There are a few points on this motion that I would like to deal with. I think the Minister is already in possession of some of the matters that I propose dealing with, and therefore I will not delay the House to any great length. This pension scheme does not compare favourably with the pension scheme for civil servants, for instance. Secondary teachers, though not large in numbers, constitute, it will be agreed, a very important body, and every effort should be made as regards the salaries and pensions paid to them to induce the best brains of the country to enter that profession. On them depends in great measure the future advancement of the country, especially as regards discoveries that will lead to scientific and economic advancement. I believe that no contribution the country can make in the way of encouraging secondary teachers would be too great. We have had an example of that recently. Discoveries recently made promise to bring great benefit to the nation. The proposal is that the secondary teachers will have to contribute 4 per cent. of their salaries and the schools in which they teach two and a half per cent. The State will be responsible for the balance. A contribution on that percentage basis will, I understand, have to be made over a period of 40 years before a teacher will be entitled to his full pension. The amounts paid to secondary teachers who retire do not compare favourably with the amounts paid to civil servants who retire. In some cases, in addition to their pensions, civil servants are entitled to get a retiring bonus equal to one and a half times their retiring salary. No such proposal has been entertained in the case of secondary teachers. The secondary teachers, in my opinion, should be regarded as being as important to the State as the great majority of civil servants who receive this consideration. One of the suggestions put forward is that in addition to the ordinary pensions which secondary teachers will become entitled that they should be given a bonus if for some reason or other they are obliged to resign after an agreed number of years' service, let those years be ten, fifteen, or twenty. There is no provision made in the scheme, as far as I can see, for a teacher who dies while on active service except as regards the return of his contributions with compound interest. I think in the case of a man who dies after fifteen years' service his dependents should surely be entitled to better treatment than that provided in this scheme. It is only in the case of a teacher who dies that compound interest is added to the contributions that are returned. I think that arrangement should apply in the case of any teacher who retires from any other cause except, of course, that he is obliged to retire for misconduct. In all other cases I think the contributions should be returned with compound interest. Teachers' contributions may very well be regarded, I think, as a form of insurance against the period when they may be compelled through ill-health to retire. A teacher who has ten years' service gets his contributions returned. In that case, too, I think the contributions should be returned with compound interest. In a case where a teacher's contributions are not as great as the salary he is earning at the time he goes out, it is suggested that his year's salary be paid in lieu of the contributions if the year's salary be the greater amount. There is another case of great hardship, and that is where a teacher contributes for 35 years' service or more and only draws his pension for a period of two or three months. I do not know if any provision is made to meet such a case.
Public Business. - Secondary Teachers' Superannuation Scheme, 1929—(Resumed).
The full amount of the contribution is given.
There are a few secondary teachers who, I understand, are working for less than the basic salary laid down in the code that applies to secondary teachers. They are expected, while receiving that small salary, to pay their contributions of four per cent. on the basic salary. I think the obvious remedy for that would be for the Minister to take steps to see that the salaries which they are earning will be raised to the basic figure. These are the only points that I wish to raise. I think that the Minister is already in possession of them.
I do not know if this fund is established on a strictly actuarial basis or not, or whether it is intended to be a self-supporting fund. If it is, the terms of the pensions provided for and to be granted seem to me, from my experience of other funds, to be on the niggardly side. One of the biggest funds with which I am acquainted is the London, Midland and Scottish. That is a company with 48,000 salaried employees. It was only established a few years ago, and is a new fund. The basis of contribution to that fund is two-and-a-half per cent. from the employees with an equal contribution from the company. That is, in the case of a clerk joining the fund at the age of 18. Of course, there is a graduated scale with a higher rate of contribution up to the age of 45, which is the age limit at which a person can be admitted. Anyone entering the fund at the age of 25 or thereabouts would pay a contribution of about three-and-a-half per cent. There is an equal contribution from the company. They pay pensions on the basis of an eightieth with a maximum of one-half. They are also able to give a bonus equivalent to a thirtieth for each year of service, with a maximum of 45-30ths, or one-and-a-half year's salary. A man, say, who retires with a salary of £400 a year gets £200 of a pension and a lump sum of £600 if he has 45 years' service. In that way, the conditions under that fund are better than the conditions outlined under this scheme—at least to the extent of the lump sum. In the case of those who get that lump sum in the London, Midland and Scottish Fund, provided that they join up at the age of 18, 19, or up to 21, they only pay two-and-a-half per cent. on their salaries, while under this scheme the secondary teacher will have to pay four per cent. on his salary.
In connection with this fund there is a point I would like to emphasise, and it is this, that it should be made compulsory on new members to join the scheme. The success of a fund very often depends on the numerical strength of it, and I think it should be made compulsory on anybody whom the State pays or partly pays, that he should make some provision for his retiring years. If the State is prepared to assist him he should be compelled to join whatever fund is in existence. In the case of the railway fund to which I have referred, it is compulsory on those concerned to join, and equally in this case, I think, it should be compulsory on the members to join, seeing that the State is contributing towards the fund. While the teachers are obliged to pay 4 per cent. on their basic salary, I observe that they will have no voice in the management of the fund. I do not think that is fair or just. In the case of the Railway Superannuation Fund a committee of management is made up of an equal number of people from each side, the employers and the employees. That means a lot in the way of the smooth working of the fund, because every other month there are applications for pensions. There are applications for ordinary retiring pensions, for break-down pensions, for refunds of contributions, and so forth. A great deal of the success of a fund depends on the point of view taken by the committee of management. I think it is only right that those who contribute to a fund should have some representation on the committee administering it, who will be there to put one point of view as against the official point of view from the other side. In view of the fact that the members contribute half the amount in the way of contributions, it would be only fair, I think, that they should have representation on the committee of management. The committee of management should be composed, I think, of representatives of the State, of the secondary schools, and of the teachers. In that way attempted abuses of the funds would be effectively checked. There would also be greater confidence on the part of the subscribers in the fair administration of the fund, and there would probably be a greater disposition on the part of those concerned to join the fund. The fund, I observe, is largely based on the provisions that apply to similar funds in other services, except that the provisions are, as I have said, rather niggardly from the point of view of the maximum amount of pension paid, seeing that no lump sum goes along with them.
I will deal first with the points made by Senator O'Farrell. This, of course, will be a Government-administered fund. It was understood all along by the different parties interested that it would be a Government administered fund, and no representation has ever been made, either by the teachers or the schools, to modify that particular suggestion. The Senator must bear in mind that there are points of difference between this scheme and the fund to which he referred. We have tried to cover all the cases we can, and that has made the scheme, perhaps, somewhat complicated. In the case to which the Senator referred, the people interested are the railway companies on the one hand, and the railway employees on the other. To a certain extent they control the conditions of service. That is not the case so far as secondary teachers are concerned. With regard to employment in secondary schools, the State has no influence whatever. There was the question whether the scheme should be compulsory or not. I did consider that. If you were simply drawing up a scheme on paper, a great deal might be said for making the scheme compulsory. In the actual conditions that prevail in this country in connection with secondary education, it would seem to be ignoring those conditions to attempt anything of the kind. A large number, possibly the bulk, of the people engaged in secondary education in this country may not wish to enter into any fund. We cannot compel them to do so. Certainly I doubt if we have the power under the Constitution to compel them to enter any such fund. Even if we had, we ought not to compel them to do so. You have a great number of secular priests engaged in secondary education in various seminaries throughout the country. As a rule, very few of them reach a pensionable age, and to make it compulsory on them to contribute to such a fund, would simply be foolish. It would mean the establishment of an elaborate system for the collection of money from them, and paying it back again, and not for the purpose of a pension. Then you have a far more numerous body of people engaged in secondary education who may not wish to join the scheme—I refer to the members of the various religious orders. These are considerations that ruled out, so far as we are concerned, any possibility of making the scheme compulsory. When the Senator was referring to the Railway scheme, did he mean only three-and-a-half per cent. of the salary that a person receives in any year is paid to the fund? Would a man at 60 who has a higher salary than when he joined the fund at 18 or 21 pay only three-and-a-half per cent. on that salary?
It depends on the year in which he joined; but the same rate applies.
Professor O'Sullivan
I indicated on the last day, I think, in reply to Senator Johnson, that we have not yet had anything like an actuarial investigation of the scheme made. The reason is that we know very little about the fund at present, or what it is likely to be. Take the analogy, with which Senator Cummins will be familiar, of the recent investigations made by actuaries in the case of the North of Ireland and in the case of the Saorstát National Teachers' fund, in the case of a person who has contributed for 40 years, as I think generally happens in the case of a national teacher, the benefits are very much the same. As regards the North of Ireland it is not quite easy to follow the figures, but in the case of the Saorstát National Teachers' Fund I think he gave what was equivalent to between seven and eight per cent. of the actual salaries.
Not in the Free State.
Professor O'Sullivan
I do not want to urge that, because I am not quite clear about it, but I am prepared to take it at eight per cent. Deputations on which, I think, most Parties in the Dáil were represented, did come to see me on behalf of the secondary teachers in connection with this scheme, as well as some members of the organisation, who have come frequently. They put various recommendations before me, and I adopted a number of them.
I indicated in the Dáil to-day an increase of the fraction for the non-contributory years from one hundred and twentieth to one hundredth, which gives an appreciably higher pension here in the case of teachers with 40 years' service than I understand they enjoy in the North of Ireland. That is a very big concession. With regard to another point, secondary teachers are in no sense civil servants. I admit that they are doing important work, if you like, important national work. They are employed by private institutions. The secondary school system as it applies here is essentially a private system. The State helps it. That is a consideration which must be borne in mind when any comparison is made between the pensions that this scheme gives to secondary teachers and the pensions given by the State to civil servants. There is another consideration that has also to be borne in mind: it is that when the salaries of civil servants are being fixed the question of pension is always taken into account, and to say that their pensions are noncontributory may or may not be the subject of debate, but I know that civil servants are very keen in saying that their pensions are contributory. They quote Lord Balfour as conclusive evidence on that point. Technically the matter has never been admitted by the Government, but undoubtedly the fact that they do get pensions is taken into account in the fixing of their salaries. Another point raised was in regard to allowances. We followed the provisions of the various other pensions schemes and felt that we could not very well depart from them. In many cases if a person retires through ill-health after a number of years' service he will not get much more than a year's salary. The Senator said that these contributions were looked upon as a kind of insurance. If you do look upon them as a kind of insurance, what happens in the case of an ordinary insurance premium when, owing to circumstances he cannot control, a person loses his employment and he is no longer able to contribute?
He gets a surrender value.
Professor O'Sullivan
Which is not equal to the paid-up premium. If the Senator knows of any company with a surrender value of that kind, personally I would like to know of it. I hope that the Seanad will pass this scheme.