Seanad Éireann debate -
Wednesday, 14 Mar 1934

Vol. 18 No. 9

National Teachers' Superannuation Scheme—(Resumed).

Debate resumed on the following motion:—

That the National Teachers' Superannuation Scheme, 1934, made by the Minister for Education, with the consent of the Minister for Finance, under the Teachers' Superannuation Act, 1928 (No. 32 of 1928) be confirmed—(Minister for Lands and Fisheries).

Mr. Cummins

Since this settlement reached the ears of the teachers of Ireland I can say that seldom has any pronouncement been heard of with, as I may describe it, such consternation and disappointment: consternation by reason of the drastic changes which it makes in the future outlook of educational matters in this country. An attack upon the moneys devoted to the educational purposes of 90 per cent. of the people of Ireland is undoubtedly not an attack upon the individuals who carry out that important duty but an attack upon 90 per cent. of the people of the Free State. That is surely what it is. President Roosevelt, who has undertaken work of a character that is unequalled in the history of the world and who, I am glad to say, seems to be on the highroad to success, did one thing in his plan of re-organisation of the economic condition of his country. It was, that while every other branch of national service was investigated and re-organised, and in some cases made to contribute very largely to the financial support of the various plans which he adopted for the revival of his country, one service he deliberately omitted: that was the service of education. Law, medicine, banks, combines, every other section of the community was called upon to contribute in great measure to the success of his plan, but he skilfully and wisely for the nation, for its future, for the hopes that he entertains of making it a great nation, refrained from touching educational services or matters relating to public welfare: mothers and children, and other matters upon which the nation builds and lays its foundations. Those two services he deliberately excluded. He did not ask them to give any part towards the reconstruction of his country.

Now, we have a Government here that is making efforts, perhaps in a comparatively small way compared with the work that the President of the United States has undertaken, to reconstruct our country. Those efforts, I hope, are succeeding, and will meet with success, but if they meet with success at the cost of encroaching on the educational rights of 90 per cent. of the people of Ireland, then I certainly say that the Government are building on a wrong foundation. The higher schools and the colleges are well provided for, but only a very small percentage of the plain people ever have the privilege of reaching those centres of education. I may say that some of the very best material that reaches these centres of education, that reaches the secondary schools, comes from the national schools of the country. They, with their meagre resources, with their staffs harassed as they have been since the days of the hedge schoolmaster ceased—harassed and attacked at every attempt that they make towards the end of securing for the child of the plain people that which everybody must acknowledge is its right, a decent system of education conducted under decent conditions—have produced results, notwithstanding some criticisms to the contrary, which have been remarkable for this nation. The best authorities who have made pronouncements on this matter, who have travelled through Continental countries and in America will bear witness, and have borne witness, to the fact that the education carried on in this country and its results have been unequalled in soundness, thoroughness, in laying the foundations of good citizenship as well as a true national outlook. All the best authorities who have spoken on the matter have borne testimony to that.

A struggle that went on for fifty years with the British secured a modicum of justice for those engaged in the teaching profession. When education is attacked the most effective method of damning its progress is to make an attack on the conditions of life of those who have charge of carrying out the work of instruction throughout the country. Now I am not exaggerating the picture. If the public did realise the actual position of those engaged in educational work, the position with regard to salaries and with regard to the various costs which are imposed upon them personally in the carrying out of education, then the plain people and those who send their children to the national schools would wake up and undoubtedly take measures to condemn the injustice that is being perpetrated in that direction. It is all very fine to say that the teachers are wealthy beyond the dreams of avarice, if you like, but anybody who goes carefully into the figures of the salaries of individual teachers will find that such exaggeration is far from the truth.

The pension fund and its origin were dealt with very thoroughly by the Minister in his statement last week. He did, however, make a few statements that caused a gasp of surprise and wonderment on the part of some of his listeners. The Minister stated what teachers' salaries were from 1914 to 1920, and then went on to say that the scales of salary under the 1920 agreement were £170 to £460 in the case of men. That was quite correct but with with great qualifications.

The Minister did not tell us how many men engaged in the work of teaching had a salary of £460, or ever hoped to reach anything like that figure. Only those specially favoured, who are in charge of very large schools, and with an efficient staff, need ever hope to reach that figure. Possibly, at the moment, the numbers would not be perhaps 10 to 20 per cent. of the teachers that could ever reach anything near that amount. If we include the lower-paid grades, junior assistant mistresses, the average salary of teachers before the present reduction would be £250. Surely no one will say that £250 is too high for those conducting teaching services. On the £250 there are many calls in connection with the discharge of a teacher's duties. In every other public service the employee enters an office which is suitably prepared, where everything necessary is provided to carry on the work. We all know how different it is in the case of a teacher. He has to go to the school before the morning work commences to see that the fires are kindled, that the rooms are dusted and to superintend. Sometimes he has to do the work of a charwoman, morning and evening in connection with the school. In many cases, he has to supply materials and maps for the walls, slates, ink, inkwells. Practically nine-tenths of the materials required in the ordinary country school are provided out of the pocket of the teacher. That is undeniable. Not a penny worth of chalk is provided. Stationery, ink, pens, etc. are provided for ordinary civil servants but over 50 per cent. of the cost is provided by the national teacher. When the £250 average salary that the teacher receives is reduced by 20 per cent., as it will be if this cut is permanently made in the salary, his outlook for the future is not a promising one, and the outlook for the nation that has to provide teachers for the education of its children is indeed very blue. Such a prospect is not conducive towards bringing in to the profession of teaching anything like the best brains in the country. I maintain that in the teaching profession conditions should be made so attractive that the very best brains should be prepared to place their services at such very important work. So much in regard to salaries.

There is not much to be said for the rest of the Bill. Some portions of it we welcome very much, such as the admission of junior assistant mistresses and lay teachers in other schools. We are very pleased that that has come about. We have long agitated for it. It is but simple justice. There is nothing to thank any Government for. It was done by the Northern Government at the change-over and these people were placed at once on the pensions scale, without any increased contribution, such as is being asked in this case, because they were given full credit for services rendered. The Government here should have made provision for that immediately on the take-over. Instead of that, they were not being taken on this fund for 10 years, with the result that many of these unfortunate people after 40 years' service are, to my own knowledge, now living on the charity of friends or in homes where they can afford to pay a modicum towards their support. We have nothing to be thankful to the predecessors of this Government for. They set a very bad headline by attacking the educational services. It is true that they did make an offer of a pensions scheme, but possibly they were excluding the provisions which the present Government has made for teachers in convent schools. The offer they made then would be possibly equal to or as good as the offer made now. The offer made later was unacceptable, the reason for non-acceptance being the promise of the new Government to go much better in the matter of pensions. These promises were made by prominent members in the new Government. The settlement offered by their predecessors was largly rejected on the strength of a promise made by the head of the present Government, and by the present Minister for Finance, who was the keenest and the sharpest critic of the offer made by his predecessors. The Minister made an offer later on. Great numbers of teachers supported the present Government and helped to get them into office, little thinking that when they got there, while their predecessors chastised the teachers with whips, this Government would chastise them with scorpions.

Mr. Milroy

You are wiser now.

Mr. Cummins

That is what happened. Notwithstanding all that we have still faith that the methods adopted by our Government are sound methods, and notwithstanding that the scorpion lashes may make themselves felt upon us, I do not think we will squeal over it. The offer of the Government was rejected. What is called the June offer, for which I pleaded when the question of salary cuts was up before was also rejected. The teachers could not believe that from a Government professing to be out for the reconstruction of their country, the first service to be attacked would be education, the very service upon which it was hoped to lay the permanent foundation for the future progress of industry. That is what happened when the salaries of the teachers were attacked. What has been done? They have broken their promise, and they are going to make a handsome profit by doing so, as I will show, at the teachers' expense. In all the negotiations on financial matters and adjustments in regard to this country that took place since the Pension Fund was established in 1879 by the British Chancellor of the Exchequer, Sir Michael Hicks-Beach, the fact was borne in mind that the Government was responsible for three-fourths of the Fund, and that the teachers' share was one-fourth. That was reiterated by Mr. McElligott, Secretary to the Minister for Finance, when the negotiations were carried on with the present and with the previous Government. Responsibility for the Fund should be borne in mind in any settlement. That statement was made and embodies the justification of the teachers' claim. In a nutshell it is a full justification of the teachers' claim that when they have contributed one-fourth of the pension money, it is the duty of the Government to find the other three-fourths. It has been said that there is no legal obligation placed upon the Government. I do not know that in a question of this importance legality should be harped upon. The moral obligation is still there. If the Government tries to shield itself on the technical legalities of the case, and to say that they are not legally responsible, then I say their moral conscience must be a very easy one. I challenge them to say whether morally they do not feel the pangs of remorse—I was about to use a stronger word—in denying responsibility.

They have neglected or have failed to maintain the solvency of the Fund. That was not the fault of the national teachers. At the take-over it was pointed out that the Fund was then a bankrupt Fund and that there was a legitimate claim to £7,000,000 from Great Britain. A responsible firm of actuaries reported to the teachers' organisation that the amount due by Great Britain was £7,000,000. That was pointed out more than once to the Free State Government but they neglected to take any steps to secure it in the financial settlement that was made. We say that they made a bad blunder, and we say that in any financial settlement made in future that £7,000,000 should be kept in mind. Statements made by Ministers are available to vindicate the claim of Ireland to that £7,000,000 for the Teachers' Pension Fund alone. There are items in the figures which we also challenge. Since 1923, the teachers' side has increased by £855,000. I should say that the present position is this, that the stock held on the teachers' side, which we are told cannot possibly be realised, and we have no information as to how the stock is held—although I daresay the information is available—amounts to £1,081,550 in stock, and in cash to £306,000. On the Government or endowment side, is stock value for £277,504 and cash £886,000. That shows a surplus of over £600,000 on the side of the teachers, which they undertake to maintain, and a deficit on the Government side of £224,000. In regard to the amount of the contribution we say that but for Government neglect that position of affairs should not exist. The amount of contributions now paid annually by teachers is £102,000. If the new class, lay assistants and junior assistant mistresses, are taken on the fund on the present contribution basis of 4 per cent. it would represent an increase of £15,000, making a total of £117,000.

We say that instead of increasing the premiums in the way of imposing cuts in our salaries, we could claim a decrease of the premiums by reason of the surplus that exists on the side of our contributions. The Government are now asking for an annual contribution from the teachers of roughly £260,000. For what? To settle the question of the pension fund, which, through the neglect of successive Governments, has been allowed to fall into this bankrupt state. They come along and say: "We will settle this if you hand over to us annually a contribution of £260,000." They propose to make a 9 per cent cut on the salaries of teachers and, to put a gloss over the gingerbread, they say it is a non-contributory scheme, so that the ordinary person in the street might say: "Is it not lucky for the master, who has a grand pension on a non-contributory basis?" They never reveal the fact that the contribution is taken out of the other pocket of the teacher in the form of a cut, which is the worst method because that cut will likely continue. That permanent cut of 9 per cent. with the previous cut of 10 per cent, imposed by their noble predecessors in office, makes a total of 19 per cent. When everything is counted, 25 per cent. of the teacher's salary is filched from him in the interest of economy, in one case, and to settle the pension fund, in the other case. It is all very well to say that the salaries of other public servants are fixed at reduced rate and that their pension rights are, therefore, taken into account. We say our case is worse than theirs, that it is worse to impose a cut on the salaries of the teachers than to put it on as a premium which they have to pay to secure their pensions. That is worse and more insidious because it will have a marked effect on the character of those who will enter the colleges in the future to become national teachers. The Government may say: "We can get plenty of people from the Gaeltacht, where they have all the brains." I do not think that they have all the brains in the Gaeltacht. And how is the Government to be sure that they can get teachers from the Gaeltacht? Are they quite convinced that the present method of training teachers is the best one? Is that the experience of inspectors who are sending out six months' notices like the leaves in Vallambrosa? These notices provide that if the teachers do not do better within six months, they will be labelled "non-efficient" and their salaries possibly withdrawn. Are they satisfied that at present they are getting the best material for the teaching profession? Experienced hands will tell you that they are not. At the end of the training course these young people will find that they have not a vocation for teaching, and they will divert their energy into some other channel. The teaching vocation is one of the most difficult to cultivate. Every professor of a training college will tell you that, even under the monitorial system, where the student had five years of teaching at school and had two years training in college, there were many indifferent teachers. How much more difficult must it be for the ordinary boy who has never spent an hour teaching in a national school to understand the psychology of the raw material that comes into his hands in the national school? There is doubt as to whether the Government is obtaining teachers through the right channels. These continued attacks and this continuous harassing of teachers will so turn young minds away from this occupation that the Government will find it difficult to secure the right material, with consequent reaction upon the whole national structure.

The Government is settling the pension fund by taking this sum of £260,000. They are taking over the assets of the pension fund, including £1,400,000, roughly, of the teachers' money. Our pension fund has gone. We are not sorry for that but we want a quid pro quo. Opinion may be divided on this matter, but we should, at least, see that we get something tangible, something that will ease the minds of those who propose taking up the work of teaching as regards their future. There are new classes taken in, of course. We welcome that. We have long fought for that but we need not be very thankful for it because it was done by the Northern Government. There has been a boundary, and a very distinct boundary, between the way the Northern Government have treated their teachers and the way the Southern Government have treated theirs. Those are the broad facts. It cannot be contended, as the Minister contends, that this offer is better than any previous offer. Under the previous offers, the pensionable salary of a man retiring next month, after forty years' service, would be maintained. Now, his pensionable salary is reduced to the extent roughly of 20 per cent., 10 per cent. and 9 per cent., so that that man, going out after 40 years' service on a pension of £150 or £180, which might be the maximum, loses about £30 per year. That is what all the promises have brought that unfortunate man.

The figures are involved and the quotation of all of them would be tiresome. I have, however, stated the position broadly. I suggest to the Minister that he should hesitate, even at the eleventh hour, to put this scheme into force. If some of the people connected with the Finance Office had not exhibited such an amount of pique and irritation the present settlement would not be imposed. It is an imposed settlement and, if it comes into effect, it will cause great dissatisfaction to those affected and it will be very injurious in its educational effects on the country.

Mr. O'Farrell

At the close of his statement on the last day we met, the Minister for Education used these words: "Taking the new scheme, as a whole, I think I can claim that the benefits provided are definitely more advantageous to the teachers than those which they at present enjoy." Knowing the facts, I, to use a favourite expression of the Minister for Industry and Commerce, "listened with considerable astonishment" to that statement. The Minister must think that the teachers are even simpler people than they are if he thinks that they are going to swallow a statement of that kind. I want to put the facts before the House very briefly and in language that the non-teacher members of the House will understand. Shorn of all verbiage, the position now is that the teachers are to pay 125 per cent. more by way of contribution towards their pensions than they did previously and they are to receive, in pension, 9 per cent. less. I hope the House will remember that. Their contributions are increased by 125 per cent.—from 4 per cent to 9 per cent.—and their pensions in the future are to be 9 per cent. less than they are. That is in the case of all teachers going out three years from now. Take the case of a teacher with £300 a year. Up to the present, he paid £12 per annum towards his pension and, if he had 40 years' service undetermined, he got £150, or half his salary. Henceforward, he will pay £27, instead of £12, per annum, as contribution towards pension and, after 40 years, he will get a pension of £136 10s. 0d. instead of £150—in other words, £13 10s. 0d. less than he got when he was paying only £12 per annum towards his pension. If that is not a distinct and definite disimprovement or worsening of his position, I should like to know what is. Under the existing arrangement, a teacher who had £100 a year paid £4 out of that towards pension. He retained £96 but his pension was calculated on the full £100. Now, he will draw only £91 instead of £96 and his pension will be based on the £91 instead of on the £100. I hope that is clear. If it is not correct, I hope the Minister will correct me because I am basing these statements on information supplied by the organisation which acts for the teachers. I believe it is correct. In other words, the new proposals are the equivalent of inflicting a 5 per cent. additional cut on salaries and a 9 per cent. cut on pensions. That is another way of putting it. Across the Border, the teacher with £300 a year will continue to pay only £12 per annum towards his pension and he will still receive £150 pension after 40 years. In other words, he will pay £15 less per annum towards his pension and he will receive £13 10s. 0d. more when he retires than the teacher here. This is the scheme the Minister refers to as "non-contributory." If the teachers get a few more improvements of that kind, they will be rich beyond the dreams of avarice, as the last speaker mentioned. I have been associated with a great many superannuation schemes. Some of them were much larger than that of the national teachers and some were very much smaller, but I never yet heard of a scheme which demanded anything like 9 per cent. from the employees. I have before me an Act governing the London, Midland and Scottish Railway Scheme, which caters for all the salaried grades of that company. This is one of the newest of the Pension Acts, having been passed in 1924. The rates of contribution range from 2½ per cent. to 3¾ per cent., according to the age limit at which employees enter. The highest contribution from the employees is 3¾ per cent., the company contributing a like amount. The pensions provided are on the same basis as those of the teachers —one-eightieth, multiplied by the number of years service, with a maximum of half salary. In addition to what the teachers get, a lump sum is provided, with a maximum of one and a half year's salary on retiral.

The first actuarial valuation has taken place and no deficiency has been discovered. If there is a deficiency the company have agreed to make it good, but they are not a company that are inclined to allow such a thing with their large commitments and, so far, at any rate, no deficiency has been discovered. A scheme brought into operation later, an almost equally big scheme, gives exactly the same benefits but the rate of contribution is one half per cent. higher. Thus you have 3¾ per cent. and 4¼ per cent. as the highest from one side.

If you double that, you still do not get 9 per cent., which the Government seeks to get from the teachers. The general ownership of this fund, and the contributory character of this fund are recognised by the fact that they are managed by a joint committee composed of an equal number of representatives of the employers and the staff. The teachers have to subscribe 9 per cent. of their salary and they are not to have one iota to say in regard to the administration of the fund, or the manner in which payments are to be made. Then there is the consideration that no option was allowed to the teachers operating under the old arrangement. In connection with any new fund I ever had anything to do with, the members of the old fund were given the option of remaining in the old fund and retaining the old conditions. A contract has been made with the teachers in respect to the old pensions fund and they have not been given an option to remain in under that contract, and a new contract is superimposed upon them. Then the amount necessary for pensions, in the future, has to be obtained through a medium of a Vote of Supply. It is open, therefore, to any member of the Dáil to move a reduction of the Vote, and if this motion is carried that amount perhaps would be reduced, as in the case of any other Vote of Supply. Surely where there is a contract for the fulfilment of which one side subscribes 9 per cent. of their income, the fulfilment of that contract should not be left to the mercy of a snatched vote in any Parliament. That is the position in respect of this particular pension fund.

The Minister takes a lot of credit to himself for having brought in lay assistants in convents and monastery schools, and junior assistant mistresses. He is claiming credit for doing what has been done in what is popularly supposed to be a very reactionary Government on the other side of the Border shortly after they came into office. What is more, the junior assistant mistresses and all this new class there are only now paying 4 per cent., while in the conditions of the fund here they have to pay 6 per cent. The remaining body of teachers are not asked to subscribe any additional contribution: they still pay 4 per cent., as against 9 per cent. here, and they get higher pensions as a result. When we talk of generosity towards the workers and special benefits we have here very distinct disadvantage to the workers on this side of the Border as compared with those north of it.

The delay in bringing the lay assistants and junior assistant mistresses in has, unfortunately, imposed a very great grievance and hardship on a certain class. I understand a few retired during the last couple of years and even within the present year, I think, a certain number of those grades with 40 or more years' service retired and they are to be deprived of a pension. Had they remained in the service until now they would be admitted to the fund and would get credit for pension purposes for two-thirds of their school service. The delay in bringing this into operation was not their fault. It is not altogether the fault of the present Government either; their predecessors have also to be blamed in that respect. I appeal to the Minister to see if something could not be done towards taking into consideration the case of those people retired within the last couple of years. Their rates of pay rendered them the least able to make provision for their old age. The number of persons affected is small and the amount necessary to give them some relief, such as they would get if they had remained in the service until this scheme was brought into operation, would be a comparatively small sum. When so much additional money has been taken from those who remained in the service, I think the Minister could, without showing any great generosity at all, do something for those people who have been so very badly treated in the past.

Regarding the general finances of the scheme, there seems to be any amount of confusion. According to the statement made by the National Teachers' Organisation, which has not been contradicted, and which certainly I am not going to doubt until I see it authoritatively contradicted—the teachers will, in the future, be subscribing upwards of 75 per cent. of the total pensions paid out. The Government claim that the Pensions Vote next year will be £370,000. The teachers say that beyond all doubt they have subscribed £260,000 as their contribution, and the £60,000 interest on their accumulated funds amounts to no less than £320,000 out of that amount. In other words, the Government will only have to find £50,000 instead of £75,000 they gave to the fund. I say that would be a saying if this statement is correct, and it has not been contradicted, of £25,000 by the Government instead of making an additional payment as the Minister claims. If these figures are not correct let the Minister correct them and say what the figures are.

Minister for Education (Mr. Derrig)

Would the Senator tell the Seanad whether these figures, which I think are inaccurate, are supposed to apply to 1934 or 1932, because even in these two years a considerable change was made owing to the fact that the fund has not been solvent and the deficiency has increased to a much greater extent now than in 1932.

Mr. O'Farrell

These figures are for the next year, according to the statement. I point out to the Minister that the teachers' side of the fund has not been depreciating, but, on the contrary, has been increasing. When the original increase of salaries was decided upon surely the Government of the day must have known that would involve increased pensions in the course of time, and that it was an obvious corollary when there was an increase of salaries that there would be an increase of pensions, and that provision should have been made as a result. The late Government failed, and the present Government failed to do that. In fact, they absolutely failed to fulfil their portion of the contract as far as pensions are concerned. They now come along to the teachers and want to make them believe that deficiencies which occurred on their side must be shared by those on the teachers' side where there never used to be a deficiency. At any rate, the teachers will be subscribing £260,000 in the coming year, and there is £60,000 interest on their investments which will bring the amount up to £320,000, so that the Minister's own figures show that he will be only finding £50,000 instead of £75,000 for the fund. Any sacrifice there, is at the expense of the teachers. But that may be just what the teachers deserved. It may, in fact, be too generous for them, but what I do not want to let pass is the attempt made to put it across the House that the Government are conferring a benefit upon teachers. There is no benefit. Something of what they possessed is being taken from them in a permanent way. The scheme that we have before us does not deal with the rate of contribution, but it does deal with the general rules of the fund, the method by which pensions are being paid, and generally with the old Government administration. There may not be a lot of change in this respect, but there have been changes, and changes of an important character. Many of these will be of great importance in the future, and for that reason I think it is definitely unfortunate that no serious discussion regarding the framework of the scheme seems to have taken place between the Minister and the teachers who are involved and whose money is at stake. In any scheme of this kind that I have had any dealings with, there have been long discussions with regard to details and before a Bill was submitted to Parliament agreements were reached in all respects. Here the teachers, who subscribe the lion's share of the money, so far as one can see, have not had one word to say as to the details of the law under which this money is to be administered. That may involve hardship and injustice in the future. I do not know who is responsible, but in my opinion the Minister responsible has done nothing to be helpful in this respect. There was a take-it-or-leave-it attitude, and a show of general arrogance not calculated to create a negotiable atmosphere. I do not know whether it is too late for any discussion to take place between those responsible with regard to the details of the scheme, but the House at present is not in a position to assess the justice or otherwise of the details of the scheme and cannot express any opinion.

I presume if we held up the scheme we would probably be doing more harm than good, but I seriously suggest to the Minister that he should come down from the pedestal on which he has placed himself and try to act in the same way that a modern employer would who should trust in his employees. If he is not satisfied with their attitude he can discuss the position with them and also modify to some extent the attitude he has taken up. He has set an extremely bad example to employers all over the country by flinging this scheme at the heads of the teachers and saying, in so many words, "take it or leave it." I hope the Minister will adopt a different attitude and, if it is not too late, have some discussion with the teachers, and see if they have any alternative proposals or suggestions to make regarding the solution of the scheme itself.

Sir John Keane

Before the Minister replies I would like to ask a question in regard to the remarks that have fallen from Senator O'Farrell. I am, I must confess, very much impressed by the clear statement made by the Senator. I would like to ask the Minister what is the position in Great Britain and Northern Ireland. I understand this scheme originated there. We took over certain pension arrangements which broke down here. Did they break down in Great Britain and Northern Ireland, and if so what remedy was applied and was it in any way on the same lines as the proposals now before this House? I do feel uneasy about this. I feel that there has been, unless the Minister is able to counter the Senator's statement, a breach of contract. That alone makes one uneasy, particularly when so much money is being spent and lavished by the Government in other directions. If a breach of contract is to be inferred, than I regard that as a very serious thing indeed.

Minister for Education (Mr. Derrig)

Senator Sir John Keane has really put his finger on a very adequate test that can be applied to this whole matter of the present settlement, as I described it, and of the crux that has arisen in connection with the Irish, Free State teachers' pension fund. With regard to breach of contract, whatever the conditions in Northern Ireland and Great Britain may be as compared with our conditions here, I do not think that if a comparison be made we are going to lose in the comparison. Generally speaking, I think if anybody takes the trouble to inquire into the present circumstances of the teachers in either Northern Ireland or Great Britain they will find that, in comparison with the revised scales of salaries which we are introducing, implementing this nine per cent. cut, that our conditions here will be found to be quite favourable to the teachers as compared with the conditions that obtain elsewhere. I will deal with that point at more length perhaps later.

Senator Cummins dealt with other matters that really do not belong strictly to this question of the settlement of the pension fund. He referred, for example, to the question of the training of teachers. I would like to say with regard to that matter, as there seems to be a good deal of misconception regarding it in the country, and as we do not, unfortunately, have as many opportunities for discussing educational topics in the Seanad as we would like, to explain that since the programme for the gradual introduction of Irish as the medium of instruction in the national schools has been introduced, there has been a steady policy of endeavouring to get a larger number of native Irish speaking teachers into the profession. But even if we were to declare to-morrow that in future we would have no teachers, that we would not train any person for the teaching profession, except persons from the Fíor-Ghaeltacht, who are native speakers, it would take perhaps, 25 years or 30 years before we would have changed over completely, and have the position that all our teachers were native Irish speakers. The position at present is that, roughly, one half of the candidates for teaching come, through an entrance examination, into the preparatory colleges where they get a full secondary education course. Then they go on to the training colleges, with the result that, having had the advantage of a first class secondary education, they are, I think, of a superior standard to the type of candidate that we had heretofore. That is only with regard to half the candidates. Roughly, the other half of the teacher candidates are selected through the pupil-teacher system. That half is open to the whole country. In regard to the half who go through the preparatory colleges it is not correct to say that the whole of these are from the Fíor-Ghaeltacht. The actual position at present is that 40 per cent. of the places, that is less than one-fourth, I think of the total number of places, are now allocated to students from the Gaeltacht, which includes, not the Fíor-Ghaeltacht only, but every district which has been scheduled as either partly or wholly Irish speaking. That is a very much larger area than the Fíor-Ghaeltacht. A further 40 per cent. is available to students, no matter where they come from, who have secured over 85 per cent. in the speaking of Irish, and the remaining 20 per cent. is given to candidates next in order of merit. As regards the preparatory colleges, it will be observed that, although we are giving a definite preference to native Irish speaking students, I do not think we have gone so far in that direction as to give them an advantage beyond their natural merit. In connection with any gradual increase in the number of such students, we have had in mind what we have got from those areas up to the present. What we have got has been very satisfactory. There has been a steady increase in the number and quality of the students from those areas, and while they might not, in open competition with the whole country, do quite as well as they do under the percentages that we have allocated, we have kept in mind the question of general merit, and have not gone to unreasonable lengths in giving a preference to those candidates.

The Senator referred to the consternation and disappointment with which the announcement of this pension scheme has been received by the teachers. Having avoided all reference to the conditions in Great Britain and Northern Ireland, which might afford a useful basis for comparison in connection with this scheme, the Senator went across to America to find an argument. I would remind the Senator, without finding any fault whatever with the policy for which President Roosevelt stands in America, that he is well aware, as I think all Senators are, that for a couple of years the teachers in Chicago had to stand in bread lines. They got no salary at all, while the teachers in these islands have always had, I think, very ample security in regard to their salaries, and in future they are going to have equal security here in respect to their pensions.

Now, with regard to the argument that in some way or another there is an obligation on the State to be responsible to the extent of three-fourths for the solvency of this fund, and that the teachers are only responsible to the extent of one-fourth, I have gone to some trouble to find out what exactly is the origin of this suggestion. Senators will remember the old saying in Irish politics: "What did Gladstone say in 1881?" For a moment we will consider what Sir Michael Hicks-Beach said in 1898. Speaking in the House of Commons on the 15th July, 1898, I find that he said:

"In 1877 I was Chief Secretary for Ireland, and I had a great deal to do with the drafting of the Teachers' Pensions Act, which afterwards became law. I know what was intended, and I know what that Act provided, and I know that it imposed no permanent liability on the Treasury whatsoever in connection with this fund."

Further on, he referred to the suggestion that a liability had been imposed on the Treasury as an extraordinary suggestion based upon the misconception "that the Treasury is to make good for all time any deficiency in the pension fund. There is no basis whatever for such a contention." Then he went on to say:

"It was clearly intended that this pension fund should be kept solvent by contributions from the teachers themselves, for the payment from the Irish Church surplus was a fixed payment, while the Act itself provided in a schedule the payments which the teacher should make, and laid down in so many words that the rules by which these were fixed might be varied from time to time by the Lord Lieutenant,"

and so on, so that the Treasury held that, as well as having complete control of the fund, it had the power at any time to amend the rules with regard to it.

I pointed out in my opening statement that from time to time, when actuarial valuations were made and when it was found that there were deficiencies, the Treasury on one occasion at any rate, as well as making an arrangement for an annual grant and making a subvention, at the time actually increased the teachers' contributions while reducing their benefits. So that with regard to the history of the fund I do not think there is any justification whatever for saying that we have inherited any obligation from the British Government in this matter. However, I admit, that so far as the book-keeping side of the teachers' fund is concerned, there had been an endowment account and a teachers' contribution account. It may be argued, and has been argued by the teachers for very many years, that as far as the teachers' contribution side of the account is concerned, it was in a solvent state, and that it was only the endowment account which showed the deficiency. I would like to say that even if that were the case in respect to these two accounts it does not mean anything. There was only the one fund. When the Actuary reported on the position in 1928 he made no reference, so far as I know, to two separate accounts. He simply referred to the fund as a whole and pointed out that, in order to make it solvent at that stage, if the teachers were to be expected to make up the whole deficiency through increased contributions, their increased contributions, in addition to the 4 per cent. which they were already paying, would have to be 8½ per cent. Now I cannot agree, with regard to the endowment account and the teachers' contribution account, that that was more than a book-keeping arrangement. I have nothing to show, and I think nothing has been shown so far, to indicate that the British Government did at any time accept as an obligation upon them that they should be responsible for three-fourths and the teachers for only one-fourth. Even if that were the position at any particular time, say in 1898—I have shown that it was not so recognised or so accepted—the trend of events in Great Britain and Northern Ireland has shown that the British Treasury, like ourselves, have had to change their minds from time to time: they have had at different times, as we have, to take into account the whole circumstances surrounding the case at the particular time that a decision had to be made.

I find that in Northern Ireland, for example, with respect to junior assistant mistresses and lay assistant teachers who were brought in some years ago that they had to pay, if they were to get two-thirds of their back service reckoned for pension purposes, a contribution of 5 per cent. If, however, they only paid 4 per cent. they only got recognition for half of their back service. Here we are giving these teachers two-thirds of their back service. We are giving it admittedly only as an act of justice. I do not wish to take any special credit for it. I simply wish to say that it is a liability so far as the State is concerned, a liability which will be of importance in the future and which we have recognised.

With regard to Senator O'Farrell's point that actuarially it should be possible to secure the solvency of the pension fund at a lower rate of contribution than 9 per cent., nothing has been said by anybody, I think, on the Government side to indicate that the whole of this 9 per cent. should be regarded as a pension contribution.

Since the late Government began to discuss the question with the teachers' organisation, it is clear, whatever attitude we may take up now about the matter, that we have to admit that the question of salaries was involved as well as the question of pensions. We are not dealing at the moment with the question of salaries only. Neither are we dealing with the question of pensions only. We introduced a new and a revised scale of salaries which, in all the circumstances, we think is fair to the teachers, having regard to the fact that we are taking over entire responsibility for pensions; that in future they will be paid from voted moneys and that there is no contribution from the teachers as such. As far as the taxpayers are concerned they will have to face a very high liability which, in the course of time, will run up to something in the nature of £600,000 annually.

I do not think I need go into the point Senator O'Farrell raised regarding teachers' pensions being placed on the annual Estimate for Primary Education. With regard to the pensions of post office officials, they are placed on the annual Post Office Vote. There is also a separate Vote for superannuation charges. Except for those in a special position, such as the judges, we have not reached the stage at which we are prepared to put State servants' pensions on the Central Fund.

Mr. O'Farrell

They do not subscribe. That is the difference.

Mr. Derrig

I suggest that they do subscribe. When civil servants' salaries are being fixed, and when reductions are made, as they are made at present, not alone in regard to the cost-of-living basis, but in regard to whatever opportunities offer for fixing new scales at lower rates, opportunities that are always taken advantage of—I say that the Department of Finance have always in mind the consideration that civil servants are going to get pensions. When they are paid a somewhat lower rate of salary than they might get in the commercial world outside, there is in mind the security that attaches to the position, and the pension that their service carries. If I may say so, I think Senator O'Farrell somewhat unfairly suggested that we have not given the teachers an opportunity of discussing this matter, and that we have placed ourselves upon a pedestal. As Senators know and as everybody in the other House knows, the teachers are a very strong body, very well organised, and they have plenty of opportunities of saying what they think in either House. They are well and worthily represented. No one in either House can suggest that we have been backward in endeavouring to effect a settlement with them. In 1931 the late Government made an offer of a 10 per cent. cut in salaries. I should say in justice to the teachers that it was recognised at the time, and was stated by the Government at the time, that there was to be general economy, and that to some extent the 10 per cent. would cover that economy, while at the same time the Government were going to take over responsibility for pensions in future. The teachers turned down that offer. In 1932 the Minister for Finance and I met the teachers and we made an offer which was described at the time as being a better offer than the one made by our predecessors. However, that was not accepted. The teachers' executive did not see its way to recommend it to the general body. The alternative is to impose a settlement of this kind.

I should like to say, in justice to the Minister for Finance and to myself, that we showed the details of the new pension scheme to the representatives of the teachers, and again pointed out that if there was no very substantial financial question involved we were always prepared to amend it, and to meet cases of special hardship among the teachers. But we made it quite clear that we were going to carry a settlement based on a 9 per cent. cut. A cut of 9 per cent. is better than a 10 per cent. cut. That was not questioned in 1931. Conditions have changed since then.

When Senator O'Farrell and other speakers point out that since we are going to impose a cut of 9 per cent., or roughly £260,000, that, thereby, the teachers, according to them, are going to pay the lion's share of the future charge, I should like to say, first, that as to the contention that the British Treasury had for some time accepted liability for three-quarters and the teachers for one quarter, under the 1914 scheme, which was devised to secure the solvency of the fund, had the conditions then obtaining continued, the cost of superannuation was met to the extent of half by the Treasury and half by the teachers. I pointed out that in 1920 there was a new agreement in regard to salaries. Salaries were greatly increased, with the result that, no provision having been made for additional contributions in respect of the increased liability, or for back service between 1914 and 1920, a deficiency began to make itself clear, and before very many years passed it was obvious to everyone the fund would be insolvent. If it is argued that, in fact, since we are making a cut of £260,000, and that the liability in the coming year will be £371,000, as a picture of the whole case, you have, I suggest, in fairness, to take the whole period until the pension liability reaches its maximum, when it should be in the region of £600,000 per annum. You have to take into consideration the enormous deficiency of something like £5,000,000, and the fact that not alone from 1928, when the deficiency was investigated by an actuary, to the present day, but that from 1920 the teachers' contribution of 4 per cent. has been hopelessly inadequate. The fact that an actuary was able to show in 1928 that an additional contribution of 8½ per cent., plus 4 per cent., would be necessary if the teachers were to bear the whole liability in respect of making the deficiency good shows what he considered the liability to be. I do not claim that the settlement is a perfect one. The teachers have their own views about it. Viewing it from the taxpayers' point of view, and comparing our conditions with those in neighbouring countries, I think the settlement should be regarded as very satisfactory. If the Teachers' Executive cannot recommend it to the general body of their organisation, and if the organisation cannot see its way to accept it as a good settlement, at least they should not set up false issues. They should not start hares which are founded on the assumption that because the British Treasury had at one particular period treated the teachers as a fairy godmother, they would have continued to do so during the last ten years. I think the fairy godmother would have changed her mind. That important point is forgotten by the teachers when making up their case. A perfect case could be made by the teachers from their point of view, but when the figures and the circumstances are gone into, it will be recognised by any fair-minded person that we have done our best to try to make a reasonable agreement. Having regard to all the circumstances of the case the only regret we have is that the teachers should not have been able to accept it as such.

Mr. Johnson

I would like if the Minister would answer two questions. As between 1920, when the change of salary scale was made, and 1923, can the Minister tell us what provision was made towards meeting the extra liability that followed the increase? Secondly, the Minister has spoken of 9 per cent. as being not wholly required to make provision for superannuation. Will he say what amount short of the 9 per cent. would be necessary to make provision solely for superannuation, leaving out the question of a reduction of pay?

Mr. Derrig

Will the Senator repeat the last part of his question?

Mr. Johnson

The Minister told us that he did not pretend that the 9 per cent. cut was solely to keep the fund solvent, or to be contributed solely for superannuation. Will he tell the House what amount would be required if he was dealing only with superannuation and had no regard to the question of economy or cuts in salaries?

Mr. Derrig

With regard to the first question, as far as I know no provision was made between 1920 and 1923 to meet the increased liability which became chargeable on the fund by reason of the increased pension, either by way of an increased teachers' contribution or by way of an additional grant from the State, and no effort was then made to meet the situation. When Senators ask me what proportion of the 9 per cent. cut we now believe will be necessary to make the fund solvent, I am afraid I cannot give a definite figure. The figure of a 5 per cent. cut plus a 4 per cent. contribution has been mentioned from time to time. I am not going to take responsibility for saying that the 9 per cent. cut is, let us say, a 5 per cent. economy cut, and a 4 per cent. pension contribution. All I can say is that the actuarial report on the position of the fund was that in addition to the 4 per cent. contribution, which the teachers were then making, an additional 8½ per cent. would be necessary to make the fund solvent. That is 12½ per cent. Having regard to the time that has elapsed, and that a larger percentage would be necessary —possibly 14 per cent.—to make the fund solvent now, I think it might be said that roughly we are contributing half and the teachers half in present circumstances. I am told when liability for pensions reaches the peak point the teachers' contribution will then be less than 40 per cent. If I am asked what percentage contribution will be necessary to make the fund solvent at present I cannot answer. On the question of salary the Government, rightly or wrongly, considered this question as bound up with the settlement of the pension fund since 1931. The original basis was a 10 per cent. cut. That has been, to some extent, taken as the basis since. We offered 9 per cent. and we are now proceeding on the basis of 9 per cent. I should prefer if my colleague, the Minister for Finance, would deal with that point. I regret that I cannot give the Seanad full information as to what extent a cut of 9 per cent. may be regarded as an economy cut as well as a pension contribution.

Mr. Cummins

I would like, with your permission, Sir, to ask the Minister one or two questions.

Cathaoirleach

I am afraid I cannot permit you to make a second speech, but if the Minister desires to answer any questions you can proceed.

Mr. Cummins

In drawing up the statutory rules governing pensions, Sir Michael Hicks-Beach made a statement in the House of Commons which I would like to quote. This is a quotation from a speech in the British Parliament on the Pension Bill:—

"From the very commencement of the pension scheme and, indeed, in the communications which took place between myself and the teachers before the Act was drafted, it was understood that the basis should be one-fourth by teachers and three-fourths by the Government."

Statutory rules were drawn up in 1898, in which, I understand, these principles were embodied. These statutory rules should be available still. Those rules are, I understand, being altered in the present scheme. I should not wish members to go away with the impression that I was deliberately misleading them. In 1929, in a communication to the teachers' organisation, Mr. McElligott, Secretary of the Department of Finance, stated:—

"In considering the question now raised as to how the provisions of the Act of 1897 should be implemented, I think you will agree that the Minister for Finance must have regard to the acts and intentions during the period from that to 1921."

That seems to me to confirm the fact that the basis was one-fourth on the part of the teachers and three-fourths on the part of the Government.

Mr. Derrig

Sir Michael Hicks-Beach, like Gladstone, may have had certain intentions but he may not have had the opportunity, or he may not have wished, to carry those intentions into effect. In fact, under that scheme and under the 1914 scheme, the contributions to the cost of the fund were to be, roughly, half from the Government and half from the teachers.

Question put and declared carried.