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NEW&JERSEY . A 2.
STATE CHAMBER W*
OF Goyence excefºre.
BUREAU OF STATE RESEARCH C LINTO N E U I LD 1 N G. N. Evv ARK
T E L. M. A R K ET 1 O7
November 15, 1918.
To the Board of Trustees of the
New Jersey State Chamber of Commerce.
SIRs: The Bureau of State Research herewith transmits the complete
report on its investigation of the teachers’ retirement systems in New Jersey.
The first part is historical in scope. It shows how the two retirement systems,
the Retirement Fund and the State Pension, began, and developed from year to
year, and what fundamental mistakes in their construction and operation were
committed.
In the second and third parts an analysis of the present condition of the two
systems is made, the defects of the latter are shown, various practical remedies
are discussed and the fundamental principles of a sound system are outlined.
As the fallacies described are common to most of the pension funds in this
country and the principles described are such as govern all sound pension systems
in private as well as public employment, it is hoped that the report may be of more
than local interest. -
The report has been prepared by Paul Studensky, Supervisor of the Pension
Investigation, who is a careful student of the pension problem, from data collected
by the Bureau of State Research for thºſºension-aid Retirement Fund Commis-
sion, created by the Legislature of the State of Yew Jersey under Joint Resolution
3, Laws of 1918, and used with the latter's permission.
Large parts of the investigative and editorial work were ably performed by
Mr. R. K. Bissell, Mr. Alexander Gourvitch, and Miss Julia R. Levy, members of
the Staff of the Bureau of State Research.
Respectfully,
cº-
Secretary.
Associate Director.


Teachers’ Retirement Systems in New Jersey
Their Fallacies and Evolution
Report prepared by
PAUL STUDENSKY
Supervisor of the Pension Staff of the Bureau of State Research
Contents
PAGE
Introduction ~~~~~~~~~~~~~~~~~~~~~~ 3
PART I. Evolution of the *- • * * - - - - * * * * - - - - - - - - - 7
PART II. Present Condition o the system. - - - - - - - - - - - - - * º - - - - - - º 'º - - - - - - - - - - 53
PART III. Fundamental Principles, Summary of Criticisms and Practical
~ - ... 65
Remedies...........................................
STATE RESEARCH
Section 2, Supplement to Vol. V. ‘NEWJERSEY” STATE RESEARch, No. 5, February, 1918
BUREAU OF STATE RESEARCH
+ Clinton Bldg., Newark, New Jersey
Consecutive No. ſo
Teachers’ Retirement Systems in N ew Jersey
Their Fallacies and Evolution
Introduction and Part I
Evolution of the Systems
CHAPTER I–Establishment of Retirement Fund and Its Fallacies
CHAPTER II—Failure of the “One Per Cent” Fund
CHAPTER III—Compulsory Clause and the Confusion of 1906
CHAPTER IV—Period 1907–1917
CHAPTER V–The State Pension and Its Effect on the Fund
Appendices
Part II. “Present Condition of the Teachers' Pension and Retirement Systems”
- will be published as Consecutive No. 12

Table of Contents
INTRODUCTION
* . Part I. Evolution of the Systems
CHAPTER I. Establishment of Retirement Fund and Its Fallacies
Evolution of teachers' retirement movement in the United States, p. 7. Movement in New Jersey, p. 8. Provisions
of law of 1896, p. 8. Fundamental fallacies, p. 9. Conflict of opinions, p. 13. Could a sound actuarial system have
been established?, p. 15.
CHAPTER II. Failure of the “One Per Cent. Fund'
Period 1896—1899, p. 17. Period 1900–1903, p. 18. Third period, 1903–1906, p. 22.
CHAPTER III. Compulsory Clause and the Confusion of 1906
Report of investigating commission, p. 24. Framing the bill, p. 25. Passing the bill and endorsement by actuary,
p. 27. Confusion created by Act of 1906, p. 29.
CHAPTER IV. Period 1907–1917
Act of 1907 at first fails to improve the situation, p. 32. Great membership campaign at end of 1908, p. 34. Increase
of liabilities and decrease of annual surplus, p. 35.
CHAPTER V. The State Pension and Its Effect on the Fund
APPENDIx A. “Article by an Eminent Actuary”—appeared in the Newark Evening News of May 20, 1896
APPENDIx B. “False prophets. Predictions of ‘experts' and “actuaries’.” (Extract from Miss E. A.
Allen's report to the State Teachers' Association in 1902.)
APPENDIx C. “As to Bankruptcy.” (Extract from Miss E. A. Allen's report to the State Teachers'
Association in 1905.)
APPENDIX D. Teachers’ Retirement Fund. Number of annuities granted, number of deaths, average
ages, length of service and annuity for each year since 1897
APPENDIX E. Teachers' Retirement Fund. Receipts, disbursements, surplus and capital of the fund for
each year ending June 30, from 1897 to 1917 .
APPENDIX F. Teachers’ Retirement Fund. Tabular statement of the development of legislation .
APPENDIX G. State Pension. Tabular statement of the development of legislation .
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Introduction
The teachers' retirement situation in New Jersey
presents a serious problem. The retirement is taken
care of by two systems: the Teachers’ Retirement
Fund, supported by contributions of the teachers,
and the Thirty-five Year Service Pension, paid at the
expense of the state. TMany teachers are dissatisfied
with the operation of these systems. There are school
authorities which find that certain features unfavor-
ably affect the efficiency of the schools. Citizens, not
connected with the school system, criticize the char-
acter of the benefits provided and the methods by
which they are financed. Legislators feel that public
interests have not been sufficiently safeguarded in
these systems and that some adjustments in the laws
governing the teachers' retirement are necessary.
As a result of this dissatisfaction and criticism,
actuarial investigations of these systems have been
made. The investigation of the Retirement Fund,
made by Mr. D. P. Fackler for the State Teachers'
Association, showed that the fund has liabilities far
in excess of its assets, is in an unsound financial con-
dition, and has only a few years to live on the present
basis. The actuarial valuation of the Thirty-five Year
Service Pension, presented in the Report of the Legis-
lative Commission [Appendix E], showed that the
liability of the state under the system amounts to
$24,350,000. The report of the Commission which
was based upon the investigations made for the Com-
mission by the Bureau of State Research, showed that
the method provided under the system for meeting
this stupendous liability is fundamentally unsound
and will result for the state in a tremendous and ever-
increasing burden.
In view of this serious situation, it is important that
a careful study be made by the teachers and the school
authorities of the history and defects of these systems
and of the methods of improving the situation. The
following monograph, prepared by Mr. Paul Studen-
sky, who for several years has been studying the pen-
sion systems in this country and abroad, presents a
valuable contribution to the study of the complicated
situation which has arisen in New Jersey." The mono-
graph was based upon the data collected for the
Pension and Retirement Fund Commission and used
with the permission of the Commission.
As the writer points out, a retirement system must
it must protect the
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Mr. Alexander Gourvitch from the annuity records which were placed
at their disposal by the courtesy of the Secretary of the Retirement
-Fund.
teachers and their dependents against the contin-
gencies of old age, disability, death and, to some ex-
tent, resignation and dismissal, and meet the economic
needs of the various groups amongst them in an equi-
table manner; and it must also improve the efficiency
of the schools by relieving them of the superannuated
and disabled who can no longer perform their duties
efficiently, by attracting better abilities into the
service and promoting the esprit de corps of the per-
sonnel. To perform these functions it needs consid-
erable resources, which, as the experience of the world
shows, must be supplied by both the teachers and the
city or state in an equitable proportion. Each mem-
ber must contribute in accordance with the cost of his
prospective benefit. The contributions of the two
parties should be equitably distributed over the entire
period of the teacher's service in such a way as to
constitute an adequate reserve against the heavy
liabilities which would mature some time in the future,
when the teachers who are now young would apply
for retirement in large numbers, and as to assure at
all times the stability of the system. In a word, the
system must be sound, from a social, economic, and
financial point of view.
These fundamental principles were not recognized
at the time the two systems were established. The
movement started with an attempt made by a group
of teachers to secure a pension entirely at the expense
of the public. There were too many objections to the
establishment of such a pension. When the measure
failed to pass, these teachers secured in 1896 legisla-
tion establishing a retirement association supported
entirely by contributions of one per cent. Of salary
from such teachers as would elect to become members.
The fund was established for the benefit of a few
old teachers whose condition was pitiable. It was not
devised to meet the economic needs of the majority
of the teachers. To the majority it was a sacrifice
and an expense, for which they received little or no
return. Instead of charging each member according
to his age and the cost of his prospective benefits, and
setting aside the contributions of the younger teachers
in order to assure the payment of their future benefits,
the fund charged all at the same rate of one per cent.
of salary, which resulted in using the contributions of
the younger teachers for the payment of benefits to
the older. In the course of years the number of older
teachers who were granted annuities has increased
and so has the number of contributors, but the char-
acter of the fund has not changed. It still taxes the
young in favor of the old, without making any ade-
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quate financial provision for meeting its liabilities
towards the thousands of prospective annuitants
among the younger teachers. It has been founded,
and still continues to operate, on the unsound assess-
ment insurance plan which has wrecked many frater-
nal organizations and disappointed thousands of mem-
bers, who never received any benefit in return for their
contributions.
One of the principles upon which the fund is based
is the so-called ‘tontine' principle, according to which
those who withdraw from the service before retirement
through resignation, dismissal, or death, forfeit for
themselves and for their dependents all their contribu-
tions, these contributions being used for the payment
of benefits to those who remain in the service until
retirement. This principle has been condemned in
the insurance world, the insurance companies being
now compelled by law to provide certain cash sur-
render benefits in case the policy lapses because of
non-payment of premiums or for any other cause. It
has survived practically only in the unsound pension
funds. The Teachers’ Retirement Fund, which is
based upon this principle, ignores the fact that those
who resign or are dismissed are no less exposed to the
contingencies of old age and disability than are those
who remain in the service, and that if they lose their
past contributions, they have to start anew in their
difficult efforts of protection against these contin-
gencies; and that it is not fair to deprive the de-
pendents of the contributions paid by the deceased
at the time when they may need them most. The
majority of the teachers, especially the younger
teachers, will withdraw from the service before retire-
ment. To them and to their dependents the Fund is
neither a good insurance nor a good philanthropy.
The Service Pension was established in 1903 for the
benefit of a certain teacher in Jersey City. It required
a continuous service of 40 years in the same district,
a requirement which exactly covered his case. During
the first two years, only two other teachers could
qualify under this high requirement. The system was
gradually broadened, until now it requires only 35 years
of service, with a minimum of 25 years in the state,
and thus admits a much larger number of old teachers.
Just as the Retirement Fund, it has been founded on
the ‘tontine' principle, the only difference being that
those who resign or are dismissed, and the dependents
of those who have died before retirement, forfeit, not
their contributions, but their pension rights. The ma-
jority of the teachers withdraw from the service with-
out a pension and receive no benefit from the system.
To summarize, both systems fail to meet the eco-
nomic needs of the majority of the teachers. Only a
system that would offer withdrawal benefits, besides
the annuity or pension, would in one form or another
benefit every teacher in the system.
y
Both systems fail to effectively relieve the schools
of dead wood and improve the efficiency of the service.
A teacher may receive an annuity of 60% of his salary
from the Retirement Fund (up to $650) and a pension
of 50% of his salary from the state, or altogether IIo9%
of his salary, except that in cases of retired teachers
who have been drawing a higher salary than $1300
the combined benefit will be below IIo9%. As the
writer shows, the majority of the now retiring teachers
receive a total benefit equal to their salary or even
exceeding that amount. The prospect of such a double
benefit is very attractive. Teachers who have 35 years
of service to their credit, but are still capable of teach-
ing efficiently for a few more years, and who would
not have applied for retirement if they were entitled
only to half pay, are now eager to retire, since by retir-
ing from work they can obtain more than the salary
they earned while working. They bring pressure upon
the Fund and usually secure both an annuity and a
pension. On the other hand, those who can no longer
perform their duties efficiently, but who have not
completed 35 years of service, and who, therefore, can
by retiring obtain only the annuity, but not the pen-
sion, are anxious to postpone their retirement until
the time when they can also qualify for the pension.
As a result, the efficiency of the schools suffers on
account of early retirements of efficient teachers as
well as postponed retirements of invalids.
Most striking are the deficiencies of the two systems
in their methods of financing. The Retirement Fund
was established on the so-called ‘assessment insurance'
plan, which is one of the most primitive forms of in-
surance, and has wrecked many fraternal and mutual
aid organizations. A large number of teachers, al-
together about 2,500, were assembled in the fund in
1896 and were assessed at a rate which permitted the
payment of benefits to a few old teachers and even
left a certain surplus, but which was not sufficient to
assure the payment of benefits to all the prospective
annuitants among the contributors of the fund. As
the younger teachers grew older, each year a certain
number of contributors applied for retirement and
were added to the annuitants already on the retired
list, and the number of beneficiaries increased, until
the assessments of all the active members were no
longer sufficient to support them. Then the managers
of the fund either brought new members into the sys-
tem and assessed them towards the support of the old
annuitants, or increased the rates of assessment, or
applied some other makeshift, which would relieve
the situation for a few years, until, along with the fur-
ther increase in the number of beneficiaries, another
catastrophe would threaten.
Four times was the system near a breakdown—in
1899, in 1902, in 1906, and in 1908—and each time
some emergency measure was applied. None of these
S T A T E
R E S E A R C H 5
measures was adequate to put the fund on a per-
manent basis and to enable it to satisfy the future
demands of its ‘policyholders'. Another cycle is now
approaching. And already a further increase of assess-
ments is suggested by the managers. Just as the
makeshifts previously applied, this measure would
only permit for a few more years to continue the pay-
ments to the old annuitants and to grant new annuities
to a few old teachers, but would not place the great
majority of the present contributors in any safer posi-
tion with respect to their own future benefits. So long
as the system continues to operate on the same unsound
basis of assessing the active contributors in favor of the
retired members, instead of setting aside the contribu-
tions of each member to a special reserve from which
his own benefit could be paid in the future—further
and further increases of assessments will be necessary.
Eventually the rate of assessment would exceed
IO% of salary. It would be far above the normal rate
which would have been necessary under a sound
method of financing and it would be altogether too
burdensome for the teachers. The state can no longer
afford to compel the new entrants into the service to
become members of a fund which will either fail to
meet the obligations towards them or charge them
with an excessive rate of assessment and place upon
them the burden of paying for the failure of the fund
to assess its members at an adequate rate and to apply
sound methods of financing. Taking this view the
Pension and Retirement Fund Commission recom-
mends in its report to the Legislature:
That the state withdraw its implied sanction of the
Teachers' Retirement Fund in requiring all new entrants into
the system to join and contribute to the Fund; or as an alter-
native, that the prospective benefits of the Fund be adjusted
to represent their just relation to pastand future contributions.
The State Pension is financed on the cash disburse-
ment basis: An appropriation is made each year of the
amount which would be necessary for the payment of
pensions which are due that year. No reserve what-
ever is provided against the heavy payments of the
future, when many of the present active teachers would
apply for the pension. The appropriation will increase
from year to year. It now amounts to about a quarter
of a million dollars annually, or about 1%% of the
aggregate salaries, but will in a not distant future
exceed a million dollars annually and eventually
amount to more than Io96 of salaries, i. e., to three
or four million dollars annually. The burden on the
state finances would become unbearable.
After conclusively showing that no further make-
shifts in financing the Fund as well as the State Pen-
sion would improve the situation the writer raises the
question: Shall the Retirement Fund be placed upon
a sound financial basis at the expense of the teachers,
and the State Pension be reorganized on a reserve basis
at the expense of the state? or shall, instead of the two
separate systems, one sound system be established by
means of joint contributions of the teachers and the
state?
In the first case, the assessments of the teachers
would have to be increased several times their present
rate. Besides paying, from now on, a much higher
normal contribution for their future benefits, the
teachers would have to pay this contribution for the
past years, when they contributed at the inadequate
rate of 2% to 3%, and, moreover, they would have to
supply the funds necessary for the payment of benefits
to the old annuitants. The total deficiency which
they would have to cover would amount to many
millions of dollars. Is there any justification for the
teachers carrying all this burden to support a system
which duplicates the pension provided by the state?
In the case of separate reorganization, the state
would also have to increase its annual appropriation
to several times the present amount and contribute
over a million dollars annually. The total liability
against which it would have to provide a reserve, ex-
ceeds $24,000,000. Is there any justification for the
state carrying this tremendous burden in order to main-
tain a system which duplicates the benefits provided by
the Fund, does not benefit the majority of the teachers,
and does notwork to the best advantage of the schools?
In the second case, it would not be necessary to
increase the contributions of the teachers, as well as
the appropriation of the state, as much as in the
former case, because the two parties would help each
other to establish a sound system. By means of their
joint contributions a system may be established that
would meet the economic needs of every member of
the system, effectively relieve the schools of the super-
annuated and disabled and improve the efficiency of
the teaching staff, and benefit the public at large, a
system that will be jointly controlled by the teachers
and the state and established on a firm financial basis,
upon which it could neither become bankrupt nor too
burdensome for the teachers and for the state. The
decision of this question rests with the teachers, the
school authorities, and the people of New Jersey.
Thousands of teachers in this state expect some time
in the future to obtain an annuity from the Retirement
Fund and a pension from the state. They believe in
the solvency of the Fund and in the permanency of the
State Pension. They do not see, what others do, that
the Fund will be unable on its present basis to meet
the obligations towards them in the future, and that
the State Pension is bound to become so burdensome
as to necessitate its discontinuance.
The attitude of the managers and many members of
the Fund may be compared with that of the managers
and inhabitants of a temporary edifice, who in the
course of years forget that the house has never been
6 ‘ N E w J
E R S E y
y
built for permanent use. The building was enlarged
since the time of its erection, here and there perhaps
some changes and repairs were made, but the founda-
tion, the material used, and the temporary character
of the structure were never changed. Several times
the collapse of the building was averted by temporary
buttressing.
They fail to see that the process of destruction has
far advanced, that new buttresses would not help, that
the walls are cracking, the roof is falling through and
the entire structure threatens to collapse. To them it
seems a strong and imposing old building. Because it
existed so long they believe it will exist indefinitely.
The only way of convincing the persistent optimist
is to show him the weakness of the foundation upon
which the system was built, the defects of the original
plan of construction, the inadequacy of subsequent
repairs, which never changed the temporary character
of the system, and its present weakness. Then, per-
haps, he may realize that the system has outgrown
its usefulness and has become a danger, and that a new
permanent structure must be erected.
The New Jersey systems are not the only systems
in this country which have been built upon an unsound
foundation. The majority of the systems in the
United States and abroad have gone or are going
through a similar experience. Many systems have
already taken steps to reorganize on a sound founda-
tion, and the New Jersey systems will also reorganize
in the light of this movement. It is to help this move-
ment, not to criticize any persons, that the fallacies of
the New Jersey systems are pointed out in this mono-
graph, and certain sound principles are expounded.
Realizing that no other method could better help to
dispel the illusions and prejudices and to clarify the
situation, the writer has treated the subject histori-
cally. The application of this method to the study of
the Teachers’ Retirement Fund involved considerable
difficulties, as the history of the Fund is extremely con-
fusing. No other pension system, either in this coun-
try or abroad, has been, within a short space of time,
so many times amended, repaired, and tackled in vari-
ous ways. As a result, shortcomings in the presenta-
tion were inevitable. This notwithstanding, it is
hoped, that this study will be helpful to those who
desire to know the true condition of the systems and to
find a way out of the entangled situation.
The monograph consists of two parts: the first part is
historical; the second deals with the present condition.
The historical part is divided into five chapters:
the first describes the origin of the Fund and analyzes
the fundamental fallacies in its construction; the
second treats of the period from 1896 to 1906, the
buttressing applied to the ‘one per cent. fund', and
its final collapse; the third chapter describes the at-
tempt made in 1906 to erect a new fund instead of the
old, and the confusion created thereby; the fourth
chapter covers the history of the ‘two, two and one-
half and three per cent. fund’ from 1907 to 1917, and
the fifth presents a history of the State Service Pension
and a description of its effect upon the Fund. Docu-
ments, tabular statements, and statistical tables are
presented in the Appendices.
The second part containing the analysis of the pres-
ent retirement situation will appear in the next issue
of ‘New Jersey' State Research, Consecutive No. 12.
SERIES OF PENSION REPORTS AND BULLETINS
PUBLISHED BY THE
BUREAU OF STATE RESEARCH
OF THE
NEW JERSEY STATE CHAMBER OF COMMERCE
Preliminary Report of the Pension and Retirement Fund Commission
State Research. Consecutive number 9, 1918. 20 p. Covers the retirement systems for teachers, police,
firemen, and other local employees.
Supplementary Report of the Pension and Retirement Fund Commission
State Research. Consecutive number 8, 1918.
I6 p. Contains a digest of the bill for the retirement of
employees of the State of New Jersey and an estimate of cost of the proposed system.
Introducing Order into Chaos.
Legislative Index, Vol. I5, No. 8, March 25, 1918. A review of what has been accomplished by six months
of investigation of Pension and Retirement Funds and what must be done in the future.
Teachers' Retirement Systems in New Jersey, Their Fallacies and Evolution
Introduction and Part I.
Evolution of the Systems.
State Research. Consecutive number Io, I918.
48 p. A monograph prepared by Mr. Paul Studensky, Supervisor of the Pension Staff of the Bureau of
State Research.
Introduction to the Monograph on the Teachers’ Retirement Systems in New Jersey, Their Fallacies and Evolution
A reprint. I6 p. pamphlet.
Police, Firemen's and Other Local Employees' Pension Systems in New Jersey
State Research. Consecutive number II, 1918. 24 p. Prepared under supervision of Mr. Paul Studensky.
Chapter on methods of financing and condition of the funds, by Mr. Alexander Gourvitch. Chapter
on development of legislation and character of benefits provided, by Mr. R. K. Bissell.
CHAPTER I
Establishment of Retirement Fund and Its Fallacies
Evolution of Teachers’ Retirement Movement in the United States; Mutual Aid Associations; Attempts to secure a pension at
public expense; Collapse of Mutual Aid Associations; Hope in Legislation; Movement in New Jersey; Provisions of law of 1896;
Fundamental fallacies; Deficiency on account of older teachers; Deficiency on account of younger teachers; Increase of deficiency
because of new members; Illusion as to point of maximum demand; Outside sources an uncertain basis; Discretionary power
of the board as safeguard against disbursements exceeding the receipts; Belief that actuarial methods are inapplicable to the
Fund; Belief that the Fund could go on without state aid; Idea of state aid overshadows idea of actuarial soundness; Conflict
of opinions; Criticism of the philanthropy, Criticism of the insurance; Could a sound actuarial system have been established?
What could an actuarial system be like? Obstacles to establishment of actuarial system; Obstacles to actuarial reorganization.
Evolution of Teachers’ Retirement Movement
ſin the United States
To understand better some of the features of the
New Jersey Teachers’ Retirement Fund, it is impor-
tant to consider its connection with the teachers'
retirement movement in this country. The movement
in the United States developed under the influence of
two considerations. First, there was the idea that the
teachers could provide against their old age and dis-
ability by means of mutual aid. The development
was further influenced by the fact that abroad the
teachers were retired partly or entirely at the expense
of the state, and that in this country the army, the
navy, and in some cities policemen and firemen, were
pensioned for their services to some extent at public
expense, and that the teachers deserved a pension
just as much as the policemen and firemen.
Mutual Aid Associations. The first mutual aid
associations among teachers provided funeral benefits
and a small life insurance. They operated on the pure
assessment plan, which is the most primitive and im-
perfect plan of insurance. They required no regular
annual contributions, but assessed their members
whenever necessary. They had no capital, and they
considered capital unnecessary. The first association
of this type was established in 1869 in New York City,
under the name of the ‘New York City Teachers
Mutual Aid Assurance Association’.
A further development of the mutual aid movement
was the establishment of associations providing tem-
porary relief in the form of sick benefits, and finally,
the establishment of associations providing per-
manent relief in the form of annuities to teachers who
have reached old age or have become permanently
disabled. The teachers of New York City and
Brooklyn were the pioneers of this movement. They
established their voluntary mutual aid and annuity
associations in 1887. The establishment of the New
York Association and of other annuity funds which fol-
lowed, was momentous. It answered a great need
among the teachers. And it set before both the
teachers and the public the problem of retiring the
aged and disabled teachers, in this manner paving
the way for a great retirement movement.
The provisions of the funds in various cities were
patterned after the provisions of the New York City
fund; an annuity of $400 to $600 was provided after
30 or 40 years of service, or before in case of disability.
Members were required to contribute one per cent. of
salary. This income was to be supplemented by ar-
ranging entertainments and bazaars and by securing
voluntary contributions from public spirited citizens.
Attempts to secure a pension at public expense. Along
with the development of the mutual aid and annuity
associations, the teachers were trying to secure legis-
lation by which the cities or the state would pension
the teachers entirely or partly at the public expense.
Attempts to secure such legislation were made by the
teachers of New York City and Brooklyn as early as
1881. However, the plan of pensioning teachers at
the public expense encountered too strong an opposi-
tion to be overcome.
Collapse of mutual aid associations. Hope in legis-
lation. The mutual aid and annuity associations were
fundamentally unsound. Their promoters thought
that they could operate them without using mortality
tables and without knowing the cost of annuities.
They also considered it possible to require the same
low rate of dues from all members and pay the same
annuities to all, regardless of the differences in their
age.
With such serious defects these associations could
not exist long. During the first few years, when re-
tirements were not numerous and the disbursements
were small, their income appeared more than adequate.
Soon, however, the insufficiency of their income ap-
peared. They could no longer keep their promises,
and, eventually, became bankrupt. The leaders of
the teachers attributed the collapse of these associa-
tions not to any fundamental defect of the system,
but to the failure of the teachers to join the enterprise
8 * N E W J
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y
in sufficiently large numbers. It was thought that
if new organizations were established on a similar
plan by legislative action, and if participation in them
were made compulsory for all teachers, they would
obtain a membership large enough to make the enter-
prise a success. Bills providing for the establishment
of such retirement funds were framed by the teachers
of New York City, Brooklyn, and Buffalo. The pas-
sage of these bills was secured in 1894 and 1895.
Movement in New Jersey
The teachers' retirement movement in New Jersey
followed a similar line of development. Seeing that
policemen and firemen obtained pension legislation, a
few active teachers decided to try to obtain the same
for the teachers. The leader of this movement was
Miss Elizabeth A. Allen, the present secretary of the
Fund. Miss Allen described the inception of the
movement as follows:*
Three women met on a street corner in Hoboken—that
“alien' among American cities. They were public school
teachers. They were not old women, though they were not
young teachers. A jocular citizen called back: “Now, there's
going to be mischief.” Mrs. Moore, vice-principal of No. 1,
was saying to (Miss Allen) the vice-principal of No. 6: “I
have been talking with Miss McCausland about pensions.
Policemen and firemen are pensioned—why not public school
teachers?” Thus, in 1890 this self-constituted committee of
three women began in New Jersey the teachers' pension
movement. . At the next session of the legislature (1891)
our bill was introduced. It was a pension bill pure and simple,
and applied only to cities. Our faith in its justice, our con-
fidence in its immediate success, were not less pure and simple.
The bill failed to pass. It was followed in 1894 and
I895 by other bills of like nature. They all provided
that the teachers should be pensioned entirely at the
expense of the public, but they failed of enactment, in
spite of the vigorous campaign waged by the teachers.
After these defeats, the teachers gave up the idea
of securing a state pension, because they realized that
public opinion was strongly opposed to it, and they
decided to try an attack at a different angle and for a
different form of retirement organization. They de-
cided to frame a bill providing for the establishment
of a “mutual old age and invalid insurance,” as Miss
Allen called it,” which would be supported entirely by
dues from the teachers themselves and would involve
no expense for the state, for they realized that public
opinion was not opposed to the mutual aid associa-
tions. They sought to establish such an association
by law, instead of establishing it privately, in order to
obtain the use of the school machinery of the state
for collecting the dues and thus to avoid the diffi-
culties which the private mutual aid associations
experienced in the matter of collecting the dues. In
return for this privilege, they offered the state the
role of administrator and custodian of the fund, a
feature which would place upon the state a certain
responsibility for the fund, and would add to the
teachers' confidence in the fund. -
The bill embodying this principle was accepted by
the legislators very favorably, because unlike the
other bills, it did not call for 'state aid'. They were
willing to permit the fund to use the school machinery
for collecting membership dues, since the fund was to
be supervised by the State Board of Education. The
bill passed both houses almost unanimously and
became a law without the signature of the Governor,
on March II, 1896.”
Provisions of Law of 1896
The law provided that an annuity of one-half of the
salary, minimum $250, maximum $600, should be
granted to any teacher who had taught for twenty
years and become “incapacitated from performing the
duties of a teacher.” The Fund was to consist of 1%
from salaries of the teachers who elected to come under
the law, and also of 1% of all annuities, “of moneys
and property received by donation, legacy, gift, be-
quest and otherwise,” and of interest upon invest-
ments. It was to be administered by a Board of
Trustees consisting of the State Superintendent, mem-
bers of the State Board of Education, and two teachers
chosen by the State Teachers' Association. The State
Treasurer acted as Treasurer of the Fund. A teacher
who elected to become a member was bound to remain
in the Fund so long as he remained in the service. If
he resigned his position before he had contributed for
5 years, he forfeited all his contributions; if he resigned
his position after having been a member of the Fund
for 5 years or more, he was entitled to a refund of one-
half of his contributions, but without interest.
The law contained two clauses which were intended
as financial safeguards, but were very naive. One of
these clauses provided that any member who would
retire within the first five years of the Fund's opera-
tions should pay in the aggregate at least 20% of his
salary, that is, a teacher with a salary of $600, must
pay $120 before he can receive from the Fund the
annuity of $300. In reality the $120 would cover only
about one-thirtieth of the cost of this annuity, which
has a value of $3,417.60 if granted to a woman teacher
at age 60 and a still higher value if granted at an earlier
age. This utterly inadequate provision was evidently
considered by the framers of the bill as a very effective
and sufficient safeguard, for it was not required in the
case of the teachers who would retire after 5 years.
There was apparently an idea that in 5 years the Fund
would be so large that such a restriction would become
unnecessary.
* Review of Reviews, 1897, page 704.
* New Jersey Laws, 1896, Chapter 32.
S T A T E
R E S E A R C H 9
The other clause was put in for a case of emergency
and provided that if at any time the funds become in-
sufficient, the annuities should be paid in the order in
which they were granted, first to the oldest annuitants
and down to as many annuitants as possible, and that
all other annuities should be discontinued until suffi-
cient funds were obtained to permit paying them to-
gether with interest. This curious safeguard was in-
tended only for temporary exigencies. The possibility
of an increasing insufficiency was not foreseen, the
opinion evidently being that ample funds would
speedily be forthcoming as soon as insufficiency arose.”
Fundamental Fallacies
All these provisions were patterned very closely after
the provisions of the private annuity and aid associa-
tions, the only differences being that the Retirement
Fund was state-wide, that it enjoyed legislative pro-
tection and that it became an official part of the school
system, that is, it was controlled by the state and could
use the administrative machinery of the school system
for the collection of dues. It inherited all the funda-
mental errors of these associations.
Deficiency on account of older teachers. The primary
purpose of the Fund was to retire immediately some of
the old teachers, who were so worn out that they could
no longer teach, and to provide a means of retiring in
the near future those who would soon become worn
out." The secondary purpose was to provide annuities
in the more distant future to those members who might
then become disabled. In carrying out its primary
purpose on the unsound basis on which the fund was
established, it had to sacrifice right along the accom-
plishment of the more remote purpose. The premium
of 1% of salary, which amounted to $5 or $6 per year,
was utterly inadequaté to cover the cost of an annuity
of $250 to $600, even in the case of the youngest
teacher, who would contribute for 20 to 30 years
before applying for the annuity. It was still more
inadequate in the case of the older teachers, who had
not contributed during the many years of their pre-
vious service, and who would now contribute only for
a few years before they would claim the annuity. The
founders of the Fund hoped to cover the enormous
deficiency which the Fund suffered on their account
by using the premiums paid by the younger teachers,
who would either pay during many years before they
* The report of the Retirement Fund Department for 1904 (New
Jersey State Teachers' Association, 1904, page 160) stated: “In case
of shortage in any one quarter, annuity payments may reduce pro
rata; a reduction not necessarily perpetual, because such a deficiency
it is the office of the Department to avert.”
* Soon after the Board of Trustees organized it had before it I5
applications for annuity on file. The average age of these applicants
was 58, average length of service 35 years, average salary $502, and
probable average annuity $280. Some of these cases were pitiful and
were described by Miss Allen in her article in the Review of Reviews,
I897, page 706.
would retire, or who would altogether withdraw from
the service without claiming any annuity from the
Fund. The arrangement of making the younger
teachers pay for the policies of the older, instead of
making each teacher pay for his own policy according
to his age, was the most fundamental fallacy of the
system. This was not realized by the founders of the
Fund. They considered the arrangement only as a
noble philanthropy on the part of the younger teacher."
Deficiency on account of younger teachers. The Fund
made promises and assumed obligations which ex-
tended far into the future. It charged premiums the
payment of which was also projected far into the
future. Every member of the fund was a ‘risk' and
a liability, which some day would either lapse or
mature for payment. He was an asset both as a pres-
ent and future contributor. The total amount of
these liabilities and assets of the fund, both with
regard to annuities already granted and those to be
granted in the future, could have been actuarially
determined, if not with an absolute, at least with some
relative degree of accuracy. It appears that these
facts were never fully appreciated by the leaders of
the fund. They had only a very vague idea of the
extent of their promises and of the amount of their
future obligations, and they made no attempt to have
them actuarially ascertained, or at least to arrive at
some more definite notion of them.” When they spoke
in their annual reports of liabilities, they had in mind
only their liabilities towards the annuitants, as if they
had no liabilities to all the other active contributors,
and, furthermore, they considered only the annual
but not the total liabilities toward the annuitants.”
* “Our first aim is philanthropic,” wrote Miss Allen in her article
in the Review of Reviews, 1897. “We have hearts ready to respond to
our needy ones and hands willing to work for them.” And in her
report of 1902 (State Teachers' Association, 1902, page 237) she wrote:
“The dignity of the profession is involved. Teaching is an honor-
able, a holy calling. It must be respected, it should be revered. This
it can never be if permitted to contribute its veterans to the pauper
class. Once let the name of veteran public school teacher become a
synonym for miserable indigence, and Ichabod may well be written
upon the brow of every one of us. for truly the glory will have de-
parted.”
7 The first attempts were made by the investigating committee of
1906, and by the State Teachers' Association and the Board of Trus-
tees of the Fund in 1917, after a considerable dissatisfaction with the
Fund had developed. See pages 24 and 39.
* It was inconsistent, of course, on one hand to contend, as they
did, that the Fund would keep every promise and, on the other hand,
not to recognize these promises as liabilities of the Fund. Just how
the managers at times regarded these promises can well be shown by
the following. When rumors of impending bankruptcy of the Fund
were spreading in 1904, after Governor Murphy declared to a dele-
gation of teachers that the Fund was “on the verge of bankruptcy,”
Miss Allen wrote in her report:
“As to the ‘promises' of the Fund. What are they? The Fund
(see Sections 216 and 217 of the General Law School) promises half-
pay (minimum, $250; maximum, $600) to those teachers who may
be granted annuity so long as there is sufficient money to give such
half-pay, but when there is not enough money to do this, annuities
shall reduce to pro rata. This is the law. This covers all the prom-
IO * N E w
E. R S E. Y
y
When they spoke of assets, they had in mind only
the capital which remained from the past operations.
They used these terms in a narrower sense than is
used by the standard insurance companies. Time
and again they reported in capital letters at the end
of a year's operation that the fund had “no liabilities”
and that it had a “surplus over and above all liabilities.” "
As a matter of fact, this “surplus” was merely the
difference between past receipts and past disburse-
Iments.
They considered every member of the fund prima-
rily as a contributor and an immediate asset and not
as a prospective annuitant, a risk, a future liability,
which must be provided for. It is true that those
members who would eventually withdraw from the
fund before claiming an annuity, represented a greater
asset than liability to the fund.
But, on the other hand, those members who would
eventually apply for an annuity, represented a far
greater liability than asset, because in the first place,
they contributed, at the utterly inadequate rate of
I%, and because, in the second place, during their
service prior to the establishment of the system they
had not contributed at all, and, finally, because part
of their premiums was used for the payment of bene-
fits to the older teachers. An actuarial investigation
would have shown that the excess of liabilities on one
side, over-balanced by far the excess of assets on the
other, and that the fund, as it was constructed, started
with a tremendous deficiency from the very outset, and
that this deficiency was caused not only by the
liabilities on account of the oldest teachers, but also
on account of the youngest groups of teachers. The
managers of the fund did not realize the presence of
this deficiency and made no provision for it, because
they took no account of liabilities which would mature
only some time in the future. Each year some of the
contributors who were paying for the annuities of the
older teachers would apply for an annuity for them-
selves and would become a charge on the other con-
tributors, shifting upon them the deficiency of their
past contributions. Each year a larger portion of the
premiums paid by the remaining contributors would
be used for the payment of annuities to the older
teachers, until a day would come (and it came more
than once) when all the receipts from premiums would
be paid out” and would still be insufficient to satisfy
the growing demand.
Increase of deficiency because of new members. Like
the promoters of the private mutual aid associations,
the promoters of the retirement fund hoped to cope
with the annual increases in the annuity demands by
assuring the fund of a constant influx of new members,
especially young teachers, considering each member
primarily as a contributor and an immediate asset.
When this influx of ‘young blood’”. failed to take place
they tried to bring it about by legislative action. One
of the main purposes of every one of the six bills “
which they framed, and the passage of which they se-
cured, was in some way or other to increase the mem-
bership of the fund and thereby to increase its immedi-
ate income. Of course, every time they brought in new
members, they increased the real liabilities of the fund
far more than the assets. And so they went on, meeting
one emergency after another by unconsciously shifting
the deficiencies of one group of contributors to the
other and increasing the total deficiency of the fund,
until a day had arrived when they could do it no
longer. Then it appeared that the fund had developed
a stupendous deficiency.”
Illusion as to point of maximum demand. Like the
promoters of the private mutual aid associations, they
10 This happened in the years 1904–1908 and in I917. The dis-
bursements exceeded the receipts from premiums. The deficiency
was covered from receipts from entertainments or interest. See
Appendix Table E.
11 As it was called at the discussion before the annual meeting of
the State Teachers' Association in 1902 (see report, 1902).
12 The laws of 1899, 1900, 1902, 1903, 1906, and Igo7.
1s Mr. D. P. Fackler, the actuary who in 1917 made an investiga-
tion of the Fund, stated in his report that the liability on account of
the annuities already granted is about two and one-half million dollars.
This is only a part of the total deficiency of the Fund. The actuary
ises of the Fund. Therefore, if annuities were to be reduced to one-
half, or one-quarter, or one-tenth, or one-twentieth, etc., the Fund
would still be honorably and honestly and completely keeping its
every promise.” . tº
“What “Bankruptcy' Means, Bankruptcy in the law means in-
ability to pay legal obligations when due. It must be apparent that
as annuities under the law become due only to the extent of the money
available for their payment, the Fund can never have legal obliga-
tions which it is unable to pay. It occupies the impregnable position
of having its permanent principle protected by law, and which can-
not be encroached upon; and of being unable to incur obligations in
the form of annuities to a greater extent than it has money with which
to pay them.” . *
“Persons having the right to annuities occupy a position analogous
to a person having shares of stock of a corporation.” [According to
this statement only the annuitants are considered as stockholders of
the corporation. The thousands of contributors are not considered
as stockholders.] “If the corporation earnings are sufficient in the
judgment of its directors to authorize the payment of a dividend, a
dividend is declared and the holder of the stock then becomes entitled
to his dividends. If the earnings of the corporation are not sufficient
to warrant a dividend, or if the directors think that the interests of
the corporation would be subserved by accumulating a fund, then
the stockholders wait until business so improves as to make the
resumption of payment of dividends advisable. If failure to declare
a dividend constitutes bankruptcy, it would be safe to say that there
would be few corporations existing that have not at one time or other
been bankrupt, for dividends are constantly passed whenever business
conditions seem to require it. It must be manifest, therefore, that so
long as the permanent principal of the Fund continues to grow (and
it never decreases under the law) the bankruptcy of the Fund is a
legal impossibility.” For fuller quotation see Appendix C. ,
* For example, in the Reports of the Retirement Fund Department
in the State Teachers' Associations reports, 1902, page 247, and 1904,
page I45, and in the annual reports of the Board of Trustees of the
Fund in the New Jersey School Report, 1913, page 493, and 1914,
page II53. .
* &
did not estimate the far greater liability and deficiency on account
of present contributors.
S T A T E
R E S E A R C H II
were under the illusion that the heaviest demand will be
put upon the fund during the first few years, and that
after that the fund would reach a point where the annual
demand for annuities would be at its maximum and
would then become normal. They thought that if the
fund would be able to meet the demand during the
first few years it would have no trouble in meeting the
future demands.” They did not know that the de-
mand was bound to increase and become heavier and
heavier from year to year, that the maximum point
and normal level of demand would not be reached, and
the ‘promised land' would not be in sight, for the next
40 or 60 years, or even more; and that it was much
easier to meet the demand of the first few years, when
only a few annuities would be granted, than to meet
the heavy demands of the future, when a large number
of annuitants would be on the list, and when each
year would add new claimants to it.
No actuarial reserve. The only method which can
enable an annuity system to meet the increasing de-
mand in the future is actuarially to determine what
reserve would be sufficient to meet the demand and
then to begin to set aside each year to this reserve the
necessary amounts. Insurance companies are required
by law to carry a certain reserve, in order to protect
the policyholders. The Retirement Fund had no ade-
quate reserve. Its capital could not be termed a reserve,
for it was only a drop in the bucket when compared
with its total liabilities. In this most important re-
spect the Fund did not protect its policyholders.
Outside sources an uncertain basis. The leaders of
the fund apparently realized that the 1% premium
might prove insufficient to provide the annuities which
they promised, but they believed that they would be
able to raise sufficient funds from gifts, legacies, enter-
tainments and associate and life memberships to make
up any possible deficiency. Miss Allen wrote in her
report of 1902: 19
14 Miss Allen wrote in her article in the Review of Reviews, 1897,
page 706: “An enormous strain will undoubtedly be put upon the
Fund at the very outset, but the maximum average demand will be
all the sooner determined. We must meet it with enterprise. A
sympathetic public is back of us and will further our projects. We
shall receive bequests and donations. And heaven helps those who
help others.” This illusory belief that the maximum annuity de-
mand was almost reached has never abandoned the managers of the
Fund, as may be seen from the following statements of the Secretary
in 1902 (New Jersey State Teachers' Association, 1902, page 237):
“An enormous strain will undoubtedly be put upon the Fund during
the first few years, but the maximum annuity demand will be all the
sooner determined”; in 1906 (New Jersey State Teachers' Associa-
tion, Igoó): “We are rapidly nearing the point of maximum annuity
demand”; in 1908 (New Jersey School Report, 1908, page 27): “We
may expect to reach very soon the maximum average annuity de-
mand”; and in 1917 (November 3, address at the Dickinson High
School): “There may be a slackening of the abnormal demand of the
past few years.” The Special Investigating Committee of 1913
(page I5) reported that “the present demand for annuities is abnormal
in proportion to the number of members and will soon reach the maxi-
Can it be that New Jersey's 8,000 loyal and generous public
school teachers banded together cannot take care, in a modest
fashion, of the occasional (?) one of their members who shall
break down through age and infirmity? One per cent. Of
salaries alone will not do it. Philanthropy alone will not do it,
but both, united in a very little practical and systematic
‘enterprise' will make up the deficiency. And just here is the
place where the advocates of a sound “business plan' are
invited to step in and ‘apply their principles'. A system of
enterprises for the benefit of the fund properly organized and
the work justly distributed throughout the state, so that upon
no one section recurs the demand too frequently, would add
greatly to income and endowment.
The leaders of the Fund underestimated the defi-
ciency and they greatly overestimated the importance
of these uncertain outside sources. The Secretary
contended 1" that “the income from sources other than
membership dues would be very considerable and is a
factor capable of unlimited development.” It was a
fundamental error to promise annuities on such an un-
certain basis.
Discretionary power of the board as a safeguard against
disbursements exceeding the receipts. It appears that
the managers of the fund regarded as an important
safeguard the fact that they could exercise a discre-
tionary power in granting annuities. They believed
that they could always keep the disbursements well within
the limits of the income simply by deferring decision on
applications or by withholding the grant of new annuities.
They developed “a custom of ‘tabling' rather than
‘rejecting’ applications, because when service has
reached the eligible limit, physical status of the appli-
cant or other circumstances (adequacy of income, etc.)
may warrant a reconsideration at any time.””
Superintendent Poland, who took an active interest
in the fund during its early development, said: “The
attitude of the Board (meaning that of the Retirement
Board in the matter of granting annuities) will be
determined almost entirely by the funds available.””
Several times, when the disbursements came very
close to the income, the Retirement Board tried to
regulate and withhold retirements and by this method
to restrict disbursements.
Thus, in 1901, the Board of Trustees had I4 of such
‘tabled' applications. Some of these applications were
tabled for the reason that the particular county to
which an applicant belonged did not contribute “its
* New Jersey State Teachers' Association report, Igo.4, page I60.
17 In reality the income from these outside sources did not prove
considerable at all. During the first Io years of the Fund a total of
about $33,000 was raised from these sources, which amounted to less
than one-fifth of the amount raised from the I9% dues. During all
the 21 years of operation a total of $39,000, or only one-fiftieth of the
amount raised from membership dues, was raised from these sources.
Mr. Gregory, the Supervisor in Trenton, was right when he called
these outside sources, “but a drop in the bucket.”
mum and then decrease.”
* State Teachers' Association report, 1902, page 233.
* State Teachers' Association, Igo.4, page I59.
** State Teachers' Association, Igo2, page 272.
I2 * N E W J
E R S E Y
y
full share according to the number and ability of its
teachers.” ”
In 1902 the Board of Trustees had 23 such pending
applications. Some of these were pending since 1899.
The Secretary explained 21 that:
The action of the Board in granting or deferring to grant
an annuity must unavoidably be subject to a number of con-
ditions beyond the mere discretion of the Board and inde-
pendent of the question of eligibility on the part of the appli-
Cant. . The friends of the fund are striving through proper
means to increase the income of the fund and in accordance
with the measure of their success will additional annuities be
granted. To defer a decision is not to reject the application.
In 1904 the Board had 23 applications pending,
Some of which were tabled from year to year since 1899.
The explanation given by the Secretary was that:
In view of the frequent damaging assaults to which the
fund has been subjected, a wise business policy dictates that
during such attacks all applications be held in abeyance until
the slanders have been refuted and confidence restored.”
Again in 1916 they had tabled an abnormally large
number of applications, 59 in all.
The result of this procedure of deferring decisions
and allowing applications to pile has invariably been
the same. It aroused dissatisfaction among the appli-
cants who were kept on the waiting list in spite of their
eligibility to the annuity. Rumors would spread
among the members that the fund is unable to meet
the demands. A movement of protest would be
started. Then in order to restore the rapidly failing
confidence of the members in the solvency of the fund,
the Board of Trustees would find itself compelled at
Once to grant the pending applications.” Thus, the
method of withholding decision on the applications
invariably proved ineffective for any considerable
length of time to restrict the natural growth of the
annuity roll and of the annual disbursements.
Belief that actuarial methods are inapplicable to the
fund. The managers of the fund believed that actu-
arial methods, involving mortality tables, etc., were
inapplicable to their fund, because an actuary could
not foretell how much money would be raised from
entertainments and donations, how many legacies
might be obtained, how many applications for annuity
might be granted by the Retirement Board, nor could
he tell what amounts would accrue to the fund from
lapses and what other uncertain conditions might
come about. They thought that mathematical rules
were just as inapplicable to their fund as they were to
universities, churches, hospitals, and charities, and
that the actuaries were “not experts or actuaries of the
generous hearts of the American people, or of the
loyalty and enterprise of the public school teachers of
the State of New Jersey.”” They believed in uncer-
tain resources, broad restrictions, vague term ‘in-
capacity', discretionary grants of annuity, uncertain
mortality, and uncertain lapses. They thought that
the salvation of the system lay in those uncertain
conditions, and they rejected the suggestion of actu-
aries to found the annuity system on more certain
factors.
Belief that fund could go on without state aid. Some
of the leaders believed that a fund managed “by the
teachers and for the teachers” was the most desirable
system. They wished to give the teachers a greater
representation in the management of the fund. They
did not ask for state aid to pay the annuities, believing
that state aid might tend rather to decrease than to
increase the teachers’ control over the fund.” The
* The report of the Secretary of the Board of Trustees (New
Jersey School report, 1901, page 370) contains the following passage:
“During the past year not one application for annuity has been
rejected, but in several cases it has been necessary to defer the declara-
tion of annuities in order that the money at the command of the Board
might be more equitably distributed throughout the state. While it
has been the policy of the Board to confer the benefits of the Fund
upon applicants for annuity without reference to the amounts con-
tributed by the section from which the applicant for annuity comes,
it is but just to modify this rule in future, by some consideration of
the means furnished, or, rather, the disposition to furnish means by
certain localities, urging the retirement of their teachers, while making
no endeavor to furnish their just share of the means necessary to retire
them. It is but right that the richer counties shall aid the poorer
ones, but it is equally just and imperative that each county do its full
share according to the number and ability of its teachers.”
* New Jersey School report, 1902, page 273; for full quotations
See page IQ.
* State Teachers Association, Igo.4, page 159; for fuller quotations
See page 43.
* For a description of such an incident in 1904 see page 23, foot-
note 25. A similar incident took place in IQI6–I917. Leaflets with
accusations that the Fund was withholding the grant of annuities
were distributed broadcast and caused considerable uneasiness among
the teachers. In 1917 the Board granted annuities in most of the
pending cases, with the result that the waiting list was at once reduced
from 59 to only 23.
* The entire section of the report entitled: “False prophets—pre-
dictions of “experts” and “actuaries,” 'in which the Secretary attempts
to discredit the actuarial point of view as applied to the Retirement
Fund, may be found in Appendix B.
* Superintendent Poland in his address before the State Teachers’
Association in 1902 (report, 1902, page 272) stated: “It is urged
against the present law that the power to retire teachers should rest
in the hands of the Board of Education. There is undoubtedly a
good basis for this view. At the present time, retirement cannot be
effected until the teacher's application is favorably considered by the
Retirement Fund Board.” While he admitted the wisdom of vesting
the power of retirement in the Board of Education under ordinary
circumstances, he felt that since the existing law provided for the
complete maintenance of the Fund by the teachers themselves, the
Retirement Fund Board, and not the Boards of Education, should be
empowered to retire teachers. He considered the recognition of this
principle of retirement “absolutely necessary,” for “the attitude of the
Board (of Retirement) will be determined almost entirely by the
funds available,” whereas the Board of Education would not be guided
by the adequacy of the Fund in exercising this power. On the other
hand, if state aid was invoked, he thought that this difficulty would
disappear and the power of retiring teachers could be safely trusted
to the Board of Education.
Superintendent Snyder in comparing the Retirement Fund with
other funds expressed a similar view. He said at the meeting of the
State Teachers' Association of 1901 (page IoI): “If you analyze the
organization of our Retirement Fund, I think you will agree with me
that it is rather a private beneficial organization of teachers; it has
S T A T E
R E S E A R C H I3
only state aid they asked for was that which would
cover the cost of the administrative office of the fund.
Under the caption, “State Aid not Asked,” Miss Allen
wrote in 1902:*
The teachers are not asking state aid. They are glad to
create the Retirement Fund from their salaries and by their
efforts, but they do not consider it fair that the rich super-
blessed state of New Jersey should be taking almost $2,000
a year from the not lavish salaries of her teachers to meet the
expenses of a fund of which the state is the chief beneficiary.
It is evident that these leaders did not realize how
great was the cost of the annuities which they promised
and how impossible it would be for the teachers to cover
this cost on a sound basis without state aid.”
Idea of state aid overshadowed idea of actuarial sound-
ness. Others who helped in promoting the fund re-
alized that the fund could not go on for any consider-
able length of time without state aid, and they believed
that sooner or later state aid would have to be in-
voked. The Newark Evening News said at the time
of the establishment of the fund that the teachers
hoped for additional legislation and for state appro-
priations, and that the law was obviously intended as
an entering wedge for a system of pensioning of
teachers.” They thought that the fund had a great
educational value as it educated the public to the
need of a retirement systefh for teachers, and that it
would eventually, be superseded by a state-supported
system.”
Unfortunately they did not realize what tremendous
obligations were involved in a retirement system and
how important it was that even a state-supported
system should be established on an actuarial basis.
The idea of state aid overshadowed in their mind the
idea of actuarial soundness. The result was that
several years later, when, finally, a state pension was
established and developed, the state was drawn blindly
into tremendous obligations.
Conflict of Opinions
As soon as the law was passed and the leaders of the
fund started a campaign for membership, it appeared
that the attitude of the teachers to this undertaking
was divided. Some teachers, especially the oldest,
who were about to retire, enthusiastically joined the
fund as “the cheapest insurance in the world” and as
the best way to invest five dollars. Others joined it
because of a professional spirit, considering that they
would contribute to a noble philanthropy. A con-
siderable number of teachers, however, mostly younger
teachers, did not join the Fund. Some were indifferent
to the undertaking; they were not interested in in-
surance, and did not feel that they could afford to
contribute for the benefit of others. Others, and
amongst them were “some of the best men and women
in the state,” did not believe in the soundness and
success of the system, either as an insurance or as a
philanthropy. A conflict of opinion arose between
them and the leaders of the fund. The conflict con-
tinued throughout many years of the operation of
the system and is worthy of consideration.
The leaders of the fund attempted to make it both
an insurance and a philanthropy, believing that the
success of the fund depended upon the combination
of these two features. This is well illustrated by the
following excerpt from one of Miss Allen's reports
entitled “Good business—blessed philanthropy”:
only a quasi official character so far as the management of funds goes.
It is rather a private concern. All the other retirement funds have
rather an official character, and official bodies participate openly and
actively both in the retiring of teachers and in the handling of funds.
There is no reason at all why the state fund should not assume the same
character; there is no reason why the state should not contribute
toward the Fund; and if the state contributes you might as well call
it a pension.”
26 State Teachers Association report, Igo2, page 225.
27 Criticizing the financial basis of the Fund in an article which
appeared in the Newark Evening News on May 20, 1896, and attracted
considerable attention, an actuary wrote that “at least 5% of the
teachers' salaries would be necessary to establish the Fund on a Sound
financial basis.” This estimate was based on the most conservative
assumption. The actual experience of the Fund indicates that a much
higher contribution than 5% would have been necessary to put the
Fund on a sound basis.
28 The editorial in the Newark Evening News (May 20, 1896) said
in part: “It is true that those who have been most active in securing
legislation providing for this Fund admit its inadequacy. They be-
lieved that by giving fairs and entertainments and enlisting the Sup-
port of those who are interested in the public schools and the teachers
large amounts of money can be raised. They hoped for additional
legislation and for state appropriations. The law was obviously
intended as an entering wedge for a system of pensioning of teachers.
It was passed, however, after repeated attempts to Secure the enact-
ment of a teachers' pension law had failed, and one of the pleas made
in its behalf by its advocates was that it would simply lend the aid of
the state to an effort by the teachers to themselves provide for those
among their number who might be forced to retire after years of faith-
ful service. Is it likely that the state will come to the aid of the Fund
by making appropriations for pensions?”
29 Mr. Chas. Surdam, member of the Board of Education, said
at the meeting of the State Teachers' Association in 190I (report,
1901, page 95): “It may be the wisest and best policy, and the one
It is simply 'good business' for teachers to thus unite for
their own protection, for who can foresee the uncertainties of
fate and fortune. It is philanthropy of the highest and most
blessed type to furnish a shield against misfortune for those
of our number who otherwise might have no refuge now, nor in
the years to come. Is there a teacher in New Jersey who would
not gladly share in the joy of succoring a stricken and helpless
comrade? And when age and failing health come it may be
most likely to win at last, for the teachers to stand their ground, and
by self-sacrifice to care for their most needy fellow-workers; and for
them and their friends to keep the matter before the public and to
agitate it judiciously until such time as the local authorities will
grant proper remuneration for services rendered, or the state will
care for its worn-out servants, or better yet when both of these much
desired objects shall be obtained.” Mr. Gregory said at the meeting:
“Let the state now take the matter up and supplement the teachers'
effort or take the whole burden.” He thought that a state contribu-
tion of 4 to 5% of salaries would probably meet the demand. Super-
intendent Poland said that an effort should be made to obtain from
the state an appropriation equal to the amount contributed by the
teachers. Superintendent Snyder also shared the belief that state aid
should be invoked.
I4. N E W J
E R S E Y
t
you will find that you ‘builded better than you knew', that
while helping others you were unconsciously building a refuge
for yourself against the “evil day’. ‘For some have entertained
angels unawares'.”
The founders of the fund apparently realized that
some teachers, mainly the older ones, would be at-
tracted to the fund because it provided a cheap
insurance, while others, especially the younger teach-
ers, could be interested only because it seemed to be a
noble philanthropy.”
Miss Allen wrote in an article in 1897:
To the young teachers as to all youth the future is of rosy
hue. Who would wish it otherwise? Young teachers advised
to make provisions for coming age smilingly reject the propo-
sition. But when they are asked to join the plan for the sake
of their comrades, who are or who may become aged or infirm,
it is quite a different question. We cannot too distinctly
affirm that the young teachers of New Jersey have proved not
lacking in the spirit of philanthropy.”
By making a different appeal to these different
classes of teachers the leaders could attract a larger
number and secure a larger income for the fund than
what they could if the fund was either a pure insurance
or a pure philanthropy. And the strength of the fund
in their opinion depended primarily on their ability
to obtain a large membership.
y
The point of view of the critics was altogether dif-
ferent from that of the promoters. Before accepting
the attractive promises made by the leaders of the
fund, they wanted to find out whether the fund could
keep its promises and whether it could be depended
upon in the future. The fund claimed to be both an
insurance and a philanthropy. They realized that
what they could expect from an insurance, they could
not expect from a philanthropy, and vice versa. After
examining the system, they found that the philan-
thropy was promulgated by dispensing with the
fundamental principles of sound insurance, and that
they were offered an unsound insurance at the expense
of an uncertain philanthropy, and they concluded that
the fund was neither good business nor good philan-
thropy, as it unwarrantedly and inextricably mixed
these two different things.
Criticism of the philanthropy. Viewing the system
as a philanthropy devised for the benefit of the old
and worn-out teachers who never had expected this
aid, the critics doubted whether the fund could pay
them for any considerable length of time the annuity
of $250 to $600 which it promised. They believed
that the demands would increase and that the teach-
ers, who would generously contribute to this philan-
thropy “for the benefit of disabled comrades and for
the upbuilding of the schools,” ” would be asked some
day to contribute more “for the benefit of others.”
They apparently doubted the wisdom of placing the
heavy burden of such a philanthropy upon the shoul-
ders of the teachers, who were already overburdened
by various other dues and subscriptions. They
thought that the system should primarily be an in-
surance, i. e., that it should be built primarily not for
the present, as a philanthropy would, but for the
future, and that even the youngest teachers should be
assured a benefit in the future. It seems that they
found no fault with the teacher who would refuse to
contribute to this philanthropy on the ground that
all he earned was needed for the satisfaction of his
present and future wants.
Criticism of the insurance. Viewing the fund as an
insurance, which promised to protect the members
against future wants, and comparing it with standard
insurance, the critics found that the fund did not abide
with the standards of sound insurance, and that it
offered them no certain protection.
An insurance company contracts to furnish to the
person who takes out the policy the protection which
he desires. It charges him for it a premium in accord-
ance with his age, The policyholder is certain that
the contract will be fulfilled. He can be so certain
because the premiums charged to the policyholders
of different ages are actuarially calculated, in accord-
ance with the rates of mortality at their ages, to be
*9 State Teachers' Association report, 1901, page 190.
* “Regarded in its purely “cold-blooded' business aspect, the Fund
is a most attractive proposition,” reported Miss Allen in 1901 (New
Jersey State Teachers' Association, 190I, page 182). “Herewith is a
table of dues, based on various rates of salary with the amount of
annuity attached to each grade. This table is based on dues of 1%
of yearly salary paid in I2 instalments.” After showing the table,
Miss Allen proceeded: “Dues, it will be observed, range from about
eight-tenths of a cent to three and three-tenths cents a day. In no
Case do the daily dues amount to carfare. Is there anyone so im-
provident that she will not pay eighty-three hundredths of a cent a
day for an annuity of $250 if a breakdown occurs after 20 years of
work, or who would not gladly buy a similar $450 annuity for half a
car fare a day, or pay three and three-tenths cents a day for $600
annuity?
“Again: Who would not make this insignificant daily contribution
for the sole purpose of relieving a worthy comrade? But you cannot
divest the plan of self-interest. While you may never break down,
shattered health may come even to you, and the Fund is there to
protect.”
On page 183 of the same report the Secretary wrote: “Do you know
what it would cost a woman of 30 to buy in the ordinary way a life
annuity of $250 a year, payable at 50 years of age and thereafter?
That is, what would it cost a woman of 30 to buy in 20 annual pay-
ments, an annuity of $250, annuity to begin at 50 years of age? The
cost per annum would be $129.84, and the total payment would
amount to $2,596.80. For a $400 annuity she would pay $207.75 a
year for 20 years, and $311.62 for the same period for a $600 annuity.”
“Observe the contrast! In 20 years teachers of $400, $800, and
$1200 salary would pay into our fund totals of $80, $160, and $240
respectively, and, subject to the Retirement Fund conditions, would
be respectively entitled to annuities of $250, $400, and $600. In no
Case do the total 20 years' payment into the fund amount to one-half
of the first year's annuity.” It was indeed a very cheap insurance.
The great question, however, was: how long will the fund be able
to continue handing out annuities valued at several thousand dollars
in return for a total payment of $80, $160, and $240?
* Review of Reviews, 1897, page 706.
88 State Teachers' Association, IQ02, page 227.
S T A T E
R E S E A R C H I5
sufficient to cover the cost of their protection. The
liability which the company undertakes under the
contract is actuarially ascertained, and a sufficient
reserve is provided, so that the discharge of these
liabilities is absolutely assured. __”
None of these standards were present in the retire-
ment fund: it was not based on mortality tables; it
did not charge premiums in accordance with age; and
it carried no adequate reserve against the future lia-
bilities. The premium of $5 or $6 per year (1% of
salary) could not be sufficient to pay annuities of $250
to $600 annually. No sound insurance system would
undertake to pay such annuities for such a premium.
The critics thought that the promoters of the fund in
their zeal made greater promises than what the system
could fulfil.
The Newark Evening News published an article on
May 20, 1896, which attracted considerable attention.
It was prepared by an actuary and contained consid-
erable mathematical calculations showing that the
fund could not accomplish all that was claimed for it.
The following is an interesting extract from it:
One's first impression from a cursory reading of the law is
that the whole scheme is absurd. One per cent. of a salary
for 20, 30, or 40 years, surely cannot pay for 50 per cent. of
a larger salary for life after age 40, 50, and 60. The average
salary of Newark teachers, of both sexes, at the end of 1895,
was a little less than $791. The average salary of those who
have taught 20 years is more than $900. One per cent. of
$79I say, for 30 years, amounts, with compound interest at
5 per cent., to $552, while, supposing the age of the teacher at
appointment to have been 20, the value of annuity of $450
at the age of 50, using the same rate of interest, is $5,547.
Even if we suppose the teacher to have been active for 40
years, I per cent. of salary on the same basis would amount
to $1,003, as against $4,381, the value of the annuity.
The writer presented several tables in which he took
account of the money left in the fund, because of the
many who resign or die before earning an annuity, and
who take from the fund either nothing at all, or one-
half of what they paid in, and he illustrated the work-
ing of the scheme for the next 20 years in Newark,
introducing all the elements of income and outgo,
and assuming that all teachers would join in the enter-
prise, and that if any do not join they will naturally
be the ones who would have to pay the longest and
whose need of the annuity seems most remote and
not those who may expect to become incapacitated
Soonest. He concluded that the disbursements of the
fund would soon exceed the receipts, unless large out-
side contributions were received from fairs, bazaars,
and bequests, or state aid was invoked, or the rates of
dues were increased to a higher percentage. He
doubted whether sufficiently large amounts could be
raised in such uncertain ways to meet the deficiencies,
and he wrote:
Surely the plan cannot commend itself as being founded on
sound business principles. More than half the income needed
to meet obligations is provided for only by hopes. Possibly
those who urged the passage of the bill before the legislature
expect the state to go farther in the future, and make an an-
nual appropriation as a pension fund. However this may be,
the teachers of the state who go into the scheme should
realize that they have no guarantee whatever that their
annuities will be paid when due, or even that they can draw
out half of their contributions if they resign after five years.
Could a sound actuarial system have been
established?
In view of the widespread criticism of the fund these
questions arise: Could a sound actuarial system have
been established? Could the unsound system have
been gradually reorganized on an actuarial basis? The
answers to these questions would be largely specula-
tive, but they are nevertheless worthy of consideration.
|What could an actuarial system be like? The first
condition necessary for the establishment of an actu-
arial annuity system is the existence of reliable
mortality tables. If the system is largely based upon
lapses (forfeiture of contributions), then it requires
data as to the rate of resignations and dismissals. If
it offers protection against disability rather than
against old age, then it mainly requires statistical
data, regarding the rates of disability.
No difficulty would have been experienced regarding
the first condition, because reliable tables based upon
the mortality among the population at large were
available. They could have been used, and could
have been subsequently adjusted in accordance with
actual experience, so as better to represent the mortal-
ity rates of the teachers. The situation was different
with regard to the second and third conditions, for
there were no adequate data regarding the rates of
resignations, dismissals, and disability in the service.
This difficulty could have been avoided, if the system
had provided that teachers who resign or who are dis-
missed should receive back their contributions with
interest instead of forfeiting them, and if it had
charged every member according to his age, and had
promised to pay him only such annuity as his con-
tributions would purchase at the age when he retired,
instead of undertaking (as the Retirement Fund did)
to charge all members a uniform premium and to pay
a uniform annuity, regardless of age, to any member
who proved disability.
Obstacles to establishment of actuarial system. There
were several obstacles to the establishment of such a
system. In the first place nowhere in the United
States had such a system ever been established for
teachers. There were precedents of such sound actu-
arial systems for teachers abroad. Italy had such a
system since 1876, covering all teachers. Ireland had
it since 1879, also covering all public school teachers.
I6 * N E W J
E R S E. Y
y
But these precedents were not known in this country.
No study of the foreign experience had been made by
the teachers who framed the retirement bills. They
had other precedents before them—the private mutual
aid and annuity associations—and they followed these
precedents hoping that by introducing certain im-
provements in their plan, they would be able to con-
struct a strong retirement fund.
In the second place, no sound actuarial system could
undertake to pay annuities of $250 to $600 from a
premium of $5 or $6 (1% salary). It would either
charge much higher contributions, or provide much
smaller annuities, or probably do both. In the case
of older teachers the premiums would be so high and
the annuities so low (because they would not be pro-
vided at the expense of the younger teachers) that
not many of them would be induced to join the system.
Of course, whatever such a system would promise could
be depended upon with an absolute certainty. It
would have made the younger teachers contribute for
their own benefit, instead of for the benefits of others,
and it would have been absolutely safe and per-
manent. But how many teachers would be attracted
by this feature? Would many have joined a system
with higher rates?
Obstacles to actuarial reorganization. The obstacles
enumerated in the preceding section stood also in the
way of any actuarial reorganization of the unsound
system which may have been proposed. The first
and greatest obstacle, however, was the fact that
the fund undertook from the very beginning a tre-
mendous obligation toward the older teachers, who
paid little into the fund, and that the only way it
could continue each year to carry the heavy annuity
roll and to meet obligations which would mature dur-
ing the year was to use every available cent that was
needed and to sacrifice more and more the future
stability of the fund.
An actuarial reorganization of the fund could not
help the managers of the fund in this problem. On
the contrary, it would have exposed the initial error
of the system and would have forced them to either
repudiate its tremendous obligations towards those
members who contributed the least, or it would have
forced them to reduce the future benefits or increase
the dues to an exceedingly high rate, which would be
sufficient not only to cover the cost of prospective
benefits, but also the cost of annuities already granted,
or else it would have forced them to invoke state aid.
The adoption of the first method would have been
equivalent to a recognition that the fund was bank-
rupt. The second move would have discouraged others
from joining. And as to the third method, some of the
promoters of the fund were opposed to state aid. And
so they rejected any suggestion for actuarial reorgan-
ization and continued a shortsighted financial policy
which took account only of the immediate problem,
which was always before them, of meeting the obliga-
tions of the ensuing year and closed its eyes to the
more remote future. If at the end of the year they
found that the fund had met these immediate obliga-
tions and had a greater surplus than during the
preceding year, they concluded that the fund pros-
pered. If, however, they felt that the income of the
ensuing year might prove insufficient to meet the
obligations of that year, then they applied some emer-
gency measure, and either secured new legislation, or
undertook a membership campaign, or else raised
funds by arranging bazaars, musical entertainments,
etc., or restricted the annuity demands by various
methods, or obtained state aid for administrative ex-
pense, or increased the rate of membership dues.
So long as any of those makeshift methods had not
been exhausted, they felt that the fund could go on
for the present. They ignored the warnings that the
system would be unable to meet its more remote
obligations. These warnings interfered with their
‘happy go lucky’ attitude towards the future. They
resented any criticism of the actuarial side of the fund,
although the criticism was in many respects just and
educated the teachers to a better understanding of
sound insurance, and they ascribed the criticism to
opposition and malicious motives,” because, they felt,
it interfered with their success in recruiting members.
And upon this success depended the ability of the fund
to meet its immediate obligations. So long as a large
part of the teachers remained outside of the fund, the
leaders believed in and propagated the idea that the
fund would be sound when it would have within its
doors all the teachers, and when it would have a large
influx of new membership each year. They thought
this would be the only sound plan. And even now,
after 20 years of operation of the fund, when they have
exhausted many makeshift arrangements, and when
the chances for obtaining legislative sanction for other
makeshifts seem dubious, and when despite the IOO%
membership, and the double and even treble rates of
* One of the critics, Mr. Gregory, Assistant Supervisor from
Trenton, said in his address before the State Teachers' Association
in 1901 (State Teachers' Association, 1901, page 84): “I yield to no
one in my respect for the intelligence, sincerity, and energy, and al-
truistic spirit of the leaders in the Retirement Fund movement. I
think, however, some of these leaders have made one mistake. In
their zeal for the cause they have been too ready to charge those who
did not believe in the movement with being insincere or untrue to
the interests of their fellow-teachers. The sincerity which they felt,
and with which they were universally credited, they had not uni-
formly credited to those who did not believe with them. Bitter
rejoinders have followed. Apart from real opposition to the Retire-
ment Fund, of which, I believe, there is very little, there is unques-
tionably much indifference, and this opposition and indifference are
predicated on the belief that the scheme cannot succeed. Now let
the most enthusiastic advocate of the Retirement Fund have in mind
that a man who holds the unpleasant belief stated above may be just
as true a friend to the teacher if he says what he thinks as the man
who pleads for the Fund.”
S T A T E
R E S E A R C H 17
contributions, which they have obtained, the income
of the fund is failing for the fourth time to cope with
the increasing demand, and when an actuarial investi-
gation which they have undertaken, shows a tremen-
dous actuarial deficiency, they still believe that only
“very little financial buttressing is necessary to make
our fund permanently sound,” ” and they propose
other makeshifts.
CHAPTER II
Failure of the “One Per Cent. Fund.”
Period 1896–1899, Decrease of annual surplus; Remedies sought. Period 1900–1903, Law of 1899; Provisions helping the fund
to increase its membership; Greater control by teachers; Law of 190o a part of the School Law; Effects of laws of 1899 and of
I900 and the activity of Retirement Fund Department; A warning of ultimate disaster; Remedy sought in new legislation;
Special effort to increase membership; Another warning put forward; Influx of young blood thought necessary. Period 1903–
I906, Bad prospects as to increase of membership, decrease of annual surplus; Securing appropriation for administrative expense.
Period 1896—1899
At the time the law of 1896 became effective, there
were about 5,000 teachers in the service, who could
come into the Retirement Fund. The law allowed
three months within which to file application for
membership. The managers of the Fund undertook
a vigorous campaign to enroll a large number of
teachers. On June II, when the three months' limit
expired, and the doors of the Fund closed, they counted
a membership of about 2,500 teachers. The critics
of the Fund have frequently stated that a large pro-
portion of these 2,500 members (known as ‘charter
members') were the older teachers, who had more
than Io years of service to their credit, and who
expected to retire in the course of the next 1o or 20
years.
Decrease of annual surplus. During the first year
no annuities were granted, and no disbursements were
made. The entire receipts of the year remained in
the Fund as a surplus. During the second year, how-
ever, 8 annuities were granted, and both the current
and the past year's administrative expenses were paid.
During the third, Io new annuities were granted,
making a total of I7 annuitants on the annuity roll.
The disbursements of the Fund increased in 3 years
to about $4,700.
The situation was alarming, especially as the income
of the Fund showed no appreciable increase. The
membership of the Fund decreased, instead of in-
creasing." The districts were irregular in remitting
the deductions from teachers' salaries, at times not
sending any dues at all, and, at other times making
large remittances at once and thereby causing un-
desirable fluctuations in the annual income of the
Fund. The proceeds from entertainments and dona-
tions, which amounted to about $1,400 in 1897,
yielded very little in 1898 and nothing in 1899. As
a result of all these factors combined, the annual sur-
plus of the Fund declined, as shown below:

Annual
Surplus
Year Annual D? * (Excess of
Receipts isbursements | Rece;pts over
Disbursements)
I897 . . . . . . $12,400 | . . . . . . . $12,400
I898 . . . . . . I5,300 $3,500 II,800
I899 . . . . . . I3,300 4,700 8,600
Remedies sought. In view of these alarming condi-
tions it was decided, in the first place, to obtain a
new law, which would, on one hand, restrict the retire-
ments, and, on the other hand, help to increase the
membership of the Fund; and, in the second place,
to establish in the State Teachers' Association a de-
partment which would help the managers of the
Retirement Fund to make it a success.
The department was established in 1898 under the
name ‘Retirement Fund Department of the State
Teachers' Association', and was to be supported by
annual membership contributions of a small sum. Its
purposes were defined as follows: to conduct an active
membership campaign among the teachers; to arrange
entertainments, bazaars, secure donations, and make
this source of income active; to use its influence to
have the Retirement Fund law made a part of the
School Law; and to secure legislation which would
make the state bear the administrative expense.
* From 2,5Io, on June II, 1896, it fell to 2,357, on April 18, 1899.
* Address of the Secretary of the Fund before the conference of
the New Jersey State Teachers' Association at the Dickinson High
School on November 3, 1917. Issued as a circular. It proposes “to
raise dues of all members of from Io to 15 years' experience to 2%%;
raise to 3% for 15 years' experience and over. Abolish the
excess one-tenth annuity making it straight half pay. . Tax at
3% all annuities which draw, as well, the state pension. Tax at 1%
all other annuities. . Provide a minimum age limit for the state
half-pay pension, except for proved incapacity, etc.”
I8 * N E W J
E. R S E Y
2
Period 1900–1903
Law of 1899. The new law was secured on March 24,
1899. It contained several provisions directed
towards a restriction of expenditures. It took away
from the members the right which they enjoyed under
the law of 1896 to receive an annuity on demand after
20 years of service, if incapacitated, and gave the
Board of Trustees full discretion to decide whether
or not the teacher was incapacitated, and to grant or
not to grant him an annuity.” In the second place,
it gave the Board the power to suspend any annuity,
“whenever it shall appear to said Board on sufficient
proof that the annuitant is able to earn and has the
opportunity of earning a sufficient livelihood, but may
be resumed whenever said Board shall deem it proper
so to do.” In the third place, it required of all future
annuitants, instead of those only who retire within
5 years after the passage of the act, that they make up
their contributions to a total of 20% of the average
salary of the last 5 years (last annual salary under the
law of 1896).
There was still one important provision of financial
order. It provided for the possibility of a deficiency,
and it was thus described in one of the reports of the
Carnegie Foundation.”
The naive assumption of the previous act that if a deficiency
occurred in the Fund it would probably be made up, and that
the full installment of pensions could gradually be paid in full
*While the law of 1896 made no provision as to who shall deter-
mine incapacity, the law of 1899 provided that retirement could take
place after the request of the teacher for retirement was approved by
the Board of Trustees and that “the decision of the Board of Trustees
upon application for such annuity, shall conclusively determine the
right of the applicant thereto.” An interesting case arose under the
law. A teacher claimed that she entered into a contract with the
Fund under the law of 1896, and that the law of 1899 could not take
away from her the rights given under that contract. The court ruled
that:
“The difference between the act of 1896 and the act of 1899 is that
under the former the incapacitated teacher had an absolute right to
the annuity upon compliance with the then prescribed conditions;
under the latter, the right depended on the action of the Board of
Trustees. It is upon this distinction that the plea which has been
demurred to relies. . * >
“The legal relation between the plaintiff and the defendant is that
of contract. By electing to accept the provisions of the act of 1896,
and making or tendering the necessary payment, the plaintiff, when
incapacitated, became entitled to the annuity, which, although not
a personal obligation of the Board of Trustees, was payable to her
out of the Fund. The terms of the agreement are to be ascertained
by reference to the statute. When this agreement was once made, it
could not be altered without the consent of both parties thereto and
upon sufficient consideration. The fact that the terms of the agree-
ment were embodied in an act of the legislature does not change its
essential character as a contract, and it was beyond the power of the
legislature to impair the obligation of this contract by subsequent
legislation. The annuity is not a pension granted by the state, and no
part of it is payable out of state funds. The fund is the result of con-
tributions by the teachers who elect to take part in the scheme, and
the rights of the contributors must necessarily depend upon the agree-
ment under which they entered into the scheme. . . .”
* Annual report of the Carnegie Foundation for Advancement of
Teaching, 1912, page 28.
with interest and in order of their falling due, was abandoned,
and instead it was provided that in case of a deficiency at any
quarterly installment all the quarterly annuities due were to
abate pro rata. This would enable the Fund to start paying
anew each quarter, whereas the original legislation in case of
a calamity, would have made possible the spectacle of some
annuitants receiving nothing, while the Fund was engaged
in satisfying fully the long past installments of older an-
nuitants.
Provisions helping the Fund to increase its mem-
bership. Another opportunity to become members
was given to all those teachers who had not entered
the Fund during the time the Fund was open to them.
No time limit for filing application was provided for
the teachers then in the service (for new appointees
the time limit of 1 year since appointment was main-
tained). The Fund was to remain open for them at
any time.
The right to membership, which under the law of
1896 belonged to “teachers in public schools,” was
extended to “teachers, principals, and supervising
principals in public schools, or in any normal or re-
formatory school, or in any school supported either
wholly or partly by public moneys raised under the
authority of any law of the state.”
Greater control by teachers. Along with the increase
in the powers of the Board, the composition of the
Board was so changed as to give the teachers a greater
representation. It provided for 3 instead of 2 mem-
bers in the Board to be selected by the teachers; it
increased their term of office from I to 3 years in
rotation; and it limited the representation from the
State Board of Education to 3 members besides the
Superintendent.
Law of 190o a part of the School Law. The campaign
of the Retirement Fund Department succeeded on
March 23, 1900, in making the Retirement Fund law
a part of the School Law. The fact that it became an
article of the School Law strengthened the official
standing of the Fund, as was shown a few years later,
when the constitutionality of the Retirement Fund
law was attacked in the court, and when it was upheld
by the court on the ground that it was a part of the
School Law.
Only a few changes were made in the text of the law.
The limit of 1 year within which the new appointees
could file their applications, if they wished to become
members of the Fund, was abolished. The new ap-
pointees were now allowed to enter the Fund at any
time. This change was made in order to make easier
for the managers of the Fund the recruiting of new
members.
Two new provisions were added. No person who
taught more than 15 years was allowed to become a
member, unless he or she passed a satisfactory medical
examination. This provision was included as a pro-
S T A T E
R E S E A R C H I9
tection against the heavy demands which the old
teachers who stayed outside the Fund would by enter-
ing impose upon the Fund, as they might soon apply
for an annuity. The rate of contribution for all
teachers who might wish to become members, but
who had taught more than IO years at the time of
applying for membership, was increased from 1% to
2% of salaries. This clause, just as the preceding
one, was directed towards greater financial caution.
Both of these clauses were included in the law
against the wishes of the leaders of the Fund. They
protested against the requirement that future appli-
cants for membership who have taught more than
I5 years must pass a satisfactory medical examina-
tion, arguing that “it excludes from membership the
very class which the Fund was originally created to
relieve, and by so doing to increase the efficiency of
the schools.” They protested against the increase of
contributions to 2% for future applicants who have
taught more than IO years, arguing that its effect
would be “to deter a vigorous and comparatively well
paid class from joining.”* They repeated their original
mistake of considering every member as an immediate
asset, and they ignored the fact that he was also a
liability in his capacity of a prospective annuitant.
Effects of laws of 1899 and 1900 and the activity of
the Retirement Fund Department. The abolition of all
time limits for teachers who might wish to become
members of the Fund offered a good opportunity for
the Retirement Fund Department to solicit mem-
bership among the 5,000 teachers who remained out-
side the Fund. An active campaign was undertaken
by the Retirement Fund Department, which resulted,
in 1900, in securing 244 new members. The following
year, however, the gain in membership was only 14 I.
About 63% of the teachers still remained outside of
the Fund and were reluctant to enter it." The small
gain in the membership of the Fund had increased
very little the receipts from membership dues, espe-
cially since the districts were delaying the transmission
of the dues.
Energetic efforts were made by the Retirement Fund
Department in the year 1900 to supplement the income
of the Fund by encouraging the teachers in various
cities to arrange bazaars, musical festivals, entertain-
ments, and baseball games, and to obtain direct
donations for the benefit of the Fund. Through this
activity about $7,000 was raised in 1900, including a
legacy of $2,300. During the following 2 years, how-
ever, the activities of the Retirement Fund in this
* Annual report of the Board of Trustees, 1901, in New Jersey
School Report, IQoI, page 369.
* In 1896 the Fund had a membership of 2,510 or about 50% of the
total number of teachers. Five years later, after the active member-
ship campaign of 1900 and I901, it had only 253 more members than
matter declined, and the receipts from these sources
decreased."
At the same time the demands on the Fund had
considerably increased. Applications for annuities
were piling up. Despite the fact that since the
enactment of the law of 1899 the Board of Trustees
used its full discretion in determining the right of an
applicant to an annuity, that in some cases it deferred
the grant of an annuity because the income of the Fund
was insufficient, and granted annuities only to the
most deserving cases; and that 25 applications, some
of which were filed as early as 1899, were still pending
in 1902,” despite all these restrictions, the total
number of annuitants on the retired list and the
amount of annual disbursements on that account more
than doubled from 1899 to IQO2.*
The increase in the disbursements, on one hand, and
the decrease in the income, on the other hand, resulted
in the decrease of the surplus, as shown below, to such
an extent, that it fell even below the amount which
was set aside at the end of the period 1896–1899.
Annual
Year Annual Annual .lus
(Ending June 30) Receipts Disbursements] (* of
Income over
Disbursements)
I900 . . . $2 I, IOO $8,200 $12,900
I90I . 2O,8OO IO,400 IO,4OO
I902 . 2O,3OO I3,600 6,700
A warning of ultimate disaster. The situation of the
Retirement Fund, which was becoming exceedingly
serious, was discussed at the annual meeting of the
State Teachers' Association in December, I90I.
Various remedies were suggested. A solitary voice
was raised, warning the teachers and the managers of
the Fund that the situation was far more serious than
they thought. The warning was sounded by Mr.
Gregory, an Assistant Supervisor in Trenton. After
in 1896, and its total membership was only about 36 */5% of the total
number of teachers.
* After the $7,000 obtained from these sources in 1900, only $3,200
was thus secured in Igor and only $2,400 in 1902.
7 Explaining the large number of pending applications, the Secre-
tary of the Board of Trustees wrote in her report for the year I902
(New Jersey School Report, 1902, page 273): “While the decision of
the Board of Trustees upon any application for annuity shall con-
clusively determine the right of the applicant thereto, the action of
the Board in granting an annuity at a stated meeting must unavoidably
be subject to a number of conditions beyond the mere discretion of the
Board and independent of the questions of eligibility on the part of the
applicant. The income of a fund sustained by the voluntary efforts
of members is by no means assured. The friends of the fund are
striving through all proper means to increase the income of the fund,
and in accordance with the measure of their success will additional
annuities be granted. To defer a decision is not to reject the appli-
cation.”
* In 190o there were 17 annuitants on the retired list; in 1902
there were 42 annuitants.
2O * N E w J
E R S E Y
3.
saying that “the financial statement of the Retirement
Fund published in the advance program furnishes
food for serious thought,” he proceeded with calcula-
tions, showing that the annual shortage of the Fund
was $2,056.” He warned the promoters of the Fund
that by increasing the membership of the Fund they
were not only adding more money, but were also
increasing the risk of the Fund, and that there was a
great question whether the Fund could meet its obli-
gations, even if it had a membership of Ioo?. He
did not share the illusion that the annuity demand
would soon become normal. On the contrary, he
contended that it would go on increasing with years,
saying that “new claims must be constantly allowed
and many of the older annuitants keep on living. Of
course, there comes an end to this increase sometime,
but the end is by no means in sight.” 10
He doubted whether the funds raised by extra
efforts such as bazaars, entertainments, etc., could
enable the Fund to meet its liabilities. He recognized
that to raise in 2 years (1900–1901) from such enter-
prises $10,000 was “a magnificent achievement and
worthy of all honor,” but he thought that “such tre-
mendous efforts cannot be often repeated.” “I trust
I am wrong,” he said. “In any case no prediction can
be made and it does not seem right to base an annuity
On such precarious support. Is there no better way?”"
He thought that state aid should be invoked.
Remedy sought in new legislation. The leaders of
the Fund, however, had a very different idea from that
of Mr. Gregory. They were concerned most deeply
Over the fact that the membership of the Fund was
not increasing, and decided that an active membership
Campaign should be undertaken.
A resolution was offered and adopted at the meeting,
which emphasized not only the philanthropic side,
but also the business advantages of the system, in
spite of all the criticism of its business soundness.
The resolution stated that “it is also in the personal
interest of every teacher to join the Fund as a prudent
investment against the possibilities of physical or
mental breakdown at a time when it is almost im-
possible to turn to another means of obtaining a live-
lihood.” 12
The managers of the fund ascribed the failure of the
* After showing the deficiencies by counties, he said: “But take
the state as a whole. Amount of annuities in force and pending,
$16,592. Annual income on the average annual salary of $526.08
is $14,535. The annual shortage for the state is seen to be $2,056.”
(Report of New Jersey State Teachers' Association, 1901, page 86.)
* New Jersey State Teachers' Association report, 1901, page 89.
* And he continued as follows: “If my calculations, taking Essex
County as the standard, prove to be correct, and an annual deficit
of $12,000 is to be met, even such tremendous efforts will fail to meet
the demand. I note the legacy mentioned in the report and rejoice
in it, but will there be many generous hearts?” (New Jersey State
Teachers' Association report, 190I, page 89.)
* New Jersey State Teachers' Association, Igo2, page 252.
membership to increase to the clauses of the law of
1900, which were inserted against their will, and which
required that all future applicants for membership
who have taught more than Io years should contribute
at the rate of 2%, and furthermore that those appli-
cants who have taught more than 15 years should pass
a medical examination. They complained that these
requirements discouraged these teachers from apply-
ing for membership.
They determined to secure legislation which would
open to this class of teachers the doors of the fund at
the old rate of 1%, without medical examination.” It
is interesting to note here that Mr. Gregory pointed
out in his address that such an action would increase
the liabilities of the already over-burdened fund.
“Let it be remembered,” he said at the meeting of the
Teachers' Association in 1901, “that a few such
teachers offset a good many young teachers. They
will soon become a charge on the fund, and they will
pay in but little money.” “
The leaders of the fund framed a bill which gave
opportunity to the older teachers until January I,
1903, to enter the fund without medical examination
at the old rate of 1%, which allowed superintendents
of schools to become members; and which provided
that annuities should be granted only to those teachers
who were incapacitated not only for performing the
duties of a teacher, but also for earning a sufficient
livelihood by any other means, and that the Board of
Trustees could suspend annuities, if it find that the
annuitant is able to earn a sufficient livelihood.” The
two latter provisions would have enabled the trustees
to exercise a greater discretion in refusing and sus-
18 The Secretary of the Board of Trustees wrote in her report for
the year 1901 (New Jersey School Report, Igor, page 369): “The
gain in membership has been less by IOS than that of the previous
year. This is in a measure due to the operation of certain amendments
passed March 23, 1900, requiring (I) teachers who have taught more
than Io years but less than I5, to consent to a deduction of 2% from
their monthly salaries in order to become members; (2) demanding
of teachers who have taught I5 years or more, to first pass a satis-
factory medical examination, before they may be admitted to mem-
bership upon the basis of a 2% deduction. The effect of the
first is to deter a vigorous and comparatively well paid class from
joining. The second excludes from the benefits of the Fund the very
class which the Fund was originally created to relieve, and by so
doing, to increase the efficiency of the schools.”
The secretary also wrote in her report of the Retirement Fund
Department (New Jersey State Teachers' Association, IQoI, page
I98) for the same year: “The Retirement Fund needs certain amend-
ments, such as restoring condition of membership to its original I9%
basis for all members; striking out, for a time at least, the clause
making a certificate of good health a condition of membership in the
fund for certain teachers, admitting superintendents to membership,
and limiting the period in which teachers may join the Fund. It is
recommended that this department shall authorize and direct the
President and Secretary, with the approval of the Executive Com-
mittee, to take such action regarding amendments to the law as they
deem wise.”
14 New Jersey State Teachers’ Association report, IQoI, page 89.
15 The words “and has the opportunity of earning” contained in the
law of 1900 were struck out.
S T A T E
R E S E A R C H 2I
pending annuities. It was intended to check to some
extent the rapidly increasing disbursements for annui-
ties. The bill was introduced in the Legislature and
became a law on March 26, 1902.
Special effort to increase membership. “During the
entire year 1902,” wrote the Secretary of the Fund,
“we made the most strenuous efforts to enroll the old
teachers, because of the fact that the law doubled,
after January I, I903, the membership dues of the
teachers of Io years' service who joined the fund on
and after that date, and in addition required those of
I5 years' experience to pass a medical examination
satisfactory to the trustees of the fund before they
might become members.” At the same time, the man-
agers of the fund made also a strenuous effort to bring
in young teachers.
They enrolled 42I older teachers, who taught more
than Io years, and 484 of the younger teachers, who
taught less than ten years. It was evident that the
infusion of old blood could not improve the condition
of the fund. The infusion of young blood, on the other
hand, was obtained after a considerable effort, which
could not be soon repeated.
Another warning put forward. At the end of 1902,
a very important discussion of the Retirement Fund
situation took place at the meeting of the State-
Teachers' Association. Another warning was put for-
ward to the effect that the fund was unsound, and a
concrete proposal was made to reorganize the system.
Professor Earl Barnes read a remarkable address, en-
titled “Can a teachers' retirement fund be a good
business investment and also a philanthropy?” in
which he proposed “a more definite separation of the
business and philanthropic sides of the work.” After
pointing out that the weakness of the system lay in
the fact that the granting of the annuity depended
entirely upon the discretion of the Board of Trustees
and was, therefore, uncertain, he proceeded as follows:
At the beginning of any such movement as this, patience
must be exercised, and a fund must be accumulated before
the full annuities can be paid. There should, however, be a
reasonable security that the fund will accumulate faster than
the applicants do. In our case there is a belief, held by many
fintelligent men and women, that the premium cannot meet the
annuities promised. The reply is that what may be called
benevolent funds, from gifts, legacies, entertainments, and
associate and life memberships, will more than make up
this deficit. But just here is where the critic says that
business and philanthropy are inextricably and unwarrant-
edly mixed and one cannot promise annuities on an uncer-
tain revenue.
Personally, I believe that this is the weak place in our
present organization; it certainly is one almost universally
cited by the strong men and women of the state. If this is a
weak place, then no amount of denunciation of critics for
lack of professional spirit will make them believe the Fund a
good business investment. To succeed with a professional
body of policyholders any plan must be backed by sincerity.
In a neighboring city a teachers' annuity which has promised
about $600 is paying some 70% of its promises. Far better to
promise less and distribute a dividend, even from the point of
view of business success.
If this is really a weak point in the present Retirement
Fund, I should like to suggest a possible change. If I am
right in my analysis of tendencies in life insurance, then those
tendencies have been in the direction of splitting up the un-
certain factor, establishing a small certain factor and leaving
the remainder for dividend and company profits.
Now why should it not be possible to divide our uncertain
factor and to establish a certain fixed small annuity, based on
say 80% of premiums payable to all who have made a certain
number of payments and who have completed a certain num-
ber of years of service? This amount based on the 80% of
the premium alone, could be easily determined by a practical
actuary and if it were only a dollar a week it would satisfy
the demand in the mind of the policyholder for something
definite and secure.
The interest on the invested capital, the remaining 20%
of premiums, the lapsed policies, gifts, bequests, and associate
memberships would constitute an irregular fund, which should
be used by the Board, as the whole fund is now used, to piece
out the small annuities of those teachers who found themselves
disabled and especially needy.
Under these conditions, the man who joined the Retirement
Fund would say: “I am to pay so much annually for so long
if I continue to teach in New Jersey. If I leave New Jersey
after 5 years, I can withdraw half my premium paid in. If
I complete 20 years of teaching, I shall have a small but cer-
tain annuity of a dollar a week. In addition, I shall have a
claim on the benevolent fund, and if I do not need it, I shall
be helping my associates to a respectable and happy old age.”
I am, however, deeply convinced that a perfectly sincere
statement of what is certain with an accompanying statement
of what is hoped will draw some of the best remaining teachers
in the state into the movement.
It is for this reason that I have dared to propose a more
definite separation of the business and philanthropic sides of
the work.”
Influx of young blood thought necessary. Of course,
the adoption of Professor Barnes' plan would have
made necessary a reduction not only of annuities to be
granted in the future, but also of those already
granted. Others who participated in the discussion
* New Jersey State Teachers' Association report, Igo2, page 240,
17 Under the caption “good philanthropy but bad business alleged’
(New Jersey State Teachers' Association, 1902, page 217) the Secre-
tary of the Fund gave the following answer to these criticisms: “We
hear from non-members of the male sex, a great deal about ‘good
philanthropy but bad business'. Now, gentlemen, will you name any
institution in this state or elsewhere that under the most favorable
auspices (and our poor little Fund has had troubles of its own from
the startſ) can show in 6 years an income of $22,000 a year and a
surplus of $68,500 above all liabilities (!), while disbursing $47,622
in annuities and administrative costs? If you find anything in the
kind of “business' that makes a better showing than this, you will do
well to stop teaching and go into it.” The writer did not realize that
its ‘flourishing business' had tremendous liabilities besides those
involved in the annuities already granted.
A fuller quotation can be found in Appendix B.
22 &
E R S E Y '
N E W
thought that this proposal was too radical and made
different suggestions.
Superintendent Maxson frankly stated his impression
that the situation of the fund was serious, and that
“the annual demands on the treasury are rapidly over-
taking the annual income, and that the time is near
when the annuities will eat up all the annual dues, and
that not long after that, if the same conditions con-
tinue, the annuities required will be greater than the
annual income, and cannot be met fully by the pay-
ments of the members on the present membership.” 18
He thought that a large annual influx of young blood
was necessary and he motivated it as follows:
Four years ago, there were about 2,200 members of the
Fund. Some of those members are now dead, some drawing
annuities, some have gone out from us and so ceased to con-
tribute to the income of the Fund, and all who remain are
4 years older and, therefore, 4 years nearer the time when they
will cease to contribute to the Fund's resources, or will them-
selves require support from its income. The membership of
4 years ago is, therefore, now a much greater burden upon the
treasury of the Fund than it was in 1898, and the only way to
meet the increased weight is by bringing in large numbers of
younger teachers, so that the many small payments from their
dues shall suffice to meet the increased risk which comes from
the increasing age of the older members.
And he concluded that “if we must have young blood
and cannot get it adequately under present conditions,
the argument seems to me great for the incorporation
in the Retirement Fund law of a clause that will make
membership in the fund a part of the contract for all
new teachers.”
Other speakers also favored the idea of obtaining
legislation which would make membership in the fund
compulsory for all new entrants. Some advocated
also the idea of state aid. And almost all speakers
thought that the expense of administration of the fund
should be borne by the state, and that the fund should
be relieved of carrying this part of the burden.
On the recommendation of the Retirement Fund
Department,” the meeting of the Association resolved
that its Executive Committee, the Committee on
Legislation, and the Executive Committee of the
Retirement Fund Department should “takesuch action
as may be necessary to secure the reimbursement by
the state to the New Jersey Teachers’ Retirement
Fund of all moneys with interest that have been taken
from the said fund for cost of administration in the
past ($10,415 on March 1, 1903), and to secure its
administration at the public expense in the future,”
and also to secure an amendment which would make
membership in the fund “a part of the contract of all
persons who become teachers in the state after June
30, 1903.””
* New Jersey State Teachers' Association report, 1902, page 275.
Period 1903–1906
Bad prospects as to increase of membership. The
income of the fund during 1903 at once increased by
about $8,000, because the membership was increased
by the law 1902 and by the great membership cam-
paign of the following eight months, and also because
the transmittances from the districts in some cases
included dues for the past year and a half. With such
increased income the fund entered into the third
period of its operation. The disbursements for annui-
ties during the same year increased by about $3,000.
A large number of applications for annuities (23 in all,
Some of which were filed as early as 1899) were
still pending. It was evident that the disbursements
would increase more rapidly in the future, and that
it would be very difficult to increase the membership
and the income of the fund proportionally. The secre-
tary of the fund wrote at the end of 1903, in the annual
report of the Retirement Fund Department:
Already it is asserted that we are not likely ever again to
enroll so many; that 1902's addition was the result of special
effort, and successful only because it offered the last chance
to the older teachers to join the Fund on the 1% basis. To
this proposition we cannot subscribe. Let this rather be our
program for 1904. Enlist I,000 new members! There are
three times that number of young teachers (really whom do
we call old?) who have not joined the Fund. Have we any
right to assume them to be less generous or less philanthropic
than the 3,800 who have already enrolled? To come into the
Fund means such a little self-denial; yet, if it were practised
by all, it would uplift the profession of teaching in New Jersey
and minister to a philanthropy that is as noble as it is neces-
sary.”
With reference to the idea that the fund was not
sound which was spreading among some of the teachers
and which restrained them from entering, the Sec-
retary wrote: “If the fund isn't sound, what reflec-
tions might be made upon a merciful captain who per-
mits the ship to be relieved and its crew strengthened
by sending off his disabled sailors in a leaky boat?
Should he not rather do what he can to make the craft
sea-worthy?”
The writer's idea, which was not shared by the
critics, was that an increase in the membership of the
fund would make the leaky boat seaworthy. In reply
to the critics who said that only a reorganization of
the fund on an actuarial basis would make it sound,
the writer insisted that “Membership of all teachers,
for all teachers and the benefit of all the schools, is the
ground plan of the fund. No other is sound.””
Decrease of annual surplus. All these appeals were
made in vain. The teachers were reluctant to enter
the fund. During the entire year 1904, the fund
gained only 99 members, instead of the I,000, which
* New Jersey State Teachers' Association report, 1902, page 250.
* New Jersey State Teachers' Association report, 1902, page 254.
21 New Jersey State Teachers' Association report, I903, page 323.
* New Jersey State Teachers Association, IQ03, page 315.
S T A T E
R E S E A R C H 23
it had hoped to gain; during the year 1905 it gained
only 76; and in 1906 a still smaller gain was made, of
only 55 members.”
As the disbursements continued steadily to in-
crease * during these three years, the amount added
to the capital fell below the already low mark set by
the preceding period.
Annual
Year Annual Annual Surplus
(Ending June 30) Receipts Disbursements (Excess of
Receipts over
Disbursements)
I903 . $28,400 $16,900 $11,500
I904 . 26,400 20,900 5,500
I905 . 28,8oo 23,800 5,000
Securing appropriation for administrative expense.
The leaders were slow to realize that the fund was
declining.” The disbursements were threatening in
a year or two to exceed the receipts, to wipe out the
annual surplus and to result in an annual deficiency.
Referring to this period, Miss Allen wrote in one of
her later reports:* “Many teachers of long service
and indisputable eligibility to retirement held on to
their positions, fearing the then financially weak con-
dition and uncertain future of the fund made it a
refuge too doubtful for them to resign their position,
till absolutely compelled to do so.” The leaders of the
fund made strenuous efforts and hoped to secure the
desired legislation in time to avert a disaster. In the
meanwhile, they stated in their official reports that all
was well with the fund. Thus, the Secretary, after
reporting in 1903 a “most prosperous year in the his-
tory of the fund,” reported in 1904 that the past year
was “a genuinely prosperous One,” that it was “a year
of marked prosperity,” and again in 1905 she reported
“another prosperous year.””
Of the two purposes, free administration and com-
pulsory membership, the first seemed easier to be
attained through legislation than the second, for it
was apparent that a compulsory measure would be
opposed not only by some legislators, but even by
many teachers.
All efforts were concentrated, therefore, on securing
free administration. Several times they introduced
bills providing that the State should reimburse the
fund for the past administrative expenses and should
pay for expenses in the future.” Finally, in 1905,
when Governor Stokes, who was greatly interested in
the fund, came into the office, the leaders of the move-
ment succeeded in securing the passage of the bill
providing for an annual appropriation up to the
amount of $1,500 for the administration of the fund.
It was to go into effect in 1906, and was to apply to the
administrative expense for the fiscal year 1907.
Although no reimbursements were obtained for past
expenses, and although the authorization was only for
a comparatively small amount, this was, nevertheless,
a very important achievement.
The report of the Committee of the Association
characterized this success as “a great triumph, the
first important victory won on the line after several
years of effort.” ” Once the principle of state aid for
administration was established, the amount could
easily be increased in the future.
This success encouraged the leaders.” They could
now concentrate their efforts on the accomplishment
of the second and most difficult purpose, the securing
of a compulsory membership measure. It appears that
they felt that great haste was necessary in this matter,
and that they tried in the meanwhile to prevent the
development of a deficiency.” It is true, the fact of a
28 Report of the Retirement Fund, New Jersey School Report,
I907, page 405. The membership on June 30, IQ03, was 3,750.
* It is interesting to note here that the large number of accumulated
pending applications (25 in 1902 and 23 in 1903) was reduced to I6
in Igo4, and to Io in 1905. Out of the I6 applications pending in
I904 8 have been tabled indefinitely for the following reasons: The
fact of disability to earn a sufficient livelihood had not been satis-
factorily established in 3 cases; I case was in litigation, 2 had resumed
employment, I had married and did not urge her claim, and I was
residing in Missouri, so that the committee was unable to report on
her case. (New Jersey School Report, 1904.)
* As a result of the fact that the Retirement Fund postponed grant-
ing the 2 I applications which were still pending at the end of Novem-
ber, Igo4, rumors were spreading that the Fund was unable to pay
them. Anonymous reports to that effect were issued and given prom-
inence by newspapers throughout the state. A circular was issued
on December 1, 1904, by Mr. T. J. Bissell, an officer of the State
Teachers' Association, and of the Retirement Fund Department, in
which he stated: “When the teachers of the state appeared before
Governor Murphy in reference to the Teachers' Retirement Fund, the
Governor frankly stated to them that he had investigated the Fund
and did not hesitate to say that the affair was then bankrupt. On
several occasions since then the Newark Evening News has in editorials
claimed that the Fund is bankrupt, and intimated that whoever per-
mitted the teachers of the state to continue paying the assessments
were no more nor less than robbers.”
Although Miss Allen immediately refuted the charges as to bank-
ruptcy, and the Board of Trustees immediately retired most of these
applicants, these views, nevertheless, helped to undermine the
teachers' confidence in the Fund (see the Secretary's statement in
Appendix C).
* New Jersey State Teachers Association report, IQIO, page I73.
27 Official reports of the Retirement Fund in New Jersey School
Report, I903, page 279; Igo.4, page 35I; Igoš, page 367.
28 In accordance with the resolution adopted by the State Teachers'
Association in 1902, two bills were introduced in the legislature in
I903. Assembly bill 312 provided for a state appropriation of $2,500
annually for administration, and assembly bill 278 provided for a state
appropriation of $10,803 to reimburse the Fund with interest for past
administrative expense. These bills failed to pass, as the Governor
did not favor such appropriations.
29 New Jersey State Teachers' Association, Igoš, page 45.
30 See page 25, quotation from report of the Committee on Resolu-
tions, New Jersey State Teachers' Association, Igoş.
31 The year 1905–1906 was marked by a great activity on their
part in arranging bazaars and entertainments; it would have ended
in a deficiency, as shown on page 27, had not large sums of moneys
been collected from these outside sources.
24 N E W J
E R S E. y
{
deficiency would not have necessarily meant that the
fund had collapsed. It could still draw upon its capi-
tal. But there is no doubt that the fact of a deficiency
would have worked towards a further loss of confi-
dence in the fund on the part of the teachers and the .
public.
Rapidly moving on the down grade, the fund
reached the crucial point, where the steepest decline
began. It was hanging on the brink of a precipice.
It needed immediate aid.
In one of her later reports (1906) Miss Allen gave
the following explanation of this disastrous situation
of the fund: “In my opinion, the only reason why the
‘old I Wo fund’ could not go on, is because the teachers
of New Jersey would not join as a body and support
it.” This belief that the salvation of the system lay
y
in a large membership rather than in a reorganization
on a sound actuarial foundation, this fundamental fal-
lacy, which together with the other fallacies was re-
sponsible for the failure of the fund, was bound to
become still more accentuated in the future.
It is true, the influx of new members, obtained
through legislative action, would give the fund a
respite, it would pull it out of its dangerous position,
and would even start it on an up-grade. But at the
same time, it would increase the real liabilities of the
fund and its deficiency, which was hidden behind the
apparent prosperity of the system.
The fund would soon start down a still deeper de-
cline and would carry down with it the hopes and the
funds of its many contributors.
CHAPTER III
Compulsory Clause and the Confusion of 1906
Report of the Investigating Commission. Framing the bill: Compulsory clause; Increase of dues; Abolition of refunds; Non-
member teachers to be enrolled; Teachers' control over the Fund increased; Original interpretation of incapacity restored.
Passing of bill and endorsement by actuary. Governor's demand; Looking for actuarial endorsement; Mr. Fackler's endorse-
ment; Bill becoming a law; Its significance; What would become of the old annuitants.
Confusion created by Act of 1906:
A surprise to the members; No special advantages; Opinion of Attorney General; Two funds and the divided membership;
Alarm sent out that the Fund might fail; Censuring the 1% contributors; Same illusion as before; Warnings to those having
a selfish point of view; Change of opinion regarding 'separate funds'; Change of opinion regarding old annuitants.
Report of the Investigating Commission
Although the Secretary of the Fund vigorously
refuted in 1905 the rumors that the Fund was on the
verge of bankruptcy," these rumors were rapidly
spreading. The criticism and lack of confidence to-
ward the Fund were so widespread that an impartial
investigation of the Fund became necessary. The
President of the State Teachers' Association appointed
an Investigating Commission, consisting of one teacher
and two outsiders; Professor Byron P. Mathews, who
was not a member of the Fund, was selected as the
teacher member; and Charles H. Hartshorne, a
prominent lawyer of Jersey City, and Judge William
R. Codington, of Plainfield, were asked to serve as
the outsiders. In the course of its investigation, the
Commission became convinced that the dues of 1%
of salaries were inadequate. The disbursements at
that time already amounted to more than 1%.” The
Commission decided to consult an actuary as to what
rate of dues would, in his opinion, be adequate, and
* Report of Retirement Fund Department in New Jersey State
Teachers' Association, 1906.
* See page 23, foot-note 25; also Appendix C.
* In 1896 the disbursement amounted to only 34 of 1% of the
what measures should be taken to put the Fund on a
more stable basis. On November I, it submitted a
series of questions to Mr. Fackler, a consulting actu-
ary, and asked him to report on these questions before
December I.
Mr. Fackler “immediately asked for statistics which
would show the proportion of teachers dropping out
during each school year for the last twenty years,
regardless of the fact whether they were members of
the Retirement Fund or not,” and “statistics as to the
number joining and dropping out by resignation from
the Retirement Fund,” and also “definite information
regarding the attained ages of present members.” ” It
appeared, however, that “on none of the above points
could any information be obtained in time to serve as
a basis” for his report, which was to be rendered by the
first of December. He made only a few calculations,
and even these he was compelled “to base largely on
assumptions.” On account of lack of statistics, he
also found it impracticable, within the short space of
time allowed, “to answer definitely the series of ques-
tions originally submitted,” and he prepared only a
very brief report, “based on hypotheses,” and accom-
salaries. The ratio increased from year to year, until finally it ex-
ceeded the I976, in 1904.
* Report of Mr. Fackler to the Investigating Commission, Novem-
ber 27, 1905.
S T A T E
R E S E A R C H. 25
panied with no actuarial tables, in support of the gen-
eral conclusions he was able to reach and of the
recommendations which appeared to him most ex-
pedient.
This report was presented on November 27, 1905.
“It recommended that the teachers should pay from
2% to 6% of their salaries, according to their ages
attained at the time when the law went into effect, or
when joining the Fund thereafter; and that no return
should be made to those who might give up member-
ship voluntarily.”* It stated that “while the per-
centages of the older ages might to some seem high,
they would be relatively rather less than should be re-
quired,” and that “some aid might be required from
the State for a few years, to make good the deficiency
in the Retirement Fund, but in the course of time the
Fund would become self-supporting.” In presenting
these conclusions, it took no account of annuities then
Outstanding.
On the basis of the various reports and evidence
received from various sources, the Commission pre-
pared its report. It found that the 1% contribution
was inadequate, and that the Fund could not continue
on the same basis.
The report of the Commission was read at the meet-
ing of the State Teachers' Association held at Atlantic
City at the end of December of that year (1905). Im-
mediately a resolution was proposed to appoint a
Commission, consisting of 21 members, to draft an
amendment. This resolution was offered in the same
report of the Committee on Resolutions which an-
nounced the success of the promoters in obtaining the
legislative measure providing for a state appropria-
tion for administrative expenses.” The resolution read
as follows: "
Now that we have a friendly Executive, we believe that
any properly considered measure looking to its (the Fund's)
strengthening, enlargement, and perpetuation on the lines of
the report of the Retirement Fund Commission of Investiga-
tion will receive the favorable consideration of the Governor
and the Legislature. In this connection, your committee
recommends the following resolution: Resolved, that a Com-
mission be and is hereby appointed with power and is directed
to frame what shall be in their opinion an adequate Teachers'
* Report of November 2, 1917.
* Mr. Fackler assumed that all teachers would join the Fund. He
assumed such distribution as to ages as would exist in the entire force.
This distribution was much lower, of course, than the age distribution
which may have existed at that time in the Fund, to which less than
one-half of the teachers belonged and in which the proportion of the
old teachers was considerable. He also assumed that the average
‘life time' after retirement at age 6o would be 6 years. This was a
very low estimate, as shown by Mr. Fackler's report of 1917, in
which he stated that “each annuity when granted has an average
present value about 9 times the amount payable in one year,” which
means that the average lifetime after retirement is more than Io
years.
* See page 23.
* New Jersey State Teachers' Association Report, 1905.
Retirement Fund bill, and after consultation with the Gov-
ernor and members of the Legislature to introduce the said
bill into the Legislature of 1905 at the earliest possible date.”
Framing the Bill
The framing of a bill was undertaken. The leaders
of the Fund wanted to rush the preparation of the bill,
believing that it should be introduced in the legislature
which was then in session. The majority of the Com-
mission supported them in this endeavor, and also
supported the measures which they proposed. A
minority of the Commission, according to a statement
by one of its members, was opposed to haste, believing
that it might result in ill-conceived measures.
While the original intention of the leaders, as evi-
denced by their address before the State Teachers'
Association meeting in 1902, was merely to secure a
provision which would compel all new appointees to
join the Fund and would thereby assure the Fund of
a constant influx of ‘young blood', their present opin-
ion, following the investigation of I905, was that this
provision alone would not sufficiently improve the
condition of the Fund, and that, in addition, it would
be necessary to increase the rates of contributions of
both present and future members.
The framers of the bill ignored almost all the recom-
mendations which the actuary made in his report to
the Investigating Commission.” They followed their
own ideas and sought no actuarial advice. Whereas
Mr. Fackler's report recommended a rate of contribu-
tions between 2% and 6% of salaries, according to age,
they decided on a rate of contributions only between
2% and 3% and graduated according to length of
service of the teacher at the time he became a member,
* The resolution proposed that the composition of the Commission
should be as follows: The President of the State Teachers' Association;
the Chairman of the State Teachers’ Association Committee on Legis-
lation; one member, appointed by the State Board of Education, or
the President thereof; Superintendents Addison B. Poland of Newark,
William E. Chancellor of Paterson, William M. Swingle of Orange,
Ebenezer Mackey of Trenton, Henry M. Maxson of Plainfield, James
E. Bryan of Camden, John Enright of Freehold, H. J. Neal of Lake-
wood; the President and General Secretary of the Teachers' Retire-
ment Fund department of this Association; the following Principals,
Mr. Albert S. Chadwick of Paterson, Mr. Otto H. Schulte of Newark,
Miss Mary A. Burrough of Camden, and Miss Margaret L. Van
Winkle of Jersey City; and, ex-officio, the President of the State Board
of Education; the State Superintendent of Public Instruction; and
the members of the Retirement Fund Commission of Inquiry.
* Mr. Fackler said in his report (1917): “The act of Igoó, however,
almost entirely disregarded the essential recommendations made in
my report of November, IQoS, that contributions should be based on
age attained at the time of entering the Fund. That law graded the
contributions only according to previous experience in teaching, from
2% up to 3%, so that a new teacher, 35 to 55 years old, would pay
no more than a young teacher, just beginning at the age of 20.”
Furthermore, the years of service were counted as of the time when
entering the Fund. Thus, a teacher who entered in 1896, after having
had an experience of Io to 15 years, would contribute the same rate
of 2%% as the teacher who would enter in 1906, after having had the
same experience. Yet the former would, in Igoó, be over 40 years of
age and have over 20 years of service, while the latter would be only
30 or 35 years of age and have only IO or I5 years of service.
26 * N E W
E R S E Y
º
in the following manner: 2% for those who have
taught less than IO years; 2%% for those who have
taught more than IO and less than 15 years; and 3%
for those who have taught more than 15 years when
becoming a member. In order to protect the higher
paid teachers from paying too large sums, it was pro-
vided that no teacher should be required to contribute
more than $50 annually, or more than $1000 in the
aggregate. The minimum ultimate payment which
every retiring teacher must contribute before receiving
the annuity, was increased from 20% of the salary to
the amount of one year's annuity, that is 50% of last
five years' average salary.
An examination of the bill shows that there were
apparently three difficult problems involved in its
preparation: first, how could opposition to compulsion
be avoided;” second, how could the rates of dues be
increased without violating the legal rights of the
members;” and third, what could be done about the
annuitants who were then on the retired list, and who
presented a heavy expense and no revenue whatsoever
for the Fund.
Compulsory clause. The compulsory clause was so
framed that it applied only to new appointees. No
attempts were made in the bill to make membership
in the Fund compulsory for all teachers who were then
in the service, but who were not members of the Fund.
This limitation of compulsion presented legal compli-
cations. The right of the state to compel new ap-
pointees to join the Fund could not be seriously ques-
tioned. It could be sustained by several arguments:
first, that the Fund was a part of the school law and a
part of the school system, and had a public purpose;
and second, that there was really no compulsion, be-
cause any applicant for a teaching position would be
informed before accepting the employment contract
that participation in the Fund was required; if the
applicant did not wish to participate, he was free to
refuse the position.
The provision was to become effective only after
January 1, 1908. For all teachers who would be
appointed within the next year and a half, the partici-
pation in the Fund was to be optional. The purpose
of this postponement evidently was to prevent objec-
tions being raised that the bill would change the con-
ditions of employment offered to those who at that
time had applied for a teaching position.
Increase of dues. The provision increasing the dues
of the members to 2%, 2%%, and 3% of salaries was
so framed as to allow the members who were then in
the Fund, either to accept the act increasing their
dues, or not to accept it. In accepting the act, the
member would have to sign a notification, in which he
would waive all rights acquired by him under previous
Statutes,” and he would then be transferred to an
entirely new ‘2, 2% and 3% fund'. Time to file noti-
fications of acceptance was to expire on January 1,
I907. Two measures were adopted against those who
would refuse the higher rates.” In the first place,
they would be classified and put under the provisions
of those acts which were in force at the time they
became members, and they would lose the rights which
might have been conferred upon them by amendments
which have been enacted since the time they had
joined. In the second place, they would be divided
into “separate funds', and their benefits would be paid
only to such extent as their respective funds would
permit. 14
All teachers who would apply for membership in
the future would be subject to the new act and would
have to contribute at the new rates.
Abolition of refunds. An important provision, which
abolished all refunds of dues to teachers who resigned
or were dismissed, was incorporated in the bill.”
This would increase the revenue from lapses and
relieve the Fund in the future of the expenses for re-
funds. The previous laws allowed refund of one-half
of the dues, without interest, to those who resigned
or were dismissed after having contributed for more
than 5 years. Only about $600 were disbursed in
refunds during the preceding four years.” With the
higher rates of contribution, the future refunds would
have been much more considerable.
Non-member teachers to be enrolled. It was important
to devise some provision which could help to enroll the
6,ooo teachers who were not members, and thereby to
increase the income of the Fund. The provisions of
the laws of 1900, 1902, and IQ03 allowed the teachers
to enter the Fund at any time. Many teachers were
probably postponing from year to year their decision
to enter the Fund, considering that they would not lose
anything by deferring decision. Now, a different pro-
vision was incorporated in the bill. The doors of the
Fund were to be closed to them on January I of the
following year (1907), thus giving them until the end
12 The text of the notification of acceptance was incorporated in
10 The discussions at the meetings of the State Teachers' Associa-
tion of 1902 and 1903 clearly show that this difficulty was realized.
* See decision of the court as to contractual nature of relations
between the Fund and its members, in case Harriett E. Ball vs. Board
of Trustees, quoted on page 18, foot-note 2.
the bill. The teacher would sign that “I do hereby agree to be bound
thereby (by the new act), and that I do hereby waive all rights under
previous statutes.”
18 That these measures were intended as a deterrent against the
refusal of the higher rates is shown by the writings of the leaders of
the Fund. See page 3I.
14 For further explanation see page 29.
15 This provision was worded as follows: “On resignation or retire-
ment from employment in any of the Schools hereinafter mentioned
for any cause other than retirement on annuity as aforesaid, all rights
or interest in said Fund of any teacher upon whom this article shall
become binding shall immediately cease and determine."
16 In accordance with the law, no refunds could be paid during the
first five years of the operations of the Fund.
S T A T E
R E S E A R C H 27
of the year a chance, and apparently the last chance,
to enter the Fund.”
Teachers' control over the Fund increased. A further
step was taken along the line of increasing the teachers'
control over the Fund. The number of teacher mem-
bers of the Board of Trustees was increased from 3 to
5. They were now to have a majority. The State
Board of Education was altogether eliminated from
participation in the management. Its three members
were to be replaced by three members non-teachers
appointed by the Governor.
Original interpretation of incapacity restored. The
restriction introduced in 1902, requiring an applicant
for annuity to be incapacitated, not only from per-
forming the duties of a teacher, but also ‘from earning
a sufficient livelihood by any other means', was re-
moved. The original condition of incapacity ‘for
performing the duties of a teacher' was restored as a
sufficient qualification for annuity.
Passing of Bill and Endorsement
by Actuary
Governor's demand. The bill containing the above-
mentioned provisions was introduced in the Legisla-
ture on March 20, as ‘Assembly Bill No. 447', by
Assemblyman Arrowsmith, of Hoboken. Its promo-
ters tried to rush the matter, because they realized
that the Fund was hanging on the brink of a preci-
pice.* The disbursements already exceeded the re-
ceipts, with the result that a deficiency began to
appear. A special effort had to be made to arrange
bazaars and entertainments, from the proceeds of
which the deficiency could be covered before the
closing of the fiscal year.” It would have been diffi-
cult to repeat the same effort the following year, when
another deficiency would have arisen. The fact that
the Fund had developed an annual deficiency would
have increased the rumors that it was bankrupt and
would have increased the opposition, both among
teachers and legislators, to a compulsory membership
provision.
The bill passed both houses on April II,” and it was
now up to the Governor to sign it. But the Governor
proceeded very cautiously. He did not want to sign
the bill containing the compulsory clause, unless it
was endorsed by an actuary as being sound.”
” The membership was also to be increased by admitting State,
County and City Superintendents and also Supervisors and teacher
clerks. These classes were formerly excluded from membership.
* As evidenced by their subsequent statement, see page 24.
* The year 1906 would have ended with a deficiency of $4,800 had
not $10,500 (the largest sum ever obtained by the Fund from outside
Sources) been collected from bazaars, entertainments, donations and
legacies.
* Passed the Assembly on March 29, and Senate on April II.
Looking for actuarial endorsement. The Secretary of
the Fund called on Mr. Fackler and asked him to give
a statement of his opinion on the bill, in order that it
might be shown to the Governor. Mr. Fackler had
not participated in the framing of the bill. In fact,
he never before had seen the bill or heard of it.” The
provisions of the bill essentially differed from those
recommended in his report to the Investigating Com-
mission. While his report proposed that “contribu-
tions should be based on age attained at the time of
entering the Fund', the bill 'graded the contributions
only according to previous experience in teaching’.”
While his report recommended contributions ranging
from 2% to 6% of salaries and, in addition, also state
aid to cover the deficiencies which, he thought, might
appear in the beginning, the bill proposed contribu-
tions of only 2%, 2%%, and 3% of salaries, and pro-
vided for no state aid. While his report assumed that
all teachers would be compelled to participate in the
Fund, the bill made participation compulsory only for
new appointees. The proportion of the old teachers
and the deficiency on their account would be much
larger, of course, in the latter case than it would be if
all teachers joined. To summarize, the bill fixed con-
tributions at a very low rate, introduced factors of a
very uncertain nature. It would naturally raise doubt
in the mind of an actuary as to the adequacy and
soundness of the plan. But only reliable statistics of
ages and lengths of service of the members of the Fund
and only thorough actuarial calculations could enable
an actuary to give a definite answer to the question:
would the contributions be adequate? would the Fund
be able to meet its future obligations?
Mr. Fackler, however, had no statistics of ages and
of lengths of service of the members of the Fund, nor
those of the lapses among the members of the Fund.
And he had no time either to obtain these statistics or
to make any thorough calculations, as he was asked
to give an immediate opinion. He thought that the
new system was an improvement on the old one, and
this he was ready to state. But the Secretary asked
for a more positive statement for the Governor.
Mr. Fackler's endorsement. Mr. Fackler was fur-
nished 'some partial statistics for twenty years, which
appeared to show a greater rate of retirement from
ment, Governor Stokes would not have signed Assembly Bill No.
447.” How cautious the State was in its attitude to the Fund, can be
seen from the fact that in granting to the Fund an appropriation of
$1,500 for annual expense of administration, it expressly declared that
“such expenses shall be in no wise a guarantee on the part of the State
* Referring to this fact in her report of 1906 (State Teachers' Asso-
ciation), Miss Allen stated: “Without whose (the actuary's) endorse-
as to the security, condition or prospects of the Fund.” (Sess. Law
I905, ch. 95).
* Mr. Fackler says in his recent report (1917): “As to the Act of
1906, I should state that I had nothing to do with framing it, and
never heard of it until after it had passed both branches of the Legis-
lature.”
28 See quotation from Mr. Fackler's recent report (1917) on page 25,
foot-note 9.
28 ‘ N E W J
E R S E. Y
deaths, resignations, etc., than had been assumed' in
his November report.” He had only about one or two
days for study,” and could only turn the question over
in his mind, without making any thorough calcula-
tions. These statistics, said Mr. Fackler in a recent
report, “induced me to express a belief that in the long
run the dues of the 1906 act would pay all legitimate
demands’.” He wrote a letter which, as later develop-
ments have shown, could be interpreted as a broad
indorsement by an actuary that the dues required
under the new system would be adequate to meet all
the future obligations and to assure the financial per-
manency of the Fund.” The letter was accompanied
with no qualifications to the effect that the actuary
had no data and no time to make thorough calcula-
tions, or that it was merely a belief which was not
based on any careful calculations. The letter read as
follows:
April 30, 1906
Miss E. A. Allen, Secretary
Room 408, 74 Cortlandt Street
Dear Miss Allen:
The proposed amendment of Article XXV of the New Jersey
Public School Law, about which you asked my opinion on the
26th, has been carefully considered, and I believe that the
income under the amendment would in the long run be suf-
ficient to meet all legitimate demands from the teachers coming
wnder the amendment. Assuming that the various laws will be
interpreted with due regard to all equities,” I can also state
that I see no reason why the funds applicable to teachers
coming under the amendment should not be sufficient for all
requirements from the time the amendment may go into effect.”
Yours very truly,
(Signed) D. P. FACKLER
Mr. Fackler's letter was exceedingly vague. If
taken as a whole, it could be interpreted in the sense
that the dues would be sufficient in the long run (as
stated in the first sentence), as well as in the immediate
future (as stated in the second sentence). On the other
hand, if only the first sentence were taken, it could be
interpreted as meaning that the dues would be suf-
ficient only in the long run, and might at any moment
in the near future prove insufficient.
Bill becoming a law. Its significance. This letter
was presented to the Governor. It evidently gave
him the assurance he wanted, for he signed the meas-
ure. The bill became a law on June II, I906.
Thus, it appears, the State was led to believe that
the interests of the new appointees would be safe-
guarded, as they would be compelled to enter a fund
which will be sufficient to meet all their annuity de-
mands in the future. Apparently, the State did not
know that the system had been constructed in a hasty
and ill-conceived manner, as shown by the fact that
it had to be amended the following year. Soon the
State was going to learn that by granting the compul-
sory provision and thus extending to the leaders of the
Fund the helpful hand which they solicited, it em-
broiled itself in a troublesome venture.”
For the founders of the Fund, on the other hand,
this was a great victory. The compulsory provision,
for which they had been longing for so many years,
was at last enacted. The Fund was put to some extent
on a ‘self-recruiting’ basis and was assured of a regular
annual influx of ‘young blood'. Its existence, which
had been in great danger, was now prolonged. And
yet, there was a great reason for anxiety as to what
the great mass of the teachers would say when they
learned of the increase of their contributions.
What would become of the old annuitants? Some of
the provisions of the Act of 1906 were expressed in very
vague terms. On the surface, it did not appear to
affect the Io.2 old annuitants who were then on the
retired list, for it never mentioned them. And yet an
analysis of certain provisions which treated of the
active contributors of the Fund shows that in an
indirect way the old annuitants would have been most
vitally affected.”
If the funds of each class of members were to be
kept separately, as the law provided, and were to be
used for the payment of annuities of the members of
that class only, then the annuities then outstanding
30 In the year 1918 a committee of the Legislature, upon learning
that the Fund on its present basis would be unable to meet its obli-
gations towards its members, recommended to the Legislature—
“That the state withdraw its implied sanction of the Teachers'
Retirement Fund in requiring all new entrants into the system to join
and contribute to the Fund; or as an alternative, that the prospective
benefits of the Fund be adjusted to represent their just relation to
past and future contributions.”
31 The entire provision governing the question of benefits and funds
of the contributors who would not accept the higher rates of dues-
this important and involved question—was expressed in the following
few and indefinite words: “Those of such teachers as shall not so
signify their acceptance of this article shall be classified under the
provisions of the respective statutes under which they became en-
titled to such interest, and shall be entitled only to such benefits as
are thereby conferred; the board of trustees shall keep separate the
* Mr. Fackler's report of November 2, 1917.
* Mr. Fackler's opinion was asked on April 26. “April 29 was a
Sunday, when no work was done,” says Mr. Fackler in his report of
I9I7, Appendix II. The opinion was rendered on April 30.
* Mr. Fackler's report of November 2, 1917.
* The circular of information issued by the Board of Trustees in
I906 appealing to the teachers to accept the new law stated that “Its
(the law's) provisions as to dues and annuities were approved by the
actuary, Mr. David Parks Fackler. It is believed that the
stability of the Teachers’ Retirement Fund is now assured.” Similar
references to Mr. Fackler's letter of endorsement were contained in
other literature issued by the managers of the Fund.
* This evidently means the equities between the members who
would come into the new 2%, 2%%, and 3% fund and those who would
not come in and would form their own separate funds, according to
the laws under which they joined. It assumes, evidently, that the
capital of the Fund will be divided between them, according to their
equities in it.
* The italics were not in the original.
fund of each class, and the Secretary of the board shall keep an
accurate roll of the members of each class.”
S T A T E
R E S E A R C H 29
annuities, and the more rapidly would the old fund
collapse and the new fund rise. If all members would
accept the higher rates, then there would be no annual
income whatever available for the payment of these
annuities, except that some moneys could be collected
from entertainments, donations, and bazaars, which
could enable the old fund to pay a few cents on each
dollar of its obligations.
The annuitants were unaware of the danger to
which they were exposed.
Confusion Created By Act of 1906
A surprise to the members. The hopes of the man-
agers of the Fund were that the majority of members
would accept the higher rates and transfer to the new
fund.” What actually took place, however, was very
different from what they had expected.
The Circular of Information, with the announce-
ment of the new act with its higher rates of dues and
an appeal to accept it, came to the members as a great
surprise.” It had never before been intimated to
them that an increase in dues was necessary; and their
opinion about it had not been asked. Only a year be-
fore, the bankruptcy of the Fund had been dis-
claimed,” and yet from the examination of the law it
appeared as if the obligations under the previous laws
were being liquidated. They wanted to know what
advantages the new act offered them, what were their
legal rights, and what effect the division of the old
fund into separate funds would have upon their
chances of obtaining an annuity in the future. “The
Secretary has been literally deluged with inquiries to
be answered by ‘return mail’, ‘definitely and accurately
on every point’,” and she stated in her next annual
report that “to answer all of these questions with
requisite speed and legal accuracy would employ a
corps of lawyers, a retinue of clerks, prompt decisions
by the Supreme Court, and instantaneous action on
the part of the Court of Errors and Appeals. Techni-
cally, the Secretary is not thus equipped.”
No special advantages. It was evident to the
teachers that the new law did not offer them any in-
crease of benefits or special advantages in return for
* See page 31, quotation from the Secretary's report.
* The circular thus explained the necessity of the law: “Under for-
mer laws the Fund had ceased to advance. During the year 1905–
1906, 55 new members were enrolled, while 150 members were lost
through marriage, death, removal from the State, discontinuing the
vocation of teaching, and retirement upon pensions and annuities
from the Fund. The demands upon the Fund were fast approaching
the limit of the Fund's ability to meet them, and unless membership
increased in proportion to the maturing claims, it would soon have
become necessary to abate annuities pro rata.
“After a careful and comprehensive investigation of cooperative
systems of annuities for teachers, the Commission of Inquiry was of
the opinion that the 1% contribution from salaries must, in time,
prove inadequate, even if all the teachers in the state should become
could not be charged against the ‘new 2, 2%, and 3%
fund'. Mr. Fackler's letter of endorsement assumed
that the dues of the teachers who would come under
the amendment would be applied only to the payment
of annuities of these members, and not to the payment
of annuities of the 1% contributors, including the old
annuitants who had retired prior to the amendment.
His letter contained no statement with regard to the
question as to whether the amendment would assure
the full payment of annuities then outstanding. Mr.
Fackler recently explained that it was well understood
at that time that the Fund could no longer maintain
at full rate the annuity roll then outstanding. It
would gradually liquidate these obligations.”
If the provisions as to separate funds were carried
out to the letter, then the members who would persist
in paying Iº would be divided into several classes
with separate funds. There would be a class of 1896,
another one of 1899, a third of 1900, a fourth of 1902,
and a fifth of I903. Since the annuitants at that time
were practically all of the 1896 class, it is probable
that their annuities would have been charged only
against the 1% fund of the 1896 class. Any other
arrangement would have probably resulted in litiga-
tions between the members of the various classes.
At that time,” the 1% dues * of all members
amounted to $21,000, whereas the annuity roll
amounted to as much as $27,400. It was evident,
therefore, that the dues of a smaller number of 1%
members would be still less adequate for the payment
of their annuity roll. Annuities would be reduced,
and the 1% fund would gradually collapse.
The smaller the number of persistent 1% contribu-
tors, the heavier would be the pro rata reductions of
* The significance of the fact that under the act of 1906 the old
annuitants could not be paid from the ‘new 2, 2%, and 3% fund'
because they belonged to the 1% class of contributors and had a
claim only on the fund of the 1% class, is discussed in Mr. Fackler's
recent report (1917, Appendix II). The report estimated that the
2I4 teachers who on June 30, 1907, still contributed 1% would have
been entitled to only about one-tenth share of the capital of the Fund,
which then amounted to about $93,000; in other words, the capital
of the I96 fund would have amounted to less than $10,000. He esti-
mated that their annual dues would have amounted to about $2,100.
Yet the annuity roll then outstanding required about $37,000 annu-
ally. The Fund would be able to pay them only about 6 cents on a
dollar. Of course, the moneys obtained from entertainments, ba-
zaars, etc., would have added something to the reduced annuities.
During the Io years from 1907 to 1917 the 1% fund would have
received a total of $21,000 in dues, in addition to the $10,000 capital,
or a total of $31,000. This was all that could have been paid out to
the I?6 contributors (including the old annuitants), if separate funds
would have been kept. “No interest has been added, as the accruing
annuities would have drawn out all the funds and receipts of this class
of members, leaving none to draw interest.” As the opinion of the
Attorney General and the Act of 1907 annulled the “separate funds'
provision of the Act of Igoó, the result was that $289,260, according to
Mr. Fackler's calculations, were paid out from the new fund during
these ten years to the retired 1% contributors, including the old
annuitants.
* June 30, 1906.
* There were only 4 or 5 members who paid 2% under the old laws.
members.”
87 See Appendix C.
30 &
E R S E Y
N E W J
the increased contributions, but that it threatened, if
they did not accept the higher rates, to deprive them
of the rights which they had acquired under amend-
ments subsequent to their becoming members, and to
place those who remained in the old fund in a pre-
carious financial condition. The further question
arises: What rights would the members lose by being
thrown back to their original status? An examination
of this question shows that the return to the previous
status would not necessarily have meant a return to
less liberal conditions. For some it would have meant
even a return to more liberal conditions. A most
inequitable and confusing arrangement would have
resulted.”8
Besides the higher rates of dues, the new Fund
appeared disadvantageous in two respects: the ulti-
mate payment of 20% of salary, which the teacher
must have made before he could apply for retirement,
was raised to the amount of one year's annuity, that
is, to 50% of salary, and the refunds of one-half of the
contributions, to which the teacher who resigned or
was dismissed under the old law was entitled, were
abolished in the new Fund. As a result of these con-
siderations, the teachers were reluctant to accept the
new law and to transfer to the 2, 2%, and 3% Fund.
Opinion of Attorney General. The reluctance was
greatly increased as they learned that the State Attor-
ney rendered an opinion to the effect that the division
of the Fund into several funds was illegal. “As I
understand it,” wrote Miss Allen, “the Attorney Gen-
eral says: There is but one fund; all members, past,
present, and future, are members of that fund, with
‘rights' varying only with the varying terms governing
the several statutes under which they joined.” 39
The opinion of the Attorney General removed the
greatest cause for anxiety among many members. It
reassured them that they would not be isolated from
other contributors if they continued on the 1% basis,
and that the Fund would not repudiate its obligations
towards them.
*How inequitable the effect of this provision upon the different
classes of teachers would have been, can be seen from the following:
teachers who entered under the law of 1896, who under subsequent
legislation could retire only in the discretion of the Board of Trustees,
would have regained the right of retirement on demand after 20 years
of service and incapacity, the Board having no power under the law
of 1896 to pass upon incapacity; those who entered under subsequent
laws would remain under the same provision allowing retirement only
in the discretion of the Trustees, and would not lose or gain any
rights in this respect. Those who entered prior to the amendment of
I902 would find that they were no longer covered by this amendment,
which restricted the retirement conditions by requiring incapacity
not only to perform the duties of a teacher, but also to earn a sufficient
livelihood; they would gain by being returned to their original status.
On the other hand, those who entered under the 1902 amendment
would find that they were especially discriminated against, being
allowed to retire only if "incapacitated from earning a sufficient live.
lihood', and that they could remove this restriction only by accepting
the higher rates and entering the new fund.
* State Teachers' Association Report, 1906.
Two funds and the divided membership. During the
six months, from June II to December 31, 1906, only
I,321 members of the old fund had filed notifications
of acceptance of the Act of 1906, and approximately
2,600 members, that is, two-thirds of all members,
remained in the old fund. As 307 new members were
added to the list, the new fund had a total of about
1,600 members on December 31, 1906. The results
appeared most disappointing to the promoters of the
scheme.
The annuity roll could not be repudiated, the old
fund resisted liquidation, and the new fund ‘did not
go'. The annuitants would continue to draw their
annuities from the moneys contributed by other mem-
bers. The persistent 1% contributors would be en-
titled to the same benefits as the 2, 2%, and 3%
contributors and would draw annuities from the same
fund.
Alarm sent out that Fund might fail. Then the
leaders of the Fund sent out an alarm that if the
teachers did not accept the higher rates of dues, the
new Fund would fail, just as the old one had done. In
her address the Secretary said:
What advantage, then, has the member of the ‘old fund'
in accepting the provisions of the Act of 1906 with its in-
creased rates and larger ultimate payments? I reply: your
own safety, the present safety, and the future permanency of
the Fund. The Attorney General's definition of your ‘Legal
Rights’ and mine to draw out annuities from the Fund puts
not one dollar into that Fund to pay these annuities.
The object of the new law was to provide a fund that is
financially adequate to meet every just claim made and to be
made upon it. I can see no way to reach that financial result
unless members voluntarily accept the new law, and induce a
fair proportion of the 6,000 teachers employed in (if not of)
New Jersey, who are not members, to become members, and
henceforth share the noble privilege of caring for the worthy
teachers whose vacant places in the classrooms they are
supplying, and in the future will supply, at far higher salaries
than any former incumbents ever received.
The actuary, Mr. David Parks Fackler (without whose en-
dorsement Governor Stokes would not have signed Assembly
Bill No. 447), Mr. Fackler in his calculations as to the feasi-
bility of the provision, says . . .
Here, the Secretary quoted Mr. Fackler's letter,
capitalizing in it the words that the Fund would be
fin the long run sufficient. It must be noted here that
the conditions to which the Secretary applied Mr.
Fackler's statement were in one respect different from
those assumed by him. Mr. Fackler certified that the
2, 2%, and 3% contributions would be adequate for
the payment of annuities which would be granted to
the 2, 2%, and 3% contributors in the future, but he
did not certify that they would be also sufficient for
the payment of annuities then outstanding. Since,
however, these annuities were not to be liquidated,
and the payment of these annuities, which in 1906
S T A T E
R E S E A R C H 3I
amounted to over $27,000 annually, was imposed upon
the funds furnished by the 2, 2%, and 3% contribu-
tors, it is evident that, under these conditions, Mr.
Fackler would not have pronounced these contribu-
tions as adequate.
Censuring the 1% contributors. The Secretary cen-
sured, in the following terms, the 1% contributors for
their refusal to accept the higher rates:
In “assuming that the various laws will be interpreted with
due regard to all equities,” Mr. Fackler did not, nor did Gov-
ernor Stokes, for one moment anticipate that the 3,500 “old
I 9% members' would settle down upon their so-called ‘vested
rights' and expect the future membership coming in, on and
after January 1, 1908, to carry them!
Same illusion as before. Persisting in her belief that
the adequacy of a fund primarily depends upon a
large membership, the Secretary explained the failure
of the old fund not by the fact that the 1% contribu-
tion was inadequate, but by the fact that “the teachers
of New Jersey would not join and support it as a
body,” and she threatened with the prospect that “the
new fund may fail for precisely the same reason.”
The same argument as to financial prospects, which
the writer had repeatedly advanced during the oper-
ation of the old fund which failed, she now repeated
in relation to the new fund; it was the same belief
that the greatest strain would be put upon the Fund
during the next few years, that “we are rapidly nearing
the point of maximum annuity demand, that in a few
years the Fund will reach the ground of safety, but
before that it may break down, if the teachers do not
sufficiently support it. *
Warning to those having a selfish point of view. Strong
warnings were sent out to those persistent I96 contrib-
utors who ‘regarded the Fund only from the stand-
point of self-interest'. Those who joined the Fund
after 1899 and prior to 1906' were reminded by the
Secretary that unless they accept the Act, they are
subject to be retired only on total disability to earn
a sufficient livelihood by other means than teaching'.”
All others, who entered before 1899 and were not sub-
ject to this condition, were warned by her that “in view
of threatened litigation (they) may do well to con-
sider that it is possible that the Attorney General's
opinion may be reversed. Also I would call their
attention to the fact that the law of 1896 contains a
provision for compulsory retirement by the Board of
Trustees of the Fund—a provision that might prove
advantageous for some of us to escape.” The menace
suggested in the last sentence was not a very serious
one. Had the power of retiring teachers been vested
in the State Board of Education, which was responsible
for the efficient management of the schools, it is very
probable that some superannuated teachers might
have been retired against their will. But the Board of
Trustees was responsible mainly for the safe manage-
ment of the Fund. Its tendency was to restrict retire-
ments, so as to prevent an excessive growth of the
annuity roll. It had nothing to gain and a great deal
to lose in case it would indulge in a policy of increasing
the liabilities of the Fund by granting annuities to
teachers who preferred to remain in active service.
As to the suggestion that the opinion of the Attor-
ney General might be reversed, and the Fund might
be divided, it was evident from the following sentence
in the Secretary's report that there was no reason for
the members to suspect that the Board of Trustees
might undertake a litigation:*
I wish to add, however, that I earnestly hope that the
Attorney General's opinion will stand, because (I) it will
avoid disputes and litigations on the part of members of the
different classes; and (2) it will simplify the bookkeeping and
keeping of accounts in the Treasurer's office, where “separate
funds' would be laboriously confusing.
Change of opinion regarding ‘separate funds'. As
shown by the foregoing quotation, the managers of the
Fund had changed their opinion regarding the desira-
bility of the division of the Fund into 'separate funds’.
Apparently the main reason for this change of opinion
was the fact that the majority of the members quite
unexpectedly remained on the 1% basis and refused
to come into the new fund. The division into separate
funds would not only have resulted in ‘endless disputes
and litigations' as to the division between them of the
total capital, which then amounted to about $90,000.
The new fund would have lost the support of about
2,000 members. Soon the 1% contributors of the I896
class would have found that their 'separate’ fund was
bankrupt, and in a few years the other classes of 1%
* “In my opinion,” the Secretary said, “the only reason why the
‘old 1% fund' could not go on, is because the teachers of New Jersey
would not join it as a body and support it. The ‘new 2, 2%, and 3%
fund’ may fail for precisely the same reason.” (State Teachers'
Association, 1906, Report of the Retirement Fund Department).
* The report of the Secretary said: “The Teachers' Retirement
Fund, unless the old members unite in accepting its provisions, has to
cross a very shaky bridge over a chasm of at least 5 uncertain years,
before it can reach the Promised Land of security made possible by
the terms of the Act of Igoé; and if the teachers do not support it
now, the Fund may break down before we get to that ground of
safety. The amount of annuities now in force calls for $39,753.24
yearly. More will be added to this obligation at every meeting of the
Board of Trustees. We are rapidly nearing the point of MAxIMUM
annuity demand. The greatest strain will be put upon the Fund for
the next two or three years. The operation of the thirty-five years'
District Pension Act has caused claims to mature and applications to
be presented that might otherwise have been deferred for some years,
had the applicants been eligible to one half-pay annuity only, instead
of two—the pension and the annuity both.”
* This statement was not entirely correct; only the teachers who
entered between 1902 and 1906 were subject to this additional con-
dition of disability “to earn a sufficient livelihood'. Those who had
entered between 1899 and 1902 could retire simply if disabled from
performing the duties of a teacher.
48 New Jersey State Teachers' Association Report, 1906, of the
Retirement Fund Department.
32 N E W J
E R S E Y
&
contributors would have found themselves in the same
predicament. The result of the law of 1906 would
have been disastrous, had not the Attorney General
come to the rescue with his opinion.
Change of opinion regarding old annuitants. It ap-
pears that the leaders of the Fund have also changed
their opinion with regard to their obligations to the
old annuitants. They had framed the bill of 1906,
under which these annuities would be discontinued and
the old annuitants would be paid off so much per
dollar as the divided funds would permit. After the
opinion of the Attorney General made it impossible to
repudiate these obligations, they changed their course
and sent out a stirring appeal to the persistent 1%
contributors and to the 6,ooo teachers who remained
outside of the Fund to save “the 128 precious lives',”
which were then on the retired list, and which were
going down ‘in sight of land'. “Throw out the life line
to them!” by joining the new Fund with the higher
rates, appealed the Secretary.
Throw out the life line! Teachers, shall we let our staunch
little Fund, that has so gallantly stemmed the breakers, go
down in sight of land, with 128 precious lives upon it, and not
throw out the life line to save it? I think not.
Shall we, to change the metaphor, stop right where we are,
with diminishing income, and depleted surplus, and 'standing
y
upon our legal rights' wait for the oncoming membership of
I905 to overtake us, so that we may lay upon their shoulders
the burden of our accumulating disabilities and liabilities?
I think not!
Shall we not, rather, 4,000 strong, go forth to meet the new
forces? Meet them more than half way, bearing unto them
priceless gifts in our hands, viz.:
I. An organized and working State Annuity System cre-
ated by ourselves for the teachers of New Jersey, that is the
most equitable and, therefore, the best that any state in the
Union has thus far devised and developed.
2. A contributing membership of 4,000 teachers carrying
their just share of the honors, the burdens, and the benefits
they confer.
3. A substantial Endowment Fund.
Thus shall we make the future teachers of New Jersey
debtors of those of the present; and thus may we bequeath
a heritage to them, for which in years to come generations
shall rise up and call us blessed.
But all the appeals to self-interest, all the appeals
to philanthropic instincts, all threats, persuasion, and
imploring—all these were in vain. The teachers were
rapidly losing confidence in the Fund. The 1% con-
tributors continued to refuse the higher rates and the
transfer to the new Fund. The 6,000 teachers outside
of the Fund continued to remain outside.
CHAPTER IV
Period 1907–1917
Act of 1907 at first fails to improve the situation; Act of 1907; Appeal to join; Further decline in annual surplus. Great member-
ship campaign at end of 1908, Results of the campaign. Increase of liabilities and decrease of annual surplus, Increase in lia-
bilities; decline in annual surplus.
Act of 1907 at First Fails to Improve the Situation
Act of 1907. The Fund, with its divided member-
ship, imperfect law, and a threatening litigation, was
in a dangerous situation, and to save it a swift remedy
was necessary. At the meeting of the State Teachers'
Association in December, 1906, a resolution of the
Association's Committee on Legislation was intro-
duced, proposing the establishment of a Committee
which should revise the Retirement Fund Law, and
prepare a bill to be introduced in the Legislature. The
resolution was adopted, and the following five persons
were appointed as members of the ‘Committee for
the Revision of the Retirement Fund Law’: Mr. J.
“Report of the Secretary of the Retirement Fund Department in
the State Teachers' Association Report, 1906.
Brognard Betts, Assistant State Superintendent; Pro-
fessor Byron C. Mathews, of Newark; Superintendent
Ed. Mackey, of Trenton; Mr. T. J. Bissell, of Newark;
and Miss Elizabeth A. Allen, the Secretary of the
Fund. Mr. Baxter, the State Superintendent, was an
ex-officio member.
The Commission revised the law of 1906 in several
important respects. The majority of the Commission,
according to the statement of one of the members,
shared the views of the Secretary of the Fund, that
the benefits under the new act should be increased.
The purpose of this apparently was to induce the
persistent 1% contributors to accept the new act with
its higher rates of dues, and also to make the Fund
more attractive to the 6,000 teachers who were not
members of the Fund.
S T A T E
R E S E A R C H 33
The clause of the Act of 1906 as to division of funds
was struck out. The provisions for pro-rating annu-
ities in case of insufficiency of funds was also omitted.
It is not clear why this provision was abandoned at
that time, when only two years before it had been
described by the Secretary as a guarantee of the
Fund's solvency." One of the explanations advanced
is that the presence of such a provision would have
made the teachers believe that the Fund was not
sound.
The bill prepared by the Committee was introduced
in the Legislature as Senate Bill No. 253 by Senator
Wakelee, on March I2, I907. It passed the Senate
and the Assembly, and was approved by Governor
Stokes on May 7, 1907.
The benefits conferred by the Act of 1907 were sum-
marized as follows in a circular issued by the Board of
Trustees:”
Special Benefits Conferred by the Retirement Fund Act of 1907
Not Conferred under any Previous Statute
I. Benefits are increased; burdens are lightened.
II. Annuities are six-tenths, or three-fifths (instead of one-
half) of the average annual salary for the last 5 years
of teaching; maximum annuity, $650 (instead of $600);
minimum annuity, $250.
III. Dues unpaid at time of retirement may be made up in a
lump sum, or the annuity may be credited towards
such payment, until the full amount due the Fund is
satisfied, after which annuity payments begin and go
on free and clear.”
IV. Annuities begin to accrue from date they are granted.
V. The annuity is relieved of the 1% tax to the Fund
(exacted under the previous statutes).
VI. Members who cease teaching and afterward return to
the vocation may resume membership in the Fund
and be credited with past payments of dues.
The annual meeting in September, at the State House
in Trenton, is a meeting of delegates to be elected by
the members of the Fund in the several counties, at
a meeting to be called by the respective county super-
intendents.
VII.
Appeal to join. “Join Now!” appealed the circular,
“to the 6,000 teachers of New Jersey who are not
members of the Fund.”
Join Now! Don't wait till the full time limit! Join the
Fund Now. Now is the time the Fund needs you; later, you
may need the Fund. The earlier you join, the lower will be
your rate of dues; the sooner they will be paid up, and the less
will be the balance you have to ‘pay down', should you wish
to be retired. On and after January 1, 1908, membership is
self-recruiting.
“Accept Now!” appealed the circular, “to the per-
sistent I96 contributors who have not accepted the
higher rates of dues.”
Membership is self-recruiting on and after January 1, 1908.
Let us meet the oncoming membership of 1908, more than
half-way, with the volunteer membership strong and with our
permanent endowment unimpaired. This provision
(compulsory membership of new appointees) will command a
membership and consequent increase of income which, we
confidently believe, will enable the Fund to meet all future
obligations.”
Since appeals to philanthropic instincts had failed
during the preceding year to move the teachers, the
strongest appeals were now made to ‘self interest'.
Under the caption, “Will it pay to join the Fund?” the
Secretary wrote in her annual report for 1907:
Our appeal is now to self interest. Do not the results
already attained by the Teachers' Retirement Fund amply
prove it to be the best investment any teacher can make who
wishes to insure a certain and comfortable maintenance in
the days of age or disability? The 36 deceased annuitants
paid into the Fund an average of $136.63 and drew therefrom
an average of $932.47. The Fund was a good investment for
them! The first annuity was granted in 1897; the living
annuitants of the classes of 1897, 1898, and 1899 paid into
the Fund an average of $146.60, and have drawn therefrom
an average of $3,760.27. These, too, have found it a good
investment. The average annual value of 190 annuities
granted to date is $353.40. To obtain this income in the
ordinary manner (by saving and investing) one must accumu-
late $7,068, which at 5% would yield $353.40. How long will
it take you to save $7,068 from your salary? To secure an
income of $650 a year one must invest $13,000. How long
will it take you to save $13,000 from your salary? The Retire-
ment Fund insures such an income against the day of need by
monthly payments so small that contributors scarcely notice
them. The question is, will it pay to join the Retirement
Fund? It is merely a matter of mathematics."
Great stress was laid on the argument that the com-
pulsory clause would make the Fund permanent.
Mr. Baxter, the State Superintendent of Schools,
estimated that the annual increase in the Fund's
income after January 1, 1908, resulting from the
operation of this clause, will be $10,600. “Add to this
the cheering fact,” wrote the Secretary in the same
report of 1907,” “that salaries have gone up, are going
up, and will continue to go up, and with the rise of
salaries a corresponding and proportionate increase in
* See Appendix, pages 42 and 43.
* Reprinted in the New Jersey School Report, 1907, page 4or.
* “If the Act of 1907 boasted of no other special privilege than that
conferred by this section,” wrote the Secretary in 1908 (New Jersey
School Report, 1908, page 28), “this alone would commend it to the
majority of members.” “Twenty-six teachers, availing themselves of
the lenient provision of the Act of 1907, authorized the Board of
Trustees to withhold their annuity payments until the amount so
withheld and credited should cancel their balances due, and thus in
six months or so, with not a cent out of pocket, they began to receive
their regular quarterly annuities full, free, and clear.”
* The italics were not in the circular.
* New Jersey School Report, 1907, page IoS.
* New Jersey School Report, 1907, page 403.
34 * N E w J
E R S E Y

the annual income of the Retirement Fund,” and we
cannot but feel that the future stability of the Teachers'
Retirement Fund is at last absolutely assured.”*
“At the same time,” wrote the Secretary, “just here
it is well to remind the teachers of New Jersey that
this 'assured increase' is still a prospective one, while
the growing demands upon the Fund are immediate
and imperative; that this ‘stability' so assured is the
"future' stability of the Fund. The “Promised Land' is in
sight, but there is a good year's journey ahead before the
Fund gets to that self-recruiting basis which is the main
guarantee of its future stability.”
Failure of all appeals. But all these appeals and
arguments failed to inject into the 1% membership
and in the teaching force at large a confidence in the
Fund, or any willingness to pay the higher rates of
contributions. On May 31, 1908, a year after the
enactment of the law, the paying membership of the
Fund was only 2,817, out of which I, II? were the
persistent 1% contributors, and 1,700 were those who
accepted the higher rates of the act of 1907.” Judging
from these figures, the paying membership of the
Fund, which prior to the Act of 1906 was far beyond
3,000, had decreased rather than increased. “Interest
in the Fund,” wrote the Secretary, “seemed to have
died out among the teachers, while hostility, active
and passive, still existed in many quarters.””
Further decline in annual surplus. The financial
situation of the Fund was far from being excellent.
While its receipts had increased by about $22,000
during the 2 years since the establishment of the higher
rates and of the compulsory clause,” in 1906, the dis-
bursements had increased during the same period by
about $25,000, with the result that the surplus of the
Fund declined to the lowest level yet attained in the
history of the Fund.”
Annual
Surplus
Year Annual Annual (Excess of
Receipts Disbursements Receipts over
Disbursements)
1906 . $34,800 $29, Ioo $5,700
I907 . 39,600 36,400 3,200
1908 . 56,400 54,800 I,600
Great Membership Campaign at End of 1908
There now approached the grave possibility that
the doors of the Fund might close with the 6,000
teachers remaining outside of the Fund, and a Con-
siderable part of its members remaining on the 1%
basis.
In September, about 4 months before the closing
day, the leaders announced that they “expected to
double the membership and income of the Retirement
Fund before the door shut on New Year's day.” They
had been actively preparing for a campaign through
the entire summer.” The planning of the campaign
was described by Miss Allen as follows:
The vital question was, How shall the interest of the
teachers be aroused? Experience had proved that but few
come to meetings, and those few were the faithful ‘old guard',
who did not need to be converted. How should we reach the
others? They would not come to meetings, and we had often
been assured that Retirement Fund communications went
into the waste basket unread. How then reach the others?
How overcome the deadly apathy? How revive interest?
How get around the active and passive hostility? Finally we
concluded that the most effective agency was the public
press.
But how could they secure the cooperation of the
newspapers, “many of the most powerful of which had
been unbelievers”? The answer was that “the Fund
had proved itself educationally, altruistically, eco-
nomically,” and had achieved remarkable results in
the past.
On this platform, we could in all propriety appeal to editors
for generous news space and friendly editorials; but we had
to furnish news; circulars and other printed matter were not
news; so we organized county rallies; sent speakers to the
institutes; and prepared reports for the press. Committees
waited on the editors, stating the situation frankly and be-
speaking Cooperation.
* The idea was rather one-sided. In reality an increase in salaries
would increase not only the income, but also the disbursements of the
Fund, as annuities would increase. The average amount of the an-
nuities granted since 1907 actually increased as follows: from $330
in Igo7, to $404 in 1910, $439 in 1913, $467 in 1916, etc. Every in-
crease in the salaries was bound to increase not only the total assets
of the fund, but also its total liabilities. Since the liabilities exceeded
the assets, every increase in salaries was bound to increase the defi-
ciency of the Fund.
* The italics were not in the circular.
* According to figures given by the Secretary in her report, 1909,
(New Jersey State Teachers' Association, 1909, page 122).
* New Jersey State Teachers' Association, 1908, page 81.
* The latter became effective only on January 1, 1908.
* It is interesting to note that the official report of the Board of
Trustees for 1908 (New Jersey School Report, 1908, page 2) referred
to that year's operation in the following terms: “Last year in the
business world was one of disaster. For the Teachers’ Retirement
Fund, it was the most prosperous year in its history, income jumped
from $39,000 in 1906–07 to $56,000 in 1907–08, and dividends (in
the shape of annuities paid) jumped from $35,000 in 1906–07 to
$53,000 in 1907–08.” According to this view, the disbursements of
the Fund are dividends, and an increase of them is a sign of prosperity.
It is the same point of view which was already discussed (see pages 9
and Io), which considers the annuitants as the only stockholders of
the corporation and ignores the fact that all members have a share in
it, and that it has definite liabilities.
18 “Although active operations were not begun until after the middle
of September, the preparatory work of organizing had been in progress
many months. Several of us had worked straight through the Sum-
mer without a day's intermission, for success depended on the thor-
oughness of preparation,” wrote Miss Allen in her report, Igo& (New
Jersey State Teachers' Association, 1908, page 81).
S T A T E
R E S E A R C H 35
The result fully justified our plan. The newspapers re-
ported our meetings with a surprising generosity; their edi-
torials were favorable beyond our expectations, and we are
glad to have another opportunity of thanking the gentlemen
of the press on behalf of the New Jersey public school teachers.
These papers we mailed by the thousand to county and city
superintendents, supervising principals, principals, and
teachers. Though the ‘literature' of this Department might
go into the waste basket unread, the editorials of the leading
newspapers commanded respect, and the favorable opinions
expressed compelled the most indifferent, even the hostile,
to wonder whether they had not been mistaken in their judg-
ment of the Fund. After the ice had thus been well broken,
we sent letters and circulars by tens of thousands, urging
membership on non-members, and urging members to coop-
erate actively in the work.”
Our appeal was on the business basis—to self interest; the
Retirement Fund as an investment; as the best insurance in
the universe. Potent arguments with editors, business men,
and teachers were the facts that for 12 years the Fund, in
spite of bitter opposition had not only met its every obliga-
tion, but had earned a surplus on each and every year's busi-
ness, and that I907–1908, a year of financial panic and disaster,
had proved the most successful in the history of the Fund.
Right here we predict that for the great majority of those members
who remain in the teaching profession in New Jersey membership
in the Retirement Fund will prove to be by far the best financial
investment of their lives. 15
Results of the campaign. The results of the campaign
were most gratifying to the leaders. Over 3,000 teach-
ers entered the doors of the Fund during the few
months before the closing time, with the result that
the total membership of the Fund more than doubled,
increasing from 2,800 on May 31, 1908, to about 6,000
nine months later.” All the 1% contributors had
accepted the higher rates of dues, except 215, who
persisted in contributing 1%. There remained only
between three and four thousand teachers who were
not members of the Fund. Each year, with the addi-
tion of new appointees, the membership of the Fund
would increase, coming closer to a 100% membership,
and the original aim of the leaders would thus be
attained.”
The income of the Fund from dues almost doubled
during 1909. Part of the dues were turned in only in
I9IO, resulting in another great increase of income
that year. The annual surplus rose at once from
$1,500 in 1908 to $33,100 in 1909, and to as much as
$65,000 in 1910. This was the largest surplus yet
realized by the Fund in any single year.

Annual
Year Annual Annual Surplus
End? Receipt Disb (Excess of
(Ending June 30) eceipts tsbursements | Rece;pts over
Disbursements)
I909 $97,700 $64,600 $33,100
I9IO . . . . . . I52, IOO 87, IOO 65,000
Increase of Liabilities and Decrease of
Annual Surplus
Increase in liabilities. The managers of the Fund
rejoiced over the fact that the great addition to the
membership increased the income of the Fund. But
they did not realize that it increased tremendously
its total liabilities and its actuarial deficiency.
The fact that the Fund had a larger membership,
a larger income, a somewhat higher rate of dues, and
that it was more often referred to as 'insurance', did
not make it much more sound than it had been before.
It continued to operate on the same unsound basis:
using the contributions of the younger members for
the payment of benefits to the older members, instead
of setting aside the contributions of each member to
a reserve, from which a benefit determined in accor-
dance with mortality tables could eventually be paid
to him.
Decline in annual surplus. After the great increase
of income of 1909 and 1910, a period followed when
the income would increase automatically, but at a
much slower rate. The annual increase of income de-
pended now mainly on the annual addition to the
teaching force and on the occasional increases of salary
schedules. The income fluctuated according to the
changes in these conditions, and also according to the
accuracy of the districts in transmitting the members'
dues. It did not increase as rapidly as did the dis-
bursements. While its average annual increase in
receipts during the 7 years from 1910 to 1917 was
about $18,000 per year, the average annual increase
in disbursements during the same period was more
than $24,000. The surplus of the Fund declined at
an average rate of more than $6,000 per year.
Thus the actual experience of these years failed to
support the belief which the managers expressed in
I907 that, with the annual increase of income, result-
ing from the self-recruiting membership and from the
salary increases, “the future stability of the Retire-
ment Fund is at last absolutely assured.””
* The campaign was conducted by an ‘army of workers', most of
whom gave their services without compensation. The expense of the
campaign covered by the Retirement Fund Department amounted to
about four and a half thousand dollars.
* State Teachers' Association Report, 1908, page 82. Italics were
not contained in the report.
* Report of the Secretary for 1909, New Jersey State Teachers'
Association, page 84.
* At the present time (1917) about 85% of the teachers are mem-
bers of the Fund.
* See page 34.
E R S E Y '
It is all too evident from the foregoing table that
Annual soon there will be no surplus—the disbursements will
Year Annual Annual º exceed the receipts, and the Fund will develop an
(Ending June 30) || Receipts | Disbursements (Excess of annual deficiency, unless further temporary relief is
Receipts over * * &
s obtained by some makeshift arrangement, or a per-
Disbursements) {º} ſº
manent improvement is effected through a funda-
mental reorganization of the system.
I9 II . . . . . . $174,800 $1 II,900 $62,900 The decline of the annual surplus of the Fund was
I912 . . . . . . . . I35,700 56,900 influenced to some extent by the operation of the so-
; tº ºn tº º º sº : ;: i. called 35 years' service pension law. It is frequently
I915 . . . . . . 23 sºo 20%00 Asºo claimed that the operation of this law tends to increase
I916 . . . . . . 264, IOO 23I,000 33, IOO the disbursements of the Fund. A few words about
I9I 7 . . . . . . 277,000 258,000 I9,000 the origin, development, and nature of this com-
paratively simple law are necessary.
CHAPTER V
The State Pension and Its Effect on the Fund
Origin of pension; How duplication could be prevented; Amendments lowering requirements; No estimate of cost made;
Double benefits and their effect; Doubt in soundness of the Fund stimulated.
Origin of pension. The agitation for a 'service
pension' payable entirely at public expense, and with-
out any contribution from the teachers, which began
in the early nineties, and, after suffering a severe de-
feat at that time, continued to develop along with the
movement of the Teachers’ Retirement Fund, achieved
its first success in a rather accidental way in the year
I903. The enactment of the first service pension law
came about in the following manner.
Some time in 1902, or in the beginning of 1903, a
certain teacher who had taught in Jersey City for
more than 40 years and had many friends in that city,
met with a severe accident. It appeared that he was
permanently incapacitated and would never be able
to return to teaching. A group of teachers in that city
attempted to obtain for him a pension. As the school
authorities had no power to grant the pension, the
teachers appealed to the Legislature to enact a law
giving the school authorities such power. They had
a bill framed and introduced in the Legislature. The
bill allowed any local board of education to pension
on half pay, without providing a special fund for this
purpose, any teacher who had served for more than
40 years consecutively in the same district. This would
have exactly covered the case of that teacher. The
bill passed both houses of the Legislature and became
a law on March 5, 1903.
It is curious to note that after the enactment of the
law, the condition of that teacher so far improved that
he returned to teaching and refused to avail himself
of the pension.
The requirements of the law were so high, and its
provisions so particular, that for the next three years
apparently only two teachers could qualify for the
pension and availed themselves of it.
How duplication could be prevented. In the year
I905, during the investigation of the Retirement
Fund by a Special Committee consisting of Professor
Mathews, Mr. Hartshorne, and Judge Codington, a
recommendation was made by Mr. Fackler in his
report to the Committee that the law should be so
changed that any teacher retiring under the provisions
of the pension act, “after 40 years of service in the same
district, should not be entitled to draw any annuity or
any withdrawal allowance from the Retirement Fund.”
Mr. Fackler also recommended a change in the pen-
sion law, by which
All teachers who have served for 40 years in the state
(regardless of whether it was in the same school district or not)
should be entitled to a pension to be paid out of the general
school fund, provided they are now or shall become members
of the Retirement Fund before June 30, 1906, or after that
date within I or 2 years after becoming teachers. This would
be a considerable incentive for all teachers to become members
of the Fund, except in cases where teaching was only a tem-
porary expedient. The state would thus say to the teachers:
“If you have, by joining the Teachers’ Retirement Fund,
shown a disposition to help yourself if incapacitated, and to
aid all others who might become so, the state will provide for
you after 40 years service.”
The main idea in suggesting these amendments was
that they would 'greatly relieve the Teachers’ Retire-
ment Fund from applications', because many teachers
would retire on the State pension, “leaving all their
contributions in the Fund', and losing all right to the
annuity from it. These amendments would have also
had another effect: they would have prevented the
S T A T E
R E S E A R C H 37
duplication of benefits, which proved later on a great
strain on both systems, and would have brought the
two systems into a closer harmony.
Several objections could be raised to these amend-
ments. It could be argued that a closer relationship
between the two systems was undesirable, as it would
lead to an interference on the part of the local school
authorities with the affairs of the Retirement Fund,
and to interference on the part of the managers of the
Fund with matters pertaining to the 35 years' service
pension. The enactment of a provision depriving all
teachers not members of the Fund of the right to a
pension would have undoubtedly evoked considerable
opposition. Furthermore, the enactment of such a
provision as recommended by Mr. Fackler would have
made it impossible for any teacher to receive two
benefits. Yet the prospect of receiving two benefits
was rather pleasing to the teachers.
Amendments lowering requirements. Whether any
objections were raised, or whether the recommenda-
tions were simply ignored, is difficult to ascertain.
One thing is evident: the teachers had a different
idea and secured amendments different from those
suggested by Mr. Fackler. At the meeting of the
State Teachers' Association in December of the same
year (1905), a resolution was adopted, directing the
Association's Committee on Legislation" to continue
“its efforts looking to a modification of the state law
for the retirement of teachers by local boards.” ” . The
desired modification was to broaden the scope and to
lower the requirements of the law. This was attained
a few months later, when on April 12, 1906, an amend-
ment was enacted, which lowered the requirements of
the law from 40 years of continuous service in the same
district to 35 years of service in the state, of which only
20 years must have been served in the same district in
which the teacher applies for retirement. This opened
the system to much larger groups of teachers. During
the following three months the number of pensions
increased from 2 to 7, and during the following year,
to 26, and it continued to increase rapidly from year to
year, as shown below:
I903 . . . I I909 . . . . . . . . 65
I904 . . . . . . . . I I9IO . . IOO
I905 . . . . . . . . I I9 II . . I25
I906 . . . 7 I9I2 . . I55
I907 . . . . . . . . 26 I9I3 . . . . . . . . I85
I908 . . . . . . . . 48 I9I4. . . . . . . . . 222
The pension disbursements rose from a few hundred
dollars to many thousands of dollars annually. Dur-
* The Committee consisted of Mr. Powell J. Fithiam, Mr. Herman
Stees, Mr. John Enright, Mr. Ebenezer Mackey, Mr. J. J. Savitz,
Mr. R. J. Boynton, Mr. W. M. Swingle, Miss Grace Duffy, Miss Mar-
garet Van Winkle, and Miss Elizabeth A. Allen.
* New Jersey State Teachers' Association, Report, 1905. The
Committee reported in 1906 that the direction which it had received
had been accomplished.
ing this time, in 1907, 1911, 1912, and 1914, the law
was again amended. The 1907 amendment allowed
not only boards of education, but also any body em-
ploying teachers, to grant pensions. The amendment
of 1911 lowered still further the requirements by giving
credit for service rendered in any other state. The
amendment of 1912 broadened the interpretation of
the service to mean ‘employed in the public school
work'.
The most important amendment was that of 1914.
It provided for the central administration of the pen-
sion system in the office of the State Commissioner of
Education, and it further liberalized the retirement
conditions: the requirement of 20 years' service in the
district in which the teacher applied for retirement was
dropped; the only limitation imposed was that, of the
35 years, a teacher must have served 25 years in New
Jersey; teacher clerks and ‘any person employed in any
supervising capacity', who were not previously subject
to the law, were now admitted to its benefits. The
funds necessary for the payment of pensions were to
be supplied from the apportionment from railroad tax
devoted to the maintenance and support of Schools,
which the comptroller distributes among the several
counties.
As a result of this amendment, the number of pen-
sioners and the amount of the pension roll increased at
a still more rapid rate:

Year r: of Amount of
e €77S707267'S O77. e
(Ending June 30) the Retired List Pension Roll
I9 I5 . . . . . . . . . 275 $150,000
I916 . . . . . . . . . 348 I76,000
I917 . . . . . . . . . 369 2II,OOO
I918 . . . . . . . . . (Estimated) 246,000
No estimate of costs made. At no time, either at the
establishment of the system, or at its subsequent
amendments, was the question raised: what does the
half-pay pension cost, what liabilities were assumed
under the system, and what additional liabilities would
accrue, if the proposed amendments were enacted?
The system was established by chance, and was modi-
fied in a purely off-hand way, without any considera-
tion as to its financial results, until finally the annual
requirements grew so high as to attract the attention
of the Legislature. Then an actuarial valuation of the
system was made, which disclosed the fact that the
system had accumulated huge financial obligations.
Double benefits and their effect. Since the Retire-
ment Fund offered a benefit of 60% of salary, and the
35 years' service pension system offered 50% of salary,
a teacher who could qualify under the two systems, and
38 N E W
E R S E. Y
y
whose salary was below $1,300, could receive in the
form of the two benefits more than the amount of his
salary. Such a prospect was very attractive. Teach-
ers who had 35 years of service, but were still capable
of teaching, and who would not have applied for retire-
ment, if they were entitled only to half pay, were now
eager to retire, since by retiring from work they could
obtain more than the salary they earned while work-
ing. On the other hand, those who could no longer
perform their duties efficiently, but who had not com-
pleted 35 years of service, and who, therefore, could
by retiring obtain only the annuity, but not the pen-
sion, were anxious to postpone their retirement until
the time when they could also qualify for the pension.
As the tendency to retire on both benefits was very
strong, any change in the condition of one system
immediately reflected on the other. Thus, for
example, in the year 1910, the fact that the Fund
with its greatly increased income realized the greatest
surplus in its history and allowed an exceedingly large
number of retirements that year, brought about a
corresponding increase in the number of pensions
granted during the same year. On the other hand, in
the year 1914, the important modification of the
pension law, which lowered the requirements and ad-
mitted a greater number of teachers to retirement on
pension, brought about a corresponding increase in the
number of applications presented and annuities
granted in the Retirement Fund.”
As early as 1906 and 1907, the managers of the
Retirement Fund began to complain that the “effect
of the district half-pay pension law induces claims to
mature, and causes applications for retirement and
annuity to be presented to the Board, that still would
have been long deferred, were the applicants not
eligible to both annuity and pension.” They tried to
combat this tendency by strict enforcement of the
disability clause and by repeated reminders addressed
to the teachers that the completion of 35 years alone
without incapacity does not entitle a teacher to the
annuity."
* In the annual report of the Teachers’ Retirement Fund of 1910
(page I23) the Secretary explained that “many teachers of long ser-
vice and indisputable eligibility to retirement held on to their posi-
tions, fearing the then financially weak condition of the Fund made
it a refuge too doubtful for them to resign their positions till abso-
lutely compelled to do so.” The Secretary also stated that the passage
of the Laws of 1906 and 1907, with the subsequent important increase
in the number of members and in the amount of contributions, en-
abled the trustees to satisfy the “demand that has been piling up for
the past few years, by granting 74 annuities in 1909–1910.” The
number of teachers retired on both the half-pay pension and the
annuity increased from 21 in Igo9 to 40 in 1910.
* New Jersey State Teachers' Association Report, 1907, page Ioë.
* The Secretary wrote in 1909 (page 133 of annual report): “Again
I call your attention to the fact that a serious danger lies in the mis-
taken impression on the part of many teachers that eligibility to the
35 years' half-pay pension necessarily makes them eligible to the
annuity from the Retirement Fund.” The following year, in the
Advance Program 1910, page 29, the Secretary wrote on the same
Subject: “If 35 years' teaching constitutes incapacity under the
Doubt in soundness of the Fund stimulated. Under
the impression of the apparent prosperity of the Fund
during the years 1909–1912 the doubt in the Soundness
of the Fund was temporarily quelled. It was stirred
up in 1913, under the influence of the great movement,
which began in Massachusetts and rapidly developed
throughout the entire country, towards the establish-
ment of pension systems on a sound actuarial basis.
Massachusetts established in 1913 the first scientifi-
cally constructed and financially sound pension system
for teachers. The new system caused considerable
discussion.
The Carnegie Foundation for the Advancement of
Teaching began a study of pension systems with a
view to reorganize its own system for college professors
on a sound foundation. It reviewed in its annual re-
ports the progress of the pension movement throughout
the country. In discussing the New Jersey Fund in
its report, which appeared in 1913," it pointed to the
financial weakness of the Fund.
During the same year, a teacher in New Brunswick,
Miss Emma C. McCoy, came out with a questionnaire
which appeared in many papers and attracted con-
siderable attention. Most of the questions referred
to the management of the system, and only a few to
the financial condition of the Fund. A special com-
mittee was appointed that year to investigate the
charges contained in the questionnaire. It made a
report, in which it stated optimistically: “Your Com-
mittee rests confident in the perpetuity of the Fund.””
terms of Section 217 of the School Law, the Fund cannot stand the
financial strain. We do not believe that 35 years' service does mean
or constitute incapacity in the purview of the law. A person who
begins teaching at 20 and teaches steadily will be 55 years of age
after teaching 35 years and in what is generally deemed to be, for the
normal man or woman, the prime of life. To retire after 35 years'
service on both pensions, and draw substantially more than was
earned as salary, is a very tempting proposition—but it is dangerous
to the Fund ! Where will the Fund be if one day the annuity account
exceeds the income? We notice that only those teachers who are
eligible to both pension and annuity consider 35 years' service as the
‘dead line' between capacity and incapacity. The Board of Trustees
is placed in a very difficult position. Boards of Education are quite
generally willing to certify that a teacher is ‘incapacitated'; as a
rule, they are very willing to “get rid of the ‘old teacher', especially if
the Fund will take care of him. There is always some one waiting
for his place. Doctors are lenient in issuing certificates. Teachers
urge the granting of this annuity or that, irrespective, sometimes, we
fear, of the ‘incapacity' requirements or the welfare of the Fund.
The Fund recognizes that “incapacity' may come long before 35
years' service; therefore it provides that annuity shall be granted on
incapacity after only 20 years' service in New Jersey. It is up to the
teachers to protect their Fund. It is much easier to pay out money
than to get money in.”
6 Report of 1912, page 27 ff.
7 Replying to the question as to the need of actuarial service, the
Committee wrote: “The New Jersey law is the result of years of ,
experiment and progressive legislation. The present law, while very
comprehensive, is simple. It requires no actuarial knowledge (!)
to determine the amount of annuities; it has none of the insurance
intricacies of the Massachusetts law. The questions that arise are
not actuarial questions (!), but questions of fact, and the trustees are
entirely competent to answer them.” (Report of Special Investigating
Committee, September 26, pages I5 and 23.)
S T A T E
R E S E A R C H 39
During the next three years, a considerable amount
of new literature, criticizing the unsound foundation
of existing pension funds and discussing principles of
sound financing, appeared. The Massachusetts Com-
mission published a report of its investigation. The
New York City Commission issued several volumes.
The actuarial reorganization of the New York City
Teachers’ Retirement Fund was broadly discussed and
finally, after a hot campaign of two years, was effected.
During the latter campaign, references to the New
Jersey Fund, as an unsound fund, were made in public
speeches and appeared in the press. The Carnegie
Foundation made some further criticism of the Fund
in its report of 1915. Miss McCoy came out with
several more circulars.
Furthermore, the Federation of District Boards of
Education adopted a resolution in favor of consolida-
tion of the Retirement Fund and the State Pension.
The fact that the Fund had accumulated a long list of
applications and delayed decision on them caused
rumors to spread that the Fund was again experiencing
financial difficulties.
All these combined factors were stimulating thought
and causing uneasiness among the teachers as to the
financial stability of the Fund. It was high time that
an actuarial investigation of the Fund should be made.
The Teachers' Association offered to bear the ex-
pense of such an investigation. The Board of Trustees
approved of the undertaking. Thereupon, in Febru-
ary, 1917, a proposition was made to Mr. Fackler that
he prepare a report on the financial condition of the
Fund.
A discussion of Mr. Fackler's report, which was
submitted in November, IQIZ, and an analysis of the
present condition of the two systems is presented in
the second part of this monograph.”
APPENDICES
Appendix A
ARTICLE BY AN EMINENT ACTUARY
(Appeared in the Newark Evening News, May 20, 1896, and
reprinted in the report of the ‘United States Bureau of Educa-
tion, 1894–1895', Volume I, pages IIo8–III.3.)
The press of the United States has taken up the ques-
tion of ‘paying pensions to civil officers', and discusses
it with all fairness, but rarely adds any new facts or
arguments either in support or opposition to pensions.
The Newark (N.J.) Evening News, however, published
(May 20, 1896) an article prepared by one of the most
competent insurance experts, who is likewise thor-
oughly informed on the various phases of public educa-
tion. The article refers to the law in New Jersey and
is here reproduced on account of the well-arranged
mathematical calculations it contains. The author
claims that the fund created by the retention of 1%
of the teachers' salaries is insufficient to meet the de-
mands which will inevitably be made upon it in future.
A much higher percentage of contributions, he thinks,
is necessary if it is to meet its promises; and he argues
that state aid will have to be invoked, or large outside
contributions be received, to make the pension fund a
success. The editor discusses the article at length.
Since his comments seem to reflect public opinion,
they are here inserted also at the close of the article:
In view of the fact that during the next 2 or 3 weeks the
public school teachers of Newark must decide whether or not
they will avail themselves of the recent state law providing
for a retirement fund, it may be of some value to consider the
plan of this law in a practical way and see if it can accomplish
all that is claimed for it.
In the first place, there can be no reference to any other
experience in which the conditions sufficiently resemble the
present ones to form a precedent. Two or three states have
passed teachers' pension laws, but so recently that as yet no
data from that source are available. In Europe the retire-
ment of teachers under pensions has been going on for many
years—in one country for 80 years, at least. But there the
state provides all, or almost all, of the fund. The societies
merely supplement the work done by the government.
In all of the following European states provision is made
from the state funds for pensions for teachers: England,
Scotland, France, Prussia, Saxony, Bavaria, Austria-Hungary,
Spain, Portugal, Italy, Greece, Holland, Belgium, Denmark,
Norway, Sweden, Finland. In New Jersey, however, there is
no assurance of help from the state, and we must look at the
plan of the Fund itself to see how much it will do for those who
put their trust in it.
The general plan of the ‘Teachers’ Retirement Fund' is this:
Teachers desiring to receive the benefits under the law shall
subscribe I 7% of their salaries monthly as long as they remain
in the school service. Subscribers who have taught 20 years,
may upon being judged incapacitated for teaching, with or
without their own request, be retired upon an annuity of half
their average annual salary for the last 5 years of teaching.
This annuity, however, must not exceed $600 nor be less than
$250, and teachers of 20 years' standing retiring under this
plan within 5 years of the establishment of the Fund must pay
20% of their annual salary upon retiring. Teachers resigning
after being subscribers for 5 years or more may withdraw
one-half of all they have paid in. Provision is also made for
the possible emergency of there being no money on hand to
pay the annuities as they fall due. They are to be paid
in their order, as soon as there is sufficient amount on hand,
together with 5% interest from the date when due.
It is the object of this article to estimate the progress of
this Fund for the next 20 years, and Newark, as the largest
city in the state will serve as a good illustration, especially
8 Part II Present Condition of the Teachers' Pension and Retire-
ment Systems will be published in State Research, Consecutive No. 12.
4O * N E W J
E R S E Y '
as there are at hand as data the reports of the city board of
education since 1856.
One's first impression from a cursory reading of the law is
that the whole scheme is absurd. One per cent. of a salary for
20, 30, or 40 years, surely cannot pay for 50% of a larger
salary for life after age 40, 50, 60. The average salary of
Newark teachers, of both sexes, at the end of 1895, was a little
less than $791. The average salary of those who have taught
20 years is more than $900. One per cent. of $791 say, for
30 years, amounts, with compound interest at 5%, to $552,
while, supposing the age of the teacher at appointment to
have been 20, the value of an annuity of $450 at age 50, using
the same rate of interest, is $5,547. Even if we suppose the
teacher to have been active for 40 years, 1% of salary on the
same basis would amount to $1,003, as against $4,381, the
value of the annuity.
In the foregoing illustrations, however, there has not been
taken into account the money left in the treasury, because of
the many who resign or die before earning an annuity, and
who take with them from the Fund either nothing at all or
one-half of what they have paid in. In the table given below
an attempt has been made to illustrate the working of the
scheme for the next 20 years in Newark, introducing all the
elements of income and outgo. If any exaggeration has been
indulged in, it has been in favor of the scheming rather than
against it. . (Here the writer produces several
tables.) . . .
It has been assumed in the table that all the teachers would
join in the enterprise. If any do not join, they will naturally
be the ones who would have to pay longest and whose need
of the annuity seems most remote, and not those who may
expect to become incapacitated soonest.
Columns 2 and 3 represent the probable number of teachers
and their salaries on the basis of the increase since 1886.
Column 4 is the annual cost to the members, 1% of their sal-
aries. Column 5 represents 20% of the annual salaries of those
adjudged incapacitated during the first 5 years. Column 6
shows the total amount paid into the Fund from the beginning.
Column 7 represents the number having taught 20 years
or more and eligible for annuities, calculated from the reports
of the city superintendent. They are 20% of the entire num-
ber employed, less those who have commenced to draw an-
nuities. Column 8 is an estimate of the number who would
commence to draw annuities each year. It is estimated that
one-twentieth, or 5%, of those eligible for annuities would
become incapacitated.
Column 9 shows the amounts drawn by annuitants, on the
supposition that their average annual salaries during their
last 5 years of teaching were $900, and that one annuitant in
each group dies every other year. Column Io is the estimated
number that would resign after teaching from 5 to 19 years.
Column II shows the amounts drawn out by those represented
in Column Io. It is supposed that the first group going out
have paid into the Fund for 5 years, the second group 6 years,
and the rest, 7 years. The number of years is under rather
than over estimated. Column 12 shows the amount paid out
of the Fund each year, and 13 shows the total amount paid
out from the beginning.
A comparison of Columns 6 to 13 shows that after the
second year the disbursements exceed the receipts, and that
before the end of the fifth year the Fund is exhausted. After
Io years the total receipts are almost $35,000 less than the
total disbursements, and are falling behind at the rate of
$7,000 per year. In 20 years the liabilities are $144,000
greater than the assets, taking no account of interest on un-
paid annuities, and the debt is growing larger at the rate of
$13,500 yearly.
In order to meet all obligations, it would be necessary to
get from outside sources an annual sum of money gradually
increasing and averaging $7,000 a year for the 20 years. As
the law applies to the whole state it seems not improbable
that there would soon develop an average annual deficit of
at least $20,000. It is said that fairs are to be held throughout
the state and donations solicited in order to meet any de-
ficiencies. It is, to say the least, extremely doubtful whether
these large amounts can be raised annually in such uncertain
WayS.
It should be remembered that in this investigation all
estimates are purposely made very favorable to the plan of the
Fund. For example, in the table it appears that I5 teachers
will commence to draw annuities during the first 3 years, while
the probabilities are that at least 30 would do so. As a matter
of fact, $40,000 a year, rather than $20,000, would represent
the annual deficit throughout the state if the only source of
income were the 196 of the teachers' salaries.
Surely the plan cannot commend itself as being founded on
sound business principles. More than half the income needed
to meet obligations is provided for only by hopes. Possibly
those who urged the passage of the bill before the Legislature
expect the state to go farther in the future, and make an annual
appropriation as a pension fund. However this may be, the
teachers of the state who go into the scheme should realize
that they have no guarantee whatever that their annuities
will be paid when due, or even that they can draw out half
of their contributions if they resign after 5 years.
If the law provides that Newark and Jersey City and per-
haps 2 or 3 others of the larger cities could have separate
organization, sufficient local pride and enthusiasm might be
aroused to secure to the Fund large amounts through dona-
tions and entertainments, but it will be hard to stir up so
much interest when it is known that all extra money raised
will go into the general state fund.
There is a flourishing Teachers' Annuity and Aid Associa-
tion in Philadelphia. It was established December 20, 1890,
and is therefore less than 5% years old. It has 885 members
enrolled, and although it did not commence to pay annuities
until it was 3 years old, there are now 72 annuitants on its
books. The fact that this association is strictly local has
been one reason, no doubt, for the liberal donations it has
received from the citizens of Philadelphia. But even with
such large contributions from outside friends and with a
state appropriation of $20,000, the charge for membership is
2% of all salaries up to and including $1,000, and I?6 of
higher salaries. Nothing has been said in this article of the
provision made by the law for the manner of deciding whether
or not a teacher is incapacitated, although the method is open
to criticism; neither has any substitute for the present plan
been suggested. It might be said concerning the latter that
at least 5% of the teachers' salaries would be necessary to
establish the Fund on a sound financial basis.
S T A T E
R E S E A R C H 4I
Following are the comments of the editor of the
Evening News, of Newark, N. J.:
The Teachers' Retirement Law
In another column of the News there appears an analysis
of the probable income and expenditures of the proposed
teachers' retirement fund as applied to this city. It is made
up according to the figures and statistics by which an insur-
ance or annuity company would calculate the results of at-
tempting to do business on such a plan. It shows, what has
been apparent from the start, that the Fund raised under the
law will not be self-sustaining; that it will be pitifully inade-
quate to meet the demands likely to be made upon it. In this
city it must also be borne in mind that the conditions are more
favorable than they would be in the state at large. The cal-
culations give every advantage to the Fund. There is no
sentiment about the mathematics of insurance and annuities,
but the formulae and the methods which are employed in
arriving at conclusions in regard to business of that kind have
experience back of them, and reliance can be placed upon
their results.
It is true that those who have been most active in securing
legislation providing for this Fund admit its inadequacy.
They believe that by giving fairs and entertainments and
enlisting the support of those who are interested in the public
schools and the teachers large amounts of money can be
raised. They hope for additional legislation and for state
appropriations. The law was obviously intended as an enter-
ing wedge for a system of pensioning of teachers. It was
passed, however, after repeated attempts to secure the enact-
ment of a teachers' pension law had failed, and one of the
pleas made in its behalf by its advocates was that it would
simply lend the aid of the state to an effort by the teachers
to themselves provide for those among their number who
might be forced to retire after years of faithful service. Is it
likely that the state will come to the aid of the Fund by
making appropriations for pensions?
The question of the advantage to teachers and to the public
offered by a teachers' pension fund it is needless to discuss.
With here and there a rare and devoted exception, men and
women who teach school follow that occupation because it is
the best and most available means that they would have to
earn their livings. To pay higher salaries or to provide pen-
sions would make positions in the public schools more desir-
able. The latter plan would enable educational authorities
to retire superannuated teachers without feeling that the act
was a cruel one, or would bring suffering to those who could
no longer do their accustomed work.
To go that far, or, on the other hand, to say that teachers,
like workers in other fields, ought to try by care and frugality
to provide for their old age, is to cover the grounds of the con-
troversy over the question whether pensions should or should
not be paid by the public to school teachers.
Apart from its failure to promise to be self-supporting, the
scheme outlined by the law has two objections. One is that
the law makes a teacher once a contributor always a contribu-
tor, as long as he or she remains in the public-school service.
There is no way provided for those who have agreed to con-
tribute to stop contributing, even though it should appear
speedily that only those first retired had any prospect of get-
ting annuities. The other point of unfairness is that in the
event of a deficiency, the plan is not to divide the money pro-
portionately among those entitled to receive it, but to pay
the claims in full in order of priority, letting later applicants
wait for their money. Both of these defects could be cor-
rected by legislation; and teachers who think that they should
be corrected, and who join in contributing to the Fund, would
do well to express their opinion. If those who start the move-
ment unite in demanding changes obviously dictated by fair-
ness and proper regard for others, the amendment of the law
in those respects can no doubt be relied upon.
Teachers who believe that the state will aid this Fund, or
that private assistance will come in liberally, together with
those who desire to assist their fellow-teachers, even if they
do not themselves expect to derive any benefit, near or remote,
will doubtless join the association. It may succeed in securing
the help that will fairly put it on its feet and make it a strong
reliance for teachers, an efficient ally of the public school
system, but those who join should do it with their eyes open
to the crudity and insufficiency of the plan as it stands alone,
and to the fact that it must be greatly supplemented if it is
to succeed. It is fair to say that Miss Allen, the foremost
champion of the law, dwelt with force upon this aspect of the
case in the address which she delivered in this city last week.
Appendix B
FALSE PROPHETS-PREDICTIONS OF
AND ACTUARIES'
‘EXPERTs’
Extract from the report, for the year 1902, of Miss Elizabeth
A. Allen, Secretary of the Retirement Fund Department, to
the State Teachers' Association. (Annual report of the State
Teachers' Association, 1902, page 237.)
From the beginning we have been assured that the
‘experts' and ‘actuaries' agree that the Fund is fore-
doomed to failure, because “it is not founded on Sound
actuarial principles” but we have never been able to
discover who these ‘experts' and ‘actuaries' are.
When we, ourselves, have consulted experienced actu-
aries, they have told us that there is, as yet, no definite
data on which to base an actuarial opinion.
For instance, of the members of the Fund who have
taught 20 or more years in New Jersey, how many are
“mentally or physically incapacitated to earn a suffi-
cient livelihood,” and hence, entitled to annuity?
About 40% of the teachers cease teaching before
5 years, this means ‘lapses' in favor of the Fund, but
to what extent cannot yet be determined. Actual
figures show that the average period of teaching service
does not increase in any such uniform ratio as does the
average age of the policyholders of an insurance Com-
pany. The last published report of the State Super-
intendent of Public Instruction (that for 1902) gives
the average teaching experience for the State as 8 years
and 8 months.
The Fund has already derived about $23,000 from
other sources than members' dues; from entertain-
ments, interest and legacy. Could any actuary have
foretold this substantial addition to our capital, or
42. &
E R S E Y '
W J
N E
what actuary can foretell what the future will add to
the Fund from like sources?
One legacy has been received. Can the actuary put
this down as the last and only legacy we shall get?
Lewis L. Elkin left over a million for the pensioning of
Philadelphia teachers. What actuary could have fore-
seen this ‘item' in making his calculations? If the
universities, churches, hospitals, charities, of America
were to be judged by the arbitrary mathematical rules
that (we are told) experts and actuaries apply to our
Fund, these institutions, with hardly an exception in
the entire country, are on the verge of bankruptcy.
But these men are not experts or actuaries of the
generous hearts of the American people, or of the
loyalty and enterprise of the public school teachers of
the state of New Jersey.
From the Jove-like brain of the ‘expert’ or “actuary'
might spring in a day a fully equipped and adequately
endowed annuity system, but the Retirement Fund,
like all successful projects, must start modestly, grow
slowly, overcome obstacles, and oppositions, and
adjust its business to conditions as they arise. Thus
have the great life insurance corporations grown into
financial giants, and thus will the Teachers' Retire-
ment Fund of the State of New Jersey, develop and
honor every legitimate demand on its bounty in the
future as it has in the past.
An enormous strain will undoubtedly be put upon
the Fund in the first few years, but the maximum
average demand will be all the sooner determined, and
the plan may be adjusted to meet it.
A certain class of ‘expert’ opinion that accuses us
of violating insurance rules seems oblivious of the fact
that in the early days of life insurance, when the con-
ditions on which policies were issued were far less lib-
eral than now, the ‘experts' loudly proclaimed that the
life companies would never be able to redeem their
promises. Nevertheless, these corporations have gone
on offering more and more liberal terms and have
waxed marvelously fat and strong thereon.
It is not so many years ago that if a policyholder
wanted to go to Europe, a special clause might be
inserted in his policy; if he wanted to travel in the
tropics he must take out a new policy at much higher
rates. Such restrictions, now obsolete, might be cited
almost indefinitely, but they have been swept aside
by the logic of events, and the ‘experts' and their
‘expert opinions' have gone to oblivion with them.
Life insurance has so progressed beyond the expert
opinion of only ten years ago that at the breaking out
of the Spanish War one of the great companies waived
the war restriction in its policies, allowed its policy-
holders to go to the front, and has since proved that
this liberality proved profitable.
Our enterprise cannot be judged by insurance
Canons alone, and any opinion based on insurance
actuarial data is per se discredited in advance.
Meanwhile we must work to meet each emergency
as it arises. A powerful press is our advocate, and a
sympathetic public is back of us. We shall receive
other bequests and donations. And heaven helps
those who help others! -
On the platform, a year ago, a gentleman ‘proved'
that with 40% of the teachers of the state members of
the Fund we had reached our zenith. Our answer is
that today 46°/.6% of the teachers are members, and
that in the city where he was superintendent the per-
centage of membership has risen in I year from 51
to 68!
Appendix C
As TO BANKRUPTCy
Extract from the report for the year 1905, of Miss Elizabeth
A. Allen, Secretary of the Retirement Fund Department.
(Annual report of the State Teachers' Association, 1905.)
Any assertion that the Teachers' Retirement Fund
is bankrupt or in danger of becoming so; that its capital
has been or is liable to be depleted, must be founded
upon actual malice, or upon such gross ignorance of
the Retirement Fund Law as is scarcely less repre-
hensible.
By Article XXV of Chapter I of the laws of the
Second Special Session of IQ03, known as the School
Law, the fullest provision is made by which the exist-
ence, conduct, and growth of the Retirement Fund is
safeguarded at every point, and its Trustees have no
power to administer it except according to the provi-
sions of this law.
Permanent Principal
The act gives the Trustees power to create a per-
manent principal of the Fund; and, under the law, no
part of such principal can be resorted to or paid out
for any purpose. The moment a dollar is transferred
by the Trustees to the permanent principal of the
Fund, that dollar is protected by law, and can never
be encroached on for any purposes. The source from
which annuities may be paid is also carefully prescribed
by law. Income, from the permanent principal, a
percentage of the salaries of members, and all moneys
received by donation, legacies, gifts, bequests, or
otherwise, which shall not be specifically directed to
be made a part of the permanent principal of the
Fund, are available for the payment of annuities.
The Law Provides that Annuities
May Reduce Pro Rata
If the money so available is sufficient to pay the
annuities in full, they are paid in full. If it is insuffi-
cient to pay them in full, the annuities under the law
‘abate pro rata'. It is thus manifest that the Fund,
S T A T E
R E S E A R C H 43
as a matter of law, can never become bankrupt. Its
growth may be rapid or slow, according as the support
it receives is generous, or the reverse. It may even
become stationary, which would result if support were
to be altogether withdrawn; but even in that contin-
gency there would always remain the permanent prin-
cipal, the income of which would be available for the
payment of annuities.
|What ‘Bankruptcy' Means
Bankruptcy in the law means inability to pay legal
obligations when due. It must be apparent that as
annuities under the law become due only to the extent
of the money available for their payment, the Fund
can never have legal obligations which it is unable
to pay. It occupies the impregnable position of having
its permanent principal protected by law, and which
cannot be encroached upon; and of being unable to
incur obligations in the form of annuities to a greater
extent than it has money with which to pay them.
Persons having the right to annuities occupy a posi-
tion analogous to a person having shares of stock of a
corporation. If the corporation earnings are sufficient
in the judgment of its directors to authorize the pay-
ment of a dividend, a dividend is declared and the
holder of the stock then becomes entitled to his divi-
dends. If the earnings of the corporation are not
sufficient to warrant a dividend, or if the directors
think that the interests of the corporation would be
subserved by accumulating a fund, then the stock-
holders wait until business so improves as to make the
resumption of payment of dividends advisable. If
failure to declare a dividend constitutes bankruptcy,
it would be safe to say that there would be few cor-
porations existing that have not at one time or other
been bankrupt, for dividends are constantly passed
whenever business conditions seem to require it. It
must be manifest, therefore, that so long as the per-
manent principal of the Fund continues to grow (and
it never decreases under the law) the bankruptcy of
the Fund is a legal impossibility. There will always
remain the income of the permanent fund which rep-
resents an irreducible minimum applicable to the
payment of annuities.
Bankruptcy Impossible
‘Bankruptcy’ being, therefore, impossible, the only
question is, will the Fund receive such support from
the teachers of the state as will keep the income up
where the full annuities can be paid and additions to
the permanent fund made, or will they, by withholding
their support, retard the growth of the Fund and bring
about an abatement pro rata of the annuities granted
and to be granted? This is the worst that can happen
to the Fund, and falls far short of that bankruptcy or
insolvency which the opponents of the Fund, through
malice, or ignorance, or both, are constantly urging
against it.
The only conditions under which the Fund can fail,
have been enumerated. It may be “slaughtered’ and
its promoters discouraged and scattered. If this occur,
the plan may fail; but bankrupt, the Teachers’ Retire-
ment Fund can never become.
Demand Follows Close on Income
That demand follows close upon the heels of income,
and must overtake it if the majority of the teachers of
the state continue to withhold their cooperation, is too
true. That membership constantly depletes through
natural causes, such as marriage, death, removal from
the state, etc., and, unless it is as constantly recruited
from the ranks of young teachers who enter the pro-
fession by hundreds every year, annuities will have
to reduce pro rata, we unhesitatingly concede.
Not a Good Rallying Cry
‘Bankruptcy'ſ is not a good rallying cry for any
business. It is a tribute to the intelligent generosity
of New Jersey teachers that membership in this an-
nually-bankrupt concern has been kept up at all.
How much more creditable, therefore, to them is the
fact that the past year has shown more general activ-
ity than ever before in the way of organizing enter-
prises to carry on the work, and to add to the per-
manent principal.
Promises of the Fund
The newspaper reports referred to, claim that the
Fund is “unable to pay 2 I applicants annuities as
promised.” If this were true it would be a serious
situation, but it is not true in any sense. As to an-
nuity applications on file, the reader is referred to
page 177. As to the ‘promises' of the Fund. What
are they? The Fund (see Sections 216 and 217 of the
General Law School) promises half-pay (minimum,
$250; maximum, $600) to those teachers who may be
granted annuity so long as there is sufficient money
to give such half-pay, but when there is not enough
money to do this, annuities shall reduce to pro rata.
This is the law. This covers all the promises of the
Fund. Therefore, if annuities were to be reduced to
one-half, or one-quarter, or one-tenth, or one-twenti-
eth, etc., the Fund would still be honorably and
honestly and completely keeping its every promise.
In this connection, it may be interesting to note the
following figures:
Average total paid into Fund by the 94 teachers
granted annuity to January 1, 1905 . . . . . . . $116.38
Average total paid to the 91 teachers whose annuities
began to accrue prior to January I, I905 83I.29
Income of Fund, 1903–1904 . . . . . . . . . . . 27, IIO.40
Less for expenses and rebates . . . . . . . . I,768.36
Net Income . . . . . . . . . . . . . $25,332.04
44 * N E w J
E R S E Y '
A Splendid Investment
Therefore, if the income were to remain stationary,
the Fund could pay an annual dividend of Ioo!/6 on an
average investment of $116.38 by 217 teachers, or
50% to 435 teachers, or 25% to 870 teachers, or 12%%
to I,74I teachers. And it is ‘up to the teachers of
New Jersey to say whether the income shall remain
stationary, or whether it shall increase by leaps and
bounds. If, one of these days, lack of funds shall
compel a reduction of annuities, the fault will not be
in the plan or the law, but the responsibility will lie
with those teachers who do not support the Fund
by joining it. If all the public school teachers in the
state were members of the Fund the income from
members' dues alone would be $48,986.82, according
to the report of the State Superintendent for 1904.
Augmenting the Annuity Fund
Heretofore, the Department has advised that at
least 70% of moneys raised by entertainments, fairs,
etc., be added to the permanent endowment of the
Fund. In view, however, of growing annuity demand
the Department would suggest that, in the future, a
portion (say, 20%) of all such revenue be placed by
the contributors at the disposal of the Board of
Trustees for the payment of annuities, while the major
portion, as heretofore, shall go to the permanent prin-
cipal. It is not desirable that annuities “abate pro
rata', or that they reduce at all. The plan suggested
will avert such necessity, and anchor the Fund against
the frequent and sudden cyclones arising from undis-
covered centers of overheated malice, and wider areas
of warm self-interest.
Appendix D
TABLE I
TABLE II
NUMBER OF NEW ANNUITIES GRANTED, NUMBER OF Average AGE, LENGTH OF SERVICE AND AMOUNT OF
DEATHS AND TOTAL NUMBER OF ANNUITIES OUT-
STANDING DURING EACH YEAR SINCE 1897

NEW ANNUITIES GRANTED DURING
EACH YEAR SINCE 1897
New Deaths * = & Average Length
*egºs. A pplications Annuities among the &#. Average Age of jº Average
nded Pending Granted Annuitants at the Years (Years (Years Annuity
June 30 During Puºng | En; of Year and Months) and Months)
the Year the Year
1898 . . . P 8 I 7 I898 . . . . 59–4 35-II $334
I899 . . . I3 IO O 17 I899 . . . . 58–8 33–10 3OI
I900 . . . IO I2 I 28 I90O . . . . 55-2 3I-4 263.5
I90I . . . I8 I2 5 35 I90I 52-4 33–I 3.18
I902 . . . 25 IO 2 42 I902 . . . . 53-4 25–5 307
I903 . . . 23 17 5 54 I903 . . . . 59–I 33-3 344
I904 . . . I6 I8 4. 68 I904. . . 57–3 3I-6 3I3
I905 . . . IO I9 4 83 I905 . . e 55-IO 27—Io 340
I906 . . . 3 22 3 92 I906 . . . . 59–5 35-IO 325
I907 . . . I3 . 40 5 I37 I907 . . . . 56–7 35–6 37I
I908 . . . 2O 35 I2 I6O I908 . . . . 60–9 37–2 472
I909 . . . 34 33 II I82 I909 . . . . 57–8 36–5 474
I9IO . . . 29 74. 8 248 I9IO . . . . 55–8 33–7 46I
I9 II . . . 26 5I 6 293 I9 II . . . . 57—7 34-IO 470
I9I2 . . . 34 54 9 338 I912 . . . . 55–7 33–8 479
I9 I3 . . . 39 63 I9 382 I913 . . . . 58-3 34-3 517
I9 I4. . . . P 71 I3 440 I9I4. . . . . 58-3 35–9 5II
I9I 5 . . . 25 49 I5 474 I9 I5 . . . . 57–I 34-9 534
I916 . . . 59 74 26 522 I916 . . . . 59-2 38–3 546
.
&
TEACHERS’ RETIREMENT FUND–RECEIPTs, DISBURSEMENTs, SURPLUS AND CAPITAL
For Each Year Ending June 3o Since 1896 to 1917 Appendix E
ANNUAL RECEIPTS ANNUAL DISBURSEMENTS
Entertain- - Annual
Premium Surblus º
ments, Dues * plu Cabital
, Donation in- and Total Dis- (Excess of api
Year Members £. Interest Total Annuities Rebates #: #. Accrued bursements Receipts at #: of
Dues Duplicate Receipts and Expenses #. *ºº Over Dis- €07”
cºales. Refunded Investments bursements)
1897 . . $11,000 $1,400 $12,400 $12,400 $12,400
1898. I4,900 2OO $200 I5,3OO $900 $2,600 $3,500 II,8oo 24,2OO
I899 . I2,900 400 I3,300 3,400 I,2OO $IOO 4,700 8,600 32,800
I900 . I3, IOO 6,900 I, IOO 2I, IOO 6,500 I,700 8,200 I2,900 45,700
I90I . I5,900 3,200 I,700 2O,800 8,600 I,800 IO,400 IO,400 56,000
I902 . I6,000 2,400 I,8OO 20,300 II,7OO $1oo I,8OO I3,600 6,700 62,700
I903. 22,700 3,300 2,500 28,400 I4,800 2OO I,900 I6,900 II,500 74,200
I904 . 20,800 2,900 2,700 26,400 I9, IOO 2OO I,600 20,900 5,500 79,800
I905. 22,700 2,800 3,300 28,800 22,200 IOO I,500 23,800 5,000 84,700
I906. 2I, IOO IO,500 3,2OO 34,800 27,400 2OO I,500 29, IOO 5,7OO 90,400
I907 . . 35, IOO 2OO 4,300 39,600 35,700 IOO 6OO 36,400 3,2OO 93,500
I908 . . 52,500 3,800 56,400 53,600 IOO I, IOO 54,800 I,500 95, IOO
I909 . . 93,700 4,000 97,700 64,000 IOO 500 64,600 33, IOO I28,200
I9IO . I47,900 4,2OO I52, IOO 86,900 $200 87, Ioo 65,000 I93,200
I9 II . I66, Ioo 8,700 I74,800 III,400 IOO 400 III,900 62,900 256,600
I9I2 . . . I82,300 IOO IO,2OO I92,600 I31,500 2OO 4,000 I35,7OO 56,900 3I3,000
I913 . . . I81,7oo 6OO I4,600 I96,900 I54,200 2OO I54,400 42,500 355,300
I9 I4. . . . 216,900 I5,000 23I,900 I83,400 3OO I83,700 48,200 4O3,500
I9I5 . . . 2I9,2OO 500 I6,2OO 235,900 2O7,OOO 2OO 2O7,2OO 28,7oo 432,2OO
I9 I6 . 246,300 17,8oo 264, IOO 230,300 IOO 2OO 400 23I,000 33, IOO 465,300
I917 . 255,600 4, IOO I7,300 277,000 256,500 IOO I,400 258,000 I9,000 484,200
Total |$1,968,500 $39,000 $133,000 |$2,140,500 |$1,629, IOO $1,200 $1,500 $19,300 $4,900 |$1,656,000 $484,200*
*The figure obtained by subtracting total disbursements from total receipts is $484,500, making a discrepancy of $300 due to the rounding off of the figures.
NEW JERSEY TEACHERS’ RETIREMENT FUND–DEVELOPMENT OF LEGISLATION
(Laws 1896–1907)
Appendix F --
Year and Chapter O I903
of the 1896—Chapter 32 1899–Chapter 178 1900—Chapter 96 1902. Chapter 36 Special Sessions Laws 1906—Chapter 31.4 1907–Chapter 139
Article XXVIII
Chapter r, Article XXV
Teachers covered .
Teachers in public schools.
Teachers, principals, and
Supervising principals in pub-
lic schools or in any normal
or reformatory school or
in any school supported
either wholly or partially by
public moneys raised under
the authority of any law of
this state.
Also superintendents in the
schools enumerated under
law of 1899.
Also any city, county, or
state superintendent; also
teacher clerks and super-
visors in public schools or in
any normal or reformatory
school, or in any other school
supported either wholly or
partially by public moneys.
Compulsory or op-
tional member-
ship
Optional. For teachers then
in the service, time for filing
application for membership
was limited to 3 months since
enactment of the law. For
new appointees to I year
since appointment.
Another opportunity to be-
come members given to those
who have not entered the
Fund heretofore; all time
limit for filing their applica-
tions was abolished. No
change re new appointees.
For new appointees
all time limit to file
their applications for
membership was abol-
ished.
No person who shall
have been teaching
more than I5 years
shall become a mem-
ber unless he or she
has passed a satis-
factory medical ex-
amination.
Same provision as before,
except certain inducements
to become members before
January I, 1903, were offered
to those who have failed to
do so before (see below under
contributions) and the pro-
vision of the law of 1900,
which barred teachers who
have taught more than 15
years from becoming mem-
bers unless they passed a
medical examination was
dropped until January I,
I903; allowing them until
January I, Igo3 to become
members without medical
examination; if they apply
for membership after that
date they must undergo a
medical examination.
Same provision as be-
fore, except that no
new inducements to
become members are
offered.
For all teachers appointed
after January I, 1908, mem-
bership was made com-
pulsory.
For teachers appointed be-
tween June 13, 1906 and
January I, 1908, membership
was optional and time was
given until January 1, 1908
to file applications.
For teachers already in the
service who were not mem-
bers before membership was
also optional and time was
given until January I, 1907
(6% months) to file applica-
tions. Teachers who are
members of the Fund must
signify before January I,
I907 whether they accept
this act; if they do not sig-
nify, they shall be under such
statutes as were in force when
they became members.
With re to teachers ap-
pointed after January
I, I908, same com-
pulsory provision as
in 1906 law.
For all teachers then
in the service and
those appointed be-
fore January, 1908,
who did not become
members, time limit
was extended to Jan-
uary I, I909.
Composition of re-
State superintendent of
schools; members of state
board of education; 2 repre-
sentatives elected by teacher
for I year.
Serve without compensation.
State superintendent of
schools; 3 members of state
board of education; 3 mem-
bers selected by teachers for
a term of 3 years in rotation.
Allowing the board to pay
and fix the salary of secretary.
State superintendent of
schools; 3 members not teach-
ers appointed by the Gov-
ernor and 5 teachers, mem-
bers of the Fund, nominated
by members of the Fund.
tirement aboard
Contributions: By
teachers
“One per cent. of salary or
annuity.” Those retiring
within 5 years after passage
of the law must contribute in
all at least 20% of their final
salary.
Same provision as in 1896,
except that I96 deduction
from annuities is stated more
explicitly and that any re-
tiring teacher (not only one
retiring within 5 years after
passage of the law) must con-
tribute in all at least 20%
of his average salary of last
5 years.
Same provision as be-
fore, except increase
of contributions to
2% for those teachers
who have failed to
become members be-
fore and who have
taught more than
Io years at the time
of applying for mem-
bership.
The provision of 1900 which
increased to 2%, contribu-
tions for those teachers who
have failed to become mem-
bers before and who have
taught more than Io years at
the time of applying for mem-
bership was dropped until
January I, 1903. Oppor-
tunity given them until Jan-
uary I, 1903 to become mem-
bers at the old rate of 1%.
After January I, 1903, in-
crease of their contributions
to 2%.
Confirmation of the
provision of law of
1902 increasing to
2% contributions for
those teachers who
have failed to be-
come members be-
fore 1903 and who
have taught more
than Io years at the
time of applying for
membership; also con-
firmation of the pro-
vision that only 1%
shall be deducted
from salaries of all
those who have be-
come members be-
fore 1903 and of the
new members who
were appointed to
service after Igo3.
Increase of contributions: To
2% for those who taught Io
years or less when becoming
member; to 2%% for those
who have taught more than
IO but less than 15 years
when becoming a member;
to 3% for those who have
taught more than ¥s years
when becoming a member.
Those members (and who
contributed 1% or 2%) may
waive their rights of con-
tributing at the old rates.
If they do not sign the waiver
before January 1, 1907, they
shall contribute and be sub-
ject to the provisions under
such statutes as were in force
at the time of their becoming
members. Maximum con-
tribution $50 annually. No
teacher shall contribute in all
more than $1,000. A retir-
Change in the provi-
Sion as to lump sum
payments of total con-
tributions of a retiring
teacher are below the
amount of 1 year's
annuity. He is al-
lowed to authorize the
board to deduct it
from his annuity until
the difference is paid
up. The 1% deduc-
tion from annuities
was dropped.
Same provision as to
signing a waiver as in
I906, except the time
limit was extended to
January I, I909.
ON
.
5

NEW JERSEY TEACHERS’ RETIREMENT FUND–DEVELOPMENT OF LEGISLATION
(Laws 1896–1907)
Appendix F-Continued
Year and Chapter
of the
Statute
1896—Chapter 32
1899—Chapter 178
1900—Chapter 96
Article XXVIII
1902–Chapter 36
Article XXVII
I903
Special Sessions Laws
Chapter I, Article XXV
1906–Chapter 314
1907—Chapter 139
ing teacher must contribute
in all the amount of 1 year's
annuity (60% of salary); if
his contributions are below
that amount he must pay the
difference in a lump sum.
Also 19% of annuities.
By state
None.
Administrative expense.
From other sources
Donations, legacies, gifts, be-
quests and moneys otherwise
received for or on account of
the Fund.
Superannuation or
service pensions
Minimum retire-
ment age
None.
Minimum length
of service
None.
Amount of pen-
sion . . . .
None
Disability annuity
conditions . . .
After teaching 20 years in
New Jersey public schools and
becoming “incapacitated from
performing the duties of a
teacher,” the teacher shall on
his or her request, or may at
the discretion of the board
of trustees without such re-
quest, be retired and shall re-
ceive the annuity specified
below.
Changes: after teaching for
a period or periods aggregat-
ing 20 years or more (no con-
secutive service required) in
public school or such schools
as defined at the head of this
column; the request of the
teacher is no longer sufficient,
it must be accompanied by
the approval of the board of
trustees, whose decision as to
the right of the applicant is
conclusive. The board is
given the power to suspend
the annuity “whenever it shall
appear to said board upon
sufficient proof that the annu-
itant is able to earn and has
the opportunity of earning
a sufficient livelihood,” but
may resume it whenever it
shall deem proper so to do.
Change in the interpretations
of incapacity, “and shall have
become incapacitated from
earning a sufficient liveli-
hood.”
In the provision allowing to
suspend annuities, the term
“and has opportunity to
earn,” was dropped.
Change in the interpretation
of incapacity “whenever any
teacher. ... having taught
20 years or more . . .”
upon proper evidence shall
in the judgment of the afore-
said board of trustees, have
become incapacitated from
performing the duties of a
teacher, “such teacher shall
at his or her request be re-
tired and shall receive,” etc.
Change in the provision al-
lowing the board to suspend
annuities: “whenever the
said board shall discover that
the annuitant has resumed
teaching.”
To the words “in-
capacitated from per-
forming the duties of
a teacher,” the follow-
ing words were added:
“or of such other em-
ployment as aforesaid”
(i. e., principals, etc.).
The decision of the
board is made subject
to appeal to the state
board of education.
A mount of lisa-
bility annuiy
One-half of average salary of
last 5 years; minimum $250;
maximum $600. In case of
insufficiency of Fund, the
treasurer shall pay as many
warrants in order of their
registration as possible and
discontinue the payment of
others until funds are avail-
able; the unpaid warrants
shall bear interest at 5%.
Same provision as in 1896,
except that in case of insuf-
ficiency of fund, the board
of trustees may pro-rate the
annuities.
Increase of annuity to
60% of average salary
of last 5 years; increase
of maximum to $650.
Death benefits
None.
Benfits at resig-
nation or dis-
flissal
Yes, at resignation after 5
years of contributing refund
of one-half of the teachers'
contributions.
Refunds at resignation or dis-
missal are no longer provided.
NEW JERSEY THIRTY-FIVE-YEAR PENSION FOR TEACHERs—DEVELOPMENT OF LEGISLATION
(Laws of 1903–1914)
Appendix G
Chapter of the Law 1903—Chapter 16 1906–Chapter Iog 1907—Chapter 121 1911—Chapter 276 1912–Chapter 58 1914—Chapter 268
Teachers covered . All school teachers. Also any principal or super- Also teacher clerks and any person
intendent in public schools. employed in any supervisory capacity
in or under any system of free public
schools in New Jersey.
Management . Local boards of education. Local boards of edu- State commissioner of public instruc.
cation or other body tion.*
employing teachers.
Contributions: None.
By teachers .
By state or local cuthor-| Appropriations from the bud- Payment from state railroad taxes,
ities . * get of the school district in deducted from apportionment for
which teacher was employed. school purposes.
Superannuation or service
pensions:
Minimum retirement age | None
Minimum length of ser– tº gº º & sº tº g *
wice Upon application after 40 | Upon application or by reso- Upon application or by reso- | Under “service' is meant | Upon application of the teacher or by
years of consecutive service lution of local board of educa- lution of local board of edu- || “employed in the public resolution of the employing body after
school work.” No mention
is made as to whether the
35 years must have been
served in New Jersey or
whether part could have been
served in other states.
35 years of service, at least the last
25 years of which must have been
served in New Jersey,
Of
After the applicant becomes 7o years
of age, having served the last 20 years
in New Jersey,
Or
After the applicant becomes 75 years
of age, having served 32 years in New
Jersey,
Or
If possible, after 35 years of service in
New Jersey if the applicant is 70 years
of age.
* Applications for retirement are first considered by local boards and their decisions are transmitted to the state commissioner of education, whose decision is final and who transmits them to the state comptroller
in the same district.
tion after 35 years of service
in New Jersey, at least 20
years of which must have
been served in the district
in which the teacher applies
for retirement.
cation or other employing
body after 35 years of serv-
ice in New Jersey or any
other state, at least 20 years
of which must have been
served in the district in which
the teacher applies for retire-
ment.
A mount of pension One-half of final salary. One-half of average salary of
last 5 years.
Disability benefits . None.
Death benefits . None.
Benefits at resignation or
dismissal. None.
who makes the warrants for payments.
£,

STATE RESEARCH
S E C T I O N
Section 2, VOL. VI ‘NE W JERS EY” NO. 1, October, 1918
Consecutive No. 12
Teachers’ Retirement Systems in New Jersey
Their Fallacies and Evolution
Parts II and III
Present Condition and Practical Remedies
Report of the
Bureau of State Research
Part I “Evolution of the Systems” was published as Consecutive No. 10
BUREAU OF STATE RESEARCH
CLINTON BUILDING, NEWARK

Table of Contents
Part II. Present Condition of the Systems
CHAPTER VI. Financial Condition. How Can the Financial Condition of a System be Shown?
Financial Prospects of Retirement Fund. Insolvency of the Fund shown by Mr. Fackler's partial
estimate. Annuitants now living and deceased have received a million and a half above what they
have paid. How much present annuitants would still require. Bulk of the Fund’s obligations are
to mature in the future. Many millions needed for meeting obligations to present active teachers. Cap-
ital of the Fund only a drop in the bucket. Only 13 years to live on present basis. Managers not
alarmed, but members awakening to dangers. Insolvency denied by the managers. The makeshifts
would not help. Financial Prospects of State Pension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER VII. Duplication of Benefits, Its Effect on School Efficiency and Teachers’ Interests.
Retirement Fund and State Pension both Superannuation Systems. “Proof of incapacity” a defective
method of determining superannuation. “Length of Service” a defective method for determining super-
annuation. The double superannuation benefit... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER VIII. The “Tontine” or “Forfeiture” Feature and the Inequitableness of the Systems.
Tontine feature and the inequitableness of the Fund. Tontine feature and the inequitableness of the
State Pension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part III. Fundamental Principles, Summary of Criticisms and Practical Remedies
CHAPTER IX. Fundamental Principles and Summary of Criticisms. Fundamental Principles. Re-
serve. Two-fold purpose and joint contributions. Return of contributions. Return of contributions
at resignation, dismissal or death prior to retirement. Summary of criticisms. Financial unsoundness.
Unsoundness from a social, economic, and administrative point of view. . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER X. Practical Remedies. Fundamental reorganization and consolidation of the two systems.
How can they be reorganized on a reserve basis? What liabilities of the insolvent Fund can the State
assume and how can equitable division of cost between teachers and State be obtained P. How can a
provision for refund of contributions be secured. Immediate or gradual consolidation. Partial re-
organization. Elimination of duplication by reduction of annuity. Maintenance of double benefits and
further makeshifts. The State and the teachers to decide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX A. Current and Capital Account of the Retirement Fund—a statistical table. . . . . . . . . . . . . .
APPENDIX B. Number, Payroll and Average Salaries of men and women teachers in New Jersey. . . . . .
APPENDIX C. List of Retired Teachers: List No. 1–Teachers receiving both annuity and pension. List
No. 2—Teachers receiving only annuity. List No. 3—Teachers receiving only pension. . . . . . . . . . . . . .
53
59
63
66
NS
N Ewó ERSEY
STATE CHAMBER
OF COMMERCE
Sº, EXECUT 1 VE OFFICE
CLINTON BUILDING, NEWARK
BU REAU OF STATE RESEARCH TEL. MARKET 1 O7
OCTOBER 15, 1918.
To the Board of Trustees of the
New Jersey State Chamber of Commerce.
SIRs: The Bureau of State Research herewith transmits the second and
third parts of the report on its investigation of the teachers’ retirement systems
in New Jersey.
The first part of the report was published as State Research Consecutive
number 10. It was historical in scope. It showed how the two retirement sys-
tems, the Retirement Fund and the State Pension, began, and developed from year
to year, what fundamental mistakes in their construction and operation were com-
mitted, and how in the minds of many persons a doubt about the soundness of the
two systems was engendered, finally compelling the State Teachers’ Association to
engage an actuary to investigate the Fund and forcing the legislators to investigate
both systems.
In the second and third parts, which are herewith presented, an analysis of
the present condition of the two systems is made, the defects of the latter are
shown, various practical remedies are discussed and the fundamental principles of
a sound system are outlined.
The report has been prepared by Paul Studensky, Supervisor of the Pension
Investigation, who is a careful student of the pension problem, from data collected
by the Bureau of State Research for the Pension and Retirement Fund Commis-
sion, and used with the latter's permission. Its findings are therefore commended
to the earnest consideration of all the parties concerned.
A large part of the editorial work was ably performed by Miss Julia R. Levy,
a member of the Staff of the Bureau of State Research.
Respectfully,
~&s.
Secretary.
Associate Director.


PENSION REPORTS AND BULLETINS
PUBLISHED BY THE
BUREAU OF STATE RESEARCH
OF THE
NEW JERSEY STATE CHAMBER OF COMMERCE
Preliminary Report of the Pension and Retirement Fund Commission
State Research. Consecutive number 9, 1918. 20 p. Covers the retirement systems for teachers,
police, firemen, and other local employees.
Supplementary Report of the Pension and Retirement Fund Commission
State Research. Consecutive number 8, 1918. 16 p. Contains a digest of the bill for the retire-
ment of employees of the State of New Jersey and an estimate of cost of the proposed system.
Introducing Order into Chaos
Legislative Index, Vol. 15, No. 8, March 25, 1918. A review of what has been accomplished by
six months of investigation of pension and retirement funds and what must be done in the future.
Teachers’ Retirement Systems in New Jersey, Their Fallacies and Evolution
State Research, Consecutive numbers Io and 12. 1918. Report of the Bureau of State Research
prepared by Paul Studensky, Supervisor of the Pension Staff. In 3 parts. I918. 88 p. Intro-
duction and Part I, Evolution of the Systems. Parts II and III, Present Condition and Practical
Remedies. 40 p. Contains besides the discussion of the retirement situation in New Jersey, a
chapter on the fundamental principles of a sound retirement system.
Introduction to the Report on the Teachers’ Retirement Systems in New Jersey, Their Fallacies and
Evolution
A reprint. I6 p. pamphlet.
Police, Firemen's and Other Local Employees’ Pension Systems in New Jersey
State Research. Consecutive number 11, 1918. 24 p. Report of the Bureau of State Research
prepared under supervision of Mr. Paul Studensky. Chapter on methods of financing and condi-
tion of the funds, by Mr. Alexander Gourvitch. Chapter on development of legislation and charac-
ter of benefits provided, by Mr. R. K. Bissell.
A Sound Municipal Pension Act and Central Supervision of All Pension Funds in New Jersey
‘New Jersey,’ Vol. VI, No. 1, October, 1918. 8 p. By Paul Studensky, Supervisor of the Pension
Staff of the Bureau of State Research. An outline and discussion of the features of the bill pro-
posed by the New Jersey Pension and Retirement Fund Commission.
REPORT PREPARED BY
PAUL STUDENSKY
Supervisor of the Pension Staff of the Bureau of State Research
PART II
PRESENT CONDITION OF THE SYSTEMS
CHAPTER VI
Financial Condition
How Can the Financial Condition of a System be Shown?
Financial Prospects of Retirement Fund. Insolv-
ency of the Fund shown by Mr. Fackler's partial estimate. Annuitants now living and deceased have received
a million above what they have paid. How much present annuitants would still require. º
Many millions needed for meeting obligations to present active
obligations are to mature in the future.
teachers. Capital of the Fund only a drop in the bucket.
Insolvency denied by the managers.
not alarmed, but members awakening to danger.
Bulk of the Fund's
Only 13 years to live on present basis. Managers
The makeshifts sug-
gested would not help. Financial Prospects of the 35 Year Service Pension.
How Can the Financial Condition of a System
Be Shown
In order to obtain a complete picture of the financial
condition of a retirement system at a certain time, it
is necessary to make an actuarial valuation of all the
assets and all the liabilities of the system at that time,
and to construct an actuarial balance sheet. The latter
will present the picture."
Strong demands were advanced in recent years for
an actuarial valuation of the two teachers' retirement
systems in New Jersey, the Retirement Fund and the
35 Year Service Pension. The State Teachers’ Associ-
ation engaged, in February, 1917, Mr. D. P. Fackler,
an actuary, to make a valuation of the Retirement
Fund. At about the same time the Pension and Retire-
ment Fund Commission of the New Jersey Legisla-
ture asked the Bureau of State Research of the New
Jersey State Chamber of Commerce to have the 35
Year Service Pension valued by its Actuary, Mr. G. B.
Buck.
It is not necessary for us here to describe the highly
technical process by which an actuarial valuation is
made. It may be sufficient to state that a valuation
can be made on the basis of the rates of mortality and
other statistical data obtained either from the experi-
ence of the Fund which is valued, or from the experi-
ence of another similar fund ; that the liabilities con-
sist of two classes: first, those on account of benefits
to be paid in the future to the members already retired,
and second, those on account of benefits to be paid in
the future to the members still in active service who
will retire some time in the future; and that the assets
of the fund also consist of two classes: first, the capi-
tal on hand and, second, the value of future contribu-
tions which the fund will receive from or on account
of the present members during their lifetime.
Financial Prospects of Retirement Fund
Insolvency of the Fund shown by Mr. Fackler's
partial estimate. Mr. Fackler found it impracticable
to make a complete valuation of the Retirement Fund
with the data which was available, and he limited his
calculations mainly to the first element of liabilities
which “is comparatively simple, depending on the
probable future lifetime of each annuitant and the
amount of the annuity.” With regard to the second
class of liabilities, he made only sample calculations of
individual cases. He made no estimate of the value
of future contributions.
The report of Mr. Fackler was submitted on Novem-
ber 2, 1917. Although it contained only a partial pic-
ture of the condition of the Fund, it was nevertheless
very suggestive.
As to the first item of liability the report stated that
“the annual payment due on annuities outstanding
June 30, 1917, was $267,542.88. After taking due
account of the higher mortality among male annui-
tants, the least present value that can be assigned
to these annuities is $2,324,651.77, which con-
*An “actuary” is one who so uses statistical data as to cal-
culate the probabilities of human life at various ages. With
the help of these calculations he determines the cost of insur-
ance policies, the premiums to be charged and the amount of
reserve which the insurance company must possess in order to
be able to meet all its future liabilities with regard to its
present policyholders. All the operations of insurance com-
panies are based upon actuarial calculations. The same
methods are now used in all scientific pension funds. By the
use of mortality rates and interest tables the actuary calcu-
lates what a certain amount of annuity or pension would
cost and what amount of contributions at various ages should
be set aside each year in order to accumulate with interest a
reserve which would be sufficient to pay the pensions as they
1113ture.
* Report of Mr. Fackler, 1917.
54 * N E W
J E R S E Y'
siderably exceeds the assets of the fund on June
30, 1917. From this the Fund appears to be
actuarially insolvent even as to this liability alone,”
unless the future contributions to be made by
members now contributing should be found to
have a value so far in excess of the deferred or
inchoate liability to those members as to offset
the deficiency above shown.”
It is entirely improbable, of course, that the future
contributions of the present members at their present
two to three per cent. rate will exceed the liabilities
which the fund will face on their account. Mr. Fack-
ler made a number of experimental calculations to
ascertain the value of contributions and liabilities in
cases of teachers who began teaching at different ages
$126,000, and have received from it a total of $1,628,-
000, or about thirteen times as much as they have paid
in. The question now arises, where did the Fund
obtain the funds with which to pay the stupendous
excess of a million and half over and above its receipts
from the annuitants? These funds were obtained
from contributions made by other members, by those
who resigned, were dismissed or died before applying
for the annuity, and by the present active members.
From the point of view of sound pension standards, as
already stated, there is no justification for an arrange-
ment by which the benefits of one individual should be
paid by depriving a score of others and their depend-
ents of their contributions. The contributions of those

MEMBERS’ DUES


Year Ending Deficiency
June 30 Total Amount Amount (Covered from Proportion Proportion Proportion
Amount Paid Out Set Aside Interest and Paid Out Set Aside of Deficiency
Outside Sources)
1910 $147,900 $ 87,100 $60,800 .............. 59% 41% | ........
1911 166,100 111,900 54,200 | .............. 67% 33% ........
1912 182,300 135,700 46,600 | .............. 74% 26% ........
1913 181,300 154,400 27,300 | .............. 85% 15% ........
1914 216,900 183,700 33,200 .............. 85% 15% | ........
1915 219,200 207,200 12,000 | .............. 95% 5% ........
1916 246,300 231,000 15,300 | .............. 94% 6% | ........
1917 255,600 258,000 | .............. $ 2,400 10.1% ........ 1%
1918 259,500 276,100 .............. 16,600 106% ........ 6%
and are now of different age. In most of the cases
he found that the value of future contributions of the
teacher was below the liability on account of his future
benefit, and concluded that “in the aggregate this
inchoate liability amounts to many millions of dollars
of which no estimate could be made for the reasons
above stated.” It is evident from these calculations,
and from comparison with other systems, that not only
would there not be any excess of contributions which
could be applied to cover the two million dollar defi-
ciency on account of present annuitants, but there
would eventually be another and far greater deficiency.
Annuitants Now Living and Deceased Have
Received a Million and a Half Above
What They Have Paid
The 558 annuitants now living,” and the 171 who
have died, have paid into the fund a total of about
"Italics not in the original.
“The condition of the Fund is discussed as of June 20, 1917.
The total number of annuities granted up to that date was
730. One annuitant (number 523) resumed teaching, and his
annuity was suspended. A year later, on June 30, 1918, the
number of living annuitants was 588, deceased 189, and the
total granted 778.
who withdrew from the service should have been
returned to them and to their dependents, instead of
having been paid out; and the contributions which had
been paid by the present contributors should have
been set aside to assure the future payment of benefits
to them, instead of being used for the benefit of others.
The table on this page shows that larger and larger
proportions of contributions were paid out, and smaller
and smaller proportions were set aside each year for
the last 7 years, and all the monies now paid by the
16,000 teachers are being used to support the benefits
of the 558 annuitants, and are even insufficient; to sup-
plement them it is necessary to draw on the interest
on the capital and on outside sources which normally
should have been added to the capital.”
How much present annuitants would still require.
Most of the 558 annuitants would still live and draw
their annuities for many years. Mr. Fackler esti-
mated the present value of future payments to these
annuitants at about $2,300,000. The amount which
would actually be drawn from the Fund for the sup-
port of present annuitants would probably amount to
* For a fuller statement, see Appendix A.
* N E W
J E R S E Y' 55
about three millions.” Thus the total past claims of
the 171 deceased annuitants and the past and future
claims of the 558 living annuitants would amount to
almost five millions, one-third of which has already
been satisfied, but two-thirds of which must still be
paid in the future. The question arises: if the present
and future contributors would supply these three
million for the payment of benefits to present annu-
itants, what funds would be left for the payment of
their own benefits? How soon would their contribu-
tions be exhausted and the bottom of the Fund be
reached P
Bulk of the Fund’s obligations are to mature in the
future. The 730 annuitants have come mainly from
the ranks of the 2,500 members known as charter mem-
bers, who joined the fund at the time of its establish-
ment in 1896. The fund has hardly started to meet
its obligations to the thousands of members who have
joined after 1896, and especially to the many who
joined voluntarily in 1908, and also to those who were
appointed since 1909, and who were compelled to enter
the Fund by virtue of their appointment. The 16,000
present members of the Fund are drawn mainly from
these classes of entrants. Several thousand among
them would sooner or later apply for an annuity, and
their total claims and the obligations of the Fund on
their account would be many times larger than the
above stated enormous liabilities on account of the
present 558 annuitants.
NUMBER OF ANNUITANTs of VARIOUs MEMBERSHIP
CLASSES
Year When the Teacher Became a Member Number
of the Fund Retired
1896 7 566
1897–98 3
1899, Mar. 24–Oct. 31 19
1900–01 9
19028 66
1904 2
1906 8
1907–08 55
After 1908 9 2
Total 730
Many millions needed for meeting obligations to
present active teachers. Every annuity which would
"The present value of future payments represents the sum
which, if now on hand, together with interest, would be suffi-
cient to make all future payments. The value is therefore
always smaller than the amount of actual payments; it is
smaller by the amount of interest.
"2,500 teachers joined the Fund in 1896. They are known as
charter members.
become payable in the future represents a liability of
several thousands of dollars; and the several thousand
annuities which would become payable at some date
or other represent a liability of many millions of dol-
lars. In order to be able to meet this tremendous lia-
bility the fund must realize from future contributions
of its present members assets of an equivalent value.
While these assets have not been as yet actuarially
determined, all the indications point to the fact that
they are far below the liabilities. If the present
annuity roll represents a deficiency of two million and
three hundred thousand dollars, then the deficiency on
account of the annuities payable in the future to the
present contributors must amount to many times that
amount.
Capital of the Fund only a drop in the bucket. It is
true, the Fund has a capital of $484,000,” but it has
immense deficiencies which are measured in millions
of dollars. Furthermore, the question arises: how
could this capital be divided between the deficiency
on account of the 558 annuitants, which requires two
million and three hundred thousand dollars, and the
deficiency on account of the present 16,000 contribu-
tors, which requires many millions of dollars? The
former have a right to an annuity, although they have
already received from the fund more than they have
paid in; the latter have so far received no benefit what-
ever from the fund, but they have an equity in the
capital.
If we disregard the legal questions involved, in the
consideration of these equities, and assume for a
moment that the present contributors, including those
about to retire, would lose all their equities in this
capital, and that the latter would be used only for the
payments to present annuitants to the end of their
lives, even then we would find that the capital would
permit the payment of only about twenty cents on a
dollar of their annuity claims, i.e., that the fund would
have to reduce their annuities to one-fifth of their
present amount. The present contributors would lose
all their past contributions and would have to start
anew their contributions towards future benefits, which
in turn would have to be reduced considerably.
* About 400 teachers joined the Fund in 1902. A consider-
able part of these 400 had more than 15 years of teaching
experience at that time, and have joined during the nine
months following the enactment of the law of March 26, 1902,
which allowed them, as a special privilege, to enter the Fund
at the old rate of 1% and without a medical examination.
In view of their age and physical condition (see Part I, page
20) they represented liabilities many times greater than the
assets. The liability on account of these 66 annuitants alone
exceeds $300,000.
* The number of teachers who have entered the Fund since
1908 far exceeds 10,000; of this number, about 3,000 had
entered in 1908 and had previous teaching experience.
* On June 30, 1917.
56 * N E W
J E R S E Y'
Only 13 years to live on present basis. In order to
be solvent and to be able to fulfill its promises, a sound
pension fund must plan far ahead for some sixty years
into the future, because many of its present members
may apply for an annuity only 40 years hence, and
may live thereafter drawing the annuity for twenty
years or even more. According to Mr. Fackler's esti-
mate, which was based on conservative assumptions,
in less than two years from now the annual disburse-
ments would exceed the receipts, the first annual defi-
ciencies would appear, and the fund would have to
draw on its capital. The annual deficiencies would
exhaust the capital of about $484,000 in thirteen years.
The fund would then be badly bankrupt. Payments
to annuitants would have to be severely reduced and
perhaps altogether discontinued. Over twenty thou-
Sand contributors would lose every cent they had paid
in. Claims amounting to millions of dollars would
remain unsatisfied, and the Fund would end its life
without a dollar to distribute. Such are the prospects
of the Fund if it continues on the present basis.
Managers not alarmed, but members awakening to
danger. In an address delivered before a meeting:
called by the State Teachers’ Association at the Dick-
inson High School in Jersey City, on November 2,
1917, the secretary assured the teachers that there
was no cause for alarm over Mr. Fackler's statement,
her interpretation of it being very optimistic:
“Mr. Fackler's invaluable report, the substance
of which, as I understand it, is that our Fund,
with its free cash reserve of about $200,000, can
go on granting and paying annuities for nine
years, without encroaching on the invested reserve
of about $275,000, and can run for four years
more, or till 1930, on this invested reserve, but
that in 1931 he foresees a deficit of something over
$12,000.”
According to this statement the Secretary sees a
deficiency only after all the capital is spent. The
annual excess of disbursements over receipts is appar-
ently not considered a deficiency. The entire opera-
tion by which the fund would not only live on all its
income (which really belongs to the future), but also
“eat up” its capital, is spoken of here as if it were an
entirely normal mode of financing. The Secretary
concludes this passage as follows:
“Mr. Fackler's statement, giving the Fund on its
present basis, more than thirteen years to live
without showing a deficit [!] will bring untold
comfort to present annuitants and annuitants
to be.”11
“Underscorings and notation not in the original. In the
foreword to a pamphlet entitled “A Compendium of Facts,”
on page 11, the Secretary points to three “most significant
Statements of the Fackler report”: first, that the Board of
Trustees has been unprecedentedly liberal in granting annui-
ties; Second, that the average retirement age of the annuitants
On the face of it Mr. Fackler's statement may seem
comforting to the few annuitants who may not live
more than thirteen years, for they would not suffer
any handship if the Fund should fail thereafter. But
to the great number of annuitants and active teachers
who expect to live more than thirteen, twenty, forty,
and even sixty years, this statement would surely seem
alarming. They feel as the policyholders of a life
insurance company would feel on learning that their
company was insolvent and that it had only thirteen
years to live. -
They have been repeatedly told that their “certifi-
cate of membership in the Teachers’ Retirement Fund
is a valuable insurance policy,” that the fund is “a
big insurance business,” “a rapidly growing insurance
proposition,” that “its provisions as to dues and
annuities were approved by the actuary, Mr. David
Parks Fackler,” and that his actuarial opinion “was
incorporated in the law,” and that they may “rest con-
fident in the perpetuity of the Fund.” All these
is lower than that in the New York City Fund, and third, that
the Fund can probably run on its capital for thirteen years.
The far more significant statement that the liabilities of the
fund exceed its assets and the fund appears to be insolvent
is not mentioned.
* In her report of 1910 (pages 172-173) the Secretary wrote:
“Besides, the certificate of membership in the Teachers' Re-
tirement Fund is a valuable insurance policy which may be
the sole support of its possessor in the years of age and in-
firmity, which must come to all, unless Heaven removes us
before that “evil day' comes. There are now more than 12,000
recorded memberships; an individual cash account is kept with
each; the ‘policy' (the certificate) may not mature for twenty
or thirty years, or even forty years, or more years. All busi-
ness men will agree that the fundamental records of the fund
must be full and accurate.”
* Report of the Secretary. Advance Program, 1910, page
26. Under the title, “The Fund a Big Insurance Business”—
“Let us not forget that our Fund has developed into a large
and rapidly growing insurance proposition, with nearly 11,000
recorded policyholders.”
“Circular of Information explaining the new law. Issued
by the Board of Trustees of the Retirement Fund, November
15, 1906, says: “The new law was therefore a necessity. Its
provisions as to dues and annuities were approved by the
actuary, Mr. David Parks Fackler.”
* Report of the Special Investigating Commission, Septem-
ber 26, 1914 (reprinted from School Report, 1914, on page 14),
showed in capital letters that “Your Committee rest confident
in the perpetuity of the Fund,” and stated, on page 13, that
“When the present law was framed, two men on the Board
of Trustees of the Fund called in the services of an eminent
Actuary, Mr. David Parks Fackler, and, giving him what facts
and data they could obtain, asked his assistance in framing a
law that would guarantee a self-perpetuating fund. From
his actuarial knowledge, he gave as his opinion that the
present scheme of rates would in the long run accomplish that
end, and it was incorporated in the law.” Mr. Fackler stated
in his recent report that these “statements are entirely
erroneous in all respects. I never saw a draft of the law of
1907 (the present law), and was not acquainted with the law
itself until this year. Early in 1907, in a pen-written letter, I
was given a few details of the proposed amendment, and posi-
tively refused to express an opinion about it. As to the act
of 1906, I should state that I had nothing to do with framing
it, and never heard of it until after it had passed both branches
of the Legislature.” For fuller account of Mr. Fackler's con-
nection with the law of 1906, see Part I of this monograph,
pages 27 and 28.
* N E W
J E R S E Y' 57
statements were either entirely erroneous or gross
exaggerations, and made them believe that although
their “policy (the certificate) may not mature for
twenty or thirty years or even forty years or more,”
the Fund will be able to take care of them to the end
of their lives.
Now they are shown that the fund can live on the
present basis only 13 years, or even less, if a greater
strain is imposed upon it, or perhaps a little more, if
some makeshift arrangement is adopted, but at any
rate, not long enough to pay all their claims, and that
in most of the cases it would fail long before their
claims would mature. They further learn that the
fund not only did not adequately assure the payment
of their policy, but that it had actually paid out to
others the money which they themselves had paid in.
This startling news is awakening them to the danger.
Insolvency denied by the managers. The insolvent
condition of the Fund is still not realized by the lead-
ers. It is denied. The Secretary says in her address:
“Mr. Fackler has not called our Fund ‘bankrupt,’
though, for more than twenty years, I have heard
with frequency that the New Jersey Teachers'
Retirement Fund was bankrupt, or on the verge
of bankruptcy, and I expect we shall now hear and
see this statement urged even more frequently.
Time and experience, however, have proved that
neither statement was true. The Fund is neither
‘bankrupt,’ nor is it “on the verge of bankruptcy.’
In its first year the Fund began building a reserve;
since which time the Fund has met every legiti-
mate demand, and has added to its reserve each
and every year of its operation, till the reserve
now approaches a half million dollars, and will
be increased this year.
“No concern is bankrupt which can meet its
ebligations as they come due. Any concern is
solvent so long as it can meet its obligations as
they come due. The New Jersey Teachers’ Retire-
ment Fund is in that position.”
According to this interpretation a concern that has
enough cash to pay the obligations which have come
due is solvent, although it may have little or no assets
whatsoever in prospect with which to pay the bulk
of its obligations that will come due in the future. Of
course this interpretation is very different from that
which is generally accepted in the business world. A
responsible concern determines its solvency by the
relation of all its obligations, not only those immedi-
ately due but also those due in the future, to all its
present and prospective assets, and if it finds that the
obligations exceed the assets, it applies for a receiver-
ship, calls the creditors together and takes such steps
as may best safeguard their interests and, perhaps,
also put the firm back in a solvent condition. Thus a
concern may be insolvent and vet not bankrupt. These
are the principles which apply also to retirement funds,
except that here in ascertaining liabilities accounting
methods are insufficient and actuarial methods are
necessary. Furthermore, Mr. Fackler's report covers
this point by specifically saying:
“The solvency of a pension fund or retirement
fund is not determined solely by the fact that it
has funds to pay all claims presented, or even
that the income exceeds the disbursements; for
a fund may be in an unsound condition, although
not yet in any financial difficulties. The true con-
dition of a fund is shown by a valuation.” .
and with special reference to the Fund, states that
it “appears to be actuarially insolvent.”
The prospective decline of the Fund appears to the
leaders not as a decline, but as a new and wonderful
record, as may be seen from the following statement
of the Secretary:
“It (the Fund) not only has met every obligation
as it came due, but, according to Mr. Fackler's
estimate, is, as now constituted, able to go on for
nine years granting and paying annuities as it has
done in the past without encroaching on its in-
vested reserve of above $275,000.00; and can go
on for five years longer, or till 1930, on its invested
reserve. He forsees a deficit of something more
than $12,000.00 in 1931, fourteen years hence. Is
this not a wonderful record for the New Jersey
Teachers’ Retirement Fund” when we contem-
plate the general ruin and reorganization of almost
every other system of teachers’ pensions in the
United States, though the New Jersey fund began
operations years before most of the others were
born, and has never failed to meet every legiti-
mate demand on it, in fact has, in Mr. Fackler's
opinion, probably been too liberal in granting
benefits.
“The New Jersey Teachers’ Retirement Fund is
not bankrupt. The New Jersey Teachers’ Retire-
ment Fund will never be bankrupt. No institution
can be bankrupt so long as it meets every obliga-
tion; is in possession of a large and increasing
reserve; forsees the need of future financial but-
tressing; has plenty of time in which to secure
this, and is able to do so. This I believe to be
the position of our Fund.”
It is interesting to note here that the reason why
some of the systems were brought to ruin or were
soundly reorganized, while the New Jersey fund still
continues to operate on its unsound foundation, is the
fact that they were unable to effect as many makeshift
arrangements as the New Jersey fund did every time
it was “on the verge of bankruptcy,” as described in
Part I of this monograph. After considerable resist-
ance they finally gave way to reorganization. There
are still many funds which are perhaps as persistent
* Italics not in the original.
58 * N E W
J E R S E Y'
as the New Jersey fund in denying the wisdom of
fundamental reorganization.
The makeshifts suggested would not help. The
leaders still believe that “very little financial buttressing
is necessary to make our fund permanently sound,
provided that only really incapacitated teachers are
retired thereon,” and suggest “a few simple changes
which will assure the stability of our Fund
. . . and make our Fund incontestably sound.”
These changes are as follows:
“1. Raise dues of all members of from ten to
fifteen years’ experience to two and one-half
per cent. ; raise to three per cent. for fifteen
years’ experience and over. The Fund is now
declining steadily to a flat two per cent.
2. Abolish the excess one-tenth annuity, mak-
ing it straight half-pay; minimum, $250,00;
maximum, $650.00.
3. Tax at three per cent. all annuities which
draw, as well, the State pension. Tax at one
per cent. all other annuities.
4. Abolish the $1,000.00 dues—maximum pro-
vision. (I am aware that, probably, these
changes cannot be made without the consent
of the members of the Retirement Fund, but
I am confident that this will be granted if
requested.)
5. Provide a minimum age limit for the State
half-pay pension, except for proved perma-
ment incapacity.
6. Amend the law so that the Fund's free cash,
about $200,000.00, now drawing only two
per cent. interest, may be invested in Liberty
or other four or five per cent. bonds; with
power to dispose of same should the money
be needed to pay annuities. At the outset this
would add from $4,000.00 to $6,000.00 a year
to income, but would, of course, decrease
annually if this free cash were drawn upon
to pay annuities.
7. Amend the law so as to permit investments to
be disposed of, if necessary, to raise money
to pay annuities.
It is my belief that these light changes
would not only make our mutual-disability-
insurance-fund, based on proved permanent
incapacity, sound financially, but would per-
mit the minimum annuity to be raised. Do
not forget that New Jersey's low percentage
rates of dues is made possible only by the
‘mutual' system.”
These slight changes and makeshift arrangements
could not make the Fund permanently sound as it is
claimed they would. Their effect upon the total assets
and deficiencies of the Fund would be comparatively
inconsiderable. The only way to make the Fund
sound is to reorganize it fundamentally, to liquidate
its huge deficiencies, and to adjust the benefits so as to
make them represent exactly what the contributions
can purchase. The reorganization of the fund cannot
be long postponed. Every year of its operation on an
inadequate basis increases the total deficiency of the
Fund both on account of its present members and on
account of new members who come in by virtue of
their appointment. Every year of postponing reor-
ganization would make reorganization more difficult
and would reduce the prospect of most of its members
obtaining any benefit whatsoever from contributing to
the fund.
Financial Prospects of the 35 Year Service
Pension
Not less serious is the financial condition of the 35
Year Service Pension. As stated in the preceding
chapter, the annual requirements of that system have
risen to about a quarter of a million dollars, a rather
considerable item in the budget of the state. The
attention of the Legislature was attracted by this
item of expenditure.
The Pension and Retirement Fund Commission,
which was appointed in 1917 to investigate the entire
subject of pension funds in New Jersey, realized the
importance for the state to know what its total liabil-
ities under the teachers' service pension are. Upon
the direction of the Commission an actuarial estimate
of the liabilities involved in the pension was made by
Mr. George B. Buck, the Consulting Actuary of the
Bureau of State Research of the New Jersey State
Chamber of Commerce. The amount of liabilities
shown by the estimate was staggering: $2,156,596 on
account of the 406 pensioners now on the retired list;
$22,200,337 on account of those teachers now in the
service who would qualify for the pension in the
future; a total of $24,357,933 on account of these
two items of liability. Each year with the entrance
of new teachers into the service the amount of liabil-
ities is bound to increase.
To give some idea of the true cost of the pension,
if, in accordance with a sound financial policy, it were
placed on a reserve basis, the actuary took the case of
a new entrant and estimated that in his case it would
cost 4% of his annual salary. In the case of teachers
now in the service, the cost would be far above that
rate, as these teachers are older than the new entrants
and have past services to their credit during which no
contributions at all were made.
The present contributions which the state makes of
a quarter of a million dollars represents only about
1%% of the payroll, i. e., only a particle of the true
cost of the pension. To be adequate on a sound
financial basis, the contribution must be increased sev-
eral times. If the system continues to operate on the
* N E W
J E R S E Y 59
same basis, merely meeting the annual pension require-
ments and providing no contribution to create an
adequate reserve, then the state would have to pay in
the future much more than what would have been
required had it contributed from the outset at an
adequate rate. The report of the Commission says:
“If the system continues to operate without
providing an adequate reserve, then the annual
requirements for pensions, which now, amount to
but a few thousand dollars and form slightly more
than 1%% of the payroll, will in a not distant
future amount to more than a million dollars.
The annual requirements would exceed 10 per
cent. of the payroll.”
The teachers' payroll already amounts to about
$14,000,000. It may double and even triple in the
course of the next thirty or forty years. Even before
the annual requirements would reach 10 per cent. of
the payroll they may amount to two or three million
dollars. Sooner or later the state must stop this tre-
mendous and ever increasing drain on the state
finances. The financial prospects of the system are
exceedingly serious.
CHAPTER VII
Duplication of Benefits—Its Effect On School Efficiency
and Teachers' Interests
Retirement Fund and State Pension both Superannuation Systems and Puplicating Each Other.
“Proof of
incapacity” a defective method of determining superannuation. “Length of service” a defective method for
determining superannuation. The double superannuation benefit.
“Retirement Fund” and “State Pension” both
Superannuation Systems Duplicating Each Other.
The managers of the Fund greatly emphasize the fact
that the Fund is a “disability insurance,” whereas the
State Pension is an “Old Age” or “Service Pension,”
and that the difference between the two systems is
considerable. The Secretary says in the already quoted
address: -
“I still consider that New Jersey has, in funda-
mental essentials, the best and most equitable sys-
tem of retiring allowances for teachers that has
yet been devised; the teachers insuring themselves
against disability; the State insuring them against
221
old age. -
The leaders also emphasize the fact that the fund
allows benefits fifteen years earlier than the state
pension does, provided that the teacher is disabled.
A careful analysis of the annuity roll and of the
pension roll reveals the fact that the difference between
the two systems is not as great as it is claimed.
The State Pension is taking care mainly of those
who are too old to continue in the service, i.e., who are
incapacitated because of old age, or, using the technical
term, are superannuated; the 417 present pensioners
have retired at an age ranging between 50 and 78, the
average being 60. Similarly the Retirement Fund has
always taken care mainly of the incapacitated because
of old age; of the 588 annuitants now living 514 were
over 50 years of age when they retired, only 74 were
below 50 and the average age is 57. Both systems are
“superannuation” systems, according to the generally
accepted terminology.
The difference betwen the two systems is mainly in
the method by which superannuation, i. e., incapacity
caused by old age, is taken care of: in one system it is
determined by means of a medical examination, in the
other by length of service; the administrators of one
system exercise considerable discretion in determining
it, whereas those of the other exercise practically no
discretion whatsoever. An old teacher usually can
show proof of incapacity and also has completed the
required length of service, and has a claim against one
and the other system. His claim for the pension can
be established almost automatically and its payment is
practically mandatory, but his claim for the annuity
can not be as easily established, because the granting.
postponement or final refusal of it depends upon the
results of medical examination and investigations by

Amount Amount Total Retirement
Number of Of Allowances
Annuities Pensions (Annuities Plus Pensions)
Teachers Receiving Both Annuity and Pension....................... 363 $194,399.81 $199,576.05 $393,975.86
Teachers Receiving Only the Annuity 225 90,916.12 | .................... 90,916.12
Teachers Receiving Only the Pension 54 .................... 34,216.38 34,216.38
Total $42 $285,315.93 $233,792.43 $519,108.36
* Italics not in the original.
60 * N E W
J E R S E Y'
the administrators of the Fund, and its payment is
therefore, to a large extent, discretionary.
Almost nine-tenths of all the pensioners have proven
incapacity and receive in addition to the pension also
the annuity. Almost two-thirds of all the annuitants
enjoy also the pension. The two systems duplicate
each other, as is shown in the table on page 11.
With each year the two systems duplicate each other
more and more. The tendency to retire only when
entitled to both benefits increases. Each year a larger
proportion of retirements are on both benefits and a
smaller on the annuity only. The proportion of cases
of premature disability, which are the only cases in
which the Fund does not duplicate the pension, de-
creases. The following table shows this interesting
process:
Number Retired Number Retired
Year Total Number On Both Annuity Only on Annuity
Finding Of Retired and Pension (Cases of Disability
June 30th by the Fund (Cases of Prior to Beedming
Superannuation) ||ºntitled to Pension)
1910 74 39 35
1911 51 28 23
1912 54 36 18
1913 63 37 26
1914 71 44 27
1915 49 32 17
1916 74 61 13
1917 58 45 13
Total........ 494 i 322 : 172
It is evident that the decrease in the number of
retirements on disability before the 35 years of service
required for the pension are completed is due not to
any improvement in the health of the teachers but to
the tendency to postpone retirement until one has ful-
filled the pension requirements in addition to those of
the annuity.
Proof of incapacity a defective method of determin-
ing superannuation. The requirements of a proof of
disability from an applicant for retirement is one of
the oldest methods of determining superannuation. It
had been long applied by the pension systems abroad.
It had been incorporated in the first police and fire-
men's laws in New Jersey, from which it has appar-
ently been copied by the Teachers’ Retirement Fund.”
Eventually almost everywhere its shortcomings
appeared.
* The Police Pension Law of 1885 permitted any city to
pension in its discretion any policeman who had served 20
wears and had either become 60 years of age or had become
incapacitated. The Firemen's Pension Act of 1888 permitted
any city to pension any fireman who had served 20 years suc-
cessively and had been incapacitated by injury from the per-
formance of duty or by old age.
Superannuation, i. e., incapacity caused by old age,
does not come at once. It is the result of a slow in-
ternal process of destruction of one's mental and phys-
ical forces. The most expert body of physicians and
the keenest administrative officers are unable to detect
the time when the employee has become incapacitated.
Very seldom can they obtain an absolutely positive
proof that the old employee should be retired immedi-
ately, and that he can not continue to perform his
duties for another half a year, or year, or perhaps even
several years. Capacity and incapacity merge so
closely in case of old age as to make it extremely diffi-
cult for any one to draw a line of demarcation.
It is for this reason that almost everywhere the pen-
Sion systems have ceased in cases of old age to require
a proof of incapacity and have fixed a minimum con-
dition of age or length of service, after fulfilling which
the employee is allowed to retire whenever he feels
that he has become incapacitated. Only in cases of
application for retirement before the fixed age is
attained, or the long service completed, do the systems
require a “proof of disability.” The term “disability”
has everywhere become to mean a premature disability
which occurs before old age is reached.
This evolution has not touched the New Jersey
Retirement Fund. *The Fund still persists in requir-
ing of veteran teachers a proof of disability and in
making their retirement dependent on a discretionary
decision of a Retirement Board, a decision which, in
spite of the best intentions of the persons constituting

the Board, is bound to be arbitrary.”
* The Secretary believes that the requirement of a proof of
disability permits the Fund to operate at a very low cost and
presents a great advantage over all other systems, as may be
seen from the following statement:
“Let us always remember and stand fast on our corner-
stone, ... the Mutual-disability-insurance principle, which
basically and sharply differentiates our Fund from any
other system of teachers' retiring allowance in the United
States, or anywhere else, so far as I know, and which is
what makes possible the New Jersey law rates of dues,
and high scale of benefits.”
* That considerable dissatisfaction with the “proof of inca-
pacity” requirements exists among teachers is shown by the
leaflets, letters and complaints which circulate among them.
Miss Emma C. McCoy recently issued a circular in which
she says:
“The number of teachers who have been refused annui-
ties from this Fund has been quiet gossip for years. The
number refused during the past year has been unprece-
dented, and we would like to know what is the trouble.
“I am reliably informed by members of the New Jersey
Federation of Women's Clubs that there are a number of
women who have taught thirty-five or more years who
ought to be retired, not only for their own good, but for
the good of the schools in which they are employed, but
they will not retire on the State Pension because they are
not quite dead enough' to apply for an annuity from the
Teachers’ Retirement Fund, so they continue in the ranks
rather than retire on the one annuity from the State.
“The following description is typical of what some of
* N E W
J E R S E Y' 61
“Length of service” a defective method of determin-
ing superannuation. The determining by “length of
service” whether an applicant for retirement is super-
annuated and should be entitled to a retirement benefit
is also one of the old practices. It was adopted at one
time or other in most of the systems in this country
and abroad. Its defects have been recognized in the
recent systems and substituted by “age” conditions.
The results obtained in the New Jersey Pension
System with the “length of service” condition are just
as unsatisfactory as those obtained in other systems.
Experience shows that long service is not a satisfactory
indication of superannuation. A teacher who entered
the service at 20 years may complete his 35 years of
service when 55 years of age and far from being
superannuated; on the other hand, late entrants may
perhaps be really incapacitated at 65 and yet not have
completed the required service, and therefore would
not be considered as superannuated.
The fact that under the 35 years service requirement
some teachers may retire who are still in prime of life
has been considerably criticised by the managers of
the Retirement Fund. However, the remedy which
they suggest would not improve the system. They
propose the application of the “disability requirement”
now practised in the Fund, which, as already shown,
can not be adjudged satisfactory.
The conclusion which may be reached from an
examination of the operation of the systems is that
they are fundamentally defective in dealing with their
primary object, i.e., with superannuation.
The double superannuation benefit: Since it has
been found that the systems duplicate each other in
practically all cases of superannuation (that is, in more
than 70% of all cases of retirement which have taken
place during the last seven years) it is interesting to
examine what the double superannuation benefits now
granted really amount to.
our teachers are up against in their efforts to secure jus-
tice from the Teachers’ Retirement Fund :
“‘I write to inform you that my annuity was granted
on April 20, 1917, after a hard fight. I secured my evi-
dence from five most eminent physicians, who certified to
my disability.’
“Other cases reported to me the teachers have had to
be examined by six, seven or eight doctors before any
attention was paid to their applications. Are YOU going
to allow this kind of treatment to continue? IT IS UP
TO YOU.”
On the other hand, the Secretary's complaints that teachers
who really are not incapacitated, but claim that they are,
obtain benefits from the fund, and her statements that with
very little financial buttressing the Fund will be permanently
sound, “provided that only really incapacitated teachers are
retired thereon”—these complaints and statements show that
the “proof of disability” requirement does not work properly.
Mr. Fackler says in his report: “If there are cases of hard-
ship where annuities are deserved but not yet granted, there
is much reason to fear that there are many more instances
where they have been granted improperly.”
A careful analysis of the annuity roll reveals the
fact that in about 70% of all the existing retirements
on double benefits, these benefits amount to more
than the full average salary of last five years of serv-
ice; in about 20% of all the cases the benefits range
between 75% and 100% of the salary, and in only
about 4% of all cases did the benefits range between
70% and 75%.
10 teachers enjoying benefits of 70% to 75% of salary
78 teachers enjoying benefits of 75% to 100% of salary
86 teachers enjoying benefits of 100% to 110% of salary
189 teachers enjoying benefits of IIo% of salary, and more
*-mº
363 teachers enjoying benefits averaging 103% of salary
The average benefit of all the 363 superannuation
retirements is $1,085, or as much as 103% of the
average salaries of $1,054 drawn by the retired teach-
ers during their last five years of service. These
average benefits amount to about 130% of the present
average salaries of the New Jersey teachers of $834.
There is no principle, nor is there any practical con-
sideration, which would justify a provision by which
an individual would obtain for his support in old age
the same or even a larger income than that which he
enjoyed during his working years. The responsibilities
of a married person become lighter in old age, because
the children have grown up, and the wants and capacity
for enjoyment in the case of a single person decrease
as he advances in age.
In order to purchase protection against the con-
tingency of old age, the individual must set aside a
part of his current income. It would be folly on the
part of the married man to reduce his income unreason-
ably and deprive himself and his dependents of the
necessaries of life, at the time when the economic
needs of the family are the greatest, in order to draw
a much larger income in the future, when some of his
dependents will have become self-supporting and the
needs of the family will have noticeably decreased. It
would also be a folly for a single person to “deprive
self” at the time when his wants are more varied and
intense, in order to assure himself the highest income
of his life for the time when his wants would have
decreased and he could not as well enjoy it.
Such a reckless scheme can only originate where its
cost is unknown and only as a result of accidental and
haphazard growth, and it can only be maintained for
any length of time where its aged beneficiaries have
not paid and sacrificed during their working years for
the sake of receiving such excessive benefits, but obtain
it mainly as a gratuity at the expense of others. The
history of the New Jersey Retirement Fund and the
State Pension shows that this is the only explanation
62 * N E W
J E R S E Y'
for the existence of this reckless provision and for its
continued maintenance in New Jersey.
The great majority of the teachers who are now
supporting by their contributions these excessive bene-
fits will never receive the same benefits for themselves
because the fund is insolvent. It does not seem fair
to these teachers, or to the people of New Jersey, who
now support the State pension, that they be asked to
contribute during their working years in order to pro-
vide a group of teachers with such costly and excessive
benefits.
It is not equitable that certain teachers should be
able to receive double benefits ranging between 70%
and 130% of their salaries, while others receive only
an annuity sometimes as small as 20% of salary if
they are high grade teachers, or rising to 80% if they
are in the lower grades, and still others receive only
a pension which for all grades is fixed at 50% of
salary, and that 363 retired teachers of the first group
should receive in aggregate retirement allowances
almost $400,000, whereas all others, 279 in number,
should receive only about $125,000. The table on this
page shows at a glance the difference between the
benefits enjoyed by the three groups of retired teachers.

Number Average Benefit Average Percentage Rates to Salary
Teachers Receiving Both Annuity and Pension....................... 363 $1,085 103%
Teachers Receiving Only the Annuity 225 404 59%
Teachers Receiving Only the Pension 54 634 50%
The excess benefits deserve condemnation, not only
from the point of view of cost, not only from the point
of view of equitable treatment as between the individ-
ual members of the system and also as between the
teachers and other classes of public employees, and
not only from a broad social standpoint, but also from
the point of view of efficiency of the schools, because
it results in an abnormal increase of applications for
retirement on the part of teachers who perhaps could
still continue teaching, but are attracted by the prospect
of receiving, without performing any duties, a larger,
or about the same, income as they were earning while
on duty.
The excess benefits are a bar to the improvement of
the retirement systems and to the extension of their
provisions. It would be very difficult to reorganize the
Systems on a Sound and permanent financial basis and
to introduce new forms of protection so long as these
costly double superannuation benefits are provided.
It has been recognized in the pension and social insur-
ance movement throughout the civilized world that
old age benefits should be smaller than the income of
one's productive years. The sound development of
pension systems, proceeded not so much towards any
further increase of the amount of superannuation ben-
efits, as it did towards the reorganization of benefits
on a more sound and firm foundation, and towards the
introduction of new types of protection: the service
limits for disability were lowered to ten years, and
even less, with the result that disability protection
covered the early periods of service; death benefits
were included; and a return of contributions together
with interest was offered in case of resignation or
dismissal.
So far the movement in New Jersey has been differ-
ent. Here, as a result of an accidental and haphazard
growth of pension legislation, a double superannuation
benefit—an anomaly in the teachers' pension history
throughout the entire world—has been created, while
at the same time other benefits, which constitute an
important part of a pension system, have remained
undeveloped.
An interesting defense of the excess benefits has
been put up by the Secretary, who wrote:
“There is one point to which I wish to call
special attention. It is this: One of the chief
arguments against our New Jersey systems of
teachers’ retiring allowances is that one may re-
tire on an income larger than he or she earned in
active service, but never, not once, not in one
single instance, have I known a speaker or a news-
paper to be fair enough to explain that the Re-
tirement Fund, which pays all the excess above
half-pay, is furnished by the teachers themselves,
every cent of it.”
The great majority of systems in this country and
abroad provide a half-pay benefit at the joint expense
of the government and the employee. The fact that
the State of New Jersey provides at its own expense a
half-pay benefit is just as anomalous as the fact that
the teachers of New Jersey provide a 60% benefit at
their own expense. Both sides, and not one, as the
Secretary claims, are paying for the excess benefit of
the teachers now retired. The Secretary further
writes:
“Nor have I ever known a critic to be fair
enough to state that the excess retiring allowance
applies only to the lower grades of salary; that
parity it reached at $1,300, and that above this
figure the ratio between salary and retiring allow-
ance steadily decreases.”
* N E W
J E R S E Y' 63
Apparently the term “excess retiring allowance” is
used in this passage as meaning excess above full
salary and not as it is correctly used in other places—
excess above half salary. It is true the excess benefits
apply differently to different grades of teachers, but
even in the higher grades they still raise the total
benefit to at least 70% of salary, which is considerably
more than what a sound retirement benefit should be.
The writer continues:
“Nor have I ever known a critic to be fair
enough to point out that only the teacher who is
both incapacitated and a veteran is eligible to both
the Retirement Fund and the State Pension.”
The fundamental idea of all sound retirement sys-
tems is that the superannuated teachers are incapaci-
tated veterans. In none of these systems has it been
thought to provide the superannuated with a double
retirement and a double benefit: one because they are
incapacitated and the other because they are veterans.
The Secretary also says “this excess above full pay is
a minor defect; a defect of which the teachers and not
the State stand the cost.” As a matter of fact, neither
side bears the real cost of the benefits. The Fund bor-
rows funds which belong to the future and the State
Pension also shifts its deficiencies upon the future.
In the opinion of the Secretary, the double superan-
nuation benefit represents a progress over the single
superannuation benefit, as may be seen from the fol-
lowing excerpt from her already quoted address:
“The question has been asked: Why should
New Jersey pay a higher retiring allowance to her
teachers than do other states? Does anyone claim
that New Jersey pays her teachers too much?
Again: New Jersey began for the United States
the campaign for teachers' pensions. Why should
she have done this in view of the fact that no sys-
tems of teachers’ pensions existed in this country;
no refuge in the years of age and infirmity, ex-
cept the poorhouse or charity? Why should New
Jersey have one? Why not let well enough alone?
Why the printing press, steam, the telegraph, the
telephone, the wireless, the railroad, the type-
writer, the power-plow, the power-reaper, the
power-thresher? For countless centuries the
world got along without these things. Why were
they adopted? Why is ‘Progress’?”
It must be noted that New Jersey did not “begin for
the United States the campaign for teachers' pensions.”
It was preceded by the pension movement in New
York City. Furthermore, the movement in other cities
and states has followed a different line of development
than that of New Jersey.
The Secretary does not specify what principle or
practical feature of the double superannuation benefit
represents progress. The fact that the benefits are
being doubled does not necessarily mean progress. It
may, and actually does, block progress, as has been
shown above.
sº
CHAPTER VIII
The “Tontine” or “Forfeiture”
Feature and the Inequitableness
of the Systems
Tontine feature and the inequitableness of the Fund. Tontine feature and the inequitableness
of the State Pension.
“Tontine” feature and the inequitableness of the
Fund. An important feature of the Retirement Fund
and of the State Pension is the so-called “tontine” or
“forfeiture” feature.
The Fund withholds the contributions of the mem-
bers who resign or are dismissed or who die before
completing all its requirements, and it adds these
forfeited contributions to the contributions of the
members who remain in the service until retire-
ment. The advantage claimed for this method is that
it permits the payment of higher benefits than could
otherwise be provided to those who remain in the serv-
ice for the prescribed period and then retire. In its
insurance aspect, if not in its philanthropic function,
the system operates like a lottery. The best winner is
the one who remains in the service until he qualifies
for retirement and who after that survives the longest,
for he receives the greatest benefit; provided, of course,
the fund does not collapse in the meanwhile. The
worst loser is the one who resigns, is dismissed or
dies on the eve of becoming entitled to a retirement
benefit, for he and his dependents receive nothing.
For this “gambling chance” (for such it is from the
point of view of sound insurance) the system charges
each member 2% to 3% of his salary.
Early life insurance organizations abroad and in this
country operated on the “forfeiture” basis. They pro-
vided life annuities to the surviving members by means
of the lapses for premiums obtained from those mem-
bers who withdrew from the organization through
64 * N E W
J E R S E Y'
death or otherwise. They were generally known under
the term “tontine.”
In the course of time considerable criticism of the
“tontines” developed. It was pointed out that their
operation was inequitable. Laws were placed on the
statute book in almost every state, forbidding the
operation of “tontines” and requiring life insurance
companies to fix the premiums in accordance with the
rates of mortality at different ages and to provide cer-
tain cash surrender benefits to the policy-holders whose
policies were cancelled through non-payment of
premiums or other cause.
The “tontine” or “forfeiture” feature was very early
introduced, in a somewhat modified form, in the pen-
sion funds in France and Great Britain, and from there
was copied into the pension funds in the United States.
A movement to rid our pension funds of this feature is
already on foot. The first steps along this line were
taken by Massachusetts, New York City, Pennsylvania
and Connecticut, which have in their new systems
supplanted the tontine features by sound insurance
and savings features.
The managers of the New Jersey Teachers’ Retire-
ment Fund uphold the “forfeiture” feature as the
“mutual feature” of the system. Let us briefly exam-
ine from the point of view of mutuality and equitable-
ness how this feature has actually worked among the
members of the Fund.
The contributors of the fund may be divided into
three classes: first, those who have fulfilled the re-
quirements of the system and have been placed on the
annuity list; second, those who have withdrawn from
the service before fulfilling the requirements; and
third, those who are in the active service and contribute
without knowing whether they will be in the one or the
other class and whether they will receive any benefit
or forfeit their contributions.
The contributors in the first class are the winners of
the game. It was not difficult for them to win, for
they were older and nearer to retirement at the time
‘A “tontine" is a form of life annuity which owes its name
to an Italian banker by the name of Lorenzo Tonti, who pro-
moted it as a scheme for a public loan in the seventeenth cen-
tury in France. The Standard Dictionary describes the ton-
time as follows: “The income from the common fund con-
tributed by the persons composing the tontine is divided at
first among all, say, 100. When one dies, his share passes not
to his heirs, as part of his estate, but to the 99 survivors of
the tontine, and so on continuously, the profit increasing to
each survivor as the number diminishes, until the final sur-
vivor takes the whole, and at his death the tontine ceases.”
The Encyclopedia Britannica says: “The tontine principle has
often been applied in Great Britain at one time in connection
with Government Life Annuities. * * * It was occasion-
ally introduced into life insurance, more particularly by Amer-
ican life offices, but newer and more ingenious forms of
contracts have now made the tontine principle a thing of
the past.”
the system started than were all the other members.”
The 730 members who so far constituted that class
have received already thirteen times as much as they
have paid in. Their total demand on the Fund, includ-
ing the annuities which the 558 now living would
receive in the future, would amount to perhaps forty
times as much as they have paid in, provided the
Fund operates as long as they live. As a matter of
fact, however, the Fund is insolvent, and in the course
of a few years will be forced either to reduce or to
discontinue its payments to them, unless it is reorgan-
ized on a fundamentally different basis.
In the second category are the losers. They not
only did not receive anything above what they have
paid in, but even lost all that they have paid. The
advocates of the present system seem to ignore the
fact that those who resign or are dismissed and forfeit
their contributions must start anew providing against
their old age or disability, and that the dependents of
those who have died lose the benefits of the latter’s
savings at the time when they may need it most. It
must be noted here that members of this class have
hardly ever had any “chance” to obtain a benefit, for
they were young and their retirement was remote at
the time they came into the system. A considerable
part of the $1,500,000 so far paid to the 730 annui-
tants over and above what they have paid came from
the forfeited contributions of these members.
In the third category are those who do not know
yet whether they will be winners or losers in the game.
Only a few of them are about or near the retirement
age and have a fair chance to obtain a benefit. The
majority consists of younger members who are further
away from retirement and have far less chance to
obtain a benefit. While the line is slowly advancing,
their contributions are being paid out to the earlier
beneficiaries of the system. Years before they would
reach the point of retirement and present their claim
for payment they would find that the system has no
more funds to distribute.
The greater part of their contributions was applied
to support the benefits of the several hundred annui-
tants. All that they are now paying is applied to this
purpose, and much more is needed by the system,
which, according to the estimate of the actuary, will be
exhausted in about 13 years, if it continues to operate
on the same basis. The majority of present contrib-
utors will never receive any benefit whatsoever from
the Fund, unless it is reorganized on a fundamentally
* Since, according to the leaders of the Fund, the System
now operates primarily not as a philanthropy, but as a “mutual
insurance,” it is being discussed here from the latter and not
from the philanthropic point of view.
* N E W
J E R S E Y' 65
different basis and includes sound insurance and sav-
ings features.
In the opinion of the leaders of the Fund, a sys-
tem such as the New York City or Pennsylvania teach-
ers' systems, which charge every member according to
his age and return all contributions with interest in
case of resignation, dismissal or death, is an “individ-
ual” and not a “mutual” system. As a matter of fact,
however, these systems are more mutual than the New
Jersey Fund, because their members are classified
according to their ages, mortality and other conditions,
the younger teachers are not taxed in favor of the old,
those who withdraw from the system are not penal-
ized in favor of those who remain in the system. No
group is placed in a more advantageous position than
another. Fundamentally every insurance company is
a “mutual” organization whether it is so in name or
not, and yet it charges premiums according to age and
offers cash surrender benefits. The Secretary pro-
ceeds in her address with the following discussion:
“An attempt will be made to drive us from our
mutual system to the individual system; from the
Divine system where all stand for each, to a sys-
tem where each must stand alone. I contend that
the entire spiritual, altruistic, economic and polit-
ical drift of humanity today is toward mutuality,
co-operation, interdependence. Then this the
present war is teaching no greater lesson. Never
before since man was created has there been such
a mighty fusing of social and material interests as
is now being wrought in the flaming crucible of an
Universe. And our tiny Retirement Fund has its
small but definite place in this vast drama or trag-
edy—call it as you will. I claim that the mutual
principle is not only the divinely appointed princi-
ple, but that it is the sound economic principle;
the principle toward which mankind is plainly
tending.”
Nowhere in this vague discussion does the writer
give a definition of what she means under “individual”
and “mutual” systemas.
From this brief analysis it is evident that the system
works inequitably as between its members. Under a
mutual system the members benefit each other. There
is no mutuality where one side only gives and the other
only receives.
“Tontine” feature and inequitableness of the State
Pension. The State Pension also operates on a “ton-
tine” basis, with this difference, however, that the
teachers do not contribute, and the forfeiture is one
of “pension rights,” not of contributions. There, too,
we may divide the teachers into three classes; those
who have completed the requirements of the system
and have obtained the pension; those who through
resignation, dismissal or death have lost all rights to
benefits for themselves and for their dependents; and,
finally, those who are in active service and do not
know whether they will be in one or the other class.
The system also operates like a lottery and the chances
of the members to win a benefit are as unequal as in
the Retirement Fund. The older teachers found no
difficulty in obtaining the entirely gratuitous benefit.
The entire contribution of the State, which now
amounts to about $250,000 annually, is applied to the
payment of their benefits.
Those of the second class, mainly consisting of
younger teachers, have lost all their prospective pen-
sion rights. Their chance to obtain the benefit was
very remote. The third class is also at a disadvantage,
as compared with the older teachers who received a
gratuitous benefit, as the earlier beneficiaries now do,
for the burden of the payments to the latter woulé
become so great as to force the state to exact contri-
butions from them and substitute the present gratui-
tous pension by a contributory system.
Appendia B
NUMBER, PAYROLL AND Average SALARIES OF MEN
AND WOMEN TEACHERS IN NEw JERSEY
IN THE YEAR 1915–16
(From the Report of the Pension and Retirement Fund
Commission, 1918.
State Research Consecutive No. 9, page 14.)
Number
Men …............... 2,462
Women ...................... 14,317
Total................ 16,779
Payroll Average Salary
$ 3,015,000.00 $1,225.00
10,987,000.00 767.00
$14,002,000.00 $ 834.00
66 * N E W
J E R S E Y'
PART III
FUNDAMENTAL PRINCIPLES, SUMMARY OF CRITICISMS
AND PRACTICAL REMEDIES
CHAPTER IX
Fundamental Principles and Summary of Criticisms
Fundamental Principles. Reserve. Two-fold purpose and joint contributions. Return of contributions at
resignation, dismissal or death prior to retirement. Summary of Criticisms. Financial Unsoundness. Un-
soundness from a Social, Economic, and Administrative Point of View.
Having reviewed the history of the two systems and
analyzed their present condition in the preceding chap-
ters, we may now briefly state the fundamental prin-
ciples of a sound retirement system, which are gener-
ally agreed upon by all students of the pension subject,
and from the point of view of these principles sum-
marize the main criticisms of the New Jersey systems,
and consider the various practical remedies that can
be devised for their reorganization.
Reserve
It is becoming recognized in this country as well as
abroad that in order to be sound a retirement system
must operate on an actuarial reserve basis. Each year
during the service of each member a contribution must
be set aside which together with interest would be
sufficient to accumulate a reserve from which that
member's annuity or pension could eventually be paid.
The cost of the annuity or pension should be calculated
by actuaries on the basis of mortality tables and the
amount of contribution determined in accordance with
the age of the member in a similar way as the cost of
various insurance policies and the amount of the
premiums to be charged for them are calculated by
actuaries. The total liabilities to all present members
and the total assets which the system will realize on
their account must be actuarially determined. If the
liabilities equal the assets, the system is solvent; if
they exceed them, there is a deficiency that must be
provided for. Just as a policy holder knows that the
company will be able to pay his policy twenty or thirty
years hence when it matures, because it charges a
premium that has been scientifically determined to be
sufficient on the basis of average mortality and other
factors to cover the cost of his policy, so a beneficiary
of a retirement system that operates on an actuarial
basis feels assured that his pension or annuity will be
paid because its cost is being covered by means of
annual instalments and the solvency of the system is
assured. The burdens which the taxpayers bear on
account of pensions are equitably distributed between
various generations by such a system; each year the
taxpayers make a proper contribution to cover the
cost of future pensions of the teachers whom they em-
ploy, and no generation is charged with the pensions
for services rendered to another generation; each year
bears its proper share of the burden, and in no partic-
ular year can the charge become too heavy. The
element of certainty and permanency which such a
retirement system contains, as well as the “pay as you
go policy” which it follows, naturally appeal to the
beneficiaries and the public.
The Pension and Retirement Fund Commission of
New Jersey has recognized the reserve principle and
has recommended to the Legislature
“that a reserve basis be adopted as the policy for
all future legislation in connection with pension
and retirement funds; that contributions be based
on definite actuarial calculations, and that no bills
for the creation of pensions be considered by the
legislature without actuarial valuations of the lia-
bilities entailed by the bill accompanying the
same.”
The Two-fold Purpose, the Joint Contribu-
tions and Co-operative Management
It has been generally recognized that a sound retire-
ment system should have a two-fold purpose: on one
hand to offer protection to the teachers against want in
their old age or premature disability and to some ex-
tent in case of resignation or dismissal and to their
dependents in the event of death, and on the other hand
to improve the efficiency of service by eliminating from
it the old and incapacitated, whom it is otherwise diffi-
cult to eliminate, by attracting to the service the best
type of teacher and by improving the morale and esprit
de corps of the personnel.
In order that it could accomplish this two-fold pur-
pose and benefit the teachers as well as the public, both
parties must contribute to it in equitable proportion.
This would usually assure the teachers and the school
administration a more or less equal voice in the man-
agement of the system, establish between them a rela-
* N E W
J E R S E Y' 67
tionship of partnership in it and permit them better to
safeguard their respective interests. It is usual for
such systems to offer besides superannuation benefits
a variety of other benefits specially devised to meet the
economic needs of the teachers, such as refunds of
their contributions in case of resignation or dismissal,
various death benefits, early disability protection and
certain optional benefits which are especially adapted to
individual conditions, and to have the retirement age
and other provisions so fixed as to maintain the service
in a most efficient condition.
Where the two parties are unwilling to financially
co-operate towards the support of the retirement sys-
tem it is impossible to establish it on a reserve basis
(unless very small benefits are provided), as the cost
of retirement benefits on a reserve basis is too great
for either one or the other side to bear alone. Of all
the systems that operate on a reserve basis either in
this country or abroad, there is practically not one
that is supported entirely by the teachers or entirely
by the state.
If the state is the sole supporter of the system it
usually keeps the entire control over the system in its
hand, and the teachers have little to say regarding its
management and benefits. The school administration
is mainly interested in efficiency and usually neglects
to provide such benefits as in its opinion are not
directly connected with efficiency, although they may
be of great economic importance to the teachers. Thus
it usually happens that gratuitous pension systems do
not provide any benefits at resignation, dismissal or
death, early disability protection or optional benefits.
The state applies its entire contribution to providing
benefits to the teachers who become superannuated
after long service and constitute but a minority of all
the teachers.
If the system is supported entirely by the teachers,
the state does not participate in its management and
takes no interest in it. As a result, the promotion of
efficiency is neglected. The older teachers, who usually
manage it, disregard the interests of the younger teach-
ers. They tax them for the benefit of the older and
provide neither refunds nor other benefits which are
of great importance to the younger elements, who con-
stitute the majority of the teachers.
In the systems which are not supported and man-
aged co-operatively by the teachers and by the state
either one or the other side is dissatisfied on the ground
that the other, although benefited by the system to
some extent, does not contribute to it.
To summarize, only a system which is supported by
joint contributions of the teachers and the public and
is jointly administered can benefit both parties and be
adequate and Sound from an economic, social and
financial point of view.
Return of Contributions at Resignation, Dis-
missal or Death Prior to Retirement
It has become recognized as a fundamental principle
of any sound retirement system that the contributions
of the teacher who resigns, is dismissed, or dies prior
to retirement should be returned to the teacher or to
his assignees, together with compound interest.
The refunds (if they are provided) are inconsider-
able only in the unsound systems in which the teachers
contribute at the inadequate rate of 1 or 2 per cent. of
Salary and where the contributions are expended almost
as soon as they are made, with the result that they
earn very little interest. They can at the utmost
amount to a few hundred dollars. It is quite different
in sound systems. There the teachers contribute 3, 4,
5 per cent. of salary, according to age. The contribu-
tions are accumulated with interest. The accumula-
tions may be considerable and amount to even several
thousand dollars, as may be seen from the following
table:
AMOUNTs WHICH AN ANNUAL CONTRIBUTION OF
$35, $50 or $75 DEPOSITED AT 4% INTEREST
WILL PRODUCE AT THE END OF A CER-
TAIN PERIOD OF YEARs.

Number Of Years $35 $50 $75
f $ 197.16 $ 281.65 $ 422.48
10 437.01 624 30 936.45
15 728.88 1,041.25 1,561.88
20 1,083.92 1,548.45 2,322.68
25 1,515.92 2,165.60 3,248.40
30 2,041.48 2,916.40 4,374.60
35 2,680.93 3,829.90 5,744.85
40 3,458.95 4,941.35 7,412.03
The majority of the teachers leave the service be-
fore retirement. The prospect of forfeiting several
hundred or even thousand dollars in favor of the
minority who remain in the service until retirement
does not appeal to them. They proclaim the forfeit-
ure feature inequitable. They want to be free to leave
the service and seek better opportunities without being
penalized for it, and they want their dependents to
enjoy the fruits of what they have saved in the fund.
They therefore demand that the system return to them
or to their dependents all their contributions together
with compound interest in case of resignation, dismis-
sal or death. Such a provision at once broadens the
system which then benefits in some form or another
every member.
68 • N E W J
E R S E Y'
The state is just as vitally interested as are the
teachers in the provision for the return of contribu-
tions, because in the absence of such provisions the
service becomes overburdened with inefficient teachers
who neither resign fearing to lose their pension rights
and contributions, nor are dismissed by their superiors
who do not wish to inflict upon them the heavy pun-
ishment of forfeiture of their contributions.
Summary of Criticisms
Neither the Teachers’ Retirement Fund nor the 35
Year Half Pay Pension embody the three fundamental
principles here described: 1, they do not operate on a
reserve basis; 2, they are not supported jointly by the
teachers and by the state and therefore do not effec-
tively benefit the two parties; and 3, they do not offer
withdrawal benefits.
Financial Unsoundness. The Retirement Fund was
established on the so-called “assessment insurance”
plan: the assessments were fixed at a rate which per-
mitted the payment of benefits to a comparatively small
group of teachers, and even left a certain surplus, but
was not sufficient to insure the payment of benefits to
all prospective annuitants among the contributors of
the Fund. Its total assets were far below its total
liabilities, and the deficiency was considerable. Only
by using the contributions which belonged to the future
and should have been set aside was the fund able to
go on. With the increase in membership the deficiency
increased, until now it amounts to many millions of
dollars, and the Fund has only a few years to live on
its present basis.
The State Pension operates on the unsound “cash
disbursement” basis: the state contributes only on ac-
count of the teachers already retired and only enough
each year to pay the pensions of that year; and it
makes no contributions on account of the other mem-
bers who would apply for retirement in the future.
The state now contributes at a rate much below the
normal cost of the pension only to eventually con-
tribute on that basis at a rate far above the normal
cost. It shifts its deficiency upon the future. Its total
liabilities amount to $24,000,000, all of which will have
to be provided for in the future.
The Fund was supported entirely by the teachers.
In reality it was only partially supported, as the 1, 2
and 3 per cent. contributions of the teachers covered
only a small part of the cost of the system, and the
donations and monies from entertainments were alto-
gether inconsequential. The larger part of the cost
was never provided for, and, as already stated, in-
creased from year to year as a deficiency.
The State Pension was supported entirely by the
State. It was established for the benefit of one teacher
with the idea that the payments which the State will
have to make thereunder will be insignificant. Each
time the system was amended and liberalized it was
thought that only a few teachers would avail them-
selves of its provisions, and that the expense would not
be considerable. Just as the Retirement Fund, the
State Pension was only partly supported, the larger
part of the cost having never been provided for.
There is no doubt that had the legislators known the
full extent of the cost of the pension, which has now
been estimated at $24,000,000, they would not have
imposed the expense entirely upon the State.
Unsoundness from a Social, Economic, and
Administrative Point of View
Both systems fail to benefit the majority of the
teachers who withdraw from the service before they
become superannuated or disabled : the latter are pen-
alized when they withdraw, being made to forfeit their
contributions to the Fund and their rights to the pen-
Sion and forced to begin anew in their effort to secure
protection against dependency in old age. At the same
time they excessively benefit the minority who remain
in the service until retirement by providing them with
an annuity far in excess of what they contributed or
with an altogether gratuitous pension. Neither of
these features can be justified from a social or eco-
nomic point of view, nor can the systems be considered
equitable.
Although the two systems have practically the same
membership, they have been planned and administered
as if they were entirely separate entities. There is no
correlation between their provisions and practically no
contact between their administrative apparatuses, each
of which grants benefits without considering what the
other does. The two systems duplicate each other's
work and result in greater and greater inequities: while
the majority of the teachers, as was shown, receive no
benefit whatsoever from either one or the other sys-
tem, some receive only an annuity, others receive only
a pension, over 70% of those now retiring receive
both annuity and pension, the double benefit in the
majority of the cases aggregating more than full
Salary.
The systems frequently harm the efficiency of the
service, as their double feature encourages an efficient
teacher to retire before he becomes superannuated and
encourages an invalided teacher to postpone his retire-
ment. In a word, the two systems are unsound not
only from a financial point of view, but also from a
social, economic and administrative viewpoint.
* N E W
J E R S E Y' 69
CHAPTER X
Practical Remedies
Fundamental Reorganization and Consolidation of the Two Systems: How can they be reorganized on a re-
serve basis. What liabilities of the insolvent Fund can the State assume and how can equitable division of cost
between teachers and State be obtained. How can a provision for refund of contributions be secured. Im-
mediate or gradual consolidation. Partial Reorganization: Elimination of duplication by reduction of annuity.
Maintenance of double benefits and further makeshifts. The State and the Teachers to Decide.
While some of the opinions concerning the situa-
tion involve a recognition of the fundamental prin-
ciples and criticisms here stated, others agree only
with some and only with regard to one or the other
system. We shall briefly discuss the practical remedies
that are suggested by the representatives of the dif-
ferent trends of opinion.
Fundamental Reorganization and Consolida-
tion of the Systems
How can they be reorganized on a reserve basis.
Those who condemn the excessive double benefit and
the independent operation of the two systems from
the point of view of equity and efficiency realize also
that the maintenance of these two features would
make impossible a reorganization of the systems on a
reserve basis.
Suppose the Retirement Fund continues to operate
independently of the state and maintain the same rate
of annuity.
It has a liability of approximately $2,300,000 on
account of the annuitants now on the retired roll and
has assets of only about $500,000. The deficiency on
that account alone amounts to approximately $1,800,-
000. Who will supply this deficiency? It is evident
that the annuitants can not supply it and that the
present and future contributors can not do it without
Sacrificing their own future benefits.
The Fund has considerable “accrued liabilities”
on account of which the present contributors have
never contributed and the Fund received no assets
whatsoever. The deficiencies on that account repre-
sent, especially in the case of the older teachers, con-
The Fund has also tremendous liabilities on account
since the time of joining the Fund, and has no
of the services which the present teachers rendered
assets whatsoever to offset them, as it has already
expended the major part of their past contributions
and must, under the present arrangement, apply the
balance to the same purpose. Even if the present
* According to the estimate of Mr. Fackler.
* The “accrued liabilities,” as already stated, are the liabili-
ties on account of services rendered prior to the time of join-
ing the fund, services for which the teachers receive crqit,
although they did not contribute then.
siderable amounts which far exceed what the teachers
can pay.
teachers were to pay for a second time, together with
interest, all that they have paid into the fund in the
past, it would be insufficient to cover the deficiency
on that account. It would be necessary for them fur-
thermore to pay for all the past years, together with
interest, the difference between the inadequate rate at
which they contributed and the rate at which they
should have contributed according to their age.
Finally, the Fund has considerable liabilities on
account of future services of its present members.
The contributions on this account (frequently called
“normal contributions”) must be supplied each year
as the services are rendered, and must be fixed accord-
ing to age. Even if the forfeiture feature were main-
tained, the rate of the normal contributions would in
many cases be higher than the present rate.
In a word, if the present Fund were reorganized on
a reserve basis maintaining the annuity of 60% of
salary and continuing to operate without state aid,
each teacher would have to contribute each year (1) a
certain amount towards the liquidation of the defi-
ciency of $1,800,000 on account of the present annu-
itants,(2) a certain contribution depending upon his age
towards the liquidation of the liabilities accrued on
his own account for all the past years since the time
he entered the service and up to the present date, and
(3) a normal contribution on his own account for the
current year, the amount of which would also depend
upon his age. There would be many cases where
the whole salary of the teacher would be insufficient
to supply all the “deficiency” and “normal” contribu-
tions. Even an average increase of the present rate
of contribution three or four times would be insuf-
ficient to provide the funds that will be necessary in
that case. The Fund can not be reorganized on a
reserve basis under such conditions.
Similarly it is impossible to reorganize the state
pension on a reserve basis as long as the present exces-
sive rate of pension is maintained. The actuarial esti-
mate prepared for the Pension and Retirement Fund
Commission has shown that the pension of 50% of
salary involves a liability of about $24,000,000, and
that their liability will increase as new teachers are
coming into the service, and that to provide against
this liability on a reserve basis an annual contribution
will be required that will amount to perhaps as much
70 * N E W
J E R S E Y'
as a million dollars. The state cannot maintain such
a tremendous liability and in addition contribute such
huge amounts without greatly reducing its other
expenditures. It is doubtful that the legislature will
consider it fair that the state expend such tremendous
amounts in order to benefit at an excessive rate a
minority of teachers who are entitled to another benefit
from the Retirement Fund.
The conclusion must therefore be made that the
rate of annuities to be granted in the future as well
as the rate of future pensions must be reduced and
the contributions of the teachers and of the state must
be increased in such a way as to provide together an
adequate but not excessive benefit for every retiring
teacher; and that the independent and uncorrelated
operation of the two systems, which allows some
teachers to retire on double benefits and others only
On one or the other benefit, should be discontinued
and a consolidation of the two systems effected; and
that the state should in that case assume in an equi-
table measure those financial responsibilities of the
actuarially insolvent Fund which the teachers cannot
bear, and that the cost of the new system should be
equitably divided between the teachers and the state in
accordance with sound principles and practical con-
siderations.
What liabilities of the insolvent Fund can the state
assume and how can equitable division of cost between
teachers and state be obtained? The teachers affected
by retirement provisions can be divided into three
classes: those already retired, those in the active ser-
vice (the so-called “present teachers”), and the “new”
or “future entrants,” i. e., those appointed hereafter.
The problem of covering the cost of the benefits of
the former two classes is complex on account of the
deficiencies involved in their case. The problem of
the benefits of the latter is comparatively simple, and
should therefore be considered first.
In the case of new entrants an equal division of
cost of retirement benefits on a reserve basis can be
easily realized. The system will have no “accrued
liabilities” on their account (except perhaps in the
case of the teachers who have previous outside service
to their credit). They would begin to contribute from
the time of their appointment, and so would the state
on their account. The contributions of the teacher
could be fixed in accordance with the teacher's entrance
age at such a rate as to enable the teacher to cover the
cost of about one-half of his or her total benefit—
that half being known as the “annuity,” while the con-
tributions of the state could be so fixed as to provide
without being burdensome the other half called
“pension.”
In the case of the present teachers a distinction
must be made between their prior and subsequent
services. The cost of the benefits on account of sub-
sequent services can be divided more or less equally
between the teacher and the state without becoming
too burdensome for either side. The teachers can
contribute from now on in accordance with their
present age at a normal rate sufficient to purchase
the annuity part of their benefit on account of subse-
quent service, which will be about equal to the pension
part which the state will provide on the same account.
The rate of contribution will not be considerable,
except in the case of the older teachers; there the
state may have to assume an additional burden. Much
more complex is the problem of the benefits for prior
services, which represent a deficiency. It is evident
that the teachers cannot cover their part of the defi-
ciency. The question therefore arises: will the state
be willing to supply the entire deficiency (amounting
to many millions of dollars) and cover the cost of
the entire benefit for the past years, relieving the
teachers of the obligation to supply any part of it?
Still more difficult to solve is the problem of the
642 retired teachers. Their annuities and pensions
represent a total liability of $4,482,248.” The pension
part of it, amounting to $2,157,596, is offset by no
assets whatsoever. It is a deficiency and must in
some form or other be paid by the state, as the latter
has obligated itself to the pensioners at the time of
their retirement to pay their pensions to the end of
their lives. The annuity part, amounting of $2,324,-
652, for which the Retirement Fund is responsible,
can be covered by the latter, as already shown, only
to the extent of about $500,000. As neither the
retired teachers nor the teachers in the active service
can cover the deficiency of $1,800,000, the question
must be raised: will the state be willing to add it to
its pension liability and thus assume a deficiency of
$4,000,000 and pay each year both the annuity and
pension roll, i. e., over $500,000 annually? That the
sum involved is large, especially considering that it is
only on account of 642 teachers, and is in addition
to many other burdens which the state will have to
assume in case of reorganization of the two systems,
can hardly be denied. The proposal that it assume
the payment of benefits of 100% of salary, and even
more, would undoubtedly be objected to. The defi-
ciency could be reduced and the foregoing objections
avoided if the annuities of the teachers enjoying both
benefits were prorated.
In the course of forty or fifty years the payments
* According to the preliminary estimates of the Pension and
Retirement Fund Commission and of Mr. Fackler.
° N E W
J E R S E Y' 71
to the present annuitants and pensioners and the
deficiencies on account of the present teachers will be
liquidated. The entire cost of the new system will
then be more er less equally divided between the
teachers and the state.
How can a provision for a refund of contributions
be secured? The continued independent operation of
the Fund and excessive rate of annuity would make
practically impossible the introduction of the provision
which many teachers demand by which they would be
allowed to withdraw their contributions, together with
interest, in case of resignation or dismissal, and to
transfer them to their dependents in case of death, as
such a provision would reduce the sources with which
the Fund could pay the present annuities, and it would
precipitate the collapse of the Fund. On the other
hand the consolidation of the two systems on a reserve
basis, the reduction of the double benefits to be granted
in the future, and the equitable distribution of the
burdens between the teachers and the state will make
such a provision entirely feasible. Undoubtedly most
of the teachers will agree to contribute one or two
per cent. more than they are now contributing, pro-
vided that they or their dependents receive these con-
tributions back, together with compound interest. The
amount of the refund may be considerable, as has
been shown in the table on page 67, and the benefit
has therefore great value.
The present practice of benefiting at an excessive
rate a minority of the teachers and discriminating
against the majority will be discontinued. The con-
solidated systems will tend to benefit every teacher in
an equitable proportion.
Immediate or gradual consolidation. Those who
see in the consolidation of the two systems the only
means of arriving at a retirement system that would
embody the fundamental principles here described may
differ as to whether the entire program of consolida-
tion should be carried out at once or whether it should
be effected gradually.
Partial Reorganization
Those who accept only sonne of the fundamental
principles and criticisms stated in the preceding chap-
ter come to different conclusions as to practical
remedies.
Eliminating duplication by reducing the annuities.
Thus, according to one trend of opinion the duplica-
tion of benefits should be eliminated, and the Fund
reorganized, but the state pension should remain sub-
stantially unchanged. Among the suggestions which
are made by the representatives of this opinion the
following deserves special mentioning: that the 60%
annuity be limited to cases of disability only, i. e., to
cases where the disabled teacher has not completed
35 years of service and is not entitled to the pension;
and that only a reduced annuity of say 10% (or so
much as the condition of the Fund would permit) be
paid to teachers who shall also receive a pension. It
is argued that the Fund could thus be placed on a
Solvent basis. In the course of years, as the present
annuities would be liquidated on account of death, the
amount of annuity could be increased.
The idea is criticized on the ground that in spite
of the high cost of the half pay pension, it plans to
maintain it entirely at the expense of the state, that
it contemplates no relief to the present contributors
from the burden of supporting the present annuitants;
that instead of changing, it continues the present ar-
rangement by which the teachers’ contributions are
not fixed according to age, and the amount of the
teacher's annuity is independent of the amount the
teacher contributed, that it will make impossible the
introduction of a provision for the return of con-
tributions in case of resignation, dismissal or death, as
the fund will need these contributions to support the
present and future annuities, that it will result in an
eventual return to the inequitable and costly duplica-
tion of benefits (which it set to correct) as the frac-
tional annuity will increase with the gradual extinc-
tion of the present annuity roll; in a word, that the
proposed measure will partly perpetuate and partly
introduce a new form of an equitable division of cost of
retirement benefits between the teachers and the state
and between various groups and individuals among the
teachers.
According to another opinion the Fund should be
altogether wiped out. A bill embodying this idea
(Assembly No. 562) was introduced in the Legisla-
ture of 1917. It provided for the abolition of the
Retirement Fund. The capital was to be transferred
to the state treasury. The state was to assume the
payment of all the annuities now outstanding besides
the present pension roll. Besides the regular pension
of 50% of salary it was to pay to the teachers who
will retire in the future an additional sum (the bill
did not specify whether this sum was to be a single
payment or an annual sum) in compensation for the
contributions which they have made to the Fund in
the past. This additional sum was fixed as follows:
5% of the average salary of last five years before
retirement if contributed for less than 5 years, 10%
if contributed between 5 and 10 years, 15% if con-
tributed 10 to 15 years, and 25% if contributed more
than 15 years. Any member who elects to contribute
to the state treasury at the same rate as he has been
contributing to the Fund will be entitled, after prov-
72 * N E W
J E R S E Y'
ing disability, to receive from the state treasury besides
the regular pension of 50% of salary the full annuity
of 60% of salary, maximum $650. New appointees
were not to make any contributions and were subject
only to the provisions of the 35 year half pay pensions.
The administration of the system was vested entirely
in the Commissioner of Education. Several features
of the proposed measure may be subjected to criti-
cisms. In the first place by abolishing any contribu-
tion by new entrants, it would perpetuate the unsound
gratuitous pension and impose an unnecessary burden
upon the state, although the new entrants, as already
Stated, could easily contribute one-half of the cost of
their prospective benefit, and it would be to their
advantage to do so, as they would thereby secure
refunds, death benefits, and other valuable provisions.
The vicious excess benefits would to a considerable
extent be maintained in spite of the utterly inadequate
rates of contributions. The burden of paying the
excess benefits would be imposed upon the state. The
measure would be tantamount to an increase of the
rate of the state pension far above 50% of salary. It
would increase the present pension liabilities of the
state, amounting to $24,000,000, by $2,300,000 for
future annuities, and by several million dollars on
account of future annuities which the state will have
to pay. The only assets which the state will receive
from the Fund will be the capital of about half a
million dollars, and the future contributions which
will not amount to very much. Instead of decreasing
the burdens of the state the proposed measure would
recklessly increase them. It is evident that the propo-
sition is impractical.
Maintenance of Double Benefits and Further
Makeshifts
Mr. Fackler, the actuary who made the investiga-
tion of the Fund for the State Teachers’ Association,
suggests two alternatives in his report, both of which
would maintain the double benefits. One is to amend
the half-pay pension law so as to allow all teachers
who completed the required 35 years of service to
be employed on half time and at half pay, and at the
same time receive the pension. By putting the old
teachers on half time with full pay (half pay salary
plus half pay pension) the measure would prevent
them from retiring on the annuity and thus relieve the
Fund of the expense of taking care of them, until
they either die or become unable to perform even part
time service. However, it would have also several
other effects which apparently are ignored. While
now many teachers serve beyond 35 years on full
time, then all such teachers would go on half time.
The state will actually pay a premium to induce teach-
ers capable of giving full time service to give only
half time ! It would cause the state a considerable loss
in efficient service and at the same time increase per-
haps by several million dollars the latter's pension
liabilities.
The alternative proposal of Mr. Fackler is to amend
the pension obtainable only after the applicant has
proved to a joint Board of Examiners (appointed
partly by the Retirement Fund and partly by the State
Treasurer) that he has become incapacitated. Thus
the number of retirements will be restricted and the
pressure on the Fund reduced. It is realized that the
addition of a “proof of disability requirement” to the
pension law will be greatly objected by the teachers,
but the fact is ignored that this feature has also proved
itself in the experience of the Fund a most inefficient
method of determining superannuation. The practi-
cability of either one or the other proposal is very
doubtful.
According to the leaders of the Fund, as already
stated, the duplication of benefits is entirely justified.
It should be maintained and the annuity slightly
reduced. The forfeiture of contributions is a sound
feature and should also be maintained. Altogether the
Fund requires only a few slight changes to become
permanently sound. The recommendation is that the
State Pension be fundamentally reorganized.
The analysis of the entire history and present condi-
tion of the two systems presented in the preceding
chapters demonstrates the shortcomings of this
opinion.
It has been shown that no further makeshifts such
as the slight reduction of benefits and slight increase
of contributions can put the Fund on a sound basis;
and that the maintenance of the duplication of benefits
and forfeiture of contributions features become im-
possible under the pressure of public opinion.
The State and the Teachers to Decide
It is left for the state and the teachers to decide
whether the two systems should be consolidated into
one sound system that will benefit them in an equitable
measure and operate on a reserve basis, or whether
the two systems shall be only partially reorganized
and continued independently. The question is being
carefully studied, and a great deal is being done to
make possible a sound decision. The Pension and
Retirement Fund Commission has taken a census of
all the teachers in the state and collected data which
will enable it to determine the financial condition of
the two systems more exactly than heretofore, and to
calculate the cost of various schemes of reorganiza-
tion. Gradually the thoughts on the subject will crys-
tallize and a solution of the problem will be arrived at.
* N E W
73
J E R S E Y'
NEw JERSEY TEACHERs’ RETIREMENT FUND
Current Account"
Appendix A
Total Percentage of Percentage of
YEAR, Members' Dues Disbursements Surplus Deficit Members' Dues | Members’ Dues
(Less Investments) Paid Out, Set Aside
1896-7 $ 11,000 | ............ $11,000 .......... () 100
1897-8 14.900 $ 3,500 11,400 ......... 23 77
1898-9 12,900 4,700 8,200 .......... 36 64
1899-1900.......................... 13,100 8,200 4,900 | .......... 63 37
1900-1 15,900 10,400 5,500 .......... 66 34
1901-2 16,000 13,600 2,400 .......... 85 15
1902-3 22,700 16,900 5,800 .......... 74 26
1903-4 20,800 20,900 ............ $ 100 100+ 0–
1904-5 22,700 23,800 ............ 1,100 105 — 5
1905-6 21,100 29,100 ............ 8,000 138 —38
1906-7 35,100 36,400 ............ 1,300 104 — 4
1907-8 52,500 54,800 | ............ 2,300 104 — 4
1908-9 93,700 64,600 29,100 .......... 69. 31
1909-10 147,900 87,100 Ö0,800 .......... 59 41
1910-11 166,100 111,900 54,200 .......... 67 33
1911-12 182,300 135,700 46,600 | ....... .. 74 26
1912-13 181,700 154,400 27,300 .......... 85 15
1913-14 216,900 183,700 33,200 .......... 85 15
1914-15 219,200 207,200 12,000 .......... 95 5
1915-16 246,300 231,000 15,300 .......... 94 6
1916-17.............................. 255,600 258,000 | ............ 2,400 101 — 1
1917-18 259,500 276,100 ........... 16,600 106 — 6
Capital Account"
Deficit
(Moneys from
Entertain- Total Entertainment.8 Net Capital
YEAR Surplus ments, Interest S., E. & I. and Interest Surplus at End of Year
Etc. Used for Annual
Disbursements)
1896-7 $11,000 $ 1,400 ............ $12,400 ............ $12,400 $ 12,400
1897-8 11,400 200 $ 300 11,900 ............ 11,900 24,200
1898-9 8,200 ............ 300 8,500 ....... ... 8,500 32,900
1899-1900 4,900 6,800 1,100 12,800 ............ 12,800 45,700
1900-1 5,500 3,200 1,700 10,400 ............ 10,400 56,000
1901-2 2,400 2,400 1,800 5,600 ............ 6,600 62,700
1902-3 5,800 3,300 2,500 11,600 ............ 11,600 74,200
1903-4.…...' ............ 2,900 2,700 5,600 $ 100 5,500 79,800
1904-5…] … 2,800 3,300 6,100 1,100 5,000 84,700
1905-6......…...…........…..] ............ 10,500 3,200 13,700 8,000 5,700 90,460
1906-7......................................] ............ 200 4,300 4,500 1,300 | 3,200 93,500
1907-8…] … . … 3,800 3,800 2300 iº 95,100
1908-9.................................... 29,100 ............ 4,000 33,100 ............ 33,100 128,200
1909-10 60,800 ............ 4,200 65,000 ............ 65,000 193,200
1910-11 54,200 ............ 8,700 62,900 ............ 62,900 256,600
1911-12 46,600 100 10,200 56,900 ............ 56,900 313,000
1912-13 27,300 600 14,700 42,600 ............ 42,600 355,300
1913-14 33,200 ............ 15,000 48,200 ............ 48,200 403,500
1914-15 12,000 500 16,200 28,700 ............ 28,700 432,200
1915-16 15,300 ............ 17,800 33,100 ............ I 33,100 465,300
1916-17.................................... ............ 4,100 17,300 21,400 2400 19,000 484,200
1917-18...…. … . … 17,300 17,300 16,600 800 485,000
* The members' dues and the interest on investments form the regular sources of the fund. The former is charged in this statement to
the current account of the Fund, the latter to the capital account. The revenues from entertainments and the legacies are an irregular source,
upon which the financing of the current expenditures can not b depended upon. It is assumed that they increase the capital of the fund and they
are, therefore, charged to the capital account.
Appendix B, see page 65.
* N E W
J E R S E Y'
Retired List No. 1
363 Retired Teachers Receiving Both Pension and Annuity
NOTE–Wherever two retirement ages are given, one pertains to the time of
retirement on the annuity and the other to the time of retirement on the pension.
Length of service is given from records of the 35 Year Service Pension System.
The star opposite the amount of annuity indicates that 1% has been deducted for the
Fund. The average salary computed by the Fund administration in many cases
differs from that computed by the Pension administration.
brackets is the one accepted by the Fund.
The figure given in
Appendia C
Num- Date of Retirement Ratio
ber NAME h Age at Age as | Length Average Salary Amount Amount Total An- of Tetal
Of On Teachers' ODI Retire-Of June | Of Of Of of nuity Plus Benefit
An- | OF RETIRED TEACHER, Retirement State ment |30, 1918 Service | Last Five Years Annuity Pension Pension to
nuity Fund Pension Salary
587 |Aitken, Ellen M.............. June, 1915 June, 1915 62 65 37 |$ 874.45 (876.00) $ 525.60 $ 437.22 $ 962.82 1.10%
700 Albright, George .......... Sept., 1916 July, 1916 57 59 37 1,600.00 650.00 800.00 1,450.00 91%
442 |Allen, Jane ...................... Dec., 1912 June, 1912 66 | 72 41 | 1,540.00(1,848.00) 650.00 770.00 1,420.00 92%
379 |Allison, Emma G........... Sept., 1911June, 1911|59–60 | 66 36 765.00 459.00 382.50 841.50 1.10%
371 |Alyea, Cor. L................... Sept., 1911|Sept., 1910 60–61 68 40 910.40 546.24 455.20 1,001.44 11.0%
425 |Anderson, H. .................. Sept., 1912 Sept., 1912 69 75 46 2,790.00 650.00 1,395.00 2,045.00 73%
529 Anderson, M. .................. Mar, 1914 Feb., 1914 55 60 35 | 1,159.20 650.00 579.60 1,229.60 106%
222 Anness, Mary.................. Dec., 1908 Dec., 1908 59 69 39 || 1,084.00 650.00 542.00 1,192.00 1.10%
657 |Applegate, M................... Mar, 1916 Feb., 1915. 55 58 36 | 1,194.00 * 591.00 597.00 1,188.00 100%
641 Ashhurst, A..................... DeC., ºpe. 1915; 58 61 36 | 1,428.00 650.00 714.00 1,364.00 96%
131 Atkinson, M..................... Jan., 1907May, 1906. 54 | 66 38 650.00 * 321.76 325.00 646.76 100%
299 |Atwater, Geo. A........... Mar., 1910Sept., 1909 67–68 76 47 2,150.00 {350,0{} 1,075.00 1,725.00 80%
209 |Avery, Sarah A............. Oct., 1908 June, 1908. 55 65 35 756.00 453.60 378.00 831.60 1.10%
652 |Ayers, William T......... Dec., 1915 June, 1915, 58 61 40 456.00 273.60 228.00 501.60 1.10%
164 |Bailey, Louise................ June, 1907|Apr., 1907 60 71 38 || 1,220.00 850.00 600.00 1,250.00 | 10.2%
681 Bainbridge, Emma J...Sept., 1916 June, 1916 59 61 42 1,300.00 650.00 $50.00 1,300.00 100%
760 |Baird, Margaret............ Jan., 1918 Sept., 1917. 63 64 45 1,600.00 650.00 800.00 1,450.00 91%
591 |Baker, Emma J............. June, 1915 June, 1915 52 55 35 797.00 (790.90) 474.54 398.50 873.04 1.10%
678 |Baldwin, Emma F......... Sept., 1916 June, 1916. 73 75 40 1,600.00 650.00 800.00 1,450.00 91%
656 |Baldwin, Lucasta C.|Mar., 1916 Nov., 1915 63–64 66 43 | 1,100.00 650.00 550.00 1,200.00 109%
207 Baldwin, Mary D......... Oct., 1908|Apr., 1908. 57–58 || 67 42 785.00 471.00 392,50 863.50 1.10%
451 |Ball, Clara E................... Dec., 1912|June, 1912 60 66 35 512.00 307.20 256.00 563.20 1.10%
539 Ballou, Emma L........... June, 1914|June, 1914 67 71 47 | 1,961.22 650.00 980.61 1,630.61 83%
153 |Bamber, Clara A......... Jan., 1907 Jan., 1907 52 63 35 560.00 (546.00) * 270.28 280.00 550.28 100%
465 |Barry, W. H................... Apr., 1913|Mar., 1913. 66 71 40 2,506.00 650.00 1,250.00 1,900.00 76%
186 ||Beam, Sarah.................. Dec., 1907|June, 1907 58 69 40 | 1,056.00(1,095.00) 630.00 528.00 1,178.00 11.1%
210 Belcher, Elizabeth........ Oct., 1908 June, 1908 53–54 63 35 | 1,260.00 : 650.00 630.00 1,280.00 10.2%
690 Benard, Elizabeth.......... Sept., 1916 June, 1916 54 56 35 800.00 480.00 400.00 880.00 1.10%
402 Bentley, Mary................ Mar., 1912|Feb., 1912 62 69 39 900.00 540.00 450.00 990.00 1.10%
446 Benton, Mary.................. Dec., 1912 Dec., 1912 55 61 || 37 | 1,400.00 650.00 700.00 1,350.00 96%
246 Berdan, Jennie................ Sept., 1909|Sept., 1909; 55 64 37 850.00 (800,00' 480.00 425.00 905.00 11.0%
577 |Bleakley, Helen.............. Mar., 1915|Mar., 1915 57 61 373 | 1,000.00 600.00 500.00 1,100.00 1.10%
363 |Bloomsburg, E............... Sept., 1911 Mar., 1911|54–55 62 35 535.00 (526.25° 3.15.75 267.50 583.25 1.10%
135 | Bodine, Emma................ Jan., 1907|June, 1906 60 72 41 800.00 (740.00 | * 366.28 400.00 766.28 100%
189 |Bogan, Margaret.......... Dec., 1907|June, 1905. 57–60 | 70 38 622.00 (670.00, 402.00 331.00 733.00 1.10%
498 |Bolling, Emma .............. Sept., 1913 Sept., 1913 58 63 36 | 1,370.88 (1,404,00) 650.00 685.50 1,335.50 97%
770 |Booraem, Anna.............. June, 1918 Apr., 1918, 59 60 42 | 1,088.00 650.00 542.00 1,192.00 1.10%
589 |Bowman, Geo. W......... June, 1916 June, 1915 66 69 41 946.36 (950.00) 570.00 473.18 1,043.18 110%
195 Boyer, Henry.................. Mar., 1908 June, 1907. 66–67 77 46 800.00 (770.00) 462.00 400.00 862.00 110%
120 |Bradway, Anne.............. July 1906 July, 1907|67–68 79 43 510.00 (422.00) * 247.48 255.00 502.48 99%


• N
75
E.
R S E Y'
W
J E
RETIRED LIST No. 1–Continued

Num- Date of Retirement Ratio
ber NAME Age at Age as Length Average Salary Amount Amount, Total An- of Total
of on Teachers’ OIl Retire-of June of Of of Of nuity Plus Benefit
An- OF RETIRED TEACHER Retirement State ment |30, 1918 Service | Last Five Years Annuity Pension IPension to
nuity Fund Pension Salary
355 |Brandriff, Hannah........ June, 1911|Sept., 1910; 59 67 40 $ 544.00 (542.00) $ 325.20 $ 272.00 $ 597.20 1.10%
766 |Branson, Anna................ Jan., 1918 June, 1916. 60 62 38 718.00 430.80 359.00 789.80 1.10%
122 |Brookfield, Eliza............ July, 1906|.................... 65 77 ... 775.00 * 383.60 386.50 770.10 100%
598 Braun, LOuise E............. June, 1915 June, 1914 58–59 62 40 | 1,660.00 650.00 830.00 1,480.00 89%
344 ||BTOWn, Marion G......... Dec., 1910 June, 1908 61–63. 71 38 || 510.00 306.00 255.00 561.00 110%
495 |Bubier, Anna L............. Sept., 1913 Sept., 1913| 73 7 41 1,925.00 650.00 962.50 1,612.50 84%
608 |Buchanan, Fanny L..... Sept., 1915|July, 1915 54 57 35 | 1,414.00 650.00 707.00 1,357.00 96%
664 |Burgyes, Annie S........... June, 1916 Feb., 1916 54 56 35 | 1,100.00 650.00 550.00 1,200.00 109%
658 Burnett, Agne ................ Mar., 1915|Nov., 1915. 67 70 49 | 1,185.60 * 586.88 592.80 1,179.68 100%
720 |Burrough, Mary............ June, 1917 June, 1916 63–65 65 45 | 1,600.00 650.00 800.00 1,450.00 94%
259 Caffrey, Mary.................. Sept., 1909|June, 1909 64 73 39 630.00 (640.00) 384.00 315.00 699.00 1.10%
474 Callis, Sarah .................. June, 1913June, 1913 62 67 42} | 840.00 504.00 420.00 924.00 1.10%
384 Camden, Marion............ Dec., 1911|Sept., 1911 58 65 40 | 1,220.00 650.00 610.00 1,260.00 103%
188 Canfield, Jennie.............. Dec., 1907 June, 1906 55–56 67 36 871.00 (895.00) 537.00 435.50 972.50 | 1.10%
716 Carter, S. Fannie.......... Apr., 1917|Feb., 1917; 68 70 49 | 1,980.00(1,990.00) 650.00 995.00 1,645.00 83%
747 |Carlin, Kate R............... June, 1918|Jan., 1918, 56 57 36 2,020.00 650.00 1,010.00 1,660.00 82%
721 Cassady, Eliz................... June, 1917 June, 1916 57–58 59 38 1,280.00 650.00 {40.00 1,290.00 10.1%
553 Chambers, Mary............ Sept., 1914|June, 1914 54 58 37 780.00 (795.00) 477.00 390.00 867.00 1.10%
699 Cheney, Emily A........... Sept., 1916 June, 1916. 62 64 40 850.00 510.00 425.00 935.00 1.10%
613 ||Childs, Edith L............... Sept., 1915|Sept., 1915 57 60 36 1,425.00 (1,416.00) 650.00 712.50 1,362.50 96%
247 Chiswell, M....................... Sept., 1909|Oct., 1909 54 63 37 810.00 486.00 405.00 891.00 1.10%
679 Clarke, Agnes B............. Sept., 1916 June, 1916 56 58 35 1,300.00 650.00 650.00 1,300.00 100%
731 Clinton, Harriet C....... Sept., 1917|Sept., 1917. 53 55 35 655.00 393.00 327.50 720.50 1.10%
644 Coleman, Martha F..... Dec., 1915||Dec., 1915. 70 73 52 2,000.00 650.00 1,000.00 1,650.00 83%
223 Cone, Nancy J................. Dec., 1908Mar., 1915 65–72 75 37 420.00 252.00 210.00 462.00 1.10%
709 Conwell, Josephine........ Dec., 1916 June, 1916 55 57 37 | 1,200.00 650.00 600.00 1,250.00 10.4%
697 Coombs, Anna................ Sept., 1916|June, 1916. 61 63 36 725.00 435.00 362.50 797.50 1.10%
640 |Coppinger, Teresa.......... Dec., 1915||Dec., 1915 56 59 39 1,780.00 650.00 890.00 1,540.00 87%
175 Cory, Catherine.............. Sept., 1907|July, 1907 84–84 95 57 958.00 606.00 479.00 1,085.00 1.10%
202 Cottrell, Katherine......|June, 1908 June, 1907. 62–63 | 73 35 752.00 451.20 376.00 827.20 1.10%
342 Crater, Georgia.............. Dec., 1910 June, 1910 60 68 35 | 1,166.00 650.00 583.00 1,233.00 106%
530 |Cringle, Kate .................. Mar., 1914|Mar., 1914 60 64 39 1,407.60(1,409.46) 650.00 703.80 1,353.80 96%
142 Curtis, Annie .................. Jan., 1907 June, 1906 61 73 39 726.00 (735.00) * 363.84 363.00 726.84 100%
596 |Davis, David.................... June, 1915 June, 1915 69 72 47 919.50 550.92 4:59.75 1,010.67 110%
484 |Davis, Mary U................. Sept., 1913June, 1913. 60 65 36 760.00 (770.00) 456.00 380.00 836.00 1.10%
319 |Davis, Mary H............... Sept., 1910May, 1910, 61 69 35 378.80 (360.80) 250.00 189.40 439.40 1.16%
493 Day, Annie C................... Sept., 1913 Sept., 1913. 55 60 35 | 1,140.00(1,134.60) 650.00 570.00 1,220.00 107%
693 |Day, Jessie ...................... Sept., 1916 Sept., 1916 54 56 35 850.00 510.00 425.00 935.00 110%
527 |Day, Margaret A........... Mar, 1914 Feb., 1914 59 63 37 | 1,190.00 650.00 595.00 1,245.00 106%
631 Demarest, James E....-. Dec., 1915 June, 1915 57 60 38 2,040.00 650.00 1,020.00 1,670.00 82%
460 |Dettmar, Juliet.............. Apr., 1913|Jan., 1912 53–54 59 35 | 1,041.61 624.96 520.80 1,145.76 110%
376 |DeWanny, Marguerita. Sept., 1911|Sept., 1911| 60 67 43 | 1,069.20(1,069.29) 641.52 534.60 1,176.12 1.10%
475 |Dickinson, H. S............. June, 1913June, 1913 58 63 40 | 1,020.00 (964,00) 578.40 510.00 1,088.40 110%
722 |Dinan, Kate F................. June, 1917 June, 1916. 60–61 62 40 | 1,300.00 650.00 659.00 1,300.00 100%
349 |Dougall, Elizabeth........Apr., 1911|May, 1910|56–57 64 35 | 1,590.00 650.00 795.00 1,445.00 91%
187 Dougall, Mary A........... Dec., 1907|June, 1907 56 67 38 1,200.00(1,220.00) 650.00 800.00 1,250.00 10.4%
680 Douglas, A....................... Sept., 1916 June, 1916 67 69 36 800.00 480.00 400.00 880.00 1.10%
550 |Du Bois, Abbie.............. Sept., 1914|June, 1914 65 69 47 780.00 468.00 390.00 858.00 1.10%
365 Dungan, Hannah C....... Sept., 1911|Sept., 1911. 57 64 39 670.00 (664.00) 398.40 335.00 733.40 110%
590 Dunnell, Anna ................ June, 1915|Mar., 1915. 65 68 43 1,300.00 650.00 650.00 1,300.00 100%

76 * N E W J E R S E Y'
RETIRED LIST No. 1–Continued
Num- Date of Retirement Ratio
ber NAME Age at Age as | Length] Average Salary Amount Amount Total An- of Total
of On Teachers’ OIl Retire-jof June of of of of nuity Plus Benefit
An- || OF RETIRED TEACHER, Retirement State ment 30, 1918|Service Last Five Years Annuity Pension Pension to
nuity Fund Pension Salary
444 |Durand, S. E................... Dec., 1912|June, 1912 55 61 37 |$1,028.40 $ 617.04 $ 514.20 $1,131.24 1.10%
616 |Dutch, Nellie.................... Sept., 1915 Sept., 1915 69 || 72 51 | 1,995.00 650.00 997.50 1,647.50 83%
248 |Eakins, Eliz. S................. Sept., 1909|Oct., 1909, 59 68 41 | 1,081.80 (1,082.00) 649.20 540.90 1,190.10 1.10%
300 |Earl, Ebenezer ................ Mar., 1910Sept., 1909|77–78 || 86 63 2,150.00(2,140.00) 650.00 1,075.00 1,725.00 80%
383 |Eldridge, G....................... Dec., 1911|May, 1911 65 72 39 477.00 286.20 238.50 524.70 | 1.10%
472 Eltringham, Han........... June, 1913June, 1913. 55 60 37 | 1,144.80 (1,156.80) 650.00 572.40 1,222.40 107%
510 |Ely, Sarah........................ Sept., 1913June, 1913. 64 69 47 | 1,670.00 650.00 840.00 1,490.00 89%
585 English, Eliz..................... June, 1915||Dec., 1914|65–66 69 43 475.00 290.40 237.00 527.40 110%
650 |Emmons, S....................... Dec., 1915 June, 1915, 56 59 35 795.00 477.00 397.50 874.50 1.10%
536 |Ennis, Lydia.................... June, 1914|June, 1914 54 54 38 | 1,416.00 650.00 708.00 1,358.00 96%
369 |Evans, Harr..................... Sept., 1911June, 1911 54 61 35 415.00 (409.00) 250.00 207.50 457.50 1.10%
621 |Eveleth, Fred. W............. Sept., 1915 Sept., 1915. 74 77 48 3,000.00 650.00 1,500.00 2,150.00 72%
503 |Everett, Sarah R........... Sept., 1913 Sept., 1913 70 75 43 555,00 333.00 277.50 610.50 110%
617 |Falkenbury, I. M........... Sept., 1915|Sept., 1915, 58 61 42 | 1,182.00 (1,196.40) 650.00 591.00 1,241.00 10.5%
698 ||Fallon, Matilda.............. Sept., 1916 July, 1916. 74 76 43 892.00 535.20 446.00 98.1.20 1.10%
313 ||Farrell, Anna.................. Sept., 1910|June, 1910. 56 64 38 1,160.00 650.00 580.00 1,230.00 106%
531 ||Fields, Jennie M............. Mar., 1914Jan., 1914 57 61 36 1,159.20 650.00 579.60 1,229.60 106%
211 Finter, Emma.................. Oct., 1908|Apr., 1908 58 68 40 | 1,013.00 607.80 506.50 1,114.30 1.10%
551 |Fithian, Laura M........... Sept., 1914|July, 1914 56 60 35 730.00 438.00 36500 803.00 1.10%
744 |Fitzer, John...................... Jan., 1918 June, 1916|62–63 64 || 38 3,000.00 594.00 1,500.00 2,094.00 70%
125 ||Flandrau, A..................... July, 1906|June, 1906 67 79 48 644.00 3.18.76 322.00 640.76 100%
637 ||Fleetwood, T................... Dec., 1915 July, 1915, 56 59 38 1,100.00 650.00 550.00 1,200.00 109%
663 ||Fletcher, Alice................ June, 1916 Feb., 1916 57 59 37 | 1,600.00 650.00 800.00 1,450.00 88%
238 ||Fogg, Anna ...................... Sept., 1909|June, 1909, 59 68 36 505.10 (505.00) 303.00 252.55 555,55 1.10%
649 |Ford, Elizabeth.............. Dec., 1915 June, 1915. 70 73 41 500.00 300.00 250.00 550.00 1.10%
497 ||Foster, Kate E............... Sept., 1913 Sept., 1913. 60 65 35 | 1,150.80 (1,171.20) 650.00 575,40 1,225.40 106%
748 |Francis, Katie ................ Jan., 1918||Dec., 1917. 53 54 35 | 1,300.00 650.00 650.00 1,300.00 100%
249 |Franklin, H. .................... Sept., 1909 Sept., 1909 55 64 37 670.00 (674.00) 402.00 335.00 737.00 1.10%
732 |Frazee, Elizabeth.......... Sept., 1917|Aug., 1917. 59 t;0 36 1,200.00 650.00 600.00 1,250.00 10.4%
401 |Gallagher, Belle ............ Mar., 1912|Mar., 1912 56 62 35 581.60 (590.00) 354.00 290.80 644.80 1.10%
258 Gallagher, Helen............ Sept., 1909|June, 1909 58 67 40 640.00 384.00 320.00 704.00 1.10%
557 |Garrabrant, Anna L.....|Sept., 1914|June, 1914 61 65 43 | 1,300.00(1,292.00) 650.00 650.00 1,300.00 100%
677 |Geraghty, Linda M....... Sept., 1916|June, 1916. 61 62 43 | 1,200.00 650.00 600.00 1,250.00 10.4%
121 |Gilbert, Frances A....... July, 1906|May, 1905. 64–65 77 44 900.00 445.48 540.00 895.48 100%
675 Gilbert, Eliza H............. Sept., 1916|June, 1916 63 65 42 | 1,230.00 650.00 615.00 1,265.00 10.3%
373 Gillott, M. Augusta......Sept., 1911June, 1911, 61 68 35 | 1,220.00 650.00 610.00 1,260.00 103%
517 Gleason, Charles H....... Dec., 1913|June, 1913 76 81 52 2,880.00 650.00 1,440.00 2,090.00 || 73%
686 Goetze, Louisa M........... Sept., 1916|Sept., 1916 54 56 36 1,196.40 650.00 598.20 1,248.20 10.4%
370 Goffe, Mary J................. Sept., 1911June, 1911. 57 64 37 | 1,040.00 624.00 520.00 1,144.00 1.10%
566 Gormley, Daniel A....... Sept., 1913 Dec., 1914 69–70 74 48 426.00 (440,00) 250.00 213.00 463.00 109%
143 |Gould, Frances V........... Jan., 1907|June, 1906 61 73 44 726.00 (735.00) 363.84 363.00 726.84 100%
196 |Green, Olive .................... Mar., 1908 Dec., 1907 55–56 66 35 700.00 (660.00) 396.00 350.00 746.00 110%
169 Gregory, Kate ................ Sept., 1907|Jan., 1907. 62 73 35 823.20 493.92 411.60 905.52 | 1.10%
367 |Habliston, Maria.......... Sept., 1911|Apr., 1911; 62 69 35 649.60 389.76 3.24.80 714.56 1.10%
561 Hagaman, Sarah .......... Sept., 1914|June, 1914 58 62 38 942.00 565.20 471.00 1,036.20 1.10%
455 |Haines, S. F..................... Apr., 1913 Apr., 1913 59 64 || 37 456.00 263.65 228.00 491.65 1.10%
654 |Hampton, Isabell.......... Mar., 1916|Dec., 1915, 53–54 56 35 | 1,100.00 650.00 550.00 1,200.00 109%
270 [Hanna, Annette.............. Dec., 1909 June, 1909, 52 61 35 667.20 400.32 333.60 733.92 1.10%
612 |Harris, Henry E............. Sept., 1915 Aug., 1915. 73 76 51 2,420.00(2,380,00) 650.00 1,210.00 1,860.00 77%
749 |Harry, Virginier............ 62 45 1,500.00 650.00 750.00 1,400.00 93%



Jan., 1918 Jan., 1918, 61
* N E W
77
J E R S E Y'
RETIRED LIST No. 1–Continued

Surn- Date of Retirement Ratio
ber NAME Age at Age as Length Average Salary Amount Amount Total An- of Total
of on Teachers' Od Retire-ſof June of of of Of nuity Plus Benefit
An- || OF RETIRED TEACHER Retirement State ment 30, 1918|Service | Last Five Years Annuity Pension Pension to
nuity Fund Pension Salary
314 Heaney, Edith G........... Sept., 1910|June, 1910. 65 73 47 $ 900.00 $ 540.00 $ 450.00 $ 990.00 110%
235 |Hedges, Maria T............. July, 1909|Apr., 1908. 57–58 67 38 909.60 (996.00) | * 493.00 454.80 947.80 100%
479 |Heisler, Mary A............. Sept., 1913 Sept., 1913. 65 70 46 480.00 2.88.00 240.00 528.00 110%
733 |Herbert, Carrie C......... Sept., 1917 June, 1917. 53 54 35 410.00 250.00 205.00 455.00 1.10%
519 |Herbert, Helen................ Dec., 1913|Dec., 1913. 55 60 35 | 1,149.60 650.00 574.80 1,224.80 107%
470 |Herbert, Laura.............. June, 1913|Feb., 1913. 62 67 41 1,149.60 650.00 574.80 1,224.80 107%
583 |Higginson, Stephen......[Mar., 1915|Mar., 1915. 70 73 40 585.00 351.00 292.50 643.50 1.10%
324 |Holden, Judith H......... Sept., 1910|Sept., 1910. 57 65 39 || 1,023.60 614.16 511.80 1,125.96 110%
723 |Holland, Anna................ June, 1917|June, 1916 57–58 59 37 780.00 468.00 390.00 858.00 1.10%
579 |Hoppaugh, Abbie J....... Mar., 1915|July, 1914 56–57 60 35 | 1,092.00 650.00 546.00 1,196.00 110%
538 |Horsley, Jane V............. June, 1914|June, 1914] 66 70 47 | 1,416.00 650.00 708.00 1,358.00 96%
575 Houston, Margaret C.|Dec., 1914|June, 1914 56 60 36 1,000.00 600.00 500.00 1,100.00 1.10%
724 |Howard, Elinor G......... June, 1917|June, 1917. 60 61 44 1,500.00 650.00 750.00 1,400.00 93%
599 ||Hudson, Anna ................ Sept., 1915Apr., 1915 60 63 39 553.76 (545.70) 327.40 276.88 {}04.28 1.10%
719 |Huff, Isabel B................. Apr., 1917 June, 1916. 64–65 66 38 926.00 556.60 463.00 1,019.60 1.10%
315 ||Hughes, Florence .......... Sept., 1910|Feb., 1910 55 63 36 1,160.00 650.00 580.00 1,230.00 106%
630 ||Humpston, M. ................ Sept., 1915 June, 1915 58 61 41 | 1,470.00 650.00 735.00 1,385.00 94%
243 Hutchings, E................... Sept., 1909Apr., 1909) 58 67 37 | 1,082.00 650.00 541.00 1,191.00 1.10%
252 |Hyatt, Emeline.............. Sept., 1909 Sept., 1909, 58 67 36 955.20 573.12 477.60 1,050.72 1.10%
399 |Hyatt, Lillie.................... Mar., 1912 Dec., 1911 54 61 38 | 1,080.00 650.00 540.00 1,190.00 1.10%
500 |Irvin, Spencer.................. Oct., 1913June, 1913 58 63 40 1,500.00 * 594.00 750.00 1,344.00 92%
659 |Jackson, Isabel E........... Mar., 1916 Oct., 1915 53–54 56 35 | 1,185.60 * 586.88 592.80 1,179.68 100%
668 |Jacques, Carrie O........ June, 1916 July, 1916 55 57 35 655.00 393.00. 327.50 720.50 1.10%
761 Jacquett, Eliza E.......... Jan., 1918|June, 1916 59 61 40 705.00 423.00 352.50 775.50 1.10%
123 James, Jennie H............ July, 1906 Sept., 1906 62 74 42 560.00 (552.00) * 273.24 1 280.00 553.24 100%
546 |Johnson, Jennie S......... June, 1914|May, 1914 63 67 44 1,178.00 650.00 589.00 1,239.00 105%
662 Johnston, Martha T.....|Mar., 1916|Oct., 1915, 53–54 57 35 | 1,200.00 * 594.00 600.00 1,194.00 100%
725 ||Johntra, Anna ............... June, 1917 June, 1916: 58–59 60 40 | 1,300.00 650.00 650.00 1,300.00 100%
537 Joslin, Abner D............. June, 1914||Dec., 1913, 76–77 81 57 2,977.10 650.00 1,488.55 2,138.55 72%
308 Keller, Mary V............... June, 1910|June, 1909 56 65 35 667.20 (656.00) 393.19 333.60 726.29 1.10%
357 |Kellet, Georgina F....... June, 1911 Jan., 1911. 53 60 36 | 1,059,12 635.04 529.56 1,164.60 1.10%
251 |Kennedy, Daisy.............. Sept., 1909|Sept., 1909, 53 62 36 | 1,245.00 (1,245.60) 650.00 622.50 1,272.50 102%
594 |Kernan, Edward ............ June, 1915 June, 1915 67 70 394 | 1,876.00 (1,880.00) 650.00 938.00 1,588.00 85%
240 |Kerns, M. Lizzie.............. Sept., 1909Jan., 1909. 57 66 36 922.00 553.20 461.00 1,014.20 1.10%
547 ||Lansing, Alice W........... June, 1914Jan., 1914 56 61 36 946.00 (945,00) 567.00 473.00. 1,040.00 1.10%
481 |Laverty, Bessie...........-. Sept., 1913June, 1913 57 | 62 38 750.00 450.00 375.00 825.00 | 1.10%
429 Lawler, Mary E............. Sept., 1912 Sept., 1912 60 66 41 1,392.00(1,410.00) 650.00 696.00 1,346.00 96%
230 |Lawler, Mary L............. Apr., 1909|Apr., 1907 52–53 63 35 928.80 (967.20) 580.32 464,40 1,044.72 1.10%
197 |Leach, Herman .............. Mar, 1908|Apr., 1908: 61 71 40 440.00 (432.50) 259.50 220.00 479.50 1.10%
386 Levy, Jennie .................... Dec., 1911|Sept., 1911, 52 59 38 | 1,072.80 (1,080,00) 648.00 536.40. 1,184.40 1.10%
400 |Lewis, Jane M................. Mar. 1912 Feb., 1912 67 73 47 | 1,800.72(1,796.64) 650.00 900.36 1,550.36 86%
556 |Leyden, Elizabeth.......... Sept., 1914|June, 1914| 66 70 44 2,091.84 (2,100.00) 650.00 1,045.92 1,695.92 81%
324 Lindabury, Mary L....... Sept., 1915|June, 1914 65–66 69 43 600.00 360.00 300.00 660.00 1.10%
519 |Lott, Eva H..................... Sept., 1915 Sept., 1915 57 60 35 | 1,182.00 650.00 591.00 1,241.00 10.5%
332 |Lummis, Lizzie H......... Dec., 1915|June, 1915, 54 57 35 740.00 444.00 370.00 814.00 110%
320 |Lutz, M. Anna................ Sept., 1910 Apr., 1910 55 63 35 896.40 (894.00) 536,40 448.20 984.60 1.10%
327 Lyon, Andrew L............. Sept., 1910|June, 1910 69 77 41% 426.20 (412.00) 250.00 213.10. 463.10 109%
508 |Mackey, Bertha C......... Sept., 1913June, 1913 53 58 35 | 1,000.00 600.00 500.00 1,100.00 1.10%
566 |Mackey, Francis T......... Sept., 1914|June, 1913. 57–59 62 41 820.00 (830.00) 498.00 410.00 908.00 110%.
458 Maclure, David .............. Apr., 1913Feb. 1913. 63 68 35 2,840.00 (2,824.00) 650.00 1,420.00 2,070.00 73%

' N E W
J E R S E Y'
RETIRED LIST No. 1–Continued



Num- Date Of Retirement Ratio
ber NAME Age at Age as | Length Average Salary Amount Amount Total An- ; of Totº,
Of On Teachers' OIl Retire-jof June of Of of of nuity Plus Benefit
An- || OF RETIRED TEACHER | Retirement State ment 30, 1918|Service | Last Five Years Annuity Pension Pension to
nuit Fund IPension Salary
| \,
726 |Magee, Margaret T....... June, 1917|June, 1916 58–59 60 36 |$1,400.00 $ 650.00 $ 700.00 $1,350.00 96%
727 |Mahlstedt, A................... June, 1917|Jan., 1917. 54 56 35 | 1,200.00(1,189.60) 650.00 600.00 1,250.00 104%
735 |Mahon, Josephine.......... Sept., 1917 Aug., 1917. 55 57 36 1,700.00 650.00 850.00 1,500.00 88%
352 Marinis, Mar...................] Apr., 1911|Nov., 1910|59–60 67 38 814.00 (796.00) 477.60 407.00 884.60 1.10%
615 Marvin, Susan ................ Sept., 1915 Sept., 1915. 74 77 51 2,195.00 650.00 1,097.50 1,747.50 80%
316 |Mayberry, Isabella........ Sept., 1910Sept., 1910, 65 73 42 660.00 396.00 330.00 726.00 110%
581 |McCain, Nellie................ |Mar., 1915|Mar., 1914 55–56 60 38 1,185.60(1,178.40) * 583.28 592.80 1,176.08 100%
280 McCullough, M.............- Dec., 1909June, 1909 55 64 35 673.00 (678.00) 406.80 336.50 743.30 1.10%
482 McCully, Clara................ Sept., 1913July, 1913, 59 64 39 || 1,240.00 650.00 620.00 1,270.00 102%.
407 McCurdy, Mary.............. Mar., 1912 July, 1917; 65–70 : 71 43 | 1,400.00 250.00 200.00 450.00 1.13%
750 |McDanold, Ella.............. Jan., 1918 Nov., 1917. 57 58 38 982.00 589.20 491.00 1,080.20 1.10%
520 |McDonnell, K................... Dec., 1913|Nov., 1913 59 64 37 1,154.80 (1,142.40) 650.00 577.40 1,227.40 106%
706 McGowan, Elizabeth....|Dec., 1916 Sept., 1916 56 58 36 1,196.40 (1,200.00) 650.00 598.20 1,248.20 10.4%
428 McNeill, Mary ................ Sept., 1912|Apr., 1912 62 68 35 966.40 579.84 483.20 1,063.04 1.10%
651 ||Meegan, Katherine........ Dee., 1915||Dec., 1915 61 64 41 1,500.00 650.00 750.00 1,400.00 93%
763 |Meehan, Mary S............. Jan., 1918 Sept., 1917. 59 60 38 1,206.00 650.00 603.00 1,253.00 10.4%
450 |Merrick, Elizabeth........ Dec., 1912|June, 1912 66 72 35 712.00 (692.00) 415.20 356.00 771.20 1.10%
469 |Merry, Sarah E............... June, 1913|Feb., 1913. 55 61 35 | 1,049.40 629.64 524.70. 1,154.34 1.10%
866 Messler, Carrie C........... Sept., 1911|Sept., 1911 55 62 35 658.00 394.80 329.00 723.80 1.10%
457 |Messler, Francis J......... Apr., 1913|Jan., 1913 53 58 35 703.20 421.92 351,60 773.52 1.10%
639 Michell, Sarah H........... Dec., 1915 Sept., 1915. 55 58 35 | 1,185.60 650.00 592.80 1,242.80 10.5%
674 |Middleton, Emma W...|Sept., 1916 June, 1916. 63 65 44 720.00 432.00 360.00 792.00 1.10%
417 |Middleton, Chas............. Sept., 1912|June, 1912 67 73 36 1,695.00 650.00 847.50 1,497.50 88%
273 |Miegal, Emily.................. Dec., 1909|Dec. 1909. 57 66 39 1,600.00 650.00 800.00 1,450.00 91%
516 |Miller, Phebe S.............. Dec., 1913 Aug., 1913 70 75 38 480.00 2.88.00 240,0{} 528.00 1.10%
430 |Mills, Alice S................... Sept., 1912 Sept., 1912, 61 67 43 1,109.52(1,084.80) 650.00 554,76 1,204.76 109%
396 |Mills, Lydia A............... Mar., 1912 June, 1910. 57–59 65 39 910.40 54.6.20 455.20 1,001.40 1.10%
643 |Minihan, Julia A........... Dec., 1915 Dec., 1915 56 59 39 2,000.00(1,998.33) 650.00 1,000.00 1,650.00 83%
426 Moore, Elizabeth............ Sept., 1912iSept., 1912 55 61 35 880.00 528.00 440.00 968.00 110%
514 |Moore, Fred S................. Dec., 1913;May, 1913. 62 67 36 531.00 3.18.60 265.50 584.10 1.10%
411 ||Moore, Hannah.............. June, 1912|Nov., 1911 55–56 63 35 1,126.00 650.00 563.00 1,213,00 10.8%
673 Morton, Annie................ Sept., 1916 June, 1916 54 56 35 750.00 450.00 375.00 825.00 1.10%
253 Mount, Georgia F......... Sept., 1909 Sept, 1909) 56 65 36 1,147.00 650.00 573.50 1,223.50 107%
492 Mulford, Sallie.............. Sept., 1913 Sept., 1913. 58 63 38 590.00 354.00 295.00 649.00 1.10%
178 Mullison, Harriet W...|Sept., 1907 June, 1907. 66 77 49 710.00 (708.00) 424.80 355.00 779.80 110%
385 |Myer, Eva Dec., 1911June, 1910|55–56 64 35 | 1,078.00 646.80 539.00 1,185.80 II:0%
387 Neafie, Emma.................. Dec., 1911|June, 1911. 65 72 36 | 1,005.60 (987.33) 610.08 502.80 1,112.88. 1.10%
694 Neer, Jane ........................ Sept., 1916 Sept., 1916 57 59 || 35 | 850.00 510.00 425.00 935.00 | 1.19%
648 ||Newell, E. M................... Dec., 1915 June, 1915 63 66 44 500.00 300.00 250.00 550.00 1.10%
184 Niles, Ellen E Dec., 1907|June, 1907. 61 72 40 870.00 522.00 435.00 957.00 1.10%
415 |Nivision, Sara................ June, 1912|June, 1912 58 64 36 650.00 390.00 325.00 715.00 1.10%
501 |O'Hara, Rebecca............ Sept., 1913June, 1913| 70 75 39 840.00 504.00 420.00 924.00 1.10%
737 O'Neill, Elizabeth.......... Sept., 1917 June, 1917. 62 63 41 750.00 450.00 375.00 825.00 1.10%
614 Outwater, Alida............ Sept., 1915|Sept., 1915 67 70 44 1,625.00 650.00 812.50 1,462.50 90%
684 Pearson, Jane.................. Sept., 1916 July, 1916 71 73 49 1,980.38(2,000.00) 650.00 990.19 1,640.19 83%
360 |Pease, Nathan................ June, 1911|Sept., 1910; 77–78 || 85 55 | 1,840.00 650.00 920.00 1,570.00 85%
655 |Peer, E. Jane Mar., 1916 Jan., 1916 56 58 36 1,582.00 650.00 791.00 1,441.00 91%
728 |Person, Fannie................ June, 1917 June, fºl? 69 || 70 || 41 600.00 360.00 300.00 660.00 1.10%
688 Peters, Francis .............. Sept., 1916 June, 1916 56 58 37 1,320.00 650.00 660.00 1,310.00 99%
109 Pelser, Agnes.................. |Oct., 1905|June, 1905 62 75 40 | 1,000.00 * 495.00 500.00 995.00 100%
* N E W
R S E Y'
J E
RETIRED LIST No. 1–Continued



Num-
ber
Of
uity
752
611
602
388
584
464
685
261
75.3
445
420
214
738
136
683
625
754
173
755
647
227
322
106
729
776
325
212
703
739
443
242
180
151
398
449
326
244
593
603
213
541
177
757
290
687
669
496
494
459
Date of Retirement Ratio
NAME Age at Age as Length. Average Salary Amount Amount Total An- of Total
On Teachers' OIl Retire-jof Junel of of Of Of nuity Plus Benefit
OF RETIRED TEACHER | Retirement State ment |30, 1918 Service Last Five Years Annuity Pension Pension to
Fund Pension Salary
Phelan, Margaret.......... Jan., 1918||Dec., 1917. 55 56 39 $ 750.00 $ 450.00 $ 375.00 $ 825.00 110%
Pierson, Lydia G........... Sept., 1915|June, 1915 69 72 51 535.00 321.00 267.50 588.50 110%
Pike, Laura A................. Sept.,1915 June, 1915, 58 61 35 | 79000 474.00 395.00 869.00 | 1.10%
Poland, Sarah E........... Dec., 1911||Dec., 1911, 61 68 41 925.00 (891.66) 546.002 462.50 1,008.50 1.10%
Polhemus, Edgar W.....|Mar., 1915||Dec., 1914 57 61 37 467.40 (466.00) 247.48 233.70 481.18 10.3%
Poole, Anna B............... Apr., 1913|Nov., 1912 53–54 |. 59 35 957.60 574.20 478.80 1,053.00 1.10%
Post, Clara...................... Sept., 1916 Sept., 1915 59 61 38 1,436.40 650.00 718.20 1,368.20 95%
POWell, Fannie................ Sept., 1915 June, 1915 59 62 35 625.00 373.80 312.50 686.30 1.10%
Prichard, Annie E......... Sept., 1909Jan., 1909 60 69 41 360.00 250.00 180.00 430.0%) 1.19%
Pulver, E. Louise.......... Jan., 1918|Mar., 1917. 56 58 35 900.00 540.00 450.00 990.00 1.10%
Quimby, Ida Dec., 1912|Nov., 1912 55 61 36 742.00 445.20 371.00 816.20 1.10%
Randolf, Ida V............... Sept., 1912||Dec., 1911|59–60 66 39 450.00 (442.00) 265.20 225.00 490.20 110%
Reed, Laura M............... Oct., 1908|June, 1908 60 70 39 1,360.00 650.00 68.0.00 1,330.00 98%
Reed, Mahlon.................. Sept., 1917|June, 1917. 59 60 35 | 1,260.00 650.00 630.00 1,280.00 10.2%
Reeve, Virginia.............. Jan., 1907|June, 1907 58 69 37 $95,00 (710,00) 351.44 347.50 698.94 100%
Reid, Lavina.................... Sept., 1916 Sept., 1916 56 58 35 | 1,200.00 594.00 600.00 1,194.00 100%
Reilly, Addie M............. Sept., 1915|June, 1915. 55 58 36 650.00 390.00 325.00 715.00 110%
Reilly, Agnes R............. Jan., 1918 Jan., 1918, 54 55 35 | 1,470.00 650.00 735.00 1,385.00 94%
Riley, Hannah M........... Sept., 1907 June, 1907. 63–63 || 74 38 375.00 (355.00) 250.00 187.50 437.50 1.17%
Riley, Elizabeth.............. Jan., 1918 Jan., 1918, 62 63 43 919.00 551.40 459.50 1,010.90 1.10%
Robinson, Albert.......... Dec., 1915|June, 1915. 72 75 49 1,000.00 600.00 500.00 1,100.00 1.10%
Robinson, Letitia..........] Apr., 1909|Nov., 1908 54–55 64 37 1,239.84 650.00 619.92 1,269.92 102%.
Roche, Kate Sept., 1910May, 1910 60 68 40 896.40 537.84 448.20 986.04 1.10%
Rogers, Wm. J............... July, 1905|Feb., 1907 71–73 | 84 49 1,500.00(1,365.00) 594.00 750.00 1,344.00 90%
Rosenkrans, Lester......June, 1917|June, 1917. 62 64 35 1,400.00 650.00 700.00 1,350.00 96%
Roth, Celia E................... June, 1918|June, 1916 55 57 35 750.00 450.00 375.00 825.00 1.10%
Rowlands, Margaret....|Sept., 1910 Sept., 1910 56 64 40 1,230.4061,216.52) 650.00 615.20 1,265.20 103%
Ryer, Gertrude E........... Sept., 1908|.................... | 66 76 sº & º & 725.00 435.00 362.50 797.50 1.10%
Sargeant, Ada E........... Dec., 1916 Dec., 1916 55 57 35 | 1,100.00 650.00 550.00 1,200.00 109%
Sayers, Grace H........... Sept., 1917 Sept., 1917| 60 61 42 | 1,449.00 650.00 724.50 1,374.50 95%
Sayre, Ann E................... Dec., 1912|June, 1912. 57 63 40% 1,848.00 (1,540,00) 650.00 924.00 1,574.00 85%
Sayre, Laura B............... Sept., 1909Feb., 1909) 59 68 35 | 1,066.00 639.60 533.00 1,172.60 1.10%
Sayre, Lucretia H......... Oct., 1907|Sept., 1907. 64 75 45 1,000.00 600.00 500.00 1,100.00 11.0%
Scarborough, R............. Jan., 1907|June, 1906. 55–56 67 37 531.00 (513.00) 253.92 265.50 51942 100%
Scarlett, Sarah B......... Mar., 1912|June, 1910; 52–54 60 35 | 1,484.00 (1,468.00) 650.00 742.00 1,392.00 94%
Schermerhorn, Ella......|Dec., 1912|July, 1912 67 73 41 1,152.00 650.00 576.00 1,226.00 10.6%
Scott, Isabell A............. Sept., 1910Sept., 1910 62 70 37 952.80 (969.60) 581.76 476.40 1,058.16 1.10%
Scott, Isabella................ Sept., 1909|Sept., 1909) 57 66 38 1,124.00 650.00 562.00 1,212.00 10.8%
Schrader, Sophie............ June, 1915Apr., 1915. 55 58 35 | 1,195.68(1,176.00) 650.00 597.84 1,247.84 10.4%
Sharp, Alfarata............ Sept., 1915 June, 1915 56 59 35 740.00 441.00 370.00 811.00 1.10%
Shepard, Edwin.............. Oct., 1908 June, 1908 60 70 40 2,400.00(2,440.00) 650.00 1,200.00 1,850.00 78%
Sherrad, Maria .............. June, 1914|June, 1914 59 63 39 841.80 505.08 420.90 925.98 || 110%
Sherwood, Mr. I. M....... Sept., 1907 July, 1906 59–60 | 71 38 1,212.00 650.00 606.00 1,256.00 10.4%
Sickles, Sarah................ Jan., 1918|Jan., 1918, 57 58 36 1,462.00 650.00 731.00 1,381.00 94%
Sipp, Maria...................... Mar., 1910|Feb., 1910. 54 62 35 923.00 553.80 461.50 1,015.30 1.10%
Sked, Bessie D............... Sept., 1916|June, 1915 68–69 71 47 550.00 330.00 275.00 8:05.00 1.10%
Smith, Adeline E........... June, 1916 June, 1916 55 57 36 1,020.00 612:00 5.10.00 1,122.00 1.10%
Smith, A. Frank C......... Sept., 1913 Nov., 1913. 56 61 36 1,402.86(1,381.60) 650.00 701.43 1,351.43 96%
Smith, Mrs. C. L. D....... Sept., 1913June, 1913. 66 71 42 1,580.00 650.00 790.00 1,440.00 91%
Smith, Emma J............. Apr., 1913|Feb., 1913. 69 74 48 1.560.00 594.00 780.00 1,374.ſ:0 88%
80 * N E W J E R S E Y'
RETIRED LIST No. 1–Continued
Num- Date of Retirement Ratio
bef NAME Age at Age as | Length Average Salary Amount Amount Total An- of Total
of On Teachers’ Od Retire-jof Junel of of of of nuity Plus Benefit 4
An- | OF RETIRED TEAOHER | Retirement State ment |30, 1918 Service | Last Five Years Annuity Pension Pension to
nuit Fund Pension Salary
*
276 |Smith, Mrs. Fannie......|Dec., 1909|June, 1909, 59 68 40 ($1,332.00 $ 650.00 $ 666.00 $1,316.00 99%
695 |Smith, J. Harry............ Sept., 1916 July, 1916 65 | 67 || 44 765.00 459,00 382.50 841.50 | 1.10%
629 Spear, Louise W............. Sept., 1915 July, 1913. 55 60 35 930.00 558,00 465.00 1,023.00 1.10%
764 |Speer, Matilda J............. Jan., 1918 Aug., 1917. 58 59 35 | 1,600.00 650.00 800.00 1,450.00 91%
730 |Stanger, Elizabeth........ June, 1917|June, 1917. 58 60 38 825.00 (807.00) 484.40 412.50 896.90 110%
165 |Stanger, Isabella .......... June, 1907|June, 1906 68 80 49 324.00 250.00 171.00 421.00 130%
705 |Stanley, Stella................ Dec., 1916 Dec., 1916 58 60 38 1,440.00 650.00 720.00 1,370.00 95%
375 |Stanley, Mrs. S............. Sept., 1911|Sept., 1911. 64 71 47 | 1,755,0001,780.00) 650.00 877.50 1,527.50 87%
452 |Steelman, J. R............... Dec., 1912 Sept., 1912 60 66 36 730,00 (720,00) 432.00 365.00 797.00 1.10%
778 |Steen, Mary E................. June, 1918 July, 1916 53 55 35 | 1,320.00 650.00 660.00 1,310.00 100% ,
745 |Stees, Herman................ Oct., 1917|Aug., 1916. 65 67 43 2,831.52 650.00 1,415.76 2,065.76 73%
597 |Sterner, Henry................ June, 1915|June, 1914 60 64 35 900.00 540.00 450.00 990.00 110% "
171 |Stevenson, G................... Sept., 1907 June, 1907 59–60 || 71 || 42 930.00 558.00 465.00 1,023.00 || 110%
232 |Stewart, Rose................ Apr., 1909|June, 1908 66–68 || 76 47 550.00 330.00 275.00 605.00 1.10%
499 |Stonaker, Cornelia ...... Sept., 1913|June, 1913. 57 62 37 854.00 512,40 427.00 939.40 1.10%
555 |Strang, Arabella............ Sept., 1914|June, 1914 56 60 37 1,360.00 650.00 68.0.00 1,330.00 98%
533 |Struthers, Susie P.......|June, 1914||Dec., 1913. 56–57 61 39 785.00 472.20 392.50 864.70 1.10%
672 Stryker, Elizabeth........ June, 1916 May, 1916 72 74 49 967.00 580.20 483.50 1,063.70 110%
740 Sturgis, Emma M......... Sept., 1917|Aug., 1917. 55 56 35 | 1,300.00 650.00 650.00 1,300.00 100%
277 |Sweasy, M. Augusta... Dec., 1909|June, 1909. 57 66 35 | 1,106.00 (1,332,00) 650.00 553.00 1,203.00 10.9%
671 Taylor, Minnie L........... June, 1916 June, 1916 59 61 39 1,278.00 650.00 639.00 1,289.00 10.1%
580 TerWilliger, JOS............. Mar., 1915|Feb., 1915 69 | 73 || 36 2,944.00 (2,940.00), 650.00 1,472.00 2,122.00 72%
636 |Thacher, Cornelius....... Dec., 1915 July, 1915 65 68 35% 2,964.00 | 650.00 1,482.00 2,132.00 72%
610 Tharp, John H.............. Sept., 1915|June, 1915. 72 75 47 748.30 448.96 374.15 823.11 1.10%
330 Thompson, Irene........... |Sept., 1910May, 1910, 61 69 43 642.00 385.20 321.00 706.20 1.10%
622 Thompson, Langdon... Sept., 1915 Sept., 1915; 77 80 60 3,000.00 650.00 1,500.00 2,150.00 72%
534 Thompson, Nellie.......... June, 1914|Feb., 1914 57 61 36 | 1,300.00 | 650.00 650.00 1,300.00 100%
578 Thompson, Sara............ Mar., 1915||Dec., 1914 62–63 | 66 44 718.00 | 430.20 359.00 789.20 1.10%
692 Thorpe, Elizabeth......... Sept., 1916|Aug., 1916 57 59 40 990.00 594.00 495.00 1,089.00 1.10%
601 Titus, Clara R................. Sept., 1915 June, 1915 60 63 41 1,580.00 650.00 790.00 1,440.00 91%
414 TOdd, Esther C............... June, 1912|Jan., 1912, 61 67 43 | 1,025.00 615.00 512.50 1,127.50 1.10%
607 Tomlin, Charles.............. Sept., 1915|Aug., 1915 62 65 40 630.00 378.00 315.00 693.00 1.10%
239 Tomlin, Mary M............. Sept., 1909|June, 1909' 59 68 39 670.00 402.00 335.00 737.00 1.10%
746 |Underhill, Georgia........ Oct., 1917|June, 1916 65 67 42 750.00 450.00 375.00 825.00 1.10%
758 |Valentine, Lelia B......... Jan., 1918|June, 1917 66 68 35 600.00 360.00 300.00 660.00 1.10%
218 Vanderbeck, L. E........... Oct., 1908 Oct., 1908, 53 63 36 916.00 548.40 458.00 1,006.40 1.10%
487 Van Kirk, Eliz............... Sept., 1913|June, 1913 59 64 37 840.00 504.00 420.00 924.00 1.10%
741 Van Winckle, E............. Sept., 1917 Sept., 1917 71 73 53 2,000.00 650.00 1,000.00 1,650.00 83%
255 Vose, Marie H............... Sept., 1909Feb., 1909, 59 68 35 928.80 (967.20) 580.323 464.40 1,044.72 110%
225 Vreeland, Anna E......... Dec., 1908 Oct., 1908 59 69 40 827.60 496.50 413.80 910.30 1.10%
362 |Vreeland, Magie............ Sept., 1911June, 1911 51 58 35 860.00 (855,00) 513,00 430.00 943.00 1.10%
565 Vreeland, Mary M......... Sept., 1914|June, 1914 53 57 36 970.00 582.00 485.00 1,067.00 1.10%
378 Wakeham, Mary E....... Sept., 1911|July, 1911 55 62 35 560.00 336.00 280.00 616.00 11.0%
256 Walker, Mary.................. Sept., 1909|June, 1909 56 65 36 650.00 (620,00) 372,004 325.00 697.00 1.10%
155 Wallington, S................. June, 1907|Jan., 1907 57–58 68 39 600.00 (588.00) 352.80 300.00 652.80. 1.10%
718 Walters, Thomas .......... Apr., 1917|June, 1916 57–58 59 35 930.00 558.00 465.00 1,023.00 1.10%
592 Ward, Clara M............... June, 1915|May, 1915 59 62 41 | 1,185.60(1,183.20) * 586.68 592.80 1,179.48 100%
618 Ward, Harriet A........... Sept., 1915 Sept., 1915 56 59 38 | 1,182.00 (1,196.00) 650.00 591.00 1,241.00 105%
702 Ware, Ida T..................... Dec., 1916 June, 1916 55 57 35 680.00 408.00 340.00 748.00 1.10%
461 Warwick, Agnes............ Apr., 1913|Dec., 1912 58–59 64 40 | 1,600.00 650.00 800.00 1,450.00 91%




* N E W
81
J E R S E Y'
RETIRED LIST No. 1—Continued

–-mº-
Num- Date of Retirement Ratio
ber NAME Age at Age as | Length Average Salary Amount Amount Total An- of Total
* of on Teachers' OII Retire-lof June of Of Of of nuity Plus Benefit
An- || OF RETIRED TEACHER | Retirement State ment |30, 1918|Service Last Five Years Annuity Pension Pension to
nuity Fund Pension Salary
\rº
‘75 Watts, Wilbur................ Jan., 1918|Jan., 1918, 75 76 51 (S1,700.00 $ 650.00 $ 850.00 $1,500.00 88%
483 Wentz, Alice C............... Sept., 1913|June, 1913. 54 59 36 770.00 462.00 385.00 847.00 1.10%
393 Westcott, Sarah............ Mar., 1912|Nov., 1911 55–56 62 38 600.00 (585.00) 351.00 300.00 651.00 110%
24 Wheeler, Samantha......|Jan., 1900|Jan., 1900, 61 79 41 542.00 (550.00) * 272.24 271.00 543.24 100%
318 Whitaker, Rie ................ Sept., 1910|June, 1910. 64 72 44 700.00 (680.00) 408.00 350.00 758.00 1.10%
707 |White, James Dec., 1916 Sept., 1916 62 64 46 | 1,980.00 650.00 990.00 1,640.00 83%
221 |White, Lydia H............. Oct., 1908 Feb., 1907; 62–63 | 73 37 625.00 375.00 312.50 687.50 1.10%
226 |White, Thomas M......... Dec., 1908 Nov., 1908 64 74 40 | 1,616.00(1,480,00) 650,00 808.00 1,458.00 92%
606 |Whittington, M. T......... Sept., 1915|June, 1915 60 63 40 945.00 567.00 472.50 1,039.50 1.10%
431 Wigent, C. M................... Sept., 1912 Sept., 1912. 69 75 44 1,570.00(1,480.00) 650.00 785.00 1,435.00 91%
646 Williams, Mrs. A........... Dec., 1915 Sept., 1915 62 65 40 556.00 (540.00) 324.00 5 278.00 602.00 110%
742 Wilson, Amanda............ Sept., 1917|Sept., 1917| 66 67 46 770.00 462.00 385.00 847.00 1.10%
638 Wilson, Hannah E......... Dec., 1915|Sept., 1915 57 60 37 2,400.00(2,516.00) 650.00 1,200.00 1,850.00 77%
574 Wilson, Laura M........... Dec., 1914June, 1914 58 62 41 745.00 447.00 372.50 819.50 110%
441 Wilson, Sarah E............. Dec., 1912 May, 1912| 70 76 47 585.00 351.00 292.50 643.50 1.10%
676 Woodward, Emma F...|Sept., 1916 June, 1916 57 60 40 | 1,100.00 650.00 550.00 1,200.00 109%
337 Worden, Mary................ Dec., 1910|Sept., 1910. 54 62 36 925.00 555.00 462.50 1,017.50 1.10%
69 Wright, Anita................ Apr., 1903|Apr., 1903 59 84 51 525.00 (707.00) * 349.966 262.50 612.46 100%
704 Wyckoff, Elizabeth........ Dec., 1916|July, 1916 55 57 35 | 1,600.00 650.00 800.00 1,450.00 91%
447 |Yates, Mary E............... Dec., 1912, July, 1912 56 62 37 | 1,088.64 650.00 {544.32 1,194.32 110%
642 |Young, Katherine.......... Dec., 1915||Dec., 1915 60 63 35 | 1,428.00 650.00 714.00 1,364.00 96%
368 |Young, Mary E............... Sept., 1911|June, 1911| 60 67 36 940.00 564.00 470.00 1,034.00 1.10%
563 |Youngblood, Hattie....|Sept., 1914|Sept., 1914 53 57 36 800.00 480.00 400.00 880.00 1.10%
Total number of teachers receiving both Pension and Annuity, 363 |Total amounts...}194,399.81 |$199,576.05 |$393.975.86
Average age at retirement........................ 60 AVerage pension $ 549.80
Average length of Service............................ 39 Average annuity plus pension................ 1,085.33.
Average Salary $1,053.71 Average ratio of total benefit to salary 10.3%
Average annuity 535.53 -
1276.00 2 565.00 3 557.28 4390 5833.00 6315.00

82 * N E W J E R S E Y'
Retired List No. 2
225 Retired Teachers Receiving Only the Annuity


Percentagó
No. of NAME Date of Age at Present | Length of Average Salary Amount of Ratio of
Annuity OF RETIRED TEACHER Retirement Retirement Age Service of Last 5 Years Annuity :
234 Aiken, Ina Apr., 1909 38 47 21 $ 442.00 $ 265.20 60%
767 || Allen, E. C. Mar., 1918 59 59 40 1,234.00 650.00 53%
518 Allen, Elizabeth F................. Dec., 1913 51 56 28 1,160.00 650.00 5.6%
19 || Atkinson, Anne .................... Jan., 1900 49 68 29 . 500.00 * 247.48 50%
111 | Ayars, Sarah E....................... Jan., 1906 60 73 34 294,60 * 247.48 84%
305 || Ayers, Harriet K................... June, 1910 61 69 42 425.00 255.00 60%
88 || Ayers, Mrs. Harriet............ Oct., 1904 58 72 29 307.00 * 247.48 81%
237 | Babbitt, Emma Sept., 1909 53 62 21 900.00 540.00 60%
279 | Baird, Margaret J................. Dec., 1909 60 * * * * 21 952.00 57.1.20 60%
66 | Baird, Jane E......................... Apr., 1903 56 71 36 515.00 * 25.4.92 50%
191 | Ball, Harriet ........................ Jan., 1903 44 tº sº dº ſº. 24 650.00 * 321.76 50%
79 | Bateman, Mrs......................... Jan., 1904 53 68 20 404.00 * 247.48 61%
391 || Bayles, Nettie D................... Dec., 1911 38 45 21 502.00 301.20 60%
220 Beach, Mrs. R. J................... Oct., 1908 43 53 24 290.00 250.00 86%
201 || Bell, Edward J....................... July, 1908 58 68 39 322.00 * 247.48 77%
437 || Bergen, Mary E..................... Sept., 1912 55 71 36 1,060.00 636.00 60%
95 || Bingham, Lizzie .................. Apr., 1905 44 57 21 830.00 * 410.84 50%
771 | Blake, Kersey S..................... July, 1918 60 60 36 3,000.00 650.00 22%
268 || Blackman, Mrs....................... Dec., 1909 53 62 22 286.20 250.00 87%
564 Bloom, Ella C....................... Sept., 1914 58 63 27 690.00 414.00 60%
297 | Bluste, Celia H....................... Mar., 1910 44 52 24 346.00 250.00 72%
263 Bosworth, Melina................ Sept., 1909 61 70 30 1,060.00 650.00 61%
91 | BOyle, Harriet P................... Oct., 1904 56 72 22 400.00 * 247.48 62%
772 | Bray, W. Irving.................... July, 1918 62 62 23 1,900.00 650.00 34%
490 || Brineshults, F. .................... Sept., 1913 40 45 21 461.00 276.60 60%
544 || Bristol, Carrie D................... June, 1914 48 68 28 850.00 510.00 60%
712 | Bristol, Kate L..................... Mar., 1917 48 49 27 1,300.00 650.00 50%
94 | Brockway, Irene .................. Jan., 1905 52 66 33 714.00 * 353.40 50%
292 | Brokaw, Mary........................ Mar., 1910 53 61 20 373.00 250.00 67%
670 Bronson, Mrs. M. V............. June, 1916 55 61 23 500.00 300.00 60%
381 | Broome, Annie M................. Dec., 1911 46 53 28 858.49 516.79 60%
573 || Brown, Elizabeth ................ Dec., 1914 45 49 22 912.00 547.20 60%
448 || Bunn, Chrissie........................ Dec., 1912 54 60 22 432.00 259.20 60%
22 | Burr, Anna R......................... Jan., 1900 51 60 30 450.00 * 247.48 55%
236 | Bush, Ida J............................. June, 1909 49 58 27 818.40 491.04 60%
359 Case, Wm. W........................... June, 1911 50 57 29 360.00 250.00 69%
711 | Clapp, Mrs. Harriet............ Mar., 1917 65 66 28 790.00 474.00 60%
306 | Clark, Anna D....................... June, 1910 42 50 22 697.00 418.20 60%
435 | Clark, Lulu E......................... Sept., 1912 40 46 21 736.00 441.60 60%
623 Clayton, Dena Sept., 1915 43 46 23 530.00 3.18.00 60%
410 || Coe, Cornelia S..................... June, 1912 46 52 25 998.40 599.64 60%
287 | Coe, James A......................... Dec., 1909 55 64 33 1,000.00 600.00 60%
356 Coeyman, Fanny.................... June, 1911 50 57 25 744.00 446.40 60%
293 Compton, Eleanor................ Mar., 1910 52 60 34 431.00 258.60 60%
274 || Conover, Emma.................... Dec., 1909 44 53 20 390.00 250.00 64%
284 || ConroW, Laura...................... Dec., 1909 41 50 21 655.00 393.00 60%
103 || Cooke, Sarah M..................... July, 1905 69 82 26 345.00 * 247.48 60%
54 | Coppinger, F.......................... | Jan., 1903 40 56 20 652.80 *323.12 49%
364 || Corson, Luther...................... Sept., 1911 56 63 33 1,160.00 650.00 56%
311 | Cosine, Frances...................... Sept., 1910 52 60 21 480.00 288.00 60%
* N E W J E R S E Y' 83
RETIRED LIST No. 2–Continued

Percentage
No. Of NAME Date of Age at Present Length of Average Salary Amount of Ratio :
Annuity OF RETIRED TEACHER Retirement Retirement Age Service of Last 5 Years Annuity Annuity
to Salary
86 | Crane, Frances O................... July, 1904 58 72 36 $ 575.00 * $ 284.64 50%
453 | Creed, Richard........................ Oct., 1903 60 75 31 274.00 * 247.48 90%
101 | Cullum, Sarah........................ Oct., 1905 46 59 29 980.00 * 485.08 50%
80 Dalrymple, E Jan., 1904 63 78 21 347.91 * 247.48 71%
56 Davis, Emily.......................... Jan., 1903 61 77 26 445.00 * 247.48 56%
44 Davis, Julia M....................... Oct., 1901 61 78 22 378.00 * 247.48 65%
489 || Davis, Mary W....................... Sept., 1913 53 58 23 459.00 275.40 60%
433 | Davis, Mrs. Edna Van B..... Oct., 1912 60 66 28 490.00 294.00 60%
137 || Decker, Mrs. S....................... Jan., 1907 55 67 28 350.00 * 247.48 71%
336 || Deeths, Sara Dec., 1910 52 60 31 666,60 399.96 60%
714 || De Motte, Bessie.................... Mar., 1917 43 44 22 1,185.50 650.00 55%
570 Dey, Lurena Dec., 1914 50 54 29 1,180.00 650.00 55%
696 || Dilks, Alfarata...................... Sept., 1916 55 57 26 575.00 345.00 60%
309 || Dilks, Hanna June, 1910 52 60 26 348.00 250.00 72%
167 | Ditmars, Maggie.................. June, 1907 44 55 22 400.00 250.00 63%
418 || Dodge, Mrs. E......................... Sept., 1912 63 69 20 360.00 250.00 69%
11 Donkersley, Mrs. Helen...... Jan., 1899 57 77 37 650.00 * 321.76 50%
403 || Donnell, Mrs. Olive H......... Mar., 1912 59 65 21 630.00 361.80 50%
628 Drake, Myra E....................... Sept., 1915 46 49 24 520.00 3.12.00 60%
354 Draper, Mary M..................... June, 1911 58 65 32 1,014.00 608.40 60%
422 | Du Bois, M. Helen................ Oct., 1912 52 58 28 850.00 510.00 60%
633 | Dupont, Mary....................... Dec., 1915 60 63 28 414.00 250.00 60%
275 | Eagles, Annie M. L............... Dec., 1909 43 52 20 762.00 457.20 60%
347 | Eckhardt, Maude.................. Apr., 1911 41 48 21 500.00 300.00 60%
715 | Eckoff, Mrs. Alice................. Mar., 1917 62 63 20 1,046.00 627.60 60%
145 | Ellen Wood, Mrs. M................. Jan., 1907 57 69 31 630.00 * 311.84 50%
102 || Erving, Olive M.................... July, 1905 52 63 26 800.00 * 396.00 50%
576 Evans, Mrs. Harriet........... Dec., 1914 74 78 21 336.00 250.00 74%
773 | Everitt, Ala Media.............. June, 1918 55 55 33 645.00 387.00 60%
549 Field, Mary C......................... June, 1914 66 70 28 1,540.00 650.00 42%
36 | Focer, Kate G......................... Apr., 1901 47 64 30 450.00 * 247.48 55%
526 Fortiner, Laura V................. | Mar., 1914 46 50 28 590.00 354.00 60%
205 |Fry, George E......................... Oct., 1908 62 72 34 800.00 480.00 60%
241 || Glover, Flora I..................... Oct., 1909 48 59 26 786.00 465.60 60%
404 || Godfrey, Robert Carter.... Mar., 1912 60. 66 31 589.80 352.20 60%
568 || Grady, Mrs. Rose.................. Oct., 1914 42 46 20 993.60 596.16 60%
132 || Graham, Mary........................ Jan., 1907 49 61 30 650.00 * 321.76 60%
467 || Gray, Jeremiah...................... Apr., 1913 64 69 41 630.00 378.00 60%
162 || Grier, Jessie G...................., June, 1907 51 62 30 504.00 302.40 60%
159 || Habberton, M......................... June, 1907 61 72 30 1,010.00 606.00 60%
127 | Hagaman, M. W..................... July, 1906 46 58 26 330.00 * 247.48 75%
134 Hancock, Clara...................... Jan., 1907 43 55 23 500.00 * 247.48 50%
6 || Hanrock, Phebe.................... Apr., 1898 65 85 24 1,000.00 * 495.00 50%
548. Harned, Grace F................... June, 1914 49 53 30 800.00 480.00 60%
110 || Harris, Cunningham ........... Jan., 1906 65 78 24 308.00 * 247.48 80%
390 || Harvey, Mrs. M.................... Dec., 1911 39 46 20 890.00 534.00 60%
343 || Hascall, Theodore............... Dec., 1910 69 77 24 2,250.00 650.00 29%
72 Healey, M. Adelaide............ Oct., 1903 41 56 20 650.00 * 321.76 50%
182 | Hendrickson, Mrs................. Oct., 1907 65 76 23 570.00 342.00 60%
413 | Hennessey, A........................... June, 1912 51 57 31 660.00 391.00 60%
* N E W
J E R S E Y'
RETIRED LIST No. 2–Continued
Pereentage
No. of NAME Date of Age at Present Length of Average Salary Amount of Ratio of
Annuity OF RETIRED TEACHER, Retirement Retirement Age Service of Last 5 Years Annuity Annuity
to Salary
609 | Herbst, Helen Sept., 1915 57 60 20 1,413.00 * 594.00 42%
219 |Higgins, Mrs. S..................... Oct., 1908 65 75 30 445.00 267.00 60%
119 Hinchman, R July, 1906 6 73 40 450.00 * 247.48 55%
154 || Hiner, Mrs. E......................... June, 1907 48 59 21 380.00 250.00 66%
521 | Holloway, Emma.................. Dec., 1913 56 61 27 515.00 309.00 60%
507 || Holloway, B. F..................... Sept., 1913 54 59 24 463.00 277.80 60%
49 || Hubbard, Kate F................... Apr., 1902 51 67 29 550.00 * 272.24 50%
774 || Hughes, Katherine ............... July, 1918 61 61 42 1,700.00 650.00 35%
18 || Hutchinson, J......................... Apr., 1899 49 68 31 500.00 * 247.48 50%
626 Irons, Winfield Sept., 1915 48 51 29 525.00 315.00 66%
454 || Jay, Kathryn.......................... Apr., 1913 42 47 20 736.00 441.60 60%
394 || Jenkinson, Harriet.............. Mar., 1912 52 58 32 823,40 494.04 66%
42 Johnson, Alice E................... July, 1901 46 63 27 800.00 * 396.00 50%
53 | Johnson, Emma .................... Jan., 1903 53 69 30 812.00 * 401.92 50%
176 || Johnson, Mrs. M. Sept., 1907 62 73 23 764.00 458.40 60%
208 || Joyce, Eva A. Oct., 1908 51 61 30 620.00 372.00 60%
372 Karner, Mary..........................] Sept., 1911 49 56 22 863.16 518.60 60%
504 || Kase, Martha Sept., 1913 76 84 37 500.00 300.00 60%
283 || Kirby, Ida H........................... Dec., 1909 61 70 33 450.00 270.00 60%
476 || Krumholz, Joanna N........... June, 1913 52 57 33 811.20 486.72 60%
775 | Lanning, Anna R................... June, 1918 56 56 36 850.00 510.00 60%
485 | La Pierre, Harriet................ Sept., 1913 53 58 37 1,090.00 650.00 60%
185 | Latchman, Mrs. Mary........ Dec., 1907 59 70 35 400.00 250.00 63%
334 || Layton, Everitt L................. Sept., 1910 41 49 21 524.00 3.10.20 66%
434 | Lews, Martha E..................... Sept., 1912 41 47 21 811.20 * 401,55 50%
45 Lindaberry, Mrs. H............. Jan., 1902 52 69 25 303.90 * 247.48 81%
265 | Lindsay, Mary B................... Sept., 1909 59 68 20 583.00 349.80 60%
338 Loag, Charlotte .................... Dec., 1910 59 67 23 544.00 326.40 60%
600 | Locke, Mary H....................... Sept., 1915 65 68 35 790.00 474.00 60%
281 |Lull, Esther M....................... Dec., 1909 63 72 32 360.46 250.00 60%
560 | Lutkemann, M.......................] Sept., 1914 60 64 30 1,190.00 650.00 55%
436 Mahany, Thomas.................. Sept., 1912 51 57 24 940.00 564.00 60%
346 | Majory, Charles.................... Apr., 1911 60 67 30 1,720.00 650.00 38%
532 |Maloney, Mary...................... Mar., 1914 49 53 25 912.00 547.20 60%
233 || Matthews, Mary.................... Apr., 1909 51 60 28 635.00 381.00 60%
419 Mayhew, Mrs. L..................... Sept., 1912 48 54 28 369.00 250.00 68%
114 | McCaughan, Lizzie .............. Apr., 1906 41 52 20 410.00 * 247.48 60%
734 | McConnell, L........................... Sept., 1917 48 50 27 950.00 570.00 60%
762 | McDonald, S........................... Jan., 1918 46 46 23 1,071.66 643.00 60%
588 McKaig, Mrs. L..................... June, 1915 51 54 24 645.00 387.00 60%
310 | McLaughlin, K...................... June, 1910 50 58 32 937.00 562.20 60%
63 | McLeod, Eunice...................... Apr., 1903 Ö8 73 39 892.00 * 441.52 50%
89 || Mershon, Lue J..................... Oct., 1904 65 79 20 324.00 * 247.48 76%
717 | Metz, Mrs. Mary.................... | Apr., 1917 51 52 21 1,159.20 650.00 56%
432 | Miller, Mrs. C......................... Sept., 1912 58 64 28 596.00 357.60 60%
312 || Mitchell, Mrs. M................... Sept., 1910 59 67 32 440.00 264.00 60%
751 | Moore, Agnes R..................... Jan., 1918 57 58 26 1,000.00 600.00 60%
554 Morris, Elizabeth.................. Sept., 1914 38 42 21 780.00 468.06 60%
701 || Morris, Georgia.................... Dec., 1916 52 54 33 970.00 582.00 69%
515 || Munyan, G. C......................... Dec., 1913 65 70 33 400.00 250.00 63%
* N E W J E R S E Y' 85
RETIRED LIST No. 2—Continued
Percentage
No. of NAME Date of Age at Present | Length of Average Salary Amount of Ratio .
Annuity OF RETIRED TEACHER Retirement Retirement Age Service Of Ilast 5 Years Annuity Annuity
to Salary
361 || Murrick, Julia........................ June, 1911 54 61 27 600.00 360.00 60%
569 | Nelson, Florence A............... Dec., 1914 47 51 27 1,162.00 650.00 56%
710 | Nelson, George O................. Dec., 1916 45 47 22 1,240.00 650.00 52%
260 | Nichols, Mrs. Alice.............. Sept., 1909 49 58 21 610.00 366.00 60%
289 |NOltemeyer, Mrs. A............. Mar, 1910 51 59 32 800.00 480.00 60%
736 Oley, Charles Sept., 1917 61 62 {38 1,390.00 650.00 47%
29 || Owen, Hannah July, 1900 58 76 34 450.00 * 247.48 55%
462 | Park, Anna H......................... Apr., 1913 63 68 35 398.84 250.00 63%
32 | Parker, Mrs. Esther............ Jan., 1901 61 79 38 1,000.00 * 495.00 50%
582 | Pendleton, Clara.................... Mar., 1915 43 M6 22 1,137.60 650.00 57%
768 Peters, Amelia J................... Mar., 1918 67 68 35 770.00 462.00 60%
480 || Phillips, Annie L................. Sept., 1913 63 68 37 500.00 300.00 60%
666 || Phillips, Mary........................ June, 1916 47 49 24 718.00 430.00 60%
389 || Pyott, Laura M..................... Dec., 1911 54 61 24 423.00 253.80 60%
269 | Pursell, Mary W................... Dec., 1909 52 61 24 496.00 297.60 60%
55 | Rasch, Margarett.................. Jan., 1903 54. 70 27 650.00 * 321.76 50%
264 || Reed, Emma Sept., 1909 39 48 21 522.00 313.00 60%
412 | Ricalton, Elizabeth.............. June, 1912 42 48 23 818.65 491.19 60%
416 | Riley, Agnes Sept., 1912 48 54 29 870.00 522.00 60%
756 | Rittenhouse, Tillie................ Jan., 1918 65 65 41 600.00 360.00 60%
113 || Robbins, Mrs. Anna............ Apr., 1906 . 65 77 30 350.00 * 247.48 71%
298 || ROmans, Thomas................. Mar., 1910 59 67 20 422.40 250.00 59%
84 || Rowland, Rachael D.......... July, 1904 53 67 30 520.00 * 257.40 50%
466 || Runyon, Louise R................. Apr., 1913 42 47 20 765.00 459.00 60%
405 || Runyon, Sarah...................... Mar., 1912 58 64 23 413.25 250.00 60%
522 || Rusling, Lilian ...................... Dec., 1913 48 53 20 820.00 492.00 60%
331 | Saunders, Mrs. E................... Sept., 1910 57 65. 32 402.00 250.00 62%
708 || Schall, May.............................. Dec., 1916 44 46 20 822.80. 493.68 60%
535 | Schieck, Caroline.................. June, 1914 46 50 21 1,008.00 648.00 60%
353 Schilton, E. N......................... Apr., 1911 55 62 34 645.00 387.00 60%
540 Schomp, Ella T..................... June, 1914 45 49 20 627.00 376.20 60%
174 Schuyler, Elizabeth.............. Sept., 1907 61. 72 32 900.00 540.00 60%
96 || Schuyler, Metta .................... Apr., 1905 44 57 23 550.00 * 272.24 50%
777 | Shafer, H. J............................. June, 1918 69. 69 45 1,315.00 650.00 49%
478 || ShotWell, Anne June, 1913 52 57 26 650.00 * 321.75 50%
558 || Simpson, Amy........................ Sept., 1914 49 53 27 1,300.00 650.00 50%
90 | Sliker, C. J. Oct., 1904 46 60 23 460.00 * 247,48 54%
542 | Slocum, Lottie...................... June, 1914 57. 61 27 660.00 396.00 60%
116 || Smalley, Flora ...................... Apr., 1906 48 60 28 690.00 * 341.52 50%
193 | Smalley, Phebe...................... Mar., 1908 52 62 30 660.00 396.00 60%
545 Smick, Mary L....................... June, 1914 56 60 21 382.25 250.00 65%
524 | Snook, Eliza E....................... Dec., 1913 50 55 20 337.00 250.00 74%
317 | Spence, Lillie.......................... Sept., 1910 50 58 21 465.00 279.00 60%
627 | Spencer, Emma Sept., 1915 44 A7 22 830.00 498.00 80%
765 | StillWell, Mrs. A................... Feb., 1918 60 60 20 900.00 540.00 60%
691 || Stout, Mrs. Hannah A.......] Sept., 1916 60 62 23 800.00 480.00 60%
61 | Stout, Ida F........................... Jan., 1903 43 59 21 465.00 * 247.48 53%
689 || Strong, Jennie M................... Sept., 1916 52 54 30 640.00 384.00 60%
511 | Struble, Louise...................... Sept., 1913 51 56 30 880.00 528.00 60%
302 || Stryker, Franklin.................. Mar., 1910 52 60 30 560.00 . 336.00 60%
86 * N E W J E R S E Y'
RETIRED LIST No. 2–Continued
Percentage
No. Of NAME Date of Age at Present Length of Average Salary Amount of Ratio of
Annuity OF RETIRED TEACHER, Retirement Retirement Age Service of Last 5 Years Annuity Annuity
to Salary
605 || Thompson, Lillian................ Sept., 1915 49. 52 26 790.00 474.00 60%
203 |Tilton, Peter .......................... June, 1908 54 64 31 1,306.00 650.00 50%
409 | Tuller, Mrs. Dora.................. June, 1912 54 60 23 415.00 250.00 60%
39 |UnderWOOd, C. Albert........ Mar., 1912 49 55 28 930.00 558.00 60%
87 |Wail, Mary J........................... July, 1904 49 63 31 710.00 * 351.64 50%
183 || Van Den Berry, Mrs........... Nov., 1907 68 79 29 897,60. 538.56 60%
559 || Van Gilder, Grace................ Sept., 1914 47 51 22 1,159.20 650.00 56%
130 || Van Kirk, Lizzie.................... Oct., 1906 60 72 30 3.18.00 * 247.48 78%
438 Van Wyck, Sarah................ Sept., 1912 60 66 28 850.00 510.00 60%
713 || Voget, Arnold........................ Mar., 1917 65 66 25 3,000.00 650.00 22%
152 | Walsh, Nellie.......................... Jan., 1907 38 50 20 720.00 * 356.40 50%
93 Ward, Mary E......................... Jan., 1905 56. 70 20 1,000.00 * 495.00 50%
307 || Warner, Francis J................. June, 1910 57 65 29 980.00 588.00 60%
295 | Webb, Marth L....................... Mar., 1910 46 54 23 751.80 451.08 60%
323 || Wilkes, Nellie A..................... Sept., 1910 52 60 22 780.00 468.00 60%
382 | Williams, L. May.................. Dec., 1911 48 & E; tº tº 24 641.20 384.72 60%
129 || Williams, Martha ............... Oct., 1906 62 74 30 650.00 * 321.76 50%
282 | Wilson, Samuel...................... Dec., 1909 56 65 28 374.00 250.00 67%
70 | Whitaker, N............................. Oct., 1903 65 80 21 430.80 * 247.48 57%
67 | White, Sanford S................. Apr., 1903 63 78 39 410.00 * 247.48 60%
424 | WhittemOre, Mrs................... Sept., 1912 53 59 23 1,028.40 617.04 60%
769 || Wood, Grace A....................... Mar., 1918 54 55 30 1,344.00 650.00 48%
294 || Wood, Augusta...................... Mar., 1910 53 61 27 540.00 324.00 60%
743 || Woodruff, Mrs. E................... Sept., 1917 61 61 25 446.40 267.84 60%
486 || WOOlman, Susan .................. Sept., 1913 45 50 20 758.00 454.80 60%
Total number of teachers retired on Annuity only, 225 Total amount of Annuities........ $90,916.12
Average age at retirement.................... 53 Average annuity $404.11
Average length of Service.................... 27 Average ratio of annuity to salary. 59%
AVerage Salary $685.00

* N E W
87
J E R S E Y'
Retired List No. 3
54 Retired Teachers Receiving Only the Pension (50% of the Average Salary of Last 5 Years)
NAME OF RETIRED Date of Age at Present, Length of Average Salary of Amount of
TEACHER Retirement Retirement Age Service Last Five Years Annuity
Atwood, Franklin Sept., 1915 55 57 35 $2,633.33° $1,316.66
Bailey, Louise M Apr., 1907 60 70 38 1,220.00 600.00
Bartolette, Olivia Aug., 1913 - 54 58 35 635.00 317.50
Batten, Laura A June, 1914 57 60 35 595.00 297.50
Berger, Mary E. June, 1910 53 60 35 1,060.00 530.00
Black, Benjamin W............................. June, 1916 58 59 37 1,800.00 900.00
Bloomfield, Adeline.............................. Nov., 1914 76 79 35 600.00 300.00
Boughton, Cornelius June, 1918 69 69 44 1,220.00 610.00
BOWers, Ida V. June, 1915 56 58 35 400.00 200.00
Brown, Sophie Feb., 1918 65 65 47 2,030.00 1,015.00
Bush, Egbert T June, 1916 68 69 40 540.00 270.00
Butler, Jacob C Nov., 1914 78 gº tº e ºs 38 708.00 354.00
Carr, Elias F. June, 1911 72 78 46 1,840.00 920.00
Contessa, Maria Aug., 1917 53 53 35 2,400.00 1,200.00
Correll, Clara P. July, 1917 57 58 39 750.00 375.00
Crane, Frances Dec., 1903 57 71 36 575.00 287.50
Day, Anna M. June, 1915 61 63 38 1,470.00 735.00
DOdson, Elizabeth June, 1908 58 67 38 610.00 305.00
Force, Emma June, 1906 57 68 37 620.00 3.10.00
Frost, Jennie M Aug., 1910 62 69 38 1,660.00 830.00
Farley, Dickerson July, 1916 70 71 43 1,900.00 950.00
Gardner, Sarah Sept., 1905 63 75 45 1,500.00 750.00
Grace, Walton May, 1908 56 65 36 486.00 243.00
Green, James M. June, 1917 65 66 46 6,080.00 3,040.00
Caroline, A. Ingalsbe............................ Jan., 1917 61 62 36 1,300.00 650.00
Locke, Mary Hawkins June, 1915 65 67 35 790.00 395.00
Mason, Margaret R June, 1915 56 58 37 796.00 398.00
McCurdy, S. Carrie.............................. June, 1917 53 54 36 600.00 300.00
Miller, Mattie M. Feb., 1918 57 57 35 1,105.00 552.50
Moolhouse, Mary J Sept., 1904 57 70 40 1,200.00 600.00
Moorhouse, Caroline M....................... June, 1914 54 57 35 690.00 345.00
MOrgan, Maria E. June, 1905 63 75 40 1,200.00 600.00
Murphy, Mary Sept., 1915 55 57 37 1,182.00 591.00
Neer, Willett Nov., 1917 64 64 35 1,293.60 646.80
Nicholson, Anna G June, 1916 61 62 35 540.00 270.00
Pearce, Cornelius C June, 1912 55 60 35 456.00 248.00
Ransom, Julius Mackey...................... Sept., 1917 54 54 35 926.00 463.00
Reinhart, H. Albert.............................. May, 1915 65 67 37 3,000.00 1,500.00
Robeson, Tillie R. June, 1917 64 64 42 600.00 300.00
Robinson, William F........................... July, 1912 58 63 35 2,300.00 1,150.00
Seely, Levi Dec., 1917 66 69 38% 2,916.00 1,458.00
Sandy, William C July, 1914 70 70 36 2,620.00 1,310.00
Smith, Sarah A. Aug., 1917 59 60 41 920.00 460.00
Snyder, Harriet L Jan., 1913 54 58 37 1,090.00 545.00
Stout, Charles L Oct., 1916 70 71 37 747.84 373.92
Tantum, Adalaine June, 1910. 58 65 37 490.00 245.00
Jlmer, Helen G. Smith........................ June, 1916 56 57 35 1,200.00 600.00
Van Brackie, D. P. July, 1917 94 94 38 539.00 269.50
Van Nuis, Amanda June, 1916 64 65 43 1,000.00 500.00
Wade, Margaret June, 1917 61 62 41 950.00 475.00
Watson, Mary M. Sept., 1915 54 56 35 740.00 320.00
Wheeler, Imogene Sept., 1915 56 59 40 1,425.00 712.50
White, M. E. (Mrs.) Feb., 1912 60 65 42 1,364.00 682.00
Williams, Marion June, 1915 59 60 35 1,100.00 550.00
Total number of teachers retired on pension only, 54 Total................" $34,216.38
Average age at retirement.............. 62. Average Salary $1,267.28
#Average length Of Service.................. 38 Average pension 633,64
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