SCHOOL TEACHERS' BENEFIT AND ANNUITY FUND.

Oamaru Mail, Volume IV, Issue 1190, 9 February 1880, Page 2

SCHOOL TEACHERS' BENEFIT AND ANNUITY FUND.

In our last issue we signified our. in: tention of publishing schemes which have >, been propounded by Messrs. Mackay and Macarthur (members of the Educational Institute of Scotland) for the establishment of an institution for the benefit of Government School teachers who may be incapacitated from attending to their duties by reason of old age or misfortune. We now give Mr. Mackay's scheme, which he entitles a Draft Scheme or Mutual Benefit Association IN CONNECTION "WITH THE Educational Institute op Sootland. As this scheme would be strongly opposed by many influential members of the Institute, if an attempt were made to render it compulsory, it would be wise to confine its operation to voluntary membership, even if there were a. probablity of compulsion being granted by the Legislature —which there is not. _ ; 1. One pound, or any multiple of a pound that may I e determined upon, shall be the annual contribution, with liberty to members to increase; their contributions at any time, if they see fit. 2. Members, after two payments, shall be at liberty to withdraw any portion of their contributions up to a fixed maximum, which can be considerably higher than the surrender value of an ordinary insurance policy, inasmuch as tho Association will not be obliged to pay a fixed sum on the death of a member, happening, it might be, soon after joining; or, the money may be borrowed on the security of tho member's accummulations, without inter* ferine with his permanent interests in tho Fund. 3. On the death of a member before entering on the enjoyment of a pension, the surrender value of his or her contributions shall be paid over to the heirs. 4. Members shall be at liberty to enter on the enjoyment of their pensions whenever they please, subject to the following conditions :—That the right to claim surrender value shall then cease ; and that the pension shall be the annuity purchasable by the gross accumulations of tho member, together with the bonus accruing from the General Fund created by the margin left, in favor of the Association, on every surrender value granted. This part of the scheme should be treated as a separate branch, which, in tho meantime, may be termed branch A. Widows and orphans should be provided for under a separate branch, whioh may be termed branch B, as follows r 1. The amount and conditions of payment of contributions under branch B shall be the same as under branch A. 2. Under branch B no surrender value shall in any case be granted; but there shall be no obligation to continue pay* ments longer than members may wish.' 3. The pension shall bo the annuity purchasable by the gross accumulations of the payments on behalf of the beneficiary, together with the proportionate intern i in the payments made on behalf of wiv( a who predeceased their husbands, orphai.a up to 16 years of age to receive their mother's allowance. 4. A widow marrying again forfeits her pension, and the claims of her children. The expediency of the division of tho scheme into two branches is suggested by the fact, that few men will care to make provision for widows and children before they have wives. Further, a united fund would leave a man no option but to make provision for himself, as well as for his wife and children, even though he might have a good reason to believe that lug School Board would grant; hint a retiring allowance. The creation of two branches enables a member to choose either, or both, as maybe desirable. The foregoing draft scheme is based on the following principles as regards branch A : 1. That voluntary membership, whether tho best basis or not, is tho only practicable one. 2. That members will in no case forfeit more than a fraction of their contribution Si 3. That, in addition to the full enjoyment of individual accumulations, thoso who became annuitants on the fund shall participate in what will really, be tho Mutual Assurance Fund—that is,' tho margins left by surrender values. Under branch B, the privilege of claiming surrender, vqlyes; 'Vwoiildbe' incompatible witli the' foi%ail6te of a pension fund of real value. Under branch A, a member arriving at an age to retire, must be to blame if the personal accumulations! j

together with the interest in tho common fund, bo not sufficient to provide a suitable annuity. Tho case of widows, however, is ditFerent ; and if a large common fund bo not provided, the annuity, in the case of early widowhood, may be so inconsiderable as to be practically valueless. It is, therefore, essential to create a common fund, oat of which a fair annual allowance might be guaranteed to all entering on branch B, immediately on marriage, with a proportionate diminution fur every year that elapsed between marriage and entry on the fund—each, or course, receiving besides, the full value of the accumulations on her own behalf. Such suggestions as these should prove of not a. little value to those who desire to see the teachers' annuity system established in this Colony. Of course there are many important points to settle in connection with the matter. It will have to be decided whether the contributions should be voluntary or compulsory. In any case it appears to ns that the Goveriijuent should deduct the premium from the salary due to each teacher. Then there i 3 the question of how the funds thus raised should be invested. The teachers should certainly be consulted on this point, for it is the most important connected with the scheme. "We shall give Mr. Macarthur's proposals in next issue.