CHAPTER IX

MUNICIPAL PENSION SYSTEMS AND PENSIONS FOR TEACHERS

It is in the field of social care for firemen, policemen, and teachers of public schools that Americans are preparing their own minds most directly for industrial insurance, and it is there they are working out methods and constructing administrative machinery which will be models for the system of compulsory insurance of workingmen which seems almost at the door. The firemen and policemen are exposed to perils which make their appeal to the popular imagination, although loss of limb and life may be actually no greater than in several important industries. The servants of the public are constantly before the eyes of citizens, their exploits are heralded by the newspapers, and their deaths are made known to the world. Something of the glory of soldiers surrounds their activities in defense of property and life. Formerly the injured firemen and policemen, or the families of those killed in the course of duty, were aided chiefly by charity balls for which tickets were peddled by policemen from door to door, and this up to very recent times. This method was annoying to the public and humiliating to municipal employees, and it seriously interfered at times with their regular duties.

Then came the voluntary associations of firemen and of policemen, with their monthly dues and benefits at death. But this method was also inadequate, uncertain, and unreliable. Within recent years a regular system of municipal insurance has been legally established in several cities of the United States, and methods are gradually improved and developed. We find record of a law of New York enacted

in 1871 providing for pensions of firemen, and in 1878 the policemen were similarly protected. The systems of various cities are by no means equally complete. In some places only retired and disabled officers are pensioned, while elsewhere widows, orphans, and dependent parents are aided.

The motives which have been effective in establishing these systems are worthy of note, for their significance extends far beyond their present sphere of action. First of all, it is felt to be shameful to permit the family of a man who died in the effort to protect life and goods to live in want and misery; the feeling which established veterans' pension funds is alive in these organizations. Furthermore the failure of the unaided efforts of the officers in their mutual benefit associations showed the necessity for a larger measure of municipal direction and public assistance. Then it became clear that the pension funds enable faithful men to give their undivided attention to the service of the public without distraction of schemes to make money for old-age support in addition to the work of each day. Pensions for disability and old age tend to make the officer more faithful, careful, sober, steady, and to retain him in the service of the city. The hope of a pension at the end of a long period prevents frequent changes in the force, since men are not apt to desert an employment after a time and thereby lose their claim on support in the time of old age.

A somewhat detailed description of the Chicago system may serve to illustrate the tendency in our cities, and to afford a more definite and adequate conception of kindred schemes elsewhere.

The police fund is controlled according to a state law.1 The law of April 29, 1887, is the basis. There are several sources of income mentioned in the law: (1) three-fourths of all moneys received for taxes or for licenses on dogs;

1 Hurd, Illinois Statistics, 1903, pp. 364-68.

(2) three per cent. of licenses of saloons and wholesale liquor dealers; (3) moneys paid for special services of policemen; (4) one per cent. of the monthly pension of each pensioned policeman; (5) fines imposed on policemen as a disciplinary measure; (6) the proceeds of sale of lost or stolen property unclaimed from pawnbrokers, secondhand dealers, and junk stores; (8) fees and fines for carrying concealed weapons; (9) one-half of costs collected for violating city ordinances; (10) rewards given to policemen, unless exception is made by chief of police; (11) one per cent. of monthly salary deducted from pay-roll; (12) three per cent. of all licenses not already mentioned up to $25,000 per annum (law amended, 1903).

After the fiftieth year of age and the twentieth year of service the policeman is entitled to a pension of 50 per cent. of his former annual salary, but not more than $900 nor less than $600. In case of his death the widow receives the pension until her remarriage and the children until they are sixteen years old. If the policeman is disabled in service he receives a pension. The figures for 1906 show the following results: Officers who have retired after a service of 20 years, 136; widows of officers who had served 20 years, 44; beneficiaries on account of disablement in service, 26; widows of officers who died in the service, 86; widows of officers who died after service of 10 years, 157; guardians of minor children, 14; total number of beneficiaries, 463. The monthly pay-roll of the fund calls for $22,000. The monthly income is $23,000. This apparently indicates an accumulation in the general fund; but in fact the number of pensioners increases faster than the income. It was the intention of the founders of the fund to set aside out of the surplus a fund for investment of $300,000, but the revenues have not made it possible to realize this hope. In order to spur the members of the corps to faithful activity in defense

of the public a notice was issued to the officers which called their attention to the fact that according to the law their pension fund would be augmented by fees and fines collected by them. The tendency of course is to keep the policemen alert and active in discovering and arresting violators of city ordinances and state laws. No record enables us to say how much this salutary influence is weakened by direct bribes paid into the hands of officers to induce them to relax their vigilance. The administration of the fund rests with a board composed of 5 persons; of whom 3 are chosen by the mayor and 2 are elected by the officers themselves.

The firemen's fund of Chicago is based on the same principles as those of the policemen's fund. The law of Illinois in accordance with which the fund is governed2 provides that the fund shall be fed from various specified sources: one per cent. of license fees; not to exceed one per cent. of the salary of members, to be deducted monthly from pay-roll; all rewards, fees, gifts, and emoluments paid for extraordinary services, unless specially granted to the member by the board; fines and penalties imposed on members of the departments; gifts and legacies, if any; interest on invested funds up to $200,000; up to 2 per cent. of gross receipts of foreign fire insurance companies, that is companies not chartered in Illinois. The board of trustees of the Firemen's Pension Fund is composed of the treasurer, clerk, attorney, marshal or chief officer of the fire department, and the comptroller of the city. This board has power to administer the fund and to decide all questions as to applications for benefits without appeal. The board reports to the municipal council. During the year 1905-6 the total number of pensioners was 449; the monthly income of the fund, $9,500; monthly pensions paid, $11,000; amount

'Hurd, Illinois Statutes, 1903, p. 368.

accumulated toward permanent fund, $151,000. All claims are paid in full. The income did not meet all needs and the permanent fund has been drawn upon to prevent deficits. But plans have been made for doubling the fees taken from foreign insurance companies. The fund is not large enough to retire some of the older men who ought to be retired. The rates of benefits at retirement are: for disability, monthly one-half of the former salary; the widow of a member who dies in the service, receives, so long as she remains unmarried, $30 monthly; the guardian of minor offspring, $6 for each child up to sixteen years of age; in all not exceeding one-half the monthly salary. After 22 years of service a member who is fifty years of age may be retired with a pension of one-half his monthly salary; light duties may be assigned to those who are able to work, if emergencies exist; after decease his widow until her marriage and his young children have the pension. By an ordinance of the city of Chicago a member of the fire department who is disabled may receive his full salary for 12 months. This is true also of policemen, but the pension is not paid during this period.

The fund of the fire-insurance patrolmen, employees of the board of underwriters, is interesting. It is administered by a board of trustees. The income is derived from an assessment of I per cent. of the salary deducted monthly from pay-roll; up to 2 per cent. of funds devoted to support of fire-insurance patrol by the insurance companies; all rewards, fees, gifts on account of extraordinary service (unless specially granted by the board); and interest on any fund accumulated. The benefits assured are: disability, retirement pension of one-half the salary; in case of death, the widow of a member receives, until she is remarried, $30 a month, the children receiving $6 each up to the sixteenth year of age; in all not more than one-half the salary. If