions from members. Others are contributory plans, many of which are carefully constructed and are rendering valuable service. They are all listed in alphabetic order in Appendix IV (A) and are numbered serially. The colleges covered by these plans appear in 3 lists shown in Appendices IV (Β), IV (C), and IV ( D ) , and opposite the name of each college is the serial number of the retirement plan that covers its staff members. Descriptions of the plans appear along with those of other college plans, easy reference being available through the general index. Little need be said about the noncontributory, nonfunded pension promises of institutions listed in Appendix IV(B). They are usually not taken too seriously by most prospective pension recipients, partly because an employee must remain in service covered by the plan until retirement if any benefit is to be received. But the contributory plans for public employees covering staff members of colleges and universities listed in Appendix IV (C) justify careful study. The provision common to all is an income benefit upon retirement. As a rule this benefit varies with salary, THE

20

PLANS

IN

BROADER

SYSTEMS

number of years of service, and age at retirement. About half of it is usually supported by member contributions, and the other half by the state or municipality. A disability pension is usually included, this being supported by the public employer alone. In case of death while in service the beneficiary or other representative of the deceased usually receives member contributions with interest, and in many systems this is augmented by an amount equal to salary for a half year or a year. Optional forms of settlement are usually available upon retirement. A number of plans permit choice between an annuity ceasing at death, a reduced annuity with the provision that payments shall continue throughout the life of the retirant and as much longer as may be necessary in order that the sum of annuity payments shall be as large as the accumulation to the credit of the individual when income payments began, or a reduced annuity payable until the death of the last survivor of the annuitant and his spouse. Participation in these plans is usually required of newcomers. Benefits in recognition of past service are provided for those in service at the inauguration of a plan who choose to participate, and this is usually sufficient incentive to bring most such employees into the plan. Coverage.—A number of these state and municipal plans apply to teachers only, while others apply to all classes of employees. A number of cities and states have separate retirement systems for teachers and for other employees. A number of teacher systems apply only to teachers in schools below the college and the university level. In some states teacher systems apply to teachers' colleges, but not to state universities. In some cases the state colleges and universities have requested exemption from teacher retirement systems, because they preferred to have retirement plans of different types. Some of these use contracts of T.I.A.A. It should be remembered that in this study only those state and city retirement plans are described that apply to at least part of the staff members of a university or a college. Those that apply only to teachers' colleges and to public schools are omitted. In some cases teachers of a publicly administered college or university are covered by a teachers' retirement plan, while other employees are

PLANS

IN

BROADER

SYSTEMS

21

covered by a plan for public employees of the state or the city. These contributory plans are largely a development of the last 25 years. Extensions to college staff members have been recent in a number of retirement systems that were established many years earlier. Withdrawal benefits.—While it is usual under these contributory plans to arrange that retirement benefits corresponding to current service shall be supported approximately half by the employer and half by the employee, it is also usual to provide that a withdrawing employee shall not profit by employer contributions. Under nearly all contributory retirement plans for public employees a withdrawing employee may take with him an amount equal to the contributions he has made, accumulated at a stated rate of interest up to the date of his request for payment to him. Most of these plans provide for no other form of settlement when the employee withdraws, and a number of them discourage delaying this settlement for more than 5 years after withdrawal from service. The Wisconsin State Retirement System is a striking exception to this rule, as may be noted from its description. While this plan offers lump-sum payment of accumulated member contributions upon withdrawal from service, it permits these accumulations to remain to the credit of the individual to support annuity payments, and, except for an individual who leaves the state before attaining 36 years of age or who joins the Milwaukee public school system, the equity established by state contributions is preserved to furnish annuity benefits for the withdrawing individual. The annuity thus supported cannot begin before the individual has reached the age of SO. RETIREMENT

PLANS

FOR RELIGIOUS

WORKERS

No general discussion will be given of retirement plans of this class because college staff members are usually only incidental in their membership and because only a small number of colleges have made definite arrangements to share with staff members in making contributions to support retirement benefits. The institutions in question are listed in Appendix IV(D). Like the retirement plans for public employees, these plans are usually administered by organizations created for the purpose and closely associated with the parent religious insti-

22

NONCONTRIBUTORY

PLANS

tutions. Also, as with the public-employee plans, benefits usually extend beyond retirement annuities for staff members, and the liabilities undertaken are not so clearly defined as would be necessary if contracts of a life insurance company were involved. A fundamental difference between the plans for public employees and those for religious workers is that the public authority has the taxing power, while a religious institution can only request its members to contribute—it cannot demand support. Difficulty was experienced in getting precise information as to the relations between these colleges and the respective religious organizations with which they are associated. Repeatedly college officers stated that their staff members or faculty members were eligible to participate in particular retirement plans of religious organizations. But failure to give full information suggests that most of these colleges have not taken action to establish definite retirement plans utilizing this proffered cooperation. Whether the college contributes in a systematic manner, what classes of staff members are eligible, whether the college requires participation if it contributes, whether or not the college has determined upon a retirement age or considered supplementary benefits in recognition of earlier service— such information is usually not forthcoming, and this indicates that, with the exception of a small number of colleges that have made definite formal arrangements, the functioning of these retirement plans for religious workers is only sporadic so far as college staff members are concerned. The result is that at some colleges listed under the heading "No Information" arrangements may be available for retirement benefits under plans for religious workers. NONCONTRIBUTORY

PLANS

covers a wide variety of pension schemes. Some plans are formal and definite despite the fact that separate funds are not usually held for their support. Others are little more than the expression of wishful thinking. It is difficult to classify them further, and the reader will be left to judge as to their value from the descriptions that are given. Many descriptions give all the information available, brief though they are. The institutions here involved are listed in Appendix V.

THIS

CLASSIFICATION

CARNEGIE

FOUNDATION

23

C A R N E G I E P E N S I O N S ONLY of the Carnegie Foundation for the Advancement of Teaching under which retiring allowances are provided for members of college faculties are described in the next section. A quarter of a century ago these rules constituted the major plan for retirement income of college staff members. While the list of individuals who may look forward to Carnegie retiring allowances has been closed for many years, some professors in each of a large pumber of colleges and universities are included, even though the institution may have long since laid more comprehensive plans for retirement income. All such institutions are indicated in Appendix lists by reference marks or letters explained in footnotes. A few institutions with Carnegie expectants on their faculties have as yet no other provision for retirement income. These are listed in Appendix VI. T H E RULES

T H E C A R N E G I E F O U N D A T I O N FOR T H E ADVANCEMENT OF TEACHING for the Advancement of Teaching should be given a prominent place in any comprehensive review of plans for college pensions. Support for this statement appears repeatedly in this publication. To be fully informed regarding the work of this foundation one should read the annual reports of its president and the various bulletins the foundation has published. An outline of its activities is printed with the 1938 edition of its "Rules for the Granting of Retiring Allowances," where it is reprinted from the 32d Annual Report. The following paragraphs will be limited to a brief statement of the allowances to be expected by eligible persons still in service and a sketch of the foundation's original rules for granting retiring allowances, with modifications that have been made in them from time to time. THE

CARNEGIE FOUNDATION

PRESENT

RULES

Allowances will hereafter be arranged only for those whose names are on the "Closed List of Pensionables of May 1, 1931" and who

24

CARNEGIE

FOUNDATION

remain in the service of specified institutions (formerly called associated institutions) until retirement. In order to receive a retiring allowance an individual must have attained the age of 65 and must have completed 15 years of active service as a professor or 25 years as an instructor and professor. The normal allowance to begin at age 70 is $1,000 a year. A few persons still in service and born prior to 1867 may receive more under earlier rules. If a retiring allowance begins at an earlier age it is correspondingly reduced—to $670 if it begins at age 65. For each such pensioner Carnegie Corporation purchases from T.I.A.A. a single life annuity of $500 a year, if begun at age 70, or of a correspondingly reduced amount, if begun earlier. The annuitant may choose an actuarially equivalent annuity of a different type. Attainment of age 65 is waived for anyone who becomes disabled (as stated in the rules) after completing 25 years as a professor or 30 years as a professor and instructor. The disability allowance in such cases is the same as the retiring allowance at age 65. If a pensioner or anyone eligible for a pension dies leaving a widow who has been his wife for 10 years, she is eligible during widowhood to a pension half as large as her husband's or that for which he was eligible. To be eligible for this benefit the widow of a pensioner must also have been married to the pensioner at the time of his retirement. A special "disability annuity allowance" is available to a teacher in active service who entered the service of an associated institution after November 17, 1915, and prior to January 1, 1933, who began participation with his employing institution in a contributory retirement plan using contracts of T.I.A.A. prior to January 1, 1933, and who became disabled after at least 5 years of such participation. The annuity is 2/z of what would have been available under the contributory plan had service continued to age 65, and one condition of its receipt is that the T.I.A.A. retirement annuity contract be assigned to the Carnegie Foundation. HISTORICAL

SKETCH

On April 16, 1905, Andrew Carnegie announced his conviction, "that the least rewarded of all the professions is that of the teacher

CARNEGIE

FOUNDATION

25

in our higher educational institutions." Because of this conviction, Mr. Carnegie founded an agency to provide a system of retiring allowances for teachers in these institutions. The words quoted above are from his "Letter of Gift to the Trustees" whom he selected for this agency—which took the name "The Carnegie Foundation for the Advancement of Teaching"—and a further paragraph states briefly the purposes that he had in mind as follows: I have, therefore, transferred to you and your successors, as Trustees, $10,000,000, 5 % First Mortgage Bonds of the United States Steel Corporation, the revenue from which is to provide retiring pensions for the teachers of Universities, Colleges, and Technical Schools in our country, Canada and Newfoundland under such conditions as you may adopt from time to time. This fund was augmented later by a second gift of $5,000,000, and comparable sums have been furnished by the Carnegie Corporation of New York. In reading the description that follows of rules for retiring allowances it should be observed that these pensions were clearly noncontractual. Rules of 1906.—Rules for the granting of retiring allowances were approved by the Board of Trustees of the Carnegie Foundation for the Advancement of Teaching on April 9, 1906. These were amended on November 21, 1906, and as so amended appear in the first annual (1906) report of the president and treasurer of the foundation. They applied to the retirement of persons of the rank of professor (including presidents and deans) in "accepted" institutions. Qualification for maximum annuity under this set of rules required attainment of age 65, but a smaller benefit was made available without regard to age after a longer period of service than was required if age 65 was attained, and nothing was said about disability. In stating the rules by which the amount of retiring allowances was determined "active pay" was defined to mean the average compensation during the last 5 years of service. A person retiring from a professorship in an "accepted" institution after attaining age 65 and having completed 15 years of service as a professor could, with the exceptions noted below, retire on an allowance of $400 more than half his "active pay." The allowance could not be more than $3,000; this limit was changed to $4,000 in

26

CARNEGIE

FOUNDATION

November, 1907. With the exception that the allowance could not exceed 90 percent of "active pay," it was not to be less than $1,000. A professor in an "accepted" institution who had completed 25 years of service as a professor could retire without reference to age on an allowance of $320 plus 1 percent of his "active pay" multiplied by the number of years of his service increased by 15. This allowance could not exceed the smaller of $3,000 and 80 percent of "active pay," but otherwise it was not to be less than $800 a year. The $3,000 was changed to $4,000 in November, 1907. No benefit was available to any person whose active service ceased before April 16, 1905, the date of Andrew Carnegie's original letter to the trustees. A widow who for 10 years had been the wife of a professor in actual service was to receive during her widowhood an allowance half as large as that which would have been available to her husband. Amendments of 1909.—The rules adopted by the trustees on November 17, 1909, provided allowances only for those who had attained age 65 or who were rendered unfit for service because of disability shown by medical examination. A teacher aged 65 was eligible if he had completed 15 years of service as a professor or 25 years as an instructor or as an officer of higher rank, and if he was retiring as a professor or as an instructor in an "accepted" institution. The maximum and minimum allowances remained unchanged. "In case of disability unfitting him for the work of a teacher as proved by medical examination," a professor or instructor in an "accepted" institution could retire after 25 years of service as a professor or after 30 years of service as an instructor or as an officer of higher rank. An allowance was then available which was equal to that formerly available after 25 years of service, except for a slight change with respect to those who counted service as instructors in qualifying for pension. The new rules made more definite the conditions of eligibility for a widow's allowance. In order to cooperate with an institution in case it seemed desirable to retire a teacher in good health at an age less than 65, the foundation agreed in November, 1910, that if an institution should retire a teacher of less than 65 years who met the service requirements for disability retirement and should pay the retirement allowance until age 65 was attained, the foundation allowance would then be made available.

CARNEGIE

FOUNDATION

27

In November, 1912, the rule defining "active pay" was modified so that if a teacher were continued in active service after age 65 on a part-time basis at a reduced salary, the full salary should be used in obtaining the average of the salaries for the last 5 years of service when retirement occurred. Amendments of 1918.—The rules thus summarized were effective until a revision was approved on April 22, 1918. With the exception of a disability benefit (to be described below), the new rules limited allowances to those who were with associated institutions (previously called "accepted" institutions) on November 17, 1915. On this date the trustees of the Carnegie Foundation approved the president's efforts to devise a contributory pension system, which resulted in the creation of T.I.A.A. as described in more detail on page 139. The rules already described were continued in effect for those who reached age 65 on or before June 30, 1923. For younger persons the rules were modified as follows: While the minimum age for retirement other than for disability remained 65 years, the retiring allowance was to be calculated in the manner already described only in case it became effective at a higher age. This maximum allowance was made available at age 66 for those reaching age 65 between July 1, 1923, and June 30, 1925, inclusive. For those reaching age 65 in the 3 succeeding years the corresponding age for maximum benefit was increased one year each year, and for those reaching age 65 after June 30, 1928, the maximum benefit was available only at age 70. In case of retirement at ages earlier than those at which the maximum benefit was available the benefit calculated as described in the earlier rules was decreased by 1/15 for each year that the age of retirement anticipated this age for maximum benefit. The rules for retiring in the event of disability remained unchanged, with the exception that the disability allowance was not to exceed the corresponding allowance for retirement because of age. The allowances were decreased by Y for unmarried men with salary above $1,800 and by 15 percent for those with lower salaries. For teachers who entered the service of an associated institution after November 17, 1915, and who participated with their employing institution in a contributory retirement plan using contracts of T.I.A.A., the new rules provided that in case a member was

28

CARNEGIE

FOUNDATION

totally and permanently disabled after participating in the contributory plan for at least 5 years, there should be an allowance of 2/i of the annuity that would have been available at age 65 had contributions continued until then at the same rate as during the last 5 years —this with the understanding that the disabled teacher would assign his annuity contract to the Carnegie Foundation. Amendments of 1922.—Effective July 1, 1923, the method of calculating allowances for persons thereafter reaching age 65 was amended further. The meaning of "active pay" was changed to the average salary of the last 10 years instead of the average of the last 5 years. The old rule allowing $400 more than half the active pay was thereafter applied to active pay of $1,600 or less. For active pay of $3,600 or more the maximum allowance was to be half the active pay, but not more than $3,600 at age 70 or $2,400 at age 65. The maximum allowance corresponding to active pay between $1,600 and $3,600 was to be half the active pay plus a fraction of $400 that varied from 100 percent to zero as the active pay increased from $1,600 to $3,600. The scaling of benefits according to retirement age remained the same as under the 1918 rules. The 1918 amendment to reduce allowances for unmarried teachers was dropped. Amendments of 1929.—Effective May 1, 1929, the rules were amended again. The method of computation remained unchanged with respect to those who reached age 65 before June 30, 1923, with the one exception that active pay was based on the average salary for the 5 years ending with the academic year 1925-26. For those reaching age 65 after June 30, 1923, the new rule resulted in the maximum allowance at age 70 being scaled from $3,600 for those becoming age 65 in 1928 or earlier to $1,000 for those becoming age 65 in 1932 or later. The modified rules referred only to those connected with associated institutions on November 17, 1915, who retire from institutions of this class after May 1, 1929. The benefit for disability applying to those entering associated institutions after November 17, 1915, was at first limited to those entering such institutions prior to January 1, 1938. In 1931 this limiting date was changed to January 1, 1933, and in 1932 the statement was added that the teacher must have joined the contributory plan in an associated institution prior to January 1, 1933.

CARNEGIE

FOUNDATION

29

The list of those who may expect Carnegie allowances is now closed and printed so that while there will be reductions in this list through death or discontinuance of service at associated institutions, no additions will be made. The list of associated institutions has been replaced by a list of "specified" institutions, transfer between which does not interfere with expectations under the foundation rules. CARNEGIE

CORPORATION

ANNUITIES

For each person reaching age 65 on or after January 1, 1931, who receives a retiring allowance from the Carnegie Foundation, the Carnegie Corporation of New York provides an immediate single life annuity from T.I.A.A. of $500 a year if payments begin at age 70 and of a correspondingly reduced amount if payments begin at an earlier age. The annuitant may choose an actuarially equivalent annuity of a different type. D E S C R I P T I O N S OF R E T I R E M E N T PLANS BRIEF DESCRIPTIONS are given below of retirement plans of particular institutions and of those plans for employees of states, municipalities, and religious institutions that include in their coverage the staff members of particular colleges and universities. These descriptions give the principal facts at hand for college plans other than those with T.I.A.A. and for those plans using T.I.A.A. contracts that have peculiarities or histories of importance which could not be stated in the scheduled items of Appendix I. All descriptions are arranged alphabetically according to the name of the institution or of the retirement plan. Any one can, of course, be located by referring to the Index. UNIVERSITY

OF

ALBERTA

In 1928 the University of Alberta adopted a contributory retirement plan applying to "all officers, teachers, investigators and such other persons permanently in the employ of the University on a regular basis of salary as may be determined by the Board of Governors of the University." The contribution of each member is 5 percent of his salary, and this amount is matched by the university.

30

DESCRIPTIONS

OF

PLANS

Contributions begin at age 36 and continue until the "age of retirement as specified in his policy." Contributions become premiums for T.I.A.A. contracts, and the plan states that "the contract will provide, ordinarily, for a monthly deferred annuity to begin at the age of sixty-five." Members in service when the plan was inaugurated were given until a stated date to accept the plan or release the university from obligation to provide retirement allowances. For newly appointed eligible persons, participation was made a condition of appointment. For staff members advanced in age when the plan was inaugurated the university undertook to supplement the annuity purchased by contributions outlined above so as to furnish a total retiring allowance of half salary when the plan was inaugurated in case of retirement at the date stated in the individual's contract and after the completion of 25 years of service. For one retiring with less than 25 years of service, but more than a certain minimum to be determined by the university, the total benefit was to be 2 percent of salary when the plan was inaugurated for each year of service. If a member retires after 25 years of service and after attaining age 65, but before the date of retirement stated in his contract, the plan provided that "he shall receive the value at the time of his retirement of the supplementary annuity that he would have received had he remained until the date specified in his contract." It also provided that if a member transfers to another educational institution "he shall take with him the benefit of the supplementary annuity that he would have received had he remained." Even so, this supplementary benefit was to be a pension paid by the university upon retirement, when approved by the governors at that time. Supplementary benefits were not contractual and have been considerably reduced because of increased taxation and lower interest earnings. No supplementary benefit is announced for new members, the university reserving "the right to make special arrangements with them." AMHERST

COLLEGE

By resolution of the board of trustees, Amherst College has arranged for retirement of teachers and administrative officers at age

D E S C R I P T I O N S OF

PLANS

31

70 with power to require retirement at age 65 and with the possibility of extending service beyond age 70 by one-year appointments. The benefit is to be half the final salary, but not more than $3,000, and the college furnishes that part of this benefit in excess of allowances available from Carnegie sources. The college is setting aside a substantial amount each year to support this plan and is considering the establishment of a contributory plan. ANTIOCH

COLLEGE

Antioch has a joint contributory retirement plan which applies to full-time faculty members, administrative officers, and administrative assistants. Contributions of 3 percent by members are matched by equal payments from the college (not to exceed $300 a year) in purchasing retirement annuity contracts from T.I.A.A. To describe participation in the plan it is convenient to class instructors and administrative assistants as the junior group and professors and administrative officers as the senior group. Persons appointed to the senior group after August 31, 1938, may participate in the plan after one year of service and must do so after 2 years of service. Juniors appointed after August 31, 1938, may participate after 2 years of service and must do so after 5 years of service. For those in service on August 31, 1938, the same rules apply, with "service" referring to total service at Antioch and with the exception that participation is required of them only upon receipt of increase in compensation. Retirement is to occur on August 31 next following attainment of age 65 except that one-year extensions of service may be made by vote of the administrative council "for such portion of an individual's time as it is of special interest to the Council to retain." The administration recognized that benefits under this plan will be modest and hoped that contributions may be increased. During the first 10 years the college undertakes to make whatever supplementary payments are necessary to bring the allowances of those retired in this period to a minimum of $300 a year. ASHLAND

COLLEGE

Upon attainment of age 70 after completing 20 or 25 years of service, faculty members are retired upon pensions fixed by the

32

DESCRIPTIONS

OF

PLANS

board in the light of quality and length of service rendered. Duties commensurate with ability and physical condition may be assigned after retirement. AUSTIN

COLLEGE

On February 13, 1933, the board of trustees of Austin College adopted a resolution to the effect that all employees of the college should be retired at age 65 unless continued in service thereafter through annual election by the board, the retirement income "to be determined according to the merits and circumstances of each individual case." BETHEL

COLLEGE

Retirement is required at age 65 unless services are extended by annual elections by the board. Such extensions are not to continue service beyond age 70. Pension payments are determined by the board in individual cases, but they are expected to be at least $1 a month for each year of service. BOSTON

UNIVERSITY

Effective January 1, 1938, Boston University entered into a group annuity contract with the John Hancock Mutual Life Insurance Company covering the full-time instructional staff members above the rank of instructor and under age 65 at the inception of the plan. Participation was made compulsory, but inauguration of the plan was accompanied by an increase in salary to the extent of the amount of the member's contributions. Present members of the staff below professorial rank and new staff members are required to become members of the plan on the September 1 next following their appointment to professorial rank provided they are then under age 65. The yearly amount of retirement annuity (payable on a monthly basis after normal retirement date until the death of the employee) purchased for an employee in each year after the effective date of the plan is equal to 2 percent of the year's salary with respect to which contributions are made. The total yearly retirement annuity on account of service while a member of the plan payable each

D E S C R I P T I O N S OF P L A N S

33

year after the normal retirement date will therefore be the aggregate of these yearly annuity credits amassed by the employee over the entire period of his participation in the plan. The plan provides that each member shall contribute 5 percent of his basic salary each year. The university's contribution is the remainder of the cost of benefits purchased year by year plus the cost of pensions for past service. A booklet describing the plan, which was distributed to faculty members when the plan was inaugurated, states that the university's contribution in recognition of current service "is estimated to be substantially more than the total contributions from the individual members." In recognition of service before the plan was inaugurated, the university intends, hopes, and expects, but does not guarantee, to purchase annuities for older members who entered the plan on January 1, 1938. Any past service annuity so purchased is to be such that when added to the anticipated aggregate yearly amount of annuity on account of current service the total yearly annuity resulting will be equal to the smaller of $900 and 2 percent of the member's basic salary on the effective date of the plan for each completed year of service, not to exceed 20 years, in professorial rank at normal retirement date. Normal retirement age is scaled from 65 years for those of age 45 or less to 70 years for those age 50 or more when they enter the plan, with the provision that with the consent of the university a member may retire on a reduced annuity at an age within 10 years below his normal retirement age. Retirement may be delayed beyond normal retirement age "if specifically requested by the University," but in this event contributions cease and annuity benefits begin as though retirement had actually occurred on the normal retirement date. The member's salary in such instances may then be adjusted. If a member resigns from full-time service in the university, he receives back his own contributions without interest, or he may have a paid-up deferred annuity in the amount which his own contributions have purchased. He does not profit from the university's contributions in respect to him unless he remains in service until his retirement date. With reference to termination of service within 10

34

DESCRIPTIONS

OF

PLANS

years prior to normal retirement date, the descriptive booklet states that "the University must necessarily reserve the right to determine whether a termination of service before the normal retirement date shall or shall not be considered early retirement." If a member dies in service, his beneficiary receives his contributions without interest; and if he dies after retirement but before he has received in annuity payments an amount equal to the total of his own contributions, the balance is paid to his beneficiary. As to contributions during interruption of compensation from the university the descriptive booklet reads as follows: If a member is temporarily absent but is receiving part of his basic salary from the University, his contributions will be proportionate to such salary and Retirement Annuity purchases will thus be continued for him. A member who is temporarily absent and who is not receiving any salary payments will make no contributions and thus no Retirement Annuity purchases will be made for him during the period of his absence. [The plan also states that] for obvious reasons, it will be impossible for a faculty member who desires to maintain his contributions at their normal rate during such periods to make such arrangements under this Retirement Annuity Plan. As explained in Section 4, however, the member may purchase an individual annuity through his own broker or insurance company.

A member may elect to receive a reduced amount of retirement annuity commencing on the normal or an earlier allowed retirement date, all or a specified part of which will be continued to a surviving dependent or relative for the remainder of such contingent annuitant's lifetime. The descriptive booklet states that if a member elects this option less than 5 years prior to retirement "approval of his election will be subject to his furnishing satisfactory evidence of his good health to the Insurance Company" and that "if this option is elected it cannot subsequently be changed or rescinded nor can an earlier Optional Retirement Date be elected without the consent of the Insurance Company." UNIVERSITY

OF BRITISH

COLUMBIA

In November, 1921, the joint faculties adopted a resolution to inaugurate a contributory retirement plan to cover instructors, faculty members of higher rank, designated administrative officers, and such others as the president might recommend. Participation in the

DESCRIPTIONS

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35

plan was to be optional for those in service whenever the plan was inaugurated and obligatory for new appointees with appointments of one year or more. Contributions of at least 5 percent by participants and a like amount by the university were to become premiums for retirement annuity contracts issued by T.I.A.A. with the exception that until the participant reached age 35 as much as 25 percent of the combined contributions might be diverted to the payment of premiums for life insurance policies. In 1924 the plan was inaugurated, and its statement was amended by the board of governors so as to determine the corresponding contributions and retirement ages for all members of the staff and to fix supplementary benefits for participants then in service. Those under age 40 at that time contribute 5 percent of salaries to be matched by equal contributions from the university and are to retire at age 65. Participants who in 1924 were in the age groups 40-44, 45—49, 50 and over, are to retire at ages 66, 67, and 68, respectively. Contributions for participants in these age groups are to be on a 5 percent, 6 percent, and 7 percent basis, respectively— those for the age group 40-44 to be 6 percent if 5 percent matched will not produce half-salary benefits. The minimum retirement allowance for all those in service in 1924 who participate in the plan on the basis described above and complete 15 years of service is to be half of average salary for the last 5 years of service. If the contributions of 6 percent or 7 percent, with equal amounts from the university, do not yield half salary at the retiring ages stated, then supplementary annuities are paid out of a special grant from the Carnegie Foundation. Those appointed to the staff after the year 1924 are entitled to contribute up to 5 percent, 6 percent, or 7 percent, according to the age groups (defined above) in which they fall at the time of their appointments. All such appointees retire at 65; no supplementary benefits are provided for them. If advantage is taken of the privilege to divert part of early contributions for the payment of life insurance premiums, any supplementary benefits to be provided by the university will be calculated as if no such diversions were made.

36

DESCRIPTIONS

BROWN

UNIVERSITY

RETIREMENT

OF

PLANS

PLAN

FOR FACULTY AND ADMINISTRATIVE O F F I C E R S

In October, 1913, Brown University adopted a noncontributory pension plan under which persons in the instructional staff might retire and might be retired at age 65 and must retire at age 70. The benefits provided at retirement were essentially those established by the Carnegie Foundation rules (see page 23) with the exception that the plan provided no arbitrary maximum to the pension payments. In June, 1920, this plan was made inapplicable to persons appointed after the academic year 1919-20, and its application to persons appointed for the academic year 1919-20 or before was limited 90 that the pension obligation of the university to any such person would be based upon his salary for the academic year 1919-20. Contributory plan.—In June, 1920, the university inaugurated a voluntary contributory plan on a 5 percent matched basis, with the agreement that contributions might be made retroactive to the beginning of the academic year 1919-20. T.I.A.A. contracts are used. The plan covered designated administrative officers and faculty members, including instructors, first appointed after the academic year 1919-20. All such persons were made immediately eligible, except that for instructors 2 years of service at Brown or at an institution of equal rank were required. Contributions were to stop at the end of the academic year in which age 65 is attained. The plan was not available to persons entitled to Brown University pensions under the 1913 plan or Carnegie Foundation retiring allowances, except by special agreement. The university's contribution was limited in the case of any one participant to $300 a year. Participants in the contributory plan could retire or be retired at the end of the academic year in which age 65 was attained, and retirement was required at the end of the academic year in which age 70 was attained. In 1926 account was taken of the fact that the pension plan for faculty members appointed in the academic year 1919-20 or earlier applied only to the 1919-20 salary, by extending to them participation in the contributory plan with reference to increases that had been made in salary payments over those of 1919-20. This amendment was made retroactive to the beginning of the academic year 1925-26.

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37

Amendments of 1937.—In October, 1937, substantial modifications were made in this contributory plan. The provision for retirement from service was not changed essentially; for one whose birthday falls between July 1 and October 1 retirement dates refer to June 30 preceding attainment of the stated retirement ages. Among the major changes is one making participation compulsory rather than optional as it had been previously. Participation of designated administrative officers, professors, and associate professors is obligatory and no period of preliminary service is required. Assistant professors and instructors are eligible after 2 years of service at Brown or some other institution of equal rank and must participate upon attaining age 40. Participation is required of assistant professors after 3 years of service as such at Brown or after 5 years of service as an instructor and assistant professor. It is required of instructors after 5 years of service at Brown. The regulation limiting the university's contribution to $300 in the case of any one participant was removed in 1937. The regulation terminating the contribution of the university when the participant reaches the age of 65 was rescinded, and the university will make its contributions until the time of the participant's retirement. Contributions are fixed at 5 percent of annual salary on the part of the participant and the same on the part of the university. Prior to the introduction of the compulsory provision the participant was permitted to contribute in any amount up to S percent of salary, and the university matched this contribution. During sabbatical leave of absence contributions are to continue in full. During any other leave of absence the university's contribution is to be based on the salary of the participant during period of leave. The plan provides that the optional form of settlement chosen upon retirement is to be elected only after consultation between the participant and the proper officer of the university. FOR NONTEACHING EMPLOYEES

Effective July 1, 1939, Brown University inaugurated a contributory retirement plan for employees of classes not covered by the plan described above. These may be briefly designated as maintenance employees and administrative staff members other than officers.

38

DESCRIPTIONS

OF

PLANS

Retirement is required at the end of the fiscal year (July 1 to June 30) in which age 65 is attained, with the exception that for those having birthdays between July 1 and October 1 retirement is required on June 30 preceding the 65th birthday, and a person may be retired at an earlier date because of disability. A year's service is required for eligibility, and participation is required of all eligible staff members, except that no one who is eligible for a pension or a retirement allowance from another source may participate without the consent of the university. The participant makes a contribution of approximately 4 percent of his annual salary or wage—and the university makes an equal contribution—toward the purchase of a retirement annuity contract issued by the T.I.A.A. For the purpose of simplifying the calculation of the contribution on the part of the university and on the part of the employee and the making of deductions from salary and wage payments incident thereto, salary and wage classifications have been established and contributions on the part of the university and on the part of the employee are to be made in accordance with these classifications. The plan provides that the optional form of settlement chosen upon retirement is to be elected only after consultation between the participant and the proper officer of the university. BRYN

MAWR

COLLEGE

In 1920 Bryn Mawr adopted a voluntary contributory retirement plan under which the college matches dollars of faculty members, administrative officers, and many other groups of regular employees of the college up to 5 percent of salary, but not to exceed $300 a year, toward payment of premiums on deferred annuity contracts or endowment life insurance policies providing for benefit payment over a period of years. The percentage may be higher than 5 percent for those in service in 1920 between ages 41 and 55 who choose to contribute on a basis which, when matched by college contributions, will furnish an annuity of $1,500 a year at age 65. The eligibility rules are somewhat complicated, involving different waiting periods for different classes of employees and for different professional grades of faculty members. At least 2 years of teaching service are

DESCRIPTIONS

OF

39

PLANS

required of faculty members, with the exception that a teacher coming from another institution where he has contributed for at least 6 months in a similar retirement plan may participate at once. During sabbatical years both teacher and college continue full contributions. If a teacher found it impossible or unwise to contribute toward premiums for an annuity or an insurance contract, the college matched dollars with him on the same basis in making payments into a fund administered by the board of trustees of the college for the benefit of contributors. The accumulation in this fund to the credit of an individual was payable on his behalf upon withdrawal, death, or retirement. It has, however, been found advisable to close this fund to new entrants. The college offers to continue the fund for those now participating or to pay the accumulation to the credit of an individual as a single premium on a deferred annuity and thereafter to match dollars in payment of further premiums on this contract. A number of variations are permitted as to type of contract. The teacher may choose a life insurance company other than the Teachers Insurance and Annuity Association, subject to the approval of the finance committee. Contracts of life insurance companies used in connection with this plan are filed with the college, but upon separation from service of the college the teacher attains full control of his policies. CALIFORNIA COVERING

STATE

EMPLOYEES'

UNIVERSITY

OF

RETIREMENT CALIFORNIA,

ACT FRESNO,

SAN

DIEGO,

SANTA BARBARA, A N D S A N FRANCISCO STATE COLLEGES

This system inaugurated January 1, 1932, applies to employees of the state teachers' colleges and the University of California who are not covered by the State Teachers' Retirement System or by the Retiring Annuities System of the university. It requires contributions that are scaled to age and sex with the intent of producing single life annuity benefits at 65 of 1/140 of average salary for the last 5 years of service multiplied by the number of years of membership service. Upon retirement at age 65 the benefit is twice as large as accumulated contributions of the participant will purchase, plus 1/70 of the average salary during the 3 years ending December 31,

40

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PLANS

1931, for each year of service prior to that date. Retirement is available at age 60 if 20 years of service have been completed and is required at age 70. In case of retirement prior to attaining age 65, the benefit is smaller, and if retirement occurs at an age greater than 65 years the benefit is correspondingly larger. Optional forms of settlement are available if desired instead of an annuity that ceases at death of the retired participant. In case of disability after 10 years of service a benefit is payable which, within somewhat complicated limits, is 90 percent as large as the allowance for service retirement. In case of death in service, a benefit of one month's salary for each year of service up to 6 years is payable from state funds, and in addition the contributions of the member with interest are returned to his beneficiary. If a member withdraws from service, he receives his contributions with interest. UNIVERSITY ACADEMIC

OF

CALIFORNIA

EMPLOYEES

For many years prior to 1924 the University of California had a retirement plan providing a benefit of 2/3 of average salary for the last 5 years of service to those aged 65 who had given at least 20 years of service in a specified rank. When the Carnegie Foundation offered free pensions, the University of California modified its plan so that the benefits furnished from university funds merely supplemented the Carnegie Foundation pensions in producing as totals the allowances formerly promised. In 1924 the arrangement for free pensions for the older faculty members was made more definite under what is called the "Pension System," and a contributory plan called the "Retiring Annuities System" was established for the younger men. Pension System.—The Pension System of 1924 promised free pensions for those in service on June 30, 1919, of rank higher than instructor, for administrative officers, and for instructors who had been continuously in the service of institutions associated with the Carnegie Foundation since November 17, 1915—provided these employees should continue uninterruptedly with the university until retired by the regents. Retirement was available only to those of age

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41

65 who had completed 20 years of service. The maximum benefit was of the average salary for the last 5 years of service, but not more than $4,000. For those reaching age 65 between July 1, 1922, and June 30, 1923, the maximum benefit was available at age 65. The requisite age for receipt of the maximum benefit was scaled upward for those retiring later, so that for those reaching age 65 after June 30, 1928, the maximum benefit was available only after attaining age 70. Upon retirement after age 65 but before reaching the age required for maximum benefit, the retirement annuity was to be the maximum benefit less as many fifteenths of itself as the actual age at retirement fell short of the required age. Retirement benefits to be paid by the university to an individual were to be decreased by the "theoretical amount of his Carnegie Foundation retiring allowance computed upon the basis of the Carnegie Foundation's rules of retirement which the Foundation put into effect on July 1,1923." Retiring Annuities System.—The Pension System is a transitional arrangement to take care of those who began their service prior to July 1, 1919, and who continue this service until retirement. Its membership is entirely closed. All those of the rank of assistant professor or higher whose service began later than June 30, 1919, are required to participate in a contributory retirement plan called the "Retiring Annuities System," adopted in 1924. Contributions of 5 percent of salary are required beginning with July 1, 1924, and are matched by the university. The member was permitted to contribute 5 percent of his salary for the college year ending July 1, 1924, and was given 3 years in which to complete this contribution; if he did so, the university matched these payments. The university contributed 5 percent of salary payments for service during the 4 years from July 1, 1919, to June 30, 1923, these payments to be credited to the teacher in case of retirement, but to revert to the university in case of separation otherwise than by retirement. Contributions cease whenever accumulations are sufficient to purchase at age 65 an annuity which will supplement any pension available through Carnegie sources in producing a total benefit of $4,000 a year. If service is continued beyond age 65, contributions are to be discontinued.

42

DESCRIPTIONS

OF

PLANS

The university accepts responsibility for contributions made to the annuities fund, promises to add interest at a rate not lower than 4 percent and to purchase for the member upon retirement whatever annuity can be obtained with the accumulations to the member's credit. Retirement is available at age 65 and is compulsory at age 70. Upon withdrawal from service prior to age 65 and after more than 4 years of service, the full accumulation to the credit of the member, with the exception of that contributed by the university for years of service 1919 to 1923, is used to purchase an annuity of such type, either immediate or deferred, as may be selected by the beneficiary. In case of death while in service this same credit is paid to beneficiaries or to legal representatives. In case of withdrawal or death prior to the completion of 4 years of service, accumulated member contributions are payable in cash, and the contributions made by the university revert to it. On May 12, 1931, the regents of the university adopted a revision of both the Pension System and the Retiring Annuities System. This revision did not apply to persons retiring on or before June 30, 1931. Revised Pension System.—The revised Pension System bases maximum benefits on the average salary for the 5 years of service ending June 30, 1929, instead of for the last 5 years of service prior to retirement, and replaces the $4,000 maximum in the old plan by a sliding maximum varying from $3,900 for those reaching age 70 prior to July 1, 1931, to $3,000 for those reaching age 70 after July 1, 1939. As before the revision, the benefit from the university takes into account amounts to be received from Carnegie sources, but a change is made in that the university is to supplement whatever is receivable from Carnegie sources rather than to supplement the "theoretical amount" of the Carnegie Foundation retirement allowances computed on a specified basis. The revised plan permits those eligible under the Pension System to join the contributory Retiring Annuities System to supplement what would be received under the Pension System in making up a benefit not to exceed $4,000 a year upon retirement under the rules of the Pension System. Acceptance of this option was open until June 1, 1931. Revised Retiring Annuities System.—Changes made in the Retiring Annuities System were largely with regard to administration. The

DESCRIPTIONS

OF

PLANS

43

revision did, however, make possible the continuation of contributions after age 65 if agreeable to the university and desired by the member. Under the 1924 plan the university guaranteed at least 4 percent interest on accumulations of contributions. Under the revised plan the rate of interest credited to individual accounts is to be at least as large as the average of the rates applied to savings deposits by the 5 banks of California having the largest savings deposits at the time of the interest addition. A rate not less than 4 percent was maintained up to June 30, 1935. This revision lays down a definite procedure for financing benefit payments upon retirement. Whatever benefits the university undertakes to pay in the way of annuities, whether under the Pension System or the Retiring Annuities System, are to be furnished through the purchase by the university of annuity contracts from life insurance companies. It is provided that the regents shall establish an approved list of life insurance companies from which annuities may be purchased. The retiring teacher may choose the company on this list from which the annuity shall be purchased and may choose the type of annuity to be purchased if he is willing to sign a form releasing the university from full responsibility for his retirement benefit. However, since the intention is to furnish annuity benefits, the university reserves the right to require that any cash surrender or loan privileges which may be included in any annuity purchased shall be made inoperative. As to possible modification, the plan states that "it is not expected that further revision will be necessary, but in the observance of their obligations the Regents must reserve, and do hereby reserve, full right and power to revise, modify or repeal their action establishing this Retiring Annuities System." The Retiring Annuities System was modified further in 1937 so as to admit certain administrative officers by designated titles and to admit instructors and others of comparable rank, such as lecturers, supervisors, and junior members of the experiment station staff. Participation was based on total salaries after July 1, 1937; prior to that date salaries for administrative service had been excluded. The purpose of practically all changes made at this time was to coordinate the retirement system of the university with the State

44

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OF

PLANS

Employees' Retirement System. This system became effective on August 27, 1937, for employees of the university who were not members of the Pension System or the Retiring Annuities System. NONACADEMIC EMPLOYEES

By amendment of the State Employees' Retirement Law, in 1937, practically all full-time employees of the university who were not eligible for participation in the system described above for academic staff members were made eligible for participation in the State Employees' Retirement System. Participation is required after 6 months of continued service. Contributions of participants are scaled upward with entrance age. It is intended that contributions of one who begins at age 30 shall be sufficient to provide a retirement annuity of about yi of average salary for the last 5 years of service upon retirement at age 65. The benefit upon retirement is the annuity that can be purchased with member contributions plus an annuity of like amount furnished by the state and a pension from the state in recognition of service prior to amendment of the plan to bring in employees of the university. This pension is, for each year of such prior service, l/70th of the average salary for the 3 years ending with December 31, 1931, or, for those whose service began later, l/70th of the salary for the first year of service. A smaller benefit is available after 10 years of service in case of inability to perform regular duties. A minimum retirement allowance of $40 a month at age 70 is provided for members with "prior service" credit. Retirement is normal at age 65, compulsory at age 70, and available at any time between ages 60 and 70 for one with 20 years of service who has contributed for at least one year, the retirement benefit being adjusted according to age at retirement. Any compensation in excess of $5,000 a year is disregarded in the operation of the system. In case of death in service the member's beneficiary receives member contributions with interest and one month's salary for each year of service up to 6 years. If a member withdraws from service, his contributions are refunded with interest. If he has had 20 years of service, he has the privilege of leaving his contributions with the fund

DESCRIPTIONS

OF

PLANS

45

and receiving upon retirement at age 60 or later a retiring allowance based upon his period of service for the state. If a withdrawn member returns to state service, he may redeposit the amount withdrawn and thus restore credit for service prior to withdrawal. Without this redeposit the reentrant comes in as a new member. Provision is made for transfers from the state system to the university system or vice versa in case of change in title or occupation, so as to maintain a uniform basis of classification under each system. Members have the privilege of making additional contributions to supplement their regular retirement allowances, but such supplemental benefits are not matched by the state. CALVIN

COLLEGE

In May, 1937, the board of trustees of Calvin College took action to establish a voluntary, joint contributory retirement plan which applies to all members of the teaching staff of the rank of instructor or higher and to "such other employees as the Synod may hereafter declare eligible to a pension." Members contribute 3 percent of their "salary rate," and the college contributes twice as much. "Salary rate" refers to the established salary for the position in question, but it does not include compensation for additional administrative duties. Retirement is normal at age 70, the benefit at that age being 25 percent of the "salary rate" if service has covered not more than 5 years, 33 percent after service of from 6 to 10 years, inclusive, and 40 percent after service for a longer period. In case of retirement at any time after attaining age 65, but before reaching age 70, a reduced benefit is available. If a member dies in service and leaves dependents, contributions of both member and college are returned in a lump sum or in installments. If there are no dependents, only the member's contribution is paid to the estate. Furthermore, the death benefit when a beneficiary exists is not to be less than a temporary annuity of $500 a year payable for a period varying from 3 to 10 years according to the period of service of the deceased. In case of death after retirement, the same ideas are carried out, but amounts already paid to the deceased while a pensioner are deducted. If a member withdraws from service, his contributions without interest are returned in cash.

46 CATHOLIC

DESCRIPTIONS UNIVERSITY

OF

OF

PLANS

AMERICA

This institution reports an informal plan based on a benefit of 80 percent of salary after 35 years of service. A contributory plan is under consideration. UNIVERSITY

OF

CHICAGO

The board of trustees considered a retirement plan as early as December, 1906. A committee reported in December, 1907, and 2 men who had reached age 70 were retired during that academic year. At first no steps were taken to fund these benefits; no contributions of faculty members were involved. A definite plan was adopted that became effective March 1, 1912, and investments valued at $200,200 were set aside as a first installment to support the plan. This plan provided for retirement after attaining age 65 and completing 15 years of service with an allowance of 40 percent of average salary for the last 5 years of service, plus 2 percent of this average for each year of service in excess of 15 years, the total benefit not to exceed 60 percent of this average or $3,000 if smaller. A widow of a pensioner or of one eligible for a pension who had been a wife for 10 years or more was to receive a pension of half of that available to her husband. In January, 1928, a benefit was added for the widow of a member who dies in active service after employment for at least 10 years, if the widow has been the member's wife for at least 10 years. The benefit was fixed at $50 for each year of active service of the member, not to exceed $1,500, to be continued during widowhood. Calculations of the cost of these prospective benefits were made and over a period of years funds were set aside to support them. In 1931, when other needs were pressing, the income from these funds was thrown in with general funds of the university with the understanding that retirement benefits would be a first charge on the total budget income. When in 1916 the Carnegie Foundation advocated contributory retirement plans, the University of Chicago considered making a change. On January 1, 1922, the old noncontributory free pension plan was closed to new entrants so that none reaching the rank of assistant professor and none receiving first appointments after that date are covered by it. A contributory retirement plan took effec: at

DESCRIPTIONS

OF

PLANS

47

the same time. Participation in this plan is open to instructors after 2 years of service and is required of those of the rank of assistant professor or higher, including designated administrative officers, whose terms of office in the university began later than December 31, 1921. Retirement is to occur under the contributory plan at the end of the appointment year in which age 65 is attained unless services are continued under a provision for one-year extensions of service. The plan is administered by means of deferred annuity contracts of T.I.A.A., premiums for which are 10 percent of salary up to a maximum of $600, shared equally by the member and the university. University contributions toward annuity premiums cease at age 65. This provision is strictly interpreted and results in the peculiarity of premium payments ceasing in many cases several months prior to the beginning of annuity payments. The plan provided for the transfer of members from the old free benefit plan until January 1, 1925, with a provision that for those so transferring the university would make up the difference between the benefit available under the old plan and the benefit provided by the accumulation under the new plan. As a matter of fact, very few transfers occurred. UNIVERSITY

OF

CINCINNATI

By resolution of the board of directors adopted May 3, 1921, a contributory retirement plan was created to become effective June 1, 1922. Members of the teaching staff and administrative officers who were not covered by the Carnegie free pension plan were made eligible after 2 years of service, and participation was optional. The university offered to match contributions up to 5 percent of regular yearly salary, but no university contribution was to exceed $250 a year, and these contributions were to cease when the joint contributions had completed the purchase of a single life annuity of $3,000 a year, first payment at age 65. Contributions became premiums for retirement annuity contracts issued by T.I.A.A. When the pension rules of the Carnegie Foundation were revised, in 1929, the university extended the contributory plan to those affected and agreed to supplement the annuity thus produced and the

48

DESCRIPTIONS

OF

PLANS

allowance and annuity from Carnegie sources so as to make a total life annuity beginning at age 70 half as much as the average salary for the last 5 years of service, but not to exceed $3,000. A similar pension was guaranteed in case of disability, effective after 25 years of service as a professor or 30 years of service as instructor and professor. Retirement is required of members of the faculties and officers of the university at the end of the year of service in which age 70 is attained. Modifications of 1938.—A retirement plan was established for employees of the city of Cincinnati in 1931, but university officers and staff members were excepted from the coverage at their request in order that they might continue the plan described above. In 1938 the legislature of the state of Ohio created a new retirement plan for public employees, which required participation on the part of public employees of the state who were not covered by any other such plan. In the face of this requirement officers of the University of Cincinnati examined both of these plans for public employees and favored the Cincinnati plan. They therefore requested and obtained a city ordinance making officers and faculty members of the university eligible to participate in the Cincinnati plan. Membership in the city retirement system is required of all officers and employees of the university except members of the faculties and of the research and teaching staffs. The latter may, at their own request, be excused from membership. Should they be so excused, the university still offers to them the contributory arrangement with T.I.A.A. referred to above. As this ordinance and the city plan are now interpreted and supported by a resolution of the board of directors of the University of Cincinnati, a member who joins the city system will receive credit for service prior to 1931 and is offered the benefits supported by the regular city contributions for the years from 1931 to 1938 if he is willing to pay regular employee contributions for this period. Furthermore, the city benefit is quite independent of any Carnegie Foundation allowance or Carnegie Corporation annuity available to the older members. Cincinnati plan.—This plan provides a pension upon retirement after attaining age 60 of 1/70 of the average salary for the last 10 years of service for each year of service prior to the establishment

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49

of the plan and 1/140 of this average for each year of service after the establishment of the plan, in addition to the annuity that can be purchased with member contributions. These contributions are scaled to entrance age and are intended to produce an annuity about equal to the pension in recognition of current service. Retirement is required at age 70, except that 2-year extensions of service may be made by the city manager upon recommendation of the administrative board. Liberal disability benefits and accidentaldeath benefits are provided. The usual death benefit is half a year's salary plus the accumulation of member contributions. Following withdrawal from service, a member receives his accumulated contributions. CLEMSON

AGRICULTURAL

COLLEGE

This institution contemplates retirement of faculty members at age 70 with an "emeritus" salary of $600 a year for those of the rank of associate professor or higher, $450 a year for assistant professors, and $300 a year for those of lower rank. COLUMBIA

UNIVERSITY

RETIREMENT

PLAN

From its earliest history the policy of Columbia University has been consistently to provide retiring allowances for its officers at the end of their terms of service. The first president of King's College, Samuel Johnson, was retired in 1763 on a pension of 50 pounds per annum. Before the adoption of a general rule on the subject and while the number of staff members was still very small, retiring allowances were provided by special action of the trustees in the following cases: 1820, Professor Wilson, $1,500 (his active salary was $2,500 and house); 1842, President Duer, $1,200 per annum; 1864, Professor McVickar, $1,000; 1880, Professor Schmidt, $1,000; 1881, Professor Naime, $1,000; 1888, President Barnard, full salary. In 1892 the trustees inserted in the university statutes a general regulation providing that any professor at the age of 65 who had completed 15 years or more of service might be retired on half salary, either upon his request or upon the motion of the trustees. This plan remained in effect until the establishment of the Carnegie Foundation, which under its original rules provided still more generous allowances.

so

DESCRIPTIONS

OF

PLANS

Benefits were paid by the Carnegie Foundation as early as the college year 1906-7, but Columbia continued to support pensions already started under its old plan. Columbia was among the first institutions accepted by the Carnegie Foundation for receipt of retiring allowances, this occurring at its first meeting for this purpose held April 9, 1906, and allowances were initiated for new Columbia pensioners during the then current college year. Contributory plan.—Beginning with July, 1917, new appointees to university service were notified that retirement provisions recited in Section 67 (now Section 70) of the statutes—based on Carnegie Foundation rules—would be modified in ways not yet determined. On April 7, 1919, the board modified Section 67 and added a new section (No. 68—now No. 71) to inaugurate a contributory plan for retirement income, using retirement annuity contracts of T.I.A.A. Section 67 no longer applied to persons whose service began on or after July 1, 1917, and its modification with respect to earlier appointees is described below under the heading "Supplementing Carnegie Expectations." The contributory plan was devised for those newly appointed on July 1, 1917, or later. Participation was made available at once to such appointees of the rank of assistant professor or higher and to instructors with salaries of $1,200 or more after 3 years of service. Contributions were to be 5 percent of salary from the individual and the same from the university, and the university offered, temporarily, to match contributions retroactively to July 1, 1917. Retirement may be brought about at any time after attainment of age 65 "upon the motion of the Trustees," and, since no supplementary benefits are involved, the individual may withdraw without loss at any time. Participation in this plan was voluntary until the statute was amended on April 7, 1930, so as to require participation on the part of those above the rank of instructor who were newly appointed or who received promotions or increases in salary after July 1, 1930. Contributions of the university under this plan are to cease whenever the joint contributions already made shall produce a single life annuity of $4,000 a year with payments beginning at age 65. Those in service when the plan was adopted who had been appointed subsequent to November 17, 1915, when the lists of the

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51

Carnegie Foundation were closed, were eligible to participate; but to those who did not accept the contributory plan the university guaranteed the expectations of those on the Carnegie list. Supplementing Carnegie expectations.—The university offered to supplement the allowances expected from Carnegie sources after the change of rules of May, 1929. For those with Carnegie expectations who joined the contributory plan as of July 1, 1929, the university agreed to add what might be necessary upon retirement at age 65 or thereafter so as to bring the total benefit, including Carnegie Foundation allowance and Carnegie Corporation annuity, to an amount equal to half the average salary for the last 5 years of service plus $400, but not more than $4,000; 110 officers accepted this plan. For those who did not accept the contributory plan the university has agreed to restore the Carnegie expectation under rules of 1922— that is, to provide a total allowance of half the active pay, not to exceed $3,600 if retirement is at age 70, this to be reduced by 1/15 for each year by which actual retirement anticipates that age. In both cases a widow's pension of half the officer's pension is provided. Retirement because of total permanent disability is available prior to age 65 for those who have completed 25 years as professor or 30 years as instructor and professor, the benefit being that which would be available at age 65. While Teachers College, Barnard College, and the College of Pharmacy participate in the contributory plan for teachers and administrative officers, details of the plan are not identical with respect to members paid by different colleges. With reference to the contributory retirement plan Columbia University Statute No. 68 (now No. 71) provides that the annuity contributions are to be paid by the part of the university that provides the salary. Barnard College adopted the university plan and apparently has no retirement provisions different from those of the university plan. TEACHERS

COLLEGE

FACULTY PLAN

Teachers College established a retirement plan for the benefit of officers and teachers of the college and related schools, under which contributions were collected as early as the year 1913. These contri-

52

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OF

PLANS

butions were scaled upward with age and were planned to accumulate at age 60 to approximately a year's salary. The benefit to be provided was to be related to the accumulation of the individual's contributions. In the year 1922 the college adopted a joint contributory plan using contracts of T.I.A.A., and at that time the accumulations of members under the old plan together with contributions of like amount from the college were applied as premiums on these contracts. While the Teachers College statute makes no mention of a 3-year waiting period for instructors, this rule was followed until July 1, 1937. At that time every full-time officer of this rank became eligible to enter the plan after completing one year of service. On July 1, 1938, participation became compulsory for all newly appointed instructors and professors after one year of service; it also became compulsory for professors who accepted promotion or an increase in salary after July 1, 1938. On June 30, 1939, participation became compulsory for any full-time officer below the rank of assistant professor who accepted promotion or an increase in salary. The statute introduces the limitation that college contributions shall cease when the accumulation to the credit of an individual's contract will purchase a half-pay annuity at age 65. It provides for resumption of premium payment if salary is increased after such a cessation, but states that the annuity shall not be more than half the average salary for the last 5 years of service. The Teachers College plan provides for retirement at age 60 unless extension of time is granted, but this provision has been waived since the year 1922. It provides for the continuation of contributions to age 65 if service is continued until that age is reached. By amendment in 1923 it contained the unusual provision that at age 65 the college will make an additional contribution to bring the total of the college contributions up to 5 percent of the total salary after the first 3 years of service; but this was abolished after July 1, 1937, except for those who had completed more than 3 years of full-time service on July 1, 1937. NONFACULTY PLAN

Employees other than officers of administration and instruction are eligible to participate under a group annuity contract between

DESCRIPTIONS

OF

PLANS

S3

Teachers College and the Metropolitan Life Insurance Company after they have completed one year of service. Participation is optional for those who were in service in August, 1937, when the contract became effective, but compulsory for full-time employees engaged after that time. Under this contract annuity benefits are available at age 60; and unless service is continued by special request, retirement is expected at age 65. For determining contributions and benefits, compensation ranges $400 in width are constructed. The employee's contribution is 3.6 percent of the midpoint of his compensation range, and the increment to his annuity benefit for each year's service is 1.5 percent of the same figure. To illustrate, for salaries between $1,000 and $1,400 the monthly contribution is $3.60, and the increase in annuity due to a year's service at this salary is $1.50 a month. The contribution of the college is whatever is necessary when added to the employee's contribution to buy the increment of annuity for the corresponding service. A printed statement signed by Dean Russell and distributed to employees in announcing the plan states that "for those who participate, retirement income benefits will be purchased by the college and the subscribing employees through approximately equal contributions." If an employee withdraws from service, he may have his contributions returned to him in cash or he may wait until he reaches normal retirement age and receive an annuity. If he has contributed for 10 years or more, this annuity will be the full retirement annuity purchased for him during his years of service. If he has contributed for less than 10 years, the annuity is that "purchased by his own contributions." If an employee dies before he has received his contributions in cash or before he has received as much as V/t times his contributions in the form of annuity payments, his beneficiary will receive V/2 times his contributions less whatever has been paid to him in the form of an annuity. The trustees declare the intention, "without creating a legal obligation on the part of the college," of recognizing service prior to the inauguration of the plan by paying upon retirement a pension of 1 percent of the "annual rate of earnings for

54

DESCRIPTIONS

OF

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1936-37" for each year of service after attaining age 35 and prior to the inauguration of the plan. COLLEGE

OF

PHARMACY

On December 5, 1922, the board of trustees of the College of Pharmacy adopted a resolution providing for contributions of 5 percent matched, participation being optional for all teachers and executive officers under age 65 who had been employed for at least 2 years and obligatory after 2 years of service for persons appointed after the adoption of the plan. This resolution is unusual in that it provides that no member of the faculty or administrative officer shall be required to retire at age 65 "provided he is well able to continue his duties" and that the college contributes annually whatever is necessary to support annuities purchased with member contributions to make up allowances of half the annual salary for those who retire after at least 20 years of service. It seems that this second provision was intended to apply only temporarily for the benefit of 2 staff members who were well along in age and service when the plan began. Because the finances of the College of Pharmacy are separate from those of Columbia University the retirement sections of the university statutes do not apply to it. CONGREGATIONAL HOME MISSIONS

AND

CHRISTIAN

CHURCHES,

BOARD

OF

COVERING LE MOYNE, TALLADEGA, TILLOTSON, AND TOUGALOO COLLEGES

This contributory retirement plan for lay workers requires participation of persons newly eligible after January 1, 1939, when they have completed 6 months of service. Member contributions of 3 percent of salary are matched by equal payments from the employer. Retirement may be required after age 60 is reached, may be demanded by the participant after age 65 is reached, and must occur not later than age 68. The retirement benefit is whatever annuity can be purchased with accumulated contributions. In case of total and presumably permanent disability a retirement benefit is available before age 65 is attained.

D E S C R I P T I O N S OF P L A N S

SS

If a member withdraws from service, he may have his contributions returned to him, but if he leaves his contributions with the retirement plan, he retains credits provided by the employer's contributions and may receive the annuity that both accumulations will purchase upon reaching age 60. In case of death in service, accumulated credits will support an annuity for dependents; otherwise they will be paid in a lump sum to a named beneficiary or to the estate of the deceased. Aside from retirement plans making use of T.I.A.A. contracts, this is one of the few plans that preserves until retirement age is reached the whole equity of accrued benefit credits to an individual who withdraws from service before eligible for retirement. UNIVERSITY

OF

CONNECTICUT

The staff members of the University of Connecticut are eligible for participation in a retirement plan for state employees created by an act of the legislature, approved June 30, 1939. Under this act retirement is available, with a retirement benefit of half the average salary for the last 5 years of service, on the application of either the employee or the employer, to an employee meeting any one of the following requirements as to service and attained age: 20 years of service and age 70; 25 years of service and age 50 if a woman, or 25 years of service and age 55 if a man; or 15 years of service if permanently disabled. After 30 years of service the benefit is 60 percent of the average salary for the last 5 years of service, and for each additional 5 years of service the benefit is increased 10 percent until for those with 50 years of service salary is continued in full. During the first 6 years the contributions of members are to be 2]/2 percent of salary. After that it is intended that contributions may be revised after actuarial investigation. Not more than half the benefit is to be taken from the fund consisting of member contributions. Retirement is compulsory at age 65 for women and age 70 for men. All persons in the service of the state are to contribute under this plan "unless they shall have notified the State Comptroller in writing before September 1, 1939." Upon withdrawal from service an individual receives his contributions without interest.

56 CORNELL

DESCRIPTIONS

OF

PLANS

UNIVERSITY

Endowed, colleges at Ithaca.—In 1903 Cornell University initiated a plan by which interested full professors contributed to a retirement fund which started with an anonymous gift of $150,000. This arrangement and Carnegie Foundation retiring allowances were the only provisions for retirement income in operation in the endowed colleges at Ithaca until a joint contributory plan was inaugurated, effective July 1, 1937. This plan covers designated administrative officers and faculty members above the rank of instructor. There is no provision in the present retirement plan to cover instructors in the endowed colleges or to cover the lower administrative, operating, and maintenance group. The university hopes, as soon as it can see its way clear to do so, to provide a contributory retirement plan for these groups. Participation in this plan is optional to eligible persons in service June 30, 1937, but required of newly eligible persons and those in service on that date who subsequently receive promotions in rank or increases in salary. For members born in 1903 or later, retirement is normal on the first day of July of the calendar year in which age 65 is attained. Normal retirement age is scaled upward for older members to age 68 for those born in 1898 or earlier. The university may continue the service of a member after his normal retirement date, and retirement annuity payments are to begin when retirement occurs. With certain exceptions concerning older employees, contributions of the employee and the university are 5 percent of "median salary." Salary ranges $250 in width are established, and the "median salary" of an employee is the middle point of the range in which his salary lies. These contributions become premiums for retirement annuity contracts, and the benefit is just whatever the premiums will buy. For persons in service July 1, 1937, and past age 40 on that date, these contracts are issued by the Prudential Insurance Company of America. Younger persons in service July 1, 1937, and new appointees may choose between the Prudential and T.I.A.A. Contracts of other companies already in effect on July 1, 1937, may be submitted to the board of trustees by any employee as substitutes. Without going into the details of special provisions for older staff

DESCRIPTIONS

OF

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57

members, the objective is given in the following paragraph from the printed statement of the plan, dated at Ithaca on June 21, 1937. The intent of the plan is to enable members to purchase annuities with contributions by the university amounting to 5% of their respective median salaries and equal contributions by the members respectively. Eventually the entire plan will work down to that basis. It is the purpose of the plan that in the meantime the university's contributions shall be greater to the extent necessary to recognize past service at the university of those members who have no Carnegie expectations and who are, on July 1, 1937, over age 40, so as to put them in the same position, so far as the university's contributions are concerned, as they would have been in had this plan been in force at the time they respectively entered the service of the university or reached the age of 40, whichever was the later date. State colleges.—Practically all persons in the service of the Colleges of Agriculture, Home Economics, Veterinary Medicine, and the Experiment Station are paid from state and federal government funds. By special act of the state legislature, in 1930, all such persons were included in the New York State Employees' Retirement System and were granted credit for past service upon payment of contributions corresponding to this service. DARTMOUTH

COLLEGE

Dartmouth College inaugurated a voluntary, joint contributory retirement plan in 1926 for all faculty members including instructors and for administrative officers other than those looking forward to allowances from the Carnegie Foundation. In 1929 this plan was opened to Carnegie expectants on a voluntary basis, and in 1930 the college made certain supplementary provisions for the older members of this class. For Carnegie expectants reaching age 70 prior to June 30, 1940, the college agreed to supplement the allowance expected from Carnegie sources to make up at age 70 benefits calculated by the 1922 Carnegie Foundation rules. For those reaching age 70 after June 30, 1940, the college agreed to purchase supplementary annuities to cover the difference between the allowance at age 70, based on the 1922 Carnegie Foundation rules, with salary for 192930 substituted for the average salary for the last 10 years of service, and $1,500 more than the annuity that could be purchased at age 70 by contributions of 5 percent matched beginning with May 1, 1930.

58 UNIVERSITY

DESCRIPTIONS OF

OF

PLANS

DELAWARE

In December, 1934, the University of Delaware inaugurated a plan for retirement income covering teachers, deans, the business administrator, and the president. Those who were nearing or beyond age 70 when the plan was inaugurated are to receive annuities of 40 percent of annual salaries upon retirement. Eligible persons beyond age 50 are required to purchase annual premium deferred annuity contracts with 8 percent of salary payments, and the university purchased single premium deferred annuities to supplement the benefits purchased by members in order to provide at age 70 annuities of 40 percent of salary. Eligible persons between ages 40 and 50 are required to contribute from 5 percent to 7 ^ percent of salary, depending upon entrance age, for the purchase of annual premium deferred annuities, and these are matched with similar contracts of equal value purchased by the university. Teachers under age 40 are required to participate in the plan when they reach age 40 by contributing 5 percent of salary, this contribution to be matched by equal payments on the part of the university. For those past age 40 when the plan was inaugurated participation in the plan was optional. For persons past age 40 when engaged after the plan was inaugurated participation is required. As increases of $500 in salary are completed, consideration is given to purchasing additional benefits. Retirement is required at age 70 "on a pension of approximately 40 percent of present salary." Retirement is available at age 65 "on whatever annuity is then purchasable by the combined contributions of individual and university" and before reaching age 65 in case of disability that seems to be permanent. Separate contracts are purchased with contributions of the member and the university, both being filed with the business administrator while service continues. The contract purchased with university contributions is "owned by the university," and the contract purchased by the member's contributions is owned by the member; but so long as he is in service he may not surrender, mortgage, assign, or alter his contract. If a member should withdraw from service, his contract is released to him free from all restrictions, the university retaining the policy it has carried for said member's retirement for conversion into cash to be placed in a reserve fund

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59

which will be used ultimately to provide more liberal retirement allowances. In case of death in service the member's beneficiary receives the death benefit under his contract, and, if the retirement and finance committees think the financial condition of the retirement system permits, 1/20 of the cash value of the university's contract may be paid to the beneficiary for each year during which the member contributed, up to 10 years. The single premium annuity contracts needed for older members of the existing staff in establishing this plan were purchased from the Mutual Life Insurance Company. No further such purchases are anticipated in carrying out the provisions of the plan. Annual premium contracts are purchased from the New England Mutual Life Insurance Company. DE ΡAUW

UNIVERSITY

De Pauw University has a partially funded, noncontributory pension plan inaugurated in 1922 and revised in 1935. The revised plan applies to "officially appointed and ranking administrative officers and teachers." Under the 1922 plan retirement was available at age 65 after 20 years of service with a pension of half the final salary. Retirement was required at age 72, with the exception that the rules were waived for persons in service prior to the year 1885. Upon retirement an incapacitated member with 20 years of service was to receive a half-pay pension without regard to age. The widow of a pensioner who had been in service for 20 years and had attained age 50 was to receive a pension 2/3 as large as that of her husband. The plan adopted in 1935 is called the "Mutual Assurance Plan for Retirement." It required retirement at age 65, but was amended in 1938 to permit continuation of service at the option of the staff member until age 67. This plan provides a pension of half the "active salary" upon retirement at age 65 or later after 25 years or more of service, but it states that " these 25 years of service shall be consecutive, unbroken by formal withdrawal from service of the university. Officially granted leaves of absence shall not be considered as breaking continuity of service." If upon reaching retirement age a member

60

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OF

PLANS

has not served for 25 years, the pension is half pay minus 4 percent of salary for each year that the service period falls short of 25 years, with the additional limitation that a pension is not payable after a service period of less than 15 years. If a pensioner leaves a widow who was his wife during 15 years of his service, the widow receives a pension of half her husband's pension, but not more than $1,200 a year. This plan provides that annual salaries and annual allowances shall be included in a single appropriation of the general budget and that "in times of retrenchment, retiring allowances and regular salaries shall be subject to the same percentage of reduction, all sharing proportionally in economies, whether active or retired." The university is considering the establishment of a contributory plan. DE SALES COLLEGE This college distributes a printed statement of its plan to pay pensions of half the average salary for the last 5 years of service to full-time employees past age 70 who have completed the equivalent of 35 years of full-time service for the college. If services are discontinued because of disability or "other just cause," the age requirement may be waived upon recommendation of the president and approval by the trustees or the executive committee. Retirement is required at age 70, and an employee who has not then completed 35 years of service "shall be entitled to retirement compensation" in amount to be determined by the trustees. DETROIT TEACHERS' RETIREMENT

FUND

COVERING W A Y N E UNIVERSITY

This retirement plan was established in 1895. The present enabling act requires contributions of not less than 1 percent or more than 5 percent of salary up to $1,500 a year from eligible persons " a s may be determined by said retirement fund board," the city to make whatever contributions are necessary to supplement member contributions in supporting benefits. At present contributions are 4 percent of salary. Retirement is available after 30 years of service, the last 20 of which shall have been in Detroit schools, no mention being made of

DESCRIPTIONS

OF

PLANS

61

age, or after 10 years of service in Detroit schools in case of disability. The retirement benefit after 30 years of service is "such uniform annuities as may from time to time be fixed by said retirement fund board." The annuity in case of disability retirement is the service annuity determined by the board, prorated in the ratio of years of service to 30 years. Upon withdrawal or death in service part of the member's contributions is payable. If a member withdraws before 5 years of service have been completed, his contributions are returned in full; after from 5 to 10 years of service, 3/4, and after 10 years of service, half of member contributions are returned. If a member dies while in service, 75 percent of his contributions are payable. If a member dies after annuity payments begin, the estate receives the excess, if any, of 75 percent of the member's contributions over the sum of annuity payments that have been made. DISCIPLES

OF CHRIST

PENSION

FUND

COVERING B E T H A N Y COLLEGE, BUTLER UNIVERSITY COLLEGE OF RELIGION, D R A K E UNIVERSITY BIBLE COLLEGE, E U R E K A COLLEGE, L Y N C H B U R G COLLEGE, AND T R A N S Y L V A N I A UNIVERSITY COLLEGE OF THE B I B L E

The Pension Fund of the Disciples of Christ is an independent corporation, offering membership to staff members of many different organizations connected with the Churches of Christ, otherwise known as Disciples of Christ. Included among these are staff members of colleges and universities connected with these churches, and the institutions listed above report having taken advantage of this opportunity. These colleges adopted this plan to apply to faculty and administrative staff members and to others who will probably stay with the institutions until retirement. Participation is optional to individuals from the beginning of service and obligatory after one year of service. Male participants who are college staff members contribute 5 percent of their salaries, and the employing college contributes 5 Yi percent of the participant's salary. The contributions for women are smaller by 1 percent, because there are no widows' benefits connected with their membership.

62

DESCRIPTIONS

OF

PLANS

Normal retirement age is 65 years, but the pension fund is willing that service be continued until age 70. The retirement benefit is 1 / 7 0 of the total salary payments during membership, and half this amount is to be continued to a surviving widow. In case of death in service a lump sum of 75 percent of current salary, but not more than $1,000, is paid and the widow, if any, receives a benefit of 25 percent of average salary, but not more than $300 a year. In case of total and permanent disability a pension of 40 percent of average salary for the last 5 years of membership, not to exceed $600, is payable, with half as much continued to a surviving widow. In case of withdrawal from the service upon which eligibility is based, an individual may, after 5 years of participation: ( 1 ) continue full membership by paying the full 10^4 percent or 8J4 percent contribution; ( 2 ) continue partial membership by paying the 5 percent or 4 percent that he or she had been paying; ( 3 ) discontinue payments and allow credits to remain and provide a prorated pension at 65; or ( 4 ) request his accumulated contributions in cash together with such portion of the institution's payments as "have not been actuarially required for their (the members') protection." T o those who withdraw before completing 5 years of participation, accumulated member contributions are returned. "Such portions of the institution's payments as have not been required for their protection" are also returned. DREXEL

INSTITUTE

Drexel Institute established a voluntary contributory retirement plan in 1929, together with a life insurance plan, both covered by group contracts with the Metropolitan Life Insurance Company. The retirement plan is open to all faculty members and administrative officers of the institute. A member contributes 5 percent of salary to the nearest multiple of $30 a year. Retirement is available at age 70 for those who are in service and age 45 or more when the plan was established, and at 65 for all others. The benefit upon service retirement is percent of salary when the plan was established for each year of service prior to that time and 2 percent of each year's salary after that time, the total benefit not to exceed $5,000 a year. Contributions automatically cease when the combined

DESCRIPTIONS

OF

PLANS

63

annuity units already purchased reach $5,000. The contribution of the institute is whatever is necessary to supplement member contributions in payment of premiums on the group annuity contract. If a member withdraws from service, he has the option of accepting a paid-up deferred annuity contract, payments to start at normal retirement age and to be whatever member contributions will purchase, or of adding to this benefit by continued premium payments, or of receiving in cash the contributions he has already paid without interest. In case of death prior to retirement, member contributions without interest are paid. The institute contributes nothing toward retirement benefits of a member who withdraws from Drexel, regardless of how long he may have served. ELMHURST

COLLEGE

Elmhurst College has an arrangement established about 10 years ago by which the college purchases from the Pacific Mutual Life Insurance Company retirement annuity contracts to provide faculty members with $30 a month upon retirement at age 70. In case of withdrawal from service the equity of the contract reverts to the college. Retirement is available at age 65 and is required at age 70. This arrangement is not satisfactory to the administration as a plan for retirement income and is looked upon only as temporary, pending the installation of a more comprehensive plan. FIND LAY

COLLEGE

Upon retirement from service, pensions of $50 a month are paid; no further information is available. FLORIDA, RETIREMENT

OF STATE

EMPLOYEES

COVERING FLORIDA STATE COLLEGE FOR W O M E N AND UNIVERSITY OF FLORIDA

Effective in 1937, the legislature of the state of Florida adopted an act to permit the retirement of state officials and state employees, reading as follows: Section 1. That from and after the passage of this Act, whenever any State Official or State employee has attained the age of Seventy years or more and has served the State as either an official or employee or both for

64

DESCRIPTIONS

OF

PLANS

as much as an aggregate time of thirty years, or more, such official or employee may retire from his office as such official or employee with the right to be paid, and shall be paid on his own requisition during the remainder of his natural life one half the amount of the annual or monthly salary received at the time of such retirement; and sufficient money to meet the requirements of this Act is hereby appropriated out of any moneys in the State Treasury not otherwise appropriated. UNIVERSITY

OF

FLORIDA

In addition to the benefits available through the law quoted above, the University of Florida has adopted a policy by which persons of age 65 who have completed 10 years of service under the board of control may be placed on "special status." A person on "special status" is relieved of teaching and routine duties, but may be given "some special assignment in the nature of research, writing, or other appropriate tasks" and receives compensation of 20 percent of his average salary for the last 5 years of service plus 1 percent of this average for each year of service up to 30 years. A disabled staff member may be placed on "special status" at age 60 if he has completed 10 years of service. HARVARD

UNIVERSITY

PROFESSIONAL STAFF M E M B E R S

Νoncontributory pension plan, 1899.—In the year 1899 the president and fellows of Harvard established a noncontributory retirement plan for officers of instruction and administration under which any person aged 60 or more who had served at least 20 years with the rank of assistant professor or higher was entitled to retire with an allowance of 1/60 of his last year's salary for each year of credited service, the allowance not to exceed 2/$ of salary. The university could require retirement at age 66. On March 29, 1915, the president and fellows voted that this plan should not apply to persons receiving a first appointment in the rank of assistant professor or higher after that date, in view of the fact that, having accepted the system of pensions established by the Carnegie Foundation, the university had not added to its retirement fund, which was consequently entirely inadequate to furnish retirement benefits.

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65

Contributory plan, 1920.—Between the years 1915 and 1920 the university offered no cooperation to those entering service or reaching the rank of assistant professor, so far as provision for retirement was concerned. In 1920 a contributory plan was established. Participation was required of all teachers appointed after September 1, 1920, for a period longer than one year. Participation was optional up to December 31, 1920, to those who had entered the university's service after November 17, 1915. As adopted in 1920 this plan required each participant to contribute 10 percent of his salary, and no contribution was made by the university. This feature was modified in 1926, so that now the teacher contributes 5 percent and this is matched by the university. The plan provided that interest be "payable upon such payments" at the rate earned on the general funds of the university, less such deduction for expenses as the corporation might deem best and less whatever the corporation might see fit to reserve for the purpose of protecting investments against depreciation. While the plan permitted the university to invest these funds separately, "at the risk of the teacher," no segregation was made between them and the funds belonging to the corporation. Retirement is available at age 60 and may be required at age 66. Upon retirement at least 95 percent of the accumulation (this was 90 percent prior to a revision in 1926) was to be used to purchase an annuity or annuities of type agreed upon between the university and the teacher or at the discretion of the university if the teacher's request were not satisfactory. The part of the accumulation not used to purchase such contract or contracts was to be paid in cash upon retirement. Upon withdrawal or death prior to retirement, the full accumulation was payable in cash, with the exception that if withdrawal should occur within 5 years of eligibility for retirement the university might require that the accumulation be applied to the purchase of an annuity. Shift to retirement annuity contracts.—Harvard continued to finance its 1920 contributory plan internally until September 1, 1936. Then the corporation decided to modify the plan, after a vote of approval by the participants, by purchasing retirement annuity con-

66

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OF

P L A N S

tracts with the accumulations already to the credit of members and by applying future joint contributions to the purchase of similar contracts. The accumulations to the credit of individuals were used to purchase single premium deferred annuities and current contributions were applied as premiums on separate monthly premium retirement annuity contracts. This separation was determined upon in part because the old plan promised payment in a lump sum upon withdrawal from service, except when nearing retirement age. While it seemed desirable to retain this understanding with respect to past contributions and while the T.I.A.A. was willing to provide for it by special endorsement of single premium contracts, the Harvard Corporation considered that this feature was of doubtful value and was ready to eliminate it insofar as future contracts were concerned. Other modifications of the old plan that were necessary to make possible the use of monthly premium retirement annuity contracts of T.I.A.A. with reference to current service were minor and were made. Contributory plan, 1929.—When the Carnegie free pensions were scaled down, in 1929, Harvard made a special offer to 162 officers of instruction and administration who had Carnegie expectations and to 24 others entitled to university pensions. For each of those officers who agreed to contribute 5 percent of their salaries thereafter toward retirement benefits the total benefit including payments from Carnegie sources was to be half the average salary for the last 5 years of service, but not more than $4,000. The practical effect of this offer was to make allowances of at least half pay available to teachers eligible for noncontributory pensions who were willing to share in the cost. It did not apply to those who would have pensions of more than half pay under the rules without the proposed contributory supplement. The offer was accepted by all but 31 of those to whom it was made. MAINTENANCE

STAFF

In November, 1937, Harvard inaugurated a joint contributory retirement plan for employees "not appointed by the Corporation," consisting largely of the maintenance staff. Participation is required of all those who had completed 3 years of service on February 1,1937, and of others on the first of February following completion of 3 years of service.

DESCRIPTIONS

OF

PLANS

67

Participants are to retire on February 1 following attainment of age 65 "unless specifically permitted to remain in service." Contributions to this plan, during each year beginning with February 1, are dependent upon the salary or wage during the preceding calendar year. Compensation ranges $200 in width are constructed, and an individual's contribution is 4 percent of the lower limit of the salary range in which his compensation fell during the preceding year. Upon retirement of a regular employee who had completed 3 years of service on February 1, 1937, and who was in service at that time, the university plans, without undertaking an obligation, to pay a pension in recognition of prior service. This expected pension is 1 percent of compensation during the calendar year 1936 for each year of service prior to February 1, 1937, after having attained age 35 plus Yi percent of this compensation for each year of such service at an earlier age. HIRAM

COLLEGE

In the year 1935 Hiram College inaugurated a noncontributory, nonfunded pension plan, under which retirement is available at age 65 and required at age 70 with a pension, after 15 years of service, of half the average salary for the last 5 years of service. This plan was established to operate "until such time as the College may be able to organize and institute a cooperative plan of retiring allowance." HOWARD

UNIVERSITY

In the year 1927 Howard University announced a noncontributory pension plan, under which administrative officers and faculty members above the rank of instructor who had completed 20 years of service could retire at their option upon reaching age 65, could be retired by the university at age 68, and should retire automatically at age 70. A pension of yi the average salary for the last 5 years of service was payable upon retirement. Effective on July 1, 1934, a contributory retirement plan was inaugurated calling for contributions of 5 percent of salary from each participant and an equal amount from the university, these contributions to become premiums on T.I.A.A. contracts. Participation in

68

DESCRIPTIONS

OF

PLANS

this plan was required in case of advance in rank or salary of all administrative officers and faculty members above the rank of instructor who were then under age 45 and of all newly appointed staff members of this class regardless of age. Those in service at the inauguration of the plan who were between the ages of 45 and 65 and who could complete a total of 20 years of service were given some of the advantages of the earlier pension plan on condition that they participate in the contributory plan. For those past age 65 the pension plan continues to operate without change or obligation on the part of the members. For those between age 60 and age 65 who would qualify under the pension plan upon reaching age 65, the benefit of the pension plan will be guaranteed if the member participates in the contributory plan during the remainder of his service. Those between age 60 and age 65 who will not have completed 20 years of service upon reaching age 65 may join the contributory plan, but they are not required to do so. Participation in the contributory plan is available to those between age 45 and age 60 and required of them upon advance in rank or salary. For those who participate in the contributory plan and complete 20 years of service the total retirement benefit at age 65 is to be not less than l/z of average salary for the last 5 years of service—the benefit under the old pension plan. No such expectations are held out to persons joining the staff after the plan was inaugurated. UNIVERSITY

OF

ILLINOIS

In 1925 the University of Illinois established a noncontributory retirement and death-benefit plan. The resolution inaugurating this plan states that the compensation of staff members as provided by contracts of employment shall be partly in cash and partly by means of death and retirement benefits. The purpose of the plan was to acquire and to maintain stability and permanence of the staff by inducing members to remain with the university for long periods of time. After the first year of service the death benefit is 5 percent of the cash salary for the year of service in which death occurs, multiplied by the number of years of service including the year of death, but is

DESCRIPTIONS

OF PLANS

69

not to be more than 50 percent of such salary nor more than $3,000. The benefit is not available in case of suicide or death through violation of certain laws. Normal retirement age is 68 years, but under special conditions retirement is possible at age 65 and may be delayed after age 68 by yearly extensions of service. The benefit is 25 percent of the average of the cash salaries for the last 5 years of service, plus I percent of such average for each year of service, but not more than 50 percent of such average salary and not more than $6,000 for a president, $4,000 for a dean or general administrative officer, or $3,000 for other members. Retirement because of physical disability is provided for any member of the staff who has been in the service of the university for not less than 5 years, in which case an annuity of 25 percent of the average cash salary for the last 5 years of service, plus percent of such average for each year of service is paid for a period of years equal to 1/5 of the number of his years of service. For anyone who has been in service for 15 years and is retired under this rule the annuity is paid during the remainder of life. The resolution makes these benefits a matter of contract of employment and states that they are part of the compensation of the members. However, all benefits are forfeited in case service is discontinued, either voluntarily or otherwise, and the trustees reserve the right to "alter, modify or annul" the provisions "without liability." STATE

UNIVERSITY

OF

IOWA

The University of Iowa provides part pay for part service after a faculty member attains age 70; the usual arrangement is half salary for a half-time schedule, but as age advances duties must be adjusted to the individual's state of health. THE JOHNS

HOPKINS

UNIVERSITY

In 1930 Johns Hopkins adopted a voluntary, contributory plan, using T.I.A.A. contracts, to cover professors, associate professors, and "other officers of equal rank." As early as 1927 a similar plan had been inaugurated for staff members of the School of Hygiene. For those with expectations from the Carnegie Foundation the plan

70

DESCRIPTIONS

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PLANS

is to provide an annuity of $1,500 a year with payments beginning at age 70. For this purpose the university matches member contributions up to 5 percent of salary, and if the annuity thus provided is less than $1,500 beginning at age 70, the university undertakes to make up the difference. For those in service when the contributory plan was inaugurated with no expectations from the Carnegie Foundation the plan is to provide an annuity of half the average salary for the last 5 years of service, but not more than $4,000 a year, first payment to be made at age 70. Again the university matches contributions up to 5 percent of salary and hopes to supplement the annuity thus provided, if this is necessary, in order to bring the total benefit to the halfsalary or $4,000 objective. For entrants since the plan was inaugurated the benefit is merely that purchased with premiums of 10 percent of salary. UNIVERSITY

OF

KENTUCKY

In the year 1928 the University of Kentucky inaugurated what is called a "change of occupation" plan, under which, upon attaining age 70, a staff member no longer performs the duties theretofore assigned to him, but instead has "such duties as may be designated by the President of the University." As compensation, he receives 20 percent of his salary at age 70 plus 1 percent of this salary for each year of service in the university. While the resolution mentions only teachers and administrative officers, the principle of the plan has been extended to other members of the staff. UNIVERSITY

OF KING'S

COLLEGE

Early in 1939 the University of King's College announced a plan by which the college will contribute dollar for dollar up to 5 percent of each faculty member's salary, but not to exceed $200 a year, toward the purchase of a retirement annuity contract maturing at age 65. Any form of annuity may be selected by the faculty member if it meets with the approval of the executive committee. Any annuity contract already held may be brought under this plan if it meets the above conditions. Participation in this plan is compulsory for faculty members up to 3 percent of salary.

DESCRIPTIONS LINFIELD

OF

PLANS

71

COLLEGE

In February, 1936, the trustees of Linfield College inaugurated a voluntary contributory retirement plan applying to faculty members and employees. The college offered to contribute 2 percent of the salary of any participant who would contribute 5 percent, these contributions to become premiums for endowment insurance or annuity contracts of the Oregon Mutual Life Insurance Company. Contributions are to continue until the anniversary of the policy nearest the 65th birthday for men and the 60th birthday for women. If a member owns less than $2,000 of unencumbered life insurance, contributions are to be applied to a life-income endowment policy and are compulsory. These policies are assigned to the college and are held by it during service. In case a member withdraws from service after completing less than 5 years of service prior to reaching retirement age (65 for men, 60 for women), his policy will be released to him if he will pay to the college 2/7 of the cash surrender value; if the period of total service upon withdrawal is between 5 and 10 years, the payment for such release is 1/7 of the cash surrender value; and after 10 years of service the policy is released without charge in case of withdrawal. In case of death in service the full equity in the contract is released to the member's beneficiary. Whenever salary increases are made, contributions are increased accordingly; these increases in contributions are accumulated by the college at 2 percent interest until the accumulation is sufficient to purchase a single premium life-income endowment or a retirement annuity contract of $500 or more. LOUISIANA,

TEACHERS'

RETIREMENT

SYSTEM

COVERING L O U I S I A N A POLYTECHNIC I N S T I T U T E , STATE N O R M A L COLLEGE,

STATE

UNIVERSITY,

SOUTHERN

UNIVERSITY,

AND

SOUTHWESTERN L O U I S I A N A I N S T I T U T E

This contributory retirement plan was established in 1936 to cover public school teachers and related officers, including any "president, dean, or teacher in any educational institution supported by and under the control of the State." Membership is required of eligible persons appointed after the plan was inaugurated and of those in

72

DESCRIPTIONS

OF

PLANS

service at that time who did not file a request for exemption within 90 days. Members contribute 4 percent of salary until they reach age 60 and may continue to contribute after that if they so desire. Retirement is available at age 60 and required at age 70, with the exception that 2-year extensions may be made by the board of trustees. The superannuation retirement benefit in recognition of current service consists of the annuity that can be purchased with member contributions, plus a pension from the state equal to the annuity that could be purchased at age 60 with member contributions paid up to the attainment of that age. Any member who served prior to the establishment of the plan receives an additional pension equal to twice the annuity that would have been provided during his years of prior service had the plan been inaugurated when his service began. In case of disability that is presumably permanent, after 10 years of service, a member receives the annuity that his contributions will purchase, plus 75 percent of the pension that would be available to him from the state at age 60 if service were continued until then at the same salary as is being received when the disability occurs. Optional forms of settlement are available upon retirement. If a member dies or withdraws from service before he is eligible for retirement, his contributions are returned with interest. UNIVERSITY

OF

LOUISVILLE

Late in 1938 the university inaugurated a contributory retirement plan available to faculty members past age 30 and above the rank of instructor and to specified administrative officers. Participation in the plan is required of new appointees whenever eligible; it was optional to those in service when the plan was inaugurated, but a large majority of eligible staff members joined. Retirement is expected at age 70 of those past age 60 when the plan was inaugurated, retirement age being scaled downward for younger members to age 65 for those under age 40 and for all new appointees. Service may be extended beyond normal retirement age by special vote of the trustees, but not beyond age 70. Equal contributions by the participant and the university are scaled to age of entry to produce an annuity of at least $50 a month

DESCRIPTIONS

OF

PLANS

73

beginning at age 65. For entrance at age 30 this contribution is $37 a year from each, and for each year that the initial age exceeds 30 years the premium increases $3, up to a contribution of $130 at age 61, the highest age for entrance in the plan. These contributions are paid as premiums for individual retirement annuity contracts issued by the John Hancock Mutual and the New England Mutual life insurance companies. These contracts are the property of the participants even upon withdrawal from service. UNIVERSITY

OF

MAINE

In the year 1933 the University of Maine inaugurated a voluntary contributory retirement plan, making use of retirement annuity contracts of the John Hancock Mutual Life Insurance Company. Participation is available to all classes of employees on the 15th of October following their appointment to service. Each month, a participant contributes 5 percent of his monthly compensation to the nearest dollar as premium to purchase a retirement annuity contract, and the university does likewise. Upon retirement from service at age 65, or earlier by mutual consent of the university and the staff member, the retiring member receives the annuities furnished by both these contracts. If a participant withdraws from service "prior to retirement," he may continue his contract in force and may purchase the university's contract and continue it in force by payment of premiums, or he may request a fully paid-up income at age 65 for his contract in the amount that contributions he has already made will purchase, or he may surrender his contract for its cash value. After a dozen years this cash value becomes as large as the sum of premiums he has paid, and after longer periods of participation it becomes substantially larger than the sum of premiums. If a participant withdraws from service after having completed 25 years of service, premiums will be discontinued on the contract purchased by the university. If when the participant reaches retirement age his contract is still in force, and if it provides an annuity at least as large as that provided by the university contract, the latter will be released to him. If a participant dies in service, his beneficiary receives the sum of premiums that he paid or the cash value

74

DESCRIPTIONS

OF

PLANS

of his contract, if larger. Several different forms of optional settlement are available when annuity payments are to begin. Supplementary benefits.—The university announced that it was building up a "contingent fund" for the purpose of supplementing the benefits described above for those who were so far along in years when they entered the plan that the annuities purchased would not produce a total benefit at age 65 of 25 percent of final salary. The university expects to keep this fund "sufficient at all times to guarantee the minimum retirement income," 25 percent of final salary. Reductions are made in this supplement if the participant chooses an option resulting in annuity payments smaller than under regular settlement or if he fails to become a participant at the earliest opportunity. UNIVERSITY

OF

MANITOBA

In 1927 the University of Manitoba inaugurated a voluntary contributory retirement plan applicable to all members of the staff and using contracts of T.I.A.A. Members of age 45 or more when the plan was inaugurated were to retire at age 70; those between age 40 and age 45, at 68; and those under age 40, at age 65. Members who were age 50 or more when the plan was inaugurated contributed 7 percent of salary; those between age 45 and age 50 contributed 6 percent; and those under age 45 contributed 5 percent of salary. The university made equal contributions. In 1937 this plan was revised, and "The Annuity By-law" added much in definiteness. Under this revision participation in the plan is available to designated administrative officers and to full-time members of the teaching staff having the rank of lecturer or higher with salary of $1,200 a year or more who: (a) are under age 50 and have completed 2 consecutive years of service at the university; or (b) come to the university with the rank of assistant professor or higher or with a retirement annuity contract of T.I.A.A. already in force. Contributions matched by the university are fixed at 5 percent of salary, but they are not to exceed $200 a year. Contributions of the university cease at age 65 or when the annuity provided by this plan and by any similar plan of an institution from which the mem-

DESCRIPTIONS

OF

PLANS

75

ber may have come amount to 2 2/9 percent of each year's salary up to 30 years, with first payment at age 65, or $2,400 a year, whichever is smaller. Any member in the service at the time of this revision who did not join the plan by May 1, 1937, thereby released the university of obligations as to a retiring allowance. For eligible persons appointed after January 1, 1937, participation is required after attainment of age 30. MARY

BALDWIN

COLLEGE

In the year 1936 Mary Baldwin College inaugurated a contributory retirement plan covering faculty members and administrative officers. Participation is required of those with salaries of $1,000 or more after 2 years of service. Member contributions of 5 percent of salary are matched by equal contributions on the part of the college, these contributions becoming premiums for a retirement annuity contract issued by the New England Mutual Life Insurance Company. For those under age 50 when the plan was inaugurated retirement will normally occur at age 65, while for older participants retirement will be normal at age 70. However, the college may retire individuals before they reach normal retirement age and may extend the service of some beyond that age. If a member withdraws from service at an age more than 10 years lower than normal retirement age, he receives half the cash value of his retirement annuity contract, the other half being returned to the college. If a member withdraws within 10 years of attainment of normal retirement age he has no right to lump-sum cash settlement without the consent of the college. In case of death in service, the whole of the death benefit under the retirement annuity contract accrues to the beneficiary or estate of the deceased. For each of those above age 50 when the plan was inaugurated who cannot through regular contributions accumulate a retirement annuity equal to 1/3 of salary, the college purchases from the insurance company additional benefits sufficient with the regular annuity to produce at age 70 a benefit of 1/3 of salary.

76

D E S C R I P T I O N S

MARYLAND,

TEACHERS'

OF

RETIREMENT

PLANS

SYSTEM

COVERING UNIVERSITY OF MARYLAND

On October 1, 1937, membership in the Teachers' Retirement System of the State of Maryland was extended to members of the faculty and staff of the University of Maryland. Membership is required of eligible persons appointed after participation in the system was extended to the university staff, and was optional to those in service at that time. Under this plan service retirement is available at age 60 and is required at age 70. Upon retirement from service the state furnishes a pension of 1/140 of average salary for the last 10 years of service multiplied by the number of years of member service. Contributions of members are computed in accordance with age at entrance and sex to provide at age 60 an annuity equal to the above-mentioned pension. Member contributions are accumulated at 4 percent interest, compounded annually. The annuity that is actually paid to a retiring member is to be just whatever his accumulated contributions will provide. The state provides an additional pension in recognition of service prior to the establishment of the system in 1927 of 1/70 of average final compensation for each year of such prior service, thus placing the member in somewhat the same position insofar as a retirement benefit is concerned as if the retirement system had been established when his services began. The system provides a retirement allowance after 5 or more years of service, regardless of age, in case of disability which is likely to be permanent. The disability allowance is approximately 9/10 of 1/70 of the average final compensation for each year of service. Several optional forms of allowance are available upon retirement. If before retirement a member resigns or is dismissed or dies, his accumulated contributions are payable to him or on his behalf. If a member dies after one or more years of service, an additional payment of an amount equal to 50 percent of his average final compensation is payable by the state on his account.

D E S C R I P T I O N S MASSACHUSETTS

INSTITUTE

OF

OF

PLANS

77

TECHNOLOGY

FACULTY PLAN

Massachusetts Institute of Technology has a combined annuity and insurance plan which became effective October 1, 1926. Membership was made optional to faculty members in service at the time of adoption, so long as they were not promoted, but compulsory for new appointees and for others upon promotion. The plan applies to instructors and teachers of higher rank and to such administrative officers as the executive committee and the institute may determine. Each member contributes 5 percent of his salary to what is called the "Teachers Annuity Fund," while the institute contributes 5 percent of each member's salary to another fund called the "Pension and Insurance Fund"—3 percent to support pension payments and 2 percent for payment of premiums on group insurance furnished by a commercial life insurance company. Pension Association.—This plan is administered through the "Massachusetts Institute of Technology Pension Association," consisting of the institute and the contributing members, with a board of 5 trustees, 3 of whom are appointed by the executive committee of the institute and 2 elected by the members of the association; a president and a secretary are elected annually by the members. Upon retirement that annuity is payable which can be purchased "at the most favorable rate" with the teacher's accumulation in the Annuity Fund and, up to a limit of $1,200 a year, this is matched by an annuity from the Pension and Insurance Fund. Normal retirement age is 70 years, but the institute may require retirement at age 65. In case of death prior to retirement the member's own accumulations plus the proceeds of a $5,000 group life insurance policy are paid to a designated beneficiary or his estate. Upon separation from service prior to age 55 for any cause other than retirement, a member receives in cash his accumulated salary deductions. If such separation occurs at age 55, the member receives a sum equal to 160 percent of his accumulated contributions, and for each additional year of age this benefit is increased 4 percent of the accumulated contributions up to 196 percent for retirement at age 64. This is limited by the proviso that the additional separation

78

DESCRIPTIONS

OF

PLANS

benefit after a member attains age 65 shall not exceed the value of a life annuity of $1,200 a year, first payment at age 65. With the approval of the treasurer of the institute a member who has already provided for an annuity payable to him at age 70 or earlier may be excused from salary deductions and a member may substitute payment of life insurance premiums for half his salary deductions without sacrificing the annuity benefit payable by the institute. NONFACULTY PLAN

Effective July 1, 1938, the institute inaugurated a contributory retirement plan for "Office, Laboratory and Maintenance employees," in which participation was required of all regular employees under age 65 after the completion of 3 years of service. The plan is administered through a group annuity contract with the John Hancock Mutual Life Insurance Company. Retirement will normally occur on the first day of July nearest to the member's 65th birthday, but with the consent of the institute a member may retire as much as 10 years earlier and receive a reduced retirement benefit. If services are continued beyond normal retirement date, retirement annuity payments will be made during such service. Member contributions are 3 p e r c e n t of basic salary. The increment of retirement annuity purchased each year is percent of the basic salary, so that the total of retirement annuity payments to be made each year for life is V/2 percent of the total of salary payments corresponding to which contributions have been made. In case of death in service a named beneficiary or the member's estate receives the total contributions of the member without interest. In case death occurs after retirement, if an optional settlement has not been chosen, the benefit is the excess, if any, of member contributions without interest over the sum of annuity payments already made. If a member withdraws from service, he may have his contributions, without interest, returned to him. If he has completed 10 years of participation in the plan, he may choose, instead, an annuity with payments to begin at his normal retirement date and to be purchased with his own and the institute's contributions on his behalf. If he has

DESCRIPTIONS

OF

PLANS

79

not completed 10 years of participation in the plan, he may choose an annuity of this type if the payments will be as much as $5 a month, but the institute's contributions are not available to aid in this purchase. If request is made as much as 5 years before retirement, a member may choose an annuity under which payments shall continue to a named "contingent annuitant" if this beneficiary is living after the death of the retired member, but if such a choice is made it cannot be rescinded unless the contingent annuitant should die, "nor can earlier optional retirement date be elected without the consent of the Insurance Company." MASSACHUSETTS

STATE

RETIREMENT

SYSTEM

COVERING MASSACHUSETTS STATE COLLEGE AND LOWELL TEXTILE INSTITUTE

Inaugurated in 1911, this compulsory contributory retirement system covers, among others, the staff members of Massachusetts State College and Lowell Textile Institute. Member contributions of 5 percent of compensation up to $50 a week are accumulated at 3 percent interest. The benefit at retirement is the annuity that these accumulated contributions will purchase, the retirant having a choice between several types of annuity plus a pension of equal value in the form of a single life annuity. Retirement is available after attainment of age 60 and completion of 15 years of service or without regard to age after the completion of 35 years of service. Of some classes of state employees retirement is required at age 65 and of all other classes, including all the employees of Massachusetts State College, retirement is required at age 70. If a member withdraws from service before becoming eligible for retirement, his contributions accumulated at 3 percent interest are returnable. More liberal benefits are available in case of disability and in case of accidental death. MICHIGAN

STATE

COLLEGE

A noncontributory pension plan was approved by the State Board of Agriculture for all employees of Michigan State College on Sep-

80

DESCRIPTIONS

OF

PLANS

tember 9, 1937. Those on the salary pay roll are eligible for immediate membership, while those on the labor pay roll are eligible after 6 months of service. Retirement is provided for at age 65, but service may be continued longer by invitation, and such service is added to the years of credit in calculating the pensions. Superannuation retirement is available at age 65 or after 25 years of service. A disability pension is available after 15 years of service. The pension is 1 percent of the average salary during the 5 consecutive years of service for which salary was highest, multiplied by the number of years of service, but shall not be less than $40 a month or more than $125 a month. In calculating the pension for anyone who retires after 25 years of service, but before attaining age 65, the years of service credited may be decreased by 65 minus the age of retirement. MICHIGAN

TEACHERS'

COVERING MICHIGAN

RETIREMENT

FUND

COLLEGE OF M I N I N G AND TECHNOLOGY,

CENTRAL STATE TEACHERS COLLEGE, MICHIGAN STATE NORMAL COLLEGE, WESTERN STATE TEACHERS COLLEGE, AND NORTHERN STATE TEACHERS COLLEGE

The Michigan Teachers' Retirement Fund was modified substantially by a law enacted in 1937. Under it each teacher contributes 3 percent of salary up to $3,000 a year and receives upon retirement at age 60 or older after completing 30 years of service a pension half as large as average salary for any consecutive 5 years of service, this pension to lie between the limits of $600 and $1,200 a year. If a teacher has completed 25 years of service, but not 30 years, when applying for retirement after attaining age 60, the pension is reduced by applying the ratio of number of years of service to 30 years. Of the 30 years of required service, at least 15 years must be in the state of Michigan, and these 15 years must include the last 5 years of service. Another requirement is that the sum of a teacher's contributions must be at least as large as the annuity payments of a single year. In case of withdrawal from service or death in service 3/4 of a member's total contributions are payable without interest.

DESCRIPTIONS UNIVERSITY

OF

OF

PLANS

81

MICHIGAN

Benefits were paid by the Carnegie Foundation for retired faculty members as early as the college year 1908-9. In April, 1919, the university adopted a contributory plan for those without Carnegie expectations, participation in this plan being a condition of employment for those of professional rank appointed after the adoption of the plan. For instructors who had been in service less than 3 years participation was made optional. Participation was also optional for those in service when the plan was adopted if they had joined the university since November 17, 1915, and if they had no Carnegie expectations due to earlier service elsewhere. By special action the regents of the university have included in the plan certain staff members for whom it seemed that provision should be made. Contributions are 5 percent of salary up to $250 a year; the university arranges to deduct this amount from regular salary payments, to match it with a like university contribution, and to pay it as premium for retirement annuity contracts of T.I.A.A. Additional payments may be made by the members, but these do not affect the university's contributions. On October 20, 1933, a by-law was enacted by the board of regents providing that service should automatically terminate at the end of the semester in which age 70 is reached or on the 70th birthday if this occurs between commencement day and the opening of the fall semester. Services may be extended by mutual agreement. Supplementing Carnegie expectations.—The university offered to supplement expectations of those whose terms of service began prior to November 17, 1915, and who would join the contributory plan as of January 1, 1931. As to the benefit for service retirement, the university offered to match the teacher's 5 percent in payment of premiums on a contract which would be the property of the teacher and to add what might be necessary upon retirement at age 70 to bring the total benefit, including Carnegie Foundation allowance and Carnegie Corporation annuity, to $400 more than half the average of salaries for the last 5 years of service, but not more than $4,000. In case of retirement between ages 65 and 70, for each year that retirement anticipates age 70, the maximum benefit is to be decreased by 1/15 of what it would be at age 70 if the salary being paid at

82

DESCRIPTIONS

OF P L A N S

retirement were continued to age 70. Contributions by the university are to cease if and when the accumulated premiums are sufficient to purchase at age 70 an annuity large enough to supplement Carnegie expectations in making up the above stated maximum. Retirement is permissible for those who have reached age 65 and have completed 15 years of service as a professor or 25 years of service as instructor or as instructor and professor (such service not being limited to service at the University of Michigan). Retirement for permanent total disability is allowable prior to age 65 for those who have completed 25 years of service as a professor or 30 years of service as instructor and professor. The benefit in case of retirement for disability is that which would be available to the member upon retirement at age 65 if the salary being received at the time of disability were continued until age 65. If a participant dies without having completed the requirements for retirement, the death benefit of the deferred annuity contract is available to the named beneficiary or to the estate. In case of death after retirement or after service requirements for retirement have been completed, half the benefit being received or half the benefit that would be available to the teacher in case of retirement is paid to the widow provided she has been his wife for at least 10 years. The regents stated that they will not be responsible for retirement benefits for those who do not accept this offer. Out of approximately 162 persons to whom this supplementary offer was open, all but 8 accepted it, and these 8 signed papers purporting to release the university of responsibility for old-age benefits. MILWAUKEE-DOWNER

COLLEGE

Provision has consistently been made by vote of the executive committee of the trustees for professional and service staffs. No further information is available. UNIVERSITY

OF

MINNESOTA

The University of Minnesota was added to the "accepted" list of the Carnegie Foundation free pension plan in the year 1909. A university pamphlet issued in January, 1937, under the title Outline of Insurance and Retirement Plans for Members of the Faculty

DESCRIPTIONS

OF

PLANS

83

describes a noncontributory, nonfunded plan which operated during the years 1931-33, inclusive, as follows: On December 18, 1930, the Regents authorized the payment of retirement allowances to professors and associate professors under certain terms and conditions. This plan provided for part-time service between age 68 and 70 and retirement at age 70. The retiring allowance of members of the staff of the University was set at SO per cent of the average base salary for full-time service during the five years preceding age 68, subject to a maximum of $2,500 for professors and $2,000 for associate professors. In the case of members of the staff eligible for Carnegie retiring allowances, the University undertook to supplement the Carnegie allowances so that the full amount as stated above might be received. This plan was admittedly temporary. The Regents so stated in approving the plan. It contained no provision for members of the staff who completed their university service as assistant professors and instructors. It was not on a contractual basis and presumably would be continued only so long as the University had available the necessary funds. It was apparent from the inception of this plan that, according to the computations made, within a limited number of years the burden of expense would be great.

In April, 1934, this plan was amended to state that "the period beyond age 70 shall be regarded as a period of continuing service and that members of the staff should be continued on pay for such duties as may be determined by the President of the University." This act of the regents limited retiring allowance for a president to $6,000 a year and that for a dean or administrative officer of corresponding rank to $3,500 a year. In January, 1935, the board of regents fixed the retirement age at 68 years, but added that service might be extended to age 70 "at a reduced salary and with a definite limitation of functions." This resolution repeated the declaration that the period beyond age 70 should be regarded as a period of continuing service, extended coverage to assistant professors and instructors with maximum annuities of $1,500 and $1,000 a year, respectively, and introduced a contributory plan for the funding of retirement benefits to be described below. Participation in this contributory plan was open to full-time professors and associate professors after one year of service, to assistant professors after 2 years of service, to instructors after 3 full consecutive years of academic service—all of whom must have salaries of

84

DESCRIPTION'S

OF

PLANS

at least $1,800—and to such other full-time staff members as have served for at least 3 successive years and receive salaries of at least $3,000. Participation in this plan is optional, and for a staff member who chooses not to contribute, the total allowance which the university hoped might be forthcoming at age 68 will be decreased by the amount of the annuity that would have been purchased had the member chosen to participate. The anticipated total allowance at age 68, including any allowance or annuity from Carnegie sources, is half the average salary for the 5 years of service ending with attainment of age 68. The contributory plan provides for the purchase by means of annual premiums of a succession of retirement annuity contracts that will be worth $1,000 each when age 68 is attained, premiums for these contracts to be paid in half by the university and in half by the individual. Each such contract produces a minimum annuity of $114.12 a year beginning at age 68. These annuity contracts carry disability coverage of $10 per month per $1,000 of value up to a maximum of $140 a month. Annuity contracts beyond a total of $14,000 to complete the funding of retirement allowances are without disability coverage. Staff members eligible for annuity contracts with disability coverage may elect to purchase endowment contracts with disability coverage, but the additional cost of endowment over annuity contracts must be met by the staff member. The university's contributions cease when annuities purchased together with the benefits anticipated from Carnegie sources reach the limit of benefit to be provided for the individual in question. A further requirement is that those past age 51 on July 1, 1935, are to contribute at least $400 a year between ages 58 and 68. These contracts permit the choice of one of several options upon retirement. When a member withdraws from service the contracts belong to the member, and the university has nothing more to do with them. Full-time employees not eligible under the faculty plan of retirement are included in the State Employees' Retirement plan.

D E S C R I P T I O N S MONTANA

STATE

TEACHERS'

OF

RETIREMENT

PLANS

85

SYSTEM

COVERING M O N T A N A STATE UNIVERSITY, MONTANA STATE C O L LEGE,

MONTANA

STATE

NORMAL

COLLEGE,

AND

MONTANA

SCHOOL OF M I N E S

Any adminstrative officer or member of the scientific or professional staff or librarian in the University of Montana, including the institutions listed above, is eligible for membership in the Montana State Teachers' Retirement System. Those in service during 1937-38 will be exempt from participation if they give notice of their desire prior to November 30, 1939. Otherwise they must participate in the plan. All newly eligible persons must participate. Aside from the membership fee of $1 a year, contributions of a member are 5 percent of salary up to a maximum contribution of $100 a year. Retirement is possible for those past age 60 who have completed IS years of teaching service, 10 of which must be in Montana. Five years of service must have been performed within the last 10 years before retirement. The benefit is 1/70 of the average salary for the last 10 years of service multiplied by the number of years of credited service, but it is not to exceed $1,000. All Montana teaching service and up to 10 years of out-of-state service is credited. To receive credit for service prior to the amendment of the plan that brought in university staff members, a teacher must have taught in Montana during the year 1938-39 and must join the system before September 1, 1940. Service for the university may be discontinued for not more than 3 years without loss of any rights if membership fees are paid. Upon withdrawal from service member contributions and ^ of the interest earned on these funds is returnable and must be taken at the expiration of 5 years after discontinuance of service. If service is resumed after contributions have been returned, the member becomes a new entrant just as if there had been no previous service. After a member has served 10 years, a benefit is available in case of disability that is presumably permanent, regardless of age. The benefit is 90 percent of the corresponding benefit for superannuation retirement.

DESCRIPTIONS

86 MORAVIAN

COLLEGE FOR

OF

PLANS

WOMEN

No formal arrangement exists, but the college is paying pensions of $480 a year. MOUNT ST. MARY'S

COLLEGE

Upon retirement from active service lay professors receive halfsalary pensions and maintenance. MUHLENBERG

COLLEGE

Muhlenberg College adopted a contributory retirement plan in February, 1937, to cover faculty members of the rank of assistant professor and higher and certain administrative officers. Prior to that date half-pay pensions were provided at retirement. Participation is required of eligible persons who were between the ages of 40 and 60 when the plan began and will be required of younger members when they attain age 40. Contributions of member and college alike are 5 percent of the member's salary. No provision is now made for increase in contributions with increase in salary. These contributions become premiums for annuity contracts purchased from life insurance companies doing business in New York or Pennsylvania. The company is chosen by the member and approved by the college board. Precaution is taken that the member shall not mortgage or surrender his contract while service continues. Retirement is to occur normally at age 65; service may be continued after that age, but not beyond age 70. Supplementary benefits are to be paid to those who were nearing age 60 when the contributory plan was established. UNIVERSITY

OF

NEBRASKA

In June, 1935, the University of Nebraska inaugurated a noncontributory, nonfunded retirement plan which merely promised to pay to retired staff members pensions half as large as the average salary for the last 5 years of service. Effective September 1, 1939, this plan was modified and amplified as follows: Those who had then reached age 72 were made subject to retirement, and the retiring age is to be reduced one year each year until it reaches age 65 on September 1, 1946. The board may extend service on a part-time basis for part-time salary whenever this

DESCRIPTIONS

OF

PLANS

87

seems to be in the interest of the university, and the board may retire individuals earlier in case of disability. The retirement benefit is equivalent to the single life annuity that could have been purchased with contributions of 8 percent of salary payments accumulated at 3 percent interest had the contributions been made during the whole period of the individual's service. The mortality basis of purchase is stated in the plan. This benefit is not to be more than $2,400 a year, and if the calculation should give a figure less than $1,200 the new rule is to be so modified as to make the transition from the 1935 rule to the new rule in 5 equal decrements, the first of which was effective on September 1, 1939, whether the individual in question retired then or in any later year. This plan is intended to cover a transition period "until the University may have in operation a contributory plan." NEBRASKA

WESLEY AN

UNIVERSITY

Following the arrangement of the Methodist Conference of Nebraska this university is paying pensions to a few retired persons of $8 a year for each year of service. This is not a formally announced plan. UNIVERSITY

OF

NEVADA

The University of Nevada has a noncontributory, nonfunded pension plan covering all full-time staff members. A staff member who has completed 15 years of service: (a) may be retired at the suggestion of the board of regents after attaining age 60; (b) may retire at his own request at any time after reaching age 65; and (c) must retire at the end of the academic year in which age 70 is attained. Provisions ( 6 ) and (c) do not apply to the administrative and service staff except for a few specified officers. Upon retirement a pension is payable at the rate of 1 percent of average salary for the last 5 years for each year of service at the University of Nevada and 1 percent for each 2 years of service at another college, university, or normal school before coming to Nevada, the total not to exceed 25 percent of the above-mentioned average nor $1,800 a year. Benefit payments cease at death. What-

88

D E S C R I P T I O N S OF

PLANS

ever benefits the board thinks justified may be paid in case of disability after IS years of full-time service. NEWARK

COLLEGE OF

ENGINEERING

A voluntary contributory retirement plan was inaugurated at this college on November 1, 1936, providing for benefits to be funded through a group annuity contract with the Prudential Insurance Company of America. Regularly employed men under age 65 and women under age 60 are eligible to participate after the completion of one year of service. Contributions of a participant are Λ]/2 percent of the mid-value of the salary range, $600 in width, in which his salary falls. The annual benefit purchased by contributions of a particular year is iy 2 percent of the mid-value of the salary range for that year. Contributions of the college are whatever are necessary when added to the member's contributions to purchase these benefits. In recognition of service before the plan was inaugurated the college is purchasing benefits of 1 percent of the mid-value of the individual's salary range when the plan was inaugurated for each year of service, less one, prior to the inauguration of the plan. Benefit payments begin on November 1 nearest to attainment of age 65 for men and of age 60 for women regardless of whether or not service continues beyond that age. A member may retire earlier for a smaller benefit if this is approved by the college. If a member dies in service, his beneficiary or estate receives an amount equal to his total contributions accumulated at 3 percent interest. Upon withdrawal from service a member may have his total contributions returned to him with 3 percent interest from the end of the third contract year following that in which they were paid to the beginning of the month in which service is terminated. Otherwise the withdrawing member will receive, upon reaching retirement age, the annuity that these contributions will purchase, and if withdrawal is preceded by 15 or more years of participation in the plan he will receive the whole retirement income that was credited to him just prior to withdrawal. UNIVERSITY

OF NEW

HAMPSHIRE

The trustees of the University of New Hampshire adopted a resolution for the inauguration of a retirement plan in January, 1938,

DESCRIPTIONS

OF

PLANS

89

the plan becoming effective July 1, 1938. The plan applies to members of the faculty and administrative officers now under age 65 "who qualify under the terms of the tenure-of-office policy." The tenureof-office policy determines when an appointee becomes a full-fledged member of the staff on permanent appointment. For staff members in service when the plan began, the date of retirement is scaled from June 30 following attainment of age 69 to June 30 following attainment of age 65. For all newcomers the retirement age is 65 years. Benefits are funded through T.I.A.A. contracts. Annuity premiums of a member are to be at the rate of 4 percent of his salary while he is under age 40,8 percent when he is between ages 40 and 49, inclusive, and 10 percent when he is still older. Half this premium is furnished by means of a salary increase, made only on the condition that the individual participate in the plan. Participation is required of new appointees as soon as they are eligible; it is optional to those in service when the plan was inaugurated. The university reports participation of all members eligible upon inauguration of the plan. A "planned annuity" of $200 more than yi of current salary, not to exceed $4,000, is the maximum basis in computing retirement salary for members of the staff in service at the time of adoption of the plan. New members of the staff will receive at retirement whatever annuities have been purchased at the time of retirement by the premiums above mentioned. For older members the annuity that can be purchased with premiums described above will be less than this "planned annuity," even for retirement at age 69. In such cases the university undertakes to continue members in part-time service after they attain age 69 and to pay, as compensation for this service, the difference between the "planned annuity" and that purchased by premiums actually paid. Whenever the annuity purchased with regular premiums reaches the "planned annuity" at an age earlier than 69 years, retirement age is to be reduced, but it is not to be less than 65 years. Whenever such a reduction occurs, no part-time service after normal retirement will be offered and the retirement age will be the age at which the "planned annuity" is available.

90

DESCRIPTIONS

NEW

YORK

COVERING

CITY

EMPLOYEES'

NONTEACHING

OF

RETIREMENT STAFF

PLANS SYSTEM

MEMBERS

OF

BROOKLYN,

H U N T E R , AND QUEENS COLLEGES, AND THE COLLEGE OF THE CITY OF N E W YORK

Established in 1920, this compulsory contributory retirement plan provides for the retirement of laborers at age 58, mechanics at age 59, and clerical workers at age 60 if they have contributed the percentages of compensation required of them. They may contribute at calculated rates higher than those required and thus provide for retirement at age 55. The general intent of the plan is that retirement benefits shall be proportional to years of service, that those who have served continuously since attaining age 25 shall be permitted to retire at the age dependent upon occupation that is stated above and shall receive about half the average salary for the consecutive 5 years chosen by the member, and that the city shall pay for about half the benefit resulting from service after the plan was inaugurated and for all of the benefit resulting from service prior to that time. Contributions are fixed with this in mind, but when an individual retires he receives the annuity that his contributions, accumulated at 4 percent interest, will purchase and a pension which depends upon age of retirement, years of service, and occupation. For those who have made the contributions required for retirement at age 55 the pension is independent of occupational classification; it is 1/120 of average salary for each year of service after the inauguration of the plan plus twice as much for each year of service prior to the inauguration of the plan. A member who continues in service after being eligible for retirement may continue contributions and thus increase his retirement benefit or may request payment to him annually of the 4 percent of his accumulated contributions at normal retirement age that would otherwise be added to the accumulation. A member also has the privilege of paying contributions half as large again as those required of him, thus purchasing additional benefits. The plan provides an annuity in case of disability from any cause after 10 years of service and a more liberal annuity in case of disability due to accident in the performance of duty at any time. It also provides a lump-sum payment in case of death from any cause

D E S C R I P T I O N S OF

PLANS

91

and a dependent's annuity in case of death due to accident in the performance of duty. If a member withdraws from service without being eligible for either service or disability retirement, his accumulated contributions will be returned upon request, but they will be continued at interest for 5 years if left with the system. In case of "dismissal without fault or delinquency" after 20 years of service, a retirement allowance is available which is at least equivalent actuarially to the credits toward a regular retirement annuity that have then been earned. Various optional forms of annuity of equivalent value are available upon retirement instead of single life annuities. NEW YORK, TEACHERS' CITY OF

RETIREMENT

SYSTEM

OF THE

COVERING BROOKLYN, H U N T E R , AND Q U E E N S COLLEGES, AND T H E COLLEGE OF THE C I T Y OF N E W YORK

While this retirement system was established in 1917, it has covered "officers of administration and instruction" in the College of the City of New York only since amendment of the Teachers' Retirement Law in 1923. Staff members of Hunter College who had been members of the Hunter College Retirement System prior to the enactment of Chapter 407 of the Laws of 1926 were covered by this special retirement system until June 30, 1938, when it was merged into the one here described. Staff members of Brooklyn and Queens colleges come under this system by the enactment of Chapter 407 of the Laws of 1926. This is a compulsory contributory retirement system, which requires no preliminary service period for eligibility. Member contributions are scaled to age and length of creditable service, if any, prior to membership, with the intention that when accumulated at 4 percent interest they shall be sufficient to purchase at retirement an annuity of 25 percent of the average salary for the last 5 years of service or for any 10 consecutive years. Members in service when the plan began, in 1917, called "present teachers," have more leeway as to the contributions they shall pay, but normal contributions for them are calculated to provide at age 65 or on the completion of 35 years of service an annuity which together with pensions fur-

92

DESCRIPTIONS

OF

PLANS

nished by the city will make up total benefits of 50 percent of average salaries. Staff members of the College of the City of New York who were in service in 1923 have the privileges and benefits of present teachers. Retirement is available at age 65 under this system, regardless of length of service, and is mandatory at age 70. Present teachers may retire after 35 years of service, regardless of age; and new entrants may retire after 35 years of service, 20 years of which must be city service. Upon retirement a present teacher receives a pension of 25 percent of average salary plus 1/140 of this average for each year of prior service and the annuity that can be purchased with accumulated member contributions. For members of the College of the City of New York prior service is service prior to June 1, 1923. In no case shall this city pension be more than 50 percent of average salary. For later appointees the retirement benefit is the annuity that accumulated member contributions will purchase plus a pension of 25 percent of average salary. Disability retirement is available after 10 years of city service on an annuity of whatever accumulated member contributions will produce plus a pension of 20 percent of average salary. An additional pension is provided for present teachers amounting to 5/7 of 1 percent for each year of prior service. If a member withdraws from service, his accumulated deductions are payable. In case of death in service, the benefit consists of the member's accumulated deductions plus a death benefit that varies with salary and years of service. A member may at any time choose certain optional forms of settlement for his beneficiary in case of his death in service. Upon retirement a member may choose a maximum allowance or have such allowance modified by any of 4 options. NEW YORK STATE EMPLOYEES'

RETIREMENT

SYSTEM

COVERING PART OF STAPF MEMBERS OF CORNELL UNIVERSITY

This compulsory contributory retirement plan was established in 1920 and was extended in 1930 to cover certain staff members of Cornell University. It provides for superannuation retirement normally at age 60 and makes it possible at age 55 if correspondingly

DESCRIPTIONS

OF

PLANS

93

larger contributions are made. Retirement is required at age 70 except under very special circumstances. Member contributions are scaled to age with the intent of purchasing at age 60 an annuity of 1/140 of "final average salary" for each year of membership service. The general intent is that upon retirement at age 60 or later a member shall receive a benefit proportional to period of service, which shall be about 1/70 of "final average salary" for each year of total service. About half the cost of the benefit corresponding to service after inauguration of the plan is to be paid by the member. For prior service the cost is paid in full by the state. "Final average salary" is the average salary for the last 5 years of service or for any consecutive 5-year period of membership service that the employee may choose. When superannuation retirement occurs, the member receives the annuity that his accumulated contributions will purchase plus a pension consisting of 1/140 of "final average salary" for each year of service after the plan began and twice as much for each year of prior service. If ordinary disability occurs after 15 years of service, a substantial benefit is available, and in case of disability due to accident in performance of duty prior to attainment of age 60, a still more liberal benefit is payable, without regard to period of service. If a member is killed in the performance of duty, dependents receive a pension of half the member's "final average salary" plus the accumulated contributions of the member. If ordinary death occurs while the member is in service, his representatives receive his accumulated contributions plus 1/12 of his last year's salary for each year of service up to 6 years. If employment is discontinued after 20 years of service "through no fault or delinquency" of the member, a benefit which is roughly the actuarial equivalent of what would be available at age 60 with the same service record is payable. Upon withdrawal from service prior to age 60 a member receives, on application, his contributions accumulated at 4 percent interest. NEW YORK

UNIVERSITY

In October, 1919, the council of New York University inaugurated a joint contributory retirement plan for full-time administrative

94

DESCRIPTIONS

OF

PLANS

officers, faculty members above the rank of instructor, and instructors with 3 years of service. It was limited to those without expectations from the Carnegie Foundation resulting from service prior to November 17, 1915. The first part of the resolution contemplates contributions by the university only for those who choose to contribute in their own behalf and provides that university contributions shall cease when the annuity already purchased by joint contributions reaches $3,000 a year with first payment to be made at age 65. However, the resolution ends by stating that "in lieu of all other pension obligations" the university will contribute 5 percent on behalf of individuals of the classes mentioned above, regardless of whether or not they contribute in their own behalf. This plan was extended in 1921 to cover certain administrative staff members after 3 years of service. A major change was made as of September 1, 1930, when the university announced that it would thereafter contribute only on behalf of those who chose to contribute for themselves. Participation in the plan continued to be optional. At the same time eligibility to participate was extended to those with Carnegie expectations; and for those Carnegie expectants who chose to participate the university offered to supplement Carnegie allowances and annuities purchased by joint contributions whenever necessary so as to bring the total benefits to $4,000 a year upon retirement at age 70. From Carnegie sources $1,500 a year beginning at age 70 was expected, so university contributions were to cease whenever the annuity already purchased came to $2,500 a year. In 1939 participation in this plan was made compulsory as follows: for new appointees of rank of assistant professor or higher, immediately upon appointment; for newly appointed instructors and administrative employees other than clerical, after 10 years; for those in service in 1939 participation is to be required only upon promotion in rank or increase in compensation; for clerical employees participation is optional after 5 years but is never required. NORTH

CAROLINA

STATE

COLLEGE

At age 70 "members of the staff are placed on light duty status and reduced pay,'' by resolution of the board of trustees.

D E S C R I P T I O N S NORTH

DAKOTA,

TEACHERS'

OF

INSURANCE

95

PLANS AND

ANNUITY

FUND

COVERING UNIVERSITY OF NORTH DAKOTA, STATE AGRICULTURAL COLLEGE, STATE NORMAL AND INDUSTRIAL SCHOOL, AND STATE TEACHERS

COLLEGES AT DICKINSON,

MAYVILLE,

M I N O T , AND

VALLEY CITY

Among others this fund covers teachers "in any State institution," including those of college grade mentioned above. Teachers are required to contribute 1 percent of salary, but not to exceed $20 a year during the first 10 years of service, and 2 percent of salary, with a $40 limit during the next IS years of service. Upon completion of 25 years of teaching service, of which 18 (including the last 5), must have been in North Dakota schools, a teacher is entitled, without regard to age, to a retirement benefit of 2 percent of the average salary of the last 5 years multiplied by the number of years of service, this benefit to lie between $350 and $750 a year. If upon retirement a member has not contributed in all as much as a year's benefit, he must pay the difference into the fund before receiving benefits. A benefit of like amount is available in case of permanent disability after 15 years of service. If a teacher withdraws from service, he receives half the sum of his contributions. NOVA

SCOTIA

PUBLIC

SERVICE

SUPERANNUATION

ACT

COVERING NOVA SCOTIA TECHNICAL COLLEGE

This act, passed in 1923, was put into operation in 1934. It applies to public service employees of Nova Scotia, including staff members of Nova Scotia Technical College, and is now supported entirely by provincial funds. The act provides for retirement upon attaining age 65 or upon becoming disabled after completing at least 10 years of service. Retirement is normal at age 65, but service may be continued beyond that age if it appears to the governor-in-council that this is in the public interest. The retirement benefit is 2 percent of average salary for the last 3 years of service multiplied by the number of years of service up to 35 years. If a pensioner dies leaving a widow or dependent children, the benefit is continued in half to the widow until death or remarriage or to the children until they attain age 18.

D E S C R I P T I O N S OF

96

PLANS

If an employee dies after having completed 10 years of service, his widow or children, if any, receive a benefit half as large as the period of service actually completed would have called for as a retirement allowance had the employee qualified for retirement. The widow's benefit ceases at death or remarriage, and children's benefits cease when age 18 is attained. Upon withdrawal from service or death prior to the completion of 10 years of service, member contributions with interest at 5 percent are payable. The act calls for contributions after a date to be fixed by the governor-in-council in such amount as he shall direct. As a matter of fact, contributions have not yet been required, but the matter is under consideration at the present time. Participation will be required of eligible employees. OBERLIN

COLLEGE RETIREMENT

PLAN

F O R F A C U L T Y AND A D M I N I S T R A T I V E

OFFICERS

Oberlin had no retirement plan prior to 1906, but had pensioned 3 faculty members, all past age 70. When the Carnegie plan was announced, Oberlin adopted a resolution affirming its nonsectarianism (June, 1906) and became an associated institution. The Carnegie plan did not apply to the Conservatory of Music, the Academy, and the Slavic Department, and in these divisions retirements were cared for entirely by the college. Contributory plan as adopted in 1922.—On November 17, 1922, the trustees adopted a resolution providing for the establishment of a contributory retirement plan, making use of contracts of T.I.A.A. The plan became effective as of January 1, 1923. Membership was made optional for eligibles who entered service prior to September 1, 1923, but compulsory for later appointees. Teachers and administrative officers who had no Carnegie expectations were made eligible upon permanent appointment or after having served 3 years. Announcement was made that noncontributory pensions would not be granted to those retiring after August 31, 1924 (provision being made for special treatment of certain individual cases). Regular contributions of college and teacher were each 5 percent of salary up to $225 a year; if the teacher chose to pay more, this did not change the obligation of the college. College contributions

DESCRIPTIONS

OF

PLANS

97

ceased when joint contributions had accumulated sufficiently to provide for the purchase of an annuity of $1,800 a year beginning at age 68, with payments of $900 to be continued to the wife if she survived the pensioner. The college offered to match dollars retroactively to September 1, 1922, for those who were interested in making retroactive contributions. For those who entered service prior to November 20, 1918, but who were not eligible to Carnegie pensions, the college offered to supplement the accumulation resulting from participation in the contributory plan to the extent necessary to make up the maximum benefit toward which the college would contribute for other members of the contributory plan. This, of course, was an inducement for the older men without Carnegie expectations to join the contributory plan. Restriction was placed on benefits to be supported by the college in case both husband and wife are members, and no benefit is to continue to a widow who was a wife less than 10 years prior to the retirement of the teacher. Retirement was made available at age 65, but any support to the contributory annuities that the college makes will be such as to produce a total benefit of 1/15 less than that available at age 68 for each year that the age of retirement anticipates age 68. Amendments of 1929.—In June, 1929, a number of changes were made in the contributory retirement plan. Normal retirement age was placed at 65 years, retirement to take place on August 31 next following the attainment of age 65, with provision for the possibility of annual extension of service. Participation in the plan was made compulsory for those having salaries of $3,000 or more and optional for other eligible persons. The limit of $225 a year on college contributions was removed. The limit on the obligation of the college (that it contribute only until the joint contributions of the college and the teacher or officer should be sufficient to produce an annuity of $1,800) was removed; and in those cases for which the college had agreed to supplement annuities to bring the benefit to $1,800 this limit was changed to $2,400. At the same time that the contributory retirement plan was liber-

98

D E S C R I P T I O N S

OF

P L A N S

alized, in 1929, arrangement was made to supplement Carnegie benefits expected by older faculty members. This was considered necessary because of the drastic reduction that was made at that time in Carnegie benefits. Without going into detail, the general plan was to require contributions from the faculty members involved and then to promise to supplement benefits otherwise available so as to make up at age 65 the benefits that were held out under the Carnegie plan in 1922 at age 70. Briefly stated, this benefit is half the average salary for the last 10 years of service, with a maximum of $3,600. Amendments of 1938.—In June, 1938, the contributory plan was amended further by changing the waiting period for eligibility of those who are not on permanent appointment from 3 years to 2 years and by providing immediate eligibility for anyone coming from another institution with a contract in force to the support of which the other institution had contributed. Participation was made compulsory for eligible persons who receive salaries of $2,500 or more (instead of $3,000 as formerly provided) and optional for eligible persons with lower salaries. FOR ADMINISTRATIVE A S S I S T A N T S AND O T H E R EMPLOYEES

Effective September 1, 1938, Oberlin College adopted a contributory plan for nonteaching employees and expressed the hope that it would pay pensions in recognition of past service to those who had completed 10 years of service on August 31, 1938. Administrative assistants and employees who give substantially more than half time to the college and who have served the college for the equivalent of a college year are eligible for coverage under the new plan. Participation is required of eligible persons who are 25 years old and is optional for younger persons. It begins, for convenience, only on the first day of September following the establishment of eligibility or the decision to participate on an optional basis. Contributions of a participant—matched by the college—approximate 3 percent of compensation. Wage ranges $200 in width are set up, and the contribution is 3 percent of the mid-value of the wage range in which the participant's compensation fell during the preceding year. Contributions become premiums for retirement annuity contracts issued by T.I.A.A. Retirement occurs normally at age 65, but annual reappointments may be made in special cases.

DESCRIPTIONS

OF

PLANS

99

The pension in recognition of past service which the college hopes to pay to older employees is 1 percent of the average salary for the 10-year service period next preceding September 1, 1938, multiplied by the number of years of service for the college prior to that date. OCCIDENTAL

COLLEGE

Effective July 1, 1938, Occidental College inaugurated a contributory plan for retirement income, participation in which is required of all persons of recognized tenure and of all other employees upon the completion of 3 years of service. Contributions of faculty members are 5 percent of compensation; those of administrative and labor staff members are 3 percent of compensation. The college makes equal contributions in recognition of current service and plans to furnish supplementary benefits in recognition of past service for faculty and administrative staff members. Retirement age is normally 68 years, although the college may request retirement as early as age 65 and may extend service of individuals until age 70. If retirement is requested at an age earlier than 68 years, it is expected that the college will make the necessary contributions to support the retirement benefit expected at age 68 and will pay corresponding benefits for the years preceding attainment of that age. For those in service who are age 60 or older on July 1, 1938, contributions of the college and the individual are funded by the college, and the accumulation is available to the individual or his representative if service is discontinued other than by retirement. For those younger than age 60 on July 1, 1938, contributions become premiums for T.I.A.A. retirement annuity contracts. Supplementary benefits.—For those who were age 60 or older in 1938 the college expects, without making contractual commitments, to supplement the annuity purchased with 10 percent of compensation so that the total monthly retirement benefit shall be at least $1 for each year of service prior to July 1, 1938, plus $50 for faculty members and plus $35 for administrative staff members. For those younger than age 60 on July 1, 1938, the college pays additional monthly premiums for retirement annuity contracts if needed to bring the total retirement benefit up to the amount provided for the older staff members.

100

D E S C R I P T I O N S

OHIO NORTHERN

OF

PLANS

UNIVERSITY

Pensions are being paid to retired teachers; the board of trustees considers each case on its merits. OHIO, PUBLIC

EMPLOYES'

RETIREMENT

SYSTEM,

STATE

OF

COVERING BOWLING GREEN, K E N T , MIAMI, O H I O , O H I O STATE, AND WLLBERFORCE

UNIVERSITIES,

AND THE

UNIVERSITIES

OF

AKRON AND TOLEDO

This is a contributory system applying to state employees, other than elective officers and persons covered by the State Teachers' Retirement System or the School Employes' Retirement System, who are paid for their services in whole or in part by the state of Ohio or its political subdivisions. Participation is required of persons newly eligible after January 1, 1935, and of those eligible at that time who do not file requests for exemption within 3 months. The board created to administer this system has the authority to exempt new appointees past age SO and persons engaged in work of a temporary, casual, or exceptional nature. Retirement is available after attaining age 60 and required at age 70. Member contributions of 4 percent of salary up to $2,000 a year are accumulated at an interest rate to be determined, between 3 percent and 4 percent limits, by the administrative board. The retirement benefit is twice as much as the accumulated member contributions will purchase at rates based on tables determined by the board plus \ y i percent of "average prior-service salary" for each year of service credited prior to January 1, 1935. The "average prior-service salary" is defined as the total salary received, up to $2,000 a year, during the 5 years prior to January 1, 1935, divided by the number of years of actual service during that 5-year period. Retirement is available in case of disability after 10 years of service, the benefit being the annuity purchasable with twice the member's accumulated contributions plus half the reserve held at that time for the prior service credited to the member. Optional forms of settlement are available upon retirement. If a member withdraws or dies prior to retirement, his accumulated contributions are available in a lump sum and must be taken within 10 years after discontinuance of service or be forfeited to the state.

D E S C R I P T I O N S OHIO,

STATE

TEACHERS'

RETIREMENT

OF

PLANS

101

SYSTEM

COVERING TEACHERS OF BOWLING G R E E N , K E N T , M I A M I , O H I O , O H I O STATE, AND WILBERFORCE UNIVERSITIES, AND T H E U N I V E R SITIES OF AKRON AND TOLEDO

This contributory retirement system was inaugurated September 1, 1920, and covers, among others, teachers in any college or other institution "wholly controlled and managed, and wholly or partly supported by the state or any subdivision thereof, the board of trustees or other managing body of which shall accept the requirements and obligations of this act." Participation is required of eligible persons entering service after the plan was established and of persons in service at that time who did not file written request for exemption. Teachers of Wilberforce University were included by special amendment to the law, effective September 1, 1933. The University of Toledo was included as of September 1, 1936. Contributions of a member are 4 percent of salary up to $2,000 a year. These contributions are accumulated at 4 percent compound interest. Retirement is available at age 60 and required at age 70, "provided in each case the consent of the employer is secured." The retiring allowances consist of an annuity twice as large as that which can be purchased with accumulated member contributions plus a pension for those in service before the plan began of percent of the average salary for the last 10 years prior to retirement multiplied by the number of years of such prior service. Retirement is available also after the completion of 36 years of service without regard to age, the benefit then being reduced to the actuarial equivalent of what it would have been with the same service record had the retiring member been 60 years old. This allowance is not to be less than $25 a month. Several different optional forms of settlement are available to the beneficiary "until the first payment on account of any benefit is made." Retirement for disability is available after 10 years of service, the benefit being 1 1 / 5 percent of final average salary for each year of service. This benefit is not to be less than 30 percent of final average salary with the exception that it shall not exceed 9/10 of the benefit that would have been available for retirement at age 60 had

102

DESCRIPTIONS

OF

PLANS

retirement been deferred until then. In case of withdrawal from service or death before retirement, accumulated member contributions are refunded. THE OHIO STATE

UNIVERSITY

Faculty members of The Ohio State University are covered by the State Teachers' Retirement System of Ohio. Nonfaculty staff members are covered by the Public Employes' Retirement System of Ohio. Effective January 1, 1940, an additional annuity plan will be inaugurated covering practically all full-time staff members of The Ohio State University, its agricultural extension division, and the department of athletics who are covered by either of the abovementioned plans. This plan requires contributions of 4 percent of salary up to $5,000. Retirement is available at age 60 or upon the completion of 36 years of service and is required at age 70. Contributions become premiums for retirement annuity contracts to be issued by the Midland Mutual and Columbus Mutual life insurance companies jointly or by the John Hancock Mutual Life Insurance Company. For each participant in service or on leave of absence on July 1, 1939, the university undertakes to supplement these annuity payments if this is necessary to bring the total retirement benefit up to 2 percent of salary on July 1, 1939, for each year of service after the academic year in which age 45 was attained. The benefit is to be at least $60 a month and the supplement is not to operate to bring the total benefit above $100 a month. In calculating this supplementary benefit, all annuities shall be taken in the form of single life annuities, regardless of which optional form of settlement may have been chosen by the participant. OHIO WESLEY AN

UNIVERSITY

Among the older retirement plans for college teachers we find that of Ohio Wesleyan University, this plan having been established June 11, 1912. It applies to all teachers and officers of the university of whatsoever rank and to their widows. The plan is noncontributory and makes clear the fact that no legal obligations are established by it. Retirement is provided at age 65 for those who have served for

D E S C R I P T I O N S OF

PLANS

103

15 years and the trustees may take special action for those who have served more than 10 years, but less than 15 years. The benefit is 1/60 of the average salary during the last 5 years of service for each year of service, but in no case more than 50 percent of such average salary. A widow older than age 60 of a pensioner or of a person eligible for benefits may receive a pension half as large as that to which her husband was entitled, provided she had been his wife for at least 10 years prior to his death or retirement. The plan includes a number of special benefits which the trustees may vote under different circumstances. This plan is reviewed in the Tenth Annual Report of the Carnegie Foundation for the Advancement of Teaching (1915). OKLAHOMA

BAPTIST

UNIVERSITY

The plan for retirement of teaching and nonteaching staff members of Baptist educational institutions is in effect at Oklahoma Baptist University. All employees of the university are eligible to participate in this plan. Participation is voluntary and involves contributions of 5 percent of salary from the employee and an equal amount from the employing institution, this to apply only with respect to the first $4,000 of annual compensation. Retirement is normal for men at the end of the fiscal year in which age 65 is attained. It is automatic 5 years later. For women the corresponding ages are, respectively, 3 and 2 years less. Automatic retirement does not apply to men below age 60 or to women below age 55 when the plan was inaugurated. The retirement benefit, whether retirement be for age or for disability, is the annuity that can be purchased with accumulated contributions to the credit of the individual. Retirement is available before attaining age 60 in case of disability. In case of death in service the employee's contributions are payable to a named beneficiary or to the legal representative of the deceased. If an employee transfers to another Baptist institution in which the same plan is effective, he retains credit for the employer's contributions. In case of discontinuance of service for any other reason, only the employee's contributions and accumulated interest are available either in cash or as credit toward annuity payments. Under this plan arrangements for supplementary benefits in recognition of

104

D E S C R I P T I O N S OF

PLANS

service prior to participation in the plan are to be handled by the employing institutions separately. UNIVERSITY

OP OREGON

In the year 1929 the University of Oregon inaugurated a retirement plan covering staff members on permanent appointment with 2 years of service who were administrative officers or faculty members above the rank of instructor. Salaries were increased on condition that twice as much as the increases should be contributed by the members as premiums for retirement annuity contracts. T.I.A.A. contracts are used. In addition, supplementary benefits were provided. A member with 25 years of service when the plan began is to receive upon retirement at age 70 a supplementary benefit sufficient to bring his total benefit to approximately half his salary when the plan was inaugurated. The corresponding supplement for those having from 20 to 25 years of service when the plan began is 1/5 less, and an additional 1/5 is cut from the supplement for each additional 5-year decrement in period of service when the plan began, those with less than 5 years of such service to receive no supplement at all. As to retirement age for younger staff members, the resolution inaugurating the plan carries the following sentence: "In making application, those of ages from 42 upwards should give age of retirement as 70; those from 35 to 42 inclusive should give age of retirement as 68; those under 35 should give age of retirement as 65." At present the plan applies only to staff members who elected to participate when the plan was inaugurated. OTTERBEIN

COLLEGE

In the year 1931 Otterbein College inaugurated a noncontributory, nonfunded pension plan under which retirement is available at age 65 and required at age 70. If retirement occurs after the completion of 40 years of service, the pension is half the final salary. This maximum pension is prorated for shorter periods of service down to % of the final salary after 10 years of service, the least period that is recognized in the granting of pensions.

D E S C R I P T I O N S OF PLANS PACIFIC UNION

10S

COLLEGE

After 25 years of service there is available a monthly pension of $1 for each year of service up to 35 years and $2 for the 36th to the 40th years inclusive. This is the plan adopted by the Seventh-Day Adventists for their ministers and teachers. THE PENNSYLVANIA

STATE

COLLEGE

By action of the state legislature in 1935 the employees of The Pennsylvania State College who are paid on a yearly or monthly basis, other than those paid wholly by Federal funds, were brought under the Pennsylvania State Employes' Retirement System. Anyone entering this system on or before December 31, 1935, who was in state service prior to the establishment of the plan on January 1, 1924, had the option of joining the retirement association on or before December 31, 1935, provided he was willing to pay all the contributions that would have been required of him had he joined the system at its inauguration. Such persons, called "original members," are entitled to credit toward retirement income for service prior to the establishment of the plan, as described below, while new members receive no such credits even if they served the state prior to January 1, 1924. Participation in this system is required after 6 months of service. Each member contributes a percentage of his salary that varies with age and is calculated to produce an annuity on "superannuation retirement" of 1 percent of "final salary" for each year of service after December 31, 1923. If the calculated contribution is more than 7 percent of salary, the participant may choose to pay only 7 percent and to accept a correspondingly smaller benefit. "Final salary" is the average of salary for the last 5 years of service, except that a member may ask that the years beginning June 1, 1933, and June 1,1934, be omitted in this calculation. Superannuation retirement is available to a member who has attained age 60, but it can be forced on him only upon the certification of an examining physician that he is "physically or mentally incapacitated for the performance of duty." Upon superannuation retirement a member receives: (a) the annuity that can be purchased with the contributions he has made

106

D E S C R I P T I O N S

O F

P L A N S

when accumulated at 4 percent interest; (£>) a pension of 1 percent of final salary for each year of service after December 31, 1923; and (c) if an original member 2 percent of final salary for each year of service prior to the establishment of the plan. The annuity from the state shall not exceed 50 percent of final salary. In case a member is disabled before attaining age 60, a pension that is usually somewhat smaller than the superannuation benefit is available after the completion of S years of service. In case a member withdraws from service or dies in service, accumulated member contributions are paid to the member or on his behalf. If a member is involuntarily separated from service after 10 years of service, but before attaining age 60, he may have his accumulated contributions in cash or an annuity which shall be the actuarial equivalent of his accumulated contributions plus the then value of his credits for a pension to be supported by the state. Upon superannuation retirement or in case an annuity is chosen by a member who is separated involuntarily from service, several different optional forms of annuity are available, presumably of equal actuarial value. If the benefit payable throughout life and ceasing at death would be less than $10 a month, the member may choose to receive the accumulated contributions in cash rather than the annuity. PHILLIPS

UNIVERSITY

At age 70 all faculty members are retired on $50 per month for the remainder of life. THE

PRESBYTERIAN

CHURCH

IN

THE

U.S.A.

C O V E R I N G A S H E V I L L E N O R M A L AND T E A C H E R S C O L L E G E ,

JOHN-

SON C . S M I T H U N I V E R S I T Y , AND T A R K I O C O L L E G E

This is a contributory retirement plan under which superannuation retirement benefits are available at age 65 or later. Participation is required of eligible persons who have attained age 30. Contributions are percent of the member's salary from the employer and 2Yi from the member. The annuity benefit at age 65 is percent of the sum of all salary payments upon which contributions have been levied. The statement of the plan is complicated by a number

DESCRIPTIONS

OF

PLANS

107

of minimum annuity provisions, most of which will probably not affect college faculty members. A safety provision that may be of importance is that a maximum pension may be established "to comply with sound actuarial practice," but this maximum is not to be less than $2,000. If a married pensioner dies leaving a widow who was his wife before he attained age 65, she is to receive an annuity half as large as that of her husband. Orphans' benefits of not more than $100 a year are included. In case of total permanent disability occurring prior to age 65, if contributions have been made regularly, a pension of $600 a year is being paid. Ultimately this benefit is to be 40 percent of average compensation for the last 5 years of service. PRINCETON FACULTY

UNIVERSITY PLAN

In 1934 a contributory plan was adopted by Princeton University, participation in which is required of faculty members of the rank of assistant professor and higher. Any member of the teaching force may be retired on September 15 following attainment of age 65 at the option of the member or the university. Retirement is required at age 68, except that service may be continued for periods of one year each by special vote of the board of trustees. Member contributions of 5 percent of compensation up to $400 a year matched by equal contributions from the university become premiums for retirement annuity contracts issued by the Prudential Insurance Company of America or by T.I.A.A. The university "guarantees" that after 25 years of service the pension of a member who retires at age 68 shall not be less than half the authorized minimum salary of his rank during his last year of active service. The maximum allowance for those retiring at age 68 in the year 1940 or later is the smaller of $4,000 and $400 more than half the salary for the last year of service. The university's contributions are to cease when the annuity already purchased is sufficient to supplement any free pension that may be available from the university under an earlier arrangement and from the Carnegie Foundation and the Carnegie Corporation in furnishing the maximum benefit and a pension to be provided for the widow. The widow's pension (including any grant from the Carnegie

108

D E S C R I P T I O N S

OF

PLANS

Foundation) is to be $1,500 if the member retired at age 68 prior to 1940, and half the pension of the member if retirement takes place in 1940 or later. The widow's pension is scaled down if the widow is more than 10 years younger than the member. If retirement occurs prior to age 68, the benefit is 85 percent of the final benefit during the year of age 65, 90 percent at age 66, 95 percent at age 67, and 100 percent at age 68 and later. NONFACULTY PLAN

In April, 1936, Princeton adopted a noncontributary pension plan for all employees not covered by plans established earlier. Retirement age was fixed at 68 years, and upon retirement at that age there will be payable a pension of 2 percent of the average annual salary received during the last 5 years of service for each year of service up to 25 years. The statement of the plan makes clear that no rights on the part of the employee are created by it. The plan is administered by the university. RHODE ISLAND, THE STATE OF

THE EMPLOYEES'

RETIREMENT

SYSTEM

OP

COVERING RHODE ISLAND STATE COLLEGE AND RHODE ISLAND COLLEGE OF EDUCATION

Effective July 1, 1936, a contributory retirement plan was established through Chapter 18, Laws of 1936, which applies to state employees generally, including faculty and nonfaculty staff members of the colleges mentioned above. Participation is required of newly employed persons and was made optional for those in service when the plan was inaugurated. Contributions are scaled to age, sex, and employment classification (laborer, clerk, or police) with the intention that superannuation retirement benefits in recognition of current service shall be supported half by members and half by the state. A participant may retire after attaining age 60 and receive an allowance of percent of his average salary for the last 10 years of service multiplied by the number of years of membership service. If he was in service on July 1, 1936, and chose to participate within a year, he also receives upon retirement the same allowance for each year of service before July 1,1936.

D E S C R I P T I O N S OF P L A N S

109

In case of retirement for ordinary disability after 10 years of service, an allowance 9/10 as large as that for service retirement is available. In case death results from ordinary causes while a member is in service, member contributions with interest are paid to the estate of the beneficiary. In case of accidental death or disability in performance of duty, an annuity is payable consisting of that purchased with member contributions plus 2/s of final compensation in case of disability and Yi of final compensation in case of death. Several optional forms of settlement are available upon retirement. If a member withdraws from service without qualifying for retirement, his contributions with interest are returned to him. UNIVERSITY

OF

ROCHESTER

FACULTY P L A N

In 1920 the University of Rochester inaugurated a retirement plan for faculty members making use of T.I. A.A. contracts. Participation in this plan is required of all full-time faculty members of the rank of assistant professor and higher and of staff members of some other designated classes. In the Eastman School of Music, because there is no distinction as to rank, participation begins after 5 years of service. Contributions of 5 percent by members are matched by contributions from the university up to $500 a year. Retirement occurs normally at age 65. See Appendix I for further details. NONFACULTY PLAN

In 1936 the university inaugurated a compulsory, joint contributory retirement plan for nonacademic employees. Participation was recommended to those in service at that time and is required of all new appointees after the completion of one year of service. The plan is administered through a group annuity contract with the Metropolitan Life Insurance Company. Retirement occurs normally on the 15th of the month nearest to the 65th birthday, but it may be either earlier or later with the approval of the university. The benefit in case of earlier retirement is less than at age 65, but if retirement is delayed beyond age 65 the benefit is the same as if retirement occurred at age 65. Member contributions are 3.6 percent of the midpoint of the compensation range ($400 in width) in which the member's compensation

110

DESCRIPTIONS

OF

PLANS

falls and the corresponding increment of benefit is 1.5 percent of the same figure. The university's contributions are whatever are necessary to supplement member contributions in purchasing the benefits mentioned above. The descriptive pamphlet distributed to members to give information regarding the plan states that the university's and the employee's contributions are approximately equal and that "the provisions of the Contract pertaining to Retirement Income cannot be changed without the university's consent until July 15, 1941, and any change made cannot affect that part of the Retirement Income purchased prior to the date of such change." If a member withdraws from service, he has a choice between leaving his contributions with the insurance company and receiving at normal retirement date the retirement income that has been purchased by his contributions or having the contributions, without interest, returned to him in one payment or spread over a period of 12 months at the option of the insurance company. If withdrawal occurs after 10 years of participation and the member leaves his contributions with the company, he obtains in addition to the annuity stated above the retirement income purchased with university contributions. If a member should die while employed, the member's beneficiary would receive member contributions without interest. If death occurs after annuity payments begin, the beneficiary receives any excess of member contributions over the sum of annuity payments that have been made. RUSSELL SAGE COLLEGE

In the year 1934 Russell Sage College inaugurated7 a voluntary retirement plan covering those of its "faculty and staff" under age 50 who are approved by a special committee of the board of trustees appointed to administer the plan. Contributions of member and college are equal and are not to exceed 5 percent of salary. The member purchases an endowment insurance policy or a retirement annuity contract from a life insurance company approved by the college, the type of policy being subject to approval by the special committee. 7 After the text for this book was in type we learned that this plan was never inaugurated.

DESCRIPTIONS

OF

PLANS

111

Retirement is available at any time after age 50 is attained, subject to approval by the special committee, and is required at age 65 unless service is extended upon the recommendation of the faculty committee of the trustees. The plan provides that in case of disability, withdrawal from service, or death in service accumulated contributions of both college and member are to be paid to the member or his representatives. For those past age 50 when the plan began the college will, upon retirement, pay pensions of 10 percent of salary, and under some circumstances this may be increased. UNIVERSITY

OF SANTA

CLARA

A voluntary contributory retirement plan for faculty members was inaugurated January 1, 1939, at the University of Santa Clara through a contract with the Occidental Life Insurance Company. For a member under age 60 with 5 years of faculty service contributions are equally divided between the university and the member. If a member having had less than 5 years of service joins, he must pay the whole premium for the benefit to be provided, but if and when he completes 5 years of service, half of this contribution is refunded to him with interest. Each contract is written to provide an annuity of $100 a month beginning on the policy anniversary nearest the 65th birthday of the member. If a member withdraws from service he can surrender his contract for cash or make a certain payment to the university and thereafter pay the premium stated in the contract directly to the insurance company. If withdrawal occurs within 12 years of the date of issue of the contract, the member receives his contributions with i l / 2 percent interest. If withdrawal occurs after the contract has been in force for 30 years, the member receives the full cash surrender value. For periods between 12 and 30 years the rate is scaled upward from member contributions with interest to the full cash value. The university receives that part of the cash value that is not paid to the member. A second option that the member has upon withdrawal is to pay to the university the amount that it would receive from the company under the first option and to continue the contract as his individual policy. While service continues, the contract is the joint property of the member and the university. If a member dies in service, the benefit is the same as the cash value.

112

UNIVERSITY

D E S C R I P T I O N S OF PLANS OF

SASKATCHEWAN

In the year 1915 the University of Saskatchewan established a contributory retirement plan providing for retirement at age 65 on a pension of 2 Yi percent of total salary payments for the last 35 years of service or for the whole of the period of service if shorter. A benefit half as large was payable to dependents in case of death of the staff member. In case of withdrawal from service, accumulated member contributions were payable. Contributions of members varied with entrance age from 5 percent of salary for those beginning at ages less than 25 years to 8 percent of salary for those who began at ages above 45 years. A contributory plan using contracts of T.I.A.A. was inaugurated in 1925. This plan is described briefly in the synoptic schedule, Appendix I. SIMMONS

COLLEGE

In 1924 Simmons College established a contributory retirement plan making membership compulsory for teachers of rank higher than that of instructor and optional for instructors and administrative officers receiving salaries of $2,000 or more. Contributions of 5 percent of salary were required from the member; the college contributed 3 percent of salary from 1924 until 1929, at which time its contribution was raised to 5 percent. When the plan was started, the college provided a reserve equal to the accumulation of 3 percent of the salaries received by those of professorial rank since their appointments. Retirement was made available at age 60 and compulsory at age 66, unless appointment was continued by vote of the corporation. The retirement benefit was the full accumulation of member and college contributions payable in a lump sum; but the college reserved the right to substitute an equivalent annuity, and the member had the right to request an equivalent annuity from the college, equivalence being determined by commercial annuity rates. Interest additions were to be made at the average rate received on college investments, but not at a higher rate than 5 percent. If the member retired at age 66 and the total accumulation was less than $10,000, the executive committee might vote to supplement this total to make up

D E S C R I P T I O N S OF

PLANS

113

a benefit of $10,000. If a member with one or more dependents should die while in service, the benefit was to be the full accumulation of member and college contributions or a full year's salary, whichever was larger. Upon withdrawal prior to age 60, accumulated member contributions were payable. The death benefit and the minimum of $10,000 at age 66 were introduced by amendment in 1929. Some fundamental changes were made in this plan, effective July 1, 1935. Rules regarding participation remained unchanged as did also the contributions of both the college and the participants. For recently eligible persons contributions both of the participants and of the college were applied as premiums for retirement annuity contracts issued by T.I.A.A., and earlier participants could choose between having their further contributions and corresponding contributions of the college used to purchase retirement annuity contracts and having them paid into the retiring allowance fund administered by the college. For those continuing under the retirement fund the withdrawal benefit was made the accumulation of both member and college contributions rather than merely the accumulation of member contributions, as it had been before, and the college reserved the right to require that settlement be made in the form of an annuity in case of withdrawal, as well as in case of retirement. A revision of 1938 provided that at retirement or withdrawal the accumulation to the credit of a participant under the retiring allowance fund should "regularly be paid over to an established insurance or annuity company as premium for a contract providing annuity benefits for such participant." The executive committee of the college was given discretion to substitute for such an annuity, at the request of the participant, payments by the college over a period of 5 years or less. After these changes had been made there was no longer a need for an optional retirement age of 60 years, and the 1935 revision states merely that retirement shall take place at the end of the college year in which age 66 is attained unless appointment is continued for one-year periods by vote of the executive committee. The college continues to guarantee that in case of death in service the total benefit shall be at least the equivalent of a year's salary.

114 SIMPSON

DESCRIPTIONS

OF

PLANS

COLLEGE

Simpson College has a noncontributory, nonfunded pension plan, under which retirement is available at age 65 and required at age 70. The annual pension is: for professors $15, for assistant professors $10, and for instructors $7.50 per year of service. SKIDMORE

COLLEGE

Skidmore College established a voluntary contributory endowment insurance plan in 1927. Two separate contracts with the Metropolitan Life Insurance Company are involved—one for term insurance, the other providing a pure endowment. Slightly more than half those eligible are now taking advantage of this plan. It provides a benefit of from $2,000 to $5,000 according to rank in case of death before or after attaining age 65 and a lump-sum payment of the same amount at age 65. Each teacher contributes toward premiums for the death benefit 35 cents per month per $1,000 of benefit, regardless of age. Toward the pure endowment benefit (that is, the lump sum payable at age 65) teachers' contributions vary according to the initial age from 28 cents a month at age 20 to $6.07 a month at age 59 for each $1,000 of benefit. The college undertakes to pay the remainder of the cost of the benefits promised. If a teacher withdraws within 5 years after entering the plan, he receives in cash, without interest, what he has paid toward the endowment fund; if withdrawal occurs after more than 5 years of participation, his contributions toward the endowment fund are returned with 3 l / 2 percent interest. It will, of course, be noted that the college contributes nothing toward a retirement benefit for those who leave its service prior to retirement and furthermore that the benefit upon retirement is a lump sum rather than an annuity. In 1939 the college inaugurated a contributory retirement plan making use of T.I.A.A. contracts. This is described through schedule entries in Appendix I. SOUTHERN

METHODIST

UNIVERSITY

This institution has a noncontributory, nonfunded plan for retirement income applicable to all employees. Pensions are available at age 70 after 15 years of continuous full-time service, periods of

D E S C R I P T I O N S OF

PLANS

115

absence on leave to be considered as periods of full-time service. Retirement is required in September following attainment of age 70. The pension is 25 percent of the participant's average salary for the last 5 years of service (not counting any leave-of-absence period) plus 1 percent of this average for each year of full-time service in excess of 15 years. The pension is not to exceed $1,000 a year. A person may be retired at the discretion of the board at any age between 65 and 70 years for benefits scheduled in the statement of the plan and smaller than those given by the formula stated above. A reduced pension is available in case of permanent disability after attaining age 60. The statement of the plan includes a declaration that while the plan may be changed or terminated, the allowance to one who has had 15 years of service and who meets the conditions for retirement will not be lowered. The reservation is included that the plan does not alter the authority of the university to dismiss teachers. SOUTHWESTERN

UNIVERSITY

This institution has in effect for professional staff members a noncontributory, nonfunded plan, under which a person may retire at age 65 after 30 years of service and must retire at age 70. For those who retire under this rule after 30 or more years of service, the pension available is $50 a month. To receive a pension, one must have served for at least 15 years, and service between 15 and 30 years in length is recognized by a pension of $1.67 per month per year of service. SWARTHMORE

COLLEGE

In the year 1919 Swarthmore College inaugurated a voluntary retirement plan for faculty members, calling for contributions of 5 percent of salary from participants and the same from the college. In 1937 this plan was revised and extended to non faculty employees. Participation is now voluntary during the first 3 years of service and required thereafter. Faculty members contribute 5 percent of salary; for nonfaculty members the same idea is carried out (except as noted in the next sentence), but for simplicity the contribution of a participant is 5 percent of the mid-value of the salary range in

116

DESCRIPTIONS

OF

PLANS

which his salary falls. The contributions of the college are the same as those of the participants, except that for employees receiving less than $1,080 a year the college pays for both, no charge being made against the worker. Contributions become premiums for T.I.A.A. contracts. Retirement age for faculty members may be fixed by the president at any age between 65 and 70 years. All nonfaculty members retire at age 65 unless service is extended for periods of one year each, by the president and the comptroller. Employment is not to continue beyond age 70. Supplementary benefits.—The college plans, "insofar as its resources permit," to supplement the annuity purchased for a nonfaculty member by joint contributions, with a pension of 1 percent of salary for the year ending July 1, 1937, for each year of service after the year in which age 35 was attained and prior to July 1,1937. This supplementary benefit shall not increase the total retirement benefit beyond $100 a month, but it is to be larger than this formula would produce if an increase is necessary in order that the total benefit be as much as $1 a month for each year of total service up to 30 years. AGRICULTURAL

AND

MECHANICAL

COLLEGE

OF

TEXAS

Effective September 1, 1937, a noncontributory nonfunded retirement plan was adopted by this college which provides for retirement from full-time active duty to part-time service at age 70, with a remuneration that is to exceed 25 percent of average compensation for the last 5 years of active service by 1 percent for each year of service up to 25 years. For those entering service later than September 1, 1936, only continuous years of service terminating with retirement are to be counted in determining the pension. For them any temporary discontinuance of service results in loss of pension credit corresponding to all service prior to such discontinuance. Shortly after this plan was adopted the Teachers' Retirement System of Texas was inaugurated. As this state plan covers Texas A. & M., it will probably discontinue its noncontributory plan eventually, but no formal steps are expected until the state plan is in full operation.

D E S C R I P T I O N S

TEXAS,

TEACHERS'

RETIREMENT

OF

117

P L A N S

SYSTEM

C O V E R I N G A G R I C U L T U R A L AND M E C H A N I C A L COLLEGE OF T E X A S , T E X A S C O L L E G E OF A R T S AND I N D U S T R I E S , T E X A S STATE LEGE FOR W O M E N ,

TEXAS

TECHNOLOGICAL

COLLEGE,

COL-

UNIVER-

SITY OF T E X A S , C O L L E G E OF M I N E S AND M E T A L L U R G Y ,

STATE

T E A C H E R S C O L L E G E S OF E A S T , N O R T H , S O U T H W E S T , W E S T T E X A S , SAM H O U S T O N , S T E P H E N F . A U S T I N , AND S U L R O S S

This system was inaugurated July 1, 1937, and from the beginning it applied to institutions of college grade supported in whole or in part by the state. It covers persons "in professional and business administration and supervision and instruction." Those in service when the plan was inaugurated were covered unless within 90 days they gave notice of their desire to be exempted. All persons appointed after August 31, 1938, are required to participate. Contributions of participants are 5 percent of compensation up to $3,600 a year. The plan calls for equal contributions from the state. Service retirement is available at age 60 and required at age 70. The benefit is twice the annuity that can be purchased with member contributions plus a pension of 1 percent of "average prior-service salary" for each year of prior service up to 36 years. The "average prior-service salary" is the average of the salaries for the last 10 years of service prior to July 1, 1937, or of all such years of service, if less than 10, plus sufficient years of service subsequent to July 1, 1937, to make up 10 years. This average is not to be more than $3,000. Several different forms of optional settlement are available. A disability benefit payable without reference to age in case of disability after the completion of 20 years of service is the actuarial equivalent of twice the accumulation of member contributions plus 50 percent of the award for prior service. Member contributions are accumulated at 3 >4 percent interest. When a member withdraws from service or dies in service, accumulated member contributions are available, and they must be taken within 7 years. I t is because the state does not match the benefit from member contributions in case of death or withdrawal that the system has funds from which to pay past-service benefits and disability benefits. The plan states specifically that if available funds are not sufficient to pay past-service and disability benefits on

118

DESCRIPTIONS

OF

PLANS

the scales stated above, these benefits shall be reduced as much as may be necessary in order that they may be covered by the funds available. It is the present policy of the University of Texas to permit interested teachers to continue service on a half-time basis after attaining age 70. UNIVERSITY

OF

TORONTO

FACULTY PLAN

In the year 1891 a retirement fund was established at the University of Toronto through monthly deductions from salaries of faculty members. These deductions followed a scale of percentages of salaries increasing up to 15 percent of salaries of $5,000 or more. Participation was not compulsory. The university made no corresponding contribution, but it allowed interest at 6 percent per annum on the accumulations. When the Carnegie Foundation developed its plan for retiring allowances, the University of Toronto became an associated institution, and the accumulations of the old retirement fund were returned to the contributors. In 1919 a contributory retirement plan using contracts of T.I.A.A. was inaugurated for faculty members appointed after November 17, 1915. The principal features of this plan are shown in the synoptic schedule, Appendix I. NONFACULTY PLAN

Effective October 1, 1929, a contributory pension plan covering administrative and clerical staff members and employees not covered by the faculty plan was established by the University of Toronto. Participation is required after 2 years of service, but is limited to permanent full-time employees. The rates of contribution increase according to entrance age from 2y 2 percent for those under age 21 to 7 percent for those of age 49. No contribution is to be more than $200 a year. The university's contribution is to be 5 percent of the member's salary up to a maximum contribution of $200. If a member leaves the service of the university without being entitled to a pension or dies in service before completing 10 years of service, or after 10

DESCRIPTIONS

OF

PLANS

119

years of service but leaving no widow or child under 18 years of age, personal contributions are returned with interest at 4 percent compounded semiannually. A pension is available at age 70, after at least 10 years of service, or at age 65 after 35 years of service, or earlier in case of disability approved by a medical advisor. The monthly pension payments are 1/60 of the average monthly salary for the last 5 years of service multiplied by the number of full years of service up to 30 years, with a minimum of $360 a year and a maximum of $2,000 a year. If an employee dies in service or as a pensioner and leaves a widow who has been his wife for 10 years or more or a child under age 18, there is payable a monthly pension of 1/120 of the average monthly salary for the last 5 years of service multiplied by the number of full years elapsed between the date of marriage and the date of death of the employee. This pension is not to exceed half the pension the member might have received. The plan is administered by the university. TULANE

UNIVERSITY

In 1921 the board of administrators of Tulane University inaugurated a voluntary contributory retirement plan making use of contracts of T.I.A.A. The university's contributions came from an endowment of $75,000 for this purpose. The plan applies to professors and instructors with at least 2 years of service who have no Carnegie expectations. The university matches contributions of the member up to 5 percent of salary, but not to exceed $200 a year. A letter of August 8, 1939, from the president's office states that while there have been no changes in the regulations of the contributory plans the university's funds for this purpose have become exhausted and that "there is at the present time a waiting list of persons desirous of receiving university participation in an annuity with the Teachers Insurance and Annuity Association." Retirement is normally at age 65. In 1936 the board voted to supplement, when practicable, benefits from Carnegie sources upon retirement prior to age 70 so that the total allowance will be what it would have been at age 70. With respect to both Carnegie expectants and other retiring faculty

120

D E S C R I P T I O N S

OF

PLANS

members the board's recent practice has been to arrange so that the total benefit for the first year after retirement shall be half the final salary and that after the first year the total allowance shall be normally $1,500 a year. If half the salary is less than $1,500, it is planned to continue to pay half the salary as a retirement pension. If, however, the president recommends a larger pension for any person in the above category, the administrators will consider each case on its own merits. UNION

THEOLOGICAL

SEMINARY

FACULTY PLAN

For a number of years this institution has been paying pensions to superannuated faculty members. Beginning January 1, 1935, a contributory plan for retirement income was inaugurated which required participation of faculty members above the rank of instructor and of designated administrative officers and under which participation is optional to other members of the teaching staff and "other persons specifically permitted by the Board" after 2 years of service. Participants contribute 5 percent of salary payments, and the regular contributions of the seminary are the same. In addition, the seminary accumulates a supplemental benefit with 2]/2 percent of each member's salary to be released to the individual account after 20 years or upon earlier attainment of age 60 or at earlier death. The seminary agreed to hold these contributions in its own treasury or to purchase retirement annuity contracts with them. It has chosen to purchase contracts for those past age 50 and to accumulate the contributions of others in its treasury. When a member retires, he may choose the type of annuity that he shall receive, with the limitation that if married he must arrange that if his wife survives him she shall receive an annuity, which is usually half as large as his own. If he withdraws from service prior to attainment of age 60, and a retirement annuity has not been purchased, the seminary will, over a period of years, return accumulated regular contributions made by the member and the seminary, but not the seminary contributions for supplemental benefits unless 20 years of service have been completed. If a member dies in service and leaves a widow,

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121

the accumulation will be used to purchase an annuity for the widow up to a benefit of $2,000 a year, and the remainder of the accumulation, if any, will be paid to the widow in cash. I f no widow exists, the accumulation is payable in cash. This, again, is subject to the provisions of any retirement annuity contract that may have been purchased. Retirement is "fixed" to occur at the end of the fiscal year nearest the 65th birthday of the member, but service may be extended to age 70. In recognition of past service the seminary has established a fund equal to that which would have been to the individual's credit had the 5 percent matched arrangement and the percent supplemental seminary contribution been operating during the whole period of his service. This fund has in large part been used to purchase annuities for the faculty members in service when the plan was inaugurated. I f death occurs prior to retirement, the equity in these policies will revert to the seminary. For certain designated professors additional annuities have been purchased, which will result in their receiving at retirement about half salary. An annuity half as large is provided for the widow. Pensions in effect at the time the plan was inaugurated were reduced 1/6. All annuities purchased by the seminary have been issued by T.I.A.A. NONFACULTY EMPLOYEES

In 1930 the seminary inaugurated a plan for retirement income for nonfaculty staff members. The seminary announced that it would set aside 3 percent of salary payments for each employee, to be accumulated while employment continues and to be used at age 65 to purchase an annuity for the retiring employee. If an employee will contribute 2 percent of his salary to the same fund, the seminary offers to contribute 4 percent instead of 3 percent; and if the employee will contribute 5 percent the seminary does likewise. If employment ceases before age 65 is attained, the employee's contributions, with interest, will be returned ιο nim. UNITED

STATES

MILITARY

ACADEMY

The faculty of the academy is composed of commissioned officers of the regular army, and as such they are covered by the noncontribu-

DESCRIPTIONS

122

OF

PLANS

tory pension provisions for officers and enlisted men of the United States military forces resulting from Congressional legislation. After 30 years of service they may retire and receive pensions of ^ of their regular pay. UNITED

STATES

NAVAL

ACADEMY

COMMISSIONED OFFICERS

Faculty members who are commissioned officers are covered by retirement provisions for commissioned officers and enlisted men. After 30 years of service they may retire and receive pensions of of their regular pay. CIVILIAN TEACHERS

By act of Congress, in 1936, civilian teachers thereafter appointed to the United States Naval Academy and the Postgraduate School are required to contribute 10 percent of compensation payments (5 percent offset by increased salary payments) toward purchase of deferred annuity contracts from a joint stock life insurance corporation having a charter restriction that its business must be conducted without profit to its stockholders. Civilian teachers in service when the act was approved had the privilege of doing likewise, beginning within 60 days. All civilian teachers are to retire on June 30 following attainment of age 65, and those in service when the act was approved were encouraged to participate in the plan by a provision that if the annuity beginning at age 65 purchased under it is less than $1,200 a year, the difference is to be paid by the Secretary of the Navy. Furthermore, if such a member is required to retire because of disability before reaching age 65, his annuity is to be supplemented so as to produce a benefit as large as it would have been had the plan been in effect from the time of his appointment, the total benefit not to exceed $1,200 a year. URSIN US

COLLEGE

In January, 1940, a plan is to be inaugurated under which faculty members will be retired at age 65 by agreement of member and board; members must retire at age 70. The pension after 15 years of continuous service will be yi the average salary for the last 10 years of service.

DESCRIPTIONS UTAH

STATE

TEACHERS'

RETIREMENT

OF

PLANS

123

SYSTEM

COVERING UNIVERSITY OF U T A H AND U T A H STATE AGRICULTURAL COLLEGE

The Utah legislature inaugurated the Utah State Teachers' Retirement System in 1937 by adoption of the "Teachers' Retirement Act." The system covers, among others, teachers of state-supported colleges and universities employed on or after July 1, 1937, but excepts anyone who is the "holder of a retirement annuity contract with the Teachers Insurance and Annuity Association or any other private organization or company in which the State of Utah or any subdivision thereof contributes part of the premium." The University of Utah has taken steps to continue its plan, making use of T.I.A.A. contracts, and to extend the plan to nonfaculty employees. (See schedule, Appendix I.) Utah State Agricultural College has heretofore cooperated with faculty members in the purchase of retirement annuity contracts of T.I.A.A., but without establishing any definite provisions for retirement or participation in a plan. Referring to the state teachers' system here described, the executive secretary of the Agricultural College writes: "From now on undoubtedly the governing body of this institution will adopt this program." Participation is required of eligible members. Contributions are based on compensation up to $2,500 a year; they are scaled to entrance age, with the objective of supporting after retirement at age 60 a benefit of 1/140 of "final compensation," defined to be the average annual compensation for the last 10 years of service, multiplied by the number of years of membership service. Retirement for service is permissible at age 60 after 15 years of service or at age 55 after 30 years of service and is required at age 70. The benefit following service retirement is twice as large as the annuity that can be purchased with accumulated member contributions plus a pension of 1/70 of final compensation for each year of service prior to the inauguration of the plan. If retirement occurs prior to age 60 and after 30 years of service, the pension mentioned above is reduced to the actuarial equivalent of the value it would have had if retirement had occurred at age 60. If a member is disabled after completing 10 years of service, he

124

DESCRIPTIONS

OF

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receives an annuity of percent of final compensation for each year of service. If he has served for less than 20 years when he becomes disabled, those years that he might have served prior to attaining age 60 had disability not intervened may be counted as years of service toward making up a total of not more than 20 years in calculating the annuity. Various forms of annuity of equal actuarial value are available in case of either service or disability retirement. If a participant withdraws from service before becoming eligible for retirement, his accumulated contributions are returned to him. I f he dies while in service, the benefit consists of the accumulated member contributions plus an amount equal to compensation earnable "during the last six months under contract immediately preceding his death." VASSAR COLLEGE

By resolution adopted in 1924 Vassar College inaugurated a contributory retirement plan covering faculty members, designated administrative officers, and staff members who were not eligible for Carnegie pensions. Participation is optional for persons under age 35 after 2 years of service if salary is $2,000 or more and after 3 years of service if salary is less than $2,000. The waiting period is waived for persons transferring from a college having a similar plan in force. An eligible person must participate when he attains age 35 and upon receiving "an advance in rank" regardless of age. Participants contribute 5 percent of salary, which is matched by equal contributions from the college. These contributions are used to purchase retirement annuity contracts maturing at age 65. The member has his choice of life insurance company and form of policy, but the latter must be of a premium refund type, must be approved by the treasurer of the college, and must be so endorsed that it cannot be cashed while the policyholder remains with Vassar. Supplementary benefits.—In 1929 the trustees voted to share equally with Carnegie expectants in periodic payments to provide at age 70 annuities sufficient, when added to payments supported by the Carnegie Foundation and the Carnegie Corporation, to make total benefits half as large as the average salary for the last 10 years

DESCRIPTIONS

OF

PLANS

125

of service. Funds so contributed have been held by the college, and from them payments are to be made directly to retiring staff members. In April, 1937, the college liberalized this arrangement by making available for those who retire at age 67 or later the same supplementary annuity that formerly would have been available if they retired at age 70. For those who retire at age 65 or 66 this benefit is reduced by 2/15 or 1/15, respectively. Payments are to be interpreted as refund annuities under which the widow or the estate is to receive any excess of contributions over benefit payments in case of the early death of the pensioner. VIRGINIA

POLYTECHNIC

INSTITUTE

A noncontributory, nonfunded retirement plan was made effective July 1, 1939. The description of this plan distributed by the president ends with the following paragraph: "It is to be understood that the plan as it now stands is recognized as tentative, and the Board reserves the right to revise it in any way that may seem best for all concerned." Under this plan, after attaining age 70 teachers and administrative officers are to perform such duties as may be designated by the president, but they are no longer to perform the full duties that have theretofore been assigned to them. Such a person shall receive compensation of 20 percent of salary for the last full year of service plus 1 percent for each year of total service, with the limitation that the total compensation shall not be greater than half the average salary for the last 5 years of service. In particular cases arrangements may be made for part-time service, with corresponding reductions in compensation prior to attainment of age 70. WASHINGTON

AND

JEFFERSON

COLLEGE

Upon retirement, pensions are paid to those "whose years of service justify it." The amount of each pension is determined individually taking into account length of service, salary, and individual needs. UNIVERSITY

OF

WASHINGTON

On January 31, 1936, the board of regents of the University of Washington adopted a plan for partial retirement, to be maintained

126

DESCRIPTIONS

OF

PLANS

until a contributory retirement system had been in operation for at least 15 years. Under this plan "retirement at half-time service or less" was made mandatory at the end of the academic year in which age 70 was attained and available upon request of the individual, with the recommendation of the president, between ages 65 and 69, inclusive. B y legislation in 1937 the board of regents of the University of Washington and the board of trustees of the state colleges of education were authorized "to assist the faculties and other employees in purchasing old age annuities." Exercising the authority thus granted, the regents approved the contributory annuity plan outlined in the synoptic schedule, Appendix I . WELLESLEY COLLEGE In 1927 Wellesley College adopted a contributory retirement plan for the instructional staff, administrative officers, and librarians. For participants in this plan who were in service prior to July 1, 1936, the college hopes and expects to see that the total retirement benefit shall be at least equivalent to a single life annuity of $100 a month beginning July 1 following attainment of age 65 or later, as determined by the board of trustees. For those who expect free pensions from the Carnegie Foundation the college intends to see that the total benefit shall be not less than would have been provided by the 1922 rules of the Carnegie Foundation. A new contributory plan was adopted January 1, 1938, which applies to officers of instruction and administration, college physicians, and members of the library and administrative staffs. Participation is required of everyone with 3 years of service who is appointed for a term of more than one year. Participation is available to, but not required of, persons on annual appointment, if they have had 3 years of service. No preliminary service period is required for those who wish to participate if they are appointed for terms of more than one year. Contributions of all participants and of the college are 5 percent of the participants' salaries, these contributions being applied to purchase retirement annuity contracts, with payments beginning July 1, following the attainment of age 65 or later, as determined by

DESCRIPTIONS

OF

PLANS

127

the board of trustees. The obligation of the college does not extend beyond the purchase of a single life annuity of $100 a month. For further information see the synoptic schedule, Appendix I. UNIVERSITY

OF WESTERN

ONTARIO

In 1939 the university adopted a contributory retirement plan covering all full-time employees. Retirement is to occur normally at age 65 for men and at age 60 for women, but older members of the staff in good health may continue in service until age 70 is reached. Contributions of the university and of staff member alike are 5 percent of the staff member's salary. Dominion Government annuities are purchased up to the maximum of $100 a month that the Government will issue. Additional annuities are purchased from 4 associated life insurance companies to the extent that contributions of 10 percent of salary will purchase more than $100 a month at retirement age. W Η EATON

COLLEGE,

ILLINOIS

In November, 1935, Wheaton College adopted a policy with reference to age of retirement. All regular employees were to be eligible to retire on reaching age 65, and they were required to retire at age 70, except that the service of an individual may be extended from year to year beyond age 70 by special action of the trustees. Upon retirement an employee is "given the advantage of the then existing pension arrangement." In May, 1937, it was announced that the pension payable to a married pensioner should be $1,000 a year, with $500 a year to the survivor, and that the pension to a single pensioner should be $750 a year. This policy is to be followed "to the extent that it is deemed possible in the judgment of the Trustees." In November, 1937, it was stipulated that if the spouse of the pensioner remains in the service of the college, the pension shall be $500 a year. WHEATON

COLLEGE,

MASSACHUSETTS

Beginning with the academic year 1930-31 a contributory plan was established to apply to all professors, associate professors, assistant professors, the librarian, and to those instructors and administra-

128

DESCRIPTIONS

OF

PLANS

tive officers whose salaries are $2,000 or more. Membership was made optional for those in service in 1930, choice being required by the end of September of that year, and compulsory for all later appointees. Member contributions of 5 percent of salary are matched by the college, invested by the college, and increased by the addition of interest at the average rate received by the college on its investments, this rate not to exceed 5 percent. Retirement is permissible at age 60 and required at age 65 unless service is extended by special action. When separation from service occurs prior to age 60, except for permanent disability, a member's accumulated contributions are returned to him. Upon retirement or death after age 60 or if permanently disabled, the amount accumulated by both member and college contributions is available. The retirement benefit is normally paid in 2 installments—the first upon retirement and the second in January of the following year. The college may require and the member may request an annuity instead of a lump-sum payment upon retirement. The minimum retirement benefit after age 60 is an amount equal to the salary of the last full year, the accumulation of contributions to be supplemented by an appropriation from the college if necessary to make this minimum payment possible. WICHITA,

THE MUNICIPAL

UNIVERSITY

OF

On January 1, 1938, the Municipal University of Wichita inaugurated a contributory retirement plan applying to faculty and library staffs and financed through a group annuity contract with the Aetna Life Insurance Company. Participation was made optional to persons in service when the plan was inaugurated, but was required of new appointees, and of those in service when the plan began if and when promoted. Normally retirement is to occur on the first of July nearest to the member's 70th birthday, but with the consent of the board of regents a member may retire at any time within 10 years prior to normal retirement date and receive a reduced retirement benefit. Contributions of a member are 3 percent of his regular salary, and an equal amount is contributed by the university. The retirement income is whatever these contributions will purchase according

DESCRIPTIONS

OF

PLANS

129

to the company's published rates. Rates stated in the announcement of the plan are not to be changed before July 1, 1943. If a member who has been in service less than 3 years withdraws from the university before retirement, he receives in cash the sum of his own contributions. If a member withdraws after having completed 3 years of service, he may have a so-called "cash value" based on his contributions and a paid-up retirement income based on the university's contributions, or he may have a paid-up retirement income based on both his own and the university's contributions. The cash value mentioned above is the sum of contributions plus interest at 3 percent accumulated on each contribution beginning 3 years after the contract year in which the contribution was made. If the member dies in service, his beneficiary receives the sum of the contributions he has made plus interest on each from the end of the year of payment to the date of death. The regular retirement income is in the form of a single life annuity, but optional methods of settlement are available at retirement. WILLAMETTE

UNIVERSITY

A contributory retirement plan was established at Willamette University, effective September 1, 1934, covering men under age 70 and women under age 60 upon the completion of one year of service. Contributions of 5 percent of salary are required of participants, and the university contributes a like amount in recognition of current service. These contributions become premiums for a group annuity contract issued by the Sun Life Assurance Company of Canada. Normally retirement occurs at age 65 for women and for men under age 60 when the plan was inaugurated; for men past 60 at that time it normally occurs at age 70. Optional forms of settlement of equal actuarial value are available at normal retirement age. In case of death before the attainment of normal retirement age the participant's contributions are paid with 3 percent interest. If a participant withdraws from service before attaining retirement age, he may receive in cash his own contributions with interest > for all but about 3 years of their respective periods of accumulation and a portion of the accumulation of the university's contribu-

130

D E S C R I P T I O N S

OF

P L A N S

tions on his behalf corresponding to at least 2 percent of his salary; in practice this has corresponded to the whole of the university's contribution. The withdrawing employee may choose instead of this cash payment a paid-up annuity of equivalent value payable when he reaches normal retirement age. Supplementary benefits.—Additional retirement benefits are purchased by the university for employees past age 60 when the plan was inaugurated. For those then past age 65 the annual premium for this supplementary benefit is 1 percent of salary for each year of service prior to the inauguration of the plan, divided by the number of years yet to elapse before normal retirement age is reached. For those between ages 60 and 65 when the plan was inaugurated the same method was used, except that percent of salary for each year of service replaced the I percent that applied for older members. WISCONSIN

STATE

RETIREMENT

SYSTEM

COVERING UNIVERSITY OF W I S C O N S I N , STOUT I N S T I T U T E , S U P E RIOR STATE TEACHERS COLLEGE, AND STATE TEACHERS COLLEGES AT E A U CLAIRE, LA CROSSE, M I L W A U K E E , O S H K O S H ,

PLATTE-

VILLE, RIVER FALLS, AND STEVENS POINT

This contributory plan for retirement income, established by law in 1921, requires contribution of 5 percent of salary from teachers past the age of 25 in the University of Wisconsin, the normal schools, and in the public schools of Wisconsin other than those in Milwaukee. Persons for whom teaching is not a major occupation do not participate. Teachers in the university are excluded if below the grade of instructor or if entitled to benefits from the Carnegie Foundation for the Advancement of Teaching. The state contributes a definite amount for each teacher, which amount increases with the length of service of the teacher in the state or elsewhere, but it is a smaller percentage of the salary for those with higher salaries. The average state contribution is about the same as the average personal contribution for the university and is considerably greater than the average personal contribution for the normal school and public school members. For a teacher newly appointed with a salary of less than $1,200 the amount is $25 plus 2l/2 percent of the salary. The maxi-

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OF

PLANS

131

mum amount contributed is $25 plus 10 percent of the salary, but it never exceeds $325 a year. No retirement age is stated in the plan. There is no distinction between retirement and withdrawal from service. Whenever a member ceases to be a teacher, he may withdraw his accumulated contributions in a single payment, in installments, or as an annuity of any one of several types. Accumulated contributions of the state are available in the form of an annuity to begin not earlier than age 50, except that in case of disability the annuity may begin earlier. Those retiring before age 50 profit by the accumulated state contributions when they reach that age. A member who becomes "permanently removed from the state" before the age of 36 may withdraw his accumulated contributions in cash even if he does not leave the teaching profession, but in doing so he must sign a release of claim on the accumulated state contributions in his behalf. In case of death in service or before the granting of an annuity, the accumulation of both the member's and the state's contributions is available in a lump sum, in installments, or as an annuity to a beneficiary or beneficiaries as directed by the member. Whenever an annuity or death benefit is payable to a teacher who was in service when the plan was inaugurated and who has completed 25 years of service, the annuity or death benefit from the state is what it would have been had the state contributed throughout the period of service prior to the inauguration of the plan. YALE

UNIVERSITY

In 1897 Yale University provided for retirement on half pay at age 65 of persons who had served the university for 25 years in a rank higher than that of assistant professor. The corporation might at its discretion reduce the number of required years of service at Yale by as much as 15 years for those who entered the service with the rank of professor at unusually advanced ages. In 1905 the corporation added that except in case of special action retirement should be compulsory at age 68. In January, 1920, the corporation provided that for those having Carnegie expectations the retirement allowance should be $400 more than half the average salary for the last 5 years of service, with a

132

DESCRIPTIONS

OF

PLAN'S

maximum allowance of $4,000; that for those without Carnegie expectations who were appointed to positions of rank equivalent to that of professor prior to January 10, 1920, the retirement allowance should be half the average salary for the last 5 years of service, with a maximum of $4,000; and that no others should expect free pensions. The university offered at the same time to match dollars up to S percent of salary, not to exceed $300 a year, with members not covered by the above-mentioned provisions, after they had served 2 years with the rank of instructor or higher, in payment of premiums on deferred annuity policies with T.I.A.A. or on a different form of contract or with a different company if the treasurer of the university was satisfied with the reasons for such different choice. In 1930 this voluntary contributory arrangement was changed by making the limit of the university contribution $500 a year instead of $300 and by providing that the university should accumulate the contributions instead of paying them as premiums on deferred annuities or other forms of contracts with life insurance companies. The university promised to add interest "at a rate which shall be the same as the average rate of income derived during the preceding fiscal year by the University from its General Funds," but not to exceed 5 percent. Upon withdrawal or retirement after less than 3 years of service, the teacher received his accumulated contributions. Upon withdrawal after 3 years of service or in case of death prior to retirement, accumulated contributions of both teacher and university were to be paid. In case of withdrawal within 5 years of reaching retirement age, the university could require that the equity be taken in the form of an annuity. The university was to purchase for the teacher, upon his retirement, an annuity from T.I.A.A. or from "some recognized company dealing in such coverage." The teacher could choose the type of annuity, but his choice must meet the approval of the corporation; otherwise the corporation could use its judgment as to the annuity to be purchased. The administration of this plan was modified fundamentally as of October 1, 1938. At that time accumulations to the credit of mem-

DESCRIPTIONS

OF

133

PLANS

bers in the contributory plan were applied to purchase retirement annuity contracts issued by T.I.A.A., with the understanding that in case of withdrawal from service prior to attaining age 60 the accumulations to the credit of these contracts will, upon request of members, be payable in cash rather than as annuities. This form of settlement is also to be available, with the approval of the university, when the member attains age 60. Subsequent monthly contributions of both university and member become premiums for regular monthly premium annuity contracts of T.I.Α.Α.; no right to lump-sum settlement is granted under these contracts. The plan continues on a voluntary basis. Its revised statement defines the eligible classes as all full-time faculty members above the rank of instructor, instructors with 2 years of service, persons holding academic rank, and persons in administrative positions with the "assimilated rank" of assistant professor or higher. Persons expecting retirement allowances from the Carnegie Foundation and those with claims for university pensions because of service prior to October 1, 1920, are not eligible to participate in the contributory plan. YOUNG

MEN'S

CHRISTIAN

ASSOCIATION

RETIREMENT

FUND

COVERING CENTRAL Y . M . C . A . , F E N N , GEORGE W I L L I A M S , SPRINGFIELD, AND SIR GEORGE WILLIAMS COLLEGES, AND NORTHEASTERN UNIVERSITY

This fund was incorporated by an act of the New York legislature adopted in 1921 "for the benefit of employed officers of Young Men's Christian Associations after their retirement from active service." Among others, teachers of the colleges listed above are eligible to participate in this plan. Participation is voluntary to eligible persons whose employers are willing to contribute. The amount to be contributed by a member is based on age at entry and is such a percentage of salary as the retirement fund board may from time to time determine, but is not to be less than 4 percent of salary; the percentage remains fixed after entrance.

134

DESCRIPTIONS

OF

PLANS

Service retirement is available at age 60, the benefit being: (a) the annuity that can be purchased with member contributions accumulated at a rate of interest between 3 percent and 4 percent as determined from time to time by the board, called the "secretarial annuity"; (b) an annuity of ^ percent of final salary (defined as the average for the last 10 years of service) multiplied by number of years of service subsequent to July 1, 1922, and prior to attaining age 60, except that this annuity shall not be greater than the secretarial annuity; and (c) an annuity of V/2 percent of final salary for each year of service prior to July 1, 1922. Several optional forms of retirement benefit are available. Disability retirement is permissible after 5 years of service, the benefit being 1 percent of final salary for each year of service, with a minimum of 20 percent of final salary, except that the benefit is not to be greater than it would have been had retirement been deferred until age 60. If a member's service is discontinued after the first year or if a member dies in service, the benefit is his contributions accumulated at regular interest. A withdrawing member may choose an annuity or a deferred annuity instead of a lump sum.

PART I I E V O L U T I O N FOR

OF

C O L L E G E

R E T I R E M E N T

PLANS

I N C O M E

EARLY D E V E L O P M E N T S record the present status of college retirement plans and sketch developments at particular institutions where substantial changes have been made from time to time. In the pages that follow we undertake to present the main outlines of this development without reference to particular institutions. There is little evidence of systematic provision for retirement income on the part of colleges and universities prior to the present century. In earlier days pension concepts were simple. No pressing need was felt for an orderly manner of providing retirement income. A pension was usually a gratuity granted in recognition of "long and faithful service" or of some outstanding accomplishment. Colleges were small, and only occasionally were payments made to staff members except for current services. As colleges grew in size and faculty membership became more definitely a contractual arrangement, the need to provide for retirement income was gradually recognized. Shortly before the turn of the century some of the older and larger colleges and universities announced pension plans and, unfortunately, did so with little appreciation of the magnitude of the financial obligations involved. EARLIER PAGES

CARNEGIE

PENSIONS

This was the status when in 1905 Andrew Carnegie determined to give pensions in a systematic manner to superannuated college professors on the ground that theirs was "the least rewarded of all the professions." The Carnegie Foundation for the Advancement of Teaching was organized for this purpose. Its rules for the granting of such pensions are reviewed on pages 23-29. In the light of recent provisions for old-age income, plans made 30 years ago seem crude. But if we bear in mind the dearth of such provisions in Carnegie's day and the fact that little attention had as

138

EARLY

DEVELOPMENTS

yet been given to the subject, we can understand the views of those who hailed Carnegie's plan as a valuable forward step. At that time a professor at Harvard could look forward to a pension from Harvard only if he remained with that institution until retirement. The same was true at Columbia. While Carnegie had no thought that his benefaction should extend to the faculties of all colleges and universities, his plan permitted free interchange of professors among the institutions that it covered without loss of pension expectations. This was a distinct advance. Entrance and graduation requirements were none too high in many institutions, and methods of financing left much to be desired. Many colleges were anxious to qualify for inclusion in the Carnegie family and were thus led to greater and earlier improvements than would otherwise have materialized. A number of the stronger institutions that did not qualify under the Carnegie gift were led to announce pension plans comparable in liberality with that of the Carnegie Foundation. Perhaps the greatest weaknesses of the Carnegie free pension plan were responsible for the most valuable work of the Carnegie Foundation in the field of planning for retirement income. Strange as it may seem, these weaknesses were that the pensions were without charge to the college or to the professor and that expectations of unknowable magnitude were aroused with only a limited, even though liberal, gift to support them. Among the first to recognize these characteristics as shortcomings was Henry S. Pritchett, the first president of the Carnegie Foundation. From the beginning he foresaw that the Carnegie Foundation could not pension professors in all colleges and universities. This he noted year after year in his annual reports. At the same time, his experiences were leading him to the conviction that from the standpoint of both the college and the faculty free pensions are not the best agency for provision of retirement income. Only a few years after the Carnegie Foundation was established Mr. Pritchett declared his conviction that a contractual arrangement by which colleges and faculty members might contribute toward provision of retirement income would be superior to free pensions. Carnegie Foundation allowances were clearly noncontractual.

EARLY TEACHERS

INSURANCE

AND

DEVELOPMENTS ANNUITY

139

ASSOCIATION

This idea grew in Mr. Pritchett's mind as he continued his intensive study of retirement plans in various countries. A life insurance company was obviously the proper instrumentality for contractual provision of retirement income, but no life insurance company was then offering a deferred annuity contract that was sufficiently flexible for the special purpose that he had in mind. Furthermore, Pritchett was convinced that it should be possible for the colleges that knew what they wanted, to avoid some of the overhead expenses that accompanied sales to individuals who must be convinced of their needs. He therefore urged the organization of a new life insurance company that would center its attention on the needs of the colleges and their staff members and would devise appropriate policy contracts that could be offered for sale by mail. This was the genesis of T.I.A.A. See page 17, above, for a description of this company. The organization of this association with the backing of the Carnegie Foundation and the Carnegie Corporation, the publicity given to this subject in the annual reports of the Carnegie Foundation, and the strong recommendation made by Mr. Pritchett that colleges and universities adopt this method of providing retirement income gave impetus to the development of retirement plans and the adoption of the contractual method of financing them. This development would probably have been much slower and perhaps would have come through much less appropriate facilities had it not been for the Carnegie Foundation. And so, while Carnegie free pensions have varied widely from those originally contemplated, the intensive study that was induced by the shortcomings of this altruistic conception has been most fruitful in the development and acceptance of a method that promises much in social value and stability. The extent to which retirement annuity contracts of T.I.A.A. are used in the funding of provision for retirement income is indicated by the schedule in Appendix I. Provisions of these contracts are described on pages 11-14. As already stated, when T.I.A.A. was organized in 1918 this type of contract was not on the market, and rarely since then has it been duplicated. It was devised for the particular purpose of funding retirement benefits for college faculties

140

EARLY

DEVELOPMENTS

and, while the experience of 20 years has suggested no fundamental changes in its provisions, it has rarely proved popular with commercial companies for sale by commissioned agents. T.I.A.A. is peculiar in that it was organized to serve a special clientele for particular purposes. Its retirement annuity contracts are a major part of its business, and there is every indication that this will continue to be the case; for commercial life insurance companies such a contract is usually little more than incidental. Tabulations given elsewhere in this publication and the summary on page 4 show to what extent the colleges and universities that fund provisions for retirement income through contracts issued by life insurance companies use these contracts. Several institutions that formerly funded their own contributory plans have shifted to T.I.A.A. contracts. Some newly established state and municipal plans cover employees of tax-supported colleges and universities, and others have been extended to cover this class of public employees. Because this movement may continue, it is important that officers of state institutions should scrutinize carefully some of the provisions of these publicemployee plans. It might be expected that group annuity contracts would be particularly well adapted to the funding of these retirement benefits. However, only a small number of institutions have adopted this method, and in several such cases only maintenance employees are involved. One reason seems to be the conviction that when an individual leaves a particular employer he should be able to continue his plan for retirement income, and this is not usually possible under group annuity contracts. There are other respects in which desirable characteristics of individual control are more readily obtained by use of individual contracts. There is, of course, much to be desired in this development. Several hundred colleges have as yet been unable to establish retirement plans, and many plans now operating could be improved to advantage. As might be expected, the larger and stronger institutions have, as a class, made more progress than have the smaller ones. But interest is widespread in many of the smaller colleges that have no plans, and any substantial improvement in economic conditions will bring the inauguration of many more plans.

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141

D E S I R A B L E PROVISIONS OF R E T I R E M E N T PLANS

A

"RETIREMENT PLAN" could be merely a statement of policy with regard to the retirement of staff members, but these words usually connote a plan for retirement and income after retirement. Before discussing desirable provisions for such a plan, we should first ask why the governing body of a college should interest itself in the retirement of college staff members or in their means of livelihood after they cease to be with the college. Presumably the college pays fair salaries and wages and offers steady employment. Opportunities to make investments of various kinds are abundant, and salesmen urge the purchase of annuity contracts on all who will listen. Why should the college interfere in these personal affairs? Some college presidents have held that a college should not. Some college trustees have suggested that each staff member should provide his own means of livelihood after employment ceases. Some rugged individualists in college faculties have wanted nothing to do with the paternalism reflected in the college's concern as to their old-age incomes. In the face of such doubts, what prompts college boards to consider the establishment of retirement plans?

The answer in general terms is very simple. A college should establish a retirement plan only if this will further the interests of the college as an institution. The college board is not an eleemosynary body. It should spend college funds only in the expectation that the college will benefit by the expenditure. It should undertake to tell staff members how they shall spend any part of their compensation only if college interests are at stake. PURPOSE

OF A RETIREMENT

PLAN

Barring premature death, most staff members finally outlive their usefulness to the college. Perhaps this is especially true of faculty members, the effectiveness of whose work rests on close sympathy with and understanding of the interests of youth. Public sentiment forbids the dismissal of persons who have grown old in satisfactory service, unless a source of income is in sight. College boards are interested in retirement plans to provide this income. To carry out

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its responsibility of maintaining the efficiency of the college staff, the board of trustees must look forward to the retirement of staff members as they become superannuated. To this end the board is justified in expending college funds to assure that, since individuals must be retired, their future needs will be modestly met. True enough, investment opportunities are all about, and annuities are pressed by anxious salesmen. But most people simply do not voluntarily provide for old-age income. It is this fact that college boards must face, quite regardless of its explanation. A college with no plan for retirement income continues the employment of staff members after both the quality and the quantity of their services have diminished. This practice hampers the effectiveness of the college, discourages able younger men who should be promoted, and sometimes develops unfortunate cleavages in faculty groups that are distinctly harmful to the college. This, and much more, may be heard from the lips of many college officers. Planning in advance for retirement and for income after retirement is the remedy that has been applied by many leading institutions, as can be noted by inspection of schedules in the appendices. Briefly, the fundamental purpose of a retirement plan is to enable the governing body of a college to part in a socially acceptable manner with individual staff members when they reach the point at which the welfare of the college will be served better by their absence than by their presence. And it is well that plans be laid with care when no emergency is above the academic horizon, for the members of a governing body not infrequently have the unpleasant task of leading even a college president to see as clearly as they do that he should have his full time to write his memoirs. Related to the fundamental purpose of a retirement plan are some others which impress themselves with varying force on different minds. Some of the most promising professional men have rejected offers of positions that were otherwise attractive because the institution did not have a satisfactory retirement plan. In other cases the existence of such a plan has been an important element in the attractiveness of an offer. And it is to the credit of the individuals in such cases that their thoughts have not been limited to the effect of the plan, or its absence, directly on themselves.

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A good man shows his promise by his desire to be a part of an institution with high professional standards and ideals. He wants to feel that his institution is thoroughly alive professionally and that it is set up in such a way as to give promise that it will maintain this characteristic in the future. From all present indications a satisfactory retirement plan is essential to the maintenance of high professional standards. As will be brought out later, such a plan can be administered in such a way that it will be an invaluable aid not only in parting with superannuated staff members but also in attracting promising men, in holding promising men, and in parting with those whose development has for one reason or another been arrested and for whom new surroundings may be essential to maximum usefulness. SOURCE OF SUPPORT

As already stated, pension plans established years ago consisted merely of the announcement of prospective pensions upon retirement and were inaugurated with little consideration or appreciation of the obligations that were being undertaken. This carefree procedure is largely a thing of the past, and with an understanding of the cost of pensions has come a realization that savings must be established during the working years of the prospective pensioner to meet this cost if retirement benefits are to be paid with regularity and without seriously crippling the current work of the institution. In a few cases contributions for the support of old-age benefits have been made entirely by staff members, and in a few cases only the employing institution has contributed; but the prevailing method in colleges, in public employment, and in industry is for the employer and the employee to join in contributing. The most popular conception is equal sharing. Logically, it matters little whether contributions come alone from the employer or the employee or from both; but from the standpoint of good feeling in employer-employee relations the method of joint contribution is best. Such a plan will be called a "contributory plan"; and it will be assumed that only contributory plans are being considered here unless a statement is made to the contrary. Some publicly administered institutions are prevented by statute

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or ruling from paying university funds as premiums for annuity contracts held by staff members. This is an unfortunate perversion of a restriction intended to prevent unjustifiable payments to individuals. Occasionally in the past administrative officers and legislative bodies have shown expensive favoritism in this way; hence the ban. But state universities have the same need for retirement plans as do privately administered institutions and it is unfortunate indeed that legislation intended to avoid sporadic abuses must be interpreted to prevent the formation of such plans. Under a well-constructed plan payments of the employer with respect to an individual are modest and can reach the individual only as an annuity with payments beginning after he retires. Such a plan treats each individual as one of a group and determines benefits far in advance of their payment so that there is practically no possibility of unjustifiable liberality so long as provisions of the plan are followed. Every effort should therefore be made to couch present safeguards in language that will prevent recurrence of former abuses without depriving the state of the advantages of a modest retirement plan for its employees. This is particularly important now because our states must compete with other employers for the services of individuals and the retirement plan of the Social Security Act applies to a large majority of workers but does not apply to those who serve the state. RESPONSIBILITY

FOR RETIREMENT

PLANNING

A retirement plan is an agreement between an institution and its staff members, and it may or may not have the binding force of a contract. Clear thinking as to the provisions that it should contain requires a definite conception of the purposes to be accomplished. Too often consideration of the establishment of a retirement plan is referred to a faculty committee with no guidance as to objectives. The relation between the faculty members and the administrative officers is more intimate than that between the employees and the employer in industrial organizations. The college profits by this intimacy, and everything possible should be done to preserve it. But in the delibeiations of the governing body the welfare of the college as a going concern must take precedence over any conflicting interests or desires of individual staff members. A retirement plan should be established or modified only to further

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the interests of the college. A college president may well ask a faculty committee to study the question of establishing a retirement plan or to study the workings of a plan already operating. But the governing body would be short sighted if it accepted or rejected a retirement plan or the modification of one merely because faculty members favor this action. This is a point at which even a majority vote of the whole faculty should not be the last word. The administrative officers and the governing body have a responsibility to the college which cannot be shifted. The welfare of the college must be their guide in dealing with staff members as individuals and in groups. A single illustration will show the possible cleavage of interest between the faculty and administration. Faculty members might favor voluntary participation in a plan on the ground that this would facilitate planning for old-age income for those interested, without meddling with the affairs of others. But the difficulties of the administration in dealing with superannuated staff members are eliminated only if the plan applies to all. PARTICIPATION

Today most college retirement plans cover only faculty members and administrative officers. A few plans have for years covered the clerical or maintenance forces or both. But only recently has any considerable attention been given to retirement benefits for members of these groups in most colleges and universities. The nonacademic employees of a number of tax-supported institutions participate in retirement plans for public employees, but privately endowed institutions have thought first of their professional staff members. Just why developments have taken this turn, we can only surmise. Considering individual need, one might reasonably conclude that those with lowest compensation would be most in need of old-age income; yet other organizations tend, as do the colleges, to favor professional and more skilled employees when providing retirement benefits. We are probably not far wrong in thinking that this tendency reflects greater difficulty in parting in a socially acceptable manner with the more skilled or professional employees than with the rank and file of workers. But the picture is not quite so cruel as this might indicate. While statistics are not available, it seems

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probable that the turnover in employment is much larger with respect to service staff members than it is in the professional group. Furthermore, those in the service staff who continue with the college until advanced age can often be of real, even though diminished, usefulness to the college and may do no harm; but professional men similarly handicapped by age may do incalculable harm by continuing, after their powers begin to wane, those relationships with colleagues and students which in earlier years were most fruitful. Perhaps little is to be gained by discussing these difficulties, because college officials are rapidly turning to the problem of providing old-age benefits for all classes of staff members. The Social Security Act is responsible for much of this attention, and at the same time uncertainty as to whether or not college workers are to be brought under this act makes officials hesitate to recommend the inauguration or modification of separate plans for retirement income. To bring this discussion to a focus we may ask: What classes of staff members should participate in a college retirement plan, and what effect should the Social Security Act have on the answer to this question? If a college must choose between the classes of staff members to be covered, academic staff members should come first for reasons purely selfish from the standpoint of the college. A college will suffer much more from ineffectiveness in its classrooms than from ineffectiveness in its halls and on the campus. There is much to be said for the old idea that a college is a collection of teachers and students. If a college is financially able to encourage participation of all classes of staff members in a contributory retirement plan, the inauguration of such a plan should not be delayed because of uncertainty regarding the Social Security Act. The plan should be adjustable to extensions of the social security coverage, and if this precaution is taken there is nothing to lose and much to gain by beginning some provision for retirement income. The Social Security Act is planned to produce only minimum benefits, and these will not be adequate for faculty members or for the better-paid members of the nonacademic staff. Hence, a private plan is desirable that can be so adjusted to the provisions of the Social Security Act that it may supplement whatever benefits may be provided by that act.

DESIRABLE PRELIMINARY

SERVICE

PROVISIONS

147

PERIOD

Many college retirement plans permit or require a specified period of service on the part of a staff member before he is eligible to participate in the retirement plan. A large variety of arrangements exists, but none of them seems to be a fundamental feature of a retirement plan. The nature of the waiting period should, of course, depend on its purpose. Many plans in which participation is optional provide that the college will match contributions with a staff member of an eligible class after a specified period of service—1, 2, 3, or 5 years. This is equivalent to saying that the college will not contribute toward retirement accumulations for those who have not completed the stated period of service, and the purpose is either to avoid the nuisance of arranging for participation of persons who will continue in employment for only a short time or to economize in the cost of the plan to the college. A number of plans make participation optional after a short waiting period and obligatory after a longer period. This means that the college is willing to contribute only after a short period of service, but insists that joint provision for retirement income be started when the longer period expires. Some colleges decline to contribute until they are ready to require participation. A few institutions delay participation until the attainment of a specified age, such as 35 years, and require it after that. Many retirement plans for public employees do not mention preliminary service periods. They often limit coverage to persons who have passed civil service tests or similar requirements that tend to eliminate temporary employment and frequently reflect substantial amounts of employment similar in nature to that being undertaken. While some of these variations have reasonable local justification, many of them either are methods of attaining economy that is considered essential in the inauguration of a plan or reflect efforts at refinement that have little objective defense. In any case, a waiting period of from 1 to 3 years will probably do little harm and little good. There is more reason for excluding persons who are on definitely temporary assignments and are fully expected and expecting to move on after short periods of service. So long as colleges and universities are not covered by the Social

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Security Act, it seems probable that the tendency will be to shorten waiting periods, because there is none whatever under the retirement plan of the Social Security Act. OPTIONAL

OR COMPULSORY

PARTICIPATION

Participation in a contributory retirement plan during working years means, of course, contributing toward the support of such a plan. At a later date it means submitting to the provisions of the plan with reference to discontinuance of service, which is usually required even when contribution toward provision for old-age income is optional. The employing institution is usually far more interested than are individual staff members in whether participation shall be optional or required. As already stated, an institution inaugurates a retirement plan as an administrative aid in parting with superannuated staff members. When it does so, it is ready to make substantial payments from its treasury for this purpose, although it is not willing to make the same payments in the form of increases in salaries. Whenever a college board is convinced that this use of college funds is for the best interests of the institution, it should also be ready to see that its objective is not thwarted by particular individuals; and in order to be sure of this participation in the plan must be required. This attitude is now being taken quite generally by college boards and administrative officers. Unfortunately a number of plans established on a voluntary basis some years ago have never been changed. In some cases this merely reflects lack of analysis in the first place and lack of attention to the provisions of the plan after it was once inaugurated. This is not difficult to understand. In the early days too many plans were established merely because the movement was popular, but with little study as to what was really involved; and after a regular procedure is established many of these plans operate so nearly automatically that busy administrative officers tend to slight them and to give their time to more insistent duties. It is, however, to be regretted that in some plans participation is still deliberately voluntary, on the ground that the cost to the college is thus minimized. Indeed, a few institutions that will match contributions of interested individuals avoid any steps that might impress this willingness on uninformed or improvident staff mem-

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149

bers. They excuse this attitude by pointing to their budgetary difficulties. A few unfortunate institutions have, because of financial limitations, established waiting lists of those who wish to participate in a contributory plan, and each year their boards are guided in their selection from these waiting lists by the amount that can be spent for this purpose and the value to the colleges, as they see it, of having retirement provisions established for certain individuals. It is encouraging to note that administrative officers and governing bodies of a number of institutions that began with voluntary retirement plans have been convinced by their own experience that participation must be required if the college is to get its money's worth from its contributions. When participation is voluntary, those who do not choose to join are, under many plans, asked to sign waivers of the institution's responsibility for their old-age income. But experience demonstrated clearly that such a waiver has little direct value. The individual may, of course, hesitate about signing it, and, perhaps, choose participation instead. But if a loyal staff member comes to old age with no income in sight after long years of valuable and popular service, no piece of paper that he signed many years before will be of much comfort to the administrative officer or to the governing body that has the responsibility of parting with him. Temporizing in one form or another will probably result, and, whatever the form, the college suffers. There is no satisfactory remedy for this; the preventive is, of course, to require participation in a contributory plan as a condition of employment. RETIREMENT

AGE

In a number of earlier college retirement plans the age at which retirement is expected is not specified. The explanation given by some college officials is that their plan is intended merely to provide retirement income and that the determination of a retirement age is impracticable, because some faculty members desire to retire at one age and some at another. To the writer this statement indicates failure to appreciate the administrative value of a retirement plan. One value of a definitely formulated retirement plan is that it gives an opportunity to announce to staff members of all ages that, unless special action is taken in individual cases, retirement is to be expected upon the attainment of a stated age. This does not mean

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that the services of an individual should be discontinued arbitrarily at the age decided upon without consideration of his value to the institution. It does mean, however, that each staff member should expect to retire after a certain age is attained rather than to continue in service. And the burden of proof as to his fitness or unfitness to continue in service should be on the individual rather than on administrative officers. Retirement at normal retirement age should not stigmatize a person as unfit or deficient, but rather should merely reflect the administration's opinion that the best interests of the institution will not clearly be furthered by continuation of this service. It should indicate that the individual is not of exceptional value or that an exceptional need does not exist rather than that he is under par. The announcement of a retirement age to all staff members long before they reach this age should enable them to plan their lives accordingly. The best safeguard against disappointment or discontent in old age is to give thought to these expectations years before they materialize. By observing elderly people in our midst we should see clearly that we cannot continue into advanced age the activities of youth and middle age. A little thought will show that we cannot expect to have the income necessary to do this even if we have the desire. We can also observe changes in methods of living, including increased urbanization and improved methods of transportation and communication, and ask ourselves what will probably be a practical and happy manner of spending our retired years. Without becoming introspective we can in this manner make the process of growing old a gradual and happy one, especially if we bear in mind that family relationships cannot be neglected and that this process of self-education must apply to all members of the family. A great many retirement plans that provide for retirement at age 65 state that service may be continued after that age by special action of the governing body, but that service shall not continue beyond age 70. Rarely is retirement before age 65 suggested in a college plan, but it is usually made clear that the plan has no bearing on tenure rules and that nothing in the plan is to interfere with the right or the duty of the governing body to discontinue the services of an individual at any age.

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151

Administrative officers of several institutions have stated definitely their desire to avoid the exercise of discretion as to whether or not an individual should be retired, and retirement plans have been set up accordingly. In such cases retirement age is usually placed at 70 years or thereabouts, and it is expected that all shall retire when that age is reached. It would probably not be desirable to be so arbitrary if 65 years were the retirement age, but by advancing this age another difficulty is introduced. Retirement of some staff members will be imperative at earlier ages, and the administrative officers will find it necessary to deal with them as special cases, the burden of proof probably resting on the administration to show that they should be retired. In actual practice the retirement of staff members under college retirement plans is still in its initial stages. The wording of many retirement plans is cruelly arbitrary in that one retirement age is applied to all alike, ignoring the fact that some are physically older at age 60 than others are at age 70. Some other plans, which by their wording invite discretion, have been operated in what appears to be a ruthless fashion, and some valuable men have insisted upon retiring in order that there may be no difficulty about retiring others at the same age. Here is a problem for the future, a problem that may never be satisfactorily solved because of the weaknesses of human kind. A common observation of administrative officers is that frequently staff members whose powers are impaired by age are unaware of this condition; perhaps the observation is equally general among members of governing bodies and college faculties that administrative officers have this same peculiar blindness. On the other hand, it is recognized that there is no date or age up to which an individual is highly valuable and beyond which he is a liability. The problem of how best to get the most from college staff members as they advance in age is still unsolved. Perhaps there is no single solution. Perhaps this will always be a test of executive ability, since it requires treatment as varied as the individuals and the institutions. And the hope is that the managements of colleges and universities may be sufficiently wise to get the most for the institutions out of the elderly workers and, at the same time, for humanity's sake, to preserve their

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peace of mind and dignity, their self-reliance, and the respect of younger colleagues for them, so that they may think of retirement as the objective of earlier efforts—"the last of life for which the first was made." CONTRIBUTIONS,

BENEFITS,

AND METHODS OF FUNDING

In nearly all contributory plans that are limited to college staff members, contributions are credited to individuals, and the benefits to which an individual looks forward are whatever can be purchased with these credits. Contributions usually become premiums for retirement annuity contracts issued in the names of the different staff members. When this method is used, the college merely helps to purchase retirement annuity contracts and thus eliminates the prospect of having to provide income during retirement. At the same time the individual staff member has as his guarantee of income after retirement a contract with a third party that specializes in the annuity business. There is usually no pooling of equities under these contracts until annuity payments begin. After that, all recipients of annuity payments pool their lots to receive payments as long as they shall live, this being justified on the ground that the period of need for income is the period of the remainder of life. Optional settlements are available for the benefit of dependents, but this only extends the principle of pooling. A few college retirement plans that use group annuity contracts and a number of plans for public employees that cover staff members of publicly administered colleges and universities provide separate allocation of only the staff members' contributions, with at least a partial pooling, from the beginning, of the institution's contributions. Some unfortunte consequences of this pooling appear when we examine the benefits to be paid in case of death in service and upon withdrawal from service, as will be explained later with reference to plans for public employees. Contributory retirement plans for public employees, a number of which cover college staff members, issue no separate written contracts to participants. Separate accounts are usually kept for contributions of individuals, but contributions of the state or the municipality are usually pooled from the beginning. There may be no

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153

power to force contributions from these public authorities, and the tendency may develop for them to rest on the taxing power and to take the attitude that the responsibility of the taxing body is merely to meet obligations as they mature. When colleges first announced their intention to pay free pensions to superannuated staff members, they gave little thought to the source of such payments. When a life insurance company contracts to pay an annuity to an individual, its ability to keep this promise rests on its holdings of evidences of (a) ownership of property or (ό) the debts of others. It can hope to make payments only insofar as it can require payments from others; hence, the state requirement that the company hold assets to cover its prospective liabilities. Under these circumstances, we think of contributions by and on behalf of participants in a retirement plan as savings for old-age benefits. Perhaps they come as near to genuine savings as our complicated social and economic mechanisms make practicable. When we come to retirement plans for public employees, the circumstances are somewhat different. When contributions are required of participants, they are nearly always credited to individual accounts, and the statement of benefits usually reflects this separate allocation. Various methods are used in determining contributions of the state (or municipality) and in accounting for them. In most cases these contributions follow careful actuarial calculations of level amounts or level percentages of compensation that will be required year after year to meet the liabilities imposed on the state by the plan. This means the building up of substantial reserves for outlays expected in the future, just the same as if a life insurance company were carrying the risk. There are, however, 2 fundamental differences: (1) state retirement plans quite frequently limit their investments to obligations of the state, while a life insurance company would never be permitted to invest in its own promises to pay; and (2) the state has the power to tax—a power the like of which is entirely foreign to a life insurance company. Legislative bodies of states and municipalities have at times failed to vote expected contributions to retirement systems, and, with the change in method of financing that has been adopted by the Federal Government with respect to the old-age and survivors' benefits of

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the Social Security Act, there is considerable speculation as to whether or not state retirement plans will be maintained on a reserve basis in the future. It would be unfortunate, indeed, if states and municipalities should fail to keep their promises in the payment of benefits arranged under these retirement plans. To this end it is essential that benefits be conservative, and in the light of unfortunate financial experiences of some municipalities it would seem advisable that most of these plans be financed on a reserve basis and that these reserves be invested in something other than obligations of the same taxing units. The danger is real that in times of adversity, when relief from taxes is sought at every point, taxing bodies may rule from their budgets all items for annuity reserves, especially when these reserves are already substantial; and they may cite as their precedent for doing so the pay-as-you-go policy of the Federal Government. Perhaps there is equal danger in the established practice of investing reserves in obligations of the same taxing body. Most municipalities with contributory retirement plans have been growing for many years. Some of them will some day cease to grow, and probably some will decrease in population and taxable values. When that time comes, retirement liabilities may be large, both in absolute magnitude and in proportion to taxable values. Unfortunate, indeed, will be the pensioner of a municipality that faces such a situation with a retirement plan that has limited its investments largely or wholly to the debts of that municipality. Perhaps there may be reason to extend the same warning with regard to some states. Relation of contributions and benefits.—Returning now to contributory retirement plans for separate institutions, we have already noted that most of these are financed through contracts with life insurance companies. Just how should contributions and benefits be related in such plans? Should contributions of college and staff members be fixed, letting the benefits be what they will? Should the benefits be determined beforehand, and the contributions be calculated to produce the benefits? Or should the benefits and the contributions of the staff members be fixed, and the college be left to pay whatever is necessary to supplement member contributions in purchasing the benefits desired?

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155

Nearly all institutions that act individually have chosen to fix the contributions of both the institution and the staff members and to let the benefits be what these contributions will purchase. A few group annuity contracts issued to colleges and universities fix benefits and contributions of the staff members and leave the employing institution to foot the balance of the bill. A few colleges have purchased retirement annuities providing fixed annuity payments, such as $50 a month for each member, the premiums of course depending upon age at issue and retirement age. This arrangement seems to have virtue only in small institutions, where most faculty members receive about the same salary. At first thought there is much to be said in favor of a plan that fixes retirement benefits in relation to salary and calculates contributions accordingly. But analysis of all that is involved may lead to a different view. For years it has been orthodox to provide a retirement benefit of half of final salary or half of average salary for the last 5 or 10 years of service. Why the SO percent rather than some other fraction is a question that apparently has never been answered. However, it is becoming generally accepted that the benefits should be related to the period of service as well as to salary, and many institutions are unable to arrange contributions sufficient to provide half-pay benefits except for those who begin when very young and who do not have too many salary increases after they pass middle age. A thorough discussion of this question would probably not be fruitful, especially since nothing conclusive can be said, and it may be as well merely to point out that it is important that: (a) retirement benefits be substantial after long periods of service; (b) the plan permit adjustment of benefit to changes in salary; (c) the plan permit adjustment of age at which retirement shall occur and benefit payments begin; (d) the plan permit choice of type of benefit at any time prior to the beginning of annuity payments; and (e) contributions be related to salary in such a way as to be not too burdensome for staff members or the college and to hold no un-

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pleasant surprises in store for the college budget regardless of what changes may take place in the age distribution of staff members. It is important that there be as much certainty as possible about the payment of a retirement benefit, but it is not important that this benefit be a definite fraction, determined years ahead of payment, of an unknowable average compensation. There is nothing much more nearly certain than that the needs of retired staff members will differ widely; so that at best a retirement benefit can only hope to be modestly adequate for most and excessive for few. This leads the writer to the conclusion that, all things considered, it is best to make contributions about as large as the traffic will bear and let the benefits take care of themselves. A danger in this approach is that the governing body of an institution may be content with too conservative an estimate of what the traffic will bear. This can be avoided by noting the benefits that can be expected from a few sample methods of contribution. As has already been pointed out, most college plans call for contributions on a 5 percent matched basis. It is difficult to tell why this basis is used so generally. Most of these plans are with T.I.A.A., but this company has at no time attempted to fix the basis of contributions. Perhaps the fact that 5 percent matched was in effect in British universities when T.I.A.A. was organized 20 years ago had its influence. At that time annuity rates were such that the 5 percent matched arrangement produced adequate retirement benefits after long periods of contributory service. This statement is couched in general terms, because adequacy is a matter of opinion, and variation in retirement age has marked effect on the magnitude of annuity payments. A fact of major importance is that annuity rates are far less liberal today than they were 20 years ago, due to substantial decreases in the yield of conservative investments and to evidence of increased longevity of annuitants. Administrative officers of colleges and universities must therefore face the fact that if 5 percent matched contributions produce retirement annuities that are no more than adequate under contracts inaugurated 20 years ago, they can scarcely be expected to produce satisfactory benefits under contracts being issued today.

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157

This is by no means a simple problem; perhaps we may find it necessary to reconstruct our ideas of an adequate retirement benefit. We should recognize that contributions of 10 percent of salary will still produce a substantial benefit, even though it is a smaller proportion of final or average salary than could formerly be contemplated. There is comfort in the thought that with contractual assurance of just what to expect in years to come, individuals may plan with some definiteness how they can "make both ends meet" with this income. If in the judgment of those responsible for planning retirement income 5 percent matched is no longer sufficient to provide a practical solution of the administrative problem of retiring superannuated staff members, a number of suggestions may be worthy of consideration. Of course, the first suggestion is the simple one of increasing the equal percentage to 6 percent or 7 percent or more. This may be too burdensome for the younger and middle-aged staff members, even if it is feasible for the college. T o meet this difficulty, the college might contribute on a 6 percent or 7 percent basis for all and might arrange that contributions of staff members should advance from 5 percent to 10 percent at age 55. Another method would be to keep contributions on an equal matching basis at all times, this to be 5 percent up to age 55 and perhaps 10 percent after that. For a number of years British universities have contributed 10 percent, and faculty members 5 percent regardless of age. 1 Self-funded plans.—A few years ago a number of prominent institutions were administering their own contributory retirement plans, and in some cases there was no formal segregation of funds dedicated to the support of retirement benefits. There was evidence of good faith in nearly every case and accounts were kept to show the pension credits. That this procedure is unsatisfactory is indicated statistically by the fact that several institutions of substantial size have given up this method in recent years and that few institutions have adopted it. It seems unnecessary to labor the objections to this method in these days of financial and investment difficulties, when we observe a definite tendency of colleges to avoid ventures 1 See "Federated Superannuation System for Universities of Great Britain," in Bulletins of the Association of American Colleges, 1937, pp. 446-51.

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that are foreign to their primary purpose for existence. Certainly it is difficult to see why a college administration should burden itself with a variety of possible embarrassments in order to provide benefits that can be arranged with more ease and less hazard by a pooling process participated in by a large number of institutions facing the same problem. The largest institutions that still fund their retirement liabilities independently are the Massachusetts Institute of Technology and the University of California. Their plans are described elsewhere in this volume. In each case the retirement plan is, at least formally, quite separate from the institution. In each case the practice is followed of purchasing immediate annuities from life insurance companies when members retire, thus avoiding the mortality risks that might otherwise be troublesome because of the small and fluctuating number of annuitants on the rolls at any one time. N o plan of this type can have the spread of investments that can be expected of a life insurance company with much larger assets. Furthermore, self-administered plans are likely to undertake the furnishing of benefits that cannot be purchased from life insurance companies. Just what would happen if many of the particular assets held under such a plan should depreciate substantially in value or if hazardous benefits that are not orthodox with life insurance companies should result unfavorably, must remain problematical. That these risks can be decimated by a pooling of similar hazards of many colleges is scarcely a matter of doubt, and the fact that even our largest life insurance companies avoid risks of certain types creates a presumption that it is not best for a college to undertake them on a smaller scale with no prospect of profiting from the smoothing effect of large numbers. Nonjunded plans.—All contributory retirement plans for college staffs are funded. The unfunded plans are merely more-or-less-formal arrangements by which the employing institutions plan to pay pensions as staff members retire. If such an arrangement is announced as a definite promise, and if staff members have been led to rely upon that promise over a period of years, we enter the realm of the philosophical when we consider whether or not staff members in reality contribute to the scheme. A case in point is the plan

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of the University of Illinois. No fund exists, and yet a state law recites the benefits to be expected and states that they are a part of compensation. Few unfunded plans are quite so definitely stated, and there is general agreement that clear-cut announcements of benefits to be expected should be accompanied by provisions to meet these promises. The officers of several institutions with definite expectations of retirement benefits and no funds in sight to support them are anxiously hoping for a revision of their arrangements. Such a revision may be far from simple, because there is involved the welfare of many individuals who have relied and perhaps have been encouraged to rely upon expectations of old-age income. However, the case of such staff members is not so clear as they might like to believe. They know that the welfare of the college must take precedence over the welfare of individual staff members. And while they may expect calculable pensions upon retirement, these pensions are usually related to salary just before retirement; yet no college can guarantee salaries to all staff members until retirement age is reached. In fact, the college cannot even guarantee employment to all, and it should be clear that if insistence upon specific retirement allowances would endanger salaries during employment, the college would have no choice but to make whatever adjustment seemed essential for the preservation of the institution as a going concern. Under all nonfunded plans loss of employment carries with it loss of pension rights. This discussion leads clearly to the conclusion that it is unwise for either a college or its staff members to rely on an unfunded pension arrangement. In fact, few, if any, governing bodies are happy with such arrangements, and although faculty members may do much wishful thinking they know that any hopes they may have are poorly founded. PAST SERVICE

BENEFITS

In many cases the inauguration of a retirement plan is prompted by difficulties in arranging retirement incomes for a few staff members who have already grown old in service. A desire for some rule of action leads to inquiry as to the cost of retirement benefits for those

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who will reach a reasonable retirement age within the next few years. A contributory plan offers welcome relief from the pension load with respect to younger staff members, but it is at once recognized that normal contributions will do little for those well along in years when the plan is inaugurated; and the question immediately arises, what can be done to supplement the normal benefits for persons of this class? This question has been answered in various ways by different colleges. Many colleges have started contributory plans that do not mention service prior to the establishment of the plan. This does not mean that the college will disregard this service, but rather that it will deal with each case individually. Probably this method is as satisfactory as any in small institutions. The larger institutions find it important to formalize their procedure for dealing with these cases. A full discussion of the methods that have been used and the arguments in their support would probably not be fruitful. However, considerable popularity has been gained by a benefit that is proportional to (a) the number of years of service after attaining a certain age, such as 35 years, and up to the inauguration of the plan; and (b) to compensation during that period or during the year prior to the inauguration of the plan, or to the average compensation for a period of 3 or 5 years prior to the inauguration of the plan. Some institutions provide a benefit of 1 percent of salary when the plan is inaugurated multiplied by the number of years of service after attaining age 35 and prior to the inauguration of the plan. Others give 2 percent for each year of service after attaining age 45 and prior to the inauguration of the plan. The general principle of all these plans is to produce modest benefits the cost of which may be calculated with certainty before the obligation is undertaken and to have the benefit reflect both salary and period of service so that there will be no substantial difference in benefits for persons with somewhat similar employment experiences. A number of plans include arbitrary limits. For example, several institutions add to one of the above formulae the restriction that this supplementary benefit shall not operate to make the total retirement benefit more than a single life annuity of $1,500

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161

a year, with payments beginning at age 65 or 70 as the case may be. This total benefit will be made up of the annuity purchased under the regular contributory plan, the supplementary benefit here discussed, and in some cases retiring allowances supported by gifts from the Carnegie Foundation and the Carnegie Corporation. Most colleges and universities have not found it possible to fund supplementary benefits of this sort. As a rule they merely pay them out of current funds when they fall due. A few institutions are purchasing supplementary benefits in the form of retirement annuity contracts by paying either single or periodic premiums. Contracts are sometimes assigned to the institution that pays the premiums, so that in case the member dies or withdraws from service, the proceeds are paid to the institution. When premiums for such benefits are spread over the expected remaining service period, the load is not heavy except for those who have almost reached retirement age when the plan is inaugurated. Of course, no plan of funding can be of much help for such cases. WITHDRAWAL,

DEATH,

AND SETTLEMENT

PROVISIONS

Retirement plans differ substantially with regard to their offerings in case of withdrawal from service or death in service. They differ also as to the freedom of choice concerning settlement annuities and as to the right to change the date when annuity payments shall begin. These provisions are related to each other and may be of considerable importance. In most cases they are incorporated in the annuity contracts that are used in funding the plans, so that they need not be mentioned explicitly in retirement resolutions. Settlement provisions.—We must frankly admit that no one can know 20 years or more beforehand at what age he should retire. It, therefore, seems desirable to fund retirement income through contracts that permit adjustment of the age at which annuity payments shall begin. Freedom in this respect is unrestricted below age 70 in contracts of T.I.A.A.; and contracts of other companies used in connection with retirement plans of some colleges and universities permit a certain range of variation in the age at which annuity payments shall begin. It is also desirable to permit an individual to choose the type of annuity that he shall receive and to permit him to make this choice

162

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just before annuity payments begin. This is fundamental, because both the college and the participant are interested in protecting the spouse of the participant, and with family conditions changing as rapidly as they do at advanced age the prospective annuitant can make his choice intelligently only shortly before annuity payments are to begin. In order to have the advantage of unrestricted choice up to the time of retirement, it is essential that the death benefit under the retirement annuity contract shall be the full value of accumulated contributions. If it were substantially smaller, threat of imminent death would result in a request that annuity payments be started at once with an option chosen that would continue payments to the spouse after the death of the annuitant. Whenever the death benefit is the full reserve under the contract, an annuitant may die in peace with assurance that his dependents will receive no less than if he had been tortured into arranging some hasty settlement. Withdrawal provisions.—The purposes for which a retirement plan is established should determine its provisions. The concept presented here is that a retirement plan is primarily an administrative aid to facilitate parting with superannuated staff members, that it should help in parting with younger persons when this seems to be for the best interests of all concerned, and that it should help to attract and hold the most promising talent. It is, also, well to note that insofar as an employer feels any social responsibility care should be taken that a retirement plan neither creates nor aggravates social and economic difficulties. If this cannot be avoided, the virtues of the plan should be balanced against the harm that it may do. High turnover of labor has been an expensive evil in our industrial development. Retirement plans have been welcomed in the hope of decreasing this turnover. Perhaps the announcement of free pensions in recognition of "long and faithful service" may at times have been for the same purpose. Under the older pension plans qualification for a pension required the completion of a specified period of continuous service, thus indicating the same effort to hold men to their jobs. Pension rights have clearly been applied as weapons in labor disputes when strikers have been threatened with loss of these rights.

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163

All of this bears on what a retirement plan should provide in case of withdrawal from service. However, this is a point at which it is well to make haste slowly. Many employers in industry have proclaimed emphatically that they do not intend to contribute toward retirement benefits for those who leave them for a competitor. An officer of a large teachers' retirement system states that a weighty argument in favor of the plan is that its penalty for withdrawal is the state's greatest protection against losing its good teachers. The subject of this discussion is retirement plans for college staff members. We should face the question squarely: should a college limit its support of a retirement plan to those who remain with the college until retirement, or should it contribute alike for all and permit a withdrawing individual to take with him the pension credits created by both his own and the employer's contributions? We may ask a related question, should accumulated contributions be payable in cash upon withdrawal from service or should they continue as during employment to support an annuity? Two separate points of view have been taken in answering these questions, and, perhaps too hastily, the assumption has been made that these points of view are necessarily in conflict with each other. One emphasizes solely the best interests of the employing college; the other stresses social responsibilities. Considering the easier question first: should whatever withdrawal benefit is decided upon be available in cash? Unfortunately some college officials have taken the same view as have industrial employers—that they are no longer interested in a withdrawing employee, so they don't care what form of settlement he takes, just so the matter is settled and will not come bounding back to the college. Furthermore, they like to have withdrawing individuals in a happy mood when they leave, and human nature is such that this can be most readily assured by a cash settlement, even though a substantial penalty for withdrawal may be involved. Little thought is given to the fact that many of these people are going to other similar institutions and that they may some day return to the institutions from which they withdrew. Little thought is given to the fact that directly or indirectly the college and its staff members must help

164

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to provide social benefits of various kinds for those who may in earlier days have withdrawn from the college and, perhaps before they reached the line of public-benefit applicants, may have withdrawn from other institutions with similar annuity equities. It should be added, however, that a large majority of college retirement plans make no cash available in case of withdrawal from service. Many college officials are determined that the college shall not encourage the dissipation for other purposes of accumulations established to furnish retirement income. The other question is more difficult and probably far more important—should or should not the college be willing to contribute toward retirement income rights for staff members who do not stay with the college until they retire ? This question has been effectively answered by the colleges and universities that have adopted retirement plans during the past 20 years. A very large majority of them have accepted the principle that the full amount accumulated for retirement purposes should be vested in staff members. Only a few have adopted methods by which a withdrawing member carries with him merely the accumulation of his own contributions. How much this development owes to the teaching of Henry S. Pritchett we cannot know, but it is worthy of note that before T.I.A.A. existed Mr. Pritchett discussed this question in annual reports of the Carnegie Foundation for the Advancement of Teaching, at a time when little popularity for complete vesting could be found elsewhere in this country. It is important to recall that until recently college retirement plans were generally limited to professional staff members. Conviction is widespread that the best interests of higher education require the free interchange of professional talent between educational institutions. Anything that tends to hamper this interchange is frowned upon; and it is clearly recognized that a substantial prospect of old-age income that depends for its realization upon continuation of services in a particular institution interferes seriously with the free interchange of professional talent. As a rule, when a college official clearly understands this idea, it is sufficient to convince him of the necessity of arranging for retirement accumulations to follow staff members whenever they move from one institution to another.

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It is immediately recognized that the right to carry his pension accumulation with him makes a strong appeal to an ambitious young man who realizes that he has no way of knowing whether or not it will be to his best interests to remain throughout his working years with a particular institution. With this right he can venture with more freedom into fields that seem attractive, and he can continue with less danger when there is doubt as to the distant future. Also the college can experiment more freely with individuals if it has less reason to fear that a case of arrested development may become parasitic. Without doubt there are times when the further development of an individual is possible only in a different environment. Under such circumstances all parties concerned will gain by any means that facilitates a change. Accumulations for retirement income that vest in the individual furnish such a means. The usefulness of an individual in a particular institution is at least partly subjective. When employment begins, this relationship promises to be fruitful; otherwise it should never have begun. When all is well, a retirement plan of the type here discussed is an aid to both the institution and the staff member, because it frees both from the necessity of giving thought to retirement income, and if this relationship matures in a normal fashion after long years of service the retirement annuity fulfills its purpose. But if unforeseen events disrupt this happy relationship—whether through personal or family changes or complications or through institutional vicissitudes that no one can foresee—nothing can be more helpful than a fully vested provision for retirement income in easing the separation that may seem necessary or at least desirable. Withdrawal provisions of public retirement plans.—It is unfortunately true that nearly all the contributory retirement plans for public employees provide that a member shall receive the contributions he has made, with interest, upon his withdrawal from service, and as a rule he is required to take a lump sum within 5 years of withdrawal from service. The anxiety of nearly everyone to obtain cash whenever it is available makes this form of settlement popular. Any benefit from employer contributions is usually forfeited, and no alternative settlement is usually available. The fact is that a large majority of those who leave public em-

166

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ployment liquidate whatever provision they have made for old-age income. The magnitude of the resulting social loss is indicated by the fact that the number who withdraw from such service is far greater than the number who retire. To illustrate, during the years 1930-37 the United States Civil Service Retirement and Disability Fund made refunds to more than 120,000 withdrawing members, while it retired 56,415 members. Public employee plans are brought into discussion at this point because they cover staff members of a number of tax-supported colleges and universities, as shown in the lists of Appendix IV. These institutions and their faculty members are at a serious disadvantage as compared with institutions that have retirement plans under which accrued retirement benefits survive withdrawal from service. There has been no extended discussion of this weakness, partly because most of the plans subject to it have not operated long enough for the consequent sacrifices to be very impressive, and perhaps partly because most staff members do not acquaint themselves sufficiently with the details to understand the points at issue. However, it should be noted that while we think of participants in such a plan as a group the suffering that results from forfeiture of equity upon withdrawal is felt, not by the group, but by individuals. A few disillusioned and irate individuals have come to the attention of the writer. One is emphatic in his condemnation of this type of plan and in his conviction that it should be illegal for such plans to exists. His indignation arose in part from his knowledge that most of his fellows were as ignorant and credulous as he had been until his sad awakening when service was broken after many years of contribution under the plan. A number of faculty members at another institution were meekly disappointed to find that the institution to which they had become effectively fettered was suffering along with them from the evils of this withdrawal provision. This university is having trouble in attracting good men and holding good men, and it seems inevitable that as a consequence its standards must suffer. Another college that participates in an institutional plan with this same weakness has been going through growing pains that have resulted in the elimination of several faculty members after long

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years of service. These men find little chance of employment, partly because they would soon be pension liabilities to any new employer. Other faculty members at this institution are thoroughly aroused, partly because they have no assurance that they may not be the next to go. They have, through these unfortunate object lessons, come to understand this defect in their retirement plan in a way that probably could never have been brought home to them by writings such as this or by the lecture method. A number of faculty members who served for years at this college are anxious to make a change to a plan under which accrued pension rights vest in the members, regardless of the fact that the change would mean giving up substantial contingent rights effective under the present plan. They prefer a known loss now to the risk of one of larger proportions that may materialize later on when their recuperative powers will have waned. A number of these retirement plans with withdrawal equities only half as large as corresponding retirement equities provide retirement equities for those who cease to be eligible to participate in the plan "through no fault of their own." Others place with the trustees of the plans the responsibility of retiring some members before they reach normal retirement age. At least one plan states explicitly that the determination of whether a separation from service is a "withdrawal" or a "retirement" must be left to the governing body. Perhaps we can never completely eliminate the necessity for judgment on the part of one person or a few persons that will vitally affect individuals ; but it seems wholly inexcusable, where necessity does not so dictate, to lay plans deliberately under which we can foresee that the fate of individuals may depend upon the board's sense of conservatism, personal likes or dislikes of the individual making the recommendations, factional divisions in the board itself, or the views of a dominating personality on the board. With faith and hope that better motives usually prevail, we should not deliberately set up a system that is vulnerable in this respect. Why introduce such a possibility, when this can be avoided by arrangements that carry with them undoubted advantages to all parties directly concerned? Surely we have more to gain from modest retirement incomes for all than from larger ones for a few at the expense of the many others. We have more to gain from maintaining

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for employees and employers freedom to part at pleasure than from tying workers to their jobs by the threat of withholding pension equities and tying employers to mediocre workers who dare not move to otherwise more promising employment because of loss of pension prospects. And we have more to gain from welcoming men past middle age in new positions than from the rejection of large numbers of middle aged or older workers who are seeking employment in vain because prospective employers look upon them as pension liabilities. In the writer's opinion the inauguration of new plans having this type of withdrawal provision indicates lack of acquaintance with technical details on the part of those responsible for making the choice and a deliberate failure to offer leadership on the part of their advisors. To formulate a retirement plan is a technical job, and the easy way of tackling it is to hire a technical expert and let him do it. What more natural than that the expert should follow the line of least resistance? It is difficult to lead a person uninitiated in this line of thought to take a long-range view of these matters, especially when this costs money or the acceptance of less attractive promises. After all, the opportunist element is strong in all of us. Why should the technical expert undertake this painful educational process? He is in a competitive business, and he may not succeed in carrying conviction. And besides, more guidance that is profitable to the advisor is necessary in the operation of a plan if curtailed withdrawal benefits are involved, because calculations are complicated by withdrawal rates and retirement rates. Here again the price of liberty is eternal vigilance. We cannot blame experts for suggesting the course of action that is least troublesome and most lucrative to them, and if this doesn't happen to be the most desirable course to follow we can blame only ourselves for having sought the line of least resistance in the solution of a difficult problem. Another decade will probably bring home to staff members of publicly administered institutions the seriousness of these withdrawal forfeitures. By that time the equities in question will be substantial for many employees and not a few of these will withdraw from service. Furthermore, we now have for comparison the national retirement scheme of the Social Security Act under which transfer of

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services from one employer to another in a large group of covered employments may have no effect whatever on the retirement benefit. When this becomes fully appreciated, it may influence other arrangements for retirement income. It seems unfortunate, indeed, that there should be this uniform weakness in retirement plans for public employees. There is no necessity for it whatever. Either directly or indirectly nearly all such plans receive substantial subsidies from taxation, and most of them include liberal disability provisions that are not considered safe in plans that do not have public treasuries behind them. Uniformly the argument is that if vesting of employer contributions in employees were introduced, the cost would be increased or the benefits would be reduced. Perhaps a reason for the common acceptance of this method is a superficial suggestion of reasonableness in the statement that when employment relations are severed, the employee should receive the product of "his contribution" to the joint undertaking and the employer should receive the same treatment. The objective was to provide a retirement benefit, and, since the individual did not retire, what could be fairer than to return to each party his contribution to the joint effort? This presentation often appeals as reasonable to an individual who leaves, even after long years of service, especially if he receives his part in cash. From the point of view of fairness, perhaps almost any arrangement between employer and employees is satisfactory that is fully understood and agreed upon between the parties. But there is always the question of complete understanding, and even when this seems to exist, there may be profound failure to grasp the implications of the bargain. "The job's the thing" for the new and hopeful and trustful employee. Perhaps this is particularly true of credulous young professional men, burning with enthusiasm for their chosen work and taking for granted that the altruistic objectives of the enlightened institution they are entering furnish sufficient protection for their personal welfare. But for the good of our educational institutions, as well as their staff members, further precautions are needed. It is obviously to the detriment of a state university to have its faculty members

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shackled to it by forfeitable pension rights. Yet just this unfortunate condition exists in a number of these institutions, and, sad to say, there is evidence that in many cases the administrative officers are unaware of this fact. Many college and university presidents have been too busy with more insistent, even though probably far less important, questions to give any attention to the retirement arrangements that happen to be operating at their institutions. Often these plans were established before the advent of the present incumbents and they operate somewhat automatically. What more natural than that these busy men should let sleeping dogs lie and give their time to matters that demand attention? Emphasis is laid on this weakness of retirement plans for public employees, because it seems that a number of such plans will probably be established in the near future and that other schemes may be extended to cover college staff members. It should be clearly understood that this is not an argument against contributory retirement plans for public employees. There would be no fundamental difficulty in modifying the plans now operating so as to vest future contributions fully, nor would there be any essential difficulty in eliminating lump-sum settlements when employees withdraw from service. In fact the old-age and survivors' provisions of the Social Security Act do not mention withdrawal benefits, although there can be no loss of pension rights for those who serve for at least 10 years in employments covered by the act. It seems probable that this plan will become widely understood and appreciated about the same time that losses are keenly felt by individuals who withdraw from public employee retirement plans. This may arouse enough feeling to bring about considerable thinking along this line by administrative officers of our tax-supported institutions, and if this should come to pass we may hope for the elimination of forfeiture of prospective retirement income. RESTRICTED

WITHDRAWAL

BENEFITS

IN PRIVATE

PLANS

Withdrawal benefits of less value than the corresponding credits toward retirement income are not limited to retirement plans for public employees. A few privately administered colleges and universities have been attracted by this method of "cheapening" retire-

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ment benefits. Commercial life insurance companies have offered a choice between nonforfeitable, noncashable pension equities with modest annuity expectations and the payment of employee contributions in cash upon withdrawal accompanied by larger annuity expectations for those who remain in service. A few institutions have accepted the latter, sometimes with seemingly complete understanding on the part of those making the choice of what was really involved, but sometimes, it seems, with only a superficial recognition of how prospective annuities compare under the two methods and with no comprehension of the less obvious consequences of their choice. All that has been said in preceding paragraphs applies here, but it now seems that not many more privately administered colleges are likely to fall into this error. The large ones will be too cautious, and the small ones are not desired for this kind of coverage by commercial life insurance companies. DEATH BENEFITS

WHILE IN

SERVICE

A benefit payable in case of death in service is a by-product of other desirable provisions in a retirement plan. It is not directly essential to a retirement plan, even though there are many reasons for the college to interest itself in at least a minimum of life insurance protection for all staff members. It does not help to retire superannuated staff members or to part in earlier years with cases of arrested development. It might have some drawing or holding power for good men, but this should not be large for insurable persons, and whatever its value it is independent of the attractiveness of a prospective retirement benefit. But we have found that the withdrawal benefit is in many respects the tail that wags the dog. It is extremely important, incidental though it may at first seem, if the retirement plan is to be of maximum value and is to avoid serious shortcomings. A moment's thought will show that the death benefit must be at least as large as the withdrawal benefit; otherwise the plan would be faced with deathbed withdrawals. Efforts would be made by and in behalf of a participant threatened with imminent death to withdraw from the plan and to choose a settlement that would preserve the equity for his beneficiary.

172 WIDOWS'

DESIRABLE

PROVISIONS

BENEFITS

A few institutions have been solicitous of the welfare of the widows of pensioners and have provided special benefits for them or required that upon retirement a staff member should choose an annuity settlement that would continue to his widow if she survived him. A number of the older nonfunded plans provide special benefits for widows of pensioners, as did the Carnegie free pension plan. A large majority of the contributory plans making use of T.I.A.A. contracts leave this to the staff member. He may choose a method of settlement of his annuity contract that will protect his widow in case of his early death, and it seems that nearly all retiring members give careful attention to this point. Whether a college should go further and try to force a staff member to protect his widow is questionable. Only when a member deliberately ignores his wife in choosing a settlement of his contract would compulsion be important, and it seems probable that in these rare cases any automatic rule might bring poor results, while any effort at coercion might place the college in an embarrassing position. Perhaps the most usual practice is best—to see that a substantial retirement equity is built up and to let the staff member decide how it shall be applied as an annuity. After all, the essential problem of the college is to part with the superannuated staff member, sympathetic though it must be to the wife or widow of the occasional ne'er-do-well or inconsiderate professor. DISABILITY

RETIREMENT

Little has been said in the preceding pages about provision for retirement because of disability. Temporary disability is not nearly so serious a matter as is presumably permanent unfitness for continued service, whether due to normal old age or to premature permanent disability that approaches totality. Permanent total disability is rare, but it is nonetheless distressing when it occurs, not only to the individual and his family but to the employing college as well. The simple fact is that life insurance companies have not learned how to insure this risk with safety, partly because they must work at a distance from most claimants. It seems impossible to define compensable disability with sufficient accuracy to enable a company to determine premium rates that are fair and adequate and to avoid

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contests as to whether or not disability exists. This being the case, the only practical method of dealing with this risk is the one that would probably be best for most colleges anyway—since they are usually comparatively small employers—and that is to consider each case on its merits. Even if a life insurance company should offer to cover permanent total disability, it would probably require for safety a premium that would be considered excessive for the college to pay, considering other uses that it might make of the same funds. These cases seem bound to be more expensive when handled by a distant insurance company than when handled locally, because the administrative officers have full knowledge of the individual's finances and family and an intimate acquaintance with each particular disability. A T T I T U D E T O W A R D R E T I R E M E N T PLAN OF SOCIAL S E C U R I T Y ACT P E R H A P S it would be out of place here to describe in detail the provisions of the Social Security Act and the corresponding tax legislation that constitute the national contributory retirement plan, because this arrangement does not now cover college staff members. Briefly stated, in addition to important needs-test benefits that are financed jointly by the states and the Federal Government, the "oldage and survivors insurance" sections of the act provide pensions upon retirement at age 65 for workers and their aged wives and minor children and for women widowed when younger if they have dependent minor children. The retirement pension will usually range from $20 to somewhat more than $50 a month to an individual and half as much for his wife past age 65. This is presented as an insurance arrangement, because related sections of the Internal Revenue Code require a tax of 1 percent of the first $3,000 of compensation from the employee and an equal amount from the employer, this percentage to be raised to 2 percent in 1943, V/i percent 3 years later, and 3 percent thereafter. Employment for the so-called nonprofit institutions, including colleges and universities and religious and charitable institutions, was excluded from coverage by this plan at the urgent request of leading administrators in these fields. Very little has been heard from the employees involved.

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ACT

It may be of some importance to consider what should be the attitude of the colleges and universities toward removal of this exclusion from coverage. The probable future of these Federal social benefits, the nature of a college's problems as an employer, the normal transfer of employees between the colleges and industry, and the effect that such coverage and submission to Federal taxation might have on other relationships between the colleges and the Federal Government—all these problems deserve attention. It seems clear that Federal officials desire to keep social benefits modest, to favor the underprivileged workers as compared with those receiving larger incomes, and to subordinate the idea of individual equity to that of providing certain minimum benefits to all who qualify, thus providing, for individuals who retire within the next decade or two and for those in low-income brackets, benefits out of all proportion to what can be supported by taxes that will be paid on their behalf. The expectation has been expressed by the Social Security Board that perhaps a third of the ultimate costs of the old-age and survivors' benefits may come from general taxation rather than from special taxes levied for this purpose. The intent under the original plan was that special taxes should support the old-age benefits, and it was thus, presumably, a self-supporting plan that the colleges chose not to enter. The 1939 amendments modified the benefits and the taxes and the original intent that the plan be selfsupporting seems to have been abandoned. When we think of a college as an employer, we must remember its nonacademic staff. Heretofore the service staff has been ignored by most colleges when planning for retirement incomes. Without going into the reasons for this attitude, it seems clear that the colleges can no longer continue it. They cannot long retain public good will unless they can hold out to their employees the prospect of benefits that compare favorably with those available under the Social Security Act to persons who do similar work for other employers. Individual institutions would find that for them to accomplish this would be very expensive, and it must be admitted that no life insurance company can arrange benefits that vary with individual or family needs in ways that are feasible for a governmental plan. Heretofore transfer of service employees between colleges and

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industry has been of little significance. But college officers may now feel obliged to warn prospective employees coming from industry that they will lose valuable potential benefits if they enter the service of the college. Indeed, it seems probable that industrial workers will soon come to realize the value of their social security cards, and personnel officers of the colleges may have difficulty defending the position of their institutions. It is also important to note that under the Social Security Act survivors' benefits cannot apply until after the completion of at least a year and a half in covered employment, so that anyone who leaves college employment for industry must continue in his new service for at least that length of time before survivors' benefits will be available to his family in case of his death. Furthermore, it should be emphasized that the amount of each of these benefits depends upon the total compensation in covered employment, up to $3,000 a year, divided by the period of possible covered employment since January 1, 1937, instead of the period of actual covered employment. Hence, if the exemption of college employment were removed as of January 1, 1941, a survivors' benefit on behalf of a person of age 27 or more, calculated on July 1,1942, would involve an average wage obtained by dividing compensation for a year and a half, not exceeding $3,000 a year, by 66, the number of months of possible service since January 1, 1937, not by 18 months, the actual period of service. But even this is not all. A condition for receiving a retirement benefit is service in covered employment for at least 10 years or, if shorter, at least half the possible period of covered employment since January 1, 1937. If exemption were removed as of January 1, 1941, a retirement benefit could be paid to a person whose work had been solely for a college, only after the completion of 4 more years of service, that is, after January 1, 1945, and, of course, after attainment of age 65. If exemption were removed as of January 1, 1942, a retirement benefit could be paid to the same employee only after January 1, 1947. In fact, until the year 1947 each year that removal of exemption is postponed will delay by 2 years the date of earliest retirement for persons in college employment. In either of the cases cited above the so-called average monthly wage involved in obtain-

176

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SECURITY

ACT

ing the retirement benefit would be only half the average for the period of covered service. Heretofore college employment has often been preferred over that with similar duties in industry. Perhaps compensation per hour has been no higher, but employment is relatively steady, and treatment in case of sickness, retirement, or death has usually been at least as liberal in colleges as could be expected in industry. Little change is taking place in the attractiveness of college employment, but the operation of the Social Security Act may soon make radical changes in the attractiveness of industrial employment. Survivors' benefits are now available under the Social Security Act. Before long the college carpenter or painter may learn of the death of a fellow mechanic working in industry who has left a widow and 2 or 3 small children. These survivors will begin at once to receive something like $50 a month from the Federal Government, these payments to continue until the children are 16 or 18 years old. Group life insurance benefits available at some colleges are meager in comparison. College officers who ignore this prospect are as unrealistic as the ostrich that buries its head in the sand. The preceding paragraphs have to do with the relations of the college to its employees. This relationship has received very little attention as yet in the reactions of college administrative officers to the Social Security Act. There is little evidence that colleges have consulted staff members as to whether or not they favor being covered by this act. Many college officials have formed opinions without much information, and they have usually considered their budgetary problems and the possible by-products of the initiation of Federal taxation more than they have their relations with staff members. A number of prominent college administrators have expressed the fear that inclusion of the colleges under the provisions of the Social Security Act would be an entering wedge for serious Federal interference in educational affairs. These leaders have persuaded themselves that our schools can preserve freedom of thought and expression and therefore freedom for investigation and research only if the Federal Government is given no opportunity to influence or to control these institutions. They look to foreign lands and see how under totalitarian influences educational institutions have become sub-

SOCIAL S E C U R I T Y

ACT

177

servient to state objectives with almost complete destruction of individual initiative in research endeavors, and they fear that it can happen here. They seem to ignore the good effects of state subsidies in foreign democracies. While we must respect the views of those who give this warning, to yield blindly to them would be a first step in the intellectual apathy that they fear so much. Even those of us who recognize the superior training of these leaders must do our own thinking on this question. In this humble spirit, the writer submits the following for whatever consideration it may command: Admittedly we are in some particulars experiencing a rapid trend toward nationalism. Perhaps this is an impersonal movement having its roots in our mechanization of industry and agriculture and, associated with this, our rapid urbanization. We may value small units as a basis of local government, in the hope that it may remain selfgovernment. But, in some of our dealings, to keep these units small in numbers of persons covered or in geographical size will be too cumbersome for patience. If these and related views are well founded, it is folly to attempt to stem the tide of this movement. It is inextricably bound up with changes in methods of living and producing and is just as inevitable as are these changing methods. We cannot stop the mechanization of industry and agriculture no matter how much we may prefer earlier methods. We cannot stop the tendency toward urban dwelling; it is merely a by-product of this mechanization. We cannot stop the tendency to eliminate distance and time by improving transportation and communication. True, there are those who would stem this tide by "back to the land" movements and by the strengthening of existing state barriers. No one can know what momentum this counter movement may gain in years to come. But it seems incredible that this can become a major influence within a generation, and the solution of social problems cannot wait so long. This is no counsel of despair. We must admit that many of these changes are improvements and that we would not think of reversing them if we could. A frank recognition of the situation—if one can admit that it is correctly pictured—is the first step in the formulation of a helpful plan of action. We are facing certain tendencies

178

SOCIAL S E C U R I T Y

ACT

that seem to have the inevitability of mass movements. Such movements cannot be stopped, but they can be guided. To oppose them is a waste of valuable effort; to guide them may be the most promising opportunity that educational leaders have ever had. Educators are the men best qualified to evaluate tendencies and to determine objectives. If the same aggressiveness that has been applied by some in opposition to popular movements can furnish leadership for these movements, we may expect at least to avoid running amuck and may, perhaps, hope for a good society—different though it must be from that which is passing—a society that may capitalize on the best of present tendencies and may make use of the carefully trained minds that this passing period has produced, in dealing with novelties that must be met. This is the test of our education to date. It should help us to meet, to evaluate, and to master new situations. It should give us breadth of view, some added ability to deal discriminatingly with novelty, and some added perspective that may help us to recognize the hopelessness of clinging to something that was good in its proper setting, but which must pass because of other changes that we cannot prevent. It seems to the writer that if a degree of Federal influence or control is in prospect for educational institutions, this will not be prevented by anything so minor as refraining from participation in a widely accepted social movement like that for social security. Perhaps a noncoöperative attitude may lose educators the opportunity to guide Federal influence that they cannot prevent. If this comes to pass, we may expect the worst from Federal bureaucrats, untutored in educational problems. They will be undertaking studies which they are not qualified to make and determining policies which should and perhaps could be kept in the hands of professional educators. From the standpoint of employer-employee relationships and from the standpoint of budgetary problems the colleges have nothing to lose and everything to gain by becoming part of the old-age and survivors' insurance benefits plan of the Social Security Act, and it would, of course, be valuable to the colleges to be part of a widely accepted social movement rather than to appear to oppose it. How these advantages weigh against the danger, if such it is, of Federal

SUMMARY

179

domination of educational ideas or organization must remain a matter of judgment. This should be left by such persons as the writer to those far better grounded in educational ideals and practices and actively engaged in this type of work. But he feels justified in pleading that judgment be based on analysis and that the issue be not too hastily prejudged because of natural resistance to novelty. SUMMARY P A R T I of this study states facts regarding college plans for retirement income. Part II undertakes to review the growth of these plans and to discuss provisions that seem desirable in them. Little headway had been made in establishing college retirement plans before the Carnegie Foundation inaugurated its free plan for retiring allowances. Experience in the administration of this plan and the intense study by Henry S. Pritchett, the foundation's first president, led many colleges to inaugurate contributory retirement plans with benefits funded through contracts of a life insurance company that was created especially for this purpose. While the principal purpose of a plan for retirement income is to facilitate the retirement of superannuated staff members, the plan may be helpful in other ways, and it is reasonable to expect that care be taken in its formation to avoid possible harmful effects. A retirement plan should help to obtain and to retain good men and to part with persons suffering from arrested development. It should not tie employees to their jobs nor should it intensify the difficulties met by persons who seek employment. These considerations lead to recommendations stated more fully in preceding pages. Retirement income should be funded through joint contributions of employer and employees under a plan applying in an obligatory manner to as nearly all classes of staff members as is practicable. A normal retirement age should be announced, and contributions should be as large as seems practicable—certainly not less than 5 percent of salary from the member and as much from the institution. Benefits should be funded through noncashable, nonforfeitable retirement annuity contracts that belong to individuals and provide for adjustment of the date at which annuity payments shall begin and the kind

180

SUMMARY

of annuity that shall be received—whether a single life annuity or one that will provide benefits to dependents as well as to the pensioner himself. Retirement plans should be so constructed that they can be adjusted to supplement the old-age and survivors' provisions of the Social Security Act in case that act is amended to cover employment for institutions of the types here considered.

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[226] II EDUCATIONAL INSTITUTIONS HAYING CONTRIBUTORY PLANS USING CONTRACTS OF OTHER LIFE INSURANCE COMPANIESa Boston University, Boston, Mass. Cornell University*!!, Ithaca, N.Y. Delaware, University of, Newark, Del. Drexel Institute of Technology, Philadelphia, Pa. Elmhurst College, Elmhurst, 111. King's College, University of, Halifax, Nova Scotia, Can. Linfield. College, McMiimville, Ore. Louisville, University of Louisville,Ky. Maine, University of, Orono, Me. Mary Baldwin College, Staunton, Va. Massachusetts Institute of Technology^, Cambridge, Mass. Minnesota, University of*, Minneapolis, Minn. Muhlenberg College, Allentown, Pa.

Newark College of Engineering, Newark, N.J. Ohio State University, Columbus, Ohio Princeton University*!, Princeton, N.J. Bochester, University of#, Rochester, N.Y.

Santa Clara, University of, Santa Clara, Cal. Skidmore College®, Saratoga Springs,N.Y. Teachers Collegei6, Columbia University, New York, N.Y. Vassar College*, Poughkeepsie, N.Y. Western Ontario, University of, London, Ontario, Can. Wichita, Municipal University of, Wichita, Kan. Willlamette University, Salem, Ore.

Ill EDUCATIONAL INSTITUTIONS HAVING CONTRIBUTORY PLANS WHICH ACCUMULATE THEIR OWN FUNDS a California, University of*, Berkeley, Cal. Calvin College, Grand Rapids, Mich. Massachusetts Institute of Technology*, Cambridge, Mass.

a

Toronto, University of#, Toronto, Ontario, Can. Union Theological Seminary*, New York, N.Y. Wheaton College, Norton, Mass.

Institutions in which Carnegie pensions are expected by some faculty members are followed by an asterisk (*); those which use T.I.A.A. contracts are followed by this symbol (j); and those in which the plan applies to maintenance employees only are followed by this symbol (#).

[227] IV FLAKS INCLUDED XH BROADER RETIREMENT SYSTEMS FOR PUBLIC EMPLOYEES AMD RELIGIOUS WORKERS β A. State, Municipal, and Institutional Retirement Plane Applying to Staff Members of Colleges and Universities California State Employees' Retirement Act Cincinnati, City Retirement System; for description see University of Cincinnati Congregational & Christian Churches, Board of Home Missions . . . . Connecticut, Retirement of State Employees; for descripton see University of Connecticut Detroit Teachers' Retirement Fund Disciples of Christ Pension Fund Florida, Retirement of State Employees Louisiana, Teachers' Retirement System of Maryland, Teachers' Retirement System of the State of Massachusetts State Retirement System Michigan Teachers' Retirement Fund Montana State Teachers' Retirement System New York City Employees' Retirement System New York State Employees' Retirement System New York, Teachers' Retirement System of the City of North Dakota, Teachers' Insurance & Annuity Fund Nova Scotia, Public Service Superannuation Act Ohio, Publlo Employes' Retirement System, State of Ohio, State Teachers' Retirement System of Pennsylvania State Employes' Retirement System; for descripton see Pennsylvania State College Presbyterian Church In the U.S.A., The Rhode Island, The Employees' Retirement System of the State of . . . Southern Baptist Conventions, Retirement Plan for Educational Institutions of the; for description see Oklahoma Baptist University Texas, Teachers' Retirement System of Utah State Teachers' Retirement System Wisconsin State Retirement System Young Men's Christian Association Retirement Fund

List Number 1 2 5 4 5 6 7 8 9 10 11 12 13 15 1U 16 17 18 19 20 21 22 23 2k 25 26 27

B. Colleges and Universities in Which Staff Members Are Covered by Noncontributory Plans for Public Employees

Florida State College, Tallahassee, Fla Florida, University of, Gainesville, Fla Nova Scotia,Technical College, Halifax, Nova Scotia, Can

List Number of Retirement Plan 7 7 17

" Institutions in which Carnegie pensions are expected by some faculty members are followed by an asterisk (*); those which also use T.I.A.A. contracts are followed by this symbol (|).

[2283 C.

Colleges and Universities in Which Staff Members Are Covered hy Contributory Plans for Public Employees

List Number of Betirement Plan Akron, University of, Akron, Ohio 18, 19 Bowling Green State University, Bowling Green, Ohio 18, 19 Brooklyn College, Brooklyn, N.Y 13, 14 California, University of*, Berkeley, Cal 1 Central State Teachers College, Mount Pleasant, Mich 11 Cincinnati, University of*l, Cincinnati, Ohio 2 Connecticut, University of, Storrs, Conn 4 Cornell University*', Ithaca, N.Y 15 East Texas State Teachers College, Commerce, Texas . 2k Fresno State College, Fresno, Cal 1 Hunter College, New York, N.Y. 13, lV Kent State University, Kent, Ohio 18, 19 Louisiana Polytechnic Institute, Buston, La 8 Louisiana State Normal College, Natchitoches, La 8 Louisiana State University, Baton Bouge, La 8 Lowell Textile Institute, Lowell, Mass 10 Maryland, University of, Baltimore, Md 9 Massachusetts State College, Amherst, Mass 10 Miami University, Oxford, Ohio l8, 19 Michigan College of Mining and Technology, Houghton, Mich. . . . 11 Michigan State Normal College, Ypsilanti, Mich 11 Mines and Metallurgy, College of, EL Paso, Tex 2k Montana School of Mines, Butte, Mont 12 Montana State College, Bozeman, Mont 12 Montana State Normal College, Dillon, Mont 12 Montana State University, Missoula, Mont 12 New York, College of the City of, New York, N.Y 13, lA North Dakota State Agricultural College, State College, N.D. . . 16 North Dakota State Normal and Industrial School, Ellendale, N.D 16 North Dakota State Teachers College, Dickinson, N.D 16 North Dakota State Teachers College, Mayville, N.D 16 North Dakota State Teachers College, Minot, N.D 16 North Dakota State Teachers College, Valley City, N.D 16 North Dakota, University of, Grand Forks, N.D. 16 Northern State Teachers College, Marquette, Mich 11 North Texas State Teachers College, Denton, Tex 24 Ohio State University, Columbus, Ohio 18, 19 Ohio University, Athene, Ohio 18, 19 Pennsylvania State College, State College, Pa 20 Queens College, New York, N.Y 13, 14 Bhode Island College of Education, Providence, B.I 22 22 Bhode Island State College, Kingston, B.I Sam Houston State Teachers College, Huntsville, Tex 2k San Diego State College, San Diego, Cal. . . 1 San Francisco State College, San Francisco, Cal 1 Santa Barbara State College, Santa Barbara, Cal 1 Southern University, Scotlandville, La 8 Southwest Texas State Teachers College, San Marcos, Tex 2k Southwestern Louisiana Institute, Lafayette, La 8 State Teachers College, Stevens Point, Wis 26

[229] Stephen F. Austin State Teachers College, Nacogdoches, Tex. Stout Institute, Menomonie, Wis Sul Boss State Teachers College, Alpine, Tex Superior State Teachers College, Superior, Wis Texas, Agricultural & Mechanical College of, College Station, Tex Texas College of Arts & Industries, Kingsville, Tex Texas State College for Women, Denton, Tex Texas Technological College, Lubbock, Tex Texas, University of, Austin, Tex Toledo, University of, Toledo, Ohio Utah State Agricultural Collegei, Logan, Utah Utah, University of®, Salt Lake City, Utah Wayne University, Detroit, Mich Western State Teachers College, Kalamazoo, Mich West Texas State Teachers College, Canyon, Tex Wilberforce University, Wilberforce, Ohio Wisconsin State Teachers College, Eau Claire, Wis Wisconsin State Teachers College, La Crosse, Wis Wisconsin State Teachers College, Milwaukee, Wis Wisconsin State Teachers College, Oshkosh, Wis Wisconsin State Teachers College, Platteville, Wis Wisconsin State Teachers College, River Falls, Wis Wisconsin, University of*, Madison, Wis

List Number of Retirement Plan ... 2k 26 2k 26 '

. .

2k 2k 2k 2k 2k 18, 19 25 25 5 11 2k 18, 19 26 26 26 26 26 26 26

D. Colleges and Universities in Which Staff Members Are Covered by Retirement Plans of Religious Organizations

Asheville Normal and Teachers College, Asheville, N.C Bethany Collegei, Bethany, West Va Butler University (College of Religion), Indianapolis, Ind. Central Y.M.C.A. College, Chicago. Ill Drake University (Bible College)*!, Des Moines, Iowa Eureka College, Eureka, 111 Fenn College, Cleveland, Ohio George Williams College«, Chicago, 111 Johnson C. Smith University, Charlotte, N.C Le Moyne College, Memphis, Tenn Lynchburg College, Lynchburg, Va Northeastern University, Boston, Mass Oklahoma Baptist University, Shawnee, Okla Sir George Williams College, Montreal, Can Springfield College, Springfield, Mass Talladega College, Talladega, Ala Tarkio College, Tarkio, Mo Tillotson College, Austin, Tex Tougaloo College, Tougaloo, Miss Transylvania College (College of the Bible), Lexington, Ky.

List Number of Retirement Plan 21 6 ... 6 27 6 6 27 27 21 3 6 27 23 27 27 3 21 3 3 ... 6

[230] V NONCONTRIBUTORY PLANS3 Amherst College*, Amherst, Mass. Ashland College, Ashland, Ohio Austin College, Sherman, Tex. Bethel College, Newton, Kan. Catholic University of America, Washington, D.C. Clemson Agricultural College, Clemson, S.C. DePauw University, Greencastle, Ind. De Sales College, Toledo, Ohio Findlay College, Findlay, Ohio Hiram College, Hiram, Ohio Illinois, University of, Urbana, 111. Iowa, State University of, Iowa City, Iowa Kentucky, University of, Lexington, Ky. Michigan State College, East Lansing, Mich. Milwaukee-Downer College, Milwaukee, Wis. Moravian College for Women, Bethlehem, Pa. Mount St. Mary's College, Emmitsburg, Md. Nebraska, University of, Lincoln, Nebr. Nebraska Wesleyan University, Lincoln, Nebr.

Nevada, University of, Reno, Nev. North Carolina State College, Baleigh, N.C. Ohio Northern University, Ada, Ohio Ohio Wesleyan University, Delaware, Ohio Otterbein College, Westerville, Ohio Pacific Union College, Angwin, Cal. Phillips University, Enid, Okla. Princeton University*}, Princeton, N.J. Simpson College, Indianola, Iowa Southern Methodist University, Dallas, Tex. Southwestern University, Georgetown, Tex. Texas, Agricultural & Mechanical College of, College Station, Tex. U. S. Military Academy, West Point, N.Y. U. S. Naval Academy}, Annapolis, Md. Ursinus College, Collegeville, Pa. Virginia Polytechnic Institute, Blacksburg, Va. Washington & Jefferson College*, Washington, Pa. Wheaton College, Wheaton, 111.

VI CARNEGIE PENSIONS ONLY Clarkson College of Technology, Potsdam, Rose Polytechnic Institute, Terre Haute, Ind. N.Y. Tufts College, Medford, Mass. Drury College, Springfield, Mo. Vermont, University of, Burlington, Vt. Missouri, University of, Columbia, Mo. Rensselaer Polytechnic Institute, Troy, Wabash College, Crawfordsville, Ind. N.Y.

a

Institutions in which Carnegie pensions are expected by some faculty members are followed by an asterisk (*),· those which also use T.I.A.A. contracts are followed by this symbol (J)·

VII

[231J

NO PLAN ° Abilene Christian College, Abilene, Tex. Adrian College, Adrian, Mich. Agnes Scott College, Decatur, Ga. Alabama College, Montevallo, Ala. Alabama Polytechnic Institute, Auburn, Ala. Alaska, University of, College, Alaska Albany College, Portland, Ore. Albertus Magnus College, New Haven, Conn. Albright College, Reading, Pa. American University, Washington, D. C. Arkansas College, Batesville, Ark. Arkansas State College, State College, Ark. Armour Institute of Technology, Chicago, 111. Asbury College, Wilmore, Ky. Atlanta University, Atlanta, Ga. Atlantic Christian College, Wilson, N.C. Augsburg College and Theological Seminary, Minneapolis, Minn. Aurora College, Aurora, 111. Baker University, Baldwin City, Kan. Baylor University, Waco, Tex. Beaver College, Jenkintown, Pa. Belhaven College, Jackson, Miss. Bessie Tift College, Forsyth, Ga. Bethany College, Lindsborg, Kan. Bethel College, McKenzie, Tenn. Blue Mountain College, Blue Mountain, Miss. Blue Bidge College, New Windsor, Md. Bluffton College, Bluffton, Ohio Brldgewater College, Bridgewater, Va. Buena Vista College, Storm Lake, Iowa Buffalo, University of, Buffalo, N.Y. Butler University**, Indianapolis, Ind. Canisius College, Buffalo, N.Y. Capital University, Columbus, Ohio Carroll College, Helena, Mont. Carson-Newman College, Jefferson City, Tenn. Catawba College, Salisbury, N.C. Cedar Crest College, Allentown, Pa. Centenary College, Shreveport, La. Central College, Pella, Iowa Central College, Fayette, Mo. Centre College, Danville, Ky. Chapman College, Los Angeles, Cal. Citadel, The, Charleston, S.C. Coker College, Bartsville, S.C.

Colorado School of Mines, Golden, Colo. Concordia College, St. Paul, Minn. Culver-Stockton College, Canton, Dakota Wesleyan University, Mitchell, S.D. Dana College, Blair, Neb. Davis and llkins College, Elklns, W.Va. Defiance College, Defiance, Ohio Denison University, Granville, Ohio Detroit, University of, Detroit, Mich. Doane College, Crete, Neb. Dropsle College, Philadelphia, Pa. Dubuque University, Dubuque, Iowa Duquesne University, Pittsburgh, Pa. D'Youville College, Buffalo, N.Y. Earlham College, Earlham, Ind. Elizabethtown College, Elizabethown, Pa. Emmanuel College, Boston, Mass. Emory and Henry College, Emory, Va. Emporia College, Emporia, Kan. Erskine College, Due West, S.C. Evansville College, Evansville, Ind. Flora MacDonald College, Bed Springe, N.C. Fordham University, New York, N.Y. Franklin and Marshall College, Lancaster, Pa. Franklin College, Franklin, Ind. Furman University, Greenville, S.C. Gellaudet College, Washington, D.C. Geneva College, Beaver Falls, Pa. Georgetown College, Georgetown, Ky. George Washington University, Washington, D.C. Georgia School of Technology, Atlanta, Ga. Georgia State Woman's College, Valdosta, Ga. Georgia, University of, Athens, Ga. Gettysburg College, Gettysburg, Pa. Goshen College, Goshen, Ind. Greenville College, Greenville, 111. Grove City College, Grove City, Pa. Gustavus Adolphus College, St. Peter, Minn. Haiden-Sydney College, HaidenSydney, Va. Hartwick College, Qneonta, N.Y. Hastings College, Hastings, Neb. Hendrix College, Conway, Ark. High Point College, High Point, N.C. Hillsdale College, Hillsdale, Mich.

° For institutions followed by two asterisks (**) see Appendix IV (D).

[232] Holline College, HollIna College, Va. Holy Cross, College of the, Worcester, Mass. Hood College, Frederick, Md. Hope College, Holland, Mich. Howard Payne College, Brovnwood, Tel. Huntingdon College, Montgomery, Ala. Huron College, Huron, S.D. Idaho, College of, Caldvell, Idaho Idaho, University of, Moscow, Idaho Illinois College, Jacksonville, 111. Imnaculata College, Immaculata, Pa. Incarnate Word College, San Antonio, Tex. Indiana Central University, Indianapolls, Ind. Intermountaln Union College, Polytechnic, Mont. Iowa State College, Abbs, Iowa Iowa Wesleyan College, Mount Pleasant, Iowa Ithaca College, Ithaca, N.Y. James Mllllkan University, Decatur, 111. Jamestown College, Jamestown, D.D. John Carroll University, Cleveland, Ohio Judeon College, Marion, Ala. Kalamazoo College, Kalamazoo, Mich. Kansas State College of Agriculture and Applied Science, Manhattan, Kan. Kansas, University of, Lawrence, Kan. Kansas, Wesleyan University, Salina, Kan. Keuka College, Keuka Park, N.Y. King College, Bristol, Tenn. Knoiville College, Khoxville, Tenn. Lafayette College, Kaston, Pa. La Grange College, La Grange, Ga. Lake Erie College, Painesvllle, Ohio La Salle College, Philadelphia, Pa. La Verne College, La Verne, Cal. Lebanon Valley College, Annvllle, Pa. Lewis Institute, Chicago, 111. Lincoln Memorial University, Harrogate, Tenn. Llndenwood College, St. Charles, Mo. Long Island University, Brooklyn, N.Y. Loras College, Dubuque, Iowa Louisiana College, Pineville, Ιλ. Loyola College, Baltimore, Md. Loyola University, Chicago, 111. Loyola University, New Orleans, La. Macalester College, St. Paul, Minn. McMaster University, Hamilton, Ontario, Can. MacMurray College, Jacksonville, 111. McPherson College, McPherson, Kan. Marlon College, Marlon, Indiana

Marquette University, Milwaukee, Wis. Marshall College, Huntington, W. Va. Marygrove College, Detroit, Mich. Mary Hardin-Baylor College, Belton, Tex. Marymount College, Salina, Kan. Marywood College, Scranton, Pa. Medical Evangelists, College of, Lcoa Linda and Los Angeles, Cal. Mercer University, Macon, Ga. Mercyhurst College, Erie, Pa. Miami University, Miami, Fla. Midland College, Fremont, Neb. Millsaps College, Jackson, Mies. Mills College, Mills College, Cal. Mlserlcordla College, Dallas, Pa. Mississippi College, Clinton, Miss. Mississippi State College, State College, Miss. Mississippi State College for Women, Columbus, Miss. Mississippi, University of, University, Miss. Mississippi Women's College, Hattiesburg, Miss. Missouri Valley College, Marshall, Mo. Monmouth College, Monmouth, 111. Moravian College and Theological Seminary, Bethlehem, Pa. Morgan State College, Baltimore, Md. Morningslde College, Sioux City, Iowa Mount Mary College, Milwaukee, Wis. Mount St. Joseph, College of, Mount St. Joseph, Ohio Mount St. Vincent, College of, New York, N.Y.

Muskingum College, New Concord, Ohio Nazareth College, Rochester, N.Y. Negro Agricultural and Technical College , Greensboro, B.C. Newark, University of, Newark, N.J. Newberry College, Newberry, S.C. New Brunswick, University of, Fredericton, New Brunswick, Can. New Mexico College of Agriculture and Mechanical Arts, State College, N.M. New Mexico School of Mines, Socorro, N.M. New Mexico, University of, Albuquerque, N.M. Niagara University, Niagara University, N.Y.

North Carolina College for Negroes, Durham, N.C. North Carolina, University of, Chapel Hill, N.C. Norwich University, Northfield, Vt. Notre Dame College, South Euclid, Ohio

Notre Dane of Maryland, College of, Baltimore, Md. Notre Dene, University of, Notre Dane, Ind. Oklahoma Agricultural and Mechanical College, Stillwater, Okla. Oklahoma City University, Oklahoma City, Okla. Oklahoma College for Women, Chlckasha, Okla. Oklahoma, Univereity of, Norman, Okla. Olivet College, Olivet, Mich. Omaha, Municipal University of, Omaha, Neb. Oregon State Agricultural College, Corvallls, Ore. Ottava University, Ottava, Kan. Ouachita Baptist College, Arkadelphla, Ark. Pacific College, Newburg, Ore. Pacific, College of the, Stockton, Cal. Pacific University, Forest Grove, Ore. Panhandle Agricultural and Mechanical College, Goodwell, Okla. Pasadena College, Pasadena, Cal. Piedmont College, Demorest, Ga. Pratt Institute, Brooklyn, N.Y. Providence College, Providence, P.I. Puerto Rico, University of, Flo Piedras, P.R. Queens-Chicora College, Charlotte, N.C. Randolph-Macon College, Ashland, Va. Rardolph-Maccn Woman's College, Lynchburg, Va. Regie College, Denver, Colo. Regis College, Weeton, Maes. Rice Institute, Houston, Tex. Richmond, University of, Richmond, Va. Rider College, Trenton, N.J. Roanoke College, Salem, Va. Rockford College, Rockford, 111. Rollins College, Winter Park, Fla. Rosary College, River Forest, 111. Rosemont College, Rosemont, Pa. Russell Sage College, Troy, N.Y. Rutgers University, New Brunswick, N.J. St. Anselm's College, Manchester, N.H. St. Benedict's College, Atchison, Kan. St. Edward's University, Austin, Tex. St. Elizabeth, College of, Convent Station, N.J. St. Francis College, Loretto, Pa. St. John's University, Brooklyn, N.Y. St. Joseph's College, Philadelphia, Pa. St. Joseph's College for Women, Brooklyn, N.Y. St. Mary's College, St. Mary's College, Cal. St. Mary's College, South Bend, Ind. St. Mary's University, San Antonio, Tex.

[233] St. Michael's College, Winooski Park, Vt. St. Norbert College, West de Pere, Wis. St. Olaf College, Northfield, Minn. St. Rose, College of, Albany, N.Y. St. Scholastica, Ccllege of, Duluth, Minn. St. Thomas College, St. Paul, Minn. St. Vincent College, Latrobe, Pa. Salem College, Salem, W. Va. San Francisco College for Women, San Francisco, Cal. Scranton, Univereity of, Scranton, Pa. Seattle Pacific College, Seattle, Wash. Seton Hill College, Greensburg, Pa. Shaw University, Raleigh, N. C. Shorter Ccllege, Rome, Ge. Shurtleff College, Alton, 111. Sioux Falls College, Sioux Falls, S.D. South, University of the, Sewanee, Tenn. South Dakota School of Mines, Rapid City, S.D. South Dakota State College of Agriculture and Mechanical Arts, Brookings, S.D. South Dakota, University of, Vermillion, S.D. Southern California, University of, Los Angeles, Cal. Southwestern College, Wlnfleld, Kan. Southwestern College, Memphis, Tenn. Spring Hill College, Spring Hill, Ala. Sterling College, Sterling, Kan. Tampa, University of, Tampa, Fla. Taylor University, Upland, Ind. Temple University, Philadelphia, Pa. Tennessee College, Murfreesboro, Tenn. Tennessee, Univereity of, Knoxville, Tenn. Texas Christian University, Fort Worth, Tex. Thiel College, Greenville, Pa. Transylvania College**, Lexington, Ky. Trinity College, Washington, D.C. Trinity Univereity, Waxahachie, Tex. Tulsa, University of, Tulsa, Okla. Tusculum College, Greenville, Tenn. Upsala College, East Orange, N.J. Valparaiso University, Valparaiso, Ind. Virginia Military Institute, I-exingtan, Va. Wagner Memorial Lutheran College, Staten Island, N.Y. Wartburg College, Waverly, Iowa Washington College, Chestertown, Md. Washington, State College of, Pullman, Wash. Waynesburg College, Waynesburg, Pa. Webster College, Webster Groves, Mo.

[234) Wesleyan College, Macon, Ga. Western Maryland College, Westminster, Mi. Western Union College, Le Mare, Iowa Westminster College, Fulton, Mo. Westminster College, Hew Wilmington, Pa. West Virginia State College, Institute, W. Va. West Virginia University, Morgantown, W. Va. Whittier College, Whittier, Cal.

Whitworth College, Spokane, Wash. William Jewell College, Liberty, Mo. William and Mary, College, of, Williamsburg, Va. Wilmington College, Wilmington, Ohio Wittenberg College, Springfield, Ohio Wofford College, Spartanburgh, S. C. Wyoming University of, Laramie, Wyo. Xavler University, Cincinnati, Ohio Yankton College, Yankton, S.D. YeahIva College, New York, H.Y. York College, York, Neb.

[235] VIII NO INFORMATION American International College, Springfield, Mass. Athene College, Athene, Ala. Atlantic Onion College, South Lancaster, Mass. Augustana College, Sioux Falls, S.S. Bennett College, Greensboro, B.C. Berry College, Mt. Berry, Ga. Boh Jones College, Cleveland, Tenn. Boston College, Newton, Mass. Brandon College, Brandon, Manitoba, Can. Brenau College, Gainesville, Ga. Briar Cliff College, Sioux City, Iowa Carthage College, Carthage, 111. Cedarvllle College, Cedarvllle, Ohio Chestnut Hill College, Philadelphia, Pa. Chowan College, Murfreesboro, N.C. Clarke College, Dubuque, Iowa Columbia College, Dubuque, S.C. Crelghton University, Omaha, Neb. Cumberland University, Lebanon, Tenn. Daniel Baker College, Brownwood, Tex. Dayton Unlvereity, Dayton, Ohio DePaul University, Chicago, 111. Detroit Institute of Technology, Detroit, Mich. Dlllard University, New Orleans, La. Dominican College, San Rafael, Cal. Ennanuel Missionary College, Berrien Springs, Mich. Florida Agricultural and Mechanical College, Tallahassee, Fla. Florida Southern College, Lakeland, Fla. Friends University, Wichita, Kan. George Pepperdine College, Los Angeles, Cal. Georgetown University, Washington, D.C. Georgian Court College, Lakewood, N.J. Gonzaga University, Spokane, Wash. Good Counsel College, White Plains, N.T. Gooding College, Wesleyan, Idaho Harding Christian College, Searcy, Ark. Hardin-Simmons University, Abilene, Tex. Holy Names, College of the, Oakland, Cal. Howard College, Birmingham, Ala. Huntington College, Huntington, Ind. Illinois Wesleyan Univereity, Bloomington, 111.

I m a c u l a t e Heart College, Los Angeles, Cal. John B. Stetson University, Deland, Fla. John Fletcher University, University Park, Iowa Lambuth College, Jackson, Tenn. Lander College, Greenwood, S.C. Lenoir Hhyne College, Hickory, N.C. Limestone College, Gaffney, S.C. Lincoln University, Jefferson City, Mo. Loretto Heights College, Loretto, Colo. Louisville Municipal College for Negroes, Louisville, Ky. Loyola Univereity, Los Angeles, Cal. McKendree College, Lebanon, 111. McMurry College, Abilene, Tex. Maryland College for Women, Lutherville, Md. Marylhurst College, Oswego, Ore. Mary Manse College, Toledo, Ohio Marymount College, Tarrytcrwn, N.Y. Meredith College, Raleigh, N.C. Middlesex University, Waltham, Mass. Milligan College, Milligan College, Tenn. Milton College, Milton, Wis. Mission House College and Seminary, Plymouth, Wis. Morehouse College, Atlanta, Ga. Morris Harvey College, Charleston, W. 7a. Mount Angel College and Seminary, St. Benedict, Ore. Mount Mercy College, Pittsburgh, Pa. Mount St. Mary's College, Los Angeles, Cal. Mount St. Scholastica College, Atchison, Kan. National University, Washington, D.C. Nazareth College, Louisville, Ky. Nazareth College, Nazareth, Mich. New Fochelle, College of, New Fochelle, N.Y. Northwestern College, Watertown, Wie. Northwest Nazarene College, Nampa, Idaho Oakland City College, Oakland City, Ind. Oglethorpe Univereity, Oglethorpe University, Ga. Our Lady of the Lake College, San Antonio, Tex.

[236]

Ozarks, College of the, Clarksrille, Ark. Park College, Parkville, Mo. Pennsylvania Military College, Cheater, Pa. Portland, University of, Portland, Ore. Prairie View State Boreal and Industrial College, Prairie Ylev, Tex. Sacred Heart, College of the, Nov York, H.Y. St. Ambrose College, Davenport, Iowa St. Benedict, College of, St. Joseph, Minn. St. Bonaventura College, St. Bonaventure, N.Y. St. Catherine, College of, St. Paul, Minn. St. Francis College, Brooklyn, N.Y. St. Francla, College of, Jollet, 111. St. Francis lavier College for Women, Chicago, 111. St. Francis Xavier University, Antiganish, Nova Scotia, Can. St. John's University, Collegeville, Minn. St. Joseph's College, Knmitsburg, Md. St. Louis University, St. Louis, Mo. St. Mary College, The, Leavenworth, Kan. St. Mary of the Springe College, Columbus, Ohio St. Mary-of-the-Wasatch, College of, Salt Lake City, Utah St. Mary-of-the-Woods College, St. Mary-of-the-Woods, Ind. St. Mary's College, Winona, Minn. St. Mary's Seminary and University, Baltimore, Md.

St. Peter's College, Jersey City, N.J. St. Teresa, College of, Winona, Minn. St. Viator College, Bourbonnals, 111. Salem College, Winston-Salem, N.C. San Antonio, University of, San Antonio, Tex. San Francisco, University of, San Francisco, Cal. Seattle College, Seattle, Wash. Seton Ball College, South Orange, N.J. Southeastern University, Washington, D.C. Spelman College, Atlanta, Ga. Tennessee Polytechnic Institute, Cookeville, Tenn. Texas Wesleyan College, Fort Worth, Tex. Trinity College, Sioux City, Iowa Tuskegee Normal and Industrial Institute, Tuskegee Institute, Ala. Union College, Barbourvllle, ly. Union College, Lincoln, Neb. Union University, Jackson, Tenn. U. S. Coast Guard Academy, New London, Conn. Ursullne College, Cleveland, Ohio Villa Maria College, Brie, Pa. Virginia State College for Negroes, Petersburg, Va. Virginia Union University, Richmond, Va. Walla Walla College, College Place, Wash. Washington Missionary College, Tacoma Park, Md. Wiley College, Marshall, Tex. William Penn College, Oskaloosa, Iowa lavier University, New Orleans, La.

INDEX

INDEX Abilene Christian College, 231 Absence, contributions during, 8, 16 Acadia University, 183 Accrediting associations, 3 "Active pay," rules defining, 25, 27, 28 Adelphi College, 183 Administrative officers, use of term, 5; when ranked as faculty members, 6; unaware of faults and evil effects of retirement arrangements, 170; see also Staff members Administrative staff members, classification of, 6 Adrian College, 231 Aetna Life Insurance Company, 128 Age, see Retirement age Agnes Scott College, 231 Agricultural and Mechanical College, Oklahoma, 233 Agricultural and Mechanical College of Texas, 116, 117, 229, 230 Akron, University of, 100, 101, 228 Alabama, University of, 183 Alabama College, 231 Alabama Polytechnic Institute, 231 Alaska, University of, 231 Albany College, 231 Alberta, University of, 29, 183 Albertus Magnus College, 231 Albion College, 183 Albright College, 231 Alfred University, 184 Allegheny College, 184 Allowances under Carnegie Foundation rules, 23-29 passim; see also Carnegie Foundation Alma College, 184 American Association of Teachers Colleges, 3 American College for Girls, Istanbul, 184 American International College, 235 American University, Washington, 231 American University of Beirut, 184 Amherst College, 30, 230 Annuity contracts of T.I.A-A., 11-17;

see also Teachers Insurance and Annuity Association Antioch College, 31, 184-85 Arizona, University of, 185 Arkansas, University of, 185 Arkansas College, 231 Arkansas State College, 231 Armour Institute of Technology, 231 Arrested development, parting with staff members suffering from, 143, 165, 179 Asbury College, 231 Asheville Normal and Teachers College, 106, 229 Ashland College, 31, 230 Association of American Universities, 3 Athens College, 235 Atlanta University, 231 Atlantic Christian College, 231 Atlantic Union College, 235 Augsburg College and Theological Seminary, 231 Augustana College, 235 Augustana College and Theological Seminary, 185 Aurora College, 231 Austin College, 32, 230 Babson Institute, 8, 186 Baker University, 231 Baldwin-Wallace College, 186 Ball State Teachers College, 186 Barnard, President, 49 Barnard College, Columbia University, 51, 186 Bates College, 187 Baylor University, 231 Beaver College, 231 Beirut, American University of, 184 Belhaven College, 231 Beloit College, 187 Benefits, contributions, benefits, and methods of funding, 152; relation of contributions to, 154; relation of retirement age to, 155; relation of salary to, 155; relation of service period to, 155

240

INDEX

Bennett College, 235 Bennington College, 187 Berea College, 187 Berry College, 235 Bessie Tift College, 231 Bethany College, Kan., 231 Bethany College, W. Va., 6!, 187, 229 Bethel College, Kan., 32, 230 Bethel CoUege, Tenn., 231 Birmingham-Southern CoUege, 188 Bishop's College, 188 Blue Mountain College, 231 Blue Ridge College, 231 Bluffton College, 231 Bob Jones CoUege, 235 Borrowing on contract, 12 Boston CoUege, 235 Boston University, 32-34, 226 Bowdoin CoUege, 188 Bowling Green State University, 100, 101, 228

Bradley Polytechnic Institute, 188 Brandon CoUege, 235 Brenau CoUege, 235 Briar CUff CoUege, 235 Bridgewater CoUege, 231 Brigham Young University, 188 British Columbia, University of, 34, 188189 British universities, contributions, 156, 157 Brooklyn CoUege, 90, 91, 228 Brown University, 36-38, 189 Bryn Mawr CoUege, 38, 189 BuckneU University, 189 Buena Vista CoUege, 231 Buffalo, University of, 231 Butler University, 231; College of Religion, 61, 229 California, State Employees' Retirement Act, 39—42, 227; 1937 amendment, 44 California, University of, 39, 40-45, 158, 226, 228

California Institute of Technology, 189 Calvin CoUege, 45, 226 Canada, classes of institutions covered in study, 3; Carnegie pensions, 25 Canisius CoUege, 231 Capital University, 231 Carleton CoUege, 190 Carnegie, Andrew, philanthropic ventures in aid of retirement income, 17, 25, 137; quoted, 24, 137

Carnegie Corporation of New York, backing given to T.I.A.A., 17, 139; provision of annuities from Τ . Ι Α Λ . , 24, 29; gifts to Carnegie pension fund, 25; annuities, 48, 51, 81, 107, 124; retirement allowances supported by gifts from, 161 Carnegie Foundation for the Advancement of Teaching, retirement allowances, 4, 11, 16, 23-29, 36, 40, 42, 47, 48, 49, 51, 56, 57, 64, 66, 69, 81, 82, 94, 96, 107, 118, 119, 124, 126, 130, 131, 133, 137 f., 139, 161, 172, 179, 183 ff., 226, 227, 230; creation of T.IA.A., 17, 27, 139; rules, 23-27, 36, 47, 50, 57; closed lists of pensionables, 23, 29; history, 24 ff., 137 ff.; list of associated institutions replaced by "specified" institutions, 29; contributory plans advocated in 1916, 46; review of Wesleyan plan, 103; beneficial influence upon institutions of higher learning, 138; H. S. Pritchett's studies of retirement income, 138, 139, 164, 179; institutions having only Carnegie pensions, 4, 23, 230 Carnegie Institute of Technology, 190 CarroU College, 190, 231 Carson-Newman College, 231 Carthage College, 235 Case School of AppUed Science, 190 Cash settlement, 163; vs. complete vesting, 164, 166ff.; public employment, 165 Catawba College, 231 CathoUc University of America, 46, 230 Cedar Crest College, 231 CedarviUe College, 235 Centenary College, 231 Central CoUege, Mo., 231 Central College, Iowa, 231 Central State Teachers College, Mich., 80, 22 8

Central YJH.C.A. College, 133, 229 Centre College, 231 Changing conditions and need of adjustment, 177 Chapman College, 231 Charleston, CoUege of, 190 Chattanooga, Unive«sity of, 190 Chestnut HU1 College, 235 Chicago, University of, 46 f., 190 Choice, unrestricted, by participant, 161 Chowan CoUege, 235

INDEX

241

Churches of Christ, pensions for organiza- Columbia University, 49-54, 138, 193; tions connected with, 61 Barnard College, 51; College of PharCincinnati, City Retirement System, 48, macy, 51, 54; Teachers College, 51-54 227 Columbus Mutual Life Insurance ComCincinnati, University of, 47-49, 191, 228 pany, 102 Citadel, The, 231 Complete vesting vs. cash settlement, Cities, see Municipalities 163 ff., 166 ff. Claremont Colleges, 191 Concordia College, 231 Clarke College, 235 Congregational and Christian Churches, Clarkson College of Technology, 230 Board of Home Missions, 54, 227 Clark University, 191 Connecticut, Retirement of State EmClemson Agricultural College, 49, 230 ployees, 227 "Closed List of Pensionables" Carnegie Connecticut, University of, 55, 228 Foundation, 23 Connecticut College, 193 Coe College, 191 Contributions, size of, 8, 156, 157, 179, Coker College, 231 183-225; during leave of absence, 8, Colby College, 191 16; annuity supplemented with regular Colgate-Rochester Divinity School, 191 joint, 10; in all cases applied as preColgate University, 192 miums for retirement annuity contracts, College of Mines and Metallurgy, Texas, 11; joint, superior to free pensions, 138, 117, 228 143; benefits, methods of funding, 152; relation of benefits and, 154-57; BritCollege of Pharmacy, Columbia Univerish universities, 156, 157 sity, 51, 54 College of the City of New York, 90, 91, Contributory plans, inauguration of, 17, 139, 180; prevailing method in colleges, 92, 228 public employment, and industry, 143; Colleges and universities, exclusion from common usage, desirable provisions, coverage of Social Security Act, v, 173; 152 ff.; see also Retirement income; consequences that will follow, v; those Teachers Insurance and Annuity Assocovered in study, 3, 4; not a party to T.I A A. contracts, 11, 12, 13; standciation. ards improved by retirement plan pro- Converse College, 194 visions, 14, 143; influence of Carnegie Cooper Union, 194 Foundation in raising standards, 138; Cornell College, 194 reason for interest in retirement plans, Cornell University, 56 f., 92, 194, 226, 228 141, 142; welfare of, must take prece- Creighton University, 235 dence over interests of members, 144, Culver-Stockton College, 231 159; attention given to maintenance Cumberland University, 235 employees, 145; why plans for academic employees are so far ahead of Dakota Wesleyan University, 231 plans for maintenance employees, 145; Dalhousie University, 195 withdrawal benefit that emphasizes best Dana College, 231 interests of, 163; competition of indus- Daniel Baker College, 235 trial employment under Social Security Dartmouth College, 57, 195 Act, 176; Federal influence in affairs of Davidson College, 195 education, 176, 178; see under name, Davis and Elkins College, 231 e.g., Antioch College; California, Uni- Dayton University, 235 versity of Death benefits, 13, 20, 152, 161, 162, 171 Colorado, University of, 193 Defiance College, 231 Colorado College, 192 Delaware, University of, 58 f., 226 Colorado School of Mines, 231 Denison University, 231 Colorado State College, 192 Denver, University of, 195 Colorado State College of Education, 193 De Paul University, 235 Columbia College, 235 De Pauw University, 59, 230

242

INDEX

De Sales College, 60, 230 Descriptions of plans, 29-134 Detroit, Teachers' Retirement Fund, 60, 227 Detroit, University of, 231 Detroit Institute of Technology, 235 Dickinson College, 195 Dickinson State Teachers College, 95, 228 Dillard University, 235 Disability allowance, 20, 24, 26, 27, 28 Disability retirement, 172 f.; advisability of college handling cases individually, 173 Disciples of Christ Pension Fund, 61, 227 Doane College, 231 Dominican College, 235 Dominion government annuities, 127 Drake University, 196; Bible College, 61, 229 Drew University, 196 Drexel Institute, 62, 226 Dropsie College, 231 Drury College, 230 Dubuque University, 231 Duer, Professor, 49 Duke University, 197 Duquesne University, 231 D'Youville College, 231 Earlham College, 231 Eastman School of Music, 109 East Texas State Teachers College, 117, 228

Eau Claire State Teachers College, 130, 229 Education, standards improved by retiremen plan provisions, 14, 143; best interests require free interchange of professional talent, 164; Federal influence in affairs of, 176, 178 Educators, leadership for mass movements, 178 Elizabetbtown College, 231 Elmhurst College, 63, 226 Elmira College, 197 Emmanuel College, 231 Emmanuel Missionary College, 235 Emory and Henry College, 231 Emory University, 197 Employees, use of term, 5, 6; see also Maintenance employees Employer-employee relations aided by joint contribution, 143; aided by vesting, 168

Employment, relation of retirement income to seeking of, 159, 167, 168, 169. 179 Emporia College, 231 Erskine College, 231 Eureka College, 61, 229 Evansville College, 231 Evolution of plans for retirement, 137 ff. Extension of service beyond normal retirement age, 15 Faculty, use of term, 6; see also Administrative officers; Staff members; Teachers Federal influence in educational affairs, 176, 178 "Federated Superannuation System for Universities of Great Britain," 157 Fenn College, 133, 229 Findlay College, 63, 230 Fisk University, 197 Flora MacDonald College, 231 Florida, Retirement of State Employees, 63, 227 Florida, University of, 63, 64, 227 Florida Agricultural and Mechanical College, 235 Florida Southern College, 235 Florida State College for Women, 63, 227 Fordham University, 231 Forfeitable pension rights, 163-171 passim Forfeiture of premium, 13 Formal retirement age, see Retirement age Franklin and Marshall College, 231 Franklin College, 231 Free pensions, see Pensions Fresno State College, 39, 228 Friends University, 235 Funding, contributions, benefits, methods of funding, 152 Furman University, 231 Gallaudet College, 231 Garrett Biblical Institute, 197 Geneva College, 231 George Peabody College for Teachers, 198 George Pepperdine College, 235 Georgetown College, 231 Georgetown University, 235 George Washington University, 231 George Williams College, 133, 198, 229

INDEX

243

Georgia, University of, 231 Georgian Court College, 23S Georgia School of Technology, 231 Georgia State Woman's College, 231 Gettysburg College, 231 Gonzaga University, 235 Good Counsel College, 23S Gooding College, 235 Goshen College, 231 Goucher College, 198 Greensboro College, 198 Greenville College, 231 Grinnell College, 198 Group annuity contracts, 18, 140, 152, 155, 176 Grove City College, 231 Guilford College, 198 Gustavus Adolphus College, 231

Idaho, College of, 232 Idaho, University of, 232 Illinois, University of, 68, 159, 230 Illinois College, 232 Illinois Wesleyan University, 235 Immaculata College, 232 Immaculate Heart College, 235 Incarnate Word College, 232 Indiana Central University, 232 Indiana State Teachers College, 201 Indiana University, 202 Industrial vs. college employment, 176 Institutions covered in the study, classes, 3, 5; numbers, 4, 5; exclusion from coverage of Social Security Act, v, 173; see also Colleges and universities Instructors, ranking of, 6 Insurance companies, see Life insurance companies

Hamilton College, 198 Hamline University, 199 Hampden-Sydney College, 231 Hampton Institute, 199 Hanover College, 199 Harding Christian College, 235 Hardin-Simmons University, 235 Hart wick College, 231 Harvard Corporation, 66 Harvard University, 19, 64-67, 138, 199200 Hastings College, 231 Haverford College, 200 Heidelberg College, 200 Hendrix College, 231 High Point College, 231 Hillsdale College, 231 Hiram College, 67, 230 Hobart College, 201 Hollins College, 232 Holy Cross, College of the, 232 Holy Names, College of the, 235 Home Missions Board, Congregational and Christian Churches, 54, 227 Hood College, 232 Hope College, 232 Houghton College, 201 Howard College, 235 Howard Payne College, 232 Howard University, 67, 201 Hunter College, 90, 91, 228 Huntingdon College, 232 Huntington College, 235 Huron College, 232

Insurance-tax requirement, Federal, 173 Interchange of professional talent, 164 Interest and premiums, T.I.A.A. contracts, 12 Intermountain Union College, 232 Internal Revenue Code, insurance-tax requirement, 173 Iowa, State University of, 69, 230 Iowa State College, 232 Iowa Wesleyan College, 232 Ithaca, Ν. Y., endowed colleges at, 56f.; Cornell University, 56 f., 92 Ithaca College, 232 James, Henry, vi James Millikan University, 232 Jamestown College, 232 John B. Stetson University, 235 John Carroll University, 232 John Fletcher University, 235 John Hancock Mutual Life Insurance Company, 32, 73, 78, 102 Johns Hopkins University, The, 69, 202 Johnson, Samuel, 49 Johnson C. Smith University, 106, 229 Judson College, 232 Juniata College, 202 Kalamazoo College, 232 Kansas, University of, 232 Kansas City, University of, 203 Kansas State College of Agriculture and Applied Science, 232 Kansas Wesleyan University, 232

244

INDEX

Kent State University, 100, 101, 228 Kentucky, University of, 70, 230 Kenyon College, 203 Keuka College, 232 King College, 232 King's College, 49 King's College, University of, 70, 226 Knox College, 203 Knoxville College, 232 Labor turnover and disputes, relation of strikes to, 162 La Crosse State Teachers College, 130, 229 Lafayette College, 232 La Grange College, 232 Lake Erie College, 232 Lake Forest College, 203 Lambuth College, 23S Lander College, 235 La Salle College, 232 La Verne College, 232 Lawrence College, 204 Leave of absence, contributions during, 8, 16

Lebanon Valley College, 232 Lehigh University, 204 Le Moyne College, 54, 229 Lenoir Rhyne College, 235 Lewis Institute, 232 Life insurance companies, benefits funded through contracts with, 4, 5, 18, 140, 154, 158, 179, 226 (specified companies, 32, 53, 56, 59, 62, 63, 71, 73, 75, 78, 88, 102, 107, 109, 111, 114, 128, 129) ; plans of, adopted since 1934, 5; Teachers Insurance and Annuity Association most effective company in field of college retirement income, 17, 139; choice of, 18, 43, 86, 132; assets to cover liabilities, 153, 158; age at which payments shall begin, 161; choice of withdrawal benefits offered, 171; disability risk, 172 Limestone College, 235 Lincoln Memorial University, 232 Lincoln University, Mo., 235 Lincoln University, Pa., 204 Lindenwood College, 232 Linfield College, 71, 226 Liquidating the contract, 12 Long Island College of Medicine, 204 Long Island University, 232

Loras College, 232 Loretto Heights College, 235 Louisiana, Teachers' Retirement System, 71, 227 Louisiana College, 232 Louisiana Polytechnic Institute, 71, 228 Louisiana State Normal College, 71, 228 Louisiana State University, 71, 228 Louisville, University of, 72, 226 Louisville Municipal College for Negroes, 235 Lowell Textile Institute, 79, 228 Loyola College, 232 Loyola University, Cal. 235 Loyola University, 111., 232 Loyola University, La., 232 Lump sum settlement, 12 Luther College, 204 Lynchburg College, 61, 229 Macalester College, 232 McGill University, 206 McKendree College, 235 McMaster University, 232 MacMurray College, 232 McMurry College, 235 McPherson College, 232 McVickar, Professor, 49 Mail, contracts sold by, 17, 139 Maine, University of, 73, 226 Maintenance-employee plans of Brown University, 37 f., 189; California, 44 f.; Colgate, 192; Harvard, 66, 200; Massachusetts Institute of Technology, 78; Oberlin, 98, 209; Princeton, 108, 212; Rochester, 109, 214; Southern Methodist, 114; Swarthmore, 115; Teachers College, Columbia University, 52, 218; Toronto, 118, 218; Union Theological Seminary, 121, 219; Wesleyan, 223; Wooster, 225 Maintenance employees, statistics, 4, 7; use of term, 5, 6; attention given to, in retirement plans, 6; attention given to, 145; turnover, value to college, 146; can no longer be ignored in plans, 174; benefits under Social Security Act, 174; transfers from colleges to industry, 175 Manchester College, 204-5 Manhattan College, 205 Manhattanville College of the Sacred Heart, 205 Manitoba, University of, 74, 205

INDEX Marietta College, 205-6 Marion College, 232 Marquette University, 232 Marshall College, 232 Mary Baldwin College, 75, 226 Marygrove College, 232 Mary Hardin-Baylor College, 232 Maryland, Teachers' Retirement System, 76, 227 Maryland, University of, 76, 228 Maryland College for Women, 235 Marylhurst College, 235 Mary Manse College, 235 Marymount College, Kan., 232 Marymount College, Ν. Y., 235 Maryville College, 206 Marywood College, 232 Massachusetts, State Retirement System, 79, 227 Massachusetts Institute of Technology, 77-79, 158, 226 Massachusetts State College, 79, 228 Mass movements, opposition to, vs. guidance of, 178 Maturity date, change in, 13 Mayville State Teachers College, 95, 228 Medical Evangelists, College of, 232 Mercer University, 232 Mercyhurst College, 232 Meredith College, 235 Metropolitan Life Insurance Company, 53, 62, 109, 114 Miami University, Fla., 232 Miami University, Ohio, 100, 101, 228 Michigan, Teachers' Retirement Fund, 80, 227 Michigan, University of, 81, 206 Michigan College of Mining and Technology, 80, 228 Michigan State College, 79, 230 Michigan State Normal College, 80, 228 Middlebury College, 206-7 Middlesex University, 235 Midland College, 232 Midland Mutual Life Insurance Company, 102

Military Academy, United States, 121, 230 Milligan College, 235 Millsaps College, 232 Mills College, 232 Milton College, 235 Milwaukee-Downer College, 82, 230

245

Milwaukee State Teachers College, 130, 229 Mines and Metallurgy, College of, Texas, 117,228 Mining and Technology, Michigan College of, 80, 228 Minnesota, State Employees' Retirement plan, 84 Minnesota, University of, 82-84, 226 Minot State Teachers College, 95, 228 Misericordia College, 232 Mission House College and Seminary, 235 Mississippi, University of, 232 Mississippi College, 232 Mississippi State College, 232 Mississippi State College for Women, 232 Mississippi Women's College, 232 Missouri, University of, 230 Missouri Valley College, 232 Monmouth College, 232 Montana, State Teachers' Retirement System, 85, 227 Montana, University of, 85 Montana School of Mines, 85, 228 Montana State College, 85, 228 Montana State Normal College, 85, 228 Montana State University, 85, 228 Moravian College and Theological Seminary, 232 Moravian College for Women, 86, 230 Morehouse College, 235 Morgan State College, 232 Morningside College, 232 Morris Harvey College, 235 Mortgaging the contract, 12 Mount Allison University, 207 Mount Angel College and Seminary, 235 Mount Holyoke College, 207 Mount Mary College, 232 Mount Mercy College, 235 Mount St. Joseph, College of, 232 Mount St. Mary's College, Cal., 235 Mount St. Mary's College, Md., 86, 230 Mount St. Scholastica College, 235 Mount St. Vincent, College of, 232 Mount Union College, 207 Muhlenberg College, 86, 226 Municipalities, retirement plans, 19 ff., 140, 152 ff., 227-29; Cincinnati's plan, 48; Detroit's, 60; New York City's, 90, 91; investments limited to debts of, 154; see also Publicly administered insitutions

246

INDEX

Muskingum College, 232 M u t u a l Life Insurance Company, 59 N a h n e , Professor, 49 National contributory retirement plan, 173 National Education Association, 3 Nationalism, trend toward, and resulting changes, 177 National University, 235 Naval Academy, United States, 122, 219, 230 Nazareth College, Ky., 235 Nazareth College, Mich., 235 Nazareth College, Ν. Y., 232 Nebraska, University of, 86, 230 Nebraska Wesleyan University, 87, 230 Negro Agricultural and Technical College, 232 Nevada, University of, 87, 230 Newark, University of, 232 Newark College of Engineering, 88, 226 Newberry College, 232 New Brunswick, University of, 232 New England Mutual Life Insurance Company, 59, 73, 75 Newfoundland, Carnegie Pensions for teachers in, 25 New Hampshire, University of, 88 f., 207 New Mexico, University of, 232 New Mexico College of Agriculture and Mechanical Arts, 232 New Mexico School of Mines, 232 New Rochelle, College of, 235 New York (city), Employees' Retirement System, 90 f., 227; Teachers' Retirement System, 91 f., 227 New York, College of the City of, 90, 91, 92, 228 New York (state), Employees' Retirement System, 57, 92, 227; Act "for the benefit of employed officers of Young Men's Christian Associations," 133 New York University, 93, 208 Niagara University, 232 Nonacademic employees, see Maintenance employees Noncontributory plans, 4, 19, 22, 227, 230 Noniunded plans, 158 f.; special bcne5t t o widows, 172 N o r t h Carolina, University of, 232 N o r t h Carolina College for Negroes, 232 N o r t h Carolina State College, 94, 230

North Central College, 208 North Dakota, Teachers' Insurance and Annuity Fund, 95, 227 North Dakota, University of, 95, 228 North Dakota State Agricultural College, 95, 228 North Dakota State Normal and Industrial School, 95, 228 North Dakota State Teachers College, Dickinson, 95, 228 North Dakota State Teachers College, Mayville, 95, 228 North Dakota State Teachers College, Minot, 95, 228 North Dakota State Teachers College, Valley City, 95, 228 Northeastern University, 133, 229 Northern State Teachers College, Michigan, 80, 228 North Texas State Teachers College, 117, 228 Northwestern College, 235 Northwestern University, 208 Northwest Nazarene College, 235 Norwich University, 232 Notre Dame, University of, 233 Notre Dame College, 232 Notre Dame of Maryland, College of, 233 Nova Scotia, Public Service Superannuation Act, 95, 227 Nova Scotia Technical College, 95, 227 Oakland City College, 235 Oberlin College, 96-99, 208-9 Occidental College, 99, 209 Occidental Life Insurance Company, 111 Oglethorpe University, 235 Ohio, Cincinnati plan, 48, 227; Public Employes' Retirement System, 48, 100, 102, 227; School Employes' Retirement System, 100; State Teachers' Retirement System, 100, 101, 102, 227 Ohio Northern University, 100, 230 Ohio State University, 100, 101, 102, 226, 228

Ohio University, 100, 101, 228 Ohio Wesleyan University, 102, 230 Oklahoma, University of, 233 Oklahoma Agricultural and Mechanical College, 233 Oklahoma Baptist University, 103, 229 Oklahoma City University, 233 Oklahoma College for Women, 233

INDEX Old-age and survivors' provisions, Social Security Act, 154, 170, 173-79 passim, 180 Olivet College, 233 Omaha, Municipal University of, 233 Optional forms of settlement, 20 Oregon, University of, 104, 209 Oregon Mutual Life Insurance Company, 71 Oregon State Agricultural College, 233 Oshkosh State Teachers College, 130, 229 Ottawa University, 233 Otterbein College, 104, 230 Ouachita Baptist College, 233 Our Lady of the Lake College, 235 Outline of Insurance and Retirement Plans for Members of the Faculty (University of Minnesota), 82 Ozarks, College of the, 236 Pacific, College of the, 233 Pacific College, 233 Pacific Mutual Life Insurance Company, 63 Pacific Union College, 105, 230 Pacific University, 233 Panhandle Agricultural and Mechanical College, 233 Park College, 236 Parsons College, 209 Participation, 7, 14, 20, 145 f., 147, 148 f. Part-time work with part pay, 4 Pasadena College, 233 Past service benefits, 10, 11, 16, 159-61, 183-225 Pay-as-you-go policy, 154 Payments in kind, 4 Peiping Union Medical College, 210 Penalties, none, for discontinuing premium payments, 13 Pennsylvania, State Employes' Retirement System, 105, 227 Pennsylvania, University of, 210 Pennsylvania College for Women, 210 Pennsylvania Military College, 236 Pennsylvania State College, 105, 228 Pension Association, Massachusetts Institute of Technology, 77 Pension Fund of the Disciples of Christ, 61, 227 Pensions, noncontributory plans, 19, 22, 227, 230; disability, 20; free, inferior to contributory plans, 138, 143; inade-

247

quacy of early plans, 143; loss of employment and of pension rights, 159; relation to labor turnover and labor disputes, 162; see also Carnegie Foundation; Retirement income "Pension System," University of California, 40, 42 Period of service, see Service Pharmacy, College of, Columbia University, 51, 54, 210 Pharmacy, College of, University of Pittsburgh, 211 Pharmacy, Connecticut College of, 211 Phillips University, 106, 230 Piedmont College, 233 Pittsburgh, University of, 211 Planning a Retirement System (T.I.A.A.), 14 Platteville State Teachers College, 130, 229 Polytechnic Institute of Brooklyn, 211 Pomona College, 211 Pooling of equities under contracts, 152 Portland, University of, 236 Prairie View State Normal and Industrial College, 236 Pratt Institute, 233 Preliminary service period, 7, 147 f. Premium payments, discontinuing, 13 Premiums, and interest, T.I.A.A. contracts, 12; group annuity contract, 18 Presbyterian Church in the U.S.A., The, 106, 227 Presbyterian College, 212 President, retirement, 142 Princeton University, 107 f., 212, 226, 230 Principia, The, 212 Prior service benefits, 9 f., 160 Pritchett, Henry S., intensive study of retirement plans, 138, 139, 164, 179 Providence College, 233 Prudential Insurance Company of America, 56, 88, 107 Publicly administered institutions, statistics, 4; coverage for maintenance employees in, In (see also Maintenance employees); barred from contributing along with staff members, 8; retirement systems for, 19-21, 140, 144, 145, 152 ff., 227-29; exception from coverage of Social Security Act, 19, 144, 173; those omitted from study, 20; withdrawal provisions, 21, 165-70; descriptions of

248

INDEX

Publicly administered institutions (Cont.) plans of particular institutions, state, municipal and others, that include college and university staff members, 29134; prevented from paying university funds as premiums, 144; preliminary service period, 147; withdrawing and retiring members, statistics, 166; staff members unaware of faults and evil effects of forfeiture of equities arrangement, 166; subsidies from taxation, 169; harmed by having members shackled by forfeitable pension rights, 169 f.; see also under Municipal; State Puerto Rico, University of, 233 Puget Sound, College of, 212 Purdue University, 212-13 Queens-Chicora College, 233 Queens College, 90, 91, 228 Queens University, 213 Radcliffe College, 213 Randolph-Macon College, 233 Randolph-Macon Woman's College, 233 Rates, annuity, less liberal today, 156 Redlands, University of, 213 Reed College, 214 Regis College, Colo., 233 Regis College, Mass., 233 Religious organizations, retirement provisions, 4, 19, 21 f., 140, 227, 229; statistics, 4; exception from coverage of Social Security Act, 19, 173; descriptions of plans of particular institutions, religious and others, that include college and university staff members, 29-134 passim Rensselaer Polytechnic Institute, 230 Resolution re retirement plan, draft, 14-17 Retirement age, under T.I.A.A. plans, 9, IS, 161; extension of service beyond normal, IS; related to age when plan is inaugurated, IS; Carnegie pensions, 24, 25, 27, 28; desirable provisions, 14952; value of announcement of, before reaching normal, ISO, 179; relation of retirement benefit to, 1SS; relation of supplementary benefits to, 160; settlement provisions, 161 f.; determination of, 167 Retirement income, borderline cases encountered, 4; statistical summary of

plans for, 4; contributory plans using contracts of other life insurance companies, 4, 18, 43, 86, 132, 140, 1S4, 1S8, 179, 226 (see also Life insurance); plans which accumulate own funds, 4, 19, 1S7, 226; noncontributory plans, 4, 19, 22, 227, 230; systems for publicly administered institutions, 4, In, 8, 1921, 140, 144, 14S, 1S2 ff., 16S-70, 173, 227-29; institutions having no plan, 4, 231-34; institutions giving no information, 4, 23S-36; contributory plans using annuity contracts of T.I.A.A., 6 17 (synoptic schedule; 183-22S, 226); participation, 7, 14, 20, 14S f., 147, 148 f.; draft resolution for inauguration of plan, 14-17; inauguration of contributory plans, 17, 139, 179; retirement systems for religious workers, 19, 21 f., 140, 227, 229; Carnegie Foundation for the Advancement of Teaching, 23-29 (see also Carnegie); descriptions of plans of particular institutions, and of plans for state and municipal employees and religious institutions that include college and university staff members, 29-134; evolution of college plans for, 137 ff.; H. S. Pritchett's study of, 138, 139, 164, 179; desirable provisions of plans, 141-73, 179; purposes, 141— 43, 162, 179; why the college should interest itself, 141, 142, 14S; inadequacy of early pension plans, 143; source of support, 143 f., 152 ff., 179 (see also Contributions); responsibility for planning, 144 f.; why plans for academic employees are so far ahead of plans for maintenance employees, 14S; contributions, benefits, and methods of funding, 1S2-S9; relation of retirement age to, 1SS; relation of salary to, 155; relation of service period to, ISS, 17S; nonfunded plans, 158 f.; reasons for inauguration of plans for, 159; relation to employment seeking, 1S9, 167, 168, 169, 179; arbitrary limit to, 160; choice of type of annuity left to individual, 161; formulation of plan the job of technical expert, 168; attitude toward plan of Social Security Act, 173-79 (see also Social Security Act); institutions having Carnegie pentions only, 4, 23, 230; see also Pensions;

INDEX

249

Rhode Island State College, 108, 228 Rice Institute, 233 Richmond, University of, 233 Rider College, 233 Ripon College, 214 River Falls State Teachers College, 130, 229 Roanoke College, 233 Robbins, Rainard B., review of retirement plans for college faculties, ν Robert College, Istanbul, 214 Rochester, University of, 109 f., 214, 226 Rockford College, 233 Rollins College, 233 Rosary College, 233 Rosemont College, 233 Rose Polytechnic Institute, 230 "Rules for the Granting of Retiring Allowances," Carnegie Foundation, 23 Russell, Dean, 53 Russell Sage College, 110, 226 Rutgers University, 233

St. Joseph's College, Pa., 233 St. Joseph's College for Women, 233 St. Lawrence University, 215 St. Louis University, 236 St. Mary College, The, 236 St. Mary of the Springs College, 236 St. Mary-of-the-Wasatch, College of, 236 St. Mary-of-the-Woods College, 236 St. Mary's College, Cat., 233 St. Mary's College, Ind., 233 St. Mary's College, Minn., 236 St. Mary's Seminary and University, 236 St. Mary's University, 233 St. Michael's College, 233 St. Norbert College, 233 St. Olaf College, 233 St. Peter's College, 236 St. Rose, College of, 233 St. Scholastica, College of, 233 St. Teresa, College of, 236 St. Thomas College, 233 St. Viator College, 236 St. Vincent College, 233 Salary, increases made at inauguration of retirement plan, 8; relation of retirement benefit to, 10, 155, 160; rules defining "active pay," 25, 27, 28; relation to benefits under Social Security Act, 175 Salem College, N. C., 236 Salem College, W. Va., 233 Sam Houston State Teachers College, 117,

Sacred Heart, College of the, 236 St. Ambrose College, 236 St. Andrew's College, 214 St. Anselm's College, 233 St. Benedict, College of, 236 St. Benedict's College, 233 St. Bonaventure College, 236 St. Catherine, College of, 236 St. Edward's University, 233 St. Elizabeth, College of, 233 St. Francis, College of, 236 St. Francis College, Ν. Y., 236 St. Francis College, Pa., 233 St. Francis Xavier College for Women, Γ36 St. Francis Xavier University, 236 St. John's College, 215 St. John's University, Ν. Y., 233 St. John's University, Minn., 236 St. Joseph's College, Md., 236

San Antonio, University of, 236 San Diego SUte College, 39, 228 San Francisco, University of, 236 San Francisco College for Women, 233 San Francisco SUte College, 39, 228 Santa Barbara State College, 39, 228 Santa Clara, University of, 111, 226 Sarah Lawrence College, 215 Saskatchewan, University of, 112, 215 Schmidt, Professor, 49 Schools omitted from study, 20 Scranton, University of, 233 Scripps College, 215 Seattle College, 236 Serttl' P~.cif c r0L'Tge 2.'3 Self-funded plans, 4, 19, 157, 158, 226 Service, prior: benefits, 9 f. Service period, 7, 147 f.; relation of retirement benefit to, 155, 175; relation of supplementary benefits to, 160

Teachers Insurance and Annuity Association

Retirement Plans for College Faculties,

review printed by Ti-A-A., v, 5 "Retiring Annuities System," University of California, 39, 40, 41, 42, 43 Rhode Island, Employees' Retirement System of the State of, 108, 227 Rhode Island College of Education, 108, 228

228

250

INDEX

Service staff members, see Maintenance employees Seton Hall College, 236 Seton Hill College, 233 Settlement provisions, 161 f. Seventh-Day Adventists, 105 Shaw University, 233 Shorter College, 233 Shurtleff College, 233 Simmons College, 19, 112 f., 215 Simpson College, 114, 230 Sioux Falls College, 233 Sir George Williams College, 133, 229 Skidmore College, 114, 216, 226 Smith College, 216 Social problems, changing, 177 Social Security Act, exclusion from coverage of, v, 19, 144, 147, 173; relation of college plans to, v, 146, 174 ff.; no waiting period, 148; old-age and survivors' benefits, 154, 170, 173-79 passim, 180; retirement benefit not affected by transfer of services, 169; withdrawal benefits not mentioned, 170; attitude toward retirement plan of, 173-79 Social Security Board, 174 South, University of the, 233 South Carolina, University of, 216 South Dakota, University of, 233 South Dakota School of Mines, 233 South Dakota State College of Agriculture and Mechanical Arts, 233 Southeastern University, 236 Southern Baptist Conventions, Retirement Plan for Educational Institutions, 227 Southern California, University of, 233 Southern Methodist University, 114, 230 Southern University, La., 71, 228 Southwestern College, Tenn., 233 Southwestern College, Kan., 233 Southwestern Louisiana Institute, 71, 228 Southwestern University, 115, 230 Southwest Texas State Teachers College, 117, 228 Spelman College, 236 Springfield College, 133, 229 Spring Hill College, 233 Staff members, use of term, 5, 6; classes covered in T.I A.A. plans, 6; independent rights to contract, 11, 12, 13; facilitating the retirement of superannuated, 11, 142, 148, 179; welfare of college

must take precedence over interests of, 144; academic, should take precedence over service members, 146; need of complete vesting to facilitate change, 165; see also Administrative officers; Teachers Stanford University, 216 State institutions, see under name of state, e.g., Louisiana State University States, retirement systems, 19 ff., 140, 144, 152 ff., 227-29; California, 39-45; Florida, 63; Louisiana, 71; Maryland, 76; Massachusetts, 79; Michigan, 80; Montana, 85; New York, 57, 92; North Dakota, 95; Ohio, 48, 100, 101, 102; Nova Scotia, 95; Pennsylvania, 105; Rhode Island, 108; Texas, 116, 117; Utah, 123; Wisconsin, 21, 130f.; see also Publicly administered institutions Statistical summary of college plans, 4 Stephen F. Austin State Teachers College, 117, 229 Sterling College, 233 Stevens Institute of Technology, 216 Stevens Point State Teachers College, 130, 228

Stout Institute, 130, 229 Strikers, threatened with loss of pension, 162

Sul Ross State Teachers College, 117, 229 Sun Life Assurance Company, 129 Superannuated staff members, facilitating retirement of, 11, 142, 148, 162, 179 Superior State Teachers College, 130, 229 Supplementary benefits, 10, 11, 16, 15961, 183-225 Susquehanna University, 217 Swarthmore College, 115, 217 Sweet Briar College, 217 Synoptic schedule of plans, 5, 6, 183-225 Syracuse University, 217 Talladega College, 54, 229 Tampa, University of, 233 Tarkio College, 106, 229 Taxation, public-plan subsidies from, 22, 169; power of state to tax to meet liabilities, 153; danger of dependence upon, 153, 154; Federal insurance-tax requirement, 173; costs of old-age and survivors' benefits, 174 Taylor University, 233 Teachers, numbers included in the sev-

INDEX eral plans, 4; use of term, 5; state and municipal plans applying to, 20, 140 (see also under Municipal; State); least rewarded of the professions, 24, 137; see also Faculty; Staff members Teachers College, Columbia University, 51-54, 217-18, 226 Teachers colleges, included in study, 3; omitted, 3, 20 Teachers Insurance and Annuity Association, review of retirement plans, v, 5; institutions using contracts of, included in study, 3, 5; number of institutions adopting contracts, 4; classes of staff members covered, 6; contributory plans using annuity contracts of, 6-17; participation, 7, 14, 183-225; waiting period, 7, 183-225; contributions, 8, 12, 15, 156, 183-225; prior service benefits, 9; retirement age, 9, 15, 161, 183225; supplementary benefit, 10, 16,183— 225; annuity contract the property of individual participant, 11, 12, 13, 16; retirement annuity contracts, 11-14; Carnegie Foundation retiring allowances, 11; a special-purpose contract in which no essential changes are necessary, 14, 140; Planning a Retirement System, 14; retirement resolution, draft, 14-17; creation by Carnegie Foundation, 17, 27, 139; as a college life insurance company, 17, 139; financing of, 17; contracts sold by use of mails, 17, 139; contracts used in public-employee systems, 20; annuities purchased from, for Carnegie Corporation pensioners, 24, 29; plans using contracts of, that have unusual characteristics or histories, 29, 30, 31, 35, 36, 47, 48, 50, 52, 55, 56, 66, 67, 69, 74, 81, 89, 96, 98, 99, 104, 107, 109, 112, 113, 114, 116, 118, 119, 121, 123, 132; gives impetus to retirement plans and contractual method of financing, 139; widow's benefits, 172; synoptic schedule of plans, 183-225 Technical expert needed for formulation of plan, 168 Temple University, 233 Tennessee, University of, 233 Tennessee College, 233 Tennessee Polytechnic Institute, 236 Terms used interchangeably, 5, 6

251

Texas, Agricultural and Mechanical College of, 116, 117, 229, 230 Texas, Teachers' Retirement System, 116, 117, 227; state teachers colleges, 117, 228, 229 Texas, University of, 117, 229 Texas Christian University, 233 Texas College of Arts and Industries, 117, 229 Texas State College for Women, 117, 229 Texas Technological College, 117, 229 Texas Wesleyan College, 236 Thiel College, 233 Tillotson College, 54, 229 Toledo, University of, 100, 101, 229 Toronto, University of, 118 f., 218, 226 Tougaloo College, 54, 229 Transylvania University, 233; College of the Bible, 61, 229 Trinity College, Conn., 218 Trinity College, Iowa, 236 Trinity College, Can., 218 Trinity College, Wash., D. C., 233 Trinity University, 233 Tufts College, 230 Tulane University, 119, 218 Tulsa, University of, 233 Turnover of labor, 162 Tusculum College, 233 Tuskegee Normal and Industrial Institute, 236 Unfunded plans, 158 f. Union College, Ky., 236 Union College, Neb., 236 Union College, Ν. Y., 219 Union Theological Seminary, 8, 120 f., 219, 226 Union University, 236 United States Civil Service Retirement and Disability Fund, 166 United States Coast Guard Academy, 236 United States Military Academy, 121, 230 United States Naval Academy, 122, 219, 230 Universities, see Colleges and universities Unmarried men, reduced allowances, 27, 28

Upper Iowa University, 219 Upsala College, 233 Ursinus College, 122, 230

252

INDEX

Ursuline College, 236 Utah, State Teachers' Retirement System, 123, 227 Utah, University of, 123, 220, 229 Utah State Agricultural College, 123, 220, 229 Valley City State Teachers College, 95, 228 Valparaiso University, 233 Vanderbilt University, 220 Vassar College, 124 f., 226 Vermont, University of, 230 Vesting, 163 ff., 164, 166 ff., 168 Victoria University, 220 Villa Maria College, 236 Villanova College, 221 Virginia, University of, 221 Virginia Military Institute, 233 Virginia Polytechnic Institute, 125, 230 Virginia State College for Negroes, 236 Virginia Union University, 236 Wabash College, 230 Wagner Memorial Lutheran College, 233 Waiting lists, 149 Waiting period, 7, 147, 183-225 Waivers of institution's responsibility, 149 Wake Forest College, 221 Walla Walla College, 236 Wartburg College, 233 Washburn College, 221 Washington, State College of, 233 Washington, University of, 125, 222 Washington and Jefferson College, 125, 230 Washington and Lee University, 221 Washington College, 233 Washington Missionary College, 236 Washington University, 221 Waynesburg College, 233 Wayne University, 60, 229 Webber College, 222 Webster College, 233 Wellesley College, 19, 126 f., 222 Wells College, 222 Wesleyan College, 234 Wesleyan University, 222-23 Western College, 223 Western Maryland College, 234 Western Ontario, University of, 127, 226 Western Reserve University, 223 Western State Teachers College, Michigan, 80, 229

Western Union College, 234 Westminster College, Mo., 234 Westminster College, Pa., 234 West Texas State Teachers College, 117, 229 West Virginia State College, 234 West Virginia University, 234 West Virginia Wesleyan, 223 Wheaton College, III., 127, 230 Wheaton College, Mass., 127, 226 Whitman College, 224 Whittier College, 234 Whitworth College, 234 Wichita, Municipal University of, 128, 226

Widows' benefits, 24, 26, 172; old-age and survivors' benefits of Social Security Act, 154, 170, 174-79 passim, 180 Wilberforce University, 100, 101, 229 Wiley College, 236 Willamette University, 129 f., 226 William and Mary, College of, 234 William Jewell College, 234 William Penn College, 236 Williams College, 224 Wilmington College, 234 Wilson, Professor, 49 Wilson College, 224 Winthrop College, 224 Wisconsin, University of, 130, 229 Wisconsin State Retirement System, 21, 130 f., 227 Wisconsin State Teachers College, Eau Claire, 130, 229 Wisconsin State Teachers College, La Crosse, 130, 229 Wisconsin State Teachers College, Milwaukee, 130, 229 Wisconsin State Teachers College, Oshkosh, 130, 229 Wisconsin State Teachers College, Platteville, 130, 229 Wisconsin State Teachers College, River Falls, 130, 229 Wisconsin State Teachers College, Stevens Point, 130, 228 Withdrawal provisions, 161, 162-71; public retirement plans, 21, 165-70; cash settlement vs. complete vesting, 163 ff., 166 ff.; penalty for withdrawal, 163; complete vesting taught by H. S. Pritchett, 164; restricted benefits in private plans, 170 f.

INDEX Witteilberg College, 234 Wofford College, 234 Wooster, College of, 225 Worcester Polytechnic Institute, 225 Workers, use of term, 5; see also Maintenance employees World Almanac, 3 Wyoming, University of, 234

253

Xavier University, Ohio, 234 Xavier University, La., 236 Yale University, 19, 131-33, 225 Yankton College, 234 Yeshiva College, 234 York College, 234 Young Men's Christian Association Retirement Fund, 133 f., 227