xt71rn305r29 https://exploreuk.uky.edu/dips/xt71rn305r29/data/mets.xml Kentucky. Department of Education. Kentucky Kentucky. Department of Education. 1944-12 bulletins English Frankford, Ky. : Dept. of Education This digital resource may be freely searched and displayed in accordance with U. S. copyright laws. Educational Bulletin (Frankfort, Ky.) Education -- Kentucky Educational Bulletin (Frankfort, Ky.), "Discussion- Teachers' Retirement System and Fourth Annual Report, June 30, 1944", vol. XII, no. 10, December 1944 text
volumes: illustrations 23-28 cm. call numbers 17-ED83 2 and L152 .B35. Educational Bulletin (Frankfort, Ky.), "Discussion- Teachers' Retirement System and Fourth Annual Report, June 30, 1944", vol. XII, no. 10, December 1944 1944 1944-12 2022 true xt71rn305r29 section xt71rn305r29 0 Commonwealth of Kentucky 0

EDUCATIONAL BULLETIN

DISCUSSION
TEACHERS’ RETIREMENT SYSTEM

and

FOURTH ANNUAL REPORT
June 30, 1944,

Published by

)EPARTMENT OF EDUCATION

JOHN FRED WILLIAMS
Superintendent of Public Instruction

ISSUED_. MONTHLY

Entered as second—class matter March 21, 1933, at the post office at
Frankfort, Kentucky, under the Act of August 24, 1912.

Vol. XII December, 1944 No. 10

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CONTENTS

Page
Foreword ______________________________________________________________________________________________________________ 378
Membership of Board of Trustees and Office Personnel ........................ 379
PART I. BULLETIN .............................................................. 380
Introduction .............................. 381
Local Systems Liquidate ...................................................................... 381
First Appropriation .............................................................................. 382

Administration
Rules and Regulations .......................................................................... 384
Teachers’ Savings Fund ______________________________________________________________________ 387
Annuities Will Increase _. 390
A Long-Time View ________________________________________________________________________________ 392
Additional Contribution ______________________________________________________________________ 396
Out of State Service _________ .. 396
Problems ____________________________________________________________________________________________________ 398
First Actuarial Report ................................................ __ ........................ 405
Losses by Death _____________ . 408
Discussion ______________________________________________________________________________ A 409
Suggestions for Reporting Teachers’ Contributions . .. 412
Principles ______________________________________________________________________________________________ 414
Some Good Features of the Kentucky Retirement Law ............ 416
The Following Propositions Have Been Suggested for Study...» 417
Method of Calculating Annuity ________________________________________________________ 419
Bibliography ____________________________________________________________________________________________ 422
PART II. FOURTH ANNUAL REPORT _____________________________ . .................... 42-5

Letter of Transmittal ________________________________________________________________________ 426
General Balance Sheet ___________________________________________________________ 434
General Statement (if Receipts and Disbursements ........ 435
Schedule 1. Investments Held June 30, 1944 ________________________________ 436
Schedule 2. Teachers’ Savings Control Ledger June 30, 1944.... 435
SChedule 3. Cost of Administration .......................... 436
Schedule 4. Refunds to Teachers ______ ..... 437
Comments—State Auditor ________________________________________________________ 439
Consolidated Balance Sheet—All Funds _____________________________________ 440
Consolidated Statement of Operations ............................................ 441

4.x ..

Page
378
. 379

380
. 381
. 381
. 382
. 383
, 384

387
. 390

392
. 396

396
. 398
. 405

408

409
, 412

414

416

417

419

422

425
426
434
435
436
436
436
437
439
440
441

.u-v

PART I.
Table
Table
Table

Table

Table
Table

Table

Table
Table

Table

PART II.

Table
Table

Table
Table
Table

Table

Table
Table
Table

Table

spew

:74ng

LIST OF TABLES

. Page
Distribution of Appropriations 1940—46 ........................ 382
Standard Annuity Mortality Table 1937 .................... 3'89

CoCmpound Interest and Discount Table Three Per
‘ent ....................................................................................
Contribution of State and Member Compared with
Required Reserve ..........................................................
Membership, State Contributions and Annuities of
Certain States With Teacher Retirement Systems
July 1, 1944 ......................................................................
Normal and Deﬁciency Contribution by Certain
States and Their Members’ Contributions EX-
pressed in Percentage of Salary Where Possible...
Biennial Budget Requests for the Kentucky Teach-
ers’ Retirement System by Years ................................
Valuation Balance Sheet July 1, 1941 ........................
Number of Withdrawals, Deaths and Disabilities
Per 1,000 Active Members by Age Groups ............
Age, Service, Salary, Contribution, Annuity and
Necessary Reserve of Members Retired July 1,
1944 ......................................................................................

I. Net Membership 1943-44 ............................................

11. Number of Members, Prior Service and Salaries
to the End of Fourth Year June 30, 1944 ................

III. Distribution by Age Groups of 1,424 New

Entrants Without Prior Service 1943—44 ................

IV. Distribution by Age Groups of 805 New Entrants

With Prior Service 1943-44 ......................................
V. Distribution by Age Groups, Showing Prior
Service and Salary of Members Who Died Before
Retirement 1943-44 ......................................................

VI. Distribution by Age Groups, Showing Prior

Service and Salary of Members Who Died Before
Retirement 1940—44 ......................................................

VII. Distribution by Age Groups of Members Who

Have Withdrawn TheirAccounts 1940—44 ..............

VIII. Distribution by Age Groups of Membership Hav-

ing Prior Service July 1, 1944 ..................................

IX. Number of Teachers Retired and Retirement

Beneﬁts Paid July 1, 1942, to June 30, 1944 ............

X. Distribution of Present Annuities With Intervals
0f Fifty Dollars July 1, 1944 ....................................

392

393

399

402

404
406

408

420

427
428
428

429

430 .

430
431
432
433

433

FOREWORD

The continued success of the Teachers’ Retirement System de«
pends upon the interest of the participants. The purpose of this bul-
letin is to stimulate interest and constructive thinking; to serve as a
point of departure in directing study and thought in terms of a per-
manent long-time program of retirement. which when taken as a
whole will serve our public school system, both teachers and pupils,
to the best interest of all.

No effort is made to reach conclusions or to present solutions of
problems, real or imaginary. Further study is deemed necessary. At
the end of the fifth fiscal )‘ea‘ a thorough actuarial study will be
made. Needed amendments ma)r then be recommended with safety.

Our Retirement Law is a good one, but it is not perfect. In
amending it we must realize the Retirement System is like a huge
balance wheel; to add a little here, take off a little there will certainly
throw it out of balance. \Vhatever may be done, it must be left in
“balance.”

The Fourth Annual Report of the Teachers’ Retirement System
is included.

JOHN FRED \VILLIAMS
Superintendent of Public Instruction

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Membership of the Board of Trustees

MARY J. MAGUIRE, Chairman, Henry Clay High School, Lexington

*W. F. O’DONNELL, Vice Chairman, Eastern Kentucky State Teachers
College, Richmond

MORTON WALKER, duPont Manual High, Louisville, Kentucky

EDWARD L. CAWOOD, The Bank of Harlan, Harlan, Kentucky

HON. J. F. WILLIAMS, Superintendent of Public Instruction, Frankfort

HON. T. W. VINSON, State Treasurer, Frankfort

HON. ELDON S. DUMMIT, Attorney General, Frankfort

*L. C. CURRY, Bowling Green Public Schools, succeeded W. F. O’Don-
nell on July 1, 1944.

Ofﬁce Personnel

N. O. KIMBLER, Executive Secretary
VERA BECKHAM, Assistant

F. L. PHILLIPS, Accountant

WELDON JONES, Bookkeeper

LORA MAE BLANFORD, Stenographer
KATHRYN BOONE, Machine Operator
LOIS KERBY, Clerk

HELEN MEADE, Clerk

DOROTHY O’NAN, Clerk

ANNIE LAURIE SMITH, Clerk

379

PART I.

A DISCUSSION OF STATE TEACHER RETIREMENT
KENTUCKY TEACHERS’ RETIREMENT SYSTEM

Introduction

Since early in the present century, the teachers of the public schools
of Kentucky have shown varying degrees of interest in a plan of retire-
ment. In May, 1912, the Teachers’ Annuity Fund of Louisville was estab—
lished in accordance with the Act of the Legislature of 1912‘. In Septem-
ber of that year teachers began to contribute to it. Contributions were
limited. Teachers with ﬁfteen years or less of service paid one per cent,
but not more than $10.00 per year; with more than ﬁfteen years of serv-
ice, two per cent, but not more than $20.00 per year. The annuity to be
paid any teacher was $400.00 for forty years of service or more and a
proportionate amount for less than forty years of service. There was
great interest and enthusiasm in the retirement plan.

Under other Acts" of the Legislature, retirement systems were set up
in Bowling Green, Covington, Frankfort, Hopkinsville, Lexington, New—
port, and Paducah. _ ,

Statewide Systems. Interest continued to increase among teachers
and citizens, culminating in the establishment of a statewide retirement
System under an Act passed by the General Assembly in 1938”, amended
and made effective by a substantial appropriation in 1940".

As provided in the Act of 1938, a Board of Trustees of the Teachers’
Retirement System of the State of Kentucky was elected and qualiﬁed.

This Board as a continuous body has met and handled the business
of the Retirement System since July 8, 1939, the date of the ﬁrst meeting.

The State Teachers’ Retirement System became operative as to mem—
bership and receipt of contributions July 1, 1940. It became operative
as to retirement and payment of annuities July 1, 1942.

Retirement Ofﬁce. The Board of Trustees employed personnel and
Opened an ofﬁce in the State Capitol Building July 1, 1940.

Local Systems Liquidate. As provided in Section 4506b-49, Ky.
Stat, the local retirement systems about over the state merged with the
State System by petition signed by a majority of their members. The
assets of the local systems were not turned over to the State Systems, but
were held in trust by the local board of education for the purpose of
paying the annuities of teachers who had previously retired under the
Provisions of the local retirement system. Any surplus was returned to
the teachers who held local membership in proportion to the amount
contributed to the fund by each up to July 1, 1940.

:Acts of 1912, sec. 2978(1-1 to see. 2978(1—18.

“Acts of 1914, c. 17, p. 62; amended 1926, c. 88, p. 301.
{ACts of 1938, 1st ex. s. c. 1.

Acts of 1940, c. 192, p. 742.

381

All Equal. Former members of local retirement systems came into
membership in the State System on the same basis in every respect as
other teachers. .‘

The advantages of the new State Teachers’ Retirement System were
quickly recognized by the teachers, and by the close of the ﬁrst year of
operation approximately 96 ‘70 of all teachers eligible were in active par-
ticipation. Under Section 450613—28, Ky. Stat, any teacher could “decline”
memberhip, but comparatively few did so, and apparently only those
not expecting to remain in the profession

Service Records. No state has been more successful in having its
teachers ﬁle the service form, giving the necessary data. By July 1, 1941,
17,393 teachers had ﬁled the information on Form A-1 and Membership
and Prior Service Certiﬁcates were issued as of July 1, 1941. Form A-l
or A—2 should be promptly ﬁled by each teacher coming into active
service. Accurate experience tables depend upon the ﬁling of these
forms. During this ﬁrst year of operation, 18,530 teachers paid contribu-
tions into the Teachers’ Savings Fund of the Retirement System. This
attests further to the interest of teachers, administrators of school’sys4
tems, and colleges.

First Appropriation. The Retirement Act of 1938 was passed after

the state budget had been made and no appropriation was made to im-

plement it.
Upon amendment of the Act of 1938 in 1940 at the regular session,

one million dollars was appropriated for the Retirement System for the
ensuing biennium.

This and subsequent appropriations have been used as shown in
Table A.

Table A. Distribution of Appropriations 1940-46

State Accumulation Fund
. , For
Year Amount E‘Epenfe .
(1) (2) T“ Subsequent Prior
(") Service Serv1ce
(4) (5)
t t 5
1940—11 I $500,000.00 I $23,069188 l $476,089.49 ‘ 9;;
1041-42 } 500,000.00 J 18.232.93 } 481,713.03 .........
10:12—43 1 050,000.00 22,319.30 I 559,672.38 1 68,007-63
1943-441 j 650,000.00 24,464.74 [ 540,390.68 [ 79,138.58
1914—15 709,000.00 1 28,000.00* I 655,000.00* | 116.000.00’
104540 323,000.00 1 28,000.00* ; 660,000.00* | 135,000.00‘
! i | , |
”i Estimates.

For the biennium 1942—44, $1,300,000.00 was appropriated, and for
the biennium 1944—46, the last General Assembly appropriated a total of
$1,622,000.00.

Future Appropriations. Because of the wide participation of the
teachers coming under the purview of the Retirement Act, these generous
appropriations are barely sufﬁcient to “match” the teachers’ contribu—
tions and pay for the prior service of the teachers now retired. AS
salaries increase and as additional teachers reach retirement age and

382

“Av... . .

e into
ect as

were
car of
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ng its
, 1941,
ership
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ttal of

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retire, larger appropriations will be absolutely necessary to keep the
Retirement System a going concern, ﬁnancially sound.

If, for example, only three-fourths of the teachers participated, that
is, one—fourth “declining” in the beginning as many people had antici-
pated, the obligation of the state for prior service would have been one-
fourth less. As it is, the full beneﬁt of the Retirement System is being
realized by the teachers and the state. Approximately 212,000 years of:
prior service credit has been given the experienced teachers now in
service.

Management and Control. Teachers have also participated in the
control of their Retirement System. The Board of Trustees consists of
seven members, four of Whom are elected by the teachers and three of
whom are ex-ofﬁcio. By means of a mail ballot, the active members
elect one member each year to Lerve for a term of four years. Three of
the elected trustees must be members of the profession who hold mem-
bership in the Retirement System. One elected trustee must be a layman
and not a 'member of the profession. The ex—ofﬁeio members are the
Superintendent of Public Intruction (who is always a member), the
Attorney General, and the State Treasurer.

A greater number of teachers receiving the mail ballot should vote.
By the exercise of this right, they will retain and strengthen it.

One of the teacher-elected members of the Board is Chairman and
another is Vice Chairman.

Faithful Service. All members of the Board of Trustees serve With—
out pay. They have a keen interet and make a conscientious effort to
serve faithfully and well. It is often necessary for trustees to make a
sacriﬁce in order to attend the meetings and perform other duties in
line with this service. A better board could not be chosen for this work.

Administration. With the opening of the ofﬁce of the Retirement
System, it was necessary to prepare forms to be used in its operation; to
ﬁt its ﬁnancial transactions into the routine required by the State Budget
Law, the Division of Accounts and Control, and the ofﬁce of the State
Treasurer. This has been done.

[It was also necessary to prepare the general books to receive the
Credits and debits of the ﬁve funds in which the assets of the Retirement
System are held. The whole ofﬁce routine had to be worked out to
handle a large volume of buiness, all handled by mail. Because of the
many funds and accounts, the calculation of interest on individual, as
Well as fund accounts, the matching of contributions, the transfer of
funds from one fund to another, the calculation of annuities, the making
of refunds, the reinstatement of Withdrawn teachers, the investment of
§urplus in all funds excepting the Expense Fund, the bookkeeping is
Intricate and technical and so is much of the other work in the ofﬁce.

Adequate general books, ledger accounts, and bond registers are
maintained. Also, an extensive and carefully worked out ﬁling system
for teacherS’ documents, whether active or inactive, and card indices
Containing more than 50,000 cards.

The Board of Trustees found it necessary to adopt the following
rules and procedures not inconsistent with the Retirement Act for the
guidance of all interested persons.

383

RULES AND REGULATIONS
of the
Teachers’ Retirement System of the State of Kentucky

I. Rules and Educational Unit's:

Independent districts, county districts, institutions and depart-
ments having teachers participating in the State Retirement Sysem
are requested to modify their respective rules, if necessary, so as to
bring them into harmony with the Teachers’ Retirement Act. (Sec.
4506b-1 to and including Sec. 4506b-51, Ky. Stat.)

II. Fractional Year:

Fractions of a year of service shall be indicated to the nearest
tenth.

III. Substitute Teachers:

Substitute teachers when legally employed may have contribu-
tions deducted from the salary in the usual manner and receive
service credit for the fraction of a year taught and paid for.

If a substitute teacher teaches a semester (or half school term)
or more, she is a regular teacher during that year, and membershlp
is compulsory. -

IV. New Entrant:

Professional Service Form A-l 01‘.A—2 shall be completed‘and
ﬁled with the chief school ofﬁcer of the educational unit at the time
the new (entrant) teacher signs her ﬁrst annual contract with the
employing board.

V. A Special Teacher; Deﬁnition:

A special teacher is one legally employed at a ﬁxed salary and
who performs duties within the purview of the Retirement Act, and
membership is required.

Salary and certiﬁcate are subject to the approval of the Depart-
ment of Education.

VI. Member with Thirty (30) Years of Service Credit:

_ A member with thirty (30) years or more of acceptable service
is not required to teach consecutively the last ﬁve (5) years before
retirement. (Secs. 4506b—41 and 4506b—42, Ky. Stat.)

VII. To Retain Membership:

In all cases excepting those designated in Section 4506b-42, Ky'
Stat, a teacher to retain membership shall teach at least three years
of each six-year period, provided the Board of Trustees reserves the
right to extend this time in such cases as may, in its judgment, war-
rant such extension and, provided further, teachers in military
service are excepted.

VIII. Prior Service:

No credit for prior service shall be given unless and until th:
present teacher shall have been a contributing member for at leas
one scholastic year.

384

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Prior service shall be granted upon the following additional
conditions:

1. To members who taught at any time during 1939-40, (a) and
who become members during 1940-41, and (b) who did not
decline membership. (Sec. 4506b—31, Ky. Stat.)

2. To members who have taught three years or more of the six-
year period ending July I, 1940. (Sec. 4506b-32, Ky. Stat.)

3. T0 members who taught a full year during 1940-41.

(By order of the Board (January 26, 1942) the following modiﬁ-
tion of Rule VIII i; made effective:

That the benefit of Prior Service Credit be extended to all
teachers who return to their profession during the war emer-
gency, and that at the close of one year of active service for
which the required contributions have been made the Prior
Service Certiﬁcate be issued in the same manner as for
“present” teachers.

This rule shall be in force for the duration of the emergency
unless sooner revoked by the Board).

IX. Credit for Service:

In all cases where any member having a legal right to pay
contributions to the Retirement System pays the same according
to Law, the amount of service credit paid for shall be added annually
to h1s service record and in no other cases. Sec. 4506b-42, Ky. Stat.)

X. Individual Contributionsz‘

Members on leave of absence and on military duty may pay
their contributions, based upon their last annual contract, directly
to the Teachers’ Retirement System during such period of leave of
absence or military duty. In such cases, receipt shall be given the
member as and when payment is made.

XL, Leave of Absence:

No leave of absence shall be granted for a longer period than
one scholastic year, provided the employing board may extend any
leave of absence annually, but in no case for more than three years
in any ten-year period.

Written notice of the granting of leave of absence and the
extension of the same shall be ﬁled in the ofﬁce of the Board of
Trustees within two weeks after such action is taken by the employ-
ing board and shall be subject to the approval of the Secretary or
Board of Trustees before such leave shall be effective for retire-
ment purposes.

XII. Membership: '

.No Membership Certiﬁcate and/or Prior Service Certiﬁcate shall
be issued to any teacher who has not complied with the require—
ments of legal employment and paid contributions for at least one
full school term, or the equivalent, excepting in those districts or
otherIemploying units in which the annual salary for the school
term is paid in eleven (11) or twelve (12) equal instalments.

. In such cases, ten (10) monthly contributions must_have been
paid currently, and the remaining instalments shall be paid not later
than August 31 .

XIII. Refunds:

Refunds to beneficiaries or administrators on account of death
0f members and refunds to former members who have withdrawn
fI‘Qm the teaching profession may be made upon approval of ap-
Phcatrons for the same by the Secretary.

It is the policy of the Board of Trustees that such refunds shall

385

W- 4.1% W ;. a: ‘

be made not later than during the calendar month following the
date of approval.

The Secretary shall report to the Board of Tru:tees upon such
refunds at each quarterly meeting; i.e., four times per year.

XIV. Remittance of Contributions:

Employing boards, through their respective treasurers, shall
remit promptly to the Retirement System all contributions due to
be deducted from teachers’ salaries, as and when deducted, as re-
quired by Section 450613—38, Ky. Stat. Since failure to do so affects
the teacher’s account and service record adversely, boards so offend-
ing are liable to the Commonwealth and to the teachers affected
for any and all such losses sustained by reason of violation of said
section.

XV. Report of Contributions:
Employing boards shall cause to be submitted to the ofﬁce of

the Board of Trustees with each check for teachers’ contributions
for any and every payroll a detailed report by school months on
a form approved by the Department of Education. Teachers’ names
shall, as far as practical, be entered on said form in alphabetical
order. In case any teacher’s name appears on the payroll more than
once, said teacher’s name shall be listed on consecutive lines to
facilitate the posting of his account and calculating of interest.

As far as practical, the teachers’ names should appear in the
same order from month to month.

XVI. Inactive Accounts:

Regular interest shall be credited to all inactive accounts an-
nually for a period of three (3) years, after which no interest shall
be credited with respect to any year until the account becomes
active, after which date the regular interest shall be credited
annually. (See. 4506b—33, Ky. Stat.)

XVII. Service Beneﬁts: .

Prior service beneﬁts shall be based upon the average annual
ssaclary for the last ﬁve years of prior service. (See. 4506b-31, KY-
at.

Subsequent service beneﬁts shall be based upon the average‘

annual salary for the last ﬁve years of subsequent service.

In either case, when there is less than ﬁve years of prior service
or subsequent service, the average of such years shall be taken as
the factor in determining annuities.

XVIII. Application for Retirement:

No retirement beneﬁts shall be granted without written ap-
plication ﬁled on blanks furnished by the Teachers’ Retirement
System. Data requested on such forms shall be furnished in com-
plete and acceptable form.

Applications for retirement July 1, 1942, may be filed with the
Secretary at any time during the year 1941—42. (Obsolete).

Applications for retirement during subsequent years may be
ﬁled at any time during the preceding year.
XIX. Annuities:

Annuities shall be based upon three factors:

1. Age 01' retirement. (Sec. 4506b—43, Ky. Stat.)

2. Years of accredited service. (Sec. 4506b—31, Ky. Stat.)

3. Salary as deﬁned in- the Law and as designated in the rules
of the Board of Trustees. (Sec. 4506b—2, paragraph 10, KY-
Stat.)

386

lg the

1 such

shall
lue to
as re-
affects
{fend-
fected
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utions
hs on
1ames
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ybe

rules
Ky.

XX. Payment of Annuities:
Annuities shall be paid quarterly in the months of September
rand/0r October, December and/or January, March and/01' April,
and June and/or July.

No annuity shall be 1etroactive, but shall be paid in the ﬁrst
designated month for payments of annuities aftei the application
has been app1oved and payment autho1ized.

No annuity shall be paid Without the approval of the Secretary
and the express authorization of the Board of Trustees, which
authorization shall appear in the minutes of the Board, provided
that, after the application has been approved and the annuity
authorized as provided above, the Secretary :hall, without further
authorization, cause the quarterly checks to be issued regularly
during the life of the annuitant.

The last quarterly check shall be issued for the amount of the
accrued annuity to and including the date of the death of the
annuitant. (Sec. 4506b-46, Ky. Stat.)

XXI. Annuitant’s Account:

For each annuitant, the Secretary shall set up and maintain an
account, showing the accumulated contributions of the annuitant, the
amount contributed by the State on his behalf to the State Accumu—
lation Fund and the amount contributed by the State in its tem—
porary appropriaion for “prior service.”

Regular interest shall be credited to these accounts.

XXII. Statement of Account:

Upon written request, the Secretary shall, as soon as practical,
mail to any member or annu1tant requesting the same a statement
of hIS account for the preceding or current ﬁscal year.

XXIII. Retired Teachers Teaching:

In no case shall a superannuated teacher, who has been granted
an Emergency Certificate, receive an annuity during the scholastic
year, or fraction of a scholastic year that he teaches; and waiver
thereofhshall be signed as a condition of employment and the right
0 teac .

Such teacher shall not pay his usual contribution and shall not
receive subsequent service credit for the time taught.

The Secretary of the State Board of Education is requested to
certify the names and location of such teache1s uho have been
granted Emergency Certiﬁcates so that annuities may be suspended
during the period of employment.

Teachers" Savings Fund. On July 1, 1944, the Teachers’ Savings
Fund held assets of $2,029,435.46 distributed to approximately 29,000 in‘
dividual ledger account cards. Each teacher’s account is individualized
and handled as it might be in a savings bank. The ledger account cards
are kept in fireproof containers when not being used. Each active ac—
count is credited with 3% interest each month of the year and interest
is compounded on July 1

During 1943- 44 the aggregate amount of interest credited to teach—
ers’ accounts was $49,252.62. This amount will increase constantly and
raPidly if the teacher remains in the profession. The amount of one dol-
lar PEI annum at 3% compound interest is in thirty years $49.00.

A contribution for each teacher for each month of employment is
certiﬁed to the Retirement System when he is paid at the end of the
month. This monthly contribution is immediately credited to his account

387

and it begins to draw interest on the first day of the next month. If such
contributions and the check for the aggregate amount deducted on the
pay roll are delinquent in any month, it necessitates about three times
as much work on the part of the bookkeepers to make the proper entries
and adjust the interest. Also, the teacher loses interest on the monthly
payment or payments for the period of delinquency. Prompt handling in
the office of origin would obviate these losses of time and interest.

The state does not match teachers’ contributions until they are re-
ceived in the Retirement office.

Withdrawals. When a teacher leaves the profession, he may with

draw his account and the accumulated interest. He must Surrender his '

retirement certiﬁcate for purposes of identiﬁcation. No funds can be
paid to the wrong person, hence the need for positive identification in
writing.

Comparatively few teachers have “permanently” left the profession
and withdrawn their accounts. Teachers’ accounts are credited with in-
terest during three consecutive years of absence. There are approxi-
mately 2,000 accounts on which interest has stopped for this reason.

In case of death before retirement, the account is paid to the bene-
ﬁciary, if one has been previously designated; if not, to the administra-
tor of the estate of deceased upon proper appointment by the court and
qualification to the satisfaction of the court.

Transfers. Each participating unit,.as Adair County or Eastern Ken-
tucky State Teachers College, constitutes a control in the handling of
teachers’ contributions. The teachers’ ledger account cards are grouped
under county and other units for convenience in handling, When a
teacher transfers from one school system to another, it is necessary
that the Retirement office have this information so that his ledger ac-
count card may be transferred likewise. This notice of transfer prevents
the setting up of a new account in the school system or college to which
the teacher transferred. Some teachers have transferred four or five
times since entering the Retirement System If notice of transfer has not
been sent each time, such a teacher may have several accounts in the
Teachers’ Savings Fund.

It is the responsibility of the administrative office of the unit and it
is the responsibility of the teacher whose account is involved to give
notice of the transfer. An individual carrying life insurance notifies his
life insurance company when he changes his address. The same care
should be exercised by the teacher when he moves from one school sys-
tem to another.

The Teachers’ Savings Fund and its operation and control will com-
pare favorably with that of the largest savings banks in the state.

Control accounts are maintained and the fund balanced monthly,
quarterly and annually.

State Accumulation Fund. Interest is also credited to the State
cumulation Fund and the amount in this fund balances with the total of
the Teachers’ Savings Fund. Assets are drawn from the appropriation
monthly.

Allowance Rese