Perth Amboy evening news., 1918-12-14

State Research of the New Jersey
| State Chamber of Commerce will 500
complete the valuation of the New
Jersey Teachers Retirement Fund,
which its actuary is preparing for the
pension and retirement fund commits
sion and which will show the exact
! amount of the total assets and liabili-'
ties of the fund and will definitely as
certain whether the fund is solvent or
not. and If not, then to what extent.
Meanwhile, the analysis of the fund
made in the report of the Bureau or
State Research by "a Studensky,
supervisor OF tho pension staff. sheds
some light on tho condition of the
fund.
Liabilities Exceed Assets.
On June 80 of last year there were
55S annuitants on the retired roll.
| Most of these 55S annuitants wonld
still live and draw their ~annuities for
many years. They will draw an
| amount valued last year by Mr.. Fack-
Ter, an actuary engaged by the State
Teachers Association. at $4,000, 600.
Against this liability the fund has as
sets of only about S4S4, 900. 1t, there
fore, has a deficiency on that account
alone of more than S 1906, 900.
The fund has about 1 5000 active
contributors. Several thousand or
their number would sooner or later
apply for IN annuity. Every annuity
which would become payable in the
future represents a liability of several
thousaid dollars, and the several thou
sand of these annuities represent a IL
ability of many millions of dcalars.
The assets which the fund will realize
in the future from h contributions of
these 16, 900 members Is. as shown by
experimental calculations, consider
ably below the liabilities. The de-
ficiency on this account is measured In
millions of dollars.
If we assume for a moment that the
present contributors. including those
about to retire, would lose all their
equities in the $4s4. 600 capital of the
fund. and that the latter would be
used only for the payments to the 55S
present annuitants to the end of their
lives, even then We would find that h
capital would permit n payment of
only about twenty cents ON u dollar OF
their annuity claims. 1. e.. thai the
fund would have to reduce their annu-
tiles to one-fifth of their present
amount. The present contributors
would lose all their past contributions
n would have to start anew their
contributions towards future benefits.
which in turn would have to be re-
duced considerably.
Unable TO Keep Its Promises.
In order to be solvent and TO be able
to fulfill its promises, a sound pension
fund must plan far ahead for some
sixty years into the future, because
many OF Its present members may ap-
ply for an annuity only forty years
hence, and may live thereafter draw
ing the annuity for twenty years or
even more. According to Mr.. Fack-
ler's estimate, which was based on
4 conservative assumptions, in less than
NMxwN $500 "a
bursements would exceed the receipts.
the FIRST annual deficiencies would APP
pear. and h fund would have to
draw on its capital. The n de-
~hciencies would exhaIse h capital of
about s4S4 900 in thirteen years.
The fund would then be badly
bankrupt. Payments to annIitants
perhaps altogether discontinued. Dive
twenty thousand contributors would
lose every cent they had paid In.
/ Claims amounting to millions of dol
lars would remain unsatisfied n the
fund would end its life without a dol
lar to distribute. Such are the pros
poets of tho fund II 1t continues on the
present basis.
A great number Of a~nnuitants and
presnt active teachers expect to live
more than thirteen. twenty. forty and
even sixty years. They feel as the pol
icy holders of a life insurance com
| pany would feel ON learning that their
company WAS deeply fnsolyent and
that 1t had only thirteen year to live.
or even less. II a greater strain Is i'm
posed upon it, or perhaps a little more
If some makeshift arranenfent in
ladopted. but at any rate, not long
enough to pay all their claims: and
, that in most OF the cases 1t would fall
long before their claims would ma
ture. They further learn the fund
not only did not adequately assure the
payment of their policy. but that it
had actually paid olTt to others the
smoney which they themselves had
paid in. This startling news II awak-
ening them to h danger.