PROVISIONS FOR PENSIONS AND RETIREMENT
UNTIL the Carnegie Foundation for the Advancement of Teaching established the Carnegie free pensions, there was no plan for large-scale pensioning of college teachers. Organized in 1905 by a gift of ten million dollars from Andrew Carnegie, the Foundation originally made no provision for the faculties of state universities. In 1908, however, Mr. Carnegie extended the benefits of the Foundation to properly qualified state universities and also increased the endowment of the Foundation by an additional five million dollars.
In February, 1909, the Regents of the University of Michigan passed a resolution directing the president to file a formal request for participation of the University in the pension plan of the Foundation.
At the September, 1909, meeting, the president reported to the Regents that one professor who had resigned after long service and the widows of two professors were being provided with retirement allowances by the Carnegie Foundation.
From 1909 until November 17, 1915, the Foundation continued to accept faculty members of qualified institutions as eligible for retiring allowances, but after the latter date no new appointments were accepted. This limitation resulted Page 276from inability to carry out the original plan of Mr. Carnegie to provide free retiring allowances to the faculties of American colleges and universities due to the unforeseen growth in the number of persons eligible for such pensions.
The officers of the Foundation thereupon made a thorough study of pension plans in Europe, and in 1918 the Teachers Insurance and Annuity Association was organized for the purpose of providing joint contributory retiring allowances. On January 10, 1919, and on April 25, 1919, the Regents adopted the Teachers Insurance and Annuity Association plan embodying the provision that the University would match an annual contribution of 5 per cent of salary by the employee with an annual maximum of $250 for such faculty members as were eligible. This plan has been in effect without interruption and is now the established pension policy for the faculty and for a limited number of administrative officers.
In 1929 the Carnegie Foundation found it impossible to maintain the original provisions of free retiring allowances for those accepted prior to November 17, 1915. At that time the Regents, with the assistance of the Carnegie Foundation and the Carnegie Corporation, established a plan to provide pensions substantially as originally contemplated by the Foundation, in the following manner:
- 1. All faculty members on the accepted list of the Carnegie Foundation were required to subscribe to an annuity policy in the Teachers Insurance and Annuity Association on the same basis as staff members already contributing to the established Teachers Insurance and Annuity Association plan, but with the University matching contributions up to $360 instead of $250 per year.
- 2. The Carnegie Foundation, together with the Carnegie Corporation, agreed to a joint annual contribution not to be in excess of $1,500, toward the pensions of persons on the accepted list of November 17, 1915.
- 3. For the purpose of making up any difference in pension between the original provisions of the Carnegie pension plan and the proceeds of the two preceding sources, the University established the so-called "older faculty members' retirement fund," which is being used to provide supplementary pensions upon retirement for those still remaining on the Carnegie Foundation accepted list when the total pensions provided under 1 and 2 above, are not sufficient.
During the past few years efforts have been made on various occasions to institute some plan of retirement annuities for the so-called nonacademic staff, but in each instance a lack of funds on the part of the University has made it necessary to abandon the proposal. In his report to the president on June 30, 1940, the vice-president and secretary in charge of business and finance mentioned an old-age security plan for nonfaculty employees as one of the outstanding administrative needs of the University.
Financial Report, Univ. Mich., 1917-40.
Proceedings of the Board of Regents …, 1864-1940.
University of Michigan Regents' Proceedings …, 1837-1864. Ed. by Isaac N. Demmon. Ann Arbor: Univ. Mich., 1915.