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SMITHSONIAN INSTITUTION

employee or his beneficiaries at that time would not be beyond his or their resources.

Vesting of the value of the pension plan in the employee is recommended.

Comparative Data

The Civil Service retirement system provides an annuity credit of 1-1/2% of annual salary per year for the first five years, 1-3/4% for the next five years, and 2% for each year of service thereafter.  The employee contributes 6-1/2% of his salary. (A deduction of approximately 10% in the annuity is made to provide a widow's pension.)  Example: Salary of $20,000, 30 years service, age 65: the annuity would be $10,400 (52% of salary).

A survey of pension plans of six museums, eight universities, and one research institution (Carnegie) shows that the National Gallery of Art is outstanding in the amount of its annuity and insurance coverage.  By supplementing the Civil Service annuity with a pension plan funded separately by the Gallery, an annuity equivalent to full salary is provided at age 60 with 30 years service.  Life insurance coverage at the National Gallery is also outstanding at 4 to 5 times salary, reducing in value as the substantial pension fund vested in the employee increases in value.

The next most favorable pension plans are found at Chicago Museum of Science and Industry, Art Museum of Chicago, Princeton University, Indiana University, Harvard University, Yale University, and Carnegie Institution.  The amount of the retirement annuity in relation to annual salary, without contribution by the employee, is generally 50% (60% at Indiana and up to 75% at Harvard).  If the employee chooses to contribute about 7% per year, comparable to the 6-1/2% contributed by Smithsonian employees, these annuities would amount to 75% of annual salary, with 30 years of service.

The retirement age is generally at 65, with several at age 70.  Life insurance generally is provided at nominal or no cost to the employee.  Insurance coverage varies up to three times salary (with limits of $40,000 life and $40,000 accidental death at Indiana).  A range between $50,000 and $60,000 reducing to $10,000 at age 60 is provided at the Carnegie Institution.

The Toledo Museum commented that "a survey of 27 art museums indicated that few of us have kept up with current progress in business and industry."

Supplemental Benefits at Universities

Mr. David Carter of the Teachers Insurance Annuity Association (TIAA) advises that many universities provide supplemental retirement benefits to their top officials.  These supplemental provisions are not normally disclosed in their responses to questionnaires.