Case Studies on the 1941 Teacher
Retirement Bill Showing How It
Would Operate In Typical Cases

These calculations are based upon several assumptions:

1. That reserve funds can be kept invested at interest for the
coming years.

2. That such investments in the long run of years will yield 3%
interest, compounded.

3. That school salaries in terms of dollars will continue at present
levels.

4, That for the next half century medical science, the American
way of living, and other factors, will not materially change
life expectancies.

5. That the yield on investments in refund life annuities beginning
at age 65 will not change materially from the present rates.

The 1941 plan would levy 4% on salaries of school employees. Upon
retirement, the employee would receive a refund annuity purchased by
the reserve. The state would make its contribution from the formula
of the bill (Section 18), “multiplying the average annual salary (up to
a maximum of $3,000) for the last ten years of school service, by the
total number of years of school service and dividing by 160. Provided
that any person having a record of thirty years or more of school service
shall receive a service annuity which added to his savings annuity will
total not less than one-third of the average annual salary during the
last ten years of school service. Provided further: That any eligible
employee who shall have served less than thirty years shall receive pay-
ments in the proportion which those years of service bear to thirty
years; and the minimum service annuity for any person having twenty
years or more of school service shall be $120.” The specific appropria-
tion of $400,000 provided in the 1941 bill would necessitate a pro-ration
of service annuities. From available figures this pro-ratio payment
would probably run four-sevenths of the amount guaranteed under the
bill in 1942.

ANNUITIES IN YEARLY TOTALS
I Begins teaching in 1941 at age 22.

Teaches 7 years.
Average annual salary $750.
Assessment $30.

Reserve accumulated at age 65...... $ 675

Refund annuity purchased by reserve 47

Service ‘amnumity “5. 6 Pee 32.81 (or pro-rata)
Total: annuity. 6 eat ee $ 79.81

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