i :) om-: ON THE POLICE PENSION FUND CITY OF NEW YORK 1913 A REPORT police pension Jfunb CITY OF NEW YORK SUBMITTED TO THE ALDERMANIC COMMITTEE ON POLICE INVESTIGATION Bureau of Municipal Research u 261 Broadway, New York ^11 133 '14 1000 CONTENTS. PART I DESCRIPTIVE AND INTERPRETATIVE REPORT. CHAPTER I. INTRODUCTION. PACK Need for Actuarial Appraisement of Fund 15 Difficulties of Making Appraisement 15 Scattered and Incomplete Records 15 Administrative Obstructions 16 Volume of Work Involved 16 Summary of Fact-Conclusions Reached 16 1. The Police Pension Fund Exists as a Legal Fiction Only 16 2. Trustees of Fund Have Been Negligent 16 3. Would Require Reserve of Over $65,000,000 16 4. Future Payments to Those Now on Rolls Nearly $150,000,000 17 5. If Present Force is Kept Up Nearly $375,000,000 Will Be Required in 83 Years 17 6. Annual Fixed Charge to City Nearly $5,000,000 17 7. Operates as Permanent Reserve or Pledge of Nearly $275,000,000 of City's Taxables 18 8. When Fully Developed Pension Requirements Will Equal One-third of Payroll 18 9. Places Police Force Among Highest Paid Officers on Average 18 10. Present Administration of Fund Operates Inequitably 18 11. Service Pensions Only 23 Per Cent, of Whole 19 12. Obligation of Officials to Face the Situation Squarely 19 CHAPTER II. HISTORY OF THE FUND. Origin of the New York Police Pension Fund 22 Brief Statement Showing Changes in Law 22 Increasing Revenues Provided 25 Increase in Demands for Pension Payments 26 Inability of Fund to Meet Obligations Without Resort to Taxation 26 Beginning of Direct Taxation 27 Effect of Consolidation 28 Direct Taxes Finally Accepted as Principal Source of Revenue 28 Cause of Increase in Pension Payments Increase in Force 28 Maturity of Obligations of Earlier Years 29 Taking Over of Force on Consolidation 29 Causes Counteracting Increases 29 Causes of Conspicuous Fluctuations 2 CHAPTER III THE LAST TWELVE YEARS OF PENSION FUND EXPERIENCE. Increase in Percentage of Number Retiring 33 Detailed Statistics of the Growth of the Fund, 1901-1912 3 1 3 286246 4 PAGE Decreasing Importance of Contributions of Force 32 Increasing Importance of Appropriations from Tax Budget 33 Increase in Percentage of Pensions to Payrolls 33 Classification of Pensioners 33 Distribution of Benefits 33 CHAPTER IV. THE FUND AND THE MACHINERY FOR ITS ADMINISTRATION. Sources of Revenue 35 Trustee of the Fund 35 Exercise of Discretion in Granting Pensions 36 Granting Regular or Service Pensions 36 Granting Disability or Invalid Pensions 36 Granting Pensions to Widows, Children, and Dependent Parents 37 Organization Provided for Administration 37 Duties of Officers Connected with Fund 38 Duties Performed by the Bookkeeper of the Department 39 Duties of the Pension Investigator 40 Duties of Surgeons 40 Composition and Duties of Pension Board 41 CHAPTER V HANDICAPS TO GOOD ADMINISTRATION. Results of Defects in' Present Laws 43 Possibility of Drawing Salary and Pension at the Same Time 43 Increases in Pensions After Being Placed on Roll 43 Pensions in Excess of Regular Pay 44 Confusion Due to Ambiguous Provisions 44 Inadequate Provisions for Administering the Fund 45 The Head of the Department Not a Proper Trustee for the Fund 45 Attempts to Cure Last Named Defect 45 An Interested Advisory Board 46 A Partisan Pension Investigator 47 Lack of Complete and Accurate Pension Records 47 Need for Exact Information Ignored by Commissioner 47 Estimate of Liabilities Impossible Without Exact Information 47 Statements in Annual Report are Misleading 48 Inaccuracies in Such Records as Are Kept 49 Inconsistencies in Data Published 49 Lack of Provision for Continuity of Policy 50 Frequency in Change of Commissioners 50 Differences in Interpretation and Application of Law 51 Elements of Uncertainty Undesirable 52 CHAPTER VI. LIABILITIES INCURRED AND THE METHOD OF MEETING THEM. Elements Involved in Appraisement 53 Present Condition of Fund When Appraised on Theory of "Reserve" Plan 54 Contributions to the Fund by Prospective Beneficiaries 55 Net Present Liabilities 55 5 PAGE Future Payments to Pensioners and Present Force on "Cash Disbursement" Plan. . 55 Payments to Future Entrants 56 Annual Payments Required if Present Force is Maintained 56 Probable Increase in Annual Demands 58 The Ultimate Cost of Police Service to the City 58 CHAPTER VIL DETAILED ANALYSIS OF FUND REQUIREMENTS. Payments to Be Made to the Present Pensioners 61 Amounts to Be Paid to Each Class 61 Payments to Be Made to the Retiring Members of the Present Active Force and Their Dependents 62 Amount Required Before Last Benefit is Paid 63 Distribution by Classes of Beneficiaries 64 Annual Installments Required to Meet Matured Obligations to Persons Now on Rolls 64 Increasing Proportion to Be Provided by City 64 Annual Pension Payments to Be Made to New Entrants 64 Total Amounts Required by Classes 65 Small Amount Required During First 15 Years. 66 Contributions of New Entrants Sufficient for 27 Years 67 Inability to Meet Obligations Thereafter Except by Appropriations 67 CHAPTER VIIL HOW THE PLAN HAS OPERATED AS A MEANS OF PROVIDING SERVICE PENSIONS. Relative Importance of Service Pension Provisions to Other Provisions 69 Four Kinds of "Service" Pensions 69 Pensions Granted for Twenty-five Years of Service at 55 years of Age. or More. 70 Rights Accorded as a Result of Military Service 70 Discretionary Pension Grants for Twenty Years of Service 70 Discretionary Retirement of Members Over Sixty Years of Age 70 "Straight Pension Plan" Adopted 70 Service Pensions as Deferred Pay 71 Wherein the Plan Has Been Modified 71 Question as to Whether the Age Limit of 55 Is Too Low 72 Inducement to Leave the Service 72 Members Leave Service to Enter Other Employment 73 Police Pensioners in the Employ of Other City Departments 74 The Present Plan Encourages the Retention of Incompetents 75 Pensions Based on Terminal Salaries Inequitable 75 Location of Present Pensioners 77 Salaries and Pensions of Police Surgeons 77 CHAPTER IX. HOW THE PLAN HAS OPERATED AS A MEANS OF PROVIDING DISABILITY PENSIONS. Disability Pension Provisions 79 Discussion of the Provisions 79 Retirements for Disability Compared with Retirements for All Other Causes 80 Disability Payments Greater than All Others Combined 80 Physical Condition of Members of Force Allowed to Deteriorate After Entrance .... 81 6 PAGE Abnormal Rates of Sickness Reported in Department 82 Surgical Division Characterized as Unsatisfactory and Inefficient 82 Present Pension Administration Responsible for Abnormally Increased Rate of Disability Retirements 83 Law Extremely Loose as Regards Disability Retirements 84 Dangerous Results of Present Law 84 Words "In Performance of Duty" Meaningless Under Present Conditions 85 Incieases in Number of Disability Retirements 85 Retirements Under the Various Disability Provisions of the Law 86 Present Physical Examination of Applicants for Disability Pensions of Questionable Value 86 Representation of Associations on Pension Board Undesirable 87 Beneficiaries Themselves Question Present Practice 89 Retirement of Persons Whose Health is Not Permanently Impaired 89 Discrimination between Applicants of Equal Merit 89 Incompetence or Lack of Good Faith in Certifications of Persons for Disability Pensions 89 The Case of Sergeant James F. Vallely 90 The Case of Patrolman James E. Wrenn 90 Statistics of Retirement Indicate That Not All Disability Pensions are Bona Fide . . 91 Many of Present Disability Pensioners Enjoy Average Good Health 92 Disability Pensioners Employed in Other City Departments 93 No Check on Propriety of Disability Retirements 93 Abnormal Rate of Disability Retirements 94 Data Necessary for Estimating Cost of Disability Pensions 94 Relative Cost of Officer's as Compared with Patrolman's Disability Pensions 95 Cost of Disability Pensions as Compared with Cost of Service Pensions 97 CHAPTER X. HOW THE PLAN HAS OPERATED AS A MEANS OF PROVIDING PENSIONS TO DEPENDENTS OF POLICEMEN. Nature of Problem Involved in Pensioning Dependents 99 Pensions to Dependents Must be Added to Cost of Service and Disability Retirements. 100 Pensions to Dependents Cost More Than Service Pensions 100 Cost of Pensions to Dependents Per Each $100 Paid to Active Members 101 While Total Expenditures Are Large, the Present Plan Does Not Provide Against Want 101 Benefits Not Distributed Equitably or According to Needs 101 Lack of Provision for Relief in Case of Policeman's Death after Less Than Ten Years in Active Service 102 A Question Raised with Respect to Benefits to Widows of Disability Pensioners 102 Insecurity of Pension Income Due to Absolute Discretionary Powers of Commissioner. 102 Changes in Administration Prevent Uniform Treatment 104 Discretionary Powers Especially Undesirable When Pension is Granted to Widow of Pensioner Disabled in Performance of Duty 104 The Principle of Having Facts Determined by a Patrolman Investigator is Wrong. . . 104 Chances for Prejudiced Interpretation of Law Because of Personal Relations of Beneficiaries to Officials of Pension Board 105 Pension of One Widow Revoked for a Given Reason 105 Pension of Another Widow Under Same Conditions Increased 105 The Same Pension Case Treated in Three Different Ways by as Many Police Com- missioners 106 Necessity for Fixed Rules and Unbiased Interpretation of Law 107 LIST OF CHARTS IN DESCRIPTIVE AND INTERPRETATIVE REPORT. PAGE Chart I. Showing the annual pension payments and revenues of the police pension fund from 1857 to 1912 27 Chart II. Showing the proportion of various sources of receipts of the police pen- sion fund from 1901 to 1912 32 Chart III. Showing the comparative growth of the active force and the various classes of pensioners from 1901 to 1912 34 Chart IV. Classification of pensions 38 Chart V. Showing the annual pension expenditures of the City of New York dur- ing the next 83 years for police pensions under plan now in use at pres- ent salaries and without increase in force 57 Chart VI. Showing the annual pension payments during the next 67 years to the various classes of pensioners who were on the pension roll of the New York police pension fund on February 1, 1913 62 Chart VII. Showing the annual pension payments during the next 83 years to the various classes of pensioners to be retired from the present active police force of the City of New York 63 Chart VIII. Showing the annual amounts which will be contributed by the City and by the members of the police force during the next 83 years for the payment of maturing pension obligations to the present pensioners and for future pensions to the present active force 65 Chart IX. Showing the annual pension payments during the next 83 years to the various classes of pensioners to be retired from the future entrants into the police force of the City of New York 66 Chart X. Showing the annual amounts which will be contributed by the City and by the employees during the next 83 years for the payment of maturing obligations to future entrants into the police force of the City of New York 67 APPENDIX TO PART I. Table I. Showing changes in police pension rates, 1860 to 1907 110 Table II. Showing changes in salaries of the uniformed force of the police depart- ment, 1857 to 1912 112 Table III. Showing the annual pension payments and revenues of the police pen- sion fund from 1857 to 1912 114 Table IV. Showing the total number of pensions granted since the foundation of the fund in 1857, the number and per cent, of the same which since terminated and the number and per cent, remaining active in February, 1913 115 Table V. Detailed statement of annual receipts of the police pension fund for the years 1901 to 1912 116 Table VI. Analysis of annual net receipts of the police pension fund for the years 1901 to 1912 117 Table VII. Comparative statement by years, showing the relation of the number of pensioners to the active members of the force and of the pensions paid to the active payroll, 1901 to 1912 118 Table VIII. Showing the number of members on the pension roll in February, 1913, drawing each specified amount of pension 119 Table IX. Showing the number of widows, children and dependent parents on the pension roll in February, 1913, drawing each specified amount of pension 119 8 PAGE Table X. Comparative strength of the uniformed police force in its several grades at the close of each specified year, 1901 to 1912 120 Table XI. List of ten pensioners who are at present on the pension roll of the New York Police Department and have drawn $321,363 in pensions 122 Table XII. Activities of the various police administrations from 1857 to 1913, as expressed by the number of pensions granted, terminated or amended 124 Table XIII. Total number of pensions on the roll from 1857 to 1913 and proportion of amended pensions to those which were not amended 126 Table XIV. Showing ten retired policemen who draw pensions and also salaries in other City departments 128 Table XV. Showing the "expectation of life" of regular pensioners and of disa- bility pensioners (monthly payments) of the New York City police pension fund 130 Table XVI. Showing the total annual cost (salary and pension) of the services of five members of the force retired on service pensions 132 Table XVII. Showing the total annual cost (salary and pension) of the services of 52 members of the force retired for disability 134 Minutes of the Pension Board of the Police Department of the City of New York 136 Pension Record of Lieutenant James F. Vallely 141 PART II. ACTUARIAL REPORT. TEXT. The Benefits 149 Employees 149 Employees' Families 149 The Data 150 Collecting 150 Checking 151 Punching 153 The Tabulation 153 General 153 The Salary Scale 154 Exposure and Check Tables 155 The Graduation 165 Rates and Comparisons 165 Active Service 165 Pensioners 169 Regular or Service Pensioners 169 Disability or Invalid Pensioners 169 Widow Pensioners 170 Children Pensioners 173 Combined Active Members and Pensioners 173 Service and Mortality Tables 173 Family History 180 Reasons for Calculating the Cost by Years and the Amount of Continuing Liability, as Well as Making an Ordinary Valuation 181 The Yearly Distribution of Cost 181 The Valuation 182 The Continuing Liabilities 182 9 PAGE Adjustments 182 The Present Active and Pension Services 182 Pension Allowances 188 Yearly Cost to City of Pension Payments to Present Active and Pension Forces .... 188 Yearly Cost of Continuing Liability 197 Total Yearly Cost of Pensions 204 Average Amount of Salary and Pension Received by an Employee 205 The Valuation of Total Assets and Liabilities 208 LIST OF TABLES AND CHARTS IN ACTUARIAL REPORT. Actual Experience Tables: Table 1. Active Service 153 Table 2. Regular Pensioners 153 Table 3. Disability Pensioners 154 Table 4. Widow Pensioners 154 Diagrams of Adjusted and Unadjusted Rates: Active Service 155 Regular Pensioners 160 Disability Pensioners 161 Widow Pensioners 162 Salary Scale 164 Rates and Comparisons: Table 5. Rate of Withdrawal from Active Service 165 Table 6. Rate of Accidental Death in Actual Performance of Duty 166 Table 7. Rate of Mortality While in Active Service 167 Table 8. Rate of Invalidity 168 Table 9. Rate of Regular or Service Retirement 168 Table 10. Rate of Mortality Among Regular or Service Pensioners 169 Table 11. Rate of Mortality Among Disability or Invalid Pensioners 170 Table 12. Rate of Mortality and Withdrawal Among Widow Pensioners 171 Table 13. Rate of Mortality in Active Force Modified to Include Regular and Disability Pensioners' Lives 172 Service and Mortality Tables: Table 14. Active Service Table and Salary Scale 175 Table 15. Regular Pensioners' Mortality Table 176 Table 16. Invalid Pensioners' Mortality Table 177 Table 17. Widow Pensioners' Mortality and Withdrawal Table 178 Table 18. Children Pensioners' Mortality Table 179 Table 19. Combined Mortality Table or Active Service Mortality Table Modi- fied to Include Regular and Disability Pensioners' Lives 179 Family History: Table 20. Showing the Conjugal Relation of Employees, the Corresponding Age of the Wife to That of the Husband Dying and the Number of Employees Who Leave Children, Together with the Average Age of the Youngest Child . . 180 The Present Active and Pension Services: Table 21. Showing by Age the Number and Salary of All Employees of the New York City Police Force 183 Table 22. Showing by Length of Service the Number and Salary of All Em- ployees of the New York City Police Force 184 10 PAGE Table 23. Showing by Age the Number and Pensions of All Pensioners of the New York City Police Force Who Were Retired on Regular or Service Pensions. 184 Table 24. Showing by Age the Number and Pensions of All Pensioners of the New York City Police Force, Who Were Retired Because of Disability 185 Table 25. Showing by Age the Number and Pension of All Widows on the Roll of the New York City Police Pension Fund 186 Table 26. Showing by Age the Number and Pension of All Children on the Roll of the New York City Police Pension Fund 186 Table 27. Showing by Age the Number of Persons on the New York City Police Force and Pension Fund 187 Yearly Cost to City of Pension System: Table 28. Showing the Aggregate and Detailed Annual Cost of Pensions to the Present Active Force and Pension Members of the New York City Police Pen- sion Fund Together with the Amount of the Employees' Contribution from the Present Active Force 190 Table 29. Showing the Annual Amounts of Pension and Salary Payments to Be Made to the Present Active and Pension Service Rolls of the New York City Police Force 194 Table 30. Showing the Annual Amounts of Pension and Salary Payments to be Made to 636 Persons Entering Each Year Into the Service of the New York City Police Force on an Entrance Salary of $800 at an Average Entrance Age of 25 Years 200 Table 31. Showing the Combined Annual Payments of Salary and Pensions to be Made to the Present Active and Pension Forces and to the Probable Future Entrants Into the Service of the New York City Police Force 203 Average Amount of Salary and Pension Received by an Employee: Table 32. Showing the Annual Amounts of Pensions and Salary Payments to be Made to 1,000 Employees Entering the Service at the Age of 25 on an En- trance Salary of $800 per Annum 206 Table 33. Showing the Annual Amounts of Pension and Salary Payments to be Made to One Employee Entering the Service of the New York City Police Force at the Age of 25 on an Entrance Salary of $800 per Annum 208 Table 34. Showing Average Pension Salary and Active Service of an Employee Entering Service at the Age of 25 210 The Valuation of Total Assets and Liabilities: Table 35. Showing the Valuation of the New York City Police Pension Fund as of February 1, 1913 211 Telephone 5860 Barclay BUREAU OF MUNICIPAL RESEARCH TRUSTEES Albert Shaw, Chairman R. Fulton Cutting, Treasurer DIRECTORS Joseph W. Hahriman George B. Hopkins William H. Allen Bradley Martin, Jr. Henry Bruere Victor Morawetz Frederick A. Cleveland John B. Pine Frank L. Polk Edwin R. A. Seligman Frank Tucker 261 Broadway, New York, December 22, 1913. Hon. Henry H. Curran, Chairman, The Aldermanie Committee on Police Investigation. Dear Sir: As requested we are submitting for your information a descriptive and critical report on the Police Pension Fund of the City of New York. As is stated in the introduction, the conditions under which the inquiry has been conducted were such as to leave no time for the prepa- ration and consideration of constructive recommendations. The value of; the report, therefore, lies in the scientific conclusions reached that may serve as a basis for intelligent consideration of the fund in the future and the consideration of pension plans for employees in other branches of the service. Following the collection of data, the actuarial report (Part II) was prepared for the Bureau by Mr. George B. Buck. From the conclusions thus reached, and the other data collected, a first draft of the interpretative report (Part I) was written by Mr. Kobert von Eeutlinger, who was iu charge under the supervision of the directors of the Bureau throughout the inquiry. In the completion of the final draft a number of persons have co- operated, of whom special mention is made of Mr. "William A. Hutcheson, Mr. John A. Tatlock and Mr. John S. Thompson, who read the report for actuarial criticisms and suggestions; of Mr. William J. Curtis, who read the text with a view to calling attention to anything of a legal character to be corrected or restated before issue; and of Mr. Clyde Furst, Mr. Monell Sayre and Mr. Lewis Meriam, who have given to the Bureau the benefit of editorial criticisms and suggestions. Special mention is also made of the Bureau of Social Hygiene, of which Mr. John D. Rockefeller, Jr., is Chairman, which provided the funds for meeting the cost of collect- ing the facts and of the making the actuarial appraisement. Sincerely, (Signed) . F. A. Cleveland, Director. PART I DESCRIPTIVE AND INTERPRETATIVE REPORT PREPARED BY THE BUREAU OF MUNICIPAL RESEARCH As of March 31, 1913 CHAPTER I Introduction The present study of the operation of the police pension fund began on January 2, 1913, and has continued to this time. Other examinations had been made of certain legal and other phases, as those recently con- ducted : 1. By the pension committee of the Citizens' Union of the City of New York (January, 1911). 2. By the commissioner of accounts, Eaymond B. Fosdick (April, 1911 and May, 1912). Need for Actuarial Appraisement op Fund One of the results of previous examinations had been to point to the need for a careful appraisement of the fund's resources and obligations with a view to determining its present condition, its future liabilities, the provisions made for meeting them, and the extent to which the present police pension plan, if continued, will become a burden on the city. It was also evident that the subject of the fund's administration should be investigated. Difficulties of Making Appraisement To make an appraisement it was necessary to provide a basis for actuarial computations. To this end a form of individual record card, adapted to use on the Hollerith machine (see page 152, actuarial report), was devised, on which were shown all the facts needed for tabulation pur- poses. On one end of the card the data essential to the computation were taken from various records in the department, and supplemented in some cases by personal inquiry. When the cards 20,000 in number were completed, each member of the force who was drawing a salary and each pensioner during the six-year period, 1907 to 1912, was included. Scattered and Incomplete Records Some of the difficulties encountered in preparing these cards may be understood when it is known that the record data were scattered through- out the department in the following manner: In the bookkeeper's office were kept a card roster of pensioners con- taining incomplete data concerning early retirements and a dis- continued book record containing the same incomplete information in very inconvenient form. In the chief clerk's office two card systems and an obsolete and incon- veniently arranged set of book records were found. In the filing bureau the personal folders containing certain essential data for pensioners were not kept separate, but were mixed in the general files, part of which were kept at the old police headquarters on Mulberry street. 15 16 Administrative Obstructions In addition to the confusion of record data, the task was made more difficult on account of lack of cooperation. Complete cooperation was prom- ised by the police commissioner at the beginning of the study, and it was understood that there would be accorded unrestricted access to all files. After the work was under way, numerous difficulties were encountered, and limitations were placed upon the staff and assistants by the police com- missioner. Originally, promise was made to supply the ages of present and prospective women pensioners, which were in some instances missing from the records. This promise was later withdrawn on the ground that it was improper to ask such personal questions of women. Volume op Work Involved These adverse conditions have a special significance when considered in relation to the time limitations placed on the inquiry. First, 20,000 per- sonal record cards must be prepared from poorly adapted and widely scat- tered records; then the record data had to be supplemented by personal inquiry. The difficulties in obtaining the essential information were so great that the tabulating could not be begun till last August. Even had all of these physical and personal handicaps been removed, the appraisement from an actuarial standpoint would have presented great difficulties on ac- count of the lack of experience tables needed to lay a broad foundation for the appraisement of a fund of this kind. The work of appraisement of liabilities under the present police pension plan combines elements and probabilities that have never been reduced to a scientific basis. In fact, this combination of probabilities had never before been made the subject of an actuarial estimate. The conclusions of this report, therefore, are the results of a new application of actuarial science to the problem of pension administration. Summary of Fact-Conclusions Reached In summary form the fact-conclusions reached are as follows : 1. The police pension fund exists as a legal fiction only: Since 1904 the annual deficiencies of the fund have rapidly increased until the deficiency in 1912 amounted to $1,135,188.22 or 54.1% of the total amount needed for the payment of pensions during that year. There are no assets held in reserve to provide for the payment of accrued liabilities. 2. Trustees of fund have been negligent: The officers who are re- sponsible as legal trustees of the fund have not even taken the steps to keep the records and collect the data needed to find out what are the prospective obligations to be met or whether there will be assets sufficient to meet them, and they do not now know and never have known the amount of the present or accruing liabilities. 3. Would require reserve of over $65,000,000: If no additions are made to the present active police force vacancies caused by re- tirements or death not being filled the trustees should now have resources in reserve amounting to $65,257,367, which, in- vested at 4% compound interest, would be sufficient, together with the funds in hand ($97,455) and future contributions of the present force, to pay pensions as they mature each year. 17 Future payments to those now on rolls nearly $150,000,000: The amount of pensions which will be payable in the future is shown in the following statement. In ascertaining these figures it was assumed that certain proportions of the active force would die and certain other proportions would be retired each year and that certain proportions of those retiring each year would die each year. Pension payments to present pensioners. . . $28,492,083 Pension payments to present active force upon retirement 120,511,528 Total pension payments to those now on roll $149,003,611 Toward meeting this amount the present force will con- tribute (2% of salaries) 4,414,556 Leaving the amount to be contributed by City $144,589,055 If present force is kept up nearly $375,000,000 will be required in 83 years: If the present quota of men on the force were to be kept up, the total expenditures of the city for police pensions during the next 83 years (the time required to liquidate obliga- tions to those now on rolls) would be as follows: Total pension payments to those now on rolls $149,003,611 Total future pension payments which must be made during the period of pension payments to persons now on roll in order to keep up the force to present quota of men without increase in salaries 225,814,962 Total expenditures of City for police pen- sions to be met within the next 83 years under plan now in use at present salaries and without increase in force $374,818,573 Toward meeting this amount beneficiaries will contribute as follows: Present force (2% of salaries) 4,414,556 New entrants (2% of salaries) 20,551,848 24,966,404 Leaving the amount to be contributed by the City which would require contribu- tions to be made each year sufficient to meet the deficiencies $349,852,169 Annual fixed charge to city nearly $5,000,000: Since no provision is made for holding in reserve an amount which, if put at in- terest, would provide the means for meeting liabilities when due, . the obligations incurred operate in the same manner as a debt of $374,818,573 without interest, payable in annual installments during the next 83 years, the amount of installment being equal to the matured pension payments to pensioners each year, less the amount contributed by the policemen themselves. These in- stallments are not in the nature of a current expense since they are for services rendered in past years. They are a fixed charge, like interest and sinking fund instalments. When pension pay- ments are not made out of a cumulated reserve fund, the city's 18 annual contributions are in the nature of payments on a deficit incurred in past years. As soon as the present pension plan has reached the point of normal operation, without any increase in force or salaries, the amount of the annual fixed charge will be $4,970,866. 7. Operates as permanent reserve or pledge of nearly $275,000,000 of city's taxables: The result of the operation of the present law and methods of meeting obligations under the police pen- sion plan is the same as if the city set aside or permanently en- cumbered $273,124,505 of the city's taxables, assuming that the present rate of $1.82 per hundred be continued. 8. When fully developed, pension requirements will equal one-third of payroll: Since the obligations are not funded (i. e., since each year and generation an amount is not set aside, which if put at interest would meet the police pension obligation pro rata) the result will be that within the next generation more than $33 will be required on the average to meet maturing pen- sion obligations for every $100 paid in salaries to policemen on the active roll. Of this, only $2 will be contributed by police- men, while the balance, or more than $31, must be provided by the city as a charge against its revenues. The requirements of the present plan are in effect the same as if the city had prom- ised to pay $33.44 for each $100 of payroll obligations, and then made no provision in the annual budgets for meeting the $33.44 except in so far as pension claims matured during each year. 9. Places police force among highest paid officers on average: Leav- ing out the question as to which particular administrations in the future will have to pay the pensions, the average cost to the city of the services of the police force in its several grades is as follows : Rank Salary, 100% Pension Paid by City, 31.44% Total Average Cost to City per Year Matron Patrolman Sergeant Lieutenant Captain Surgeon (Inspector) $1,000 1,400 1,750 2,250 2,750 3,500 $314.40 440.16 550.20 707.40 864.60 1,100.40 $1,314.40 1,840.16 2,300.20 2,957.40 3,614.60 4,600.40 10. Present administration of fund operates inequitably: This, how- ever, does not mean that each and every member of the force actually receives benefits amounting to 31.44% of his aggregate salary. It is one of the most unsatisfactory features of the plan that, while some of the members get only a small proportion of the pension benefits ,or none at all, losing in addition their 2% contributions, others receive their full share and not infre- quently draw more in pensions than in salaries. 19 11. Service pensions only 23% of whole. Of the total pension pay- ments to the present pensioners and to the present active force, 23% will be paid for service pensions, 26% to widows, children, and dependent parents, and 51% to disability pensioners as follows : Expenditures for service pensions $34,904,611 = 23% Expenditures for pensions to widows, children and dependent parents 38,072,080 =26% Expenditures for disability pensions 76,026,920 =51% Total pension payments to those now on rolls. . . $149,003,611 = 100% 12. Obligation of officials to face the situation squarely: Having in mind the welfare purpose of the fund and the obligations which the city has undertaken, it is obvious that there are a number of important questions which executive officers, as well as the board of estimate and apportionment and other legislative offi- cers, must consider. These questions relate to three subjects, viz.: a. Laws creating and controlling the operation of the police pension fund. b. Use of official discretion in its administration. c. Plan adopted to finance its requirements. To none of these subjects has proper consideration been given. In fact, the present aldermanic inquiry is the first attempt to face the situation squarely. As the date on which this report must be submitted makes it impossible to formulate constructive recommendations, these have been reserved for later presentation. CHAPTER II History op the Fund The adoption of plans for pensioning superannuated employees in pub- lic as well as private service dates back more than a century. This is one of the products of the new social philosophy. It has since become a subject of increasing social concern. In foreign countries, where the executive branch of government has assumed responsibility for leadership and where reliance has been placed in a more expert personnel of administration, the principle of retirement, embodied in some sort of a provision for old age, has been quite general in its application. Here we have been guided by the doctrine of "laisser faire. " We have not taken the duties and responsibilities of government seriously. Official position has been a reward of partisanship. Anyone who had the cunning to get a "job" was thought to be competent to perform public service. With lack of executive leadership, and lack of appreciation of the services rendered by those in subordinate administrative positions, the civil service has been both the mark and the victim of legislative jealousy of executive power. In addition, the fact that our enormous war pen- sions have been used as a bid for party favor has stood in the way of at- tempts to gain support for retirement allowances to civil servants. The need for pensioning municipal employees has been recognized in few cities except as applied to school teachers, firemen, and policemen. Ef- forts to introduce retirement schemes for the benefit of other employees have been spasmodic and with few exceptions to little purpose. But with the more recent demand for efficiency, both private and public corporations have come to consider seriously the welfare of the employee, and growing out of such consideration there has been more frequent and more adequate provision made for his old age. The recent demand for pensions and group compensation for disability, including old age, has been a result of the popular awakening that has come with the realization that it is only through government enterprise that individual welfare can be adequately safeguarded. With this conclusion accepted as a premise for political thinking, the civil servant has come to be regarded as quite as important a factor in the community and national life as the soldier. A recently published survey of pension funds for municipal employees in the United States 1 gives an outline of 81 policemen's funds in cities having 25,000 inhabitants or more. An examination of the data presented in this publication indicates that the majority of these funds have been erected and conducted on an unscientific and improper basis. Because of the short period they have been in operation and in the absence of actuarial estimates, their many financial and other serious defects have not become apparent. The New York police pension fund is the oldest, having been estab- lished 56 years ; it has had a long experience which, when analyzed, should 1 Pension funds for municipal employees and railroad pension systems in the United States. March 14, 1910. Published as Senate Document No. 427, 61st Congress, 2d Session. 21 22 prove of great value to all similar funds. Since at the time of the publi- cation of the results of the survey referred to no complete study had been made of this or of any of the other funds, it is thought that this report and the one recently made on the New York City teachers' pension fund x will have a special significance. Origin of the New York Police Pension Fund The origin of the present police pension fund dates as far back as 1857, when the ''Police Life and Health Insurance Fund" was established. The original insurance features providing for the relief of members in- jured in the performance of duty and of those dependent upon them for their support, in case such injury resulted in death, were soon changed to a pension plan. The first pensions in amounts not exceeding $150 per annum were granted to disabled and superannuated members of the force, and to widows and children of policemen killed in the performance of duty. Gradually the conditions for retirement were elaborated and ex- tended to include new classes of employees and their dependents. The rates were increased from time to time until at present the maximum pen- sion to a member of the force is $1750, and to a widow $600 per annum. The sources of the fund, limited in the beginning to gifts and rewards on account of extraordinary services of members of the police force and to proceeds of sales of lost or stolen property, were gradually increased by the diversion to the fund of public moneys. Brief Statement Showing Changes in Law The following historical review of the laws relating to the police pen- sion fund is a condensed statement from a report prepared by Mr. Henry W. Hardon and published by the pension committee of the Citizens' Union of the City of New York (January, 1911) : Laws of 1857, Chap. 569. The legislature created the Metro- politan Police District under State control, consisting of New York, Kings, Richmond, and Westchester Counties. It established the "Police Life and Health Insurance Fund" to consist of "all re- wards, fees, gifts and emoluments . . . paid and given for ac- count of extraordinary services of any member of the police force, and all moneys arising from the sale of unclaimed goods" (Sec. 24). It provided for the payment out of this fund, upon the ap- proval of the police board, of the "necessary expenses" of any member of the force occasioned by bodily injury sustained in the course of duty, and for the payment, with like approval, of $1,000, if the injury caused disability which was likely to be permanent; or of $2,000 to any person "absolutely interested pecuniarily in the continuance of his life" if the injury resulted in death. Laws of 1860, Chap. 259. The "Police Life and Health In- surance Fund" became the "Poliee Life Insurance Fund," to which also fines imposed on the members of the force and the proceeds of suits for penalties under the act were added. It authorized the Police Board to pay pensions "in their discretion" (1) to the mem- bers of the force in case of (a) disability or (b) superannuation "^i Report upon the condition of the Public School Teachers' Retirement Fund, by Actuary Wm. A. Hutoheson, New York, October 1, 1913. 23 after ten years' service; and (2) to widows during widowhood or children under 16 years of members killed or dying of injuries sustained in the discharge of duty. No pension was to exceed $150. Laws of 1864, Chap. 403, Sec. 67. This act was like the act of 1860, except that it contained a further provision that all pensions were discretionary, might be terminated at discretion, and should not be ' ' chargeable as a matter of legal right ' ' against the fund. Laws of 1867, Chap. 806, Sec. 16. This act amended the act of 1864 by increasing the pensions to policemen disabled in the course of duty and to widows and children of policemen dying from in- juries sustained in the course of duty to a sum not exceeding $300. Laws of 1868, Chap. 535. This act amended the acts of 1864 and 1867 by providing for pensions only if the policeman was in- jured "by reason of the performance of duty and without fault on his part. ' ' It increased the rate for all pensions to a sum ' ' not ex- ceeding $300," and extended the age of pensionable children to 13 years. It retained the precautionary provisions of the act of 1864. Up to this time, therefore, the course of legislation had been such as to place from time to time new safeguards about the pension system, to prevent the granting of pensions except in meritorious cases, and to make it clear that the proposed pensioners had no vested rights. Laws of 1870, Chap. 137. The legislature passed an act "to re- organize the local government of the City of New York." It re- pealed the act of 1857, and created a city police department, to which were transferred all the members of the Metropolitan Police Department, who at the time of the passage of the act were assigned to duty in New York City at the salaries they were then receiving; it provided for the division of the former Metropolitan Police Life Insurance Fund, and the creation of the new "Police Life Insurance Fund" (Sec. 66), composed as before, to be administered by the city chamberlain as trustee. Laws of 1870, Chap. 383. This supplemental act continued (Sec. 19) the provisions of the act of 1867 for contributions to the fund by all members of the police force at the rate of 50 cents a month (Sec. 19), and conferred for the first time power to retire, for the good of the service, captains or sergeants on a pension not exceeding one-half their salary, and patrolmen on a pension not ex- ceeding $400 per annum (Sec. 19), without reference to physical condition or length of service. It omitted the precautionary provi- sions of the act of 1864. It thus became possible to appoint a man one day and retire him the next, and all appointments and probably all retirements were made as matters of favor. Laws of 1871, Chap. 126. This act repealed all the preceding pension acts, constituted the police commissioners trustees of the Police Life Insurance Fund, and provided for a contribution of one dollar a month from each member of the force. Pensions were 24 provided for policemen disabled or superannuated after ten years' service, and for widows and children at the rates of the act of 1868. The provisions of the act of 1870 for dismissals on pension for the good of the service at the rates provided in that act were retained and extended to surgeons and clerks. Thus the two systems of pensions were running together, pensions for persons disabled in the service and their widows and children at the old low rate, and pensions on retirement at discretion at the new high rate. Laws of 1873, Chap. 335, "to reorganize the local government of the City of New York," authorized the retirement, by unanimous vote of the full board, of officers, patrolmen, and surgeons "dis- abled in the actual performance of duty" at a pension not to exceed one-third the salary. The prior acts above mentioned were repealed (Sec. 119), excepting the provisions for pensions to widows and children, contained in the act of 1871. Laws of 1878, Chap. 389. The country had now recovered from the panic of 1873, and the long period of depression which followed. A boom was on. Prices and salaries were high. This act created the Police Pension Fund, consisting of the old Police Life Insurance Fund, composed as before, except that the contribu- tions were increased to three dollars a month (Sec. 3). It intro- duced two innovations: (1) it gave the members of the force the absolute right to retire after twenty years' service, and (2) it pro- vided that all pensions granted on retirement after twenty years' service "shall be for the natural life of the officer and shall not be revoked, repealed or diminished." The only important change of pension rates was the provision that in case of retirements for disability or after twenty years' service the rate should be from one-fourth to one-half the salary, no pension to exceed $1,000. At this time captains were getting $2,000 salary, inspectors $3,500, and the superintendent $7,500. Except in the case of twenty-year pen- sions the precautionary clauses of the act of 1864 were retained. Laws of 1882, Chap. 410, Consolidation Act. This act made no change, and merely restated the existing law. Laws of 1882, Chap. 330. This act, modifying the Consolida- tion Act, introduced for the first time a pension for superannuation without limit of service, increased the retiring pension after twenty years to not less than one-half the salary, authorized pensions to the superintendent and inspector of $1500 and $1200 respectively, authorized all previous pensions to be increased to the new scale (Sec. 6), for the first time continued the pension to policemen re- tired after twenty years' service to their widows and children, but not to exceed $50 (Sec. 7), and for the first time exempted pension moneys from seizure on execution (Sec. 10). Laws of 1885, Chap. 364. This act provided for large diver- sions of public moneys to the Pension Fund, increased pensions to inspectors and captains, and provided for continuation to widows or children of all pensions to policemen in the discretion of the com- missioner, but not to exceed $600. 25 Laws of 1887, Chap. 574; 1890, Chap. 531; 1892, Chap. 52; 1894, Chap. 536. These acts increased the pensions of all officers above the grade of patrolmen to sums exactly half the salary they were receiving at the time of retirement. The act of 1887 also in- creased the pensions of widows and children of pensioners to a sum not exceeding $600, leaving other widows and children at a sum not exceeding $300. Laws of 1888, Chap. 575. This act created for the first time the power to retire compulsorily without proof of incapacity, any mem- ber of the force who had become sixty years of age, on a pension of not less than one-half the salary. Civil "War veterans were excluded from this provision by Laws of 1892, Chap. 82, and Mexican War veterans by Laws of 1892, Chap. 178. These provisions are still in force. Laws of 1897, Chap. 378, Sees. 354-5, the New Charter. This left the preceding pension law substantially as it was. The im- portant changes were the imposition of the age limit of fifty-five years for voluntary retirement after twenty years ' service. "While the pension rates for officers above patrolmen, and for widows, and children remained as before, the rates for patrolmen retired after twenty years' service were increased from not less than one-fourth to not more than one-half the salary to a sum "not less than" one- half the salary, thus permitting a retirement at the whole salary, which for a roundsman was $1500, and for a four-year patrolman, $1400. Laws of 1899, Chap. 674. This act made the matrons part of the uniformed force, gave a salary of $1,000, and conferred the absolute right to retire after twenty years' service at a pension of not less than one-half the salary. Laws of 1901, Chap. 466, Amended Charter. This added the telegraph service, boiler inspectors, and surgeons to the police force, if they were not there before. No change was made in pension rates. Laws of 1907, Chap. 445. This act placed the dependent par- ents of a policeman killed in the course of duty, or of one who died as a result of injuries, on the pension roll at a rate not to exceed $600. The above indicated changes in the law affecting the pension rates of the fund are well illustrated by Table I (see appendix, page 110). Increasing Revenues Provided The gradual increases in the revenues provided for meeting the grow- ing obligations of the fund, which matured under laws extending enlarged benefits to policemen, are summarized below : 1860, Chap. 259, Sec. 66. Police Life Insurance Fund. 1860, Chap. 259, Sec. 66. Fines imposed on members. 1860, Chap. 259, Sec. 66. Gifts and rewards. 1860, Chap. 259, Sec. 66. Proceeds of suits for violations. 1860, Chap. 259, Sec. 66. Proceeds of lost or stolen property unclaimed. 26 1871, Chap. 126, Sec. 2. One dollar a month deductions for lost time. 1878, Chap. 389, Sec. 3. Three dollars a month deductions for lost time. 1882, Chap. 330. Not exceeding four dollars a month deductions. 1885, Chap. 364. Proceeds of sales of condemned property. 1885, Chap. 364. Deductions for absence. 1885, Chap. 364. Penalties ($50) for failure to report boiler inspections. 1885, Chap. 364. Twenty-five per cent of excise moneys not exceeding $125,000. 1885, Chap. 364. Proceeds of pistol permits ($2.50). 1885, Chap. 364. Masked ball licenses ($5). 1885, Chap. 364. All unexpended balances of appropriations. 1888, Chap. 552. Twenty-five per cent of excise moneys not exceeding $200,000. 1890, Chap. 532. Twenty-five per cent of excise moneys not exceeding $250,000. 1891, Chap. 351. $300,000 from excise moneys. 1892, Chap. 539. Any deficiency must be supplied by Board of Estimate. 1893, Chap. 338. One-half penalties recovered in New York County for viola- tions of agricultural law. 1893, Chap. 529. Two per cent of salaries. 1904, Chap. 626. $430,000 from excise moneys. The changes in salaries of the members of the police force are pre- sented in Table II (see appendix, page 112). Increase in Demands for Pension Payments During the 56 years of the existence of the fund, its obligations have grown in a manner wholly unexpected. During this time its income has also increased by the application of new municipal revenues ; by deductions from payrolls; and by the utilization of lapsed appropriations. With these increases the fund was able to meet its obligations until 1904, when direct appropriation by the city from the tax budget was resorted to. The annual pension payments, which amounted in 1858 to $30, gradually in- creased to $2,094,866.58 in 1912. The annual revenues increased from $423.10 in 1857 to $961,194.82 in 1912. Table III (see appendix, page 114) furnishes the detail of this growth, and Chart I presents graphically the relation of annual revenues to expenditures. On Chart I, the solid or " pension" line indicates the annual amounts expended for pensions, and the dotted or " revenue" line the annual revenues of the fund received from various sources as provided by law. An additional or "deficit" line, drawn by means of dashes and circles, shows the amounts supplied out of the general tax levy which covered the annual deficiencies of the fund since 1904. This chart is interesting and significant from two standpoints. It points out the fact that the fund has failed to be self-supporting, and that the annual pension payments have recently increased at a very rapid rate. The actuarial report shows (see also Chart V, page 57) that under indicated assumptions this rapid increase will continue about 35 years when the demands will approximate the normal. Inability op Fund to Meet Obligations without Resort to Taxation The amounts made available for the payment of pensions by multiply- ing sources of revenue, other than direct taxation, finally became inade- quate, as is indicated in Chart I (page 27) by means of the dotted line. A comparison of this with the, solid or "pension" line shows the discrep- ancy between revenues and matured claims. That is, even with its in- creased revenues, about 1880 the matured obligations became so large that the reserve was threatened with exhaustion, and but for further aid the fund would be no longer on a self-supporting basis. 27 Beginning of Direct Taxation The excess of revenues over pension payments, accumulated and in- vested, during the first 15 years of the existence of the fund (1857-1881) was consumed in meeting the annual deficiencies incurred during the suc- ceeding seven years (1882-1888). Its reserve all gone, the fund during the following seven years (1889-1895) lived only by a hand-to-mouth exist- ence, with no certainty that it would be able to meet demands. CHART I^SHOW/NG THE ANNUAL PENSION PAYMENTS AND REVENUES OP THE POL ICE PENSION EUND EROM 1857 to 19/2 YFARS '*fo itts i>7o it is is so isss /S9o iaas is 00 I90S It W Yf/WS AMOUNT OOLL/IRS 2.000,000 - If 00.000 - I.SOO.000 - 1*00.000 - '.2OO.000 - 000.000 - 900.000 - 1 1 1 1 1 1 1 1 f/MOUM T DOLLARS 1 ^LGCND^ SIWU/K PENSION P/IYMENTS I I mo othep miscellaneous sources ) /jhnc/al orriciNcics or the ruNO ) COYf/teO BY DIRECT Af>P/>OPfH/ITI0NS [ .__ UNO THE ISSUE Of SPEC IX L PE1ENUE BONOS) f / t / / (/ 1 \ \ - '- j y / ' 1 ' 4-00000 2O0.O0O J 4-00.000 200,000 I : ' ' 1 I i r r YC/)f?S to iets isto it TS IS to IS ts II 90 It'tS 191 jo isos i9io YCATRS In 1885, authority was given to use the unexpended balances of ap- propriations for "salaries of the uniformed force." This proving inade- quate, other revenues were set aside. The laws of 1888, 1890, and 1891 provided for the use of certain excise moneys, and since 1893, 2% has been deducted from the salary roll for the benefit of the fund. But these were not enough to keep pace with the ever-growing obligations. The diversion of miscellaneous revenues had been in the nature of appropriations. The city thereafter definitely adopted the policy of making good deficiencies by taxation. This conclusion was reached, qualifiedly at first, in authorizing the use of the unexpended balances. But the practice proved to be vicious, as it put a premium on "padding" the estimates. In 1896 an "unexpended balance of appropriation" amounting to $375,492.77 became available, and 28 the total receipts increased to $1,034,058.78 (see upward jump in "reve- nue" line on Chart I). This enabled the fund, to put by and invest $331,- 187.04 in bonds for future emergencies. The emergency was not long de- layed. In 1897 the excess of revenues over payments was small, but the increase in demands for years following was rapid. Effect of Consolidation In 1898, due to the "Greater City" consolidation, the fund took over the pension funds of the department of public parks of the boroughs of Manhattan and the Bronx and of the police departments of the county of Richmond and the borough of Brooklyn. Of these funds only the two first mentioned turned over a small reserve ($83,002.07 in all), while the Brook- lyn fund showed a deficiency of $8,335.40. The pensioners taken over with these funds were, however, large in number, and the resulting increase in liability of the new pension fund was by no means counterbalanced by the small increase in income derived from the capital turned in by the old funds, and from the 2% salary contributions of the increased active force. Direct Taxes Finally Accepted as Principal Source of Revenue As has been said, the miscellaneous revenues as provided by law soon became entirely inadequate to meet the obligations, and since 1901 have not approximated the amount required to pay pensions. In 1902 the city got under the load. In 1903, 1904, and 1905 the fund applied the invested surplus of 1896 toward meeting annual deficiencies, and since 1904 these have been estimated and covered each year by direct appropriations from the general tax levy. These straight contributions by the taxpayers in- creased each year in amount. As shown in Table VI, page 117, and Chart II, page 32, they constituted the following percentages of the total fund receipts during the years indicated: 1904 16.0% 1908 24.2% 1905 15.7% 1909 25.8% 1906 27.5% 1910 36.0% 1907 26.9% 1911 45.4% 1912 54.1% Causes of Increase in Pension Payments Increase in Force The most important contributing cause for the rapid rise of the ' ' pen- sion" payment line is the increase in the active force during the 56 years under observation. The comparative strength of the pensionable, or uni- formed, police force at the close of the years stated was as follows: 1858 1,430 1898 l 7,457 1863 1,856 1901 7,510 1880 2,519 1902 7,673 1885 2,898 1903 8,175 1887 3,232 1904 8,272 1890 3,525 1905 8,859 1892 3,731 1906 8,873 1893 3,842 1907 9,461 1894 3,859 1908 10,012 1895 3,825 1909 10,162 1896 4,609 1910 10,177 1897 5,002 1911 10,207 1912 10,371 1 Consolidation. 29 Maturity of Obligations op Earlier Years Another chief cause of rapid increase in pension payments in recent years is the fact that relatively few of the early pension obligations ma- tured until many years after they were incurred. In comparing the growth of the pensionable force with the increase in pension payments, it must be kept in mind that there is no direct or immediate relation between these two elements. That is to say, that a present increase in the force will have no effect on the amount of the present pension roll, and will only be instrumental in increasing the annual pension payments at some future period when the new entrants will be pensioned. Since the pension plan was begun only 56 years ago, relatively few obligations matured prior to 1882. Then was the beginning of the rapid increase, which will continue during a period of approximately fifty years the first thirty-five years' increase being largely due to the retirement of men in the service prior to 1882, the increases of the next 15 years being largely due to the retire- ment of men who entered subsequently. Both of these increases will be affected by the larger number of men on the force. Taking Over of Force on Consolidation The solid "pension" line on Chart I, for instance, shows a substantial upward jump in 1898. This is not due to the increase in the active force from 5,002 to 7,457 members by consolidation, but to the large number of matured obligations to pensioners taken over by the consolidated fund. The effect of the sudden growth in the numerical strength of the active force, however, influenced the upward rise of the "pension" line in later years when the additional force became gradually eligible for retirement. From what has been said it is evident that it is difficult to foresee the consequences in the annual pension payments of a present increase in force. This difficulty is augmented by the consideration of counteracting causes for decrease in the annual pension charge. Causes Counteracting Increases The two most important of these causes are the mortality of pen- sioners, and the revocation and reduction of pensions in the discretion of the administrators of the fund. The prospective effect of these causes on the annual pension expenditures is also difficult of exact prediction, be- cause of the absence of reliable mortality statistics of police pensioners and the impossibility of predicting the extent to which discretionary powers will be exercised by a future administration. Notwithstanding the difficul- ties of forecasting the effect of the counteracting causes just mentioned, they must be kept in mind when considering the amount of the demands for payments and the net increases which each year must be financed. Among the causes which make for increase are the increasing liberality of pension provisions including new classes of employees and their depend- ents, and increases in pension rates. Among the causes which make for decrease are the various restrictive provisions, such as the imposition of an age limit and extension of the term of service required as a condition for retirement, and the reduction of pension rates and various other provi- sions intended as safeguards of the fund. Causes of Conspicuous Fluctuations The operation of most of the causes discussed is relatively constant. In examining the "pension" line on Chart I (page 27), certain con- 30 spieuous fluctuations in the general upward rise are noticeable. These may be explained to a certain extent as caused by changes in pension pro- visions. The sudden upward tendency of the "pension" curve between 1867 and 1870, for instance, coincides with the general increase of pension rates from $150 to $300 in 1867 and 1868. The still more pronounced up- ward turn of the curve after 1870 is no doubt partially due to the legal provision permitting the retirement of members of the force ' ' for the good of the service ' ' without reference to physical condition or length of service. The period between 1873 and 1878 does not show a continuation of tho rapid increase of the preceding years, but, on the contrary, indicates in 1875, 1876, and 1878 pronounced decreases. This was doubtless due to the repeal in 1873 of the provisions for the retirement "for the good of the service " ; to the general reduction in pension rates ; and to the extension of powers to the police board to revoke and reduce all pensions. These causes had the effect of checking the growth of the pension roll, and de- creasing the amount of annual payments required. During the next period of 19 years (1878-1897) the "pension" curve does not indicate any marked fluctuations, but rises almost evenly from $67,401.78 in 1878 to $686,640.75 in 1897. This is largely explained by changes in rates, re- ductions in service requirements, the making of pensions irrevocable, and the continuation of a policeman's pension to his widow or children (Table I, page 110). These were the reasons which, in addition to the current influence of previous increases in the active force, explain the marked and continuing rise of the "pension" curve. After. 1897 the sudden jump of the curve of payments in 1898, as previously explained, was the result of the increase in the number on the pension roll by the transfer of pensioners of Brooklyn and the other new areas as charges against the pension fund of the Greater City of New York after con- solidation. During this year, 1898, the fund also expended more than $20,000 in the payment of over-due pensions to pensioners of the three funds absorbed by the present fund. This accounts for the slightly smaller payment in 1899. If this retroactive expenditure were subtracted from the total pension payments of 1898 the resulting amount, represent- ing the true annual disbursement for current pensions, would register on the chart below the point indicated and the next year would show an in- crease over the pension payments in 1898. The three years, 1898, 1899, and 1900 of the administration of the fund by the Greater New York police boards are noticeable on the chart by the very slight increase of the "pen- sion" curve. This is accounted for by the fact that it was in the previous year (1897) that a law was passed imposing the age limit of 55 years for voluntary retirement after 25 years' service. The next 12 years, from 1901 to 1912, show the cumulative and progressive effect of measures passed in prior years. There is a pronounced upward rise of the pension curve, the annual pension expenditures increasing from $909,173.65 in 1901 to $2,094,866.58 in 1912. CHAPTER III The Last Twelve Years of Pension Fund Experience The steady increases in accrued liabilities of the fund to meet which no reserve had been provided during the many years when the pension force was on the active service list now became felt in increasing propor- tion. From year to year prospective annuitants became more numerous. The maturing claims were doubly accentuated by age and increasing disa- bility on the one hand, and the absence of adequate legal provisions for meeting increasing liabilities on the other. Increase in Percentage op Number Retiring For the purpose of indicating the growth of the pension roll with re- gard to the number of pensions granted during the 56 years of the experi- ence of the fund and the number of pensions since terminated or remain- ing active, Table IV (see appendix, page 115) has been compiled from the card records of the pension bureau of the police department. It is interesting to note that of the total 6,683 pensions granted, 2,759, or 41.3%, were placed on the roll during the first 44 years of the existence of the fund, while 3,924 pensioners, or 58.7% were retired by single com- missioners during the last 12 years. In February, 1913, 3,901 pensioners, or 58.4% of the total, were still drawing their pensions, and of these 873, or 22.4%, were on the pension roll from 12 to 56 years having been re- tired prior to the administration of the police department by single com- missioners. Detailed Statistics op the Growth op the Fund, 1901-1912 The administration of the police department by single commissioners from 1901 to 1912, as previously pointed out, was marked by rapid increase in the annual pension payments as well as by the steadily increasing in- ability of the fund to meet its maturing pension obligations from revenue other than tax appropriations. This resulted in demands upon the general treasury of the city to cover the annual deficiencies of the fund by means of direct appropriations or the issue of special revenue bonds. It is there- fore deemed desirable to throw more light on this particular period. For this purpose Table V (page 116), setting forth a detailed statement of the receipts of the fund, and Table VI (page 117), classifying the same in five groups, have been prepared and are presented in the appendix. These tables showing the various items of receipts each year include not only the regular revenues which ordinarily are turned over to the fund, but also the amounts used in order to meet the annual deficiencies which were derived either from the sale of bonds belonging to the fund, or from special or extraordinary revenues such as direct appropriations and the sale of special revenue bonds. Since during the last 12 years the total receipts, as specified above, were used in paying pensions with only small cash balances or deficits carried over from year to year, the presentation of the total receipts from all sources facilitates the determination of the 31 32 relative importance of each source, and its adequacy or inadequacy in meeting the annual pension payments of the fund. Chart II graphically illustrates the relative importance of the five groups of receipts during the years 1901-1912. Decreasing Importance of Contributions op Force An important point, illustrated by this chart, is that the contribution of 2% from the salaries of the active force, although steadily increasing in amount, is nevertheless of less and less importance relatively. In 1901 these salary deductions provided 25% of the total payments of the year. From this time on they have yielded each year a smaller percentage until in 1912 the amount derived from this source was only 13.5% of the amount expended for pensions. It is also to be noted that the miscellaneous reve- nues, while fluctuating in amount each year, do not show a tendency to increase in the future. As a means of meeting the annual matured liabili- ties of the fund, they are becoming less and less adequate ; furnishing 75% of the total receipts in 1901 and in 1912 only 32.4%. Since 1903 it has become necessary to provide increasingly larger amounts from other sources. These were furnished during 1903, 1904, and 1905 by the sale of bonds forming the reserve capital of the fund ; but the amounts thus made available formed only 9.9%, 11.8%, and 11.2% of the total receipts during 33 the years mentioned ; so small as compared with the accrued liabilities as to be negligible. Increasing Importance op Appropriations from Tax Budget Unless an adequate reserve and adequate annual contributions were provided, there was only one way out, namely, to meet currently matur- ing obligations from taxes. In 1904 the city, by virtue of a law passed in 1892, had to appropriate $197,000, or 16% of the total receipts, to meet the annual deficiency of that year. This extraordinary source of revenue became of increasing importance each year as an item of receipts, until in 1912 it constituted over one-half, $1,135,188.22, or 54.1%, of the total amount made available for the payment of pensions. The proportion of the contributions from taxes must continue to increase rapidly during the next thirty-five years when the city in one form or another will contribute over 90% of the cash for meeting current payments. Increase in Percentage op Pensions to Payrolls The growth of the pension fund during the period 1901 to 1912 as com- pared with the growth of the active force is indicated by Table VII (see appendix, page 118) . As previously mentioned, there is no direct or imme- diate relation between one and the other. The comparison, however, serves as a basis for a proper appreciation of the proportions of the growth just mentioned. In 1901, for every $100 expended for the services of the uni- formed force, $8.60 was paid for pensions representing a consideration for services rendered at some period in the past. Of this sum $2 was contributed by the active force, while the balance, $6.60, was furnished by the city in the form of miscellaneous revenues. The relative amount required for the pay- ment of pensions increased as time went on, and in 1912 for every $100 paid in salaries to policemen, $14.50 was required for the payment of pen- sions, the present force contributing $2 as before, or 13.8%, while the city was called upon to provide the remaining $12.50, or 86.2% of the amount expended in pensions. A graphic illustration of the comparative annual increases in the active force and number of pensioners is presented by means of Chart III (page 34). This chart shows that the total number of pensioners increases at a more rapid rate than the number of members of the force. During the entire period of 12 years, 1901-1912, the force has increased 38.1%, while the number of pensioners has increased 93.1%. As might be expected, the increase in the number of pensioners was greater in the case of retired members of the force than in the case of widows. Classification of Pensioners In February, 1913, there were 3,901 pensioners. This number included 2,484 retired members of the force, 1,338 widows, 70 families of children, and 9 dependent parents. The rates of pensions drawn by these four classes of pensioners are set forth in Tables VIII and IX (see appendix, page 119). Distribution of Benefits Table VIII indicates that 1,400 former policemen, or 56.4% of the total 2,484 pensioners, are drawing between $700 and $1,000 per annum. This group is chiefly composed of patrolmen and sergeants retired on half pay, that is, $700 or $875 per annum after 20 years of service. Pen- 34 sioners receiving less than $700 are 695 in number and form 27.9% of the total. The majority of these pensioners were retired for disa- bility after less than 20 years' service, in which case the law limits the amount of pension to less than half the salary received on the date of retirement. Another group of pensioners, numbering 384 and drawing be- CHART HI- SHOWING THE COMP/tR/ITIVE GROWTH OF THE ACTIVE FORCE AND THE VARIOUS CLASSES OF PENSIONERS FROM 190/ to 1912 YEARS 1901 1901 /apS zap* '90S /tot 1907 /90t /9p0 iaiO 1911 /> YRRS NUMBCR NUMBER - IOJOOO aooo a.ooo TOOO tjOOO aooo LECtMD ror/ti OUT numb m/mac* or pritsioc*s r/O or [T/*COMlMa[RS _-.. _ m/MBi ma /> of /vmiiOMfo cmoaeii ,000 3-000 - tooo- 3.0C0 _.... - - - ----- ycars /t 01 19 01 / 03 /9 O* /J or /aot /aor laoa /aoa ta/o mi n * Ye/i/fs tween $1,000 and $2,000 annually, comprises 15.4% of the total pensioners, and is composed of the higher ranking police officers lieutenants, captains, and surgeons, who are retired on half pay at $1,125, $1,375, and $1,750 per annum, respectively. Finally, there are four former inspectors who were retired under an old law on half pay, or $2,500 per annum, and one former chief of police drawing $3,000 annually. Table IX showing the pensions received by widows, children, and dependent parents indicates that 1,026, or 72% of their total number (1,417), receive between $300 and $400 annually; 371, or 26.2% draw less than $300 ; and 20, or 1.4% are pensioned at a rate exceeding $400. One of the last group is a widow who draws $1,000 per annum as a result of a speeial legislative act. CHAPTER IV The Fund and the Machinery for Its Administration The provisions of the law under which the police pension fund is operated at the present time have been in force without any material changes since 1898. They are set forth in sections 351 to 357 of the pres- ent charter. Sections 351, 352, and 353 are devoted to the definition of the sources of the fund and its administration. Sources of Revenue The revenues to the fund by sources are as follows: 1. Revenues arising from the activities of the police department : a. Fees for steam boiler inspection. b. Fees for masked ball permits. c. Fees for pistol permits. d. Property clerk's returns. 2. Deductions from payrolls of the uniformed force : e. Disciplinary deductions for fines. f. Disciplinary deductions for lost time. g. Contributions by policemen two per cent, deductions from all salaries. 3. Revenues from other departments and outside sources : ' h. Interest on bank deposits. i. Rewards and donations. j. From law department, violations of the coal law. k. From state department of agriculture, miscellaneous. 4. From taxation: 1. Excise moneys. m. Unexpended balances of appropriations. n. Budget appropriations for police pension fund. Trustee of the Fund The police commissioner is trustee and treasurer of the fund, and has complete control over its administration. Quoting the law: "Said trustee may, and he is authorized and empowered, from time to time, to establish such rules and regulations for the disposition, investment, preservation, and administration of the police pen- sion fund as he may deem best." The commissioner is under a $100,000 bond to the comptroller of the City of New York conditioned upon the faithful discharge of his duties, while the bookkeeper of the police department is under a $10,000 bond to the commissioner, and is responsible for the receipts and disbursements of the fund. The law requires that an annual report be made showing the condition of the fund, items of receipt, and items of disbursements; and 35 36 on the first day of March each year a committee is appointed by the mayor to examine the condition and audit the accounts of the fund. This com- mittee is composed of two members of the uniformed force and one retired member of the police department. Exercise op Discretion in Granting Pensions Sections 354 to 357 of the charter indicate, in a general way, the con- ditions under which pensions are granted, charge the police commissioner with the interpretation of the law, and confer upon him extensive discre- tionary powers. He is ''authorized and empowered to make and adopt all such rules, orders and regulations as are or may be necessary to carry out and enforce the provisions of this act as to pensions." The pensions granted under these sections of the charter apply only to the members of the uniformed force, the composition of which for the years 1901-1912 is set forth in Table X (see appendix, page 170). The classes of pensions concerning which discretion is exercised may be summarized as follows: 1. Regular or service pensions. 2. Disability or invalid pensions. 3. Pensions to widows, children, and dependent parents. Granting Regular or Service Pensions The provisions specifying regular or service pensions make the rate mandatory at not less than one-half final salary, and exempt such pensions from revocation and amendment. Pensions are granted as a matter of right: 1. To all members who have served 25 years on the force and are 55 years old when application is made in writing. 2. To all veterans of the Civil "War who have served 20 years on the force without regard to age, or who have attained the age of 60 without regard to length of service. In addition, the police commissioner may in his discretion place on the pension roll: 1. Members of the force of the age of 55 or over who apply for a pension after 20 years of service. 2. All members of the force, not veterans of the Civil or Mexican wars, who have attained the age of 60. Granting Disability or Invalid Pensions These pensions are granted to members of the force who are perma- nently disabled so as to be unfit for police duty. In cases where a member has served less than 20 years, the pensions are limited to not less than one- fourth or more than one-half of the final salary, and are granted, revoked, or amended in the discretion of the police commissioner. Pensions granted after 20 years' service, however, may not be less than one-half of the final salary, and once granted are exempt from revocation and amendment. The charter provides for the following groups of disability benefits: 1. Pension of not less than one-fourth and not more than one-half of final salary to all members of any age or length of service who are disabled in the performance of duty. 37 2. Pension of not less than one-fourth and not more than one-half of final salary to all members of any age who have served more than 10 and less than 25 years, and who, through no miscon- duct of their own, are disabled so as to be unfit for police duty. 3. Pension of not less than one-half of final salary to members of any age who, after 20 years of service, are disabled so as to be unfit for police duty. It should be noted that the last mentioned provision restricting to not less than one-half of the final salary the minimum of a disability pension after 20 years' service has the effect of also limiting to a period of service of less than 20 years the application of pension rates of less than one- half of salary in cases of benefits mentioned under "1" and "2." In all in- stances when retirements are made on the ground of disability, the charter provides for an examination of the member by '.'so many of the police sur- geons as the police board may require," and the filing in the department of a certificate setting forth the cause, nature, and extent of the disability. Granting Pensions to Widows, Children, and Dependent Parents The law leaves the granting, revocation, and amendment of these pen- sions entirely to the 'discretion of the police commissioner, and limits the total benefits to be allowed to the dependents of one member to a sum not exceeding $600 per annum. When, however, a pension must be provided from the fund for only the widow of a member who died in the service while not in actual performance of duty or while drawing a disability benefit after less than 20 years' service, such pension is limited to an amount not to exceed $300 per annum. Pensions to widows terminate upon remarriage while the benefits paid to children cease upon their marriage, or upon their reaching the age of 18. The conditions under which the pensions to dependents are granted are as follows: 1. To widows and children: a. Of all members of the active force, without reference to age or length of service, who are killed in the actual per- formance of duty. b. Of members of any age, who have served on the force not less than ten years, whose death is not caused by the actual performance of duty. c. Of all deceased pensioners. 2. To the dependent parent or parents of all members of the active force who are killed in the actual performance of duty. In order to facilitate the study of the charter provisions relating to pensions, the same are presented in chart form (see Chart IV, page 38). Organization Provided for Administration The provisions of the charter outlined above do not specify the de- tails for carrying the pension law into effect. This is left to the discretion 38 2- g.s a O o *3 o 5* o a SI 3 2 c - h * o < h W U o ! j3 i ja i "S $! & a g> a >> cj OhflJ cj cj o 4) a _ a " P 33 a a a 5 o o 5 o o 00 p, S = ft S Q Q o$ 9 1 1 > > a ! O 1 feid si OJ 03 3 C a a.2 jd ] 5 fc 4 gesgs Q Q a 5 o o 2 S g ***** 88888 n < P4 00 00 OJ V T3 13 a a w 3 3 .3 S fl a * T3 T3 ft S 33 B 2 a cj a o o J .b .fa m OT3 OT3 ft-0.-3T3.73 >> >> a a a S g < Si a <* o M 03 o o a 1 a K 03 J3 e3 3 1 TS 3 a tj OJ o 33 o a S a & 1 3 o s f O I & $ "5 a o O -O-J? oj 3 33 3t3 -a w 5 * a oj T *? et * J3 ( o CO CO 1 5.2.o i-H > 00 00 03 B o T3 T3 a a 3 a S-s T3 T3 flfl 1 3 ft .2 a . tl . 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J] & & =8 2 t - CM T 0) -^ . 1 C0 ^ O 05 CO ill S- 3 a ^ oS a co * f,a 5o sJ %\ SI a ?, a S o o ^J o.S .2 ft oj .2 & oj s Q h b O o OJ OJ B til 03 03 E d 03 O 03 O d| H n o a 2 Q Q * * * * HH HH CCCO too 00 00 OJ OJ T3 T3 a a 3 3 a fl T3 43 3 la e . t- . . ft | OT3 B3 T333 S-a TT T5 1J, Id 03 03 U5 to Jfl ,c 03 03 OJ OJ Q Q m ii 3- inim year ary. inim year ary. a a 00 k >. lO O lO to 10 0J Sia a < o CO fl S a >.2 03 - OJ "ft -a a fa a 333 o . > "oSM ^o 3.S 3^ a o s"E a ^ git 03 fl u ^ M 03 &.S 3 3 CO CO >o >C o 'O CO co US to 5a -= i ^ c 5a N ? o '5 o V3 5-1 ^a b b g a si fl u a o u O.S B o f J J O O u 2 0< - . a a J s. j, 2 ft oj Q Q Q a >- o o o OJ B a of B .a fcfl d 3 E 3 03 O d ft S 5 03 af v sz -= P ^3 P > 5 03 P 03 O o u P Q q Q * * * * * * OO oo 8 a 88 OO OO 3 to to to to to to to to oo -/ / 00 OJ u 01 OJ T3 - - T3 a 3 3 fl 3 3 3 3 b fl 3 3 a U 1) 3 3 T3 ~ TJ T3 j 2 ^3 ~ ^3 J3 CJ s & o ft o & O tt' OT3 OT3 OT3 OT3 T333 13 33 T333 -3 33 a $6 1 o If -3 S-a 1 1 1 1 1 5 ^HCM A C-l him 03 rt H 1 t^ a O a a ! A X ^5 J3 D 03 a i OS OJ I 1 OJ Q Q S Q a 7 3! 3! "3 a OB 7J cr: 3^> s 3 >. g 3 >> lib .a^s.s 1 b-- >.03.S oj C-a oj C >> 03.3 >i 03 M a a a a t >, ^ ^ R < ! < S o b O L o i 11 3 p C 3 S n fl h 3 < >>a O o 5 IN CM N Cj ti OJ ' >. . cr rr a 3 2 ^ OJ OJ s ? T3 > V a OJ '-3 - O 3 ftE 3 c o B o > 85 m o lO lO i<3 ui uj >o CO cc eg co t>. 00 a o 39 of the police commissioner, who is authorized to make and adopt such rules and regulations as he may deem best. Upon investigation at the police de- partment, however, those in charge of the inquiry were told that no rules or regulations of any kind touching on pension administration had ever been issued. It was also stated that no separate organization nor office had ever been set aside for the exclusive or adequate consideration of pension matters. Duties of Officers Connected with Fund The duties in connection with the various phases of administration of the fund are distributed among a number of officials of the department who are busy with other routine matters, and who are not required to cooperate with each other. Only a fraction of their time could be devoted to pension work. The papers and records relating to pensions are not as- sembled in a central pension bureau, but as has been said are scattered in the various offices at police headquarters to suit the convenience of those by whom the work is to be done. The officials of the department who are connected with pension administration are as follows: 1. The bookkeeper of the department, who has charge of the receipts and disbursements of the funds. 2. One patrolman, who acts as a pension investigator. 3. The police surgeons, who make a physical examination of members of the force retiring for disability. 4. A pension board, consisting of six officials of the department, who consider applications for pensions and submit recommendations to the police commissioner. Duties Performed by the Bookkeeper of the Department The bookkeeper, who has under him a force of about 18 clerks, is in charge of all financial transactions of the police department. His office, erroneously called the "pension bureau," disburses at the present time over $16,000,000 annually, of which only about $2,500,000 is paid out in pensions. His duties in connection with the pension fund, therefore, are considered of secondary importance, and neither he nor any one of the three clerks who are occasionally engaged in the preparation of pension payrolls devote their entire time to pension work. This work is regarded merely as a matter of safe keeping of moneys that come into the fund, of proper accounting for receipts and disbursements, and of handling an ordi- nary payroll as far as pension payments are considered. Neither the pen- sion applications nor other pension papers are referred to the bookkeeper's office. As a basis for the payment of pensions, the special orders of the department dealing with the pensioning of members of the force and their dependents are used. Entries are made from these orders into two kinds of records providing information for each individual pensioner. The offi- cially discontinued book records, in which beneficiaries are entered in the chronological order of their retirement, continue to be used unofficially, and present one kind of individual record. The other kind is a card sys- tem, recently installed, in which each beneficiary is represented by a sep- arate card. These records require duplication of work, are incomplete with regard to retirements of earlier years, and are not kept up to date. Their 40 present use is to provide a basis for the preparation of the pension roll. The information contained is limited to such data as would apply to the immediate payment or discontinuance of pensions. The ages of pensioners, and other important data, which are essential in the construction of mor- tality and experience tables for the purpose of ascertaining the present and future obligations of the fund, are lacking. Since the pensions to widows terminate automatically upon their re- marriage, and the payment of further pensions would be illegal, the book- keeper requires from every widow an affidavit to the effect that she has not remarried before the monthly allowance is paid. The ages of children are noted on the pension records, and pension payments are stopped upon their reaching the age of 18. The duties of the bookkeeper in connection with the preservation and investment of the fund are reduced to a minimum because of the fact that since 1905 there has been nothing to preserve or to invest. The amounts derived from the various sources, as provided by law, are promptly paid out to the pensioners, and since at the present time these amounts are not sufficient to pay even one-half of the annual obligations, it becomes the duty of the bookkeeper to submit to the board of estimate and apportion- ment an estimate with the request for an appropriation to cover the ex- pected deficiencies. The lack of proper data for the determination of future obligations of the fund prevents the bookkeeper from submitting a reliable and intelligent estimate. In calculating future pension payments it is as- sumed that they will continue to increase at the same rate as in the past. The inadequacy of such a method is obvious. In 1911 and 1912 the amounts appropriated on the basis of submitted estimates proved inadequate before the close of the corresponding years, and additional funds had to be raised by the objectionable method of issuing special revenue bonds to provide for additional deficiencies in the sum of $150,000 in 1911 and of more than $250,000 in 1912 (see Table V, page 116). The annual report of the pension fund is also prepared in the book- keeper 's office, and presents merely a statement in detail of all receipts and disbursements of one year. It is issued in book form, and is also published in the City Record. The addresses of the pensioners inserted opposite their names are in many instances incorrect and obsolete, as was discovered dur- ing the present investigation when efforts were made to locate some of the beneficiaries living in New York and elsewhere. As a source of informa- tion of the progress of the fund, the annual report is of no value, because it does not present any comparative figures or tables to show increases or decreases in the annual receipts and disbursements. Duties of the Pension Investigator One patrolman, assigned to the office of the fourth deputy commis- sioner, is the entire investigatng force in connection with pensions. His duties primarily relate to making inquiries into the "financial" and "so- cial ' ' condition of women applicants for pensions and into applications for increases in pensions. Although under the present administration the financial condition of a widow is said not to be taken into account (the represented policy being to grant the maximum amount allowed by law whenever she is found to be eligible for a pension), the investigator in each and every case is required to report in detail the sources of income of the applicant. In addition, he examines the service record of the deceased 41 husband, with reference to any facts which bear on the eligibility of his widow to a pension, and presents the assembled information in the shape of a report which he submits to the pension board. When it is borne in mind that at the present time more than 300 widows' pensions and increases in pensions are granted each year, it is evi- dent that one pension investigator is unable to investigate all new applica- tions properly, and that pension decisions are delayed because of the lack of a proper investigating force. It has also been ascertained that there is no strict rule or adequate supervision to compel the consideration of appli- cations in the order of their receipt that the pension investigator is al- lowed to use his discretion. The danger of such a practice is obvious. It is important to note that the investigator's work is almost entirely limited to new applications, and that for the widow pensioners already on the pen- sion list (1,351 on December 31, 1912) no adequate provision is made for supervision. For this reason the illegality or irregularity of pensions granted by previous administrations would not be discovered except by chance or when an investigation is made of a case in connection with an application for an increase. Duties of Surgeons The retirements of members of the force on the ground of disability may be voluntary on their part or compulsory by order of the police commissioner. When the retirement is voluntary, the member makes an application to his district surgeon, who, if he finds him worthy of con- sideration, refers the matter to the chief surgeon. Both in the case of voluntary and compulsory retirement, the commissioner, through his deputy, selects three surgeons to serve as a board of survey for the physi- cal examination of the member. The findings of this board are presented in a certificate specifying the nature and extent of disability, and whether it was incurred in the performance of duty or through natural causes without misconduct on the part of the member. This certificate, accom- panied by an extract from the service record of the member, is sub- mitted to the pension board for consideration. Composition and Duties of Pension Board For the consideration of pension applications the present adminis- tration has established a pension board composed of various officials of the department. During the year 1912 the composition of the board was as follows: James E. Dillon, fourth deputy commissioner, chairman. William Kipp, chief clerk of the department. Donald Grant, inspector and head of the Captains' Benevolent As- sociation. Richard E. Enright, lieutenant and head of the Lieutenants' Benevolent Association. John T. Nilon, sergeant and head of the Sergeants' Benevolent Association. Peter McEntee, patrolman and head of the Patrolmen's Benevo- lent Association. 42 The chairman of the board, who is the representative of the police commissioner in pension matters, is not required to devote his entire time to pension administration. His work in this connection, as ex- pressed by him on the witness stand, is "one of the minor things" in his office. The duties of the other members are limited to the attendance at the board meetings which are held irregularly from one to four times a month. At the meetings of the board the applications and other papers of members are submitted for scrutiny, and applicants themselves are ques- tioned. In the case of widow pensioners, appearance before the board is not required, the consideration of applications being based on the report of the investigator. The powers of the board are limited to the submis- sion of recommendations to the police commissioner. The decision of the board recommending the action to be taken in each case and the amount of pension to be granted, is noted on a specially provided blank accom- panying the application. The police commissioner to whom these recom- mendations are submitted approves as a matter of course, since there is little else that he can do. The papers of the applicants bearing the recommendations of the board are turned over to a typist, who prepares from them the minutes of the board meeting which are later signed by the chairman. A copy of the minutes of the board meeting held on Aug- ust 20, 1912, is to be found in the appendix (see page 136). The pen- sion papers are finally returned to the filing bureau of the department where they are placed in the general files. CHAPTER V Handicaps to Good Administration Results op Defects in Present Laws The pension law as it stands to-day is a patchwork the result of an unsatisfactory and unscientifically constructed measure, originated 56 years ago. Amended and extended in a haphazard way from year to year, it now stands a maze of highly complicated provisions difficult for a newly appointed commissioner to comprehend, and on account of conflict- ing interpretation still more difficult to administer equitably. The provi- sions in force are set forth under sections 351 to 357 and section 366 of the present charter, a reading of which is necessary only to obtain an idea of their vagueness. For the purpose of showing the unsatisfactory results of the operation of official action under these circumstances a few cases, unique in the history of pension funds, are cited. Possibility op Drawing Salary and Pension at Same Time On September 7, 1870, one Thomas Mulvey was appointed a patrol- man in the old city of New York. On October 17, 1893, after having been in service 23 years, he retired with the rank of sergeant on a pension of $1,000. He then went to the town of New Utrecht, where he became a captain of police. Soon afterward New Utrecht was made part of Brook- lyn, and Mulvey automatically became a patrolman of the Brooklyn po- lice force. When Brooklyn was absorbed in the Greater City of New York, Mulvey once more became a member of the New York police force from which he had retired four years before. The pension of $1,000 per annum which had been paid to him while he served on the police force of New Utrecht and Brooklyn was continued, and Mulvey during the next 17 years received both a salary and a pension from the same de- partment. In 1898 and 1901 the department made efforts to stop the pension payments while Mulvey was in the active service. These efforts proved futile, however, as the pension was each time restored to him by the court. In the meantime Mulvey was promoted to the rank of detec- tive sergeant in February, 1901, which paid a salary of $2,000 a year; the salary and pension netting him an annual income of $3,000. This was increased to $3,250 when, in 1909, the salary of lieutenants who were formerly detective sergeants was raised from $2,000 to $2,250. In Janu- ary, 1913, Lieutenant Mulvey, who by that time was 63 years old, was compulsorily placed on the retirement list at half his salary, or $1,125 per annum, while his former pension of $1,000 was discontinued. Mul- vey, who saw no reason in law or logic why he should not draw two pen- sions at the same time, brought his case before the court, but the case was decided against him in April of the same year much notoriety being given to the matter in the press. Increases in Pensions after Being Placed on Roll A case which well illustrates the results of administration as applied to increases is that of Sergeant Edgar Davis. In 1874, after an inter- 43 44 rupted service aggregating about 17 years, Davis was retired on $500 per annum. He drew this pension for 11 years and 2% months, receiving a total of $5,605. In 1885, when the pensions of 13 retired sergeants were increased to a higher scale, Davis began to draw a pension of $800 a year, and in the next 8 years and 10y 2 months received $7,103 from the fund. In 1894 a law was passed x which amended existing retirement provi- sions and contained the following clause: "* * * and to each ser- geant and detective sergeant of police heretofore relieved and dismissed from said force and service and placed on the roll of the pension fund, as hereinabove provided, the sum of one thousand dollars per annum thereafter." This amendment raised the pensions of all sergeants, of whom there were 36, including Davis on the roll at that time, to $1,000 per year. In the next 18 years and 10 months (to March 25, 1913) Davis drew a total amount of $18,830. The absurdity of the case becomes evi- dent when it is considered that the retired sergeants whose pensions were increased to $1,000 per annum had never received a compensation of more than $1,600 when in active service. Under such conditions it was made comparatively easy for a retired officer to draw in the aggregate more money in pensions than in active pay. Pensions in Excess of Eegular Pay To summarize; in the above quoted case of Sergeant Davis, this po- lice officer, during his entire service of 17 years, could not have drawn more than $25,000, while his pensions during the next 38 years and 11 months aggregated as follows: 11 years 2J^ months at $500 per annum $5,605 8 years 10J/ months at 800 per annum 7,103 18 years 10J^ months at 1,000 per annum 18,830 Total $31,538 The total of $31,538 drawn in pensions up to March 25, 1913 repre- sents a probable excess over the sergeant's active pay to date of more than $6,000. To this amount must be added the future payments as the pensioner continues to draw his pension, which again at his death may be still further increased by the amount paid to his widow and children (at a reduced rate). Illustrations of the same kind are found in Table XI (see appendix, page 122) in which are tabulated the details of the retirement of ten police officers. This table shows that up to March 25, 1913, these ten officers had drawn a total of $321,363 in pensions. The first three mentioned ser- geants, Anderson, Blake, and Davis, had drawn more in pensions than in active pay. The large amounts drawn by the remaining seven officers are mainly due to the high pension rates (from $1,000 to $3,000 per annum) received by the officers. Since they are still on the pension roll, they may fall into the same category as the first three as time goes on. Confusion Due to Ambiguous Provisions The above enumerated individual instances, while not exhausting the available illustrations, serve to show the extraordinary possibilities of the application of the retirement law. The ambiguity of its provisions has L., 1894, Ch. 536, amending Sec. 307 of Consol. Act. 45 caused a considerable amount of litigation. In one instance a judge x in handing down a pension decision made the following statement with re- gard to the present pension law: "An unscientific and bungling statute cannot be construed and interpreted by the same strict scientific rules as a consistent and scientific statute." Inadequate Provisions for Administering the Fund The charter charges the police department with the interpretation and administration of this loosely drawn law which at the present time involves the payment of more than $2,000,000 per annum, and which in the future will rapidly increase this demand to two or three times this amount. The police department is organized to protect persons and property from violence, and should be expected to give its undivided attention to these duties. Under the circumstances the administration of the pension fund by the police officers can only result in neglect and con- fusion. But those who are in direct working relations with policemen are unfitted for such work. The administration of pension matters is an important function, and should not be laid upon officers who, if they at- tend to their main duties, must treat the administration of the fund as a side issue, not requiring any special attention. Such an ex officio relation is not conducive to efficient administration. Even though the fund is not used for questionable purposes, provisions of law are wrong when they impose a semi-judicial function on those who are interested in the results. The Head of the Department Not a Proper Trustee for the Fund The head of an operative department is not a proper trustee for a pension fund, especially when its administration admits of the exercise of official discretion. The wide scope of his departmental duties does not permit him to give more than the most casual attention to the pension administration. He must, therefore, delegate this important work to some subordinate. But there is the more potent reason, viz. : because the head of the department is responsible for operative results, and the temptation is ever present to utilize the pension fund for current administrative pur- poses. When the head of the department, as trustee, is given authority to decide when men shall be retired, he will in all probability elect to jeopardize the fund rather than assume responsibility for continuing a man in service who is persona non grata. Attempts to Cure Last-named Defect For the purpose of overcoming in part this last-named defect (lack of time for attention to details and official interestedness in results) , the pen- sion board was created by the present police commissioner to consider and recommend to him the amounts of pensions to be granted to retired mem- bers of the department and to widows and orphans. He has thereby thought to delegate his judicial functions. But the composition of this board of officers is also unfortunate. The pension board is interested in re- sults ; besides, they are also the heads of various private benevolent associa- M. of Reynolds v. Bingham, 126 App. Div. 289, 291 (1908). 46 tions of the department, whose members are interested parties. This member- ship points to the possibility that the recommendations may favor persons who are also members of the particular associations in which the officers are interested. The composition of the advisory pension board is defective in another particular, viz. : in making recommendations they are under no necessity or responsibility for considering the cost which is entailed through their recommendations. An Interested Advisory Board "When Fourth Deputy Commissioner Dillon was questioned on the witness stand with regard to the attitude of the pension board, of which he was president, his replies made it clear that the question of cost was never considered. The following questions by Mr. Buckner, chief coun- sel of the Curran Committee, and answers by Deputy Commissioner Dillon * are interesting in this respect : Q. You were not interested in the saving of money? A. I was not interested in the fund except just in the way as I have explained to you only there as a pension board. Q. What you call a merciful administration? A. "We were there as a pension board to. grant pensions where pensions were expected to be granted under the law. Q. I see. Well, you piled up more than any other adminis- tration ? A. Very pleased. I hope the next administration will con- tinue the good work. In the light of such an attitude toward the question of cost the re- cent large increases in the annual pension payments become more in- telligible. Since the pension board's recommendations to the commis- sioner are advisory only, and since the commissioner, as the officer re- sponsible for the condition of the fund, has no time intelligently to pass upon the merits or demerits of the recommendations submitted, he in- variably puts them into effect. Bearing on this point the answers made on the witness stand by Patrolman Healy, pension investigator, are sig- nificant 2 : Q. Did you use to see the recommendations of this board after the meeting was over? A. Yes, sir. Q. And do you know whether their recommendations were generally followed by the police commissioner? A. Usually. Q. Do you know any cases where they were not? A. I can't recall any case that the recommendations was overruled. 1 Page 4338, minutes of the meeting of the Committee, March 26, 1913. Page 4325, minutes of the meeting of the Committee, March 26, 1913. 47 Q. So that your "usually" might almost be extended to "universally," might it not, and still be within the facts? A. Yes, sir. A Partisan Pension Investigator Although the members of the force to be retired are brought before the board and questioned, the recommendations relating to widows' and children's pensions are based upon the reports of the pension investi- gator, who is a patrolman on the force. It is, therefore, reasonable to assume that a great deal depends on the manner in which this investi- gator presents his reports. And since the investigator, because of his posi- tion on the force, is a partisan, it is reasonable to assume that his findings will be more or less favorable to the applicant while the character of his findings will be more or less colored by his personal likes and dislikes. Lack of Complete and Accurate Pension Records To have a pension board and investigators composed of officers who, because of the absence of personal relations with prospective beneficiaries, would be able to decide upon pension applications without bias, thereby insuring fair and impartial treatment to all, is not the only considera- tion that enters into the establishment of an efficient pension administra- tion. The necessity of a proper record system for the accumulation of data bearing upon mortality experience, rate of disability, rate of with- drawals from active service, etc., is of the utmost importance. ' It is only by means of the data so recorded and collected that the present and prospective obligations of the fund can be ascertained and the actual cost of the pensioning of policemen determined. It is only by such means that the requirements of law for an annual report setting forth the condition of the fund can be fully complied with. Need for Exact Information Ignored by Commissioner The importance of a proper record system has been entirely ignored by police commissioners. The handling of moneys that come into the fund as well as the paying out of pensions when they fall due, has been attended to by the bookkeeper's department, but the necessity for find- ing out the extent of obligations accumulated by the fund has never been considered. As in the case of the interpretation of the pension law by the pension board, none of its members are required to devote their entire time to such duties, so in the case of the financial administration of the fund neither the bookkeeper nor any of his clerks are giving their attention exclusively to the recording and accumulation of pension sta- tistics. Estimate of Liabilities Impossible without Exact Information The principles involved in the financial aspects of a pension fund are much like those which enter into the business of insurance companies. Since the solvency of such companies involves the welfare of so many in- dividuals, the laws are very strict in their requirements as to the amount of reserve to be constantly on hand to secure the future payment of in- 48 curred obligations. In view of this attitude of the law toward private insurance companies, the utter disregard of elementary business princi- ples in the management of pension funds, which after all are funda- mentally governmental insurance enterprises, is astonishing. In the case of the police pension fund, not only were its liabilities unknown to the officers connected with its administration, but the meaning of the term liability has not been understood. It is obvious that the amount of liability incurred by the granting of a pension can only be ascertained when it is known how long the beneficiary is expected to draw the pen- sion. The probable length of the pension term is the probable length of the pensioner's life. The estimate of this probability depends on full information as to age and physical condition at the time of retirement, and experience as to mortality among policemen previously retired. The absence on the pension records of the department of complete data giving ages and the absence of vital and mortality statistics naturally makes it impossible for the liabilities of the fund to be accurately determined. Statements in Annual Eeport Are Misleading Each annual report of the pension fund, however, sets forth the "yearly increase of liability," this latter term being applied to the re- sult of certain computations which are of little or no value in the deter- mination of real liabilities as the term is commonly understood. These amounts, which have been published by the pension administration as in- creases of "liabilities" during the years 1901 to 1912, are as follows: Year Amount of Increase Amount of Decrease Increase of Liability 1901 $92,647.00 123,613.00 170,930.00 135,410.40 245,668.00 230,503.48 192,667.30 129,927.30 166,070.00 183,928.00 321,616.40 255,874.00 $42,760.00 57,460.00 50,895.00 55,503.00 86,424.00 126,384.00 92,602.00 113,325.00 96,423.00 57,351.00 87,661.00 106,953.00 $49,887.00 1902 66,153.00 1903 119,945.00 1904 79,907.40 1905 159,244.00 1906 104,119.48 1907 100,065.00 1908 16,602.30 1909 69,647.00 1910 126,577.00 1911 233,955.40 1912 148,921.00 The amounts entered in the column headed "Amount of Increase" represent the addition of the annual pensions granted or increased dur- ing the year indicated, while the figures in the next column headed "Amount of Decrease" were obtained by adding the annual pensions which were discontinued during the same year because of deaths or revo- cations. The amounts set forth in the last column headed "Increase of Liability ' ' represent the excess of the annual increase over the annual decrease. It is obvious that these amounts do not give any idea of the real increase of liabilities of the fund, which of necessity must take into account the period for which such pensions are to continue, and, therefore, the presentation of such information in the annual reports of 49 the pension fund is misleading. It shows simply the increased amount which must be set aside for the year's pensions without regard to the future years. Inaccuracies in Such Eecords as Are Kept The lack of thoroughness in the administration of the pension fund so far as the bookkeeping is concerned, is also illustrated by the unre- liable and incorrect data included in the annual reports of the fund, which are prepared by the bookkeeper's office of the department. During the present investigation efforts were made to locate a number of pen- sioners at their home addresses which are furnished in the annual report for 1912. It was found that a great number of those addresses were in- correct, obsolete, and in some cases fictitious. For instance, the addresses of Captain Robert O. Webb, and Lieutenant Henry Hahn indicated as 449 West 123d Street and 158 East 83d Street, respectively, were found to be fictitious. At the first mentioned address it was stated that no per- son by the name of Webb had ever lived there, and in the second instance it was ascertained that Lieutenant Henry Hahn's permanent address is now, and for a number of years has been, 2 James Slip. WhW inquiries were made about pensioners living out of town it was discovered that some of the addresses as given in the annual report were obviously wrong, as, for instance, in the following cases: Howard, Jennie C. Does not receive mail at recorded address. McDonald, James Works in New York and recorded ad- dress is too far to commute from. Sheldon, Samuel Gr. Works in New York and recorded ad- dress is in Florida. In the following instances the addresses were found to be obsolete: Burns, Loretta Lyman, George Edwards, F. W. Mairs, James Graham, Elizabeth C. McConnell, Matthew Huntington, John W. Skidmore, George M. Jacoby, Henry F. Walsh, Bartholomew Webster, Frank A. The publishing of addresses of pensioners when they are incorrect and obsolete is of no value. It is not only a waste of public money but also results in loss of official time. Inconsistencies in Data Published Other information presented in the annual report is just as unre- liable as the above mentioned addresses. More than 150 pages are de- voted to names, addresses, and amounts relating to present and past pen- sioners. The arrangement of this detailed information is made without any classification except that of alphabetical order of names and by the first letter of the surname only. On one of the pages is given what pur- ports to be a recapitulation of the detailed information. In the report for 1912 the recapitulation presented on page 177 is not supported by 50 the details set forth in the same publication, tained discrepancies is presented below: An illustration of ascer- As Reported by Department Recapitulation As Ascertained from Detailed Information in the Same Report Pensions Granted in 1912: Officers pensioned 246 1 157 161 1 2 16 * 135 33 3 4 29 26 2,439 1,341 7 10 106 287 pp. 178-186 2 pp. 178-186 156 pp. 178-186 202 pp. 178-186 Officers increased Widows pensioned Widows increased Dependent parent increased Matrons 2 pp. 181,185 16 x p. 192 144 pp. 36-199 40 2 pp. 36-199 5 pp. 36-199 4 pp. 36-199 29 3 pp. 207-208 1 p. 130 25 3 pp. 207-208 2,447 pp. 36-199 1,347 pp. 36-199 5 pp. 36-199 9 pp. 36-199 Children pensioned 1 Pensions Terminated in 1912: Officers deceased Widows deceased Widows' pensions revoked Widows married Children age limit Officer'6 pension rescinded Children's pensions revoked ' Number of Beneficiaries Now Are (Dec. 31, '12) : Officers Widows Dependent parents Matrons Children 68 > pp. 36-199 1 Children of one family are here considered separately; elsewhere they are grouped as one. Thirty-four, according to pp. 205-206. Fourteen, according to pp. 36-199, where children of one family are considered as one. Lack of Provision for Continuity of Policy One of the most important features to be provided for in establish- ing a pension system is a means for maintaining continuity of policy, so that there may be uniformity in the application of the system in indi- vidual cases. It is impossible to word a pension law in such a manner as to insure uniformity in its interpretation by non-continuous adminis- tration, even if no discretionary powers are conferred by its provisions. The operation of the present system, moreover, depends largely on the extensive exercise of executive discretion. It would be difficult, if not impossible, to find two individual administrators, one succeeding the other, who would take exactly the same view in interpreting the original intent of the law. This is good reason for the creation of an impartial, disinterested supervisory board which will be continuous though not for establishing a partisan and self-interested board with an interested ad- visor such as now exists. Frequency in Change of Commissioners When the frequency of change in administration is considered, the significance of the foregoing observations will be realized. Since 1901, during a period of 13 years, no less than eight single commissioners have 51 succeeded each other in the administration of the department, terms of office were as follows: Their Commissioner Duration of Term Feb. 22, Jan. 1, Jan. 1, Jan. 1, Jan. 1, July 1, Oct. 20, May 23, Dates Murphy . Partridge Greene. . McAdoo. Bingham . Baker. . . Cropsey . Waldo. . . 103^ months 1 year 1 year 2 years 3 years, 6 months. . . . 1 year, 3 Y% months . . 7 months 2 years, 7 months . . . 1901 1902 1903 1904 1906 1909 1910 1911 to Jan. to Jan. to Jan. to Jan. to July to Oct. to May to Dec. 1, 1902 1, 1903 1, 1904 1, 1906 1, 1909 20, 1910 23, 1911 31, 1913 From the above statement it becomes evident that, since 1902 at least, the retirement law has been subject to frequent differences in in- terpretation and application, the administration of the fund never re- maining in the same hands successively for more than three years and six months even the pension board being absent from the scheme of management before the last term. For the purpose of showing the re- sults of the interpretation of the pension law by the various police ad- ministrations, a tabulation was undertaken at the pension bureau of the department. The only source of information which could be used in this connection was the card system maintained in the bookkeeper's office. As pointed out in Chapter IV of this report (see page 39), however, these records were incomplete, especially with regard to earlier retire- ments. These limitations, therefore, should be kept in mind when ex- amining Tables XII and XIII (see Appendix, pages 124 and 126). The data omitted from the tables tend to make the results presented an under- statement of the facts in point, since they show during the earlier admin- istrations fewer changes in pensions than actually took place. Differences in Interpretation and Application of Law Table XII is illustrative of the fact that the interpretation of the pension law is subject to changes as the administration of the fund passes into different hands. The original retirements as well as amendments increase or decrease in number, according to the viewpoint taken by each succeeding police commissioner and the duration of his term of office. The most pronounced difference in the application of the pension law is illustrated by the comparison of pension decisions during the administra-' tion of the fund by Commissioners Bingham and Waldo. The tabulation takes in the entire term of 42 months of Commis- sioner Bingham's administration, and only 21 months (May 23, 1911- February, 1913) of the trusteeship of Commissioner Waldo. The pre- sented data shows at a glance that the present administration is a liberal one, not only as compared with the administration of Bingham but all other commissioners. During the 42 months of Commissioner Bingham's administration 833 policemen were retired, while Commis- sioner Waldo in 21 months, or half the time, placed 609 members on the pension list. During the shorter period of time 20 pensions were in- creased as compared with 12 increases during Commissioner Bingham's administration. In the case of widow pensioners, the present commis- 52 sioner has surpassed all records set by his predecessors, ing extract from Table XII : Note the follow- Widow pensions granted . . Widow pensions restored. . Widow pensions increased , Total Monthly Average Widow pensions decreased Widow pensions revoked. . Administrations McAdoo (24 Months) 214 1 110 325 1 1 Bingham (42 Months) 239 3 71 313 m 90 74 Waldo (21 Months) 260 3 347 610 29 12 Elements of Uncertainty Undesirable Table XIII shows the lack of stability in pensions, a great number of which are subject to amendments in the discretion of the frequently changing police administrations. The pensions of members who have served more than 20 years are not subject to amendment. The majority retire after completing the indicated term, and their pensions cannot be revoked or amended. This partly explains the fact that only 134 of the 4,260 pensions of this class, or 3% of the total, were changed. The great majority of these amendments were authorized by law which on several occasions automatically increased the pensions of men already retired. In the case of pensioned dependents of the members of the force, the discretionary powers of the administration are complete except as to the maximum amounts to be granted in certain cases. Because of this fact these pensions present the least permanent provision under the pension system, as is well illustrated by the fact that, of every 100 pensions granted to widows and dependent parents, 33 are either revoked, de- creased, or increased in amount. The children's pensions having a shorter duration because of their termination upon the attainment of age 18, did not present as frequent demands for the exercise of the discretionary powers of the commissioner. Consequently only 18% of their total num- ber underwent any kind of a change. The preceding pages contain a presentation of the general defects of the present pension system caused by the personal interpretation of the pension law by the department, and the inefficient and totally ignorant manner in which the finances of the fund and the pension records and statistics are handled. Specific defects of the law itself and the present features of the plan are discussed in chapters dealing with: 1. Service pensions or retirement of members of the force in con- sideration of length of service (Chapter VIII, page 69). 2. Disability pensions or retirement of members of the force be- cause of disability making them unfit for police duty (Chap- ter IX, page 79). 3. Pensions to the dependents of the members of the force (Chap- ter X, page 99 ) . CHAPTER VI Liabilities Incurred and the Method op Meeting Them The pension plan adopted by the City of New York for policemen provides for the granting of annuities to members of the force who re- tire from the service because of impaired health or after serving for a certain number of years. A life annuity, when granted, is in the nature of a promise on the part of the grantor to make certain specified pay- ments each year to the grantee, as beneficiary until he dies, or till the happening of a certain other event. To provide for such payments one or another of the following methods may be employed: 1. A "reserve plan" of funding all liabilities incurred may be adopted. 1 2. Matured obligations may be met at maturity without any pro- vision being made for funding liabilities incurred, i. e., a "cash disbursement plan" may be adopted which requires only that the necessary payments be currently provided for. Elements Involved in Appraisement Either of the foregoing methods may be employed, whatever means may be used for obtaining the resources required for meeting obliga- tions, or whatever may be the conditions attached to the rights of par- ties in the funds and to the disbursements. It seems probable that at the time the police pension fund was founded, the theory was that it would operate on a "reserve plan." The founders and subsequent build- ers of the fund, however, took none of the steps necessary to determine what foundation would be required to support the superstructure obli- gations incurred what would be necessary to enable it to meet the vari- ous kinds of financial strain that would be put upon the fund. The re- sult has been that, without any change in conception, a change of prac- tice has taken place which has in later years caused it to operate practi- cally on the "cash disbursement basis." As this study is the first attempt to obtain an appraisement of the fund's present assets and ultimate revenues and its present as well as its ultimate liabilities, it seems desirable to consider what is involved in each. To reach a conclusion with respect to either, it is necessary to de- termine with respect to each beneficiary: 1. The nature and extent of the annuity, which he may draw on re- tirement for service and the average future lifetime at date of retirement. 1 This necessitates putting amounts aside each year during active service, so that when retirement comes a fund is on hand which is sufficient, with interest thereon, to meet the pension payments as they become due. The amounts^ so put aside may, of course, be contributed by the active force, or the total of the yearly individ- ual contributions required may be paid into the fund by the City each year. 53 54 2. Rate of disability before reaching the age of service retirement, annuity to be granted on disablement, and average future life- time if disabled. 3. Probability of leaving the service before retirement age, etc. The experience of the force, active and retired, in the past, should be used to indicate what the future experience will be. In addition, for the purpose of appraisement under the "reserve plan," it is also necessary to determine the rate of interest which can be earned on the accumulations of the fund. In the appraisement of the police pension fund of the City of New York there are other elements to be considered, due to the options of prospective annuitants and the discretion of officers provided for in the plan, but in any case the above described data for individuals should be accurately kept in so far as they relate to the past and can be recorded. The factors used in calculation must be made available in tables that afford a scientific presentation of the average experience of a large num- ber of entrants and for each class of beneficiaries, since calculations based on individual cases may prove to be wide of the mark. By consider- ing the average experience of the members of the active service and the annuitants as applied to retirement, death, etc., and by assuming that the experience of the period used is a good index of what it will be in the future, the liability for prospective pension payments can be calculated and an adequate "reserve" set up as fast as liabilities are incurred; or if the "reserve plan" is not adopted, adequate provision can be made for meeting pension payments, as they mature by "cash disbursement." Present Condition of Fund When Appraised on Theory op "Reserve Plan" Since the pension fund has almost no cash assets available at present (only $97,455 at the time of making the estimate), an appraisement of the fund consists only in ascertaining its liabilities and determining the exact extent of its insolvency if considered on the "reserve basis." In gauging the liabilities of the fund, the claims of two groups of persons have been separately considered in this appraisement: 1. The amounts which must be paid to persons who were on the pension roll at the time of the valuation (those whose claims are already fixed and determined by officers acting under authority of law). 2. The amounts which it may be assumed have accrued to the pres- ent active force as a part of the inducement for them to enter and remain in the service of the city. Assuming the original intent or the present policy to be to operate on a "reserve plan," the amount determined by this appraisement as the present liability to persons now on the pension rolls is the sum which, if invested at interest (4% being taken for this calculation) on the date of valuation, would be sufficient to enable the fund to continue to pay all maturing obligations, the pensions fixed and determined by officers under authority of law until the last present pensioner has died. The liability 55 to the present active force, as determined by appraisement on this basis, is an amount which, if cumulated at the same rate and invested at 4%, would be sufficient to pay pensions for life to the members after they shall have retired. The amounts of the two kinds of liabilities are set. forth in the valuation balance sheet of the actuarial report (see page 209) as follows: Liability to present pensioners $20,138,817 Liability to present active force for future pensions 48,292,652 Total liabilities $68,431,469 Contributions to the Fund by Prospective Beneficiaries The only means provided for meeting these liabilities are: 1. Contributions to the fund by prospective beneficiaries. 2. Appropriation of municipal revenues special or general appro- priations. The ''miscellaneous revenues" which inure to the benefit of the fund are in the nature of permanent or continuous appropriations of city revenues, and therefore are to be considered in the same category with annual appropriations to be met by taxation. The amounts derived from the "miscellaneous revenues" during the past twelve years (1901- 1912) and shown in Table V (page 116), form a very uncertain income, the future increase or decrease of which it is next to impossible to de- termine with any degree of accuracy. The only part of the revenues of the fund which is contributed by prospective annuitants is the 2% deduc- tions from the payrolls. The present value of the future 2% contribu- tions of the present active force during the remaining term of service of its members before their retirement has been estimated to be $3,076,647. Adding to tljis amount the cash on hand at the date of valuation, $97,455, the total assets of the fund are determined as $3,174,102. Net Present Liabilities Setting against these assets the total amount of liabilities, $68,- 431,469, the deficiency of the fund is found to represent a total of $65,- 257,367. This is the amount which should have been provided from one source or another on the date of valuation, February 1, 1913 ; the amount which, in addition to the cash on hand and the future contributions of the present active force, should have been in the fund and invested at 4% interest, if the fund had been financed on the theory that provision is to be made each year for meeting its pro rata of the liabilities incurred during the period of the plan's operation. The above calculation does not take into consideration the prospective obligations to future entrants by a continuation of the plan. The funding requirements for the accumu- lation of a reserve to meet future obligations to those who shall come into the service when members of the present force have retired, are made the subject of a separate calculation (pages 64-68). Future Payments to Pensioners and Present Force on "Cash Dis- bursement Plan" The fund, however, as has been already explained, has not been operated along lines recognizing the need for the accumulation of a re- 56 serve and the investment of the same at compound interest. Although not definitely recognizing an obligation on the part of the city to meet deficiencies until 1892, the plan has, during the last 30 years, provided only about enough cash to meet matured claims. Under such circum- stances accrued liabilities have been ignored, and in effect the "reserve plan" has been abandoned. An estimate, therefore, has been made of the amount of cash which the fund must disburse in meeting future obli- gations as they mature. In this there can be no assumption of an in- vested reserve; there will be no investment income. On the "cash dis- bursement basis" the valuation balance sheet (see page 209, actuarial re- port) gives another set of figures, based on the assumption that the pres- ent method which does not include the compound interest factor would be continued. Assuming the continuation of the 2% contribution by the active members of the force, the total amount which the city must ulti- mately contribute in the form of appropriations of miscellaneous reve- nues and appropriations of taxes for the payment of pensions to the pres- ent pensioners and to the members of the now active force after they shall have retired, is $144,491,600. The difference between the amount of ap- propriations required by the "reserve" plan ($65,257,367) and the "cash disbursement" plan is $79,234,233, which represents the investment income which would accrue to the fund if an adequate "reserve" were set aside. Payments to Future Entrants The above calculation does not tell the whole story of future fund- ing needs. To maintain the force, vacancies must be filled. For the pur- pose of this estimate it is assumed that there will be no decrease in the number of policemen, and that the salaries will remain the same. Under these conditions liabilities will be incurred for future pensions to new entrants into the service when the new members are actually employed, since the prospect of getting a pension can properly be considered as part of their remuneration for service. In order to give a complete idea of the future growth of the demands on the fund, it is necessary to include the pension payments to new en- trants when they retire. With this idea in view a calculation was made to show the total annual payments during the next 83 years, at the end of which period it is assumed that: 1. All present pensioners will have died. 2. The members of the now active force will have retired on pen- sions and will be deceased, and 3. The fund will have reached the point of normal operation. Annual Payments Required if Present Force Is Maintained The result of these calculations is presented in Chart V. The total annual pension payments as indicated by the solid curve will increase from year to year during the next 36 years until the year 1948, when the load of the fund will approximate normal, and the annual pension expenditures will amount each year thereafter to more than $4,925,000 (see Table 31, actuarial report, page 201). It must be pointed out that each yearly expenditure as indicated on the chart represents the pay- ment of pensions in consideration of services rendered in past years. 57 Therefore, the amounts paid are in the nature of contributions to the payment of a deficit which, when the point of normal operation of the fund is reached, will require $4,970,866 annually, this amount being also paid for past services. To summarize throughout the history of the fund, each administration has contented itself with providing the funds for meeting only such part of pension obligations incurred by its predecessors as mature in the form of claims for benefits. At the same CHART V- SHOWING THE ANNUAL PENSION EXPENDITURES OF THE CITY OE NEW YORK DURING THE NEXT 83 YEARS FOR POLICE PENSIONS UNDER PLAN NOW IN USE AT PRESENT SALARIES AND WITHOUT INCREASE IN FORCE YEARS s to /s 20 2s jo 3S 40 +S SO SS 60 6S 70 75 80 85 YEARS jf % OOLLPPS ^F , 1 .7 - r - - - ----- jF 7 t % . oo. / . _ __ j< --- _ . . / :::::__ i 7 j ^- .- :.(.:? ' ' i f \ :::::::::j.:::::"2[::::::::::::s":;;: [ TOT*l PCNS,ON MYMftTi To,*t s c7s,o t s * 2.949*0*3 3000000 i...A J. : s ; ' / \ I in.rtf.mm __.j i \ Pf/tSION PAYMENTS TO * fi/TUfff eNTMNTS TQKCtP 25Q0D00 \ uproxce to pee$NT QVQT* . *. +. **.*>.+.*.* 22 5.8/ +.9&2 **^ ::l._i. .: ::::;; X-Z. j , :::'.:..:: \ \ \ l f \ f \ J ' ^ VY YO K /.t> ::::::/.v : 1 \ ::::::. vx i t-\ J. T A .00 P -[_ 5:::: i ::::: :?::::::::::: :::t :::^ t :::r ^ i :::::::::::::5;::::::::::::: :::::::::::: SOOfiOO :::::::::::::::::::::;?:;;:::::::"" ::::::::::::::::. ^"::;:::::;::::::::::::::::: f m '* " a ^^^ Y/7R$ O S /O. /S 20 25 SO 3S .*o *s so ss to is 70 7S so r y/!RS time it has issued new pension promises under the operation of the plan by the appointment of new employees and the granting of pen- sions to those whose rights are optional or discretionary. It does not operate on a "reserve" principle; that is, it does not lay aside a suffi- cient amount each year which, if put at interest, would provide the means for making good all promises as they mature; it leaves the question of meeting such obligations as they mature to the succeeding administra- tions. The solid curve of the chart indicates that, as the service about reaches its normal size, the annual pension payments will be equalized, and each succeeding administration thereafter will be called upon to con- tribute an equal annual amount toward the payment of pensions for past services. 58 Probable Increase in Annual Demands It would be misleading, however, to assume that such a condition of the fund will ever actually be reached. The prediction of the future as projected on the chart is necessarily limited to the theoretical assumption that no increase in force or in the scale of salaries will be made in the fu- ture, and that the pension law and its interpretation will remain un- changed. Such assumption was necessitated in the case of actuarial com- putations because of the practical difficulties encountered in gauging the probable future of the factors just mentioned with a reasonable degree of accuracy. It is safe, however, to assume that increases in force and salaries of the active service will be made, and that if no thorough revision of the pension law is effected, the same will continue to be liberalized and ex- tended in its application. As a result, the pension expenditures will in- crease from year to year, and never reach the normal point. Under such conditions each administration will spend a smaller amount in paying for the debts inherited from its predecessors than the amount of new obli- gations it will incur, and will leave as an inheritance to posterity a debt unprovided for akin to the fixed charges (interest and sinking fund to cover depreciation) on borrowing. The Ultimate Cost of Police Service to the City By means of the valuation of the fund it was ascertained that within the next generation, as the annual demands of the police department for salaries and pensions approach an equalization, approximately $33.44 will be required, on the average, to meet maturing pension obligations for every $100 paid in salaries to policemen on the active roll. Of this only $2 will be contributed by policemen, while $31.44 must be provided by the city as a charge against its revenues. Under the present system this proportion of pensions to salaries is not apparent because of the fact that pensions are paid as they mature. In other words, the obliga- tions to creditors incurred by previous administrations are paid as the installments fall due, while the settlement of pension debts incurred cur- rently are left to posterity. Without considering the question as to which particular administrations in the future will be called upon to pay the pensions, the real cost of the pensioning of members of the force to-day can be expressed thus: The payment of each $100 in current salaries involves the payment of pensions in the future which will amount in the aggregate to $33.44, of which $2 will be contributed by the policemen themselves and $31.44 by the city. If the plan were operated in such a way that each year and generation an amount would be laid aside for each $100 spent in current salaries, which if put at interest would meet its pro rata of pension obligations, less than one-half of $31.44 would have to be contributed by the city each year for every $100 on the ac- tive payroll. The advantage of such a method of securing future pen- sion payments is great. It permits the determination of the total cost of maintaining the police force each year; such cost being measured by the active salary payroll and the pro rata of future pensions earned by the members of the active force in consideration for their services during that year. The failure to adopt such a method is partly responsible for the increase in the cost of the plan, since its adoption would have brought to light the unreasonably high cost of pensions. For the purpose of showing the real cost to the city of the services 59 of an average employee entering the service at the age of 25, a calcula- tion has been made and the results obtained presented (Table 34, page 208, actuarial report) . It appears that for every hundred dollars paid in wages to the average employee, the following amounts are paid in pen- sions to the: Employee himself $23 . 73 Widows and children 9.71 Total $33.44 Contributions by the employee $2 . 00 Contributions by the City 31 .44 Total $33.44 Applying the same proportion of pensions paid by the city (31.44%) to the salaries (100%) received by each grade of the present active force, the total (131.44%) average cost of their services to the city per year would be calculated as follows: Rank Salary, 100% Pension Paid by City (31.44%) Total (131.44%) Matron Patrolman Sergeant Lieutenant Captain Surgeon (Acting Inspector) $1,000 1,400 1,750 2,250 2,750 3,500 $314.40 440.16 550.20 707.40 864.60 1,100.40 $1,314.40 1,840.16 2,300.20 2,957.20 3,614.60 4,600.40 The above figures, however, should not be interpreted in such a way as to mean that each individual member of the force will eventually re- ceive in pensions $31.44 for every $100 paid to him during his active service. It is one of the unsatisfactory features of the present plan that, while some of the members get only a small proportion of the pension benefits or none at all, losing in addition their 2% contributions, . others receive their full share and not infrequently draw more in pensions than in salaries, as is shown in succeeding chapters of this report. CHAPTER VII Detailed Analysis of Fund Requirements As indicated on Chart V (see page 27) the solid curve represent- ing the total annual pension expenditures of the fund is the projected result of the addition of the annual pension payments which will be made to three definite groups of pensioners as follows: 1. Former members of the force and their dependents, 3,930 in num- ber, who were on the pension roll of the department on Febru- ary 1, 1913. 3. Such number of the 636 policemen required to be employed an- ruary 1, 1913, as will be pensioned in the future, and their dependents. 3. Such number of the 636 policemen required to be employed an- nually after February 1, 1912, in order to keep up the pres- ent quota of the police force, as will be pensioned in years to come, and their pensioned dependents. Payments to be Made to the Present Pensioners The annual pension payments to this group of pensioners is indi- cated on Chart V by means of a dotted line which registers an expendi- ture of over $2,000,000 in the first valuation year, gradually decreasing as a result of deaths and revocations of pensions to a nominal sum in the course of 40 years, and continuing to decrease for a further period of years until the last pension payment is made. During the life of these pensioners, the aggregate pension payments will amount to a total of $28,492,083. No assets are held in reserve by the fund for the payment of these obligations. If, for the sake of argument, it were assumed that the pension fund had to pay only its obligations to the present pension- ers, the annual income from its miscellaneous revenues, which averaged about $825,000 per year for the past five years (see Table "VI, page 117), would prove insufficient for the next 15 years to meet these obligations, and the city would have to provide for the resulting deficiencies. Amounts to be Paid to Each Class Chart VI shows the amounts which will be required annually for the payment of pensions to the various classes of present pensioners and also the annual totals of these amounts. The latter are indicated by means of the solid curve which is identical with the dotted line of Chart V, showing the same payments as part of the total future pension ex- penditures of the fund. The payments which will be made to the pres- ent 1,641 pensioners retired for disability, represent a total of $16,540,732. The annual amounts required will gradually decrease from the $1,122,606 to be paid in the first year after the present valuation of 61 62 the fund until the end of the sixty-fourth year when, according to the mortality experience of this class of pensioners, the last survivor will draw his last pension. The 840 pensioners on the present roll who were retired on regular pensions will draw in the first year after valuation $640,892. Payments in decreasing amounts will be made during the next 46 years, when the last pension survivor will die, according to the mortality experience among service pensioners. The total cost of CHART 11 -SHOWING THE PNNUHL PENSION PAYMENTS DURING THE NEXT 67 YEPRS TO TNE VARIOUS CLASSES OP PENSIONERS. WHO WERE ON THE PSNSION POLL OP THE NEW YORK POLICE PENSION PUND ON PEBRUPPY /"/SIS YE/IRS o s 10 ir to tt so w -*o - SS 4S 70 YCAR3 AMOUNT ..... ...... AMOUNT \ \ . ::::::::::::::::::::::: \ i vy f -NSiON PAYMCN7S WYMCNTS FQA: Y fiCNStONS */6*S+0,7S* PENSIONS -- - * 6./7g,9/0 ' \ A TOPttesi \ &SAB/UT Sfl9V/C \ \ C MIL Off \ \ rX\ \ \ \ V \ \ s ffi \ \ \ IK K \ r """"' EM JT# ! i YEARS o s ic /S SO 3S SO 5S +C 4S SO ss *t tS TO YEARS this class of pensions will he $6,172,910. The pensions to the 1,342 wid- ows on the present pension roll will require in the aggregate a total of $5,721,527, which will be paid in decreasing amounts during the next 67 years, when the last beneficiary of this class is expected to draw the last benefit. The payment of pensions to the present 107 children pensioners will require an expenditure of only $56,914, which will be made in an- nual installments in the course of the next 14 years, when all beneficiaries will have reached the age of 18 and their pensions will be terminated. Payments to be Made to the Ketiring Members op the Present Active Force and Their Dependents The annual payments required to be made to this group of pension- ers are indicated on Chart V as part of the total annual pension expendi- 63 tures of the fund. Chart VII shows the composition of the annual amounts required for the payments to be made to the various classes of pensioners of which this group is composed. Amount Required Before Last Benefit Is Paid The total annual pension payments (see solid curve on Chart VII) will amount in the aggregate to $120,511,528, and will be made in the CH/IRTm-SHOWING THE ANNUAL PENSION PAYMENTS DURING THE NEXT S3 YEARS TO THE VARIOUS CLASSES OE PENSIONERS TO BE RETIRED EROM THE PRESENT ACTIVE POLICE FORCE OE THE CITY OE NEW YORK YEARS o s ip is so ss 30 3 r 4-0 +S SO SS 60 65 70 7S 80 SS YEARS AMOUNT lit i 1 1 ' ' ' ' ' 1 1 AMOUNT ....... ' ~TT lu 1 1 ' H^TiMJ LCGTA/D~ .i___MJi4MijI IlSt t 7V97^ PfiYMCNTS ro* O/SHS/LfTY PENSIONS mm . * 49,<+9Q,/88 , . / 1 S/tWCC Pensions . * 28,731.701 3.000.000 WIDOWS PEHSIOMS # 26, S5"0 5"2* Tjfjl t'jfrttrt \'T- /in i \ / / \ i j 4 A.. L/_ .x f r v ...| ,, i \ t 1 ft t ,. L ...J) ^-L-H // W ji-""' ! i- !l 41-- 5!.,^ 1, .. : \h L'f\-f''f :.:;;:<:;.... v.. fh *&'"[ . wt YC/7flS O S 10 IS SO SS 30 38 to *s so ss do is 70 TS SO K YC/fffS course of the next 83 years. Since the contributions of the present active force were used up in paying pensions to those retired in the past, there is no accumulation of such contributions available in the fund to pay the future pensions of the present active force. The contributions which will be made annually by this force in the future will gradually decrease as the members withdraw from active service, while the pension payments as shown on the chart will steadily increase for the next 25 years. The total amount of 2% deductions of the active payroll, or about $280,000 during the first year, will only be sufficient to pay the pensions maturing during the same year, the amount required being $119,954. During the next years the contributions will be less than the amount needed, and during the succeeding years they will form gradually a lesser percentage of the amounts actually expended for pensions. 64 Distribution by Classes of Beneficiaries This group of pensioners is composed of the same classes of benefi- ciaries as in the case of the present pensioners, the annual pension pay- ments to each class being indicated by separate curves on Chart VII. The estimated periods over which these payments will extend and the total amounts to be disbursed are as follows: Disability pensions 73 years $59,486,188 Service pensions 77 years 28,731,701 Widow pensions 83 years 26,250,524 Children's pensions 72 years 6,043,115 All pensions 83 years $120,511,528 Annual Installments Required to Meet Matured Obligations to Persons Now on Rolls As indicated in the foregoing pages the fund has no reserve on hand which could be used to meet the obligations to the present pensioners, nor has it an annual income large enough to allow the accumulation of a reserve for meeting its obligations to the present active force for future pensions. If no revision of the present method of financing the pension plan is made, the administrators of the fund will continue to disregard the necessity of accumulating reserves, and will pay only annually ma- turing obligations. Assuming for the purpose of illustration, that mem- bers of the present active force after their separation from the service will not be replaced by new appointments, and that the force will be al- lowed to decrease gradually and finally discontinue, the fund would be required to pay certain sums annually for pensions becoming payable. These future pension payments and the annual amounts which will be contributed by the employees themselves and the city, are presented in, graphic form on Chart VIII. Increasing Proportion to be Provided by City The total annual pension payments indicated on this chart by means of the solid curve represent, in the aggregate, a total expenditure of $149,003,611 ; and it will require a period of 83 years in which to make these payments. The 2% deductions from the salaries of the force will make available only $4,414,556, while the city will be called upon to pro- vide the balance or $144,589,055 in the form of miscellaneous revenues and contributions out of the general tax levy. The contributions of the employees, as indicated on the chart, will decrease annually as the mem- bers separate from the force until 53 years from now, when they will stop entirely since all the members will have left the service. The contribu- tions of the city, on the other hand, will form a constantly growing pro- portion of the total amounts required to meet annually maturing obliga- tions. Annual Pension Payments to be Made to New Entrants The annual pension payments to this group of future pensioners which will be recruited from new entrants into the service is indicated 65 on Chart V, by means of a "dash and circle" line, and represent part of the total annual pension expenditures of the fund. Although the amounts to be paid in the future do not represent as yet "incurred" liabilities, it is none the less important to consider them because of the fact that their incurrence is unavoidable if the police force is to be kept up to the present strength. The necessity of considering these future obligations also becomes evident in view of the fact that, as shown in CHART WL^SNOyriNG THF annum AMOUNTS WH/CHW/LL BE contributed BY THE city rnd by the members Or THE POLICt rORCE DURING THE NEXT S3 YERRS rOR THE PRYMENT OE MATURING PENSION OBLIGRTIONS TO THE PRESENT PENSIONERS RNO EOR EUTURE PENSIONS TO THE PAESEN T ACTIVE rOAC YEARS 'f * >f '' 1S ~*4 -f-S SO SS tSO 6S 70 7S so os yrflRS AMOUNT 1 ,_ j r tt AMOUNT N OOLLABt III J\ r~^f V +;:::::ii::jr::i;::i;;;:::::::itii js > ' ' r v sv 3AOO0OO / f \ / / \ TO rat PENSION PJIYMf NTS TO \ ' 4" 7_t T \ 11 \ ' r .njl , / l\ irr srr/vicr roece i+s.oar.fii / / rl ] TOT Hi AMOUNT Or 2% OfOUCT/ONS) / ' \ r/iONi sm/imrs or />/>Snt ro/tciS ' *rn+.ss& f ' \ \ i.ojojoo j i y 1 CQNTnibuTCO 0Y CITY *f7*4.S89,OSS , :t:i:j:::::::::::::::::::::::::::i:: 1 i ............ ,:...... t. i I n 1 ' \\\ " T I 2 ........ J. ............ t tf t to I.I fi 'M - I ...... T ..... i:::::::::::::::::::::::::::::::::::::::::::i ' tit \ T !ILl__--L :|::::::::::::::::::::::::::::+:::::::::::: . fc t T ...... t i .... \ V I V \ * \ V \ 4- -4- I ::::::i:::tt::::::::::::::: \ ,i 'i i. iiiitr^t:"::::::::::::: v ' \ N ,1 1 \ 1 "if if ::::::::::::::: 1 V % i*"+tl p YiLj I t T lt"T-i-r-i-^.- . . , J. I ! '"TT- = . _L YEARS O S lo IS 10 IS SO 3S 4o *s so ss so ts 70 7f fo sr YEARS the preceding pages, neither the deductions from salaries of the em- ployees nor the annual revenues of the fund will be sufficient to pay obligations already incurred to the present pensioners and the present active force. The question of providing additional funds for these future obligations represents, therefore, an important feature of the present pension problem. Total Amounts Required by Classes Chart IX indicates by means of the solid curve the total annual pen- sion payments to be made during the next 83 years to new entrants into the service after they retire and to their dependents, whereas the remain- ing four curves represent the pension amounts to be made to the various 66 classes of which this group of pensioners is composed. The estimated total payments during the next 83 years will be made as follows : Disability pensioners $130,137,177 Service pensioners 36,380 047 Widow pensioners 44^323973 Children pensioners 14,973,765 Total $225,814,962 CHART /X -SHOW/NG THE ANNUAL PENSION PAYMENTS DURING THE NEXT S3 YEARS TO THE VARIOUS CLASSES OF PENSIONERS TO BE RETIRED FROM THE rUTURE ENTRANTS INTO THE POLICE FORCE OF THE CITY OF NEW YORK YEARS o s /o is so zs 30 3$ +o +s so ss to tf 70 JS SO gf YS/l/fS AMOUNT I 1 1 1 1 1 1 . -_^~~ r ~ ! ~~~ '" ' /IIOUHT -=LEGENP=~ \ S / f 1.500.000 TVrjfi PfMJlO* *M**7S / TO MTU*! M7*0NTS ' i f J \ J il- -- - --, - -^_ -H--4- -1 - * ' .(.- . _ :::::::::::::::::::::::::::::;:; t ,/_. i ::>:::: / / 1::/.:::: JfOO/fOO f /JVO.OOO :::::::::::::::::::::::::::::::t: :::::::::::: . : it : : ::: : i t <* -f * J ~ i.oo a i / ! 1 >'t Li * J * " ::.2.. . ! Jrf' S ' ~" TT: t T 1 I..,., .\..,\; w ....i, ii= = K:$ 111 tt 1 I II ! 1 1 1 III II YEMRS /O IS to 2S 30 It 40 4S so is to ts to ts it if ve/ms Small Amount Kequieed During First 15 Years As indicated on the chart, the pension payments to the future en- trants into the service during the first 15 years will be very small, and will be made only to those members who retire for disability. After the twentieth year, however, because of the heavy retirement on the ground of disability and also because of the steady increase in the number of new entrants, the curve showing the annual pension expenditures begins to mount rapidly until after about 55 years, when the pension load grad- ually begins to be equalized. On the assumption that a force of uniform size will be maintained in the future, this yearly diminishing increase will continue until the year 1996, or 83 years from the date of valuation,. 67 when the normal, constant, annual expenditure of $4,940,866 will be reached. Contributions op New Entrants Sufficient for 27 Years In order to show what part of the money needed annually to pay pensions to future entrants will become available from their 2% salary contributions, and also to indicate the amounts which will be asked from CHARTX- SHOWING THE ANNUAL AMOUNTS WHICH WILL BE CONTRIBUTED BY THE CITY FIND BY THE EMPLOYEES DURING THE NEXT 83 YEARS FOR THE PAYMENT OF MATURING OBLIGATIONS TO FUTURE ENTRANTS INTO THE POLICE FORCE OF THE CITY OF NEW YORK YFfiRS S fO /S 20 2S SO 3S~ +0 +S SO Sf 60 tS 70 IS 20 9S YflRS AMOUNT 1 1 I 1 /A/ DOLL A AS ^LFGFND^- ! TOTAL PFNStON f*YMMTS foooooo TO MTU*? XT**#TS g - TOTML AMOUNT Of *% DtOUCTIOMS r*OMSM.MMEi TOTAL AMOUNT TO S co\Tfi/3vrra by c/ty 20S,26S,//A- / V 1 i 1 U 1 /I 1 A J] J 1 J ~~ _ ...: i::::::: ;::;=!: ! Ill i YC/lftS O S IO IS ZO 2S 30 jr +o +s s o ss to ts 70 7S go K Yf/7/?S the city to cover deficiencies, Chart X is presented. This chart shows that during the first 20 years the annual salary contributions of the new entrants will not only be sufficient to pay pensions to those who retire during the indicated period, but will allow the accumulation of a re- serve fund which will be used to pay deficiencies occurring during the next six years, even if no interest is allowed on these accumulations. In the twenty-seventh year, the last dollar of the accumulated reserve fund will have been expended, and the city, as shown by the "dash" curve on the chart, will have to come to the rescue and cover the deficiencies of the fund in annually increasing amounts. Inability to Meet Obligations Thereafter Except by Appropriations This chart can serve as an explanation of the fact that funds estab- lished without actuarial advice usually are able to meet their pension 68 obligations during a number of years until the employees begin to grow old and retire in increasing numbers. As a rule, only when the last dol- lar of the fund is gone and the annual demands of a fund begin to grow out of proportion to the receipts, the awakening comes and actuarial ad- vice is sought. In this connection it is of interest to compare the above presented chart with Chart I (page 27), which shows the struggles of the police pension fund during the 56 years of its past experience, and to note the striking similarity of the data presented. CHAPTER VIII How the Plan Has Operated as a Means of Providing Service Pensions Relative Importance op Service Pension Provisions to Other Pro- visions From the records of the pension bureau no idea could be obtained relative to the cost of the various kinds of pensions. It was only after nearly a year spent in compilation of the data as shown in this report, and at a cost of $10,000, that a conclusion could be reached. This is found in Table 28 of the actuarial report, page 190, which shows the com- parative cost as follows: Future Payments to Present Pensioners and to Present Active Force Required for Pensions Amount Per Cent. Payments for service pensions $34,904,611 38,072,080 76,026,920 23 Payments for dependents' pensions 26 Payments for disability pensions 61 Total payments $149,003,611 100 The above summary shows that service pensions (those to members of the force who have served 25 years and have attained the age of 55) occasion the least expense; that next in importance are pensions to wid- ows and children of members of the force ; and that the expense of grant- ing pensions for what is called "disability" is greater than that entailed for both of the other classes. Four Kinds op Service Pensions As set forth on page 36, the service pensions fall into two general groups, each group having two classes, as follows: 1. Pensions granted as a matter of right upon application: a. To all members 55 years old who have served 25 years on the force. b. To all veterans of the Civil War who have served 20 years on the force without regard to age, or who have at- tained the age of 60 without regard to length of ser- vice. 69 70 2. Pensions granted in the discretion of the police commissioner: a. To members of the force 55 years old who, after 20 years' service, apply for a pension. b. To members of the force, not veterans of the Civil or Mexican Wars, who have attained the age of 60. The amount of pension in all above-mentioned cases is fixed by law at "not less than half" the salary at the date of retirement, and all pen- sions so granted are for life and exempt from revocation or amendment. Pensions Granted for 25 Years of Service at 55 Years of Age or More The first of the four kinds of pensions mentioned above, requiring an age limit of 55 years and 25 years of service for retirement upon ap- plication, was evidently intended to be the main form of retirement an- nuity to be provided to policemen. It is also to be noted that, with the minimum entrance age in the department at from 21 to 30 years and the age of retirement at 55, the policeman is required to serve from 25 to 34 years, according to his entrance age, before he may retire as a mat- ter of right. Eights Accorded as a Result of Military Service Although there are only a few still living who can avail themselves of the privilege granted by law to Civil War veterans, it is to be noted that the effect of the rule is to add to an already liberal federal pension allowance, a civil pension more liberal than any other service pension awarded. The conditions of the grant have no relation to efficiency; in fact, the reasons which lie back of the law are political rather than evi- dence of a desire to be beneficial to the police system. Discretionary Pension Grants for Twenty Years of Service The third class of service pensions (those granted by the police com- missioner in his discretion to policemen at the age of 55 who have served 20 years) is limited in its application to those who entered the service under old regulations permitting an appointment to the force of men 35 years old and over. The purpose was evidently either political or to enable the commissioner to get rid of undesirable members, rather than as a reward of merit. Discretionary Retirement of Members Over Sixty Years of Age The fourth class of service pensions (those granted by the police commissioner in his discretion to compel policemen to retire, other than war veterans who have reached the age of 60) has evidently been pro- vided on the assumption that at this age the great majority of policemen become superannuated. "Straight Pension Plan" Adopted Under the straight pension plan adopted by the city the employee is not conceived as having any interest or right in the fund, or any claim 71 to benefits in case of death or superannuation except upon the fulfillment of the exact conditions prescribed as to age and length of service. That is, there are no accruing benefits to be availed of in case one becomes sep- arated from the service before the date as of which he has a right to be retired on an annuity. It is held that, since the employee by accepting employment accepts also the prospect of being retired subject to its con- ditions, the pension arrangement is therefore fair, and the employee has no reason to be dissatisfied. The arrangement for old age, commonly known as the straight pension plan, has an assumed advantage to the government of keeping men in service, thereby giving to the government the benefit of their increased efficiency. Service Pensions as Deferred Pay When considered from the viewpoint of the highest welfare of the employee, it is argued that the recognition of a pension as deferred wages is in every way more beneficial: 1. Because it establishes an unassailable right not only to the pen- sion but in case of separation to any part thereof which has accrued prior to death or resignation. 2. Because it leaves the employee free to choose, and therefore makes the service attractive to a higher grade of men. 3. Because it forces the government to recognize accruals of liabili- ties to be met, and thereby guarantees the ample protection of the plan, when by a straight pension plan there is a dis- position to be over-liberal in promises during the first dec- ades; then, having overreached, to be forced to curtail in the end by being less liberal than the employee had reason to hope, and 4. Because it enables the employee to shift from one government service (municipal, state, or national) to another without loss. On such a basis the employee would have a right to claim the return to him of the total of his theoretical contributions of deferred pay with interest if he died before the pension retirement date, or at any time he chooses to leave the service. It operates in the same manner as a guar- anteed investment. Those opposing the straight pension principle main- tain that its application does not produce the advantageous results claimed by its advocates, and that the cost is bound to prove much higher in the end, since it usually cumulates obligations for years without making any provision for meeting them. It is not the province of this report, how- ever, to discuss the relative merits of plans, but to point out the results of operating the present one. Wherein the Plan Has Been Modified The lack of provision by means of surrender values for the separa- tion from the service of members who have not reached the retirement age and served the required number of years to entitle them to retire- ment on a service pension, has lent the claim of justice to measures pro- viding for retirement from the service before the established conditions 72 were met. These measures have been of two kinds, viz.: legislative and administrative. By legislation the age and service requirements have been reduced; by administration the disability pension provisions have been invoked, when it seemed desirable to give men the benefit of an an- nuity. As determined during the present investigation, in the period from 1907 to 1912, six years, 695 members left the service because of dis- missal and resignation, the majority being probationary policemen and those who had served only a few years in the department, as is evident from their ages: Number Policemen Dis- Age missed or Resigned Under 23 13 23 to 27 225 27 to 32 254 33 to 37 95 38 to 42 63 43 and over 45 Total 695 Considering the size of the force, the number of members leaving the service without being pensioned is small. The number of retirements on regular service pensions requiring a long period of service and upon reaching the age of 55, is still smaller. Only 344 members were pen- sioned in the indicated manner during the aforementioned period of six years. This is even more surprising than the small number of with- drawals. An explanation is afforded in the number retiring for disabil- ity. During the same six years, 1,181 members were retired for disa- bility, exceeding the total withdrawals without pensions and retirements on service pensions by 142. Question as to "Whether the Age Limit op 55 Is too Low It is urged that a law which provides for retirement on pensions at 55 does not accord with the purposes of a pension plan. Those who have the benefit of a hardening, healthy, outdoor life may be considered al- most in the prime of life at the age of 55. The retirement of policemen at that age must of necessity result in the loss to the city of strong, able- bodied members. The provision requiring the police commissioner to re- tire a policeman when he has reached the age of 60 seems to indicate that the law itself does not assume that the age of 55 is the probable or aver- age age of superannuation in the service, but that by specifying the latter age for retirement after from 25 to 34 years' service, it intends mainly to grant a pension as a reward for long service instead of on the ground of superannuation. In this connection it is to be noted that 60 and 65 are accepted as the proper superannuation age limits in 23 pension schemes for policemen in various cities of the United States, according to a government report made on the subject of municipal pension funds. 1 Inducement to Leave the Service Owing to the absence in the present pension plan of features which would encourage the policeman to stay on in the service beyond the period entitling him to retirement, he will choose in most cases to retire while 1 Pension funds for munioipal employees and railroad pension systems in the United States. 61st Congress Senate Document No. 427. 73 still in good physical condition. The certainty of a steady unassailable income of half pay and the probability, because of his capability both mentally and physically, of finding employment outside of the depart- ment, are inducements strong enough to influence him to quit the ser- vice, and in a good many cases to improve his financial condition. Owing to the ease with which retirements on pensions may be ef- fected, even before fulfilling the regular age and service requirements, the majority of policemen leave the service under some of the various disability provisions. Due to this circumstance the available number of service retirements for purposes of observation is somewhat limited. Of the 344 members who were placed on the pension roll during six years under the bona fide service provisions, 96 left the service as soon as they could be retired, either upon application or in the discretion of the police commissioner, while the remaining 248 pensioners were placed on the roll at the following ages: 100 members at age of 56 to 59 113 members at age of 60 to 65 35 members at age of 66 and over Members Leave Service to Enter Other Employment That a great number of pensioners who retire under the regular ser- vice pension provisions do so more because of the desire to receive a pen- sion and at the same time obtain profitable employment elsewhere than because of superannuation, is evident from the commonly known fact that retired policemen find it easy to secure employment outside of the police department. During the present investigation efforts were made to locate pensioners, and to ascertain whether they were employed. Owing to the unreliable addresses furnished by the pension bureau of the department in its annual reports, the success of this particular inquiry was qualified. The occupations of only 268 out of 2,481 retired police- men were ascertained; and of these only 93 were found to be retired on service pensions, i. e., upon reaching the age of 55 and over. "When it is considered, however, that at the time of the investigation, in the early part of 1913, only 840 of the total 2,481 pensioned members of the force were retired under the service pension provisions of the law, the 95 cases (11%) in which the occupations were recorded, if the facts could be ascertained for all persons on the roll, would probably be extended to such number as to form a considerable proportion of the total pensioners in this class. The occupations of the 93 service pensioners were found to be as follows : In business for themselves 15 In other City departments 12 Detectives 11 Real estate brokers 11 Bookkeepers and clerks 10 In other occupations: Workmen 8 Agents 4 Attendants 3 Inspectors 3 Miscellaneous 16 34 Total 93 74 Police Pensioners in the Employ of Other City Departments Of special interest is the fact that twelve service pensioners were found to be holding positions in city departments other than the police department. A law which permits an employee to draw from the city a salary and a pension at the same time must be considered faulty. In a private organization, such an arrangement would not be tolerated under any circumstances. That the original intention of the law was to prevent this practice may be seen from the following section of the general provisions of the charter : "Section 1560. No person now receiving or who may here- after receive any pension from the City of New York or any of the departments thereof, or out of any fund under said city, or any of its departments, shall hold any office, employment, or position under the City of New York or any of the counties included within said city. Any officer, subordinate, or employee of said city or any of its departments or any of the counties included within said city now in receipt of any such pension shall forthwith forfeit such office, position or employment." The above quoted provision was held by the courts to be unconstitu- tional and, therefore, could not be put into effect. No doubt the wording could have been changed so as to allow a pensioner to hold office in other city departments, at the same time suspend his pension during the period that he draws a salary from the city. Such a provision would probably be constitutional and at the same time equitable to the city and its em- ployees. In the case of ten pensioners, five of whom were retired for disability, and five under the regular service provisions, the details of their employ- ment by other city departments are presented in Table XIV (see appen- dix, page 128). As will be observed from this table, the five service pen- sioners materially improved their financial condition by leaving the police department at the earliest possible age. All but one draw more salary than they were getting on the police force. The pensions drawn while in the employ of the city, as indicated on the table in the last column, amounted to about $37,000. It is evident that the payment of this money is unfair to the taxpayer, and in the end must be prejudicial to the em- ployee, since it tends to create unfavorable public opinion. The following questions of Alderman Downing and answers by Dep- uty Commissioner Dillon, former president of the police pension board, during a hearing before your committee on March 27, 1913, 1 are signifi- cant in this respect: Q. Commissioner, is there any rule in the Police Department permitting former policemen drawing a pension to hold a position in the city government? A. I beg your pardon? Q. Any rule in the Police Department permitting a former policeman drawing a pension to hold a position under the city gov- ernment? A. Nothing prohibitive in the law. 1 Pages 4340 and 4341, minutes of the meeting of committee. 75 Q. Well, are there any men drawing a pension working in another department? A. I believe there are quite a number. Q. There is nothing in the law prohibiting it? A. Nothing prohibiting it; no, sir. Q. "Well, do you think that is altogether just to the city? A. Well, I do not know; it is a serious question. A man may not be able to do police duty and may be able to perform other duties than the police duty. There may be other positions in the city government that he would be able to perform a duty in. Usually the men who go out on a disability pension, as a rule, I do not think that they engage in other business, but there are a number of them that do. Those who go out on the service pension, after 25 years' service, very many of them you will find in office buildings through- out the city and find some of those who are disabled, physically disabled, you find in large numbers in various other services. The Present Plan Encourages the Retention of Incompetents It is natural to expect that experienced and efficient men will have no difficulty after retirement in obtaining remunerative employment as private detectives, special officers, etc. Since no inducement in the way of increased pension for a prolonged service is offered, they will undoubt- edly leave the service as soon as they are eligible for retirement. On the other hand, the less efficient men not having the same opportunities for securing outside employment and those whose income, according to recent disclosures, has not been restricted to the salary received from the depart- ment, will remain on the force as long as possible. It is evident, therefore, that the pension plan as it operates tends to defeat its main object, i. e., to increase the efficiency of the service. Pensions Based on Terminal Salaries Inequitable The present method of basing the pension rate on the salary at the date of retirement is especially unfair to members who do not receive pro- motions. The amounts granted for service pensions to the various grades are as follows: Salary Pension Patrolman $1,400 $700 Sergeant ; 1,750 875 Lieutenant 2,250 1,125 Captain 2,750 1,375 Let us assume, for the sake of illustration, that four members of the force have entered the service at the age of 25, and served in the depart- ment 30 years. During the 30 years' service one member was not pro- moted and was retired as a patrolman, while the other three members were promoted and retired as sergeant, lieutenant, and captain, respect- ively. Let us further assume that the three men served an average period of years in each rank before promotion, as set forth on page 4,593 of the report on personnel and civil service features of the police department 76 submitted to your committee. The length of service in each rank would be as follows: Retired as sergeant: Length of service as patrolman 11 years, 10 months Length of service as sergeant 18 years, 2 months Total 30 years Retired as lieutenant: Length of service as patrolman 9 years, 6 months Length of service as sergeant 6 years, 3 months Length of service as lieutenant 14 yearsj 3 months Total 30 years Retired as captain: Length of service as patrolman 6 years, 10 months Length of service as sergeant 3 years, 8 months Length of service as lieutenant 7 years, 6 months Length of service as captain 12 years Total 30 years Since we have assumed that the four members have entered the ser- vice at a uniform age of 25 and served 30 years, their ages on the date of retirement will be 55. The expectation of life of a service pensioner of that age is 13.67 years. Using the above indicated data as a basis, the active pay and pension received, leaving interest out of account, by the four members will be as follows : Active Pay Rate of Pension Total Pension Per Cent, of Active Pay Retired as patrolman $40,150 46,458 56,450 64,013 $700 875 1,125 1,375 $9,569 11,961 15,379 18,796 23.83 Retired as sergeant 26.73 Retired as lieutenant 27.24 Retired as captain 29.36 As indicated in the last column, the four members received in pen- sions a varying percentage of their active salaries, the proportion growing in favor of the higher ranking officers. If the pension were based on an equal recognition of the services rendered, that is, on the average salary received during the entire service of each individual member, the propor- tion of pension to active pay would be uniform, as follows: Active Pay Rate of Pension Total Pension Per Cent, of Active Pay Retired as patrolman Retired as sergeant . . Retired as lieutenant Retired as captain . . $40,150 46,458 56,450 64,013 $700 810 984 1,116 $9,569 11,071 13,452 15,254 23.83 23.83 23.83 23.83 77 From the foregoing comparison it will be seen that those who are pro- moted have a very large inducement to bring pressure to bear to have their salaries raised just before retirement; the amount of the inducement over what would be received each year if the pension were based on the average pay is as follows: Retired as patrolman Retired as sergeant . . Retired as lieutenant Retired as captain . . . Present Pension Rate $700 875 1,125 1,375 Pension Based on Average Pay $700 810 984 1,116 Excess Pension $65 141 259 Assuming that each lived the average expectancy, the total increased pay for promotion of a patrolman to a captaincy just before retirement would be ($18,796 $9,569) $9,227. But, when the same advantage is given to those who are retired for so-called "disability," the inducement to obtain influence for promotion is multiplied by the added years of expectancy. In many cases the total pension payments will exceed the total salary payments, as has been shown in Table XI, page 122. Location op Present Pensioners There is another phase of the retirement list that is of interest, viz. : the residences of pensioners. From the roll when examined on December 31, 1912, it was ascertained that 2,411 of the total of 2,439 pensioners were located as follows: Manhattan and Bronx 999 Brooklyn 696 Suburbs of New York 233 Other cities of the U. S 450 Abroad 33 Total 2,411 The above figures are significant when considering the amount of the pension paid. A majority of pensioners were found to remain in the crowded boroughs of the City of New York, where rents and other living necessities are high, instead of choosing their residence in the suburbs and going to their home towns where the same pension income would go much further toward making them comfortable. Salaries and Pensions of Police Surgeons In connection with the discussion of pension rates, it is appropriate to consider pensions to surgeons who are regarded as part of the uni- formed force. The present yearly salary of surgeons is $3,500, and they are entitled to a pension of $1,750 per annum. It also must be remembered that surgeons are not prohibited from having a practice outside of the department while on the active roll. The reason that policemen were favored above all the municipal employees in the establishment of the 78 fund is that they were assumed to be employed in extra hazardous work. This reasoning does not apply to the surgeons. The extraordinary large salaries and the lack of extraordinary risk raise the question as to whether, until the city provides pensions for other branches of the service, it should not be relieved from the necessity of carrying the surgeons after they be- come 55 years of age. During the present investigation, the circumstances after retirement of five pensioned police surgeons were made the subject of detailed inquiry. It was found that they are all in comfortable cir- cumstances. One pensioner's address in the annual pension report is given as Florence, Italy. He is said to do much traveling, and it ap- pears that he has other sources of income. A letter is on file in the de- partment in which the police commissioner is requested to furnish the in- formation as to the amount due him in pensions. Another retired sur- geon, with a good practice, permanently resides at the Park Avenue Ho- tel, where he has lived for about 20 years. Still another maintains an office in an exclusive neighborhood, and is in prosperous circumstances. CHAPTER IX How the Plan Has Operated as a Means op Providing Disability Pensions Disability Pension Provisions As mentioned on pages 36 and 37, the charter provides for the grant- ing of disability pensions in the discretion of the police commissioner under the following conditions: 1. Pension of one-fourth to one-half of final salary to all members of any age or length of service who are disabled in the per- formance of duty. 2. Pension of one-fourth to one-half of final salary to all members of any age who have served more than 10 and less than 25 years and who, through no misconduct of their own, are dis- abled so as to be unfit for police duty. 3. Pension of not less than one-half of final salary to members of any age after 20 years of service who for any cause, whether through their own misconduct or not, are disabled so as to be unfit for police duty. Discussion op the Provisions Under the above provisions, members who are disabled in the per- formance of duty have the preference over those who are disabled, but not in the discharge of duty by being made eligible for retirement at any age or after any length of service, the minimum service required of other disabled members being ten years. The second class of disability annuities to persons disabled, though not in the performance of duty, but through no misconduct of their own, provides for the same benefits, but prescribes not less than ten nor more than twenty-five years of service in the department. This would seem to indicate that the annuities to the beneficiaries would be graduated in amount, from one-quarter of the final salary given to members serving ten years to one-half of the final salary in the case of a member who has served 25 years. In the case of a patrolman receiving $1,400 per annum, the pension amounts would be granted after a service of a varied number of years, ap- proximately as follows: 10 years' service $350 15 years' service 465 20 years' service : 580 25 years' service 700 Under this schedule, which was in vogue prior to Commissioner Waldo's administration, a disability pensioner could only be retired on 79 80 one-half salary after not less than 25 years' service, receiving propor- tionately smaller pension amounts for shorter periods of service. Although this arrangement was seemingly within the meaning and intent of the provision of the law above indicated under the second pro- vision listed, it was found to be at variance with the third plan to this extent, viz. : that the third class, which included the second class, must be retired on an annuity of not less than half salary for disability after 20 years', service. A number of patrolmen who were retired for disability after a service of 20 years and less than 25 years and who, ac- cording to the old schedule, received pensions of less than half the final salary, contended that they were entitled to the full pension amount. Their case was taken up by the patrolmen's benevolent association, and about two months after Commissioner Waldo took charge, a new schedule was adopted under which the minimum amount of pension of one-fourth of final salary was granted after a service of ten years, and scaled upward according to the number of years and months served, until the maximum of one-half of final salary was reached in the case of those serving 20 years and over. The disability provisions permit of voluntary as well as compulsory retirement. In case of voluntary application for retirement under the present practice, however, the commissioner is permitted no discretion, as in all cases the order of retirement is based on a certificate of disability furnished after the examination of the members applying for a pension by a board of three police surgeons selected by the commissioner. Retirements fob Disability Compabed with Retibements fob All Otheb Causes The comparative importance of the disability provisions as a separate feature in the police pension plan is well illustrated by the results of the actuarial computations which have been dealt with on page 69. It was found that, without taking into account future entrants, the amount of payments which must be made to persons and their dependents now on the rolls will be $149,003,611 before the last pensioner will have died. Of this amount, $76,026,920, or 51%, will be required for disability pensions. The payments for service pensions during the same time have been estimated at $34,904,611, or 23%, while the payments to widows and other dependents amount to $38,072,080, or 26%; that is, 49%, or only $72,976,691 of the $149,003,611 will be required to finance the payment of all remaining obligations to retiring members and their dependents, based on provisions for service, even including the allowances to widows, children, and parents of members who died in the service or while on the service or disability pension rolls. Disability Payments Gbeateb than All Othebs Combined The ordinary impression gained from an examination of the charter provisions relating to police pensions leads to the conclusion that the service pensions to policemen at the age of 55 and the pensions for disa- bility incurred in performance of duty, are the essential features, and that all other pensions for disability and for the maintenance of the wid- ows, children, and parents of deceased policemen are collateral induce- ments, the costs of which are relatively small. This assumption, however, is an error. The fact is, that the burdens placed on the city because of the disability pensions granted after a short period of service and at an 81 early age, have become the main features of the pension plan. This is con- clusively shown not only by the figures given above with respect to pro- spective payments to persons now on the rolls, but by the following com- parisons of payments to be met to discharge obligations to the three groups of disability and service pensioners : Total Expen- diture for Service and Disability Pensions Per Cent. Expenditures for Group of Pensioners Disability Pensions Per Cent. Service Pensions Per Cent. Present pensioners Pensioners to be retired from present active force $22,713,642 88,217,889 166,517,224 100 100 100 $16,540,732 59,486,188 130,137,177 72.8 67.4 78.2 $6,172,910 28,731,701 36,380,047 27.2 32.6 Pensioners to be retired 1 from the future en- trants into the police force 21.8 Total $277,448,755 100 $206,164,097 74.3 $71,284,658 25.7 _ l The amounts set forth for this group do not represent a complete liquidation of obligations. The figures indicate the payments to be made to this group of pensioners during the term of 83 years, at the end of which period it is assumed that the normal load of the fund will be reached if there be no increase in the size of the service. These figures show that if the present pension laws and their inter- pretation in the future remain unchanged, even though there is not an increase of a man on the roll or a dollar in salaries, the total expenditures for service and disability pensions in the next 83 years will amount to $277,448,755, of which amount $206,164,097, or 74.3%, will be required for payments to persons retired on disability pensions, the service pen- sioners receiving only $71,284,658, or 25.7% of the total. The experience of the pension fund during six years (1907-1912) used as a basis for the above calculations, brought out the fact that of 1,525 members, only 344, or 22.6%, were retired on ordinary service pen- sions, while 1,181 members left the service on the ground of disability, forming 77.4% of the total number of retirements made during the above mentioned period of six years. Physical Condition of Members of Force Allowed to Deteriorate After Entrance The disability provisions of the pension plan indicate the willingness of the department to assume responsibility for the risk to which members of the force are exposed on account of impairment of their health while in the service. Interpreted with reference to the city's interest in an effi- cient force, this willingness is explained by the necessity of having on the force only members who, because of their satisfactory physical con- dition, are fit to perform their duties. For the maintenance of a high standard of health among the members of the force, a surgical bureau con- sisting of 25 police surgeons has been established in the department. These surgeons are responsible for the health of the members, who are 82 entitled to free medical treatment during temporary sickness. In addi- tion to free medical treatment, the department grants sick leave ; and when the disease or disability of a policeman assumes a permanent character, he is eliminated from the service by means of retirement under the disa- bility provisions. It is evident that the importance of the supervision of the health of members cannot be overestimated. It is important to the man; it is im- portant to the city as a means of maintaining a high efficiency; it is im- portant to the city financially. As a means to this end,, the city should not only provide adequately for looking after the health of the force, but should see to it that the plan is well administered and that the men are brought within its discipline. As a result of the severe physical test to which new entrants into the service are now subjected, the force is recruited with a picked body of men. It seems reasonable to assume that the outdoor life of such physi- cally perfect policemen should have a wholesome effect on their health, so far as the requirements of the service are concerned. The work of the average policeman is not hazardous. In view of these favorable condi- tions, and taking into consideration also the additional safeguards pro- vided by the free treatment of temporary diseases and the general medical supervision of the force by the police surgeons, it is but fair to assume that unless the element of personal habits, which may be controlled by discipline, are adverse, the general condition of the health of policemen should be excellent, and that there is no reason for a high rate of retire- ment on the ground of disability. It is therefore surprising to learn that both the sick list of active members and the pension list of members re- tired for disability are widely at variance with this conclusion. Abnormal Rates op Sickness Reported in Department During a recent investigation of the surgical division of the police department by the office of the commissioner of accounts, 1 the sick rate of the uniformed force in 1910 was found to amount to 2.6%. In 1911 the rate increased to 3%, and during the first quarter of 1912 showed 3.4%. In the police department of Chicago the average daily sick rate for 1911 was 1.5%, while in Boston it amounted during the same year to 1.6%. The comparison of these rates would lead to the conclusion either that the health of the New York policeman is inferior, or that when mak- ing their reports the police surgeons of New York are more liberal in deciding what should be regarded as cause for sick leave. It cannot be assumed that the differences are due to climate or other general conditions affecting health. If it be assumed that the health of the New York police- man is not inferior to that of policemen in other cities, then a question should be raised with respect to the accepted causes for sick leave. If the health of the New York policeman is inferior to that of policemen of other cities, a question should be raised with respect to discipline. Surgical Dtvision Characterized as Unsatisfactory and Inefficient The results of two recent investigations, 2 made with the purpose of establishing the efficiency of the work performed by police surgeons, are 1 Report on examination of the Surgical Division of the Police Department, May 17, 1912. * Examination of the Surgical Division of the Police Department by the Office of the Commissioner of Accounts of the City of New York, May 17, 1912. Examination of the same Surgical Division by the Bureau of Municipal Research submitted to your Committee, March 17, 1913. 83 significant because they assume that the surgical division is not fulfilling its purpose. The report of the commissioner of accounts contains a frank condemnation of the work of the surgeons. It was found, while checking the daily reports of surgeons, that nearly half of the members reported as sick were not found at home when visited. Other indications of super- ficial work on the part of the police surgeons were also brought out, and the report concludes with the statement that "the sick list might be sub- stantially reduced by increased attention on the part of the police sur- geons. ' ' A later examination, the results of which were submitted to your committee "as of March 17, 1913" (see pages 4644-4651) has also led to the conclusion that the surgeons show only a passive interest in the health of the department. The findings presented in the report mentioned bear a direct relation to the question of disability retirements, and there- fore should be considered in connection with this report. One of the conclusions which summarizes the lack of proper care of the health of the members of the force is here quoted in full: "A thorough search of the records reveals no comprehensive study of causes of illness, general causes of disabilities, and such other subjects as would provide a basis for making recommenda- tions concerning the welfare of the force. There was no evidence that all or any of the twenty-five surgeons of the department have ever made a general medical survey of the force. There were no evidences of a comparative study of general causes of illness in other large bodies of men such as the army, navy, and other police forces. Nothing indicates that the surgeons have performed any duty other than the mere disciplinary functions defined in the rules." In the light of the evident lack of interest and carelessness in the performance of their work on the part of the police surgeons, the high sick rate of the New York police force cannot be accepted as conclusively establishing the good faith of records and reports upon which sick leave is granted. Nor does it seem to lay a solid foundation for the exercise of discipline over members for intemperate habits. It only points to the need for better discipline of the police surgeons, and the need for a more adequate and effective means of guarding the health of policemen and the interests of the city. These inquiries are also significant in considering the high rate of retirements on the ground of permanent disability. Present Pension Administration Responsible for Abnormally In- creased Rate of Disability Retirements While orders for retirements of policemen for disability are based on the reports of police surgeons, this does not relieve the city from bad administration. The retirement of members of the force under disability provisions may still be largely within the discretion of the police com- missioner, and therefore his attitude on the question of disability is of primary importance. He appoints the police surgeons; he can determine the procedure; he decides who shall be examined for disability in so far as this does not arise on application of a member or on the initiation of the surgeon. As the head of the department, he is in a large measure 84 responsible for the unsatisfactory operation of the surgical division. In- competence or neglect in this division seems to have been largely responsi- ble for laying the foundation for the retirement of many policemen on disability pensions which could have been prevented by faithful adminis- tration. Law Extremely Loose as Kegards Disability [Retirements One of the conditions adverse to good administration is the lack of definition of the word "disability" in the law. The law contents itself with a general phrase "disabled physically and mentally so as to be unfit for full police duty. ' ' Upon the interpretation of this phrase, the decision as to whether the retirement of a policeman will be recommended hinges. It is evident that, although the law is indefinite and can have only limited value in that it allows a wide range of construction, nevertheless the com- missioner has the power to establish a rule of interpretation which will be final; one which will be definite and specific in its application. Under the present practice, with this indefiniteness, it may be assumed that the policeman is only disabled when his disease or injury seriously and unquestionably interferes with the performance of his everyday duties, and that this disability will continue as long as he lives. On the other hand, it is possible to assume that the health and physical condition of the policeman should be at all times of the same high standard as is prescribed by the civil service rules at the date of appointment. It is easy to foresee that the strict and uniform application of the latter sug- gested rule would, within a short time, place every member of the force in retirement. It may be held that any trivial impairment, which would hardly be noticed in private life, would incapacitate the person examined for ' ' full police duty, ' ' and for this reason make his retirement on a disa- bility pension desirable. Dangerous Results of Present Law While the interpretation of the disability provisions by former ad- ministrations could not be characterized by the full recognition of wise limitations, as is evidenced by rather heavy disability retirements in the past, the report of the commissioner of accounts on the subject would lead to the conclusion that the present commissioner strongly leans toward a stricter interpretation of the disability term, regardless of the expense which such interpretation entails. Reporting on the inquiry made in 1912 into the causes which had led to recent increases in the number of disability retirements. Commissioner of Accounts Raymond B. Fosdick made a statement to the effect that Commissioner Waldo's policy was to assume that all the men of the uniformed force must be thoroughly able to do patrol duty. As a result, those who had been long reported as on sick leave were ordered before the board of surgeons, and many were sub- sequently retired. Other persons have from time to time been designated for examination for disability retirement, and if it is to be assumed that under the present organization and administration, the police surgeons have been accommodating in granting certificates for sick leave, it is quite as reasonable to assume that some significance may be attached to an offi- cial order which requires a report to be made as to whether the person to be examined is ' ' unfit for full police duty, ' ' an affirmation of which would be used as a basis for an order of retirement on disability pension. 85 Words "In Performance of Duty" Meaningless Under Present Conditions There is no rule or distinct line of demarcation setting forth what in- terpretation shall be given the law. It is possible to apply the more lib- eral provisions to cases where retirement may be thought desirable. Com- missioner Waldo's opinion that a police officer is in the actual discharge of his duty at all times shows the extent to which the original intent and meaning of the law may be defeated, and results in justifying retirement for any disability in the first ten years of service, which the law evidently meant to limit to cases where an injury or disease was incurred in the per- formance of a specific act of duty, such as wounds received in the quelling of a riot or while making an arrest, etc. In the light of the above indi- cated tendency, to be liberal in the interpretation of a carelessly drawn- up retirement law, the recent heavy increases in the number of disability retirements during the present administration become more intelligible. Increases in Number of Disability Eetirements The following table shows the increases in the number of retirements made in 1910, 1911, and during a 19-month period, May 23, 1911, to De- cember 31, 1912, during which time the present administration was re- sponsible. Period Number Per Cent. Average Years of Service Average Pension Total Retirements: 1910 1 228 360 557 178 269 449 50 91 108 100 100 100 78 75 81 22 25 19 $674.35 1911 726 71 May 23, 1911, to Dec. 31, 1912 * Disability Retirements: 1910 21.7 738.50 1911 x May 23, 1911, to Dec. 31, 1912 2 , Service Retirements: 1910 x 19.5 723.92 1911 * May 23, 1911, to Dec. 31, 1912 2 30.8 833.33 1 From the report of the Commissioner of Accounts on an examination of the SurgicaliDivision of the Police Department, May 17, 1912, pp. 9 and 10. Compiled by hand tabulation from the card records of the Pension Bureau of the Police! Department. The data presented for 1911 embrace a period during which the pen- sion fund was administered by Commissioners Cropsey and Waldo, while the last-mentioned period falls entirely within the 19 months of the pres- ent administration. The table shows a rapid increase in the pension amounts granted, from an average pension of $674.35 in 1910 to $726.71 in 1911, and in the 19 months of the present administration the amount rose to $738.50; a total increase of $64.15 per pensioner. These figures also indicate that the ever-present tendency of members to obtain an early retirement for disability in preference to remaining in the service until eligible for an ordinary or service pension has been, since May, 86 1911, more successful in defeating the original purpose of the law than under former administrations. In 1910 for every 100 retirements, 78 were made on the ground of disability, while during the first 19 months of the present administration, 81 members out of every 100 who were pensioned left the service under the more favorable disability provisions. Retirements Under the Various Disability Provisions of the Law For the purpose of showing the constant increase in disability retire- ments made after varying periods of service, statistics have been prepared covering the period from 1907 to 1912. The following table shows: 1. The number of members who were retired because of disability incurred in the performance of duty during the first ten years of service. 2. The number of those who left as disabled after a period of ten years' and less than 20 years' service. 3. The ever-growing number of those members who chose the favorite mode of separation from the service after 20 years and before the age of 55. Administration Strength of Act- ive Force Total Number of Dis- ability Retire- ments Per Cent of Active Force Number Retired After A Service of Total Num- ber Year Less Than lOYrs. 10 Yrs. & Under 20 Yrs. 20 Yrs. or more of Service Retire- ments 1907 Bingham 9,461 10,012 10,162 10,177 10,207 10,371 168 129 203 177 268 236 1.78 1.29 2.00 1.74 2.62 2.28 6 4 9 19 15 18 42 44 73 44 93 76 120 81 121 114 160 142 58 1908 Bingham 31 1909 1910 1911 1912 Baker (July 1) . . . . Cropsey (Oct. 20) . Waldo (Mav 23) . . Waldo.....' 49 50 92 64 Total 1,181 71 372 738 344 Present Physical Examination of Applicants for Disability Pen- sions of Questionable Value While the police commissioner is primarily responsible for the admin- istration of the disability provisions of the law, this responsibility must be discharged through the police surgeons who have to examine every prospective pensioner, and furnish certificates of disability without which a disability retirement would be illegal. For the protection of the com- missioner and the city, as well as the good opinion of the service, some means should be provided for bringing the surgeons under administra- tive control by requiring the submission of reports setting forth facts that will show whether or not disability certified to by the surgeons is real. The use of the fund for purposes not in harmony with the spirit of its creation does not require outright dishonesty on the part of the surgeon. A physically perfect man probably could not be found in existence, and 87 if such an ideal standard of health were to be considered in the minds of the examining physicians as a requirement for the performance of "full police duty," the task on the part of the surgeons to discover imperfec- tions in an average policeman would not prove difficult. If it is assumed that defective vision unfits one for "full police duty," it is probable that nine-tenths of the policemen could be retired. It is essential, therefore, to have reported the exact extent of the impairment and whether or not it can be corrected. Another matter is of importance. The surgeons are not prohibited from carrying on a private practice ; in fact, from making this their prin- cipal source of income. They are not even prohibited from including in their private practice the families of the members of the force. This may result in a business relationship between the surgeons and prospective pen- sioners which may influence the former to grant certificates of disability. It was reported by those making the two recent examinations of the surgical bureau that the entire work of the surgeons is characterized by carelessness and inattention to duty. The conclusion to be drawn from these reports is that there is lack of discipline on the one hand and lack of regard for the purpose of the pension plan on the other. Knowledge of this condition makes for greater looseness in practice and accommoda- tion to the wishes of the persons interested. If there are three surgeons on the board of survey who will lend themselves to subversive practices, this, if known, is sufficient to accomplish any bad result. The unques- tionable fact is that there has been a very heavy expense resulting from too great liberality shown in the granting of disability pensions, and be- cause the city has been willing to foot the bills, few of those who are vitally interested in the faithful administration of the fund have been heard to complain, and those few have been the ones who have been dealt with in such manner that they have received small, if any, benefit. The findings in relation to the activities of the surgeons presented to your committee as of March 17, 1913, are. significant, and should be examined in connec- tion with this report. Representation op Associations on Pension Board Undesirable In view of the attitude of associations of policemen and pensioners, the appointment of their heads to serve on the pension board whose duties are primarily concerned with the determination of pension amounts to be granted, would seem to be a serious mistake in policy. In this connec- tion, the testimony before your committee on March 27, 1913, of Jeremiah S. Perkins, a retired patrolman, who, after a service of 20 years and five months, was retired during the administration of Commissioner Cropsey on $573 per annum, and later at the very beginning of Commissioner Waldo's administration was raised to $700 is significant: Q. The amount of your pension when you were retired on May 6, 1911, was what? A. $573. Q. "Who was the commissioner? A. Commissioner Cropsey. Q. What have you got now? A. $700. Q. That is the maximum, is it? A. For patrolman, yes, sir. Q. You could not get more than that, could you? A. No, sir. 88 Q. When were you raised to the limit? A. July 20th. Q. What year? A. 1911. Q. Who was commissioner then? A. Commissioner Waldo. Q. "Police Department, July 20, 1911" about two or three months afterwards, wasn't it "Mr. Jeremiah S. Perkins, 201 West 135th Street, Borough of Manhattan Dear Sir: The Police Com- missioner, on the 19th inst., ordered that the proceedings of May 5, 1911, retiring Patrolman Jeremiah S. Perkins, Public Office Squad, be amended by fixing the pension at $700. Bespectfully, William Kipp, Chief Clerk." Now, how did you go about after Commissioner Waldo got in to get your pension put up to $700? I just want no criticism we just want to find out about A. (Interposing) : There were eight or ten men, I believe, that had been lower than they thought it ought to have been, and we met and held a consultation over it. I suggested employing coun- sel, and they all agreed upon it. I went down and saw Julius Mayer, spoke to him about it ; he said that if the men wanted to get together enough monej' to retain him that he would willingly take the case. In the meantime, why, we consulted and I wrote to the president, I think it was, of the Patrolmen's Benevolent Associa- tion, told him that they ought to take it up. I have those com- munications here, my letters to them, and their replies. Q. Well, just tell us the substance? I do not care to read them all in evidence. A. The substance is that they engaged Mr. William Murphy, who was the attorney for the Patrolmen's Benev- olent Association, and he took the matter up and was going to take it into court, and I received a letter from him that he had been to see if he could straighten it out, when he looked into the matter. I afterward received word that the pension had been increased. Q. So really you had nothing to do with getting the increase ? A. No, sir. Q. Mr. William Murphy did it all. A. Yes, sir. Q. Did the Patrolmen's Benevolent Association pay Mr. Murphy, or did you gentlemen have to pay it? A. We did not pay him a nickel. Q. The Patrolmen's Benevolent Association attended to it? A. Yes, sir; he was employed, I believe, under a yearly salary to look after that interest. Q. By this Association? A. Yes, sir. Q. And after you wrote the Patrolmen's Benevolent Asso- ciation, told them that they ought to take it up, and after their lawyer came to see you, then you knew nothing about it until you were raised up to the limit, $700? A. No, sir. Q. That is all you had to do with it?- A. That is all I had to do with it. Q. You didn't see the Commissioner yourself? A. No, sir. 89 Q. You didn't send anybody to see him? A. No, sir. Q. Were the* whole crowd of you raised to $700 ? A. I be- lieve they all received their increase. Beneficiaries Themselves Question Present Practice The extraordinary expense that has resulted from the constantly in- creasing use of the disability pension granted before the ordinary service retirement would be available (i. e., before the service pension require- ments of 25 years' service and age 55 are complied with) has been shown at the beginning of this chapter. It has further been shown in a general way that a more frequent use has been made of this method during the present administration. In view of the great danger of having the whole pension plan impaired through inefficient administration, and of the resulting high cost and the disrepute attached to the unnecessarily heavy burden imposed on the taxpayer if the present methods are not checked, it is of interest to know that some of the policemen are alive to- the situation. In this connection, a letter sent by the late Mayor Gaynor to Commissioner Waldo on December 6, 1911, is of interest: I am sending you an anonymous letter on a police department letter-head about the doctors certifying policemen for retirement. I know, of course, that we cannot always give full attention to such communications, but from what I know of the retirement of policemen by surgeons in the past, I am ready to believe almost anything about it. I hope you will make a full investigation of it. Retirement of Persons Whose Health Is Not Permanently Impaired Among the cases of disability pensioners re-examined by physicians employed by the commissioner of accounts in 1912, three were in such condition that the physicians expressed doubt as to whether the pensions had been properly granted; three were frankly in good physical condi- tion, there being apparently no trace of the disability) for which they were retired, and three others refused to be examined. On the other hand, in seven cases examined, where applications for retirement on the plea of disability were denied in 1911-1912, four were found to be in good physical condition, but it was apparent that the remaining three should have been retired. 1 Discrimination Between Applicants of Equal Merit The failure to certify to a disability which warrants retirement is quite as serious to the city's interests as the tendency, of the surgeons to be accommodating in certifying to disability when it does not exist. It is not only injurious to the whole service by tending to undermine the plan, but it works a special hardship on the individual who is deprived of bene- fits which he may fairly expect as a condition of employment. Incompetence or Lack of Good Faith in Certifications of Persons for Disability Pensions A peculiar case brought to light during the present investigation in- dicates either lack of good faith or incompetence upon the part of physi- cians certifying to a permanent disability. 1 See pages 12 and 13 of the report on the examination referred to. 90 The Case of Sergeant James F. Vallely Detective Sergeant James F. Vallely was retired for disability on February 14, 1905, receiving a pension of half his final salary, or $1,000 per annum. After a period of a little over ,one year, he decided that it would be to his advantage to return to active service. The means for effecting a reinstatement were provided through a special law passed at Albany ''authorizing the police commissioner of the City of New York to reinstate detective sergeants. ' ' * Since Sergeant Vallely had been found permanently disabled only about a year before, however, -it was necessary to re-examine him and find the disability gone before he could be returned to active service. This was done ; a board of survey consisting of Surgeons Augustus H. Brown, Edward T. Higgins, and John D. Gorman duly certifying that the sergeant was "fit, physically and mentally to perform police duty." The sergeant was reinstated, and returned to his duties on June 7, 1906. Again, after serving about two years, he decided that he would like to retire. Even then, although he had something more than 25 years to his credit, his age was less than 55. This prevented re- tirement on a service pension. He therefore tried the same mode of exit as on the occasion of his first retirement, i. e., on the ground of perma- nent disability. This time Police Surgeons Walter B. Browner, Edward J. Donlin, and Samuel M. Johnson found on May 20, 1908, the sergeant's vision defective to such an extent as to "unfit him for the performance of police duty," and the officer was again, on May 21, 1908, pensioned at the old rate of $1,000. Later, a report was made by an examiner, who was instructed to inquire into the case. This report states that the pen- sioner is in good physical condition, and is employed by the Central Trust Company, 54 "Wall Street, as special officer. The record of this case, in the form of documents and correspondence relating to the retirement, was found to be complete in the files of the department except such part as relates to the period preceding the passage of the above-mentioned senate bill. Copies of the remaining papers are appended on pages 140 to 146. From such cases as this, it would appear that the certification of "permanent" disability, in some instances at least, is nothing less than a farce which cannot but discredit and injure those who are deserving. The Case op Patrolman James E. Wrenn Among other instances of the abuse of the disability provisions may be cited the case of James E. Wrenn. This patrolman during his active service was reported to be collecting graft in Harlem for Inspectors Thompson, Sweeney, Hussey, and Murtha. The complaints of citizens received by the department were turned over for investigation to Inspector Thompson, who replied that "upon examination" he found the complaints were without foundation. When the district attorney began work on the graft cases in which the above-mentioned inspectors were implicated, Wrenn, at that time, December, 1912, having less than 20 years' service to his credit and there- fore not being eligible to retirement on a service pension, was found "per- manently disabled" by Surgeons S. M. Johnson, D. D. Jennings, and E. H. Fiske, who, on December 10, 1912, certified that the patrolman was suf- fering from "defective vision" and "nephritis," which diseases were of 1 Senate Bill 366, Chapter 663 of the Laws of 1906. 91 such a nature as to unfit and disable him for the performance of "full police duty." Notwithstanding the fact that Wrenn had served only 19 years and 9 months in the department, and therefore was not entitled to a full pension, his pension rate was fixed by the pension board at $700, or half his annual pay of $1400. Being out of the department, he then made his well-known confes- sions of having acted as a graft collector while in the service. This, how- ever, did not result in the forfeiture of his pension, although the charter is clear with regard to the power of the police commissioner to revoke pensions granted for disability to members who have served less than 20 years. The present circumstances of this pensioner have also been made the subject of investigation, and it has been found that he is apparently in perfectly good health and comfortable circumstances, owning a "Raines Law Hotel" in Harlem. The favorable opinion of a community in regard to the pension fund cannot continue long when a man of this kind is allowed to draw a pen- sion of $700, while other policemen, more honest and less clever, may die before completing 25 years of service and leave their families nothing. Or, if they live, they may have to serve, in some cases, 34 years before they can retire on a $700 pension, which their discredited comrade was clever enough to secure after serving 14 years less than their own term. It is so serious a reflection on the administration that it not only lowers the confi- dence of men in the service, but it may cause the whole pension system to be worked as a standing inducement to political corruption. Statistics of Retirement Indicate that Not All Disability Pensions Are Bona Fide An analysis of the number of disability retirements has shown that in the majority of cases policemen leave the force after 20 years of ser- vice (see page 107). In this connection the following table showing the length of service of 449 members who were retired for disability during 19 months of the present administration, May 23, 1911 to December 31, 1912, is of interest : Number Length of Service * of Retirements under 10 years 22 10 years and under 15 years 36 15 years and under 16 years 36 16 years and under 17 years 23 17 years and under 18 years 12 18 years and under 19 years 24 19 years and under 20 years 16 20 years and under 21 years _. 95 21 years and under 22 years 35 22 years and under 23 years 38 23 years and under 24 years 28 24 years and under 25 years 24 25 years and under 26 years 19 26 years and under 27 years 13 27 years and under 28 years 10 28 years and under 29 years 2 29 years and under 30 years 8 30 years and over 8 Total 449 1 The average length of service of the 449 retired men was 19.48 years. 92 A study of the above table shows that, with the increase in length of service and therefore the corresponding increase in age, the number of disability retirements grows until the member has served 25 years or more, when the same naturally decreases because of the opportunity to retire on ordinary pensions, on application, provided age 55 is reached. An interesting fact becomes evident when a comparison of the num- ber of retirements around the twentieth year of service is, made. After 19 and less than 20 years' service, only 16 policemen were retired, and probably the majority left the service under compulsion, while almost six times this number, or 95 members, left the force on the ground of perma- nent disability after 20 and less than 21 years of service. This sudden increase is due to the fact that the retirement on disability after 20 years of service has the same advantages as retirement on a regular pension, i. e., the pension cannot be revoked by the commissioner, and the amount is fixed by law at "not less than half" the final salary. Many of Present Disability Pensioners Enjoy Average Good Health An effort was made to determine the present occupations of retired policemen. For this purpose the list of names and addresses as published in the annual pension report was compared with the city directory. Be- cause of mistakes in the directory, as well as in the annual report, the results of such a comparison were limited, and additional inquiries were made through personal interviews and correspondence. Of the total of 268 policemen who were found to have occupations, only 93 were on ser- vice pensions, while the remaining 175 were men who had been retired because of disability. This is more than 10% of the total number of disa- bility pensioners on the roll in the early part of the current year (1,641). Segregated according to the number of years served in the department, the record of the 175 pensioners is as follows: 13 pensioners retired after less than 10 years' service. 47 pensioners retired after 10 and less than 20 years. 115 pensioners retired after 20 years or more. The occupations of these 175 disability pensioners were found to bo as follows: In business for themselves i 27 Bookkeepers or clerks 23 Real estate brokers 23 Watchmen, guards and special officers 16 Detectives 14 In other city departments , 13 In other occupations: Messengers and collectors 8 Managers and foremen 7 Agents ... 5 Day laborers 5 Carpenters 3 Salesmen 3 Inspectors 3 Superintendents 3 Miscellaneous 22 59 Total 175 93 The above table showing various occupations followed by disability pensioners does not present conclusive proof that the retirements in the 175 cases were made upon insufficient grounds. It is quite possible to assume that the disability of a policeman, although making him unfit for the performance of "full police duty," does not in the least interfere with his opportunities to secure and hold a position in another field of endeavor. It all depends on the manner in which the term "full police duty" is interpreted. A better understanding may be had from intimate knowledge of what some of these men are doing. One of the pensioners, Matthew McConnell, included in the above tabulation under "miscel- laneous" was found to be a trainer for boxers. He was retired on $500 per annum after a service of less than 20 years, which, under ordinary circumstances, would lead to the conclusion that the disability which caused his separation from the service was of a serious nature. Such con- clusion, however, seems to be questionable in view of his occupation. Other cases raise a number of questions. They are not given for lack of time and space. Disability Pensioners Employed in Other City Departments In this connection, Table XIV (see page 128) is of special interest. It shows that of the ten pensioners listed who are employed in other city departments, five left the service on the ground of disability and have substantially bettered themselves financially, receiving more in salary than in pension ; the income resulting from both sources being larger than the salary they drew during their active service in the department. No Check on Propriety of Disability Retirements It was ascertained during the present investigation that no efforts have ever been made to learn whether or not the disability of a pensioner has disappeared after his retirement. It is well known that there is a pos- sibility on the part of the examining surgeons to make a mistake as to the permanency of a disability and, therefore, a number of police pension funds, which retire policemen on disability pensions, have specific rules providing for a periodical examination of disability pensioners, and their return to police duty if the disability disappears. Notwithstanding the fact that the law is clear with regard to the commissioner's power to re- voke certain disability pensions, no revocation has ever been made on the ground of restored health, nor has any effort ever been made to organize a system of physical examination of members retired for disability. The provisions relating to the granting of pensions for disability after a service of ten years and less than twenty-five years are defined in section 354 of the charter under paragraphs 3 and 4. The same section emphasizes the fact that the granting of pensions under this section is entirely within the discretion of the police commissioner. Section 356 provides that "the commissioner may, in his discretion, order any pension granted, or any part thereof, to cease, or be diminished, except those pen- sions as to which it is otherwise provided in this act, and as therein pro- vided. ' ' This gives the commissioner the power to revoke and amend any pensions granted under section 354, since no provision to the contrary is contained therein. When Commissioner Waldo was interviewed with regard to the lack 94 of measures in the department for physical examination of disability pen- sioners, he made a statement that it would be "unethical" to retire a policeman on the ground of disability and then to re-examine him and take away his pension. Whatever the meaning of this statement may be, it shows that the administration is too little concerned as to whether there may have been mistake or fraud in the examinations, or unjustified cost imposed on the city, or an improper use of public funds. Abnormal Eate op Disability Retirements The heavy charge to the city and the large strain on the fund for disability pensions are well brought out by the diagram in the actuarial part of this report on page 158. The smooth curve showing the adjusted values of disability retirements indicates that the latter increase abnorm- ally, in the case of members 41 years old and upwards, i. e., after they have served 20 years or more. On page 168 of the actuarial report an- other table is presented showing a comparison of the rate of invalidity as observed in the police department of New York City during the six years, 1907-1912, with rates experienced in other services and funds. The rate of disability of the police pension fund is so abnormally high in com- parison with rates of other funds that it raises a strong presumption that in many cases retirements are made on insufficient grounds. The most surprising fact, however, is brought out by the rate of mortality among disability pensioners as compared with the mortality rate among service pensioners. Two diagrams are presented on pages 160 and 161 of the actuarial report. In the case of disability retirements after less than 20 years' service, i. e., when the members are between 21 and 50 years of age, the mortality rate is high, indicating that, in the -majority of cases, the policemen were retired for bona fide disability. The rate decreases, however, during this period, indicating that as the pension amounts increase with the number of years a member has served in the department, and, consequently, the desirability of retirement on such pen- sions increases also, the policemen who are placed on the disability roll have prospects of long life. After the age of 55 the mortality rate of disability pensioners begins to increase, due to the normal increased prob- ability of death because of old age. A comparison of the rate of mortality among disabled policemen with similar rates observed in other funds is presented in Table 11, page 170, of the actuarial report. Data Necessary for Estimating Cost of Disability Pensions Calculations incident to the determination of the proper pension rates to be granted and of the cost of operating the disability phase of the plan, depend to a large degree on the reliability of the following data : 1. The rate of bona fide invalidity in the service. 2. The mortality rate among disability pensioners. 3. The ages of disabled members who retire on disability pensions. With regard to the first two factors, the abnormal rates as shown in the actuarial report indicate that it would be financially impossible to continue the present method of retirement for disability. 95 With regard to the third factor, the present scheme is faulty because it does not recognize the age of a pensioner as the most important factor in the determination of the pension amounts to be granted. It is necessary, therefore, to point out that the experience of the fund with regard to disability retirements cannot be used in its present shape, in forming any conclusions as to what the invalidity and mortality rates would be, or in estimating the cost of disability provisions under a sound plan, where only actual, bona fide, permanent disability cases would receive pensions. The pension records of the department lack the most important details needed as a basis for such actuarial computations. What little information there is with regard to the nature and extent of the disabilities which caused retirements, is presented in such unsatisfactory form and filed in such an inconvenient way that it would seem almost im- possible to bring the data together in any serviceable manner. Unfortu- nately, therefore, the long experience of the fund in this respect has been practically wasted. As pointed out on page 81, the disability retirements are responsible for 74.3% of the total pension expenditures to be made to retired mem- bers of the force during the next 83 years. It is further shown that dur- ing 1907-1912, six years, 77.4% of the total number of retirements were made on the ground of disability. The comparison of the quoted per- centage of cost with the percentage of the number of retirements would seem to indicate that the disability pensioners draw individually less money from the fund than those who retire on service pensions. This is explained by the fact that those who retire in the first years of service draw a small pension, and in addition, as shown by the mortality rates in the actuarial report on page 170, Table 11 (see also Table XV, page 130), their disability is, as a rule, of a serious nature, causing a great number of deaths soon after retirement. These conditions tend to lower the aver- age cost of disability pensions. While the pensions granted for disability in a few early years of service are comparatively inexpensive, because of the high mortality of the pensioners, the pensions granted after a longer service result in a heavy burden on the fund due to the high pension rates granted and the lower rate of mortality of the pensioners. As pointed out on page 188 of the actuarial report, the average pension allowance made in the case of disability retirements during the six-year period, 1907-1912, formed 47% of the final salary of the pensioner. In view of the fact that the disability pension rates vary from 25% to 50% for retirements after from 10 to 20 years' service, it is evident that the great majority of disability retire- ments are made after the members have served 20 years in the depart- ment, as indicated on page 86. The heavy rate of disability retirements after 20 years' service, as compared with the singularly insignificant number of service retirements, leads to the conclusion that the disability provisions of the pension plan have the effect of reducing the retirement conditions from 25 years' ser- vice and the age of 55 to 20 years' service regardless of age. Relative Cost of Officers' as Compared with Patrolmen's Disability Pensions Since the final salary is taken as a basis for calculating pensions, the officers who least need pensions get a larger pro rata than patrolmen. 96 For the purpose of illustrating the operation of this practice in this re- spect, let us assume that four policemen entered the service at the average age of 25, and that after 20 years' service they retired on the ground of disability with the rank of patrolman, sergeant, lieutenant, and captain, respectively. Let us further assume that these officers served in each rank the average number of years as set forth on page 4593 of the report on personnel and civil service features of the police department. The length of service in each rank would be as follows : Retired as sergeant: Length of service as patrolman 11 years, 10 months Length of service as sergeant 8 years, 2 months Total 20 years Retired as lieutenant: Length of service as patrolman 9 years, 6 months Length of service as sergeant 6 years, 3 months Length of service as lieutenant 4 years, 3 months Total 20 years Retired as captain: Length of service as patrolman 6 years, 10 months Length of service as sergeant 3 years, 8 months Length of service as lieutenant 7 years, 6 months Length of service as captain 2 years, Total 20 years Since we have assumed that the four members entered the service at a, uniform age of 25 and served 20 years, their age on the date of retire- ment will be 45. The expectation of life of a disability pensioner of that age was found to be 17.8 years. Using the above indicated data as a basis, the active pay and pension received by the four members would be as follows: Disability Retirements Active Pay Rate of Pension Total Pension Per Cent, of Active Pay Retired as patrolman $26,150 28,794 21,762 36,513 $700 875 1,125 1,375 $12,460 15,575 20,025 24,475 47.65 Retired as sergeant 54 09 Retired as lieutenant 63 05 Retired as captain 67.03 The larger cost of pensions to higher officers shows that the present disability pensions operate most favorably to those who need them least. 97 Cost op Disability Pensions Compared with Cost op Service Pensions The difference in the cost of pensions of the same amounts granted to disability pensioners at the age of 45 and to service pensioners at the age of 55 is great, as may be seen from a comparison of the above table with a similar table containing data for service retirements, presented below : Service Retirements Active Pay Rate of Pension Total Pension Per Cent, of Active Pay Retired as patrolman $40,150 46,458 56,450 64,013 $700 875 1,125 1,375 $9,569 11,961 15,379 18,796 23 83 Retired as sergeant 26 73 Retired as lieutenant 27.24 Retired as captain 29.36 While the pensions granted for disability cost more than service pensions, the contributions of the disability pensioners during a shorter period of service are, of necessity, smaller than those made by service pensioners during a longer term, as may be seen from a comparative table which follows: 2% Contributions Total Pension Per Cent. Contributed by Employee Service Pensioner Disability Pensioner Service Pensioner Disability Pensioner Service Pensioner Disability Pensioner Retired as patrolman Retired as sergeant Retired as lieutenant .... $803 929 1,129 1,280 $525 576 635 730 $9,569 11,961 15,379 18,796 $12,460 15,575 20,025 24,475 8.39 7.77 7.34 6.81 4.21 3.69 3.17 2.98 The following table shows the average annual cost of the active ser- vice of the eight above-mentioned disability and service pensioners, in so far as such service is compensated by a pension: Total Pension Pension Per Year of Active Service Service Pensioner Disability Pensioner Service Pensioner Disability Pensioner Retired as patrolman $9,569 11,961 15,379 18,796 $12,460 15,575 20,025 24,475 $318.97 398.70 512.63 626.53 $498 40 Retired as sergeant 623 00 Retired as lieutenant 801 00 Retired as captain 979 00 98 In order to show the average annual cost to the department of the services of disability pensioners, such cost consisting of active pay and pension has been determined in the case of 52 individual disability retire- ments, and presented in Table XVII (see page 134). This data should be compared with Table XVI (see page 132), giving similar information in the case of five service retirements. CHAPTER X How the Plan Has Operated as a Means op Providing Pensions to Dependents op Policemen Nature op Problem Involved in Pensioning Dependents In considering this phase of the present plan the first question to be considered is whether and under what conditions the city should under- take to pay pensions to relatives of decedent policemen. The retirement pensions provide a protection to the policeman and his family against poverty in old age, when he is no longer able to render efficient service. These pensions are granted when the recipient is still at an age to engage in business or obtain other employment. Having shown this marked liber- ality to policemen when many thousands of other civil servants of the city are wholly without provision for old age, the questions arise : 1. "Whether it is a wise step for the city to go further in helping employees to provide for their families. 2. Whether, in case it is decided to continue to grant annuities to the families of decedent employees, these should not be of uni- form amount, so that the relief will be primarily to those of lower rank and those who really need support, making to these much more liberal allowances than at present. 3. Whether in any event the benefits should not be confined to those who were members of the family at the time of retirement, and not hold out an inducement to contract new family obligations while on the roll of pensioners with a view to making the an- nuity available to persons not in any way connected with the service for a long time after the death of the retired member. Aside from the question of cost, it is to be assumed that any plan adopted should be based on ideals of community welfare and not on the personal advantage of individuals. The pension plan, therefore, should not be one which will weaken the moral force of beneficiaries; and as an institutional matter the grant should not be based on a multitude of fac- tors which are not in any way related to the policeman's service to the community. It has been urged that grants to widows should be considered as a question separate and apart from retirement. On the occasion of an in- vestigation into the causes which led to the insolvency of the civil service retirement fund in New South Wales, Mr. Teece, the examining actuary, expressed himself with regard to gratuities to widows and relatives of deceased officers as a provision "repugnant to the principles of a super- annuation scheme." This viewpoint has also been urged in relation to the pension plan of the police department, the object of which is princi- pally to increase the efficiency of the members of the force and not to act as a fund for the aged and dependent. In support of this view it is 90 100 . said that it is of the highest social advantage to have policemen them- selves assume the obligation of caring for their families, and the families so to conduct themselves that they may have ordinary comforts after the death of the retired employees. The early retirement would contribute to this result. If it is desirable not to leave the matter to the member, there are various plans which might be invoked to do this. It is possible, for example, to empower the department to require its members to take out insurance for their families. It is possible for the city to establish savings funds with guaranteed interest-bearing deposits without cost of administration. Again, in case of actual want arising through misfor- tune, there are remedies to be resorted to that would comport with a social scheme of relief. Since, however, the main purpose of this report is to paint the picture of present conditions and the results of present practices, and to leave to subsequent consideration specific recommenda- tions, this chapter will be given over to observations on the operation of the present plan. Pensions to Dependents Must Be Added to Cost of Service and Disa- bility Retirements The provisions of the charter relating to the pensioning of the de- pendents of policemen are set forth on page 37. Under the present pension plan, the city undertakes : 1. To repair the loss to those who share in the salary of the police- man (to the extent of the pension allowances) when such in- come is lost through death of the employee while in the ser- vice. 2. To extend the same benefits to those who, when a pensioner loses his pension by death, would be deprived of this means of sup- port. The principles, therefore, underlying the retirement of members of the force on service and disability pensions, which have been previously discussed in this report, are also recognized in the pensioning of their wives, children, and parents. The benefits conferred upon the dependents of policemen must for that reason be regarded as an extension of the original plan to provide an income after retirement whether for length of service or for disability, and in effect to carry the contributions of the city over to the next generation. Pensions to Dependents Cost More than Service Pensions Simply to give perspective to the subject, the relative importance of this additional feature of the present pension system, so far as the ques- tion of cost is concerned, may again be stated. Assuming that no pen- sions will be granted to anyone who is not now either on the pension roll or on the active force, and that the present practice will be continued for these, the future pensions would be distributed as follows: Pension payments to service pensioners $34,904,611 23% Pension payments to disability pensioners 76,026,920 51% Pension payments to widow pensioners 31,972,051 22% Pension payments to children pensioners 6,100,029 4% Total pension payments $149,003,611100% 101 It should be noted that the pensioning of widows (22%) and children (4%) costs the department more than the retirement of members of the force (23%) on pensions for "service." This is explained by the fact that not only are widows and dependents of deceased "service" pen- sioners placed on the pension roll, but also the widows and dependents of deceased "disability" pensioners. Cost of Pensions to Dependents Per Each $100 Paid to Active Members Another view may be taken of the relative importance of pensions to dependents. According to the data presented in Table 34, page 208, of the actuarial report, for every $100 in salaries paid to the active mem- bers, the city must ultimately pay $33.44 in pensions to persons who have retired, or their dependents. Of this $33.44 paid out for pensions, $23.73 will be paid to those who have been retired from the force for "disability" and "service," and $9.71 will be spent as pensions to de- pendents. In other words, for every $100 spent on pensions $70.96 will be paid to members while in retirement and $29.04 to relatives after their death. "While Total Expenditures Are Large, the Present Plan Does Not Provide Against Want Assuming that the city adopts the policy of protecting the widows and orphans of policemen, the large amount ($38,072,080) which will be paid to those dependents would seem to justify the conclusion that ample means will be made to provide them against want. This, however, is not accomplished. If the policy indicated is to be carried out,' jihe benefits must be increased. On page 188 of the actuarial report' it is' sftown that during the six years, 1907-1912, preceding this investigation, the 'average allowance to widows amounted to $283 per year, and $152 -per 1 /year to: each family of children to continue until the youngest child reaches 18 years of age. It is evident that $5.44 per week ($283 per year) is insuffe- cient to protect a widow against the absolutely essential necessities of life, and that in order to exist she would be obliged to find work. The additional pension received in the case of children, the maximum amount- ing to a weekly income of $2.92 ($152 per year) cannot be seriously regarded as an adequate relief under the circumstances. Benefits Not Distributed Equitably or According to Needs But more serious for individual pensioners is the fact that the aver- age allowance does not go to all. Those who are otherwise protected ob- tain the largest allowances, while those who are in need receive less. Table IX, on page 119, indicates the annual amounts received by the 1,338 widows who were on the pension roll in February, 1913. Of this number, 1,004, or 75.8%, were receiving $300 and less than $400 per year ; 18 were on an annual pension income of more than $400, while 316 widows, or 22.7% of the total, were drawing less than $300 per year. Analyzing again the benefits to the last group, it is found that 169 were pensioned on less than $200 per year, which means a weekly income of less than $3.85. 102 Lack of Provision for Relief in Case of Policeman's Death After Less than 10 Years in Active Service One of the gross inequities in the operation of the present plan is found in the treatment given to widows and children of certain members of the force who died in service and those who die after retirement. To the first class no relief is given, to the second class a pension is given as long as the member lives, then the benefits are extended to the widow as long as she lives, and then to the children till they reach the age to earn an independent income. Although the present pension plan is in part contributory, it does not recognize the employee's right to a pension un- less he has complied with the retirement conditions. No surrender values are established, and the pensions granted to the widows and children of a policeman bear little or no relation to the value of his services to the department. If a deceased member has served less than ten years, no pro- vision is made for the relief of his dependents unless he was killed in the discharge of duty, when a maximum allowance of $600 per year is paid to his widow or children, or, in the absence of a family, to his dependent parents. During the six-year period, 1907-1912, only 27 out of a total of 496 members who died while in active service lost their lives due to the performance of some specific act of duty. The dependents of a member dying during the first ten years of service from causes not included in the discharge of duty are not entitled to any benefits from the depart- ment, although during that time he will have contributed 20% of a year's pay. A Question Raised with Respect to Benefits to "Widows of Disa- bility Pensioners As shown on page 81 in the chapter on disability pensions, about three times as much is paid out on disability pensions as on service pen- sions. During th3 six-year period, 1907-1912, of a total of 1,525 retire- ments, only 344 were made on the ground of long service and age limit, while 1 ,181 policemen left the department before complying with the regu- lar retirement requirements, on the ground of disability, the nature of which in many, if not most, cases was not serious enough to interfere with the pensioner's chances for long life. This may be seen from the mor- tality rates determined among the disability pensioners, set forth on pages 161 and 170 of the actuarial report, both by means of a table and a dia- gram. The bona fides of many, if not, most of these disability pensioners are open to question. So long as this condition prevails, so long as the dis- ability pension is used for purposes which are questionable, if not fraudu- lent, the continuation of the pension benefits to the relatives of the 1,181 disability pensioners is a matter for serious consideration, especially when it is known that many of the widows and orphans of the 344 service pen- sioners are inadequately provided for. The large number of widows of disability pensioners on the roll explains why it is that the widows' bene- fits cost more than the benefits to service pensioners. Insecurity of Pension Income Due to Absolute Discretionary Powers of Commissioner Another serious defect in the present plan lies in the uncertainty of its operation. This is largely due to the power of the police commissioner 103 to decide what benefits shall be given. This results in grave injustice being done to some of the pensioned dependents of policemen. It has been shown that the average pension granted during the six-year period, 1907-1912, amounted only to $283 per year. Small as such an income is, it may prove of some benefit as a protection against poverty. There is not only the danger of personal bias, but every change of administration of the police department may be accompanied by a change in pension policy. Much depends on the attitude of each administration with regard to the inter- pretation of the pension law. By one a tendency to economize may be dis- played, and the existing pensions scaled down according to a newly adopted schedule; by another a liberal interpretation of the law may result in raising all pensions to the limit allowed by law. It is, therefore, not sur- prising that with each change of administration the army of almost 1,400 widows on the pension roll may entertain fear for the safety of their in- comes. Moreover, this places the officers themselves under constant pres- sure. Those whose pensions are below the maximum will endeavor to have their incomes raised through appeals to the police commissioner, as well as through the intervention of representatives of various associations and constituencies. Such a plan, in fact, encourages the organization of such constituencies. A partial list of those agencies which make these matters their special care follows: Patrolmen's Benevolent Association. Patrolmen's Endowment Association. President, Elroy I. Quick, C. 0. Squad. N. Y. Police Endowment Association. President, Inspector Donald Grant. Clerical Patrolmen's Benevolent Association. Patrolmen's Widows' Benevolent Society. President, Mrs. Ellen Joyce. Secretary, Theresa V. McGinley. Veteran Police Association. Brooklyn and Queens Police Mutual Aid Association. President, James J. Mannion, 173d Precinct. Mutual Police Association. Directors: Patrick J. McQueeny, Patrick H. Walsh, Timothy J. Dorcett, Harry J. Young. Lieutenants' Benevolent Association. President, Richard E. Enright. Patrolmen's Wives' Benevolent Association. President, Mrs. E. J. Finch. The appeals are not only made directly in person or by correspond- ence, but also indirectly by obtaining the intervention of individuals who 104 are thought to have enough influence with the police commissioner to induce him to lend weight to requests and recommendations. The net result of these activities is that much valuable time of the officers is wasted attending to conferences and correspondence in connection with these appeals, and by forcing on the police commissioner duties of a character which he should not perform. Changes in Administration Prevent Uniform Treatment As indicated on page 51, since 1901, or during a period of 13 years, no less than eight commissioners have succeeded each other in the admin- istration of the department. Each of these commissioners has interpreted the pension laws in his particular way. This has resulted in various revo- cations, restorations, increases, and decreases in pensions. The activities of three administrations (McAdoo, Bingham, and Waldo) in this connec- tion have been presented in the form of a table on page 52. Table XIII (see page 126) shows the total number of pensions granted to widows since 1857, and the proportion of pensions which were amended as com- pared with those not amended. It appears that of 2,109 widow pensioners, 693 or about 33% of their total number were amended and some were amended four, five, and six times. Discretionary Powers Especially Undesirable When Pension Is Granted to Widow op Pensioner Disabled in Performance of Duty Uncertainty in the amount of pensions is especially vicious in cases of the family of a member who lost his life in performance of duty. Not only has the police commissioner the right to decide whether or not a pen- sion shall be given, but each of his successors may disagree with his de- cision, and revoke and amend the pension according to his interpretation of the law. A decision as to whether or not the family of a policeman who is killed in the performance of duty should receive a pension, is a decision which should not be left to any man, but should be settled as a matter of law. His family should have a fixed, indisputable right to a pen- sion when the fact of his having lost his life in the performance of duty is established. The Principle of Having Facts Determined by a Patrolman Investi- gator Is Wrong By reason of the fact that the police commissioner cannot personally inquire into all the facts, he must content himself with determining ques- tions of policy, turning over questions of fact to the pension board, an agency established during the present administration. This board, how- ever, bases its recommendations to the police commissioner on the reports of a single pension investigator, who comes into personal contact with the prospective widow pensioner, who is not required to appear before the pension board when her application is acted upon. This investigator is a patrolman of limited education and experience, and with very close per- sonal ties and sympathies with those who apply for benefits. So long as this means is employed, it is logical to assume that the patrolman's judg- ment, in many cases, will be subject to limitations which will not make him an impartial witness, and that he will be affected by his personal contact with the prospective beneficiary and her attitude toward him. 105 Chances for Prejudiced Interpretation of Law Because of Personal Relations of Beneficiaries to Officials of Pension Board The same possibility also exists in the board as at present constituted. In cases where the widow of a policeman takes a personal or active part in obtaining a pension, there is always left to her the chance of interesting the members of the pension board in her particular application, as the members of the board are also members of the police force and may be her friends. It is also obvious that a widow who is aggressive may have an advantage over her more retiring sister, whose husband may have served a much longer period and may have been a more efficient member of the force. With all the intertwined relations existing in the force, the widow who knows how to utilize her friends to reach the pension board may ob- tain benefits not deserved in the form of a pension or an increase in pen- sion, as the case may be ; while another widow who deserves and is entitled to favorable consideration may receive only a relatively small pension or none at all. All this tends to bring the pension plan into disfavor, and shows the need for the establishment of conditions that will be in every way favorable to the protection of the funds, and to insuring their use for the high purpose for which they are created. Pension of One Widow Revoked for a Given Reason The situations suggested are not merely academic portrayal. Just such results have obtained in connection with the examination of pension applications of widows by the present pension board ; the statement on the witness stand of its chairman, Deputy Commissioner Dillon, is of interest : l The only point we examined is whether a policeman had served 10 years in the Department, whether the woman was his widow, and whether she had been married to him during the time he was a mem- ber of the Police Department. If the woman had been married to him during the time he was a policeman and was of good moral character, as far as we could ascertain, saw no reason why she should not get a pension, and the pension was granted to the amount of $300 the same as in the Fire Department. One of the women pensioners (Agnes Lyons), whose pension was granted during the administration of Commissioner Baker, May 13, 1910, at the rate of $120 per year, applied during the present administration for an increase. The pension investigator of the department made an ex- amination and reported that the petitioner had married the deceased pen- sioner nine years and ten months after his retirement from active service. It is significant that this fact was not brought to light until the widow in question applied for an increase, and points to the possibility that there may be a number of similar cases among the 1,342 widow pensioners now on the roll. The pension under discussion was revoked on the recommen- dation of the pension board, because "the Police Department does not grant pensions to women who are married to retired members of the force.'* Pension of Another Widow Under Same Conditions Increased An entirely different decision was reached, however, in the case of another widow (Jennie Cotter). She had married a service pensioner 13 1 See page 4333, minutes of the meeting held by your Committee on March 26, 1913. 106 years after his retirement, but succeeded in obtaining a pension of $120 per year on December 9, 1909, during the administration of Commissioner Baker. During the present administration, she applied for an increase in her pension. Although the fact of her having married the pensioner 13 pears after his retirement was known, and was a matter of record in the department, an increase of her pension to $300 per annum was granted. The two parallel cases show not only the possibility but also the fact that favoritism does obtain in the granting of pensions. The Same Pension Case Treated in Three Different Wats by as Many Police Commissioners The pension law, as previously stated, is vague and allows a wide range of interpretation. As an illustration of the possibilities of variety in interpretation, as well as of the fact that the cost of pension depends in a great measure on the viewpoint taken by the police commissioner in the granting of pensions, the following incident is of interest: On the day of the police parade in 1903, a sergeant (Thomas F. Gilhooly) and two patrolmen (Peters and Russo) entered a saloon at the corner of Sixth avenue and Third street. They had been drinking. While there, the sergeant is alleged to have drawn his revolver and ordered a colored man named Jeff Sanders to dance to the music of his pistol. The colored man became frightened, and jumped behind the bar. There he procured a pistol, and shot and killed the sergeant and one of the patrolmen. Sanders was tried and acquitted on the theory of self-defense. Because of the circumstances attending the death of these two men, Commissioner Greene, then at the head of the department (January 1, 1903 to January 1, 1904) refused a pension to either of the widows, upon the ground that they were not entitled to it inasmuch as their husbands did not die either in the performance of duty or even while they were on duty, but while they were engaged in a drinking bout, in violation of the rules of the department. Toward the latter part of Commissioner Greene 's term (November 5, 1903), however, he was moved to grant a pension of $300 to the sergeant 's widow. Under the charter this decision came within his discretion, as the sergeant had served more than ten years ; but in the case of the widow of one of the patrolmen (Peters) , the commissioner took refuge under the plea that, since her husband had served only 6 years and 7 months in the department, he had not the power to act favorably on her petition. During the next administration (January 1, 1904 to January 1, 1906), Commissioner McAdoo was prevailed upon through the intervention of Dock Commissioner M. Featherson on behalf of the patrolman's widow, to reconsider her case. He took the stand that, though all circumstances tended to show that the patrolman was not killed while in the actual per- formance of duty, there may have been a possibility that he was shot while effecting an arrest of the negro bartender. Therefore, his widow should be given the benefit of the doubt, and as a result she was granted a pension of $300. Both widows were drawing $300 per annum until the present com- missioner took office. Then they made application for increases. On Aug- ust 21, 1912, the sergeant's widow began to draw from the fund at the rate of $600, and the same amount was authorized for the patrolman's widow on September 26, 1912. 107 Necessity for Fixed Eules and Unbiased Interpretation op Law In the administration of the law relating to pensions to dependents of policemen, the importance of fixed rules and unbiased decisions cannot be over-emphasized. Because of the close relations of prospective benefi- ciaries to the officers of the department, it is clear that the latter are in- competent to administer pension provisions strictly and justly. The two unfortunate widows whose pension history is mentioned above, of course, could not be held responsible for the acts of their husbands. Their plight, therefore, properly aroused the sympathies of a great number of the mem- bers of the force. The pension board, composed of members of the force, were in a sympathetic attitude toward the women, as might be expected. No question is raised with respect to the propriety of their sympathies, but the wisdom of present provisions of law and of the present means for administering a fund that should command the respect if not the rever- ence of every citizen is challenged. APPENDIX TO PART I 110 Table I. Showing Changes in Act Beneficiaries and Conditions Entitling to Pensions 1860, Chap. 259 1864, Chap. 403 1867, Chap. 806 1868, Chap. 535 1870, Chap. 383 1871, Chap. 126 1878, Chap. 335 1878, Chap. 389 Disability 2 $150 2 $150 2 $300 2 $300 2 $300 S1 A-V 2 After 10 years 2 150 2 150 2 150 2 300 2 300 $300 400 After 15 years After 25 years After 30 years *K-H Sixty years of age Chief or Superintendent Deputy Chief Inspector Inspector Captain 2 M 2 K S1 A 21 A Sergeant Detective-Sergeant Patrolman 2 400 2 400 21 A * l A 2 300 2 300 Surgeon 21 A Clerk' Widow, 10 years 2 150 2 150 2 150 2 300 2 300 2 300 2 300 2 300 Widow, killed 2 150 Children, 10 years 2 150 2 150 2 150 2 300 2 300 2 300 2 300 2 300 2 300 2 300 Children, killed 2 150 Parents of policeman killed or 1 From the report of the Pension Committee of the Citizens' Union of the City of New York (January, ment since 1882. Ill Police Pension Rates, 1860 to 1907 l . 1882, Chap. 410, Sec. 306-7 1882, Chap. 330 1885, Chap. 364 1887, Chap. 574 1890, Chap. 531 1892, Chap. 52 1893, Chap. 326 1894, Chap. 536 1897, Chap. 378, Sec. 354-5 1904, Chap. 512 1905, Chap. 516 1907, Chap. 445 H-H $300 400 H-H H-H H-H H-H H-H 2 $300 300-600 H-H H-H H-H H-H 3il A 3il A If 55 yrs 4 3^ If 55 yrs. 4 M *H-H iil A li V2 3il A $2,500 $3,000 2,500 2 1,500 $2,500 $3,000 2,500 1,750 2 1,200 1,750 1,750 1,375 1,750 1,375 1,000 1,000 1,000 1,000 ( B ) 300 300 2 300 2 300 300 300 2 500 2 300 2 300 2 500 300 2 300 2 300 2 600 2 300 2 300 2 600 $300-600 300-600 2 $300 2 600 2 $300 2 600 2 600 2 600 2 600 300 300 2 300 2 300 2 300 2 300 2 600 2 600 2 600 2 600 2 600 2 600 2 300 2 600 2 600 1911). * Not to exceed. * Not to exceed $1,000. * Not less than. 6 Clerks not eligible for retire- 112 Table II. Showing Changes in Salaries of the Uni Act Chief or Super- intend- ent 1 Chief Inspector or Deputy Chief 1 Deputy Inspec- tor 1 Captain Lieu- tenant Sergeant* Detective Ser- geant* Rounds- man* 1857 C569.. 1860 C259.. 1864 C403.. 1866 C861 . . 1880 C521 . . 1882 C410.. 1884 C182.. 1885 C555.. 1886 C450.. 1887 C572.. 1888 C137.. 1888 C420.. 1894 C741 . . 1897 C378.. 1901 C466.. 1905 C637.. 1907, Apr. 19 1909, Dec. 19 1910, July 1 . 1912 $3,000 5,000 ' 7,500 ' 6,666 Aboi.' $2,000 5,000 Aboi.' $2,000 2,500 3,500 3,000 ' 3,500 Aboi.* $1,200 1,500 2,000 1,800 2,750 $2,666 2,250 $900 1,200 1,600 1,250 1,600- 2,200 ' 2,666 ' 1,566 1,750 $1,600- 2,200 ' 2,666 Aboi.' $1,566 Aboi.' 1 Abolished chief 1901, deputy chief 1907, deputy inspector 1907, doorman 1912. April 19, 1907, sergeants and detective-sergeants made lieutenants; roundsmen made sergeants. * 1880 salary scale applied only to appointments made after May 29, 1880. A captain acting as inspector receives $750 per annum additional compensation and is eligible for retire 113 formed Force of the Police Department, 1857 to 1912. Patrolman Doorman 1 Matron 1st Yr. 2dYr. 3dYr. 4th Yr. 1st Half 5th Yr. 2d Half 5th Yr. Over 5Yrs. Surgeon $800 $800 $800 $800 $800 $800 $800 $700 $1,500 1,000 1,200 s 800 1,000 1,200 3 800 1,000 1,200 s 900 1,000 1,200* 900 1,000 1,200 s 1,000 1,000 1,200 s 1,000 1,000 1,200 s 1,000 800 900 1,800 2,250 1,500 1,000 1,100 1,200 1,200 1,200 1,200 1,200 1,000 2,250 1,000 800 1,150 900 1,250 1,000 1,300 1,150 1,300 1,250 1,300 1,350 1,400 1,400 Abol. $1,000 3,000 3,500 meat at $1,750 per annum if he has acted as inspector not less than ten years. 114 Table III. Showing the Annual Pension Payments and Revenues of the Police Pension Fund from 1857 to 1912. Years 1857. 1858. 1859. 1860. 1861. 1862. 1863. 1864. 1865. 1866. 1867. 1868. 1869. 1870. 1871. 1872. 1873. 1874. 1875. 1876. 1877. 1878. 1879. 1880. 1881. 1882. 1883. 1884. Pension Payments $30.00 240.00 809.31 1,425.75 2,133.32 2,642.32 3,877.49 6,680.72 7,332.50 7,870.54 13,099.63 19.231.64 26;223.83 45,746.69 56,680.95 61,422.72 73,224.17 61,681.03 44,357.57 76,784.98 67,401.78 80,230.28 97,822.63 105,183.65 116,488.91 142,795.17 187,012.35 Total Revenues as Provided by Law 1 $423.10 2,200.00 3,646.37 5,021.08 10,050.15 10,011.57 8,833.13 19,495.48 26,479.19 44,465.30 31,209.83 32,100.11 36,124.78 73,519.81 58,473.56 68,630.64 56,113.80 80,776.92 65,376.00 60,909.16 64,939.55 91,715.29 114,293.55 113,869.56 117,696.90 86,823.53 81,319.71 183,545.49 Years 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 Pension Payments $248,023.73 304,905.48 368,288.39 413,889.40 424,760.29 451,993.58 480,510.34 509,286.80 563,372.42 595,592.34 636,842.33 671,754.76 686,640.75 893,449.75 880,330.21 888,029.48 909,173.65 953,914.02 1,075,999.37 1,162,775.38 1,302,309.21 1,409,242.10 1,510,322.61 1,574,544.29 1,639,944.18 1,726,918.77 1,855,483.13 2,094,866.58 Totals Revenues as Provided by Law 1 $232,212.06 269,783.60 385,071.23 294,829.54 417,152.41 516,236.79 416,810.88 522,742.82 608,008.67 562,112.70 618,661.14 1,034,058.78* 709,752.60 846,991.13 867,996.56 967,473.41 826,678.23 940,205.57 910,552.33 884,696.11 904,861.46 1,057,556.84 1,085,118.03 1,254,973.63 1,148,331.28 1,068,158.80 1,022,929.19 961,194.82 1 Not including direct budget appropriations and special revenue bonds for the purpose of meeting the annual deficits of the fund as follows: 1904, $197,000.00; 1905, $193,946.26; 1906, $400,000.00; 1907, $400.- 000.00; 1908, $400,000.00; 1909, $400,000.00; 1910, $600,000.00; 1911, $850,000.00; 1912, $1,135,188.22. * The sudden increase in 1896 is due to the fact that a mistake was made in the estimate of 1895 for the appropriation for salaries of the uniformed force. The resulting large amount of unexpended balance of appropriation was turned over to the fund in 1896. 115 (I'M 9 H O 0> i 1 S3 fj o o o> ^ 5 Pm 1 11m! 01 "5-* t-h 00 CD ^ 322 ^ % tf^NNOOt-OiOOiOO CO *\ w C G G < "tt o3 f T-TrH t4 t-Tt-H O CO ^ +s O" -j fin 0> -2 s mm v a P CO _2 t- iH^^^.t-tH^t, G G G o 0) Oi OI G G G O O O Dl 10 B U X X 09 CO CO CO CO Oi ass ss s o o o s SS sss o o o QUO 0> 0>.5 .2.2 2 'co '35 -^ K CO CO 111 sss 00 Q.2 V C -a * o 09 s 11 a "2 O o fiCQ -3 2fl IS* o e> dcxija 3 It 1 T-H l-H T It It IH T-H T-H T-H H w oPh CO O* 00 "* ">* 0> iH C4 ^* HIO !S <0 00 0)OHHNN CN CN eo^i "3 Ph rlHHHH iH iH HH "ONNMhOh CO t^ co oo a o 4> tOOCOMClHffiM t^ T-H IO a co tj< os i os c COO " 1 1 i 1 T-H T-H i 1 i 1 T-H T 1 T-Tef CNOOiDOOCOcOiOOl o lOO NOi't'^HNWH 00 CNCO fe5 t^COl ll-IT^^Hb-ic^ t*5 l-^ t^-* H00NHNO00O CO as OO 00 ^rJ^Tj^C^io |> OS OS CO T-H rHCN^ o~ oo oT i-T oT co" im" >o of tjT O00 o CO ?l lOTttioiCi i co co co rH co 00 CO >o t^o^i-^Tj^oq^co o *_ as T-H T* ooor-Tr-T^'efeii co" co~ "**" Hi- li It 1 t-H i-H t-H t-H T-H T-H tH t-H e t|I N H Ol O 00 (O O) rH o t-iH 3 dCflefliHCNr-li-li-l m OS 001^ Q i J 53 giw < oocit-^co(J>OTj *H HO 1 T3 o 53 o ** OOOtHi-HtHt-HC C iH CN CO _. HHHrtiHHrlw TH r>4 rlrt cs^ j fe CO 00 OJ CD OI CO OS 05 fc >* ^ T-H o> O5(Nt^TfCCiOC0^t 2 CN COIO CD S* N00 00C5OOOC c T-H CNCO HHHr i 1 1 r-i t-H CSTjiCSOSCOtNt-O. >* M IO to OQ O CN^H " f CN cn'cn' O^C-NNOfHC t- CO coco -l 0Nt>O>OHHC r- i eo CD t- >^o "3 9 ^1 c > CO COCO tH) CO t rH N * CO (N tO (M O > t> CO T-H CO (MOtOHNNtDf ) T- < OS HO 4) t-h CN t CO 00 OS C > o CO *^i Ph of of of of of of of cv r c r eo CO CO + COIOCNOSCOt-HO 1 o 1 t^ t^T-H ^ hNNN5NOt- < C ) t^ 0!> iq co i-^o^oq^oq^c > i- i T-H CNCO iH o O t>Ti>ooooooooosc * c " o" OO 00 5 & *- < T- H 1-H T-H i-H CO X! ij 31 3* 3* -gj) iooSSE ,fi>-3 9><3<1 bC&Ot s3P ;oS! jcn a 5 O 5 Q CO O NtS H OS OS OS OS OS OS OS C 5 05 os OS OS T-H -I i- 4 T- -1 i- 1 r- -1 1- -1 i- H i-H T-H I-H i-H ^H ag ten i| n o li 8 R a "Er 119 Table VIII. Showing the Number of Members on the Pension Roll in February, 1913, Drawing Each Specified Amount of Pension. 1 Amount Number of Pensioners Receiving Per Cent, of Total Under $100 $100 and under 200 and under 300 and under 400 and under 500 and under 600 and under 700 and under 1,000 and under 1,500 and under 2,000 and under 2,500 and under 3,000 and over. $200. 300. 400. 500. 600. 700. 1,000. 1,500. 2,000. 2,500. 3,000. 6 1 17 75 91 189 316 1,400 366 18 Total. 2,484 .2 .1 ,7 3.0 3.6 7.6 12.7 66.4 14.7 .7 .2 .1 100 i Compiled by hand tabulation from card roster of pensioners in the Pension Bureau of the Polio* Department. Table IX. Showing the Number of Widows, Children and Dependent Parents on the Pension Roll in February, 1913, Drawing Each Specified Amount of Pension. 1 Amount Total Widows Chil- dren, Num- ber Dep. Parents, Num- ber Per Cent, of Total Num- ber PerCent. of Total Num- ber Under $100 11 98 102 79 81 1,026 1 3 15 1 .8 6.9 7.2 5.6 5.7 72.4 .1 .2 1.0 .1 10 20 8 12 1 $100 and under $150 76 93 66 81 1,004 1 3 13 1 5.7 7.0 4.0 6.0 75.8 .1 .3 1.0 .1 2 150 and under 200 1 200 and under 250 1 250 and under 300 . . 300 and under 400 20 2 400 and under 500 . . 500 and under 600 . . . 600 and under 700 2 700 and over 1,417 100.0 1,338 100.0 70 9 'Compiled by hand tabulation from card roster of pensioners in the Pension Bureau of the Polie* Department. 120 Table X. Comparative Strength of the Uniformed Police Force in Year Total Inspec- Sur- Cap- Lieu- Sar- Patrol- Door- tors geons tains tenants 2 geants* men men* 7,510 14 21 77 585 335 6,222 183 7,673 12 21 81 519 394 6,393 176 8,175 15 23 85 674 425 6,682 188 8,272 15 23 89 673 427 6,776 189 8,859 16 23 85 662 578 7,225 189 8,873 14 23 92 661 578 7,232 189 9,461 19 25 90 625 584 7,839 194 10,012 17 25 91 606 558 8,439 193 10,162 19 24 87 619 585 8,571 193 10,177 18 25 87 614 568 8,585 194 10,207 19 25 97 624 586 8,585 191 10,371 18 25 97 588 639 8,923 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1 Compiled from annual reports of the Police Department. *This column contains the number of "sergeants" and "detective-sergeants" up to and including 1906. 'This column contains the number of "roundsmen" up to and including 1906. In 1907 this title was 4 The rank of "doorman" was abolished on April 16, 1912, and 193 doormen became patrolmen. 121 Its Several Grades at the Close op Each Specified Year 1 1901 to 1912. Matrons Supt. of Asst. Supts.of Tele- graph Chief Line- Linemen Boiler In- Supt. of Battery- Chap- Mes- Tele'gh man spectors Boilers man lains senger 56 2 6 5 1 1 1 61 2 6 4 1 1 1 70 2 .... 6 3 1 67 2 6 2 1 69 2 6 2 69 1 7 2 '4' 70 1 6 2 4 69 . 1 6 2 4 69 1 6 2 4 70 2 6 2 4 69 2 5 2 70 2 5 2 In 1907 these titles were changed to "lieutenants.' changed to "sergeant." 3 122 16 O 03 HH * r-< OS 00 Tt< T*< CO rH CO g> o oo r CO CO CO ft ft o I 8 88 J^aa o o aa U5H 00 00 do 03 g m OQ tf a o3 "6 CO d 3 o am o3 !> oQ g . d-S.a -g 8 S3 J J 8 d "S o-_: a a B< S/g-aa o3 o3 kg oij :^J*2 d 6 : T3 ||| J .8 3 4) O O O O O C o o o o o o o 'E'E'E'E'E'E'E 3 5 S S3 53 53 S3 co CO CO CO 02 CO CO 124 Table XII. Act i v i t i es of the Various Police Administrations from 1857 to Administration Totals Mem Title Term 5 E C 6 M 1 I d 1 i 1 a E Q T3 B O > n 3 E O Met'p'tan police Municipal police Greater N. Y. police boards . Com. Murphy. . Com. Partridge. Com. Greene. . . Com. McAdoo . . Com. Bingham . Com. Baker Com. Cropsey . . Com. Waldo.... Administration 1857 to 1869 1870 to 1897 Jan. 1, 1898 to Feb. 22, 1901 Feb. 22, 1901 to Jan. 1, 1902 Jan. 1, 1902 to Jan. 1, 1903 Jan. 1, 1903 to Jan. 1, 1904 Jan. 1, 1904 to Jan. 1, 1906 Jan. 1, 1906 to July 1, 1909 July 1, 1909 to Oct. 20, 1910 Oct. 20, 1910 to May 23, 1911 May 23, 1911 to Febru'y 1913 23 2,349 387 138 227 273 627 1,140 460 168 879 12 "3 "i "i 1 5 "4 3 64 32 16 20 18 140 87 73 17 371 17 ii "2 1 "2 95 2 1 1 "6 4 2 8 1 1 85 2 2 38 7 8 1,466 150 62 134 199 389 833 299 107 609 4 2 i Total 6,683 15 858 115 156 4,260 3 1 Compiled by hand tabulation from eard roster of pensioners in the Pension Bureau of the Police 3 As a unit is considered one or more children of a member under the same guardian. 125 1913, AS EXPRESSED BY THE NUMBER OP PENSIONS GRANTED, TERMINATED OR AMENDED 1 bers Widows Children* Dependent Parents | | 2 1 1 1 | 1 1 1 | 3 -2 1 1 B B E o Q o > H i a J Ph E J E 1 n o B i 1 g 5 E B I 15 3 35 ... 751 3 29 11 6 132 ... ... ... ... 9 202 23 4 35 2 1 69 1 14 2 7 5 84 11 8 9 4 5 72 1 13 1 2 . 27 214 1 110 1 24 3 1 12 4 2 239 3 71 90 74 66 4 1 9 2 9 * 141 59 13 4 1 2 7 i 3 57 12 1 1 2 1 3 ... 20 1 2 260 3 347 ... 12 10 1 ... 23 ... 3 1 9 ... 1 5 7 ... 1 3 1 ... 5 ... ... ... 136 6 5 2,109 12 699 106 110 302 19 3 40 12 4 1 Department. 126 X a 5 1 CO 1"H 1-4 X 3 fc 3 "3 i * ! CM E & (E <* 'Ui ' i * c s a 1 p 1 o CO 1-tCOi-l 00 T3 CO CO E I < cococot- CO _ N i-ieo "3 I i-i 7-1 c Oh OfONK $ i i CNi-htJ< i-( IQ CO -8 13 c 03 a ot s-s eoooooo: CO H , COHCC 1-1 1 00 a Ph to o 'I a 3 ^ CO ^ ^ cooiub U5 00 i-HCO 00 Ph & 3 4* T3 a B t^t^CNN t^ h r ooooc 00 < 53 E-i ** o 9 & CO ,2 coiooooc CNi-h-* t~ a a o> # o T-ITt< J3 '53 B P-. fc TjH 1-1 o 6 jo fcj OcNCM CO COOOr- 00 3 CNi-HCO co CO H^ on 3 3 3 B a V eq I a 1 | C s 3 Ph o 128 Table XTV Showing Ten Retired Policemen Who Dkaw Nature of Retirement Name Rank Life of Pension Rate of Pension Amount Drawn in Pensions Pres- ent Age Yrs. Mos. Disability. . . Henry Hahn .... Lieutenant. . 5 7 $1,000 $5,583.33 55 Disability. . . Disability. . . Jas. C. Mont- John S. Clancy . . Patrolman . . Patrolman . . 17 5 10 700 358 12,483.33 1,790.00 65 39 Disability. . . JohnT.McCarthy Patrolman . . 2 6 700 1,750.00 56 Disability. . . Wm. McCarthy. Patrolman . . 2 8 700 1,866.66 51 Service and veteran Wm. H. Lake . . . Patrolman . . Roundsman. 16 20 8 700 650 11,666.66 13,000.00 66 68 Service David W.Erskine Patrolman . . 21- 600 12,600.00 70 Service Alex. Price Roundsman. 18 10 650 12,241.66 68 Service Patrick J. Lane . Lieutenant. . 2 7 1,125 2,906.25 61 $75,887.89 1 Except Henry Hahn who ia employed as messenger in State Comptroller's office, 165 Broadway, New York * Does not include fees earned by City Marshal. 129 Pensions and Also Salaries in Other City Departments. 1 Where at Present Employed In what Capacity L'gth of Time E'pl'yed with Other Departments Rate of Present Pay per Annum Amount Drawn in Sala- ries Total Drawn in Pensions and Salaries Amount of Pensions Drawn while in Employ of Yrs. Mos. Other City Depts. State comptroller's office, N. Y. C City court Messenger Court At- tendant . Clerk.... Court At- tendant . Court At- tendant . Examiner. Clerk.... City Mar- shal. . . . Section Foreman Court At- tendant . 2 2 1 1 2 16 8 9 17 2 6 5 6 6 7 10 6 6 $1,500 1,200 600 1,500 1,200 2,400 2,100 Paid by fees 1,200 1,500 $3,000 3,000 850 2,250 3,000 29,375 16,800 19,200 3,750 $8,583.33 15,483.33 2,640.00 4,000.00 4,866.66 41,041.66 29,800.00 31,441.66 6,656.25 $2,000.00 1,750.00 507.17 Tenement house dept. bureau of admin- istration Court of special ses- sions bureau of ex- amination 1,050.00 City magistrate's court first division bureau of administration . . . Corporation counsel's office main office . . Municipal civil service Office 462 E. 158th St.. Street Cleaning Dept . . Court of special ses- sions 1,750.00 11,608.33 5,200.00 5,900.00 11,375.00 2,812.50 $81,225 $144,512.89 $43,953.00 City. 130 Table XV. Showing the "Expectation op Life" of Regular Pensioners and of Disability Pensioners (Monthly Payments 1 ) of the New York City Police Pension Fund. Expectation Age Expectation Age Disability Regular Disability Regular Pensioners Pensioners Pensioners Pensioners 20 4.40 56 13.47 13.26 21 4.89 57 12.99 12.86 22 5.45 58 12.50 12.46 23 6.07 59 12.01 12.06 24 6.78 60 11.52 11.66 25 7.54 61 11.04 11.26 26 8.35 62 10.57 10.87 27 9.21 63 10.11 10.47 28 10.11 64 9.66 10.09 29 11.13 65 9.21 9.71 30 12.06 66 8.78 9.32 31 12.96 67 8.36 8.95 32 13.82 68 7.94 8.58 33 14.64 69 7.54 8.22 34 15.38 70 7.15 7.87 35 16.04 71 6.76 7.53 36 16.63 72 6.38 7.20 37 17.11 73 6.02 6.88 38 17.49 74 5.67 6.57 39 17.78 75 5.33 6.25 40 17.97 76 4.99 5.94 41 18.09 77 4.67 5.65 42 18.12 78 4.35 5.36 43 18.08 79 4.04 5.07 44 17.97 80 3.75 4.81 45 17.80 81 3.46 4.55 46 17.57 82 3.19 4.30 47 17.28 83 2.93 4.05 48 16.96 84 2.67 3.79 49 16.61 85 2.42 3.53 50 16.22 86 2.16 3.31 51 15.80 87 1.94 3.05 52 15.36 88 1.75 2.82 53 14.90 89 1.58 2.61 54 14.43 90 1.43 2.42 55 13.95 13.67 i By "monthly payments" is meant that the expectation shown is the curtate expectation of life plus the umber of complete months lived in the year of death. This is greater than the curtate expectation and slightly less than the complete expectation of life. 132 Table XVI. Showing the Total Annual Cost (Salary and Pension) op the Schedule Num- Name Rank at Date of Retire- ment Active Pay ber Years Months Amount 51 Surg Capt Lt. (Serg) Ptl 34 25 38 27 38 10 9 6 11 9 $69,580 65,250 97,716 21,845 49,850 44 Marsh, Edward T. T 48 McLaughlin, Wm. W 32 85 133 Services of Five Members of the Force Retired on Service Pension. Amount Average Pension Drawn Future Pension Contri- Cost to Total buted the City Pay and Pension at 2% Per Year of Years Months Amount Present Age Expect, of Life Rate Amount Per Annum Active Service 20 3 $50,625 81 4.55 $2,500 $11,375 $131,580 $1,392 $3,738 8 7 12,875 70 7.87 1,500 11,805 89,930 1,305 3,442 5 7 13,958 66 9.32 2,500 23,300 134,974 1,954 3,455 12 12,000 67 8.95 1,000 8,950 42,795 437 1,517 1 t 4 933 65 9.71 700 6,797 57,580 997 1,460 134 Table XVII. Showing the Total Annual Cost (Salaet and Pension) of Schedule Num- ber Name Rank at Date of Retire- ment Active Pay Years Months Amount 5 49 50 78 12 14 37 33 11 80 2 89 86 87 3 36 72 19 7 81 47 52 30 1 38 26 29 25 15 27 28 24 20 76 71 13 34 73 55 8 82 83 90 9 88 91 94 40 17 74 75 77 Mallam, Benjamin . . McKenna, John J . . O'Keefe, Patrick A. WiUiamsj Geo. W. . Chandler, Alex Lussier, John J Armstrong, Jas. M . Bergen, Wm. C . . . . Devanney, James . . . Eckoldt, John Isenberg, David .... Lawlor, Michael E. . Leary, Frank R . . . . Lyne, Christopher J Riley, Jas. J Rosenfeld, Morris. . Summersgill, Robert Tennant, John A . . . Vondrean, Eustace. Winters, Wm. F.... Fluhrer, Wm. F Sullivan, John D . . . Burns, Joseph Tighe, Robt. A Braun, August Charlton, Robt Daly, Daniel Ennis, Wm. J Fitzgerald, Peter . . . Maher, John L Murray, Henry T . . Nolan, Michael. . . . Quigley, Daniel S . . . Ryan, Jos. F Sheridan, Wm. P . . . Taggart, Archibald . Farrell, Daniel J. . . Stoney, Frank C . . . Bach, Emil Devlin, Peter Faney, Patrick Foley, John F GaUigan, Jas. T Hayes, Joseph P . . . Lynch, Wm. J Maclsaac, John D . . McKenna, John .... Noll, George Reilly, James Schmidt, Joseph .... Sullivan, Patrick. . . Wall, James Ptl.. Ptl.. Ptl.. Ptl.. Lt... Lt... Ptl.. Ptl. . . Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Surg. Surg. Capt Capt Lt... Lt... Lt... Lt... Lt... Lt... Lt... Lt... Lt... Lt... Lt... Lt... Sergt Sergt Rds. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. Ptl.. 3 1 12 19 18 16 15 14 10 10 19 19 16 11 13 16 14 15 21 20 20 29 22 24 22 21 20 24 25 23 27 23 23 20 21 20 20 21 21 27 20 23 21 21 20 22 26 20 26 21 1 $12,591 7 466 2 2,891 11 1,625 9 20,443 6 28,675 23,600 8 21,835 7 20,819 11 18,050 3 12,449 6 14,150 1 25,666 2 25,782 10 22,000 7 14,669 11 18,226 9 20,403 2 18,283 10 22,316 5 50,750 10 58,666 3 41,190 3 49,361 4 34,961 1 38,553 4 34,679 10 35,166 6 31,516 7 36,718 1 37,007 5 35,623 11 47,200 7 35,050 41,181 3 27,884 10 30,835 6 30,437 24,000 io 29,266 9 29,050 7 36,319 8 27,729 11 31,581 6 28,900 4 28,664 1 27,000 9 28,650 2 32,419 6 27,600 33,400 7 29,012 135 the Services of Fifty-two Members of the Force Retired for Disability. Amount 1 Average Pension Drawn Future Pension Contri- Cost to Total buted the City Pay and Pension at 2% Per Year of Years Months Amount Present Age Expect, of Life Rate Amount Per Annum Active Service 1 2 $525 36 16.63 $450 $7,484 $20,600 $252 $2,241 10 12,500 35 16.04 1,400 22,456 35,422 9 61,057 13 15,701 37 17.11 1,400 23,954 42,546 58 13,403 1 450 27 9.21 450 4,145 6,220 33 3,222 3 "3 2,060 39 17.78 634 11,273 33,776 409 2,617 5 3 5,108 47 17.28 973 16,813 50,596 574 2,565 4 2,524 50 16.22 631 10,235 36,359 472 1,994 8 *3 4,950 49 16.61 600 9,966 36,751 437 2,178 5 1 1,760 45 17.80 543 9,665 32,244 416 2,043 1 3 675 41 18.09 540 9,769 28,494 361 1,886 5 9 2,070 42 18.12 360 6,523 21,042 249 2,029 5 9 4,025 36 16.63 485 8,066 26,241 283 2,472 1 1 760 43 18.08 700 12,656 39,082 513 2,021 1 675 49 16.61 675 11,212 37,669 516 1,938 4 "8 2,696 50 16.22 578 9,375 34,071 440 1,998 5 4 2,160 40 17.97 405 7,278 24,107 293 2,056 3 6 1,704 42 18.12 487 8,824 28,754 365 2,039 1 5 991 43 18.08 700 12,656 34,050 408 2,008 2 992 40 17.97 496 8,913 28,188 366 1,963 1 "3 687 42 18.12 550 9,966 32,969 446 2,154 15 2 22,750 66 8.78 1,500 13,170 86,670 1,015 3,999 5 1 8,896 71 6.76 1,750 11,830 79,392 1,173 3,755 3 9 5,166 49 16.61 1,375 22,839 69,195 824 3,376 5 6 7,562 58 12.50 1,375 17,188 74,111 987 2,500 2 6 2,812 47 17.28 1,125 19,440 57,213 699 2,531 4 8 4,666 54 14.43 1,000 14,430 57,649 771 2,362 3 844 45 17.80 1,125 20,025 55,548 694 2,457 "i 4 1,500 45 17.80 1,125 20,025 56,691 703 2,565 6 5 6,417 53 14.90 1,000 14,900 52,833 630 2,546 3 1 3,084 49 16.61 1,000 16,610 56,412 734 2,265 3 5 3,416 51 15.80 1,000 15,800 56,223 740 2,212 3 300 48 16.96 1,125 19,080 55,003 712 2,318 6 1,687 54 14.43 1,125 16,234 65,121 944 2,299 1,125 53 14.90 1,125 16,763 52,938 701 2,215 3 3,375 51 15.80 1,125 17,775 62,331 824 2,674 "7 4,583 47 17.28 1,000 17,280 49,747 558 2,429 4 1,166 46 17.57 875 15,374 47,375 617 2,142 4 1,166 46 17.57 875 15,374 46,977 609 2,262 19 10 12,892 68 7.94 650 5,161 42,053 480 2,079 7 1,809 50 16.22 700 11,354 42,429 585 1,917 6 1,050 53 14.90 700 10,430 40,530 581 1,837 700 50 16.22 700 11,354 48,373 726 1,728 "4 933 52 15.36 700 10,752 39,414 555 1,880 2 1,516 50 16.22 700 11,354 44,451 632 1,832 2 817 46 17.57 700 12,299 42,016 578 1,927 3 875 52 15.36 700 10,752 40,291 573 1,862 700 53 14.90 700 10,430 38,130 540 1,872 *6 5,250 54 14.43 700 10,101 44,001 573 1,909 9 2,625 59 12.01 700 8,407 43,451 648 1,636 5 991 51 15.80 700 11,060 39,651 552 1,907 9 5,425 62 10.57 700 7,399 46,224 668 1,752 750 57 12.99 700 9,093 38,855 580 1,774 : 1 136 Minutes op the Pension Board op the Police Department op the City op New York Meeting of the pension board called to order by the president at 2.30 P. M., August 20, 1912, with the following members present : President, Fourth Deputy Commissioner James E. Dillon. Chief Clerk William H. Kipp. Lieutenant Richard E. Enright. Sergeant John T. Nilon. Patrolman Peter McEntee. The meeting was called to order by the president and the following applications for retirement, pension, and increase of pension were passed upon by the board : William F. Delaney, applicant for retirement. It was unanimously voted that the board recommend to the police commissioner that this applicant be retired on an annual pension of $1,125. James Irwin, applicant for retirement. It was unanimously voted that the board recommend to the police commissioner that this applicant be retired on an annual pension of $875. Bernard J. Burns, applicant for retirement. It was unanimously voted that the board recommend to the police commissioner that this applicant be retired on an annual pension of $700. Bernard J. McCahill, applicant for retirement. It was unanimously voted that the board recommend to the police commissioner that this applicant be retired on an annual pension of $350. Patrick D. Shea, applicant for retirement. It was unanimously voted that the board recommend to the police commissioner that this applicant be retired on an annual pension of $420. Edward Schnitzker, applicant for retirement. It was unanimously voted that the board recommend to the police commissioner that this applicant be retired on an annual pension of $585. Ellen Davis, applicant for pension. It was unanimously voted that the board recommend to the police commissioner that this applicant be granted an annual pension of $300. Louise Liddell, applicant for pension. It was unanimously voted that the board recommend to the police commissioner that this applicant be granted an annual pension of $300. Mary Reeves, applicant for pension. It was unanimously voted that the board recommend to the police commissioner that this applicant be granted an annual pension of $300. 137 Minnie V. Jones, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that this applicant's pension be increased to the sum of $300 per annum. Joseph F. Martin, guardian of Francis and Marion Martin, infants, for pension. It was unanimously voted that the board recommend to the police commissioner that a pension of $15 per month be granted to Marion Mar- tin, infant, and $10 per month to the infant, Francis Martin. Mary E. Hughes, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the pension of this applicant be increased to the sum of $300 per annum. Sophia Hesch, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the pension of this applicant be increased to the sum of $300 per annum. Catherine Dougherty, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the pension of this applicant be increased to the sum of $300 per annum. Mary Hedeman, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the pension of this applicant be increased to the sum of $600 per annum. Margaret Gilhooly, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the pension of this applicant be increased to the sum of $600 per annum. Eebecca Creed, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the pension of this applicant be increased to the sum of $300 per annum. Orville A. Todd, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant be laid over for future consideration. Alexander H. Howry, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. 138 John J. Conlon, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. Charles Richards, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. Thomas Young, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. Mrs. Joseph M. Phelan, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. George W. Creighton, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase be denied. Frederick H. "Wolff, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. Matthew Dwyer, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. Martin J. O'Connell, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase be denied. James Duvanney, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. Carrie Brown, applicant for increase. It was unanimously voted that the board recommend to the police commissioner that the application of this applicant for increase of pension be denied. No other business being before the board the meeting was adjourned to August 27, 1912. President. PENSION RECORD OF LIEUTENANT JAMES F. VALLELY First retirement February 14, 1905 Reinstated to active service June 7, 1906 Second retirement May 21, 1908 7-100 141 Record op Complaints Name, James F. Vallely Rank, Lieutenant Appointed, August 12, 76. Date of Nature of Complaint Judgment Complaint Date Penalty Conduct unbecoming an officer Neglect to patrol Oct. 31, 76 Jan. 29, 77 Oct. 14,78 D. C. 3 days Dec. 27, '84 Neglected to report rubbish on street Promoted to Detective Sergeant D. C. Sept. 16, '92 Honorable Mention and Medal rescued woman from fire April 3, '99 Commended for services in case of murder of Evalin Reynold Feb. 14, '05 Retired June 7, '06 Re-instated April 19, '07 Title changed to Lieutenant SENATE NO. 366 Chapter 663 AN ACT AUTHORIZING THE POLICE COMMISSIONER OF THE CITY OF NEW YORK TO REINSTATE DETECTIVE SERGEANTS. Accepted by the City. Became a law, May 31, 1906, with the ap- proval of the Governor. Passed, three-fifths being present. The People of the State of New York, represented in Senate and As- sembly, do enact as follows: Section 1. The Police Commissioner of the City of New York is hereby authorized, in his discretion, to reinstate any detective sergeant who has been retired within two years prior to the passage of this act, upon application in writing for such reinstatement; and the Police Com- missioner may, in his discretion, restore such reinstated detective sergeant to his former rank in the police department. 2. This act shall take effect immediately. State of New York, Office of the Secretary of State. ss: I have compared the preceding with the original law on file in this office, and do hereby certify that the same is a correct transcript there- from, and the whole of said original law. Given under my hand and the seal of office of the Secretary of State, at the City of Albany, this first day of June in the year one thousand nine hundred and six. (Signed) Horace G. Tennant, Second Deputy Secretary of State. 142 New York City, N. Y., June 4th, 1906. Hon. Theodore A. Bingham, Police Commissioner, 300 Mulberry Street, City. Sir: In accordance with Senate Bill 366, Chapter 663, of the Laws of 1906, authorizing the Police Commissioner of the City of New York to reinstate Detective Sergeants who have been retired within the past two years, which became a law on May 31st, 1906, I respectfully apply for reinstatement as Detective Sergeant, and would state that I was retired February 14th, 1905. Trusting that my application meets with your favorable approval, I remain, Eespeetfully, (Signed) James F. Vallely. Memorandum in Ink. Detective Sergeant, Jas. F. Vallely is reinstated in accord- ance with Chap. 663 Laws of 1906 to take effect 8 A.M., June 7, 1906. (Signed) Theo. A. Bingham, Police Com. TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN: "Whereas: On the 14th day of February, 1905, an order was issued by the Police Commissioner of the Police Department of the City of New York retiring and dismissing James F. Vallely from the Police Force of the Police Department of the City of New York and awarding him a pen- sion of the annual sum of One Thousand Dollars ($1,000), and "Whereas, said James F. Vallely has applied for reinstatement to the said Police Force, and in consideration of said application being granted by the Police Commissioner, has agreed to waive and relinquish any and all claim to said pension moneys so granted to him by the order of the Police Commissioner, and to any and all claim or salary as a member of the Police Force which may be due him prior to this date; and Whereas, the Police Commissioner, in pursuance of the provisions of Chapter 663, of the Laws of 1906, has this day reinstated the said James F. Vallely to his former rank of Detective Sergeant in the Police Depart- ment on condition that the said James F. Vallely shall file a release and waiver forever for any claim for himself, his heirs, and executors upon the Police Pension Fund for any pension which may be due him under the order of the Police Commissioner adopted as aforesaid, and also a re- lease and waiver forever for any claim for himself, his heirs, and executors upon the Police Department of the City of New York, or upon the City of New York for any salary which may be due him prior to this date. Now, therefore, for and in consideration of the premises, and of the sum of One Dollar to me in hand paid, the receipt whereof is hereby ac- knowledged, the said James F. Vallely for himself, his heirs, executors, 143 administrators, and assigns does forever release, remise, and discharge the Police Department of the City of New York and the Police Commissioner thereof, and the Mayor, Aldermen, and Commonalty of the City of New York, their and each of their successors and assigns of and from any and all claim or cause of action which may arise, or has arisen by reason of the granting of the aforesaid pension, or for any salary which may be due the said James F. Vallely prior to this date. In witness whereof, the said James F. Vallely has hereunto set his hand and seal at the City of New York on the 6th day of June, 1906. (Signed) James F. Vallely. Sealed and delivered in the presence of (Signed) Andrew H. G. Evans. State of New York, City and County of New York. ss: On this, 6th day of June, 1906, before me personally came and ap- peared the above named James F. Vallely, to me known and known to me to be the individual described in and who executed the foregoing in- strument, and he duly acknowledged to me that he executed the same for the purposes therein mentioned. (Signed) James F. Vallely. Sworn to before me this, 6th day of June, 1906. (Signed) Andrew H. G. Evans, Notary Public, New York County. POLICE DEPARTMENT OF THE CITY OF NEW YORK 300 Mulberry Street Office of the Chief Surgeon. New York, June 6th, 1906. Memorandum for the Police Commissioner: Under my direction, Surgeons Augustus H. Brown, Edward T. Hig- gins, and John D. Gorman, this day examined James F. Vallely, retired Detective Sergeant, and find that he is fit, physically and mentally, to per- form police duty. Respectfully, (Signed) John J. Quigley, Chief Surgeon. 144 POLICE DEPARTMENT OF THE CITY OF NEW YORK 300 Mulberry Street New York Provided, That James F. Vallely shall file a release and waiver for- ever, for any claim for himself, his heirs, or executors, upon the Police Pension Fund for any pension which may be due him under an order of the Police Commissioner of the Police Department of the City of New York, dated February 14, 1905, retiring and dismissing him from mem- bership in the Police Force and placing him upon the Police Pension roll and awarding and granting to him a pension from the Police Pension Fund of the annual sum of $1,000.00, and a release and waiver forever for any claim for himself, his heirs, or executors upon the Police Depart- ment of the City of New York, or upon the City of New York for any salary which may be due him prior to this date. Now, upon reading and filing a certified copy of Chapter 663 of the Laws of 1906, authorizing the Police Commissioner of the City of New York to reinstate any Detective Sergeant who has been retired within two years prior to the passage of said act, and upon filing the application in writing of James F. Vallely for reinstatement as Detective Sergeant, Ordered, that James F. Vallely be and is hereby reinstated as Detec- tive Sergeant in the Police Department of the City of New York, to take effect at 8 o'clock A. M., June 7, 1906. Theo. A. Bingham, Police Commissioner. POLICE DEPARTMENT OF THE CITY OF NEW YORK 300 Mulberry Street May 11th, 1908. The Police Commissioner. (Through Official Channels.) Sir: I have the honor to recommend that a medical survey be held upon Lieutenant James F. Vallely, of the Detective Bureau, for the pur- pose of determining his ability to perform police duty. Respectfully, ("Signed) A. H. Brown, Surgeon 13th District. 145 POLICE DEPARTMENT, CITY OF NEW YORK 300 Mulberry Street Order of Examination Under Provisions of Section 355 of the Greater New York Charter New York, May 18th, 1908. Special Order No. 121-D. Ordered, That Police Surgeons "Walter B. Brouner, Edward J. Donlin, Samuel M. Johnson, do proceed to the examination of Lieut. James F. Vallely, Det. Bur., a mem- ber of the Police Force and who has served on such Police Force for a period of twenty years and upwards, for the purpose of ascertaining if he is permanently disabled, physically or mentally, so as to be unfit for duty. Ordered, That said James F. Vallely do appear before said Police Surgeons, at such time and place as they may designate, for the purpose of submitting to such examination. Ordered, That said Surgeons, upon making of such examination, do report and certify the result thereof in writing, and whether or not such disability, as upon such examination they may ascertain to exist, is perma- nent and of such a character as to unfit said James F. Vallely for the per- formance of police duty, and that they also and at the same time ascertain, report, and certify the cause, nature, and extent of such disability. Ordered, That such examination proceed and such report be made with all reasonable diligence. (Signed) Wm. F. Baker, Acting Police Commissioner. POLICE DEPARTMENT, CITY OF NEW YORK 300 Mulberry Street Retirement for Disability Certificate Under Provisions of Section 355 of the Greater New York Charter New York, May 20th, 1908. To the Police Commissioner. Sir: In compliance with Special Order No. 121-D, dated May 18, 1908, the undersigned Police Surgeons have on this, 20th day of May, 146 1908, examined Lieut. James F. Vallely, Det. Bur., a member of the Police Force, and respectfully submit the following certificate in relation thereto : We do hereby certify, That said James F. Vallely, who has per- formed duty on the Police Force for a period of twenty years and up- wards, is permanently disabled (a) physically so as to be unfit for duty; that the cause, nature, and extent of such disability is: Cause, arterio- sclerosis. Nature, defective vision. Extent, impairs his vision so much as to prevent the performance of duty by him ; that such disability is per- manent and is of such a character as to unfit him for the performance of police duty. Walter B. Brouner, (Signed) J Edward J Donlin, 1 Samuel M. Johnson, Police Surgeons. POLICE DEPARTMENT, CITY OF NEW YORK 300 Mulberry Street Order of Retirement and Dismissal Under Provisions of Section 355 of the Greater New York Charter New York, May 21, 1908. Special Order No. . Special Order No. 121-D having been made on the 18th day of May, 1908, directing Police Surgeons Walter B. Brouner, Edward J. Donlin, and Samuel M. Johnson to proceed to the examination of Lieutenant James F. Vallely, Detective Bureau, a member of the Police Force who has served thereon twenty years, for the purpose of ascertaining if he is permanently disabled physi- cally or mentally so as to be unfit for duty, and said Police Surgeons hav- ing conducted such examination and having reported and certified the re- sult thereof in writing, and the cause, nature, and extent of his disability, and that the said James F. Vallely is permanently disabled physically so as to be unfit for duty, and it appearing that Section 355 of the Greater New York Charter is applicable to such case, it is Ordered, That James F. Vallely, a member of the Police Force of the City of New York, be and he is hereby relieved and dismissed from said Police Force and Service and placed on the roll of the Police Pension Fund, and he is hereby awarded and granted a pension at the rate of $1,000.00 per annum, the said pension to be paid and the payment thereof to be subject to the laws and statutes in that case made and provided, and the rules and regulations of this Department with reference thereto. Ordered, That this order take effect this day at 12 o'clock midnight to-day. (Signed) Theo. A. Bingham, Police Commissioner. PART II ACTUARIAL REPORT PREPARED BY GEORGE B. BUCK As of February 1, 1913 THE BENEFITS. The provisions in the various laws governing the granting of pension* to the employees of the New York City police force provide a number of benefits. Briefly summarized they are as follows: Employees. Regular or service pensions : Pension in the discretion of the Police Commissioner of a minimum of one-half final salary to all members superannuated after 20 years of service who have attained age 55. Pension in the discretion of the Police Commissioner of a minimum of one-half final salary to all members superannuated at age 60. (Vet- erans of Civil and Mexican wars excluded.) Pension of a minimum of one-half final salary to a veteran of Civil War who has had 20 years of service or has attained age 60. Pension of a minimum of one-half final salary to all members having 25 years of service who have attained age 55. Disability or invalid pensions: Pension of one-fourth to one-half of final salary to all members disabled in actual performance of duty. Pension of one-fourth to one-half of final salary to all members becoming unfit for police duty (without misconduct on employees' part) who have had from 10 to 25 years of service. Pension of minimum of one-half final salary to members becoming unfit for police duty after 20 years of service. (Certificate of surgeon.) Employees' Families. (The amount of the pensions to persons other than members of the active force is discretionary with the Police Commissioner. Maximum limit generally $600.) Widows (All benefits terminate on remarriage) : Pension to widows of all members of active force killed in actual performance of duty. Pension to widows of all other members of active force who die after 10 years' service. Pension to widows of all pensioners dying. 149 ' 150 Children (All benefits terminate at age 18) : Pension to children of all members of active force killed in actual performance of duty. Pension to children of all other members of active force who die after 10 years' service. Pension to children of all pensioners dying. Dependent parents: Pension to dependent parents of all members of active force killed in actual performance of duty. Before a valuation of a fund embracing these pension contingencies could be made, it was necessary to collect data and investigate the various forces and changes which were operating to increase or diminish the re- sources of the fund, as it is only upon an accurate measure of these ele- ments that a valuation can be made. The points that it was necessary to know were as follows : (1 (2 (3 (4 (5 (6 (7 (8 (9 (10 o : r- CM CO i "t ID X o ; - CM CO : ^t in co : r^. C9 O) Q O j V" CM CO ; t to CO ; 1^ CO 0) X O ' T- CM co ! * lO co : r-. CO 0) o X o i t- CM CO i ^t in CD ; r>- 00 en o ! w CM CO ! * in CD ! t^ CO 0) a x - CM o i - CM co- : tJ- in CD ; h- CO 0) < . - X o O i CM co ! en en en en en en en en Ul " < X ul E a. > > .1 a 6 6 d d s i s a> O^ o id o UU 5sp io 5 K < cc ul ul ' \ < o < CO so \ -J Ul o a Ul < H u < \ O CO m < CO O o \ < o o a Ul U. \ 2 r z )60V 153 Punching. The cards, after the information had been supplied at police head- quarters, were shipped to Washington, where they were punched and tabu- lated. It was necessary to punch some of the dates reported in two different fields, as the date punched for a member leaving the active force on a pension is not always taken as the same date as that on which he enters the experience of the pension members, etc. THE TABULATION. General. After the cards were checked and punched, they were sorted and tabulated by machine. The period covered by the experience is January 1, 1907 to January 1, 1913, a period of six years, this period being adopted because January 1, 1907 is the earliest date for which records for the entire service were available. The tabulation for the present pay and pension rolls was made as of February 1, 1913, this being the latest date for which the cards gave a record of all changes. The following table heads give a summary of the result of the tabulations, with the exception of the pay and pension rolls, which appear later in the report. These working tables are not set forth in detail because of the space required. Table 1 Actual Experience ActiveIService. Age Sur- vivors En- trants With- drawals Acci- dental Deaths Other Deaths Disa- bility Retire- ments Other Retire- ments Exist- ing 21 22 Etc. Detail foi each ag Total 9,715 3,116 695 27 469 1,182 344 10,115 Table 2 Actual Experience -Regular Pensioners. Age Survivors Entrants Withdrawals Deaths 3 Existing 55 56 Etc. De tail for each ige Total 861 286 1 349 797 154 Table 3 Actual Experience Disability Pensioners. Age Survivors Entrants Withdrawals Deaths Existing 23 24 Etc. Detail for each ige Total 889 989 4 350 1,524 Table 4 Actual Experience Widow Pensioners. Age Survivors Entrants Withdrawals Deaths Existing 23 24 Etc. Detail for each age Total 1,049 541 114 205 1,271 The Salary Scale. The salaries of the active members for the respective years of the period could not be punched on the card because of lack of room, and it was therefore impossible to tabulate them directly by machine. The salary for each year had to be considered in relation to the age of the employee in that year, so that each card had to be handled as if it were the report on six different men at so many different ages. By means of this com- bination the salary scale was based on the entire six-year period, which gave averages based on a total of 65,984 employees, with an aggregate pay- roll of $90,598,485. In tabulating the salaries, those of the active force were tabulated and the averages obtained from the results roughly gradu- ated ; the final salaries of pensioners, including those pensioned before the period, were tabulated and the averages roughly graduated; the final salaries of pensioners, excluding all of those pensioned before the period, were then tabulated and the results roughly graduated; and the salaries of pensioners were tabulated for the year preceding the final salary year and the averages graduated. The curves made by the various classes were then plotted and compared. This process was deemed expedient in order to study the effect of a possible selection in regard to the members retiring, and as an assistance in the construction of a salary scale. The salary scale was finally based on a combination of the salaries of the active force and the final salaries of pensioners, who retired during the period covered by the experience. 155 EXPOSURE AND CHECK TABLES. Tables of actual exposure were made from the actual experience tables and in these tables the actual decrement was compared with the expected decrement, which was obtained by the use of the adjusted rates in each case. These working tables are not shown; however, a diagram is given for each rate, which gives a comparison of the actual unadjusted rate and the rate obtained by graduation. o.'o 6.09 ::r t= ==l ______________ = = __^H___ __________ =j_|ji___ oos sE 1 = = = = == = = = = ; ill lllllllllillll lllllifllll llllllljlil 1111111111 0.07 _,_ - _ . _L___ _ ____J_ ______ ^__ 0.OI. EEEEEE = = = EE = EEEEEEE^E = EEEE = = = = = = EEEEEEEEEEE oos % E _:__j_ JMrs os -H-H H i i Wti/Y/T/ifflW/ILS ffiOM i t". ACT/rE ocnr/Cf 0.0) _ OM> A L. 'F ^ Y_ f i 5 Ti "1 \ ~\ i\ 00/ __ 1 l r TjT _,, 4 vJ\2f Pj3_ ^ it N ^kJL If wl i " _ i ~v Xj ;i_ , _W _ Jj SJ /TGC 30 158 ' : r =============l============iii at ^= s s = ~ _ i ; = = = E= E E = = = = = -11- = bate or j= /NVJILIDJTy //V \ 111111=1= =1=1111111 1111111111 \ JlCT/yf SEMJCl Z/e-*#6 ij/t f=* *m&MsrEptm#s : ::__::::" L::___:::: :: : a__: . A^V . L H __ _ ..j.]5^.l..,U:J -:..:L!s < sZ!s4.L:J X :::::::::::; J tt -L. L ...__N I: 5 to Met jo 159 160 SO /76 60 161 ||M| pip ill II i imi ||||||;!igi:| 1 I I HH S 1S iPlP ;iM^-:::::T-t:+ J||:Pt:J:j:+ :::: E;:-S' = *^ii. :::::: ^~5 * r ~~ ^ u Hi ji i If- II |,,;,,.. Ijli.. :: WW- llg|i||i : -" 1 isp 4fn* #! -tW|t4 H:fe|:|:|::::::i::: " , 1 j i JiLU : l|- ' .._.IL J: _:_ 4U1 i, i . ^flffi-S-rffl 1 --'- N g - _ +~ J__ " Hi!! n *- ~ntntTT^"T T T 1 T ,*- xia-;ilhUzz- -rJv TTT 1 * "liPTH" I = =:=? S= = - ; ""i".l|~r j-jl- 5lS:i:::::*t:":::::: -;z:: ;|;; j i 1 i ? *' filll Hi ill * 1G2 IiTIMEMII[nnWn r TT , ?r"TTTTTTT""TT"TI 1 ^ f-fr^-mHill 1 '!! ~t H-ft t H - irr " ; : r ~~ ~~*u^ h i.il i i i'pi;i -H- 1 --fr H - ! -*^=; -~j 1 1 1 f 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 13 > --; : U 5 ^|:ji^ E=====Bsis====== m iPr^i : i =::::: | :==i [J g^^Tt ^ j.i ~-- :: i >~- *^-TTT' N 3 1 \\\\W\ , -+j\\~ k.* .-- - v^ S ;., \A J. 1 - |, a SI |1 U44*_^- t'li'll ill ^ 32 -------- -r-44 ||k|].j||. ttntfT 1 frU- 4 \ '' ~ Mill 1 II -- * HI +TH+-- 'ii'::,j|i II 164 It was found in plotting the curves on the ordinary coordinate paper that as the various rates ran into the smaller decimals, the rise and fall of the curve was lost unless paper was used which was so large as to be im- practicable. To overcome this difficulty it was necessary to make a spe- cial coordinate paper, which would magnify the smaller decimals. On the paper used the spaces were graduated on a logarithmic basis, which aided materially in reducing the size of the sheet on which the curves were plotted and gave very satisfactory results. A comparison of the actual salaries with the expected salaries, as obtained by the use of the adjusted salary scale, was made by means of a check table. A graphic comparison of the actual average salaries and the graduated salaries is given in the following diagram : BiB = = M^MH!!!!i?^iipiS **V -" ]- i ' . j 1 I 1 J 1 1 1 1 tr -r i - = - = = = =&= = = ====== J [:=: = =f=-;Sp _44f|-f#4^^ ; M ; *-" -=--~ : ^fp 1 - ; =il= ss; = -TT-j-3=.i= - {---'- '.-- ;-^gp~E^E^; i-Uil ! ' I - W~ ~ "======= ===P= = = = = = = = = = == = = = = = = = = = ==b= = = =1= - - - 4 t- ' J- ' '" --r ----) " - ' "HI ~~-~ ~ : ~ = = = = = = = = = = = = = = = = = = = = =fp = = = = = = Ffi W^ J^^^-r-f+i' Hi#l=H T^fff^l I ' '' '' " ~ - \~rf = -- r-----||-=: =;p|-3z = EEEEEEEEEE = = = = = = = = = = E^EEEpEEE - a * jffi = | = E j|5 = = | = i= = =E=| = j = M==-iL ad =*?=- - 2-- =- = = -: q?5i|* =)--!; 3i = "-'-" ^ ^ . r'^p "1 "Sw ~ \--A, ..- -X-- = = :: ^tz. OHLHnr OC/fLt - \ z ~ _rT= ~ r- 7 r zjG-z/re/it/e c* , tor/rajiurep Mit/es i Ji i r / 1 7 - it 7 f V ^ - - . - - 55 - to co ro *9 Note : The reason for not using the ordinary co-ordinate paper in this case was simply to preserve uniformity in the graphs. 165 THE GRADUATION. The actual rates obtained directly from the exposure table were in a form unsuitable for use in forecasting the probable experience of the future until they were adjusted or graduated into regular curves. The graduation was all done by a combination of the graphic method and Wool- house's graduation formula, the latter being applied by means of Mr. J. A. Higham's summation method (J. I. A., Vol. 31, 319). As the experience in some cases was not very extensive, it was exceedingly difficult to obtain a curve which appeared to be the probable experience of the fund; how- ever, the rates as finally adjusted check closely to the actual experience and are considered entirely satisfactory. RATES AND COMPARISONS. Active Service. Considering the various rates in the order in which they appear in the diagrams given and the experience tables shown later in the report, the first rate is that of withdrawal from active force. The comparison of the rate used with that of other funds shows that the, service has a much lighter withdrawal experience than might be expected in a service which is generally classed among those of a hazardous nature. This rate indi- cates that either the employees find the conditions in the service sufficiently attractive to hold them, or that the mode of exit from the active force is by some other way than resignation or dismissal. Table 5 iATE OF Withdrawal From Active Service. < .flGC^ . .a pl;o~ &Uts < CT3 fl i!J s IN a gw >; o ^^ ' O 03 O rs -i-= o> ^ fl V - a fl 3 tn S u < o V .22 CL^^ S fell C 00 ' CT3 fl O C o3 11*1 J 2 2c2 o a; -si 55 H 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 .0563 .0476 .0400 .0338 .0291 .0257 .0234 .0218 .0203 .0186 .0168 .0147 .0126 .0107 .0093 .0083 .0078 .0075 .0073 .0071 .0068 .0858 .0805 .0745 .0679 .0607 .0535 .0464 .0402 .0353 .0315 .0285 .0264 .0249 .0238 .0230 .0224 .0218 .0211 .0202 .0190 .0177 .0550 .0500 .0470 .0440 .0410 .0380 .0350 .0330 .0310 .0290 .0270 .0250 .0230 .0210 .0190 .0170 .0150 .0140 .0130 .0120 .0110 .0487 .0559 .0585 .0558 .0509 .0461 .0413 .0365 .0323 .0287 .0252 .0223 .0195 .0176 .0157 .0142 .0126 .0117 .0108 .0099 .0089 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 .0063 .0057 .0050 .0043 .0036 .0030 .0025 .0022 .0019 .0018 .0017 .0016 .0016 .0015 .0014 .0013 .0011 .0008 .0006 .0004 .0002 .0162 .0147 .0131 .0118 .0106 .0100 .0095 .0091 .0087 .0081 .0074 .0066 .0059 .0051 .0044 .0035 .0025 .0015 .0005 .0 .0 .0 .0 .0 .0 . .0 .0 .0 .0 100 090 080 070 060 050 040 030 020 010 .0085 .0082 .0078 .0075 .0070 .0065 .0059 .0054 .0049 .0043 .0037 .0031 .0025 .0019 .0013 .0007 166 The rate of mortality from accidental death while in actual perform- ance of duty is not compared with any other accidental death rates, as accident tables are not available for published comparisons. The rates given show that the mortality from this source is very low, and that the general impression that the New York police service is extremely haz- ardous is erroneous. Great care was taken in the investigation of this rate, and, as it corresponds very closely with an accidental death investiga- tion of the same force made some few years ago, the figures are considered to indicate properly the experience of the fund. Table 6 Rate of Accidental Death While in Actual Performance of Duty. Age Rate Age Rate Age Rate 20 .00000 33 .00040 46 .00064 21 .00000 34 .00040 47 .00077 22 .00008 35 .00041 48 .00083 23 .00014 36 .00041 49 .00084 24 .00020 37 .00041 50 .00083 25 .00026 38 .00041 51 .00076 26 .00030 39 .00042 52 .00056 27 .00033 40 .00042 53 .00038 28 .00035 41 .00043 54 .00024 29 .00037 42 .00044 55 .00015 30 .00038 43 .00046 56 .00007 31 .00039 44 .00048 57 .00001 32 .00039 45 .00053 58 .00000 The rate of mortality in the active service, exclusive of the mortality due to accidental death, is what might have been expected in a service of this nature. In the younger ages the mortality is light, due no doubt to the selection of healthy men for service on the police force. The mortality remains rather light until after the employees have reached age 50, when it gradually increases to a rate which is very close to that of the American or the Combined experience tables of mortality. An explanation of this change might be found in the fact that the tendency of employees whose health is in any way impaired to retire on a disability pension, maintains a service of very healthy persons. It is possible that this tendency is re- tarded about age 50, as the ordinary employee will have reached an age where he would prefer to wait until he can retire on a regular pension, since the maximum amount of disability pension allowable is the minimum amount of the regular pension allowance. 167 Table 7 Rate of Mortality While in Active Service. CD (H cl ni *?^d J MP Si fi S: CD OCj HH d P i Age York City ice Force, 2* ernal Socii in U. S. ai er. Experiei thur Hunt< 1) itish Railw tem (R. -dy and *, 1905) piled from ious funds ( Manly, 191 Age York City ice Force, 2* ernal Soc in U. S. a er.Experier thur Hunt 1) itish Railw tern (R. dy and ig, 1905) piled from "'os - a o o3 New Pol 191 Frat ties Am (Ar 191 |IS +i CO C W r { -S CO cj 5-5ai W > 3.5 ; 1* 20 .0026 .0075 .0041 .0021 50 .0144 .0129 .0 126 .0 089 21 .0026 .0075 .0044 .0021 51 .0164 .0136 .0 138 .0 094 22 .0027 .0076 .0046 .0022 52 .0183 .0144 .0 148 .0 098 23 .0027 .0076 .0046 .0023 53 .0199 .0152 .0 158 .0 103 24 .0027 .0077 .0046 .0024 54 .0211 .0161 .0 167 .0 109 25 .0028 .0077 .0044 .0025 55 .0218 .0172 .0 174 .0 115 26 .0029 .0078 .0043 .0026 56 .0223 .0184 .0 182 .0 122 27 .0031 .0078 .0042 .0027 57 .0225 .0197 * .0 191 .0 133 28 .0034 .0079 .0041 .0028 58 .0229 .0211 .0 202 .0 149 29 .0037 .0080 .0041 .0029 59 .0235 .0227 .0 217 .0 166 30 .0040 .0081 .0042 .0030 60 .0247 .0244 .0 233 .0 186 31 .0045 .0082 .0044 .0032 61 .0265 .0268 .0 250 .0 212 32 .0049 .0083 .0045 .0034 62 .0290 .0294 .0 264 .0 242 33 .0054 .0084 .0046 .0036 63 .0320 .0323 .0 275 .0 274 34 .0059 .0085 .0046 .0038 64 .0355 .0354 .0 279 .0 307 35 .0063 .0086 .0046 .0040 65 .0393 .0389 .0 283 .. 36 .0068 .0087 .0046 .0042 66 .0432 .0426 .0 291 37 .0073 .0088 .0046 .0044 67 .0472 .0467 .0 307 .. 38 .0077 .0090 .0046 .0046 68 .0512 .0512 .0 336 39 .0080 .0091 .0046 .0049 69 .0553 .0560 40 .0082 .0093 .0048 .0052 70 .0596 .0614 41 .0084 .0095 .0051 .0055 71 .0642 .0671 42 .0086 .0097 .0056 .0058 72 .0692 .0733 43 .0088 .0100 .0063 .0062 73 .0747 .0798 44 .0090 .0102 .0070 .0065 74 .0807 .0867 45 .0092 .0105 .0079 .0069 75 .0872 .0941 46 .0095 .0109 .0088 .0073 76 .0943 . 1022 47 .0099 .0113 .0097 .0077 77 .1020 .1110 48 .0109 .0117 .0107 .0081 78 .1103 . 1208 49 .0125 .0123 .0116 .0085 * Exclusive of mortality resulting from service accidents. The rate of invalidity or disability is extremely high, and seems to explain the reason for the comparatively low withdrawal experience. The rates indicate that the most desirable as well as remunerative mode of exit from the active service is not by way of resignation or dismissal but rather by means of the disability pension. A comparison of the experience of the fund with an ordinary invalidity table or the experience of other funds, shows that the high rate cannot be the result of ill health or service break- down alone, but must be the consequence of persons entering the disability pension roll, when they are in reality not permanently disabled or in- validated, but merely suffering from temporary impairment or disability. This assumption is demonstrated to be correct by the mortality experience among the disability pensioners. This breaking down of the bars between active service and disability pension is due either to a desire of the em- ployees to obtain a disability pension and then enter a new field of em- ployment or business, or to the administration's desire to rid the active 168 force of members without the embarrassment which might be caused by dismissals. The comparison of the disability rates in the police force with the other rates given in the following table shows very clearly that such a dis- parity in liability to bona fide permanent disability could hardly exist. Table 8 Rate of Invalidity. Age New York City Police Force, 1912 Fraternal Orders in the United States (Arthur Hunter, 1911) New South Wales Government Rail- ways and Tram- ways, 1906 various funds (H. W. Manly, 1910) CR New York City Police Force, 1912 Fraternal Orders in the United States (Arthur Hunter, 1911) New South Wales government nan- ways and Tram- ways, 1906 Compiled from various funds (H. W. Manly, 1910) 20 .0006 .0005 45 .0473 .0012 .C 1029 .0047 21 .0007 .0005 46 .0542 .0012 .C 032 .0053 22 .0009 .0005 47 .0595 .0013 .C 1035 .0059 23 .0010 .0005 48 .0640 .0014 .C 1039 .0068 24 .0011 .0005 .0001 49 .0669 .0016 .C 044 .0080 25 .0012 .0005 .0002 50 .0686 .0017 .C 1052 .0092 26 .0014 .0005 .0003 51 .0689 .0019 .C 075 .0108 27 .0016 .0005 .0004 52 .0680 .0020 .C 100 .0127 28 .0019 .0005 .0005 53 .0657 .0022 .C 125 .0150 29 .0022 .0006 .0006 54 .0628 .0025 .C 150 .0174 30 .0025 .0006 .0007 0004 55 .0582 .0028 .C 175 .0200 31 .0029 .0006 .0008 0006 56 .0527 .0031 .C 200 .0229 32 .0034 .0006 .0009 0008 57 .0470 .0035 .C 240 .0260 33 .0039 .0006 .0010 0010 58 .0414 .0040 .C 300 .0295 34 .0046 .0006 .0011 0012 59 .0354 .0046 .C 570 .0333 35 .0055 .0006 .0012 0014 60 .0306 .0054 .( 900 .1902 36 .0065 .0007 .0013 0016 61 .0264 .0063 .3 300 .3002 37 .0076 .0007 .0014 0019 62 .0227 .0074 .4500 38 .0094 .0007 .0015 0022 63 .0190 .0088 .5000 39 .0118 .0008 .0016 0024 64 .0159 .0104 .5000 40 .0153 .0008 .0018 0027 65 .0128 .0124 41 .0197 .0009 .0020 0030 66 .0100 . . . . 42 .0259 .0009 .0022 0034 67 .0069 43 .0327 .0010 .0024 0038 68 .0045 44 .0400 .0011 .0026 0042 69 .0026 As the employees do not all retire as soon as they become eligible for regular or service retirement, no certain age of retirement could be used; it was therefore necessary to determine the rate of retirement after the employee became entitled to retire on a regular pension. The following table shows the rates obtained : Table 9 Rate of Regular or Service Retirement. Age Rate Age 63 Rate Age Rate 55 .2008 .1758 71 .1966 56 .1295 64 .1753 72 .2727 57 .1310 65 .1687 73 .3732 58 .1330 66 .1568 74 .4952 59 .1400 67 .1415 75 .6226 60 .1500 68 .1316 76 .7445 61 .1610 69 .1309 77 .8502 62 r .1711 70 .1508 78 .8897 169 Pensioners. Before the cards were received and tabulated it was expected that all tables for pensioners would have two decrement columns, one column showing the deaths and the other the pension revocations or withdrawals from the pension roll. On the completion of the tabulation it was found that among the regular and disability pensioners combined, there had been but five revocations in the six-year period. As it was possible that in these cases the pensioners had been restored to the active force, it was con- sidered best to discard them and thereby reduce the regular pensioners' tables to one-column decrement tables similar in form to ordinary mortal- ity tables. In the case of widows the revocations were more frequent and were of importance, since this experience covered the pension terminations caused by second marriages. 'Regular or Service Pensioners. The rate of mortality among members on the regular pension roll is shown in the following table. The mortality is slightly higher than the American experience table until after age 80. This might be expected among employees of such a service who have been on the force long enough to retire on regular or service pensions. Table 10 Rate op Mortality Among Regular or Service Pensioners. Age 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 US |2 .0436 .0449 .0463 .0478 .0495 .0513 .0533 .0554 .0578 .0603 .0632 .0662 .0696 .0732 .0772 .0814 .0860 .0909 .0961 .1017 .1077 .1141 .1210 cQ~ _, <* OS Eh ^-'i-\ ^ CO ~ g fl 03 O O >-i .0383 .0396 .0410 .0425 .0441 .0458 .0477 .0498 .0523 .0552 .0584 .0617 .0650 .0681 .0709 .0727 .0750 .0777 .0809 .0849 .0901 .0963 .1032 from funds Manly) from funds Manly) O MX! H Age U o Pen- M.D. 909) rs _. . d TO New York City Police Force, 1912 Fraternal Orders m unueu states (Franklin B. Mead, 1910) Fraternal Orders in Canada (Sid- ney H. Pipe, 1909) Compiled from various funds (H. W. Manly) 20 .2740 .4000 .5380 60 .0449 .1 270 .1820 .0700 21 .2597 .3471 .4500 61 .0479 .1 270 .1800 .0660 22 .2452 .3036 .4060 62 .0502 .1 271 .1790 .0620 23 .2310 .2677 .3730 63 .0539 .1 271 .1780 .0580 24 .2173 .2386 .3460 64 .0565 .1 272 .1770 .0540 25 .2037 .2155 .3220 65 .0602 .1 272 .1760 .0550 26 .1910 .1976 .3080 66 .0650 .1 273 .1740 .0570 27 .1784 .1840 .2950 67 .0688 .1 273 .1720 .0600 28 .1659 .1738 .2830 68 .0740 .1 274 .1690 .0680 29 .1535 .1661 .2740 69 .0797 .1 275 .1650 .0790 30 .1408 .1601 .2650 2700 70 .0843 .1 276 .1600 .0900 31 .1298 .1552 .2570 2500 71 .0904 .1 278 .1600 .1000 32 .1195 .1510 .2490 2320 72 .0975 .1 281 .1620 .1100 33 .1096 .1464 .2430 2150 73 . 1040 . 1 285 .1650 .1200 34 .1002 .1433 .2370 1990 74 .1120 .1 290 .1680 .1300 35 .0922 .1406 .2300 1840 75 . 1200 . 1 297 .1720 .1400 36 .0840 .1382 .2250 1710 76 . 1300 . 1 307 .1760 .1500 37 .0769 .1361 .2220 1580 77 . 1400 . 1 322 .1810 .1620 38 .0702 .1343 .2180 1470 78 . 1500 . 1 346 .1860 .1750 39 .0643 .1328 .2150 1370 79 . 1645 . 1 385 .1920 .1890 40 .0600 .1315 .2120 1280 80 .1800 .1 445 .1980 .2050 41 .0557 .1304 .2100 1200 81 . 1960 .2050 .2220 42 .0514 .1295 .2080 1130 82 .2140 .2120 .2400 43 .0480 .1288 .2060 1080 83 .2360 .2200 .2590 44 .0454 .1282 .2050 1030 84 .2570 .2280 .2790 45 .0424 .1277 .2030 1000 85 .2820 .2360 .3010 46 .0404 .1273 .2020 0980 86 .3120 .2660 .3230 47 .0390 .1270 .2020 0960 87 .3450 .3030 .3480 48 .0378 .1268 .2010 0940 88 .3840 .3470 .3710 49 .0365 .1267 .2000 0920 89 .4260 .3960 .4000 50 .0358 .1267 .1990 0900 90 .4695 .. .4550 .4250 51 .0352 .1267 .1990 0880 91 .5150 .. .5320 .4580 52 .0350 .1267 .1980 0860 92 .5603 .. .6340 .4830 53 .0352 .1268 .1960 0840 93 .6100 .7340 .5000 54 .0360 .1268 .1950 0820 94 .6620 .8570 .5330 55 .0369 .1268 .1940 0800 95 .7220 1.0000 .5710 56 .0380 .1269 .1920 0780 96 .7945 .6670 57 .0390 .1269 .1900 0760 97 .8740 1.0000 58 .0408 .1270 .1870 0740 98 .9820 59 .0425 .1270 .1840 0720 99 1.0000 Widow Pensioners. The rate of mortality among widow pensioners was graduated and, on being compared with other rates of mortality, was found to be very 171 nearly the same as that of the Actuaries' or Combined experience table of mortality. On applying the probability of death from the combined table to the actual exposure column, in the ordinary manner of checking by comparing actual with expected deaths, the expected deaths were so nearly the same as the actual deaths that it seemed better to use it in place of the graduation from the actual data, which, although it checked a little closer than the rates of the Combined table, was based on a much smaller experience than that of the Combined mortality table. Table 12 Rate of Mortality and Withdrawal Among Widow Pensioners. Rate Rate Rate Rate Age of of Age of of Mortality Withdrawal Mortality Withdrawal 20 .0073 .1032 60 .0303 .0112 21 .0074 .0970 61 .0326 .0111 22 .0075 .0908 62 .0351 .0110 23 .0076 .0846 63 .0378 .0109 24 .0077 .0785 64 .0408 .0107 25 .0078 .0726 65 .0441 .0106 26 .0079 .0668 66 .0476 .0104 27 .0080 .0613 67 .0515 .0103 28 .0081 .0562 68 .0556 .0101 29 .0083 .0515 69 .0600 .0099 30 .0084 .0473 70 .0649 .0097 31 .0086 .0435 71 .0702 .0095 32 .0087 .0401 72 .0758 .0092 33 .0089 .0371 73 .0819 .0090 34 .0091 .0344 74 .0885 .0087 35 .0093 .0319 75 .0956 .0084 36 .0095 .0297 76 .1032 .0080 37 .0097 .0277 77 .1115 .0077 38 .0099 .0258 78 .1204 .0073 39 .0101 .0242 79 .1301 .0069 40 .0104 .0227 80 .1404 .0065 41 .0106 .0214 81 .1514 .0061 42 .0109 .0202 82 .1632 .0056 43 .0113 .0192 83 .1759 .0051 44 .0117 .0182 84 .1897 .0046 45 .0122 .0174 85 .2051 .0041 46 .0128 .0166 86 .2225 .0036 47 .0135 .0159 87 .2422 .0031 48 .0143 .0152 88 .2653 .0026 49 .0151 .0146 89 .2924 .0020 50 .0159 .0141 90 .3237 .0014 51 .0169 .0136 91 .3610 .0008 52 .0179 .0132 92 .4053 .0001 53 .0191 .0128 93 .4572 54 .0203 .0125 94 .5163 55 .0217 .0122 95 .5843 56 .0231 .0120 96 .6486 57 .0247 .0117 97 .6923 58 .0264 .0115 98 .7500 59 .0282 .0114 99 1.0000 The rate of withdrawal given in the table represents the combination of pension terminations caused by remarriage and those caused by revo- cations. In tabulating the data the terminations caused by marriage were 172 kept separate from the revocations, but they are not divided in this report, since there is no difference between the termination by marriage or revoca- tion so far as the effect on the valuation is concerned. This separation in the tabulation was made merely for the purpose of seeing the relation of the number of terminations from the two causes, and in order that no retabulation of the cards would be necessary to get this experience in the event of a valuation being made of widows' pension benefits in which the objectionable feature of discretionary revocation is not present. Children Pensioners. The paucity of data regarding the mortality among children pen- sioners made it useless to attempt to graduate a rate of mortality. A pub- lished table of mortality was adopted, therefore, which appears later in the report. Combined Active Members and Pensioners. While no actual experience table is shown, the rate of mortality among the combined active and pension forces is given. The following table shows the mortality graduated from a combination of all the data, and gives an idea of the ordinary mortality of policemen. This table was graduated directly from the original data, and was used in some of the calculations of widows' benefits. Table 13- -Rate of Mortality in Active Force, Modified to Include Regular and Disability Pensioners' Lives. N. Y. Ameri- Com- N. Y. Ameri- Com- City can bined City can bined Age Police Experi- Experi- Age Police Experi- Experi- Force ence ence Force ence ence 1912 Table Table 1912 Table Table 20 .0027 .0078 .0073 46 .0170 .0116 .0128 . 21 .0028 .0079 .0074 47 .0181 .0120 .0135 22 .0029 .0079 .0075 48 .0193 .0125 .0143 23 .0030 .0080 .0076 49 .0205 .0131 .0151 24 .0032 .0080 .0077 50 .0214 .0138 .0159 25 .0034 .0081 .0078 51 .0235 .0145 .0169 26 .0037 .0081 .0079 52 .0249 .0154 .0179 27 .0040 .0082 .0080 53 .0265 .0163 .0191 28 .0043 .0083 .0081 54 .0281 .0174 .0203 29 .0047 .0083 .0083 55 .0299 .0186 .0217 30 .0051 .0084 .0084 56 .0319 .0199 .0231 31 .0055 .0085 .0086 57 .0339 .0213 .0247 32 .0060 .0086 .0087 58 .0364 .0229 .0264 33 .0065 .0087 .0089 59 .0384 .0247 .0282 34 .0070 .0088 .0091 60 .0410 .0267 .0303 35 .0077 .0089 .0093 61 .0440 .0289 .0326 36 .0083 .0091 .0095 62 .0464 .0313 .0351 37 .0094 .0092 .0097 63 .0496 .0339 .0378 38 .0097 .0094 .0099 64 .0525 .0369 .0408 39 .0104 .0096 .0101 65 .0558 .0401 .0441 40 .0112 .0098 .0104 66 .0594 .0437 .0476 41 .0121 .0100 .0106 67 .0628 .0476 .0515 42 .0130 .0103 .0109 68 .0668 .0520 .0556 43 .0139 .0105 .0113 69 .0707 .0508 .0601 44 .0148 .0108 .0117 70 .0751 .0620 .0649 45 .0159 .0112 .0122 71 .0800 .0677 .0702 173 Table 13 Rate of Mortality in Active Force, Modified to Include Regular and Disability Pensioners' Lives {Continued). N. Y. Ameri- Com- N. Y. Ameri- Com- City can bined City can bined Age Police Experi- Experi- Age Police Experi- Experi- Force ence ence Force ence ence 1912 Table Table 1912 Table Table 72 .0850 .0737 .0758 87* .2422 3030 .2425 73 .0903 .0802 .0819 88 .2653 3467 .2653 74 .0964 .0870 .0885 89 .2924 3959 .2924 75 .1020 .0944 . .0956 90 .3237 4545 .3237 76 .1090 .1023 .1032 91 .3610 5325 .3610 77 .1164 .1111 .1115 92 .4053 6343 .4053 78 .1242 .1208 .1204 93 .4572 7342 .4572 79 .1329 .1317 .1301 94 .5163 8571 .5163 80 .1432 .1445 .1404 95 .5843 1 0000 .5843 81 .1551 .1586 .1514 96 .6486 .6486 82 .1684 .1743 .1632 97 .6923 .6923 83 .1842 .1916 .1759 98 .7500 .7500 84 .2016 .2114 .1897 99 1.0000 1.0000 85 .2130 .2356 .2051 100 86 .2299 .2657 .2222 * Extended by combined Experience Table. SERVICE AND MORTALITY TABLES. The rates given in the preceding pages were used in the construction of the active service table and the various pension tables. The tables were constructed by the usual method of applying the rates for each age to the number of survivors at the exact age. The mortality table for children, as previously explained, was not constructed from the experi- ence of the fund, it being an adopted table. The table shown is one de- duced by Mr. Archibald Hewat from an experience of a Scottish Ministers' Widows and Orphans' fund. Each symbol used in the tables has a little letter affixed in parenthesis at the upper right hand side to indicate the table as I y = Number living in active force at age x. lx = Number regular pensioners living on fund at age x. 1% = Number invalids living on fund at age x. 7(0. *> x ' 7(c) . 1 X ](m). Number widow pensioners living on fund at age x. Number children pensioners living on fund at age x. i Number living in active force or on pension at age x. The table for the active service has an additional column which shows the adjusted salary scale. The scale is not based on or connected with the service table in any way, but, as the salary scale only applies to mem- bers in the active force, it seems appropriate to combine the two. These tables indicate the experience of the fund during the six-year period. Any probability relating to persons in a certain class can be figured from the table for that class. For instance in the active service table the l l f column shows the number living and surviving at any exact age x, and the other columns show the number of persons out of these who will leave the active force from the various causes during the year, or between 174 the ages x and x + 1. At age 20 the table shows that out of 100,000 persons living at the beginning of the year, 5635 will resign or be dis- missed, none of them will be accidentally killed while on duty, 260 will die, 61 retire because of disability, and that none of them will be retired on service pension. Since (5635 -{- 260 -j- 61 = 5956) 5956 leave the ac- tive service between ages 20 and 21, there will be (100,000 5956 = 94,044) 94,044 persons who will survive to exact age 21. This process continues throughout the table. The column s ( f shows the scale salary at each age, and the ratio between the scale salary at various ages gives the relative probable increase or decrease in the salary of any employee. A simple example of the use of this table is as follows: What will be the number of persons on, and the amount of, the payroll 5 years from date, covering the survivors of 500 employees, who are at present 20 years of age and drawing average salaries of $800 per annum? The number of persons is iM. x 500 79,438X500 I 100,000 - d97 - 19 The amount of the payroll is S -MlM v 500 X 800 - 79,438 X 984 X 500 X 800 _ s (a) j <) X 500 X 800 - - $400,850 . 67 20 L 20 ' This gives 397 persons surviving at age of 25 out of the 500 living at age 20. Since the payroll is $400,856 at age 25, the average salary of the em- ployees at that time might be obtained by dividing the total salary by the number of employees, as: ' ' = $1,009.23 = Average salary of survivors at age 25. This could be obtained directly from the table and the average salary at age 20, since: *25 and , . = Rate of increase in salary. 6 20 !| x 800 - *^9? = $1,009.23 ^20 Both methods give the probable average salary of $1009 as the amount of the employees' average pay on reaching age 25. As a matter of fact, probably not a single one of the survivors will be drawing a salary of exactly $1009 per annum at age 25, but on the average this has been the amount which employees at this age have drawn during the six-year period. Note: The example given is merely to illustrate the use of the tables; the rules of the Department do not permit the employment of minors. 175 Table 14- Active Service Table and Salary Scale Acci- dentally Dying Dis- B egu- Age Living Wi dra\ th- ving Other Deaths ability Retire- ments R n etfre- Total lents Decr f Salary Scale ment 7 () (a) X a d^ d c ? * r (o) ' X r () ' X S x 20 100,000 5,6 35 260 61 5,956 780 21 94,044 4,4 74 247 67 4,788 814 22 89,256 3,5 70 1 237 76 3,890 850 23 85,366 2,8 82 12 230 82 3,206 891 24 82,160 2,3 90 17 225 90 2,722 936 25 79,438 2,0 43 20 225 99 2,387 984 26 77,051 1,8 04 23 227 109 2,163 1,037 27 74,888 1,6 29 25 234 118 2,006 1,091 28 72,882 1,4 78 26 246 135 1,885 1,145 29 70,997 1,3 21 26 260 153 1,760 1,198 30 69,237 1,1 60 26 279 172 1,637 1,248 31 67,600 9 92 26 301 196 1,515 1,296 32 66,085 8 31 26 323 225 1,405 1,339 33 64,680 6 94 26 346 255 1,321 1,377 34 63,359 5 91 25 371 294 1,281 1,411 35 62,078 5 17 25 394 339 1,275 1,439 36 60,803 4 71 25 414 394 1,304 1,464 37 59,499 4 45 24 433 454 1,356 1,484 38 58,143 4 23 24 445 546 1,438 1,502 39 56,705 4 00 24 451 672 1,547 1,518 40 55,158 3 72 23 452 841 1,688 1,533 41 53,470 3 36 23 449 1,056 1,864 1,547 42 51,606 2 92 23 444 1,336 2,095 1,558 43 49,511 2 47 23 435 1,617 2 322 1,568 44 47,189 2 02 23 424 1,885 '. '. '. 2^534 1,577 45 44,655 1 60 24 411 2,112 2,707 1,584 46 41,948 1 26 27 398 2,272 2,823 1,591 47 39,125 99 30 386 2,330 2,845 1,597 48 36,280 79 30 394 2,322 2,825 1,604 49 33,455 65 28 418 2,238 2,749 1,612 50 30,706 55 26 443 2,105 2,629 1,620 51 28,077 47 21 461 1,934 2,463 1,629 52 25,614 41 14 470 1,743 2,268 1,640 53 23,346 37 9 465 1,533 2,044 1,653 54 21,302 32 5 450 1,338 1,825 1,669 55 19,477 27 3 425 1,133 3 ,912 5,500 1,685 56 13,977 18 1 311 737 1 ,810 2,877 1,700 57 11,100 12 250 521 1 ,454 2,237 1,713 58 8,863 7 203 367 1 ,179 1,756 1,721 59 7,107 4 167 251 995 1,417 1,722 60 5,690 2 141 174 854 1,171 1,716 61 4,519 1 120 119 727 967 1,705 62 3,552 103 80 608 791 1,690 63 2,761 88 53 485 626 1,674 64 2,135 76 34 374 484 1,658 65 1,651 65 21 279 365 1,643 66 1,286 56 13 202 271 1,630 67 1,015 48 7 144 199 1,618 68 816 42 4 107 153 1,607 69 663 37 2 87 126 1,598 70 537 32 81 113 1,589 71 424 27 83 110 1,581 72 314 22 86 108 1,573 73 206 15 77 92 1,565 74 114 9 56 65 1,557 75 49 4 31 35 1,547 76 14 1 10 11 1,534 77 3 3 3 1,517 176 Table 15 Regular Pensioners' Mortality Table. 1 Living Dying Living Dying Age / (p) *> X d^ Age /(P) 1 X d) - X d<> With- Decre- Age 7 (u 1 X t \ With- Decre- drawals (w) ment d (w J drawals ment 18 100,000 713 11,556 12,269 59 11,174 316 127 443 19 87,731 632 9,598 10,230 60 10,731 326 120 446 20 77,501 565 7,999 8,564 61 10,285 335 114 449 21 68,937 509 6,689 7,198 62 9,836 345 108 453 22 61,739 461 5,609 6,070 63 9,383 355 102 457 23 55,669 421 4,712 5,133 64 8,926 364 96 460 24 50,536 387 3,969 4,356 65 8,466 373 90 463 25 46,180 359 3,352 3,711 66 8,003 381 83 464 26 42,469 335 2,837 3,172 67 7,539 388 77 465 27 39,297 315 2,409 2,724 68 7,074 394 71 465 28 36,573 298 2,056 2,354 69 6,609 397 65 462 29 34,219 283 1,763 2,046 70 6,147 399 59 458 30 32,173 271 1,521 1,792 71 5,689 399 54 453 31 30,381 261 1,321 1,582 72 5,236 397 48 445 32 28,799 252 1,155 1,407 73 4,791 392 43 435 33 27,392 244 1,016 1,260 74 4,356 385 38 423 34 26,132 238 898 1,136 75 3,933 376 33 409 35 24,996 232 797 1,029 76 3,424 353 27 380 36 23,967 227 711 938 77 3,044 339 23 362 37 23,029 223 637 860 78 2,682 323 20 343 38 22,169 220 573 793 79 2,339 304 16 320 39 21,376 217 517 734 80 2,019 283 13 296 40 20,642 214 469 683 81 1,723 261 10 271 41 19,959 212 427 639 82 1,452 237 8 245 42 19,320 210 391 601 83 1,207 212 6 218 43 18,719 211 359 570 84 989 188 5 193 44 18,149 212 331 543 85 796 163 3 166 45 17,606 215 306 521 86 630 140 2 142 46 17,085 219 284 503 87 488 118 2 120 47 16,582 224 264 488 88 368 98 1 99 48 16,094 230 245 475 89 269 79 1 80 49 15,619 235 229 464 90 189 61 61 50 15,155 242 214 456 91 128 46 46 51 14,699 248 200 448 92 82 33 33 52 14,251 256 188 444 93 49 22 22 53 13,807 264 177 441 94 27 14 14 54 13,366 271 167 438 95 13 8 8 55 12,928 280 158 438 96 5 3 3 56 12,490 289 149 438 97 2 1 1 57 12,052 297 141 438 98 1 * .75 * .75 58 11,614 306 134 440 99 * .25 .25 .25 Decimals were used to avoid necessity for larger radix. 179 Table 18 Children Pensioners' Mortality Table. Living Dying Living 1 Dying Age 7(0 1 X d Age 7 (c) v X d 10,000 620 11 8,717 35 1 9,380 150 12 8,682 26 2 9,230 92 13 8,656 17 3 9,138 83 14 8,639 18 4 9,055 72 15 8,621 25 5 8,983 63 16 8,596 34 6 8,920 53 17 8,562 35 7 8,867 45 18 8,527 43 8 8,822 35 19 8,484 50 9 8,787 35 20 8,434 51 10 8,752 35 21 8,383 Table 19 Combined Mortality Table or Active Service Mortality Table, Modi- fied to Include Regular and Disability Pensioners' Lives. Age 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 Living (to) 100,000 99,734 99,455 99,169 98,871 98,552 98,215 97,852 97,461 97,044 96,591 96,103 95,574 95,001 94,386 93,722 93,005 92,235 91,371 90,485 89,545 88,542 87,474 86,335 85,137 83,878 82,549 81,144 79,672 78,131 76,529 74,890 73,133 71,313 69,427 67,476 65,462 63,377 61,229 59,003 Dying d () 266 279 286 298 319 337 363 391 417 453 488 529 573 615 664 717 770 864 886 940 1,003 1,068 1,139 1,198 1,259 1,329 1,405 1,472 1,541 1,602 1,639 1,757 1,820 1,886 1,951 2,014 2,085 2,148 2,226 2,263 Age 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 Living (to) 56,740 54,414 52,023 49,612 47,154 44,681 42,190 39,686 37,194 34,711 32.259 29^836 27,449 25,116 22,849 20,647 18,542 16,521 14,599 12,786 11,087 9,499 8,026 6,675 5,445 4,347 3,421 2,635 1,997 1,467 1,038 702 449 267 145 70 29 10 3 1 Dying d (TO) 2,326 2,391 2,411 2,458 2,473 2,491 2,504 2,492 2,483 2,452 2,423 2,387 2,333 2,267 2,202 2,105 2,021 1,922 1,813 1,699 1,588 1,473 1,351 1,230 1,098 926 786 638 530 429 336 253 182 122 75 41 19 7 2 1 ISO FAMILY HISTORY. The valuation of benefits which embrace pensions to widows and children necessitated figures showing the probability of a member leaving a widow and the age of the widow at his death, also the probability of a man leaving children and the ages of such children. As the records at police headquarters did not furnish the data required for investigating the conditions in the service, it was necessary to adopt the experience of another fund as reflecting these conditions. The following table shows the Table 20 Showing the Conjugal Relation of Employees, the Corresponding Age of the Wife to That of the Husband Dying, and the Number of Employees Who Leave Children, Together With the Average Age of the Youngest Child. Proportion of Average Proportion of Average Those Dying Age of Age Those Dying Age of Age of Who of Who Employee Who Leave Young- Employee Who Leave Young- are Hus- Children Wife est are Hus- Children Wife est bands age 17 or tinder Child bands age 17 or Under Child 20 .002 .001 22.0 .5 59 .668 .605 50.1 8.7 21 .006 .003 22.4 .6 60 .667 .593 51.0 9.2 22 .017 .009 22.8 .7 61 .665 .577 51.9 9.6 23 .036 .020 23.2 .7 62 .662 .557 52.8 10.1 24 .058 .034 23.6 .8 63 .656 .532 53.7 10.5 25 .088 .057 24.0 .9 64 .650 .502 54.6 10.9 26 .117 .078 24.8 1.0 65 .640 .468 55.5 11.3 27 .149 .103 25.6 1.0 66 .629 .431 56.5 11.6 28 .185 .134 26.4 1.1 67 .616 .390 57.5 12.0 29 .245 .184 27.2 1.2 68 .601 .349 58.5 12.3 30 .295 .228 28.0 1.3 69 .586 .309 59.5 12.6 31 .344 .274 28.7 1.3 70 .569 .270 60.5 12.9 32 .390 .320 29.4 1.4 71 .551 .233 61.5 13.2 33 .434 .364 30.1 1.5 72 .534 .200 62.5 13.4 34 .481 ..411 30.8 1.6 73 .515 .170 63.5 13.6 35 .526 .457 31.5 1.7 74 .496 .144 64.5 13.9 36 .563 .496 32.1 1.8 75 .476 .122 65.5 14.1 37 .593 .529 32.7 1.9 76 .455 .103 66.5 14.3 38 .617 .558 33.3 2.0 77 .432 .088 67.5 14.4 39 .632 .575 33.9 2.1 78 .408 .076 68.5 14.6 40 .643 .590 34.5 2.3 79 .385 .066 69.5 14.7 41 .648 .600 35.2 2.5 80 .361 .058 70.5 14.8 42 .657 .612 35.9 2.6 81 .334 .050 71.5 15.0 43 .665 .620 36.6 2.8 82 .315 .046 72.5 15.1 44 .672 .629 37.3 3.0 83 .293 .042 73.5 15.2 45 .677 .635 38.0 3.3 84 .271 .039 74.5 15.2 46 .679 .639 38.8 3.5 85 .249 .037 75.5 15.3 47 .680 .641 39.6 3.8 86 .227 .034 76.5 15.4 48 .678 .640 40.4 4.1 87 .208 .031 77.5 15.5 49 .678 .642 41.2 4.5 88 .185 .028 78.5 15.6 50 .679 .643 42.0 4.8 89 .164 .025 79.5 15.6 51 .680 .644 42.9 5.2 90 .142 .022 80.5 15.7 52 .681 .646 43.8 5.6 91 .125 .021 81.5 15.8 53 .680 .645 44.7 6.0 92 .103 .018 82.5 15.9 54 .678 .641 45.6 6.4 93 .092 .017 83.5 15.9 55 .676 .638 46.5 6.9 94 .077 .014 84.5 16.0 56 .673 .632 47.4 7.3 95 .071 .013 85.5 16.1 57 .671 .625 48.3 7.8 96 .053 .010 86.5 16.2 58 .670 .618 49.2 8.2 97 .038 .008 87.5 16.2 181 rates adopted, which are based on those given by Mr. Henry William Manly in one of his valuable papers on pension funds. The rates are founded on the experience of the widows' funds of Scottish bankers and the statistics of the colony of New Zealand. These assumed rates probably slightly overstate the cost of annuities to dependents, but they were adopted in this case, as they were among the best available in a form suit- able for use. REASONS FOR CALCULATING THE COST BY YEARS. AND THE AMOUNT OF THE CONTINUING LIABILITY AS WELL AS MAKING AN ORDINARY VALUATION. In the valuation of a pension fund the ordinary presentation and comparison of present values of assets and liabilities should be entirely ample. To an actuary or one acquainted with the use and meaning of present values, a distribution of cost by years is unnecessary ; however, in the establishment of a pension scheme or where it is considered necessary to impress all concerned with the actual condition of a fund, such distri- bution is very useful. In the present case, where it is necessary to make the meaning of the valuation very clear to any person who is interested, such a valuation is not only useful but highly essential, since a mere presentation of present values would not be readily appreciated by the layman. Owing to the fact that there is, under the present conditions, no reserve accumulated, and hence no interest factor involved, a presentation of present values with an interest factor would hardly be very helpful. If the present conditions are allowed to continue, the City will be called upon to raise the funds every year as they become payable, and it is the amount of these appropriations, or annual payments, which it is desired to know in advance. The ordinary valuation, showing the present values, which involve an interest factor, is also given, in order to show the effect of the operation of interest on the accumulations of the pension fund. THE YEARLY DISTRIBUTION OF COST. The difficulty of the calculations involved in the presentation of a valuation in a form which shows the yearly cost can hardly be appreciated when compared with the amount of labor involved in making an ordinary valuation. The valuation of a varying annuity, such as one based on final salary, which may be entered upon at any time, as on the occurrence of disability, is a task which involves some very pretty formulae, but when it is desired to show the same distributed by years the methods which are necessary present no little difficulty. Mention need only be made of the additional provisions that an annuity of a different amount will go to the widow or children of the first annuitant to give an idea of the cal- culations necessary. These facts are mentioned because of the view which is sometimes taken that calculations of this nature are made by simply distributing values by means of a mortality table. It is only neces- sary to refer to some of the distributions of cost as shown in this report to see that any such procedure would involve an almost endless amount of 182 time and labor with a cost which would make it both impractical and pro- hibitive. Because of these difficulties and of the time and space required, it has been considered inadvisable to discuss the actual methods used in the calculation of costs. THE VALUATION. The valuation which is given, and which involves a 4 per cent, interest factor, was made by discounting the results obtained in the annual cost distribution. THE CONTINUING LIABILITIES. The continuing liabilities were calculated on the assumption of a uni- form increment to the service. On a uniform annual increment the service would gradually reach a stage where the decrement exactly equaled the increment, and would then remain the same as to the number of employees. At this stage the number of pensioners will remain in a fixed ratio to the number of employees in the active force, and the pension system will have reached its normal load. ADJUSTMENTS. Since the payments of pensions are made in monthly installments, it seemed best to modify the calculations in order to allow for deaths during the year. All of the calculations were adjusted, therefore, so as to take into account a uniform monthly decrement of one-twelfth the annual decre- ment for the year. Such a method reflects the actual working of the fund as closely as necessary, although a disregard of this adjustment could not have affected the results very materially. THE PRESENT ACTIVE AND PENSION SERVICES. In making up the payroll for the entire active force by age and length of service, it was necessary to adopt some certain date on which to make the valuation. After making a few assortments of the cards it became evident that February 1, 1913, was the best date to use as such starting point, as it is the first day of a calendar month and the latest of such dates on which the information showed the exact condition of the service. Con- sequently it was thought best to use this time, as it brings the valuation to the nearest possible date. In checking the cards to the totals published by the police authorities it was found that 18 pensioners did not appear on the list; these were, therefore, not considered in the check; but on in- vestigation of the cause of this inconsistency it was found that they were bona fide pensioners, who had been omitted because they were either in receipt of but nominal pensions of one dollar or less or had entered the pension roll too late to be included in the lists before they were sent to press. These cards were included in the valuation. 183 The employees and pensioners who were active on February 1, 1913, and upon whom the valuation was made, are shown in the following tables. The table showing the number of active members and their salaries classified by age and length of service is not shown here because of its size. The table actually used required a sheet for each age of employees. It must be noted at this point that these figures represent the basis of the actuarial valuation ; they show all salaries and pensions in whole numbers, and were not taken from the actual payroll of the police force. If one man drew both a salary and a pension he was treated as two men; if a man drew one salary for eleven months of the year and another for one month he is considered as on the force at the salary which he drew for the maxi- mum period. The dependent parent pensioners are included in the table for widows throughout the report. The age given represents the nearest year. Table 21 Showing By Age the Number and Salary of All Employees op the New York City Police Force. Age Number Salary Age Number Salary 22 1 $900 51 191 $312,350 23 64 60,050 52 202 335,600 24 201 188,100 53 189 313,300 25 168 156,300 54 131 219,300 26 246 258,150 55 108 176,700 27 406 478,900 56 43 71,300 28 507 643,000 57 43 77,850 29 587 759,150 58 44 78,200 30 502 649,740 59 24 40,150 31 533 698,450 60 20 35,650 32 486 665,800 61 16 25,750 33 504 708,630 62 16 30,100 34 479 676,950 63 10 18,500 35 479 675,750 64 7 13,250 36 420 600,800 65 5 9,100 37 358 519,600 66 7 10,700 38 352 521,050 67 3 4,200 39 352 548,750 68 7 9,800 40 302 467,950 69 4 8,300 41 301 475,170 70 1 1,400 42 241 394,830 71 1 1,400 43 286 460,300 72 44 261 430,800 73 1 1,400 45 298 489,040 74 2 2,800 46 215 347,250 75 47 175 282,300 76 48 188 315,800 77 49 162 271,300 78 1 1,400 50 197 322,100 Total 10,347 $14,865,410 184 Table 22- -Showing By Length of Service the Number and Salary of All Employees of the New York City Police Force. Year of Service Number Salaries Appointment 1913 to H year 262 $234,850 1912 3^ to \]/2 years 728 694,250 1911 \ x /2 to 23^ years 420 454,450 1910 2V 2 to %Y 2 years 327 414,570 1909 314 to 4)4 years 652 897,100 1908 A]4 to 53^ years 700 990,500 1907 f>y 2 to 6^2 years 871 1,230,200 1906 63^ to 73^ years 687 967,750 1905 73^ to &%, years 494 695,100 1904 %y 2 to 93^ years 538 765,600 1903 9M to 10 Y 2 years 464 668,800 1902 10K to 113^ years 449 652,150 1901 11H to Yiy 2 years 90 134,050 1900 \iy 2 to 13 y 2 years 145 209,850 1899 \2>y 2 to 143^ years 4 4,000 1898 143^ to 153^ years 145 223,650 1897 \hy 2 to 163^ years 750 1,228,160 1896 163^ to 173^ years 541 906,500 1895 \iy 2 to 183^ years 154 240,780 1894 183^ to 193^ years 333 538,050 1893 193^ to 20^ years 269 421,100 1892 203^ to 213^ years 164 264,650 1891 213^ to 223^ years 195 315,950 1890 223^ to 23^ years 134 222,900 1889 23^ to 24^ years 187 314,700 1888 and prior 24^2 to 25 or more Total 644 1,175,750 10,347 $14,865,410 Table 23 Showing By Age the Number and Pension of All Pensioners of the New York City Police Force, Who Were Retired on Regular or Service Pensions. Age Number Pension Age Number Pension 52 1 $700 72 19 $17,475 53 1 1,125 73 30 25,350 54 1 1,000 74 17 12,450 55 13 10,800 75 9 7,675 56 26 19,500 76 14 11,275 57 32 27,375 77 11 7,475 58 24 19,850 78 10 8,575 59 18 15,500 79 5 3,875 60 25 20,475 80 5 3,000 61 25 19,650 81 6 5,400 62 28 22,675 82 3 1,800 63 48 41,225 83 8 6,000 64 42 34,375 84 1 550 65 63 50,175 85 1 1,375 66 70 54,625 86 1 600 67 67 52,750 87 3 2,200 68 57 41,625 88 69 54 41,775 89 70 71 60 41 46,950 29,600 90 i 600 Total. . . 840 $667,425 185 Table 24 Showing By Age the Number and Pension op All Pensioners of the New York Police Force, Who Were Retired Because op Disability. Age Number Pension A ?e Number Pension 27 3 $765 6 2 21 $16,181 28 4 1,375 6 3 24 15,802 29 6 4 24 17,900 30 3 1,500 6 5 18 12,725 31 2 1,050 6 6 23 18,125 32 3 1,750 6 7 14 11,190 33 3 1,400 6 8 17 11,750 34 2 700 6 9 9 6,379 35 7 3,305 7 8 6,000 36 9 4,085 7 1 9 5,351 37 6 2,129 7 2 6 4,100 38 20 10,309 7 3 5 3,900 39 16 7,695 7 4 10 7,300 40 20 9,872 7 5 6 4,555 41 20 10,911 7 6 4 2,800 42 25 13,135 7 7 4 1,950 43 30 18,073 7 8 1 500 44 35 21,712 7 9 45 44 29,224 8 2 400 46 74 49,137 8 1 2 1,300 47 54 38,654 8 2 48 52 36,643 8 3 2 900 49 74 53,815 8 4 50 91 69,231 8 5 51 129 92,305 8 6 52 119 85,980 8 7 1 1 53 111 83,702 54 102 75,965 55 99 70,799 56 69 54,216 57 59 43,133 58 50 38,590 59 28 21,525 60 31 22,075 61 37 27,000 To1 ,al... 1,641 $1,150,869 186 Table 25 Showing By Age the Number and Pension op All Widows on the Roll op the New York City Police Pension Fund. Age Number Pension Age Number Pension 28 1 $300 59 35 $9,660 29 4 1,500 60 44 12,620 30 4 1,020 61 25 7,440 31 6 1,800 62 37 10,800 32 6 1,680 63 29 7,690 33 10 3,120 64 33 8,970 34 16 4,800 65 27 7,580 35 10 3,000 66 37 11,120 36 17 4,950 67 27 7,500 37 17 5,100 68 28 7,310 38 28 8,790 69 30 8,530 39 25 6,970 70 18 4,880 40 30 9,280 71 22 5,700 41 23 6,510 72 19 4,740 42 35 10,700 73 18 5,194 43 33 9,480 74 14 4,050 44 39 11,630 75 7 1,920 45 44 12,020 76 8 2,060 46 52 14,580 77 5 1,800 47 35 9,490 78 10 3,030 48 28 8,160 79 7 1,980 49 42 12,050 80 3 660 50 38 11,060 81 6 1,680 51 41 11,660 82 7 1,820 52 46 13,390 83 53 39 10,060 84 5 1,320 54 32 8,544 85 1 120 55 38 10,600 86 56 26 7,150 87 i 300 57 38 10,560 88 58 34 9,220 89 2 550 Total... 1,342 $380,198 Table 26 Showing By Age the Number and Pension op All Children on the Roll op the New York City Police Pension Fund. Age Number Pension Age Number Pension 4 5 6 7 8 9 10 11 2 1 4 2 5 6 8 7 $240 120 570 240 456 590 870 920 12 13 14 15 16 17 18 Total. .. 6 10 10 12 13 19 2 $595 862 1,065 990 1,475 1,906 180 107 $11,079 i 187 Table 27 Showing By Age the Number of Persons on the New York City Police Force and Pension Fund. Number of Persons on the Number of Persons on the A * e Ac Dis- Regu- Wid- Chil- A e Ac Dis- Regu- Wid- ( ;hil- !t- ability lar ow's dren's t- ability lar ow's d ren's i\ r e pen- pen- pen- pen- i\ e pen- pen- pen- 1 )en- foi ce sion sion sion sion for ce sion sion sion 1 3ion roll roll roll roll roll roll roll roll 4 2 49 16 2 74 42 5 1 50 19 7 91 38 6 4 51 19 1 129 .... 41 7 2 52 20 2 119 46 8 5 53 18 9 111 1 39 9 6 54 13 1 102 1 32 10 8 55 10 8 99 13 38 11 7 56 4 3 69 26 26 12 6 57 4 3 59 32 38 13 10 58 4 4 50 24 34 14 10 59 2 4 28 18 35 15 12 60 2 31 25 44 16 13 61 1 6 37 25 25 17 19 62 1 6 21 28 37 18 2 63 1 24 48 29 19 64 7 24 42 33 20 65 5 18 63 27 21 66 7 23 70 37 22 i' 67 3 14 67 27 23 6 4 68 7 17 57 28 24 20 1 69 4 9 54 30 25 16 8 70 1 8 60 18 26 24 6 71 1 9 41 22 27 40 6 "3 72 6 19 19 28 50 7 4 "l 73 i' 5 30 18 29 58 7 4 74 2 10 17 14 30 50 2 "3* 4 75 6 9 7 31 53 3 2 6 76 4 14 8 32 48 6 3 6 77 4 11 5 33 50 4 3 10 78 i' 1 10 10 34 47 9 2 16 79 5 7 35 47 9 7 10 80 "2 5 3 36 42 9 17 81 2 6 6 37 35 8 6 17 82 3 7 38 35 2 20 28 83 "2 8 39 35 2 16 25 84 1 "'5' 40 30 2 20 30 85 1 1 41 30 1 20 23 86 ...... 1 .... 42 24 1 25 35 87 3 43 28 6 30 33 88 44 26 1 35 39 89 "2 45 29 8 44 44 90 Vi" 46 21 5 74 52 47 17 48 IS K KA 9K 8 G 5 2 2 8 Total 10,: 547 1,641 840 1,342 ] L07 188 PENSION ALLOWANCES. Since the amount of the pension that is allowed in any case is purely discretionary, it was necessary to calculate the average pension allowances that had been made in the past. The average allowances that have been made in pensions during the period of the experience were as follows: Kegular or service pensioners: Pension of 50 per cent, of final salary per year. Invalid or disability pensioners: Pension of 47 per cent, of final salary per year. Widow pensioners: Pension of $283 per year. Children pensioners: Pension of $152 per year to each family of children to run until the youngest child reaches 18 years of age. It is very noticeable that the regular pension allowance is 50 per cent, of final salary, which is the minimum amount allowed by law, while in the case of disability pensions the allowance has been 47 per cent, of final salary, with the legal limits of from 25 to 50 per cent. This means that there is only 3 per cent, difference in the amount of allowance granted in case of disability from that granted for length of service. YEAKLY COST TO CITY OF PENSION PAYMENTS TO PRESENT ACTIVE AND PENSION FORCES. In showing the annual cost of pensions to the present active and pen- sioned forces the figures are given for the cost of each set of similar bene- fits. The receipts of the fund by way of employees ' contributions are given also in order that they may be compared with the actual cost of the pen- sions and the net amount of appropriations required of the City. The payments for service pensions include all payments to be made to employees under the benefits for age or length of service as given under the list of benefits on page 149. The payments for disability pensions include all pay- ments to be made to employees under the benefits which arise because of disability or invalidity. The payments for widows' pensions and those for children's pensions include the payments to widows arising from all of the benefits, and those to children arising from all of the benefits, respectively. In showing these annual payments the cost for pensions entered upon has been separated from those which will be entered upon later by members now in the active force. The contributions which will be made by em- ployees now in the active force, before they go on pension, are given. By deducting the amount of employees' contributions from the total cost of pensions, we have the amount of money which it is necessary for the City to contribute each year to the present active and pension forces alone. In other words, if the City should repeal the entire pension law as regards 189 all new entrants into the police force, but allowed the provisions to persons now on the rolls, it would still be necessary to pay the amounts shown in the following table before the liability to the persons who have already come under the benefits of the law is wiped out. The following table shows that the present active force with their wives and children will draw in round numbers about one hundred and twenty-one million dollars ($121,000,000) in pensions after leaving the active service. The figures on annual cost show that the annual pension payments to members now in the active force will increase every year for twenty-five years, or until the year 1937, when they will reach a maximum load on the fund of about three million six hundred thousand dollars ($3,600,000) a year. After the year 1937 the pensioners coming on the fund from the active force will not equal the number of pensioners going off the fund by death or otherwise, and the cost will gradually decrease. The pensioners who are now on the pension roll will draw in round numbers about twenty-eight million dollars ($28,000,000) before their pen- sions are terminated. The annual payments to the present pensioners will gradually decrease because of deaths and revocations of pensions, as shown in the table. The total annual payment of all pensions to the present active service and pensioners will increase each year for the next twenty-two years, when it will reach its maximum load on the fund of about four million dollars ($4,000,000) in the year 1934. The cost will gradually decrease after this period until all of the pensioners on the present active service or pen- sion rolls are either dead or have had their pensions revoked. The total amount payable in pensions to these persons who have already come within the benefits of the law, or, in other words, the present active and pension services, is, in round numbers, about one hundred and forty-nine million dollars ($149,000,000). The amount of the employees' contributions of 2 per cent, of their salaries to the pension fund is shown in the table. As the present active force will gradually decrease by way of resignations, deaths, retirements, etc., the amount of contributions gradually decreases, but a total of about four million dollars ($4,000,000) will be received from this source. De- ducting the annual amount of the employees' contributions from the annual total cost of pensions, we get the annual net cost of pensions to the City for the present active and pension forces alone. This amount gradually increases for the first twenty-two years, when it reaches its maximum of about four million dollars ($4,000,000) per annum in the year 1934. From 1934 on the annual amount decreases until all of the pensioners are off the pension roll. The total net cost to the City of pensions to the present active and pension rolls alone will be, in round numbers, about one hundred and forty-five million dollars ($145,000,000). 190 Table 28 Showing the Aggregate and Detailed Annual Cost of Pensions to the Fund, Together with the Amount op the Employees' Con Date Pensions Accruing to Members Now in Active Force Year After Valuation Service Disability Widows' Children's Total Pen- sions Not Pension Pension Pension Pension Entered Upon 1 1913 $20,728 $75,772 $16,205 $7,249 $119,954 2 1914 66,026 217,083 48,911 21,918 353,938 3 1915 116,310 353,272 80,915 36,890 587,387 4 1916 169,797 482,826 112,693 52,162 817,478 5 1917 227,437 605,247 144,474 67,704 1,044,862 6 1918 287,291 724,633 176,415 83,457 1,271,796 7 1919 343,811 840,548 207,371 98,411 1,490,141 8 1920 393,786 951,012 238,640 113,167 1,696,605 9 1921 439,607 1,057,416 269,617 128,467 1,895,107 10 1922 477,409 1,163,228 300,303 141,822 2,082,762 11 1923 514,446 1,264,697 330,612 155,385 2,265,140 12 1924 562,643 1,362,595 360,494 169,903 2,455,635 13 1925 580,141 1,459,691 389,818 181,953 2,611,603 14 1926 606,289 1,550,974 418,342 191,256 2,766,861 15 1927 629,187 1,639,139 445,983 198,406 2,912,715 16 1928 650,250 1,721,384 472,752 204,483 3,048,869 17 1929 669,426 1,796,505 498,032 205,139 3,169,102 18 1930 689,394 1,864,160 522,078 205,768 3,281,400 19 1931 706,445 1,921,411 545,231 206,396 3,379,483 20 1932 722,239 1,966,685 566,181 202,865 3,457,970 21 1933 742,347 1,999,910 585,725 202,808 3,530,790 22 1934 761,208 2,019,031 604,298 201,374 3,585,911 23 1935 780,782 2,023,320 620,353 197,539 3,621,994 24 1936 800,198 2,014,063 634,758 195,420 3,644,439 25 1937 819,378 1,990,669 647,829 192,254 3,650,130 26 1938 838,032 1,953,174 658,343 185,701 3,635,250 27 1939 857,742 1,904,346 666,980 182,710 3,611,778 28 1940 877,538 1,844,467 673,993 177,959 3,573,957 29 1941 892,256 1,773,544 678,628 170,175 3,514,603 30 1942 897,285 1,695,479 681,130 165,093 3,438,987 31 1943 891,102 1,611,611 681,283 158,420 3,342,416 32 1944 877,141 1,522,799 679,865 149,164 3,228,969 33 1945 855,416 1,431,615 675,957 142,427 3,105,415 34 1946 825,012 1,339,228 669,456 135,446 2,969,142 35 1947 787,741 1,246,108 661,762 125,146 2,820,757 36 1948 745,903 1,154,045 651,568 115,788 2,667,304 37 1949 700,898 1,063,827 639,212 106,990 2,510,927 38 1950 653,984 975,424 625,444 95,290 2,350,142 39 1951 606,106 889,996 609,336 86,532 2,191,970 40 1952 558,252 807,840 591,360 73,117 2,030,569 41 1953 511,010 728,771 572,229 60,657 1,872,667 42 1954 465,006 653,991 551,111 53,846 1,723,954 43 1955 420,722 583,042 528,494 42,317 1,574,575 44 1956 378,482 516,066 505,147 34,965 1,434,660 45 1957 338,487 453,971 480,268 28,667 1,301,393 46 1958 300,820 395,771 454,306 20,398 1,171,295 47 1959 265,578 342,378 428,233 17,114 1,053,303 48 1960 232,802 293,595 401,359 13,183 940,939 49 1961 202,477 248,949 373,506 9,784 834,716 50 1962 174,705 209,203 346,502 7,518 737,928 51 1963 149,351 173,798 319,349 5,432 647,930 i 191 Present Active Force and Pension Members of the New York City Police Pension tribtjtion prom the present active force. Pensions Accruing to Persons Now on Pension Roll Total Total, All Pensions Amount of Em- Pension Cost Less Chil- dren's Pension Total to Actives ployees' Employees^ Service Disability Widows' Pensions and Contribu- Cont'b'n. Pension Pension Pension Entered Upon Pensioners tions Net Cost to City $640,892 $1,122,606 $370,616 $10,974 $2,145,088 $2,265,042 $289,616 $1,975,426 592,876 1,072,162 353,179 8,942 2,027,159 2,381,097 282,787 2,098,310 546,642 1,023,597 336,243 7,450 1,913,932 2,501,319 269,661 2,231,658 502,154 976,656 319,806 6,448 1,805,064 2,622,542 264,274 2,358,268 459,623 931,021 303,885 5,377 1,699,906 2,744,768 253,838 2,490,930 419,049 877,472 288,431 4,512 1,589,464 2,861,260 240,943 2,620,317 380,380 842,869 273,462 3,914 1,500,625 2,990,766 233,700 2,757,066 343,801 800,105 258,998 3,003 1,405,907 3,102,512 222,820 2,879,692 309,292 758,023 244,812 2,147 1,314,274 3,209,381 209,320 3,000,061 276,914 716,639 231,168 1,568 1,226,289 3,309,051 201,488 3,107,563 246,600 675,881 217,922 1,123 1,141,526 3,406,666 190,129 3,216,537 218,407 635,742 205,167 889 1,060,205 3,515,840 176,304 3,339,536 192,279 596,301 192,832 341 981,753 3,593,356 168,212 3,425,144 168,297 557,571 180,949 226 907,043 3,673,904 155,619 3,518,285 146,319 519,611 169,470 835,400 3,748,115 144,774 3,603,341 126,345 482,490 158,459 767,294 3,816,163 133,671 3,682,492 108,333 446,313 147,834 702,480 3,871,582 122,947 3,748,635 92,170 411,124 137,669 640,963 3,922,363 112,370 3,809,993 77,796 377,006 127,936 582,738 3,962,221 101,944 3,860,277 65,113 344,098 118,620 527,831 3,985,801 91,881 3,893,920 53,997 312,462 109,753 476,212 4,007,002 82,324 3,924,678 44,382 282,193 101,278 427,853 4,013,764 73,109 3,940,655 36,107 253,346 93,234 382,687 4,004,681 64,533 3,940,148 29,070 226,062 85,590 340,722 3,985,161 56,314 3,928,847 23,154 200,362 78,329 301,845 3,951,975 48,817 3,903,158 18,246 176,303 71,481 266,030 3,901,280 41,491 3,859,789 14,203 154,034 65,029 233,266 3,845,044 35,133 3,809,911 10,936 133,438 58,954 203,328 3,777,285 29,357 3,747,928 8,303 114,646 53,279 176,228 3,690,831 24,374 3,666,457 6,228 97,616 47,961 151,805 3,590,792 19,888 3,570,904 4,592 82,309 42,972 129.873 3,472,289 15,850 3,456,439 3,340 68,723 38,351 110,414 3,339,383 12,824 3,326,559 2,375 56,850 34,072 93,297 3,198,712 10,183 3,188,529 1,651 46,491 30,135 78,277 3,047,419 7,973 3,039,446 1,129 37,640 26,510 65,279 2,886,036 6,225 2,879,811 752 30,145 23,214 54,111 2.721,415 4,839 2,716,576 484 23,875 20,199 44,558 2,555,485 3,744 2,551,741 302 18,728 17,478 36,508 2,386,650 2,886 2,383,764 176 14,536 15,018 29,730 2,221,700 2,216 2,219,484 99 11,207 12,830 24,136 2,054,705 1,694 2,053,011 53 8,556 10,883 19,492 1,892,159 1,289 1,890,870 28 6,441 9,168 15,637 1,739,591 972 1,738,619 13 4,831 7,656 12,500 1,587,075 723 1,586,352 5 3,587 6,345 9,937 1,444,597 525 1,444,072 2 2,604 5,215 7,821 1,309,214 369 1,308,845 1 1,896 4,247 6,144 1,177,439 249 1,177,190 1,390 3,456 4,846 1,058,149 160 1,057,989 958 2,734 3,692 944,631 96 944,535 693 2,160 2,853 837,569 54 837,515 492 1,688 2,180 740,108 28 740,080 327 1,302 1,629 649,559 13 649,546 192 Table 28 Showing the Aggregate and Detailed Annual Cost op Pensions to the Fund, Together with the Amount of the Employees' Con Date Pensions Accruing to Members Now in Active Force Year After Total Pen- Service Disability Widows' Children's sions Not Pension Pension Pension Pension Entered Upon 52 1964 $126,774 $141,894 $291,433 $4,291 $564,392 53 1965 106,498 114,894 265,358 3,130 489,880 54 1966 88,589 91,477 239,693 2,475 422,234 55 1967 72,937 71,062 213,900 1,722 359,621 56 1968 59,386 54,833 190,462 1,360 306,041 57 1969 47,773 41,346 167,989 1,094 258,202 58 1970 37,925 29,981 145,937 851 214,694 59 1971 29,687 21,146 126,538 610 177,981 60 1972 22,877 15,152 108,522 465 147,016 61 1973 17,304 9,929 91,757 360 119,350 62 1974 12,842 6,576 77,047 239 96,704 63 1975 9,336 4,207 63,853 178 77,574 64 1976 6,646 2,378 52,287 . 109 61,420 65 1977 4,604 1,473 42,238 76 48,391 66 1978 3,103 775 33,589 52 37,519 67 1979 2,008 399 26,299 32 28,738 68 1980 1,271 204 20,237 17 21,729 69 1981 777 89 15,259 9 16,134 70 1982 450 40 11,269 6 11,765 71 1983 253 17 8,133 2 8,405 72 1984 129 6 5,702 2 5,839 73 1985 61 1 3,883 3,945 74 1986 30 2,561 2.591 75 1987 13 1,607 1,620 76 1988 1989 1990 1991 1992 1993 1994 1995 4 1 979 566 297 156 74 28 14 6 983 567 297 156 74 28 14 6 77 78 79 80 81 82 83 Total Annual Payments. $28,731,701 $59,486,188 $26,250,524 $6,043,115 $120,511,528 * Valuation Year February 1 to January 31. If we consider the amount of the pension payments in relation to the salary payments we have the results shown in Table 29, page 194, so far as the present active force and pension rolls alone are concerned. This method of comparison is misleading and is improper in the case of a fund before it has reached its normal load, which is seldom within less than fifty to one hundred years after its establishment. The normal load is generally reached when the increment to the service equals the decrement 193 Present Active Force and Pension Members op the New York City Police Pension tribtttion from the Present Active Force. Continued. Pensions Accruing to Persons Now on Pension Roll Total, All Pensions to Actives and Pensioners Amount of Em- ployees' Contribu- tions Total Pension Service Pension Disability Pension. Widows' Pension Chil- dren's Pension Total Pensions Entered Upon Cost Less Employees' Cont'b'n. Net Cost to City $231 162 104 73 50 31 21 14 8 5 3 1 1 $992 745 551 400 286 200 137 91 59 37 23 13 7 4 2 1 $1,223 907 655 473 336 231 158 105 67 42 26 14 8 4 2 1 $565,615 490,787 422,889 360,094 306,377 258,433 214,852 178,086 147,083 119,392 96,730 77,588 61,428 48,395 37,521 28,739 21,729 16,134 11,765 8,405 5,839 3,945 2,591 1,620 983 567 297 156 74 28 14 6 $5 1 $565,610 490,786 422,889 360,094 306,377 258,433 214,852 178,086 147,083 119,392 96.730 77,588 61,428 48,395 37,521 28,739 21,729 16,134 11,765 8,405 5,839 3,945 2,591 1,620 983 567 297 156 74 28 14 6 $6,172,910 $16,540,732 $5,721,527 $56,914 $28,492,083 $149,003,611 $4,414,556 $144,589,055 therefrom. However, since the percentages given are not to be used as determining the amount of the employees ' or City 's contribution, they are shown in the following table, which gives a comparison of what the City will have to pay under present conditions, so far as the present forces alone are concerned. It will be noticed that after the twenty-first year the pen- sion payments will exceed the salary payments, so that no percentages are given beyond that date. 194 I E | 9 a = a Q K < O - - 8 Z a o o jp 3 Pi o a* a s < . < B E <: a B g o X CE 1 >> Ph 2 a -^Ph cc B O 03 T3 B -. co ^Ph >B a 5 *n '35 -/. co 03 a ^ k /. q f"'#iOlOCOiC>iOCOiO-Nt'~>-i0et^^CO i-ii-irHT-ii-iNNNNeQCOeO-^-'sHTfiOcOcOt^oOOS 888888883888888888883 N IN N N N N N N N N N N N N N N IN IN N N IN '^'J'lC'OCOiOOiiOCpiO'tOONNOOOOOHCOCOiO O00Q0ON-U3000000t^Nt>-rHOSWt^l>-eO "OtDOOOl-HCCiONOMiOffiNN-HNMaNtON lOOl'HNXMaOS^COXSNONOSOOMOO'OOOSa*^^ !t^O0t^00t*-i0><-iN.N00Nt^COiON^HNiOt^ i_O_CC_00_'-^05_0^a> CO'*NlOiOCO'.00iC- rcdcd^^T^""idT^^id""oo"cd^od^^""id"idcTTjr?d 'X^05'*0C'*CDNO'HM0CC0X'*-Ha05i- I iO N i iTtHt^iC ~00 cdofN" -<".-"" "GO 00"t>^'t>^fiCrtM -OCOO-*OSt^l^-H NOiUiaL'J'tciJMNNnaiCSiflHOinoONNX'JiiONO^OO) 00_O "^'* M O0^Q0_CO "* "* "^0 ^O N * OOOSO^<(MC >* CON oo"os" OS 00 ^HN 00 ^N_'H_T)^^T^oq_i^co^05^io b- 00^00^01 * r^co NOrto^cocsHO cd os" co" n" cd i-h" id of 00 id 00 00 co" of id 00" oi" of ^ to cz i-T cf 06" t>T 06" cd t^iocooooio -h" -f 1" -T f-T h r-T ^-T r-T r4" n" n" n" n" n" n" n" n" of of n" n" n" of N" -H* rn" r* ^^"^^^^NCO^iOiOI^OO i^M-HiOfflNXCSOHN rtHrtHH-HrtNNNNNNNNNNMMMWMMMMMM^'*^ ooo 195 o l-H g t>.COiOcOCO ^P-l O CO-eo(Ncoeo i-HCOi IOOiOOlOOit>.Oi^HCO'<*CO<00>-IOOOOOit>-CO00000 "* s O i '* i '^O i l>^l>^'-^C 0^*0 C^Tj^t-^cD^lO^r-^lf^cO r^oo^o^co ^oooo " CO O C H N * CO CO ^, 3.2 o oo s oo Ph copn 03* S'-^ > O'*NOMOONNNNiON00'*C0^(IMHOw:(NO'*rtOiO C)TtlTtH00aiCOi-<^^'- ICOC5COt^CCOOTOCOrHT-lt^O^(^'--<'^^CO000'^ )Oi00t>COlO-<*CO(N(Mi-lT-( N(NO0 OCDiC ONOffl(OCN(NPINNlNMMONOOCO(MiOiOlOOHlOCONNOO (NNCOrH^ffiOiOCO^NOONiONlOOOTjlOSNlNOOOMOONOOCO 05 U3 -# t- t>^t~ i-^10_0_CO ^OOjC^SO^t^ir^DOj-l HOiOHOOMOHH co*i-H s o6~o~co~rf' tsTrf ^c^^cr^ar<^i>reo"*''* s orar'^'ciCrtlCOC^T--( (OiO^COCNHOOOSOONiOlOlO^COMIMNtNi-CTHrt Tj-OT-lTj(0005t>COCOOI>.l>. OTOOOSCOt^iOGOOOCOiOCOCOCOOOOOCNIt^Ot^OlOt^OSOOCOOOt^tNOOt^ iocr^<^oo"ccTr^Tfcd , af!^u5crcxrod''^c>f<^^ 0(^CN100-*0>OOiOT-HCDCV|l>COOCDCOOt^'*C>C|0001>OTHCO]>t^COOlO'*-tfCOCOCO0005O'-l(NC0'*iODl>.000SO'-HC000iOi-l(N Tt<^^Tt.t>.t->. 66di6666oooooo0'3>0)oroc)0)oc50o>ooojooo) ^-ICC|eO'<*HODt>.00 050>-ltMcO ,, *lO?Ot^OOOiOi-ltMCO'*0Ot^0005 coeocococococococo-^^^^^^^H^^^i^^^ifjuj^juj^i^^^ 196 * g-co 03 3 o p m 5 W 'G.2 9^ Ph .s Pm *.! H 2 a & .2 o S3 3.2 Id "33 S GO 0) fi 2.2 >"ni fa - CCPM ; 3 Ci00C5<I>OM>OOt}(010NH CCNONNNOSOOO^h ffiiO N CO * NWN m OTt05C5C505 0>050i05050505050S05050505050505050>05050500>0505 u rH(MCC , *0Dt^OOOSO'-ICC05CO<.t^t^t^l^t>.^t^t^00 00 0000 0000 oj a 3 197 YEARLY COST OF CONTINUING LIABILITY So far in the report the liability to members of the present active and pension rolls only has been considered, and no account has been taken of payments of pension which will be made to persons who enter the force subsequent to the valuation. As the 2 per cent, deduction from salaries does not cover the cost of the pensions, it is necessary to allow for these persons in the calculations in order to obtain the entire cost of the pension system. During the six years covered by the valuation the average en- trance age of persons coming into the police force was 26 years. In mak- ing the calculations the entrance age of 25 years was used, as the assumption of this age gives a minimum cost to the City and makes a very conservative estimate. The maintenance of a service of the size of the present one would require 636 entrants each year, provided the present salary roll continued the same. This number of entrants was used, therefore, in mak- ing the calculations covering the continuing liability. The estimate of cost as to future entrants is the minimum, and does not allow for any increase in the size of the force. As the size of the force and payroll un- doubtedly will increase, the actual cost probably will run far in excess of the estimate. The percentage relationship between salaries and pensions remains the same for any uniform number of entrants, so that these per- centages may be said neither to understate nor overstate the fact. The fol- lowing table shows the annual cost per year for each class of pension benefits and the total salary payments to be made to 636 persons entering each year. It will be noted that the total amount of money or the per- centage of salary contributed by the City toward pensions gradually in- creases each year until the eighty-fourth year, or until 1996, when the fund will reach its normal load. At this time the pensions will amount to 33.44 per cent, of salaries and the City will have to contribute an annual amount equal to 31.44 per cent, of the salary roll. The table shows that the 2 per cent, salary deductions from the employees' salaries will carry all of the pension claims for some twenty-five years or more; in other words, the City will not be called upon to contribute toward the pension fund so far as new entrants are concerned for over twenty-five years, since the unexpended balance of the employees' contributions will carry the expense beyond the time where the pensions amount to over 2 per cent, of the total salaries. This is a very striking example of the trap into which so many pen- sion schemes enter through lack of actuarial investigation or advice in the establishment and maintenance of a fund. Under favorable conditions many funds can meet their obligations for a period of some fifty years after their establishment on an unscientific basis, and because of this fact the administrative officials beguile themselves into totally disregarding the necessity of actuarial assistance. 198 E ftf 5 < %$ &% a &. O o < r-, Hg 2^ *2 H O g fc g < w E $H 3 o 3S P S w H o < 01 U. it ^< * < Jm H < O Ah 5 *>* 8d < * fc O W 3 o S 55 o S r fc o 2 J o gCL, P " is ^JO 3 ^* K r ^ *s* 2 o W , 4 s Hc/J J 3& CIhq 'O^ 0!01Q0MXXNN(0fflU5^MNOfflMOMXMNo|2SM I I r-Hi I t^TtOOXXNHiO00 "s s .2 O OQ a .2 00 V CC050500t^(N'*0'*0'*Tt^HCCOl^OOOCO'-H>eOiO O^OOCO^COCOOtOCO(Nt^(NOCO0000-*OOC^OO'rcD"crco"ro N CC O TO^MCO 0000"K"O HHIMMCO^UXOXOCCOOiO 00 CD rff CO CO CO CO i-Hi-ItH(N(MCOCO'*iOCCH>0005 111 199 M TO 3 ^3 fl.-2'o {2 fc q 1 8 sb Ph 55 s! < CO 00 h B fe s b& 3 * "5 3 pi 1 w " S PhO> OOOQOOOOOOOOOOOOOOOOOOOOOOOOOO oooooooooooooooooooooooooooooo W i C COCO'CcDOOOlNCO'OCDI>OOOOOOt^cO-*'-iQOiO'-iCDi-iiOCOt^O(N'* OSOHINeO>0N00050HIMCO'OtONNOO(3)0)OdHHrtlN'(M(N rHrtiHi^iHi^i^rti^NNWNMNNCNNMC^NCOeOCOeOCOeOe'OeO os m s PU OS W Ph NOOMO)^NOnOO^HHU3T((00(MONNONOOOOOOOO NHNNN05hOht|(00(0Ni(iONhhh01hhhhhhhh C^CO^T^IO C^<^^^N^C<^00^00^00^00^00^00 00^00^00^00_00_00 OOOOOOOOOOOOoOOO ^^ ^^ ^^ "*^ ^T ^T^ ^T* ^^ ^^ ^^ ^7^ w^ ^^ ^^ , ^ ^^ ^^ ^^ ^^ ^^ "^^ ^^ ^^ ^^ ^^ Tt^ ^^ TjH ^^ ^^ &'~' rH '"' '-"-"-"-"-H H i-H ,-H rH _l H ^ .-H .H ~H ,-H H r-l ,-H ^H A 5 fe o Q M o Jg w o g* o S wg h o CO H Si CO -< H DQ o E 3 E Pn h o I P o ^p- 3.2 V>Ph 2.2 n c COPh g COOOiCOtvO>OCDCOr-HTt COMHtDONNfflHOOOOONHNOHN oToTr^Tiroo c^cTcToo'crcfco'ccr.-H^io'cf io o o"-^~i>rarorort>rfo~tCo~cr tOOOHWOW^COtOOlCOCOOimcOOCONO^NOMCOaiMiONO^ HHNNNMMmn^'COOiCD'^CDOOOOCDCD'*iOcOTti^H(Ni-HlO-HiOCOb-.OOt>-OO l O-^T-H t^C^OTOC005^iCOCliOCifOCrcr '^*~0 >-H'N^Oro"od~CD~00'cD~Cf oT-rtTio'c^r^rcO'cO t^OO"l^T)Tor rfiiO'OCOCD^3iO'*CO'-HOOiOCqoO'* l ai^01C000005O0Si0OC0Oc0'-l'^iC ^C^C^fN^C^C^^O^i-H^iO^iO OJ ON O^O cOO^05I>O500-r^^co~c>o"c^T^cro'co i> o ot>Tco'o'i> t^~>o -' iiCO5(NiO00'-HfOCO00C35^O-1CO'*iOCOCD & HHHININMCO^^iOiOiOCOtOtONNNNNOOIXlOOOOOOOOOO tOTtOOtONOOOJOrHNM^iOtDNOOOlO- ^(MfOTj TjHTjOiOOiOiCiOlOcC^^OtOCOOOCOcC)t--.t>.t-- OOTC^OOTOOO050505C350i010i05050205C505C50505O05050505a> 200 n o Eh 3 ri H '. ^S H < o a 2 S S o z o W<3 H 5 3 2 z & < >J t* ^ 5 Ah < Hi $* a a -< u CO z -< z zw 2z 05 < H 5 Ah <-> w OS b ? a p s o 3 - 5 < w Hcq c.-So a ill M o) O CO .- .** mo B_o3 fl &H O.S d l e oJS ^CO 03 a .si a%t H c? s a a * ."2S 33 55 XI CD CCPh ** "S Q) -4-a 03 Ob-osO'-i'-icOrHi-H(Mr(3COeOC<3'*Ttl^ T t< T JH^ T J<^ T J( T JH T 4H^|^| T J| OOOOOOOOOOOOOOOOOOOOOOOOO HHHr- IHHHf I i IHHr- IHHHf If It It It I r- I T-H T-H Tt T-H ^r ^1 ^1 ^T *HH TjH T"H ^i ^H ^H ^i ^ a* _ . ^ ** y ^t ^4 ^^ ^4^ ^H oqoqGC^GC^GqGq^GO^oqGqGq^oqoqGO oo^go^oo oqcc go go go go co go go ^T* "^^ ^* ^7* ^^ *^T ^^ ^^ ^^ ^^ ^^ ^^ T^ Tt^ ^^ ^^ ^^ ^^ ^^ *^ ^^ ^f ^^ ^^ ^^ NNiONa^OSONOOHCNMOMOiOOSOOTHN^fOCO 0>G0Ort<->*0l s 'Dt^t^T}0'X>C0C0c0 lO^e^sO^cO^oqsO^H^iq^r-^iO o^-^co lO T-H^Tti cDI>GOGOGOGOGOGO t-T-^Tcc c^cfroc4"oTio cjT^uj^gooTo oocJcT oooo G0G0000505050505030i050>O50i01050505O3O0505050>05 Ot>eOO>GOiOO(N05-*tOl>GOGOGOGOGOGOGOGOGOGOGOGOGO t^t"-.COC3t*-T icO^HHnioiOiOOiOiOiOiO>CiOiQiOOiCiOiO O* 0~ CO~ 0~ CO - co" CO* CO* CD~ CO~ CO~ C^ CO* CO" CO~ CD~ CO~ CO~ CO* CO* CO" CO* CO" to" CO* OOOOOOOOOOOOOOOOOOOOOOOOO cocoeccoMcoMMcccocccoeowrocococccoMroMcoMM GO'-HGCt^500c>JCOCO GOcN05H**c005COGOO(NGOOiOOOOOOOOOOOOO mototomoMotpooooooociaooioooiciooffio QOCO * CO CO t^wo o o^o o^o o o p^o O O O^O o o^o^o^ CO CO* QC OS* 0~ O O" t-h' t-T t-H* t-H* t-T t4* t^* T-H* t-T t-H* i-T t-T i-T tH* t-T t-H* t-T t-T COCOCOCDcOCOCOcOCOCOCOCOCDcDCOCOCDCDCDCDcOcOcOCOCO ci* of m" im"~ ci* c4* cOOGOGO005COiO-HCOCOcOCOcOCOCOCOCOCOCO l^O-'tioCJOlOlGOOl'OCOOIcOGOGOGOGOGOGOGOGOGOGOGOGO OtO'^COrHMrHtOONM'*'*'*'*'*^'*'*'*'*'*^'*'* CNCOOt-hCC^iCOCOcOCOCOCOCDCOCO 1 t^t^t^XGOGOGOGOGOOOGOGOGOGOGOGOi GOGOOOOOGOGOOOGOOOGOGOGOGOGOGOGOi 'COcOcOcOcOCOcOcO IGOGOGOGOGOGOGOGO IGOGOGOGCGOGOGOGO CO'^'OCONOOOlO'HNCO'^iOtONOOOSOrHMCC^iOCON NNNNNSNOOOOOOOOOOOOOOOOOOQOfflCSOCSCSOJOiO) OlOO!0)01ffiOO)0500)0!OlO)0)010CJOfl!0100)00 T^MfO'^'OCDNOOOSO'HfqcC'^'OCONOOOSO'HINMTjiiO COCOOcOCOCOCOCOC01>t>t>-t>-l>t > -l>l>t-l>GOQOGOGOGOGO CO b 202 TOTAL YEARLY COST OF PENSIONS. Since the present active and pension rolls and the new entrants to each, which are of course covered by the entrants to the active service, embrace the entire pension system, it is but necessary to combine these costs to get the total cost of pensions. The following table shows this cost for each year until the service reaches a normal load, which it will do within eighty-five years if present conditions continue. After that time the pen- sions will remain in a fixed ratio to the salaries. This ratio is shown as 33.44 per cent, of the total payroll. 203 pL, a S OIO)r'-tOCO''*tO^HCOOO^H01i-HCOt00001i ltO00t>-t>-C0l>-00t~- HNOHOiOO^HO^OOMOiOHtOHNNNNNNNNtDOm NiNNNNNWNNMCqNINiNNlMiNNMNlMNIMiMNNINNM SCO (I, O)Olt>iOC0"*tO'-iC0G0r-(OI>-HCOtO00Ol~HtO00t'^t'>-C0I^00t^ HNtDH00' , *HO'*OOC<30OH(OHMNNNNClNINOCC tqtOl^l>00^H<-i01COCO''*iTjiiOtor^t^OOOO<-H^H ^HrHHHrtrt(NIMN(NlNN(NlN(NlNNN(MIMN(NlNNP:c<3COCC OH 3 ~H tOO) o5 Q0305Ncomoa O C^C^C^^T^f^iq^lO^Tj^lO^iO ir^iO lO "*^ TfMMWNflrtHHO to"0~to"to"t6~io"to"to"to~to~to~i6~to~to~to"to~iO~i6~to"to"i6~t^ 00GCtO00GCt^C0^HiOC00Ct>C0t^t>-*T-HCO-<*iC0O1 TtiGOtOOlCO^i iCOtOi tC0tOOlC0COOI00Gt^---r of-*"to"''i<'"oo"or , '#' co -^""of i-T^Tto ^' --CO00OliOiOOlt^00- to O^to C^cd^^^co^gc^^^^i-h_^o^oo^co_gc_co oq_oi__ ^n- o co co oo > 2 "5 5s o J? + a' m OJt0OT--i01C0C0'*t0l>r^00C00Ct00CTt00iOOCr~- ~ of co"co~'-H't^"" <*"" to" >*"'" to" """" oo"co i>foo N'rH>ONi- I T^ t^ lO ~H "^*H^O^^^r-i -* O^tO 00 * t^O^ HfflOiOrtTf(M ^""-^co co of of -^"^o"o"o^oo~oo^^"co~io io~^^co"coofofofi^""T^~.-H OH s^l OOOH PHOO OOtDMCOCiiONNMOCONOOCOr-icOOO'^COCONOOX'^M M00MaiOON"OM0>(iHU5fflOM'HCi5nN'*3O !>-OCO(MCO'^t^05'-HTfOOC005iO"* l '^lOt^-DCO^Hi005'OCO'-( CD 00 < 0\CO>0< e4 > c01-*T-i0101CO'*COOI^Ht^toOJl^-*t>.cOGC-*CO >i>oo'-iojco'>*toi^ceooi-i'-ioico"'tf->*iotor^ s E-.s Ph S m O100i-i00Olt->--^'-HCOTtHO1iO*H0CO)0COliOl^00-* l rt i-H to o^c^eo i^^eo^o eo^o t^oo o o^t-^ oototoo) ** i-Tofco" lO^OTtToO^rfrMO orfi^'^eCb^ococoOTf'oreocot^'Tjr rtHrt(MCC-*iOii00OWliHtD(NO00N00O5'HT)i MWOcONHHCOfC^iOMNMHHN^rtrtUJO^iOH rtoTjo 000)~HtOt^01tOCO^to010COi-H"*i001>CO ^^tWCO! iOOGOi^'-iCOCOtOt-^tO "f 00 1> < i ^^ ^H GO b- GO^i I ^rffOJNffiOl^rHCJNOlffl rC tjT ,-T ~ " to" of to" to" i-T " of oo" of r-T of t>T o*" trf i-f rfT " to" i-T co" -^ -irtOeOOOO>Tt t^ s '-^o^eo *_ o o ^^ ___ to t-T .-T i-T ^-T r-T of of of of of of co" co" co" co" co co" co" co" co" co co" co"coco" O m a as g.2 oo oo o ionT *oi ^H 0)-*-*io^TtHtococo-*ocoooi-^00^0^00^_^00^O^0^C0^O^ co" to of of ""to T^~l>tOtO"*-*COCOCOOI010IrH CO-*J-00^0!CO-00i-< ,Hi-i^H^-i^r-HT-HoiO)0)0)0>oioioiO)Oicocococococococococo-*^ti 204 o 3 A, | o.S 00 K g U g I g* a > 13 a 2 o b < Tl to o a 8,- >> iL 03 *" *> Ph goSO Sir ^S> Asia..! III- 8 ! 3 Pw c3cocococococococococococococo 'OOOOOOOOOOOi 'OOOOOOOOOOOi ooooooooo ooooooooo NNNNIN(N(NNlM'NN'NNfiCii(NN CN ^ a l"^ r> V'^L t> ^l C i U ?."5 COJ> CO OS^"* OS -^OJO^TlH-^TlH-^Tp rtf^S^^Sf^^^S^S^^^^^^^CO^OlOufiO^tffiO^^ qqqqqcsjqc oo^co oo oo oogoocooooccoooocooooooooooooogc CD 4> s a TO rS > a> a a> 'C , i o I 5 2*1 OSSOO ScNi-i OCSCO ooco -QOTtiOiCOOQiCt>-l>-lO'-iCOO(M-^iOiOiCOiOiOiO'OlO iflTjHHNHiOMOHMW^tCOCCtDfflcDOcOtDOtDtOtDtD ^o o o i^r^i> oc 00 00 00 GO 00 00000000000000000000000000 HCOH OOOOS CO tar-l OS OS ^f OSI>ce t^00'-HiOl^cOCO'*t-' i0505-*^iCOlOiOCOTt<(MCC(N CNN(N01NNiHT*0(N'ONiCNiHO)0^'*NH "~l. 50 .C>^e3^^CN > l>^t>^TJ^cO i-H CXlT^TtHOSOOt^-^COIN 'oTcoi^i^^^c^^Tjro6~eb~ccrcocrTirt>ri-r id CO CO CM i-i i-i i-H C 03 (H O OH 3* osoo ~hO OOi-h CO OS 00hXNU5O'-ic 03C000CN-*fiOOC0l^-l>.00000000Q0000000t"-t s -l>-r^t>.Sr^l> GOCOCCOOOSOOSCSCSOSCSGsasCSCSOSCSOSOSOSOSCSOSGSOSOS *^l ^* ^1 ^i *^l TP ^3* ^^ ^* ^1 ^1 Tjl TJI ^4 ^4 tJH TJ4 ^1 ^H ^i ^i tJI *^ ^1 ^H ^H ^H BQ CD Jo 32-^ cu a" M . Oh 8-8 -g g S ro n, v ?, O 4) -go j- '^3 a> H o S3 I -g o aj" >jr ^! ^ co (3 -^Ch t^-o> cNi-t qoq l^-CM i ICO 05iOOOCOtOOC05000'*t--0500-HOO-*CO'^OcM "os->*it>.ocoeoosooo5oocDcooco>0'-irHO rtNOOiOOWrtNOOOOrJiNNOOSOiO il^ t^ CO CO^CO^I o> cnT o -h" co io ^~ -T OOtOf MOOOO<* *O00O(MMiON COOiCiCOOOcO'*c005C0005i HO(MCOCDTt i> rt>rcNTc>f.cocN iOOSt^OSi-HCOTfiCOcOO^0000O5t^COiO t^r-_ *_ q *_ -^ q t^ o" cCOO5'*00C-ioos ooi>coiort_qo5_co coco co o oi to oc^co^^rHrHcoo^t^^^oTofoTco'co''^ COl^CMt^COOt^>OTflCOCO-*COOOCMOOiOi-i OOOt^iO-^COi-iOOSOOt^cOiO-^T^cOCOtNCN lOCO OS COCO Tfit^t^os^ocoooi HffiNNHiOOMl. - rtiCNCNCN^iOiOt^i-l'tlcOiOOSOO-HOOCOOO'-lcOOlOSCOTjleOcNi-l ^3 >*<>^i CC|CO'*OCON-OOOSO'-'01CO'*iOCON.00050i-iC^CO'*>OCOl---COOSO ?*TtH^lTtlTt0"3"5"3CCOCOCOCOCOCOOcOOcOt^ osososososososososososo^ososososososososoosososososososos Oi-icNCO-^'OCDSOC050-HtNCO'^iOCOt>-OOOSO'HlNCO^t , iOCOJ>00 CO COCO COCOCOCOCO COCO ^*'^-*Ttl-*'*'*-<*-^000OiOiOiOiO>0 205 cococococococococorocococococococococococococococococo MM , o C - o & co O -^ a o 3 | 05.2, O s 5P 53 a '58 Id a-'s OH | .2 S /-, o '> CO H 2 | 85 8 ^-3 g cc on O I So.a CO s? en _. is a? a t Ph O 3.2 00 d -c c o S & o 55 rt > o Ph O"^ fl 53 ><0>"3 C^C^C>CIC-( i-h^ooi r-H T-H 0\05 Oi-H t^ t^- OSCS t-Ht It-It-It It-Ht It-Ht-Hi It-Ht It-Ht-HiI000000 0505O5O5O5O505O5O5O505050505O5O505O50505O505O5 ^1 ^* ^i ^1 ^1 ^4 ^H ^1 TJ1 *3* ^H ^HH ^i ^i ^HH ^r|K ^H ^^ tH ^i ^H ^< ^1 !ONN 0100 05 o_t^>o 00 -H^t-H C1t^-*cOC-lTtlCO0C|00 O'jiirjHioOTjicooiOH'^ M'^'tiOiOOOOOONN 050505050505050505050505 ^i ^i ^rji ^1 ^^ ^i tj< ^rf* ^HH ^^ t^ t^ t^ ^pJH ^^ ^i tH/< ^H tJH ^^ lO 05 00 00 00 CO Ol^OO 'o"~o~o* 05 05 05 "*CM * COCO lO CO CO CO CD oq_oooooooo ooooo 05 05 05 05 05 CO CO CM oooo 05 O CO OCOOOlOrHOJOS'H/lOlflOSlOrHOMNSCDH/l COOO(N05.I t>K3- , #coiai>t^'-Ht^"'#ooa5io05io(Ni-i i-HO'^ ,, *O'-HQ005Tt>t^Tj<00TtlCD OOr-Hi001>C<<'-HCOC<>eOCOOCO-*05cNOO05lOt>-0005O'-HtNie0'*U3C0b-.00OrHC^00Tj. t^tvt^l^t^t~-l>I>t^00000000000000000000O5O5O5O5O5O5O5O5 05 05 0"jOOC5C50505C5C505~C505C5C:C5050505050i050505 OO'^cNlC0'*"5l>00O'-HCl>t>t>l>l>l>t>Tj>.l>000000000000 M 33 c4 . o T-H " I + -I* ojrj s!s g -3 n^ o III 3.2 w o ^ ^ fcvl a|5 0)35**^ ^ S a P K.h u ft w fl) -O G =g 53 0^8 J)? _ 6 b S II as 3t3"o OQ S CO is! ., a CO 4} 'C-d CO h O 53 T-H 0) a o I a^ O s a .2 o CO ' 2 >> fl 2 3.2 2 -S S g ^ H CO CO . H d o o Z2? 206 AVERAGE AMOUNT OF SALARY AND In determining the total cost of pensions for the total number of em- pension received by the average entrant into the police force. To do this the persons entering at age 25 on an entrance salary of $800 per annum was class of benefits and the total salary payments received by the 1,000 em- service and their pensions are terminated. Table 32 Showing the Annual Amounts of Pension and Salary Payments to Police Force at Age 25 on an Year of Pay- ment 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Service Pen- sion 16,946 39,543 51,330 59,885 66,068 70,401 73,270 74,710 74,858 73,827 71,883 69,076 65,760 Dis- ability Pension $241 623 1.005 li336 1,429 2,475 3,147 3,923 4,926 6,093 7,502 9,212 11,270 13,813 17,060 20,629 26,733 33,833 42,787 53,492 65,739 79,127 92,945 106,639 119,707 131,668 142,229 151,197 158,388 163,903 167,414 168,424 166,893 163,724 159,342 153,973 148,000 141,483 134,551 127,413 120,134 112,763 105,215 Total Pension to Em- ployees $241 623 1,005 1,336 1,429 2,475 3,147 3,923 4,926 6,093 7,502 9,212 11,270 13,813 17,060 20,629 26,733 33,833 42,787 53,492 65,739 79,127 92,945 106,639 119,707 131,668 142,229 151,197 158,388 163,903 184,360 207,967 218,223 223,609 225,410 224,374 221,270 216,193 209,409 201,240 192,017 181,839 170,975 Total Salary Wid- Chil- Pension Total Pay- ows' dren's to Wid- All ments for Pension Pension ows and Children Pensions Active Service $11 $3 $14 $254 $786,622 36 12 48 671 804,997 72 27 99 1,104 823,754 118 48 166 1,502 841,821 180 78 258 1,687 858,557 258 117 375 2,850 872,797 348 164 512 3,659 885,571 454 222 676 4,599 895.047 578 292 870 5,796 901,321 729 379 1,108 7,201 904,840 926 491 1,417 8,919 903,987 1,187 641 1,828 11,040 900,375 1,567 855 2,422 13,692 892,447 2,126 1,169 3,295 17,108 881,749 2,947 1,630 4,577 21,637 867,880 4,010 2,234 6,244 26,873 850,990 5,214 2,935 8,149 34,882 830,530 6,530 3,720 10,250 44,083 804,723 7,943 4,574 12,517 55,304 774,289 9,438 5,487 14.925 68,417 739,412 11,013 6.460 17,473 83,212 700,091 12,672 7,497 20,169 99,296 658,097 14,409 8,587 22,996 115,941 614,228 16,211 9,724 25,935 132.574 570,395 18,057 10,902 28,959 148,666 527,314 19,919 12,106 32,025 163,693 485,433 21,830 13,256 35,086 177,315 445,789 23,795 14,513 38,308 189,505 409,212 25,778 15,773 41,551 199,939 376,138 27,784 16,984 44,768 208,671 244,556 29,825 18,118 47,943 232,303 284.263 31,897 19,109 51,006 258,973 215,956 33,979 20,022 54,001 272,224 173,309 36,082 20,057 56,139 279,748 139,346 38,175 20,784 58,959 284,369 111,749 40,249 21,448 61,697 286,071 88,823 42,316 22,051 64,367 285,637 69,753 44,327 21,407 65,734 281,927 54,061 46,255 21,765 68,020 277,429 41,521 48,077 20,734 68,811 270,051 31,798 49,755 19,382 69,137 261.154 24,450 51,269 19,254 70,523 252,362 19,014 52,584 17,455 70,039 241,014 15,028 207 PENSION RECEIVED BY AN EMPLOYEE. ployees it was considered advisable to figure the amounts of salary and annual amounts of salary and pension which would be received by 1,000 calculated. The following table shows the amounts of pensions for each ployees from their entrance into the service until they are all out of the be Made to 1,000 Employees Entering the Entrance Salary of $800 Per Annum. Service of the New York City Year of Pay- ment Total Total Salary Service Dis- Pension Wid- Chil- Pension Total Pay- Pen- ability to ows' dren's to Wid- All ments for sion Pension Em- Pension Pension ows and Pensions Active ployees Children Service 44 $62,058 $97,747 $159,805 53,664 $15,396 $69,060 $228,865 $12,061 45 58,063 90,258 148,321 54,471 13,109 67,580 215,901 9,730 46 54,072 82,870 136,942 54,987 10,674 65,661 202,603 7,740 47 50,176 75,710 125,886 55,236 9,798 65,034 190,920 5,899 48 46,321 68,550 114,871 55,026 7,393 62,419 177,290 4,116 49 42,543 61,742 104,285 54,896 5,247 60.143 164,428 2,503 50 38,847 55,051 93,898 54.198 4,515 58,713 152,611 1,257 51 35,104 48,595 83,699 53,216 2,948 56,164 139,863 477 52 31,339 42,491 73,830 51,913 2,462 54,375 128,205 127 53 27,641 36,857 64,498 50,304 2,028 52,332 116,830 22 54 24,262 31,458 55,720 48,397 1,204 49,601 105,321 55 21,051 26,528 47,579 46,218 977- 47,195 94,774 56 18,107 21,950 40,057 43,797 795 44,592 84,649 57 15,342 17,842 33,184 41,153 647 41,800 74,984 58 12,934 14,203 27,137 38,339 364 38,703 65,840 59 10,793 11,034 21,827 35,394 299 35,693 57,520 60 8,831 8,451 17,282 32,285 247 32,532 49,814 61 7,136 6,221 13,357 28,573 205 28,778 42,135 62 5,709 4,343 10,052 25,610 168 25,778 35,830 63 4,460 2,934 7,394 22,676 134 22,810 30,204 64 3,390 1,878 5,268 19,835 104 19,939 25,207 65 2,498 1,056 3,554 17,125 79 17,204 20,758 66 1,784 587 2,371 14,578 58 14,636 17,007 67 1,249 352 1,601 12,229 24 12,253 13,854 68 892 117 1,009 10,101 17 10,118 11,127 69 535 82 617 8,193 11 8,204 8,821 70 357 34 391 6,528 7 6,535 6,926 71 178 10 188 5,094 4 5,098 5,286 72 89 2 91 3,876 2 3,878 3,969 73 62 62 2,861 1 2,862 2,924 74 25 25 2,044 2,044 2,069 75 7 7 1,400 1,400 1,407 76 1 1 916 916 917 77 563 563 563 78 322 322 322 79 164 164 164 80 76 76 76 81 26 26 26 82 83 84 12 5 1 12 5 1 12 5 1 Total . 1,393,413 4,151,353 5,544,766 1,787,232 481,383 2,268,615 7,813,381 23,365,965 208 If we divide the results in the preceding table by 1,000, we get the cost for a single employee. The following table shows the annual amounts of pension payments received, the average annual amount of Table 33 Showing the Annual Amounts of Pension and Salary Payments to be at Age 25 on an Entrance Year of Payment Pension Payments Salary Payments Total Pension and Salary Payments Employee's Contribution to Pension Annual Net Cost to the City 1 $.25 $786.62 $786.87 $15.73 $771.14 2 .67 805.00 805.67 16.10 789.57 3 1.10 823.75 824.85 16.48 808.37 4 1.50 841.82 843.32 16.84 826.48 5 1.69 858.56 860.25 17.17 843.08 6 2.85 872.80 875.65 17.46 858.19 7 3.66 885.57 889.23 17.71 871.52 8 4.60 895.05 899.65 17.90 881.75 9 5.80 901.32 907.12 18.03 889.09 10 7.20 904.84 912.04 18.10 893.94 11 8.92 903.99 912.91 18.08 894.83 12 11.04 900.38 911.42 18.01 893.41 13 13.69 892.45 906.14 17.85 888 29 14 17.11 881.75 898.86 17.64 881.22 15 21.64 867.88 889.52 17.36 872.16 16 26.87 850.99 877.86 17.02 860.84 17 34.88 830.53 865.41 16.61 848.80 18 44.08 804.72 848.80 16.09 832.71 19 55.30 774.29 829.59 15.49 814.10 20 68.42 739.41 807.83 14.79 793.04 21 83.21 700.09 783.30 14.00 769.30 22 99.30 658.10 757.40 13.16 744.24 23 115.94 614.23 730.17 12.28 717.89 24 132.57 570.40 702.97 11.41 691.56 25 148.67 527.31 675.98 10.55 665.43 26 163.69 485.43 649.12 9.71 639.41 27 177.32 445.79 623.11 8.92 614.19 28 189.51 409.21 598.72 8.18 590.54 29 199.94 376.14 576.08 7.52 568.56 30 208.67 244.56 453.23 4.89 448.34 31 232.30 284.26 516.56 5.69 510.87 32 258.97 215.96 474.93 4.32 470.61 33 272.22 173.31 445.53 3.47 442.06 34 279.75 139.35 419.10 2.79 416.31 35 284.37 111.75 396.12 2.24 393.88 36 286.07 88.82 374.89 1.78 373.11 37 285.64 69.75 355.39 1.40 353.99 38 281.93 54.06 335.99 1.08 334.91 39 277.43 41.52 318.95 .83 318.12 40 270.05 31.80 301.85 .64 301.21 41 261 . 15 24.45 285.60 .49 285.11 42 252.36 19.01 271.37 .38 270.99 43 241.01 15.03 256.04 .30 255.74 -rm 209 salary received, the average annual amount of the employees' contribution, and the average annual net cost to the City for a single employee: Made to One Employee Entering the Service of the New York Citt Police Force Salary of $S00 Per Annum. Year Pension Payments Salary Payments Total Pension Employees' Annual of Payment and Salary Payments Contribution to Pension Net Cost to the City 44 $228.87 $12.06 $240.93 $.24 $240.69 45 215.90 9.73 225.63 .19 225.44 46 202.60 7.74 210.34 .15 210.19 47 190.92 5.90 196.82 .12 196.70 48 177.29 4.12 181.41 .08 181.33 49 164.43 2.50 166.93 .05 166.88 50 152.61 1.26 153.87 .03 153.84 51 139.86 .48 140.34 .01 140.33 52 128.21 .13 128.34 128.34 53 116.83 .02 116.85 116.85 54 105.32 105.32 105.32 55 94.77 94.77 94.77 56 84.65 84.65 84.65 57 74.98 74.98 74.98 58 65.84 65.84 65.84 59 57.52 57.52 57.52 60 49.81 49.81 49.81 61 42.14 42.14 42.14 62 35.83 35.83 35.83 63 30.20 30.20 30.20 64 25.21 25.21 25.21 65 20.76 20.76 20.76 66 17.01 17.01 17.01 67 13.85 13.85 13.85 68 11.13 11.13 11.13 69 8.82 8.82 8.82 70 6.93 6.93 6.93 71 5.29 5.29 5.29 72 3.97 3.97 3.97 73 2.92 2.92 2.92 74 2.07 2.07 2.07 75 1.41 1.41 1.41 76 .92 .92 .92 77 .56 .56 .56 78 .32 .32 .32 79 .16 .16 .16 80 .08 .08 .08 81 .03 .03 .03 82 .01 .01 .01 83 .01 .01 .01 84 Total $7,813.38 $23,365.99 $31,179.37 $467.36 $30,712.01 210 The following table is a summary of the pension and salary payments to members of the police force as compared with active service rendered in return therefor. Table 34 Showing Average Pension, Salary and Active Service of an Employee Entering Service at Age 25. Total net cost to city Total salary payments Total pension to employee Total pension to widow and children Total all pensions Total contributions by employee , Total net cost of pensions to city Average length of service 20 years, 6 months Net cost to City per year of active service Salary payments per year of active service Employee's pension per year of active service Widows and children's pension per year of active service All pensions per year of active service Contributions by employees per year of active service . . . Net cost to City of pensions per year of active service . . . $30,712.03 $23,365.97 5,544.77 2,268.61 7,813.38 467.32 7,346.06 $1,498.47 $1,140.05 270.53 110.69 381.22 22.80 358.42 THE VALUATION OF TOTAL ASSETS AND LIABILITIES. The ordinary actuarial valuation of a pension fund consists in a com- parison of the present value of all liabilities with the present value of all assets. "While such a valuation alone would have been hardly adequate to show the liabilities of the fund and its actual working so clearly as the distribution by years, it is very helpful to illustrate the effect of interest on the accumulations of a pension system. The following table shows the ordinary balance sheet of a valuation, to which have been added two additional columns. The first column of figures shows the actual amount of the pension payments which will be made by the City on ac- count of the present active and pension rolls. The second column shows the present value of these liabilities, or the amount of money which, if placed at 4 per cent, interest, would be sufficient to meet the payments as they come due; the third column shows the difference between the first and second, or the amount of interest which would be allowed on the amounts shown in the second column before they were entirely paid out in pensions. The same relationship exists between the columns on the asset side of the valuation sheet. The amount of the deficiency, which is shown on the asset side of the sheet, shows the amount of money which the City will have to contribute toward pensions on account of the present active and pension rolls alone, or one hundred and forty-four million dollars ($144,000,000). The pres- 211 as >> 3 Xi *=> s as !E3ci jft c 03 L^ 2^1* r< > 02 > O.Q 43 d to ojtJ > I U3 i I ^ V >> OJ S fig*3,g a N s e o 3 N a M ~i 00 * ^ i i /. r i o eq CO a r^ N o r^ * * * > c a a a m I r- : go d E E a p ga E a X E c E a 'x q H 'x a a a S3 d a q B, a OJ ~ d P d r I U,^l OJ D OJ -<+t 43 *+> ai^ PhCO CO - O d OJ FH c c a > 43 c3 a J c a ^2 -/: O'O r> u a x a y n 3D p a 'A g a 03 > (-1 . c .73 -O . E a> 03 . OJ . 3OTJ :S A . . c . S br, c a %'* O O c.2 OJ > 03 l> Qp > fer^-rt w oj^? >> >. J3 (-. o -ti > a 03 u 03 03 "y Ph Ph P-l Ph P, C OJ 03 aj.flJ H'S flJ oj oj >>'o5 3J - 3 a 212 ent value of this amount, or sixty-five million dollars ($65,000,000), is the money which the City might place at interest immediately to com- pletely discharge the liability. If this amount could be set aside, it would reduce the cost to the present members to less than half, or by about seventy-nine million dollars ($79,000,000). These figures show forcibly the advantage of accumulating the proper reserve for a pension system instead of waiting until payments are due before providing for them. RETURN CIRCULATION DEPARTMENT TO * 202 Main Library LOAN PERIOD 1 HOME USE 2 3 4 5 6 ALL BOOKS MAY BE RECALLED AFTER 7 DAYS Renewals and Recharges may be made 4 days prior to the due date. Books may be Renewed by calling 642-3405. DUE AS STAMPED BELOW FEB 101996 tff*\l * fl ; 11 UV 1 u *"* CIRCULATION DEI T. UNIVERSITY OF CALIFORNIA, BERKELEY FORM NO. DD6 BERKELEY, CA 94720 U.C.BERKELEY LIBRARIES cosib^o?! y 286246 UNIVERSITY OF CALIFORNIA LIBRARY I i