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Bulletin No. 1483

Financing
Supplemental
Unemployment
Benefit Plans

UNITED STATES DEPARTMENT OF LABOR
W. Willard Wirtz, Secretary
BUREAU OF LABOR STATISTICS
P

Arthur M. Ross, Commissioner




Financing

Supplemental
Unemployment
Benefit Plans

Bulletin No. 1483
May 1966

UNITED STATES DEPARTMENT OF LABOR
W. Willard Wirtz, Secretary
BUREAU OF LABOR STATISTICS
Arthur M. Ross, Commissioner

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C., 20402 - Price 20 cents









Preface
This bulletin provides a review of the financial
c h a ra c te ristic s and recen t operations of supplem ental
unem ploym ent benefit (SUB) plans. The analysis w as con­
ducted on two levels, the f irs t involving com piling w orker
coverage and selected financial sta tistic s for the period
1960— and the second an analysis of SUB experience
63,
to determ ine and ap p raise the nature of plan operations.
The in terrelatio n sh ip s betw een benefit experience and other
financial item s, such as contributions and fund a sse ts, w ere
of p a rtic u la r in te re st.
The in itial im petus for this study w as provided by
the U.S. D epartm ent of Health, Education, and W elfare.
The data w ere obtained from financial re p o rts filed by
SUB plan ad m in istra to rs w ith the D epartm ent of L ab o r's
Office of L abor-M anagem ent and W elfare-P en sion R eports.
A lim ited am ount of additional inform ation w as obtained
from a few com panies and unions. BLS is grateful for
the cooperation and a ssista n ce received from these p a rtie s.
R eaders in te re ste d in the detailed provisions of SUB plans
a re re fe rre d to a recen t BLS study, M ajor C ollective
B argaining A greem ents: Supplem ental U nem ploym ent B en­
efit P lan s and W age-Em ploym ent G uarantees (BLS B ulletin
1425-35 — one of a se rie s analyzing collective bargaining
provisions in detail.
This bulletin w as p rep ared by E m erso n B eier,
a ssiste d by H arry E. Davis and R obert C. Jo in er, under
the supervision of Donald M. Landay, in the B u reau 's D ivi­
sion of Indu strial and Labor R elations, Joseph W. Bloch,
Chief, under the general direction of L. R. L insenm ayer,
A ssistan t C om m issioner, Office of Wages and In d u strial
R elations.

Hi

Contents
In tro d u c tio n ________________________________________________________________________
T he SUB p l a n ______________________________________________________________________
Scope and m e th o d ______________________________________________________________
C o v e ra g e ___________________________________________________________________________
F unding a rra n g e m e n ts _____________________________________________________________
C o n trib u tio n s ______________________________________________________________________
In v e stm e n t in co m e_________________________________________________________________
D isb u rse m e n ts_____________________________________________________________________
B e n e fits_________________________________________________________________________
O th er p lan d is b u rs e m e n ts _____________________________________________________
A s s e ts ______________________________________________________________________________

Page
1
1
2
2
3
4
6
7
7
10
12

A ppendix. Scope and m ethod of stu d y ___________________________________________

15

T a b le s :
1.

C o n trib u tio n s, b e n e fits, and a s s e ts of SUB p la n s, by type
of funding, 1960—63____________________________________________________
2. C o n trib u tio n s, b e n e fits, and a s s e ts of SUB p la n s, by
in d u stry , 1960—63_____________________________________________________
3. C o n trib u tio n s, b e n e fits, and a s s e ts of SUB p la n s, by
union, 1960—63_________________________________________________________
4. A v erag e y e a rly e x p en ses c h a rg ed to SUB funds on a p e r em ployee
b a s is , by type of ex p en ses p aid , 1960—63____________________________




16
17
18
19

Financing Supplem ental U nem ploym ent Benefit Plans, 1960—63
In tro d u ctio n
B oth p u b lic and p r iv a te b e n e fit p ro g ra m s aid in red u cin g the im p a c t of
te m p o r a r y and lo n g - te r m w o rk lo s s . The n ation w id e, S ta te -a d m in is te re d u n e m ­
p lo ym en t in s u ra n c e s y s te m p ro v id e s te m p o r a r y fin a n c ia l a s s is ta n c e th ro u gh the
p a ym en t of w e e k ly b e n e fits . Its p r iv a te c o u n te rp a rt is the su p p le m e n ta l u n e m , p lo ym en t b e n e fit (SUB) p lan . T h e ir com m on o b je c tiv e is fu rth e rin g the s ta b ility
< of em p lo ym en t an d / or w o rk e r in co m e.
'
The SUB P la n

S u p p lem en tal u n em p lo y m en t b en efit p la n s, w h ich evolved d u rin g the 1950's
a s a p ro d u c t of c o lle c tiv e b arg a in in g , a re a lm o st in v a ria b ly n eg o tiated , so le ly
e m p lo y e r-fin a n c e d , and funded th ro u g h a tr u s t fund a rra n g e m e n t. W hile little
grow th o c c u rre d in e ith e r th e w o rk e rs co v e re d or n u m b er of p lan s a fte r the f ir s t
few y e a rs , lib e ra liz a tio n of SUB b e n e fits and the a d d itio n of re la te d b e n e fits have
continued am ong e x istin g p la n s.
V a ria tio n s in un em p lo y m en t b e n e fits m ake a rig id d efin itio n of SUB p lan s
d ifficu lt. In g e n e ra l te r m s , ho w ev er, th ey a re p lan s d esig n ed p r im a r ily to p r o ­
vide w eekly su p p le m e n ts to S tate u n em p lo y m en t in su ra n c e b e n e fits. C o n c u rre n c y
and in te g ra tio n of SUB and S tate b e n efits a re u su a l. An a s s o c ia tio n of a d m in is ­
tra tiv e p ro c e d u re s , such a s the u se of S tate e lig ib ility d e te rm in a tio n s to v e rify
the w o rk e r's e lig ib ility fo r SUB p a y m en ts, is a lso com m on.
B e c a u se SUB w as in ten d ed to su p p lem en t r a th e r th an re p la c e S tate
un em p lo y m en t co m p en satio n , s a tis fa c to ry ru lin g s or s ta tu to ry am en d m en ts to
S tate law s w e re n e c e s s a ry to p e rm it c o n c u rre n t S tate and p lan p ay m en ts. F a v o r ­
able a c tio n p ro m p tly follow ed in m o st S ta te s, but le g a l o b sta c le s to n o rm a l p lan
function in g w e re not re m o v e d in C a lifo rn ia, Indiana, and O hio, u n til 1959.1 T h ese
a c tio n s w e re p a r tic u la r ly im p o rta n t in view of the la rg e n u m b er of p lan p a r ti c i­
p an ts em p lo y ed in th e se S ta te s. P la n s u su a lly w e re a d ju ste d to th e se d elay s in
one of tw o w ay s. M any, in clu din g th o se n eg o tiated by the A utom obile W o rk e rs,
d id not b eco m e effe c tiv e u n til fa v o ra b le ru lin g s w e re o b tained. O th e rs, such
a s the s te e l in d u s try p la n s, o p e ra te d w ith or w ithout a p p ro v a l— a su b stitu te
m u ltip le -w e e k or lu m p -su m b e n e fit w as p aid if a p p ro v a l w as not fo rth co m in g .
B oth d e la y s in ob taining fa v o ra b le S tate a c tio n and the m eth o d s u se d to cope w ith
th em d is to rte d b en efit e x p e rie n c e fo r 1959 and e a r lie r y e a rs ; h o w ev er, little
d is to rtio n h as o c c u rre d sin ce th a t d ate.
SUB o p e ra tio n s g e n e ra lly have b een c h a ra c te riz e d by c o n sid e ra b le s e n s i­
tiv ity to eco n o m ic co n d itio n s. The n u m b er and am ou nt of b en efit p ay m en ts, w hich
depend on the p re v a le n c e and d u ra tio n of lay o ffs, v a rie d in v e rs e ly w ith em p lo y m en t
and the le v e l of b u s in e ss a c tiv ity . The e m p lo y e r's fin a n c ia l o b lig atio n w ith r e s p e c t
to e ach o p e ra tin g p e rio d w as a lm o st alw ays b a se d on the n u m b er of h o u rs p aid
fo r o r th o se a c tu a lly w o rk ed by c o v e re d em p lo y ees. C o nsequ ently, h is c a sh
c o n trib u tio n s v a rie d d ire c tly w ith the le v e l of b u sin e ss a c tiv ity u n le ss p a r t of h is
o b lig atio n a c c ru e d as a con tingen t lia b ility .2 U nder such funding a rra n g e m e n ts ,
both c o n trib u tio n s and b e n e fits in c re a s e d w h en ev er m a jo r c o n v e rsio n s of co n tin ­
gent lia b ility into c a sh c o n trib u tio n s w e re need ed to p ay b e n e fits.
Virginia is the only State that does not permit supplementation. New Hampshire, New Mexico, South
Carolina, and South Dakota have not taken a position on this issue.
Payments to discharge this liability are required only if needed to pay benefits.




1

2

F lu c tu a tio n in the m agn itu de of c o n trib u tio n s and b en efit p ay m en ts,
coupled w ith the te n d e n c y fo r th em to m ove in op p o site d ire c tio n s, fre q u e n tly
led to a b ru p t a c c u m u la tio n or d ep letio n of fund a s s e ts . The re su ltin g need fo r
liq u id in v e stm e n ts led m o st p lan s to p e rm it in v e stm e n t only in h ig h -g ra d e ,
s h o r t- te r m debt s e c u ritie s . U.S. G o v ern m en t s e c u ritie s w ith re la tiv e ly sh o rt
m a tu ritie s a cco u n ted fo r the m a jo r p o rtio n of a ll SUB fund a s s e ts .
B en efit e x p e rie n c e d u rin g the 1960— p e rio d te s te d the ad eq u acy of
63
fin a n c ia l a rra n g e m e n ts . F o r ex am p le, b en efit p ay m en ts fro m a ll SUB funds
ex c e e d e d c a sh c o n trib u tio n s by about o n e -fo u rth d u rin g 1961, the y e a r of h e a v ie st
un em p lo y m en t. A m a jo r c u rta ilm e n t of b e n e fits w as seld o m n e c e s s a ry am ong
p lan s funded th ro u g h g e n e ra l tr u s t fund, pooled fund, and in d iv id u al acco unt a r ­
ra n g e m e n ts. H o w ev er, a co m b in atio n of fa c to rs led to w id e sp re a d b en efit r e d u c ­
tio n s in I960 and 1961, am ong th o se w ith a g e n e ra l fund and co n tin g en t lia b ility .
A s a re s u lt, m an y of th e se p lan s w e re su b seq u en tly am end ed to a s s u r e few er b e n ­
efit re d u c tio n s by in c re a s in g p lan re s o u rc e s and by po stp o n in g the c u rta ilm e n t of
b e n e fits. T his p ro c e s s of p lan im p ro v e m e n t by c o rre c tin g in ad eq u acie s and fillin g
gaps in p ro te c tio n can be exp ected to continue.
The a g g re g a te fin a n c ia l e x p e rie n c e of SUB p lan s d u rin g 1960—63 is
su m m a riz e d by the follow ing an n u al a v e ra g e s :
Annual average
(in millions)
Income------------------------------------ $146.8
Contributions------------------------134.3
Other incom e----------------------12.4
Disbursements---------------------------109. 7
Benefits------------------------------106. 7
Expenses------------------------------3.1
Assets (end of 1963)-------------------446.9
Workers covered-----------------------------2.3

Scope and M ethod. A ll em ployee w e lfa re p la n s w ith o v er 25 p a rtic ip a n ts
th a t in clu d ed a su p p le m e n ta l u n em p lo y m en t b en efit p ro v isio n fe ll w ith in the scope
of the study. (P la n s w ith few er th an 26 em p lo y ees w e re ex clu d ed b e c a u se of the
d iffic u lty of se c u rin g d ata fo r th em .) A s tra tifie d , ran d o m sam p le w as s e le c te d
fro m th o se SUB p la n s fo r w h ich fin a n c ia l r e p o r ts fo r I960 w e re su b m itted to
th e U.S. D e p a rtm e n t of L abo r p u rs u a n t to the W elfare and P e n sio n P la n s D is ­
c lo s u re A c t.3 O p eratin g s ta tis tic s fo r I960 th ro u g h 1963 w e re o b tain ed fro m
the a p p ro p ria te an n u al fin a n c ia l (D-2) r e p o r ts . S up po rting p lan d o cu m en ts w e re
u se d to id en tify th o se p lan s th a t p ro v id ed su p p le m e n ta l u n em p lo y m en t b e n e fits,
a s w ell a s to d e te rm in e p e rtin e n t p lan p ro v isio n s. A lim ite d am ou nt of ad d itio n al
in fo rm a tio n w as o b tained d ire c tly fro m a few co m p an ies and un io n s. (A m o re
d e ta ile d ex p lan atio n of scope and m eth od is p re s e n te d in the appendix.)
F in a n c ia l re p o r ts fo r I960 and la te r y e a rs w e re file d w ith the U.S.
D e p a rtm e n t of L abo r by a d m in is tra to rs of abo ut 700 SUB p la n s. T h ese p lan s
c o v e re d n e a rly 2.3 m illio n w o rk e rs in 1963, of w hom 4 out of 5 w e re em ployed
in th re e in d u s try g ro u p s— tra n s p o rta tio n eq u ip m en t, p r im a r y m e ta ls, and a p p a re l.
3
The use of a fixed sample introduces a slight bias owing to the exclusion of new plans; however, supplementary
information obtained from BLS and union sources indicate that relatively few plans of substantial size have been
established since 1960.




3

T h is c o n c e n tra tio n w ith in a few in d u s trie s r e fle c ts th e p ro m in e n t ro le p lay ed by
th e A u tom obile and S te e lw o rk e r un io ns in th e e s ta b lish m e n t of SUB. T he th ird
grou p, w h ich ac c o u n te d fo r a six th of a ll w o rk e r co v erag e, p a rtic ip a te d in a
n a tio n a l p la n n e g o tia te d by th e In te rn a tio n a l L adies* G a rm e n t W o rk e rs' U nion
(ILGWU) and e m p lo y e rs in the w o m e n 's and c h ild re n 's a p p a re l in d u s trie s . O v er
96 p e rc e n t of a ll p a rtic ip a n ts w e re c o v e re d by n e g o tia te d p la n s.
_____Workers covered (thousands)______
1960

1961

All industries-----------------------------------

2,361

Manufacturing---------------------------------------Transportation equipment-------------- ----Primary metals:
Ferrous------------------------------------ ----Nonferrous------------------------------------Apparel-------------------------------------------Machinery, except electrical—------------Rubber----------------------------------------- ----Fabricated metal products--------------------Electrical machinery--------------------------Other-----------------------------------------------Nonmanufacturing-----------------------------------

Industry

2,271

1962
2,235

1963
2,259

2,258
649

2,168
610

2,138
614

2,157
634

607
71
375
218
132
79
58
69

586
68
386
199
127
73
53
66

546
72
386
199
129
75
51
66

530
69
410
198
127
73
51
63

103

102

96

102

The co m p o sitio n of c o v e re d g ro u p s re fle c te d th e p ro m in e n c e of n eg o tiated
p la n s. T ho se w ith only p ro d u c tio n o r h o u rly w o rk e r m e m b e rsh ip acco u n ted fo r
m o re th an h alf of a ll w o rk e r c o v e ra g e . A fo u rth of th e to ta l p la n s sp e c ific a lly
in clu d ed a ll c la s s e s of e m p lo y e e s. M o st of th e re m a in in g p la n s co n tain ed co v erag e
p ro v isio n s th a t w e re not a m en ab le to c la ssific a tio n ; n e v e rth e le s s , p ro d u ctio n
w o rk e rs d o m in ated th e ir m e m b e rsh ip . In the few in sta n c e s w h e re a p lan co v ered
s a la rie d e m p lo y ees only, th e c o m p a n y 's h o u rly em p lo y ees w e re u su a lly co v ered
by a n o th e r p lan .
T he re la tiv e ly s e v e re im p a c t lay o ffs m ay have on sm a ll co m p an ies,
coupled w ith the a b se n c e of in s u ra n c e a rra n g e m e n ts , h a s m ad e it d ifficu lt to
ap p ly SUB to s m a ll em p lo y ee g ro u p s. P la n s co v erin g la rg e g ro u p s acco u n ted
fo r m o st SUB c o v e ra g e — n e a r ly 8 out of 10 w o rk e rs w e re in p ro g ra m s w ith
m o re th a n 4, 000 p a rtic ip a n ts . T hose w ith le s s th an 1, 000 w o rk e rs c o v e re d only
9 p e rc e n t of th e to ta l.
U nlike th e m a jo rity of em p lo y ee b en efit p ro g ra m s , gro w th h a s not b een a
c h a r a c te r is tic of SUB. E xcluding the ILGWU p lan w ith its 400, 000 m e m b e rs — it
w as n e g o tia te d la te in I960— c o v e ra g e in I960 w as abo ut eq u al to e s tim a te s fo r
1956.4 A d ditio ns a ttrib u ta b le to new p lan s w e re m o re th a n o ffset by em p lo y m en t
d e c lin e s w ith in th e in d u s trie s acco u n tin g fo r a s u b sta n tia l p a r t of to ta l co v erag e
(e .g ., tra n s p o rta tio n eq u ip m en t).
O v e ra ll chan ges in co v e ra g e sin ce I960 could not ’be d e te rm in e d a s p a r t
of th is study, b e c a u se p la n s begun a fte r th a t d ate w e re ex clud ed. H ow ever,
su p p le m e n ta ry in fo rm a tio n fro m o th e r BLS s o u rc e s re v e a ls th a t few p la n s of
s u b s ta n tia l siz e have b e e n e s ta b lis h e d sin ce I960.
F un din g A rra n g e m e n ts
T he fin a n c ia l n e e d s of em p lo y ee b e n e fit p la n s a r e m e t e ith e r on a c u rre n t
b a s is o r by ad v an ce funding. N u m ero u s fa c to rs , su ch a s th e n a tu re of th e b e n ­
efit, th e a v a ila b ility of in s u ra n c e , ta x c o n sid e ra tio n s, c o lle c tiv e b a rg a in in g
4 C f., Social Security Bulletin. April 1965.



4

p r e s s u r e s , and the e m p lo y e r's fin a n c ia l p o sitio n , g e n e ra lly in fluence the se le c tiv e
p ro c e s s . In the c a se of SUB p la n s, the n a tu re of b en efit p ay m en ts is of s p e c ia l
im p o rta n c e . A dvance funding is d e s ira b le b e c a u se la rg e and a b ru p t chan ges in
b e n e fit c o m m itm e n ts could a d v e rs e ly a ffe c t the c o m p an y 's c u rre n t o p e ra tin g
p o sitio n . S ince p ay m en ts a r e tie d to lay o ffs, d is b u rs e m e n ts ten d to in c re a s e
w hen com pany o p e ra tio n s and e a rn in g s a re d eclin in g . In su ra n c e h as not b een
a v a ila b le a s a p ra c tic a l a lte rn a tiv e to funding b e c a u se of the u n d e rw ritin g d iffi­
c u ltie s th a t a r is e fro m su ch b e n e fit e x p e rie n c e and S U B 's clo se in v o lv em en t w ith
la rg e ly u n in su ra b le b u s in e ss r is k s . T hus, SUB p lan s a r e a lm o st alw ays funded
w ith som e fo rm of tr u s t fund a rra n g e m e n t.
S e v e ra l tr u s t a rra n g e m e n ts w e re u se d am ong the p lan s stu d ied . The
m o st fre q u e n t a p p ro a c h re q u ire d c o n trib u to rs to m e e t th e ir e n tire fin a n c ia l
o b lig atio n fo r e a c h o p e ra tin g p e rio d by p ro m p t c a sh p ay m en ts into a g e n e ra l
tr u s t fund. T his m eth o d w as u se d in p lan s n e g o tia te d by the A utom obile W o rk e rs
a s w e ll a s by s e v e ra l o th e r u n io n s. O v er 1 m illio n w o rk e rs w e re c o v e re d by
p la n s fin an ced in th is w ay.
A s im ila r funding a rra n g e m e n t w as u se d in po oled p la n s, w h ich in clu de
m u ltie m p lo y e r p la n s, ex ce p t th a t c o n trib u tio n s fro m p a rtic ip a tin g e m p lo y e rs w e re
p la c e d in a sin g le fund fro m w hich a ll b e n e fits w e re paid. A lthough th e se p lan s
w e re few in n u m b e r, th ey c o v e re d about o n e -h a lf m illio n w o rk e rs .
A n other a p p ro a c h , dev elo p ed in the b a s ic s te e l in d u stry , sp lit the
c o m p a n y 's fin a n c ia l o b lig atio n into p e rio d ic c a sh co n trib u tio n s and a con tin g en t
lia b ility . The c a sh p o rtio n w as p la c e d in a g e n e ra l tr u s t fund, a s above, w hile
th e lia b ility a c c ru a ls m e a s u re d the e m p lo y e r's o b lig atio n to m ak e ad d itio n a l
p a y m e n ts, if need ed. In th is w ay, the co n tin g en t lia b ility in c re a s e d the p la n 's
to ta l re s o u r c e s w hile the com pany re ta in e d c o n tro l and u se of the fund s. P la n s
of th is type c o v e re d a p p ro x im a te ly 700, 000 w o rk e rs .
P la n s a llo c a tin g r e s o u r c e s (i.e ., c o n trib u tio n s, in v e stm e n t in co m e, and
fund a c c u m u la tio n s) to in d iv id u al em p lo y ee a cco u n ts w e re th e only p lan s th a t
p ro v id e d p a rtic ip a n ts w ith a v e ste d in te r e s t in fund a s s e ts . Such p lan s c o v e re d
abo ut 65, 000 w o rk e rs , a s show n by the tab le below .
Funding provision
All plans---------------------------------General fund only--------------------------General fund with contingent
liability--------------------------------------Pooled (multiemployer) fund---------- Individual employee accounts —.----------------Unfunded---------------------------------------Other-------------------------------------------Information not available------------------ ---------

Workers covered (thousands)
1960
1962
1961
1963
2,271

67
9

2,235

2,259

1,008
720
463
60
7
4

1,005
689
464
57
7
3

1,006
672
495
65
7
4

9

9
10
NOTE: Because of rounding, sums of individual items may not equal totals.

C o n trib u tio n s
The c a sh n e c e s s a r y to d is c h a rg e b e n e fit o b lig atio n s and to p ay e x p e n se s
c h a rg e d to th e funds of the SUB p lan s stu d ied w as o b tain ed fro m em p lo y er
c o n trib u tio n s and in v e stm e n t in co m e. C o n trib u tio n s acco u n ted fo r $ 537 m illio n
or 91.5 p e rc e n t of the $ 587 m illio n of in com e re c e iv e d by a ll p lan s d u rin g the
1960—63 p e rio d .



5

Total
receipts
1960....................................
$131.3
1961— ..................................... 118.0
1962
................................. 170.4
1963
................................. 167.3
4-year totals---------------

587.0

Other income
Total
Other as percent of
income total receipts
antributions
(Millions of dollars)
$119.6
$11.7
8.9
107.1
10.8
9.2
157.5
12.9
7.5
152.9
14.3
8.6
537.2

49.8

8.5

NOTE: Because of rounding, sums of individual items may not equal totals.

T o ta l SUB c o n trib u tio n s v a rie d fro m y e a r to y e a r w ith the g e n e ra l
em p lo y m en t p a tte rn , d e c lin in g in 1961, a s the econom y w en t th ro u g h a re c e s s io n ,
and in c re a s in g d u rin g the follow ing 2 y e a rs of stro n g re c o v e ry (table 1). H ow ever,
w hile c a sh c o n trib u tio n s flu c tu a te d in a c y c lic a l m a n n e r in som e in d u s trie s ,
co n se c u tiv e in c re a s e s o r d e c lin e s o c c u rre d in o th e rs . D is s im ila r em p lo y m en t
e x p e rie n c e and funding a rra n g e m e n ts acco u n ted fo r th e se v a ria tio n s .
T he e m p lo y e r's fin a n c ia l o b lig atio n fo r e a c h o p e ra tin g p e rio d w as u su a lly
g e a re d to th e c o m p a n y 's le v e l of o p e ra tio n s by re la tin g it to em p lo y m en t, g e n e ra lly
e x p re s s e d a s a sp e c ifie d n u m b er of cen ts p e r m a n -h o u r. In th e au to p la n s, th e
o b lig atio n w as r e la te d to the h o u rs p aid fo r, and in s te e l p lan s to th e h o u rs
w o rk ed . O th er m eth o d s, su ch a s a p e rc e n t of g ro s s p a y ro ll o r a fla t am ou nt
p e r p ay p e rio d fo r e ach a c tiv e em p lo y ee, w e re seld o m u se d . T ho se p la n s w ith
the g e n e ra l tr u s t fund, pooled fund, and in d iv id u al acco u n t funding a rra n g e m e n ts
re q u ire d p ro m p t d is c h a rg e of th e e n tire o b lig atio n s h o rtly a fte r the end of each
o p e ra tin g p e rio d . T hose u n d e r the g e n e ra l fund w ith co n tin g en t lia b ility a r r a n g e ­
m en t, ch iefly th o se n e g o tia te d w ith the S te e lw o rk e rs, allo w ed p a r t of the
e m p lo y e r's o b lig atio n to a c c ru e in the fo rm of con tin g en t lia b ility th a t w as only
p ay able if n eed ed fo r b e n e fits. In a ll c a s e s , th e em p lo y e r w as not re q u ire d to
m ake any ad d itio n a l c o n trib u tio n a fte r h is cen ts p e r m a n -h o u r c o m m itm en t w as
d isc h a rg e d even though b e n e fit re d u c tio n s m ig h t be n e c e s s a r y ow ing to a lack
of funds.
On th e o th e r hand, re d u c tio n s in th e e m p lo y e r's o b lig atio n s w e re p o ssib le
if m ax im u m fin an cin g p ro v isio n s b e ca m e o p e ra tiv e .5 T h ese p ro v isio n s, w hich
w e re found in m o st p la n s, e ith e r e lim in a te d fu rth e r a c c ru a ls o r c a n c e le d som e
of th e e m p lo y e r's e x istin g lia b ility , a s long a s the d e s ire d fin a n c ia l p o sitio n s
w e re m a in ta in e d .6 In ad d itio n , a fte r 1962 m o st p lan s n e g o tia te d w ith the S te e l­
w o rk e rs co n tain ed a " s p illo v e r" a rra n g e m e n t w h e re b y e x c e ssiv e r e s o u r c e s w e re
m ad e a v a ila b le to fund sav in g s and v a c a tio n p la n s.
G e n e ra l funds w ith con tingen t lia b ility a rra n g e m e n ts o rig in a lly in clu d ed
a p ro v is io n to m a in ta in a c o n sta n t re la tio n s h ip b etw een re g u la r c a sh co n trib u tio n s
and co n tin g en t lia b ility a c c r u a ls . H ow ever, a fte r th e 1962 re v is io n s m an y of
th e m re d u c e d the c a sh p o rtio n and in c re a s e d th e con tin g en t lia b ility p o rtio n by
an eq u al am o u n t a s in c re a s e s in the le v e l of p lan fin a n c e s o c c u rre d u n til, a t
the h ig h e st le v e l, no c a sh p ay m en t w as r e q u ir e d .7
A few plans do not contain maximum financing provisions. Moreover, an exception may arise among those
that do, if the general trust with contingent liability funding arrangement is used. Contingent liability must be
convened into cash contributions whenever fund assets are less than current benefit needs.
Typical maximum financing provisions are discussed on p. 13. Maximum financing provisions which would
reduce contributions after a period of favorable benefit experience were seldom operative during the period of study
until 1963. For the exception among steel plans see p. 9.
The 1962 steel plan revisions are discussed on p. 9.



6

T he in flu en ce of funding a rra n g e m e n ts w as re fle c te d in th e an n u al vo lu m e
of c o n trib u tio n s to SUB p la n s by in d u stry . C o n trib u tio n s in th e tra n s p o rta tio n
eq u ip m en t g ro u p in d ic a te d the in d u s try 's changing le v e ls of b u sin e ss a c tiv ity ,
w h ile the c o n se c u tiv e in c re a s e s in th e p r im a r y fe rr o u s m e ta ls g rou p re fle c te d
b o th b u s in e ss and b e n e fit e x p e rie n c e . T he su sp e n sio n of o b lig atio n s d u rin g th e
s te e l s trik e in 1959, coupled w ith in c lu sio n of th a t p e rio d in th e c a lc u la tio n of
su b se q u e n t o b lig a tio n s, r e s u lte d in a low a s s e t p o sitio n in m an y s te e l p lan s
d u rin g I960. T h e se a s s e ts w e re q u ick ly d e p le te d w hen la rg e b e n e fit p ay m en ts
w e re r e q u ire d d u rin g 1961. T hu s, a d d itio n a l p ay m en ts to fu lfill con tin g en t
o b lig a tio n s fre q u e n tly m o re th a n o ffse t d e c lin e s in re g u la r c a sh c o n trib u tio n s .8
W hile em p lo y m en t le v e ls d e te rm in e d th e e m p lo y e r's o v e ra ll o b lig atio n and o r d i­
n a ry c a s h p a y m e n ts u n d e r th e s e p la n s, b e n e fit e x p e rie n c e stro n g ly in flu en ced th e
to ta l c a sh c o n trib u tio n s m ade d u rin g a d v e rs e p e rio d s .
D esp ite th e g e a rin g of c o n trib u tio n s to em p lo y m en t o r, a s in s te e l p la n s,
to b o th em p lo y m en t and b e n e fit ab o u t 8 out of 10 p a rtic ip a n ts w e re c o v e re d by
p la n s in w h ich th e a v e ra g e an n u al change in c a sh p ay m en ts w as slig h t o r
m o d e ra te .9 T he am o u n t of an n u al SUB c o n trib u tio n s w as re a s o n a b ly sta b le .
P la n c o n trib u tio n s in th e tra n s p o rta tio n eq u ip m en t in d u s try w e re m o st sta b le ,
w h ile th o se in e le c tr ic a l m a c h in e ry w e re le a s t sta b le . T he an n u al flu c tu a tio n s
in c o n trib u tio n s a r e s u m m a riz e d fo r e a c h in d u s try in th e follow ing ta b u la tio n
show ing th e p e rc e n t of c o v e re d w o rk e rs in p la n s in e a c h s ta b ility g ro u p .
Total Very
Very
workers stable Stable Unstable unstable
Industry
All industries------------------------- 100.0
56.6 23.7 10.8
8.8
Manufacturing------------------------------- 100.0
55.2 24.2
11.4
9.2
Rubber------------------------------------ 100.0
15.8 72.9
11.3
Primary metals------------------------ 100.0
31.4 36.7 23.3
8.6
Ferrous------------------------------- 100.0
33.1
32.9 25.5
8.4
Nonferrous-------------------------- 100.0
17.3 66.7
5.2
10.8
Fabricated metal products--------- 100.0
25.8 39.3
9.5
25.4
Machinery, except electrical------ 100.0
45.8 21.2
19.7
13.3
Electrical machinery----------------- 100.0
14.1
31.3
54.6
Transportation equipment---------- 100.0
95.9
.8
1.4
2.0
Other------------------------------------- 100.0
71.4 17.3
11.3
Nonmanufacturing------------------------- 100.0
81.2
15.0
1.5
2.3
NOTE: Because of rounding, sums of individual items may not equal totals.

In v e stm e n t Incom e
T he u n p re d ic ta b le n a tu re of SUB fund d is b u rs e m e n ts m ade liq u id ity ,
r a th e r th a n in co m e, th e fo re m o s t c o n sid e ra tio n in in v e stm e n t p o licy . T he
p o s s ib le n eed of su b s ta n tia l su m s of c a sh on sh o rt n o tic e g e n e ra lly d ic ta te d th e
s e le c tio n of h ig h -g ra d e , s h o r t- te r m s e c u r itie s . M any p la n s, in clu din g th o se
n e g o tia te d by th e A utom obile W o rk e rs, r e s tr ic te d in v e stm e n ts to g e n e ra l o b li­
g atio n s of the U.S. G o v ern m en t. W hile th e m on ey h eld in th e SUB funds n e g o tia te d
by th e S te e lw o rk e rs a ls o could be in v e ste d in "o th e r a p p ro p ria te s e c u r itie s
ap p ro v e d by the com pany, " th e p ra c tic e h as b een to in v e st a lm o st e n tire ly in
U .S. G o v ern m en t s e c u r itie s . V e ry few p lan s allo w ed b an ks and o th e r c o rp o ra te
tr u s te e s m u ch la titu d e in in v e stm e n t d e c isio n s.
Benefit reductions were also common.
9 See appendix for an explanation of change computations and definition of the four stability groups.



7

L im ite d a s s e t a c c u m u la tio n s and high liq u id ity n eed s g e n e ra lly r e s u lte d
in low le v e ls of in te r e s t, d iv id en d s, and o th e r fo rm s of in v e stm e n t in co m e. Such
in co m e a c c o u n te d fo r le s s th a n 10 p e rc e n t of th e re c e ip ts re p o rte d by a ll p la n s
in e a c h y e a r fro m I960 th ro u g h 1963, and a v e ra g e d 8.5 p e rc e n t fo r th e e n tire
p e rio d .
T he c o m p a riso n of in v e stm e n t in co m e w ith to ta l SUB r e c e ip ts in clu d in g
c o n trib u tio n s, in th e follow ing ta b u la tio n , in d ic a te s th a t th e re la tiv e im p o rta n c e
of in v e stm e n t in com e v a rie d w ith th e type of funding a rra n g e m e n t. It w as le a s t
am on g p la n s u sin g the g e n e ra l tr u s t w ith co n tin g en t lia b ility a rra n g e m e n t,
re fle c tin g th e ir r e la tiv e ly low a s s e t p o sitio n s.

Type of funding
All plans-----------------------------

Investment income as a percent of total receipts*
1963
1962
1960^63 1960 1961
8.5

8.9

9.2
14.5

7.5

8.6

11.4
9.1
10.9
General fluid------------------------------- 11.1
General fund with
2.9
1.4
2.5
3.8 2.2
contingent liability-------------------11.4
9.4 7.9
9.2
9.5
Pooled fund-------------------------------20.4 18.6
14.1 20.4
Individual employee accounts —---- 18.2
11.1 31.3
100.0 40.0
Other----- ---------------------------------- 28.6
0
0
0
0
Unfunded-------------------------------- — 0
25.0 31.5
7.3 2.6
11.1
Information not available--------—
1 Includes miscellaneous veceipts, such as return of benefits erroneously paid.
These receipts were almost invariably negligible.

D is b u rs e m e n ts
E x p e n d itu re s to p ay SUB and o th e r b e n e fits in clu d in g m oving allo w an ces
and s e p a ra tio n pay, and e x p e n se s c h a rg e d to th e SUB funds to ta le d $ 4 3 9 m illio n
d u rin g the 1960—63 p e rio d . B e n e fits acco u n ted fo r $ 4 2 7 m illio n o r 97 p e rc e n t
of th e to ta l.
B e n e fits. M ost SUB p la n s e x p e rie n c e d a s u b sta n tia l change in b e n e fit
p a y m e n ts fro m one y e a r to the n ex t b e c a u se of th e ir d ep end ence on lay off
e x p e rie n c e . T o ta l b e n e fit p a y m e n ts of $ 91 m illio n w e re re p o rte d in I960 (tab le 1).
T hey su b se q u e n tly in c re a s e d by $ 3 8 m illio n , o r 42 p e rc e n t, in 1961. Im p ro v ed
b u s in e s s co n d itio n s le d to c o n secu tiv e d e c lin e s of 22 and 5 p e rc e n t d u rin g th e
n ex t 2 y e a r s .
T he y e a r - to - y e a r chan ges in b e n e fit d is b u rs e m e n ts v a rie d am ong in d u s­
tr ie s (tab le 2). A nnual b e n e fit p a y m en ts in th e tra n s p o rta tio n eq u ip m en t in d u s try
follow ed a c y c lic a l p a tte rn th a t w as co u n ter to chan ges in the le v e l of c o n tr i­
b u tio n s. H o w ev er, co n se c u tiv e y e a r - to - y e a r in c re a s e s o c c u rre d in p r im a r y f e r ­
ro u s m e ta ls u n til 1963, w h ile fa b ric a te d m e ta ls and m a c h in e ry , ex ce p t e le c tric a l,
had c o n se c u tiv e d e c lin e s . T he m ag n itu d e and d ire c tio n of y e a r - to - y e a r b en efit
chan ges a r e s u m m a riz e d by in d u s try in th e follow ing ta b u la tio n .10
10

Only annual data were available for all SUB plans; thus, changes of shorter duration could not be analyzed.




8

Percent change in benefit payment
1961
1960
1962
to
to
to
1961
Industry
1962
1963
42.2
All industries-------------------------------- --------2 1 .5
- 4 .9
Manufacturing--------------------------------------------Rubber------------------------------------------- -------Primary metals-------------------------------- -------Ferrous----------------------------------------------Nonferrous-----------------------------------------Fabricated metal products---------------- -------Machinery, except electrical--------------------Electrical machinery------------------------ -------Transportation equipment-------------------------Other----------------------------------------------------Nonmanufacturing-------------------------------- --------

39.6
103.6
6.91
2.3
52.8
—1. 3
7.7
51.1
119.1
25. 1
151.2

-2 2 .2
-4 0 .0
4. 74
13.6
-5 4 .6
- 1 .4
-1 1 .3
-4 3 .9
-4 4 .4
-2 6 .3
- 5 .6

-6 . 2
-1 7 .0
-1 .3 6
- 2 .7
21.3
- 1 .2
- 4 .3
-1 1 .0
- 6 .2
40.6
18.5

S in ce the d ata fo r a ll p la n s in e ach in d u s try w e r e to ta le d b e fo re th e s e p e rc e n t
changes w e r e c a lc u la te d , th e y a r e not a s g re a t a s the flu c tu a tio n s of in d iv id u a l
p la n s, e s p e c ia lly in in d u s trie s th at had flu c tu a tio n s in o p p osite d ire c tio n s th at
o ffs e t each o th e r.
M axim u m fin an cin g p ro v is io n s and p r e s c r ib e d c o n trib u tio n re q u ire m e n ts
p la c e d d e fin ite lim its on the e m p lo y e r's p o te n tia l o b lig a tio n s. T h ese r e s t r i c t i o n s ,
in tu rn , m ade it n e c e s s a r y to p ro v id e fo r p o s s ib le b e n e fit a d ju stm e n ts in o rd e r
to be s u re th at p lan co m m itm en ts w ould not e x c e e d a v a ila b le r e s o u r c e s . Thus,
b e n e fit p a y m e n ts did not a lw a y s r e f le c t la y o ff p a tte rn s e x c lu s iv e ly . A c tu a l p a y ­
m en ts w o u ld f a ll b elow th o se ex p ecte d on the b a s is of e m p lo y m e n t e x p e rie n c e
w h e n e v e r p ro lo n g e d la y o ffs re d u c e d the fu n d 's fin a n c ia l p o sitio n o r cau sed w o r k e r s
to e x h a u st th e ir e lig ib ility fo r b e n e fits .
It w a s com m on to p ro v id e fo r re d u c tio n s in e ith e r the n u m b er o r am ount
of w e e k ly b e n e fit p aym en ts d u rin g tim e s of fin a n c ia l s t r e s s . M any p la n s u sed
both m eth od s to re d u c e p a ym en ts fr o m the fund a s fin a n c ia l r e s o u r c e s d ec lin e d .
P la n s w ith no a llo c a tio n of r e s o u r c e s to in d iv id u a l m e m b e r a cco u n ts
a lm o s t in v a r ia b ly u sed " c re d it units" to d e te rm in e the e x te n t of e ach e m p lo y e e 's
rig h t to b e n e fits and to re d u c e o v e r a ll c o m m itm e n ts. A re d u c tio n in the n u m b er
of p o te n tia l p aym en ts w as a c c o m p lish e d b y in c re a s in g the n u m b er of c re d it u n its
need ed fo r a fu ll w e e k ly b e n e fit. The o p p osite a p p ro a c h — a re d u c tio n in the
d o lla r am ount of the r e g u la r o r u su a l b e n e fit— lo w e re d to ta l co m m itm en ts w h ile
re ta in in g the n o rm a l c re d it unit c a n c e lla tio n r a t e . 11
The ILGWU p lan w a s a n otab le e x c e p tio n to the ab ove p r a c t ic e . In th is
p lan , in w h ich c re d it u n its w e r e not a c c ru e d , th e r e w a s no a u to m a tic re d u c tio n
in b e n e fit co m m itm en ts w hen fin a n c e s w e re lo w . A fix e d sch ed u le of b e n e fits ,
w h ich v a r ie d w ith the w o r k e r 's fo r m e r w e e k ly e a rn in g s , w a s p ro v id e d . The
d u ra tio n of b e n e fit p aym en ts w a s dependent on y e a r s of s e r v ic e .
H ow ever, the
b o a rd of t r u s te e s could, at its d is c re tio n , re d u c e e ith e r the am ount o r d u ra tio n
of b e n e fits if it w as c o n s id e re d n e c e s s a r y to m a in ta in the s o lv e n c y of the fund.

It was common to provide senior employees with more favorable treatment than those with less seniority.
See Major Collective Bargaining Agreements: Supplemental Unemployment Benefit Plans and Wage-Employment
Guarantees (BLS Bulletin 1425-3, 1965), pp. 22-25, for more details.



9

The e x te n t to w h ich b e n e fit o b lig atio n s w e re a c tu a lly re d u c e d v a rie d by
in d u s try and funding a rra n g e m e n ts . S u b sta n tia l b en efit c u rta ilm e n ts w e re seld o m
n e c e s s a r y am ong p la n s th a t r e q u ire d im m e d ia te d isc h a rg e of th e e m p lo y e e s
e n tire o b lig a tio n by re g u la r c a sh c o n trib u tio n s. F o r ex am p le, th e 5-c e n t co n ­
trib u tio n ra te and re la tiv e ly high m ax im u m funding lim its (ran g in g fro m about
$ 300 to $ 4 0 0 p e r em p lo y ee), in the p lan s n eg o tiated by the A uto m o bile W o rk e rs,
g e n e ra lly p ro v e d to be m o re th a n a d eq u ate. In a few in s ta n c e s, m a jo r b en efit
c u rta ilm e n ts r e s u lte d fro m a d v e rs e em p lo y m en t e x p e rie n c e d e sp ite th e r e q u ir e ­
m e n t th a t funding p o sitio n s m u s t d e te rio ra te s e v e re ly b e fo re b e n e fit re d u c tio n s
a re m ad e. Such re d u c tio n s w e re , h o w ev er, a ty p ic a l of th e se p la n s.
F o r re a s o n s not r e la te d to th e ir u se of con tin g en t lia b ility , p lan s w ith
p a r t of th e ir fin a n c e s in th e fo rm of con tingen t lia b ility a c c ru a ls had le s s
fa v o ra b le e x p e rie n c e . R ed u ctio n s w e re w id e sp re a d d u rin g m u ch of I960 and 1961.
About 1 in 4 of th e se p la n s p aid re d u c e d b e n e fits a t the end of I960. A y e a r
la te r 3 out of 10 p aid re d u c e d b e n e fits. T he p e rc e n ta g e w as ev en h ig h e r d u rin g
som e m o n th s in th e se 2 y e a rs .
T h is high in cid en ce of re d u c tio n s re s u lte d fro m a co m b in atio n of fa c to rs .
P r io r to the a m e n d m e n ts n e g o tia te d w ith th e S te e lw o rk e rs in 1962 and su b seq u en t
y e a rs m o st of th e se p la n s p ro v id e d fo r b en efit re d u c tio n s w h en ev er to ta l fin an ces
fe ll below 75 p e rc e n t of th e ir m ax im u m le v e ls . A t the sam e tim e , the m ax im u m s
(about $ 200 p e r em ployee) w e re m uch lo w er th an th o se in m o st o th er p la n s.
M o re o v e r, the 1959 s te e l s trik e g re a tly re d u c e d c o n trib u to ry h o u rs and em p lo y e r
o b lig atio n s fo r s e v e ra l m o n th s. In clu sio n of th e s trik e p e rio d in m ax im u m
finan cin g c a lc u la tio n s s u b s ta n tia lly lo w ered m ax im u m le v e ls by re d u c in g the h o u rs
b a s e . T he r e s u lt of th e s e low m ax im u m le v e ls w as low c o n trib u tio n s and even
c a n c e lla tio n of con tingen t lia b ility a fte r the s trik e . The h eav y b en efit dem an d s
th a t follow ed ra p id ly d e p le te d p la n r e s o u r c e s and led to e ith e r a re d u c tio n in
b e n e fits o r th e ir u ltim a te su sp e n sio n .
The 1962 am e n d m e n ts w e re ad o p ted by about tw o -th ird s of th is group
of SUB p la n s, g re a tly re d u c in g the lik elih o o d of s im ila r e x p e rie n c e in th e fu tu re
by p ro v id in g fo r la r g e r em p lo y e r c o n trib u tio n s, no c a n c e lla tio n of con tin g en t
lia b ility a c c ru a ls , h ig h e r m ax im u m finan cin g le v e ls, e lim in a tio n of s trik e p e rio d s
in c a lc u la tin g c o n trib u to ry h o u rs, and the in itia tio n of b e n e fit re d u c tio n s a t m uch
lo w er fin a n c ia l le v e ls . F o r ex am p le, p a r tia l b e n e fits w e re to be p aid w hen to ta l
fin a n c e s fe ll below 35 p e rc e n t of the m ax im u m le v e l in ste a d of 75 p e rc e n t. F ew
re d u c tio n s w e re n e c e s s a r y in 1962 and 1963 due to th e se im p ro v e m e n ts and to
a m o re fa v o ra b le em p lo y m en t situ a tio n . A t the end of 1963, 4 out of 5 s te e l
p la n s w e re a t m ax im u m finan cin g.
In a c c o rd a n c e w ith th e in te n t of p ro v id in g only te m p o ra ry a s s is ta n c e
th ro u g h SUB p ro g ra m s , th e n u m b er of w eek ly p ay m en ts th a t a w o rk e r could
re c e iv e in any one p e rio d of u n em p lo y m en t w as lim ite d to 52 o r le s s . A lthough
d a ta on e lig ib ility e x h a u stio n s w e re not a v a ila b le , in fo rm a tio n fo r s e v e ra l p lan s
w ith d is s im ila r e x p e rie n c e in d ic a te d th a t ex h au stio n s seld o m ex ce ed ed 5 p e rc e n t
of a p la n ’s m e m b e rsh ip . B e c a u se of se n io rity p ro v isio n s, lay o ffs g e n e ra lly w e re
c o n c e n tra te d am ong n e w ly -h ire d w o rk e rs ; about a fo u rth of the e lig ib ility
ex h a u stio n s w e re fo r the secon d, th ird , or a su b seq u en t layoff.
The v o la tility of b e n e fit p a y m en ts d iffe re d sig n ific a n tly by in d u stry .
P la n s w ith lim ite d flu c tu a tio n in th e am ou nt of ann ual b e n e fit p ay m en ts co v e re d
o v er h alf of th e p a rtic ip a n ts in p lan s in p r im a r y fe rro u s m e ta ls . In c o n tra st,
le s s th a n a fo u rth of th o se in tra n s p o rta tio n eq u ip m en t w e re c o v e re d by p lan s
w ith s im ila r e x p e rie n c e . A m a jo rity of th em w e re c o v e re d by p lan s w ith
m o d e ra te flu c tu a tio n .12 The follow ing ta b u la tio n show s the p e rc e n t of w o rk e rs
in e a c h in d u s try belon gin g to p lan s in ea c h of fo u r s ta b ility g ro u p s.

12 See

appendix for an explanation of change computations and stability classes.




10

Industry

Total
woikeis

All industries-----------------------Manufacturing----------------------------Rubber----------------------------------Primary metals-----------------------Ferrous------------------------------Nonferrous-------------------------Fabricated metal products---------Machinery, except electrical----Electrical machinery----------------Transportation equipment---------Other------------------------------------Nonmanufacturing------------------------

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

Very
stable Stable
31.1 41.6
32.0
37.7
47.3
51.7
12.6
52.9
11.2
10.3
22.4
23.1
15.9

39.8
40.8
25.3
20.3
65.2
17.3
36.1
79.6
56.3
26.9
73.0

Very
Unstable unstable
17.4
9.9
17.9 10.2
16.0
5.5
18.4
9.0
19.3
8.8
11.1
11.2
10.8
19.0
19.3 33.4
5.3
4.9
18.3
3.0
28.0 22.0
7.2
3.8

NOTE: Because of rounding, sums of individual items may not equal totals.

O th er P la n D is b u rs e m e n ts. It w as not u n u su al to c h a rg e a SUB fund
w ith som e of th e c o sts of a d m in is te rin g th e p la n and m an ag in g th e fund. D u ring
the 1960—63 p e rio d , su ch c h a rg e s a cco u n ted fo r about 3 p e rc e n t of to ta l fund
d is b u rs e m e n ts . Som e y e a r - to - y e a r v a ria tio n n a tu ra lly o c c u rre d in th e se c h a rg e s
sin c e th e y ten d ed to v a ry d ire c tly w ith th e siz e of th e fund and c la im s a c tiv ity .
E x p e n se s w e re e s p e c ia lly high in 1961 w hen in c re a s e d b e n e fit p ay m en ts in c re a s e d
the b u rd e n of a d m in is tra tio n .
In g e n e ra l, the fu n ctio n s p e rfo rm e d in th e o p e ra tio n of SUB p la n s, su ch
as p ro c e s s in g of c la im s , p ay m en t of b e n e fits, han dling of a p p e a ls, m ain ten an ce
of p e rtin e n t re c o rd s , and issu a n c e of r e p o r ts , w e re s im ila r to th o se in m o st
o th e r ty p es of em p lo y ee b e n e fit p ro g ra m s . T he p ro fe s s io n a l s e rv ic e s o b tained
fro m a tto rn e y s , a u d ito rs , and c o rp o ra te tr u s te e s w e re a ls o s im ila r, b u t an
e x c e p tio n o c c u rre d w ith r e s p e c t to c o n su ltin g a c tu a rie s . A lthough g e n e ra l c o st
e s tim a te s w e re n e c e s s a ry , p e rio d ic ev alu atio n s b a se d on com m on a c tu a ria l
tec h n iq u e s w e re not fe a s ib le , due to the u n c e rta in n a tu re of u n em p lo y m en t
e x p e rie n c e .
A d m in istra tiv e p ro b le m s have p ro b a b ly b e e n h eld to a m in im u m by the
ex te n t of o rg a n iz a tio n of o p e ra tin g p ro c e d u re s in th e p ro to ty p e p lan s and th e ir
ado ption in m o st of th e p la n s th a t follow ed. R e la tiv e ly few a d m in is tra tiv e changes
w e re n e c e s s a r y e x ce p t fo r th o se re q u ire d by p lan am en d m en ts th a t lib e ra liz e d
b e n e fits, e tc . W hen p ro b le m s a ro s e , a sin g le in te rp re ta tio n o r d e c isio n w as
fre q u e n tly a p p lic a b le to m any p ro g ra m s b e c a u se of th e ir s im ila rity . S e v e ra l
p la n s in b a s ic s te e l d e lib e ra te ly u se d the sam e a r b itr a to r to a s s u r e g r e a te r con­
sis te n c y of in te rp re ta tio n .
D ire c t tie s to th e S ta te -a d m in is te re d u n em p lo y m en t in su ra n c e sy ste m ,
th ro u g h u tiliz a tio n of S tate e lig ib ility lis ts , fu rth e r re d u c e d the b u rd e n of SUB
p la n a d m in is tra tio n .
The v a rio u s c o sts in c u rre d in th e o p e ra tio n of SUB p ro g ra m s w e re
han d led in a v a rie ty of w ay s. T h e re w as a tre n d aw ay fro m ch arg in g e x p e n se s
to th e fund d u rin g th e 1960—6*3 p e rio d , ex ce p t am ong m u ltie m p lo y e r p la n s. F o r
ex am p le, u n d e r th e 1958 F ord-U A W plan, th e c o sts and e x p e n se s of th e tr u s te e s ,
ex p e n se s of the b o a rd of a d m in is tra tio n , and th e c o st of a d m in is tra tiv e se rv ic e
p e rfo rm e d by the com pany w e re a ll c h a rg e a b le to the fund. The 1961 F ord-U A W
plan, h o w ev er, p ro v id e d fo r ch arg in g only tr u s te e , bank, and au d itin g fe e s to
the fund; any o th e r e x p e n se s w e re to be b o rn e s e p a ra te ly by the com p any or
sh a re d w ith th e union. B oth th e I960 b a s ic s te e l p lan and its re v is e d fo rm of



11

1962 r e s tr ic te d c h a rg e s to re a s o n a b le tr u s te e fe e s and e x p e n se s. A lm o st a ll
p la n s con tinued to p ro v id e th a t tr u s te e fe e s and e x p e n se s could be c h a rg e d to
th e fund ev en though o th e r c h a rg e s fre q u e n tly w e re not allow ed.
In a c tu a l p ra c tic e ,
re im b u rs e m e n t fo r e x p e n se s
c h a rg e s , th e m o s t fre q u e n t
funds w ith 82 p e rc e n t of th e
p a id fro m 45 p e rc e n t of th e
a p p ro x im a te ly 15 p e rc e n t of
a ll c o v e ra g e .

a c o n sid e ra b le n u m b er of co m p an ies did not se e k
th ey w e re e n title d to c h a rg e to th e fund. T ru s te e
ex p en se ite m , w e re p aid fro m 77 p e rc e n t of th e
to ta l w o rk e r co v e ra g e . T h ese w e re th e only c h a rg e s
fund s. No ex p en se d is b u rs e m e n ts w e re m ad e fro m
th e funds w h ich acco u n ted fo r n e a rly 11 p e rc e n t of
Percent

Expenses paid
Plans Workers
All plans..........- ........................... 100.0 100.0
No administrative expense------------ 15.3 10.8
24.5
Trustee only------------------------------- 45.2
Trustee and audit------------------------.9
.5
Trustee, audit, and salaries---------- 31.0 57.4
Other administrative----------------------- 3.6 3.5
Other...................................................... 4.1
3.3
NOTE: Because of rounding, sums of indi­
vidual items may not equal totals.

P ro fe s s io n a l fe e s, a d m in is tra tiv e s a la r ie s , and e x p e n se s w e re c h a rg e d
to a th ird of th e funds w h ich c o v e re d about 6 out of 10 w o rk e rs . B o a rd of
a d m in is tra tio n e x p e n se s u s u a lly w e re p aid by the com pany, w hile th e com pany
and union a lm o st in v a ria b ly p aid th e re g u la r s a la r ie s of th e ir re sp e c tiv e b o a rd
m e m b e rs and th e co m p e n sa tio n of any im p a rtia l c h a irm a n o r a r b itr a to r w as
s h a re d eq u ally .
T he $ 12 m illio n of o p e ra tin g e x p e n se s c h a rg e d to SUB funds d u rin g th e
1960— p e rio d w e re eq u al to 2.3 p e rc e n t and 2.8 p e rc e n t of c o n trib u tio n s and
63
b e n e fits, re s p e c tiv e ly . H ow ever, b e c a u se co n trib u tio n and b e n e fit e x p e rie n c e
w as by no m e a n s u n ifo rm , in d iv id u al p la n ra tio s ten d ed to d iffe r ev en m o re
w id ely b e c a u se of the v o la tile n a tu re of b e n e fits and c o n trib u tio n s. A v erag e
an n u al e x p e n se s w e re eq u al to le s s th an 5 p e rc e n t of b e n e fit p ay m en ts in p lan s
co v e rin g 58 p e rc e n t of a ll SUB p a rtic ip a n ts . H ow ever, 85 p e rc e n t of th e p a r ­
tic ip a n ts b elon ged to p la n s in w hich ex p en ses eq u aled le s s th an 5 p e rc e n t of
c o n trib u tio n s.
E x a m in a tio n of e x p e n se s on a p e r em p lo y ee b a s is i’s m o re u se fu l. D u ring
th e 1960—63 p e rio d , a p p ro x im a te ly h alf of the SUB funds w e re c h a rg e d w ith
a v e ra g e an n u al ex p en se p a y m e n ts am ou nting to le s s th an a d o lla r p e r m e m b e r.
T he ty p es of e x p e n se s c h a rg e d to the funds a r e a m a jo r d e te rm in a te of th e ir
am ou nt; fo r ex am p le, a lm o st 3 out of 4 p lan s w ith e x p e n se s of le s s th an $ 1 p e r
m e m b e r h ad d is b u rs e m e n ts only fo r tr u s te e fe e s and e x p e n se s. T he g r e a te s t
v a ria tio n in e x p e n se s o c c u rre d am ong funds w ith p ro fe s s io n a l fe e s and s a la r ie s .
A re la tio n b etw een p la n s iz e and e ffic ie n c y of o p e ra tio n w as ev id en t w hen c o st
c o m p a riso n s w e re m ade of p la n s w ith s im ila r e x p e n se s c h a rg e d a g a in st th e ir
fund s— a ll bu t one of th e la rg e p la n s th a t p aid only tr u s te e fe e s and e x p e n se s
sp e n t le s s th a n $ 1 p e r m e m b e r, w h ile a lm o st h alf th e sm a ll p lan s w ith s im ila r
c h a rg e s sp e n t m o re th an th a t am ount.



12

E ven without c o n s id e rin g the type o f e x p e n s e s c h a rg e d , on ly a fo u rth of
the funds— c h ie f ly th o se of s m a l l plan s— had ex p en se d is b u r s e m e n t s of m o r e than
$ 3 per m em b er.

____ Percent
Average annual administrative
expense paid per employee
Plans Coverage
All plans-------------------------- 100.0 100.0
Less than $1 ---------------------------- 49. 8 52. 5
$1 but less than $3-------------------- 23. 5 37. 1
$3 but less than $5-------------------- 12.4 4.4
$5 but less than $7-------------------7. 4 2. 2
$7 and over----------------------------6.9
3.7
NOTE: Because of rounding, sums of indi­
vidual items may not equal totals.
A s sets
SUB
$ 340 m i llio n
d r a in of $ 20
a lm o s t $ 4 4 7

funds held a s s e t s , e x c lu s iv e of
at the end of the I 9 6 0 r e p o r tin g
m i ll io n re d u c e d th em b y about 6
m illio n , a 4 0 - p e r c e n t gain o v e r

P la n s
f o r m o r e than
ch aracteristic
b ilit y a c c r u a l s

contingent li a b il it y , w o r th a lm o s t
y e a r (table 2). 13 In 1 9 6 1 , a net
p e r c e n t . B y 1 9 6 3 , a s s e t s to ta le d
1961.

of the t r a n s p o r t a t i o n equipm ent in d u s t r y c o n s i s t e n t ly accounted
h a lf of a ll SUB a s s e t s .
In c o n t r a s t , a lo w a s s e t p o sitio n w as
of funds in the p r i m a r y m e t a ls i n d u s t r i e s , w h e re contingent l i a ­
exc e e d e d r e g u l a r c a s h c o n trib u tio n s .

The funds f o r the in d iv id u a l account p la n s, w hich functioned som ew h at
as sa v in g s p lan s, contained the m o s t a s s e t s p e r p a rt ic ip a n t . 14

Funding provision
Assets per worker:
General fund-----------------------------Pooled fund------------------------------General fund with contingent
liability---------------------------------Individual accounts-------------------Total resources— general fund
with contingent liability --------------

Average amount of resources per employee
1961
1963
1960
1962

$247.48 $243.54 $301.91 $359.94
149.15 158.67 162.09 133.13
34. 08
42.25
41.33
41.21
337.46
387.95 414.12 403.16
206.65 170.93 235. 55 258.31
Includes contingent liability accruals.

D espite sig n ifican t y e a r - t o - y e a r ch anges in the r e l a t i o n b etw een a s s e t s
and contingent li a b i l i t y in plans so m an aged , contingent l i a b i l i t y has c o n s i s te n tly
accounted fo r the m a j o r p o rtio n of the plans' r e s o u r c e s — f r e q u e n tly m o r e than
7 5 p e rc e n t.
Contingent li a b i l i t y a c c r u a l s accou n ted f o r a l a r g e r p r o p o rt io n of
the r e s o u r c e s of the la r g e p lans than of the s m a l l o n es.
In 19 6 3 , contingent
li a b i l i t y accou n ted f o r 87 p e r c e n t of the r e s o u r c e s of p lans w ith m o r e than 4, 000
m e m b e r s as a g a in st 75 p e r c e n t among th o se w ith f e w e r m e m b e r s .
S m a lle r
d if fe r e n c e s p r e v a i le d in the p re c e d in g 3 y e a r s .

13 About 80 percent of all financial reports were on a calendar-year basis. The remainder used a fiscal year.
14 As mentioned previously, participants had no equity or interest in these fund assets, except for those covered
by plans that made allocations to individual employee accounts.




13
The y e a r e n d a s s e t data g e n e r a l l y r e f le c t e d the r e s u l t s of d if f e r e n t c o n ­
tr ib u tio n r a t e s and the im p a c t of d i s s i m i l a r b en efit e x p e r i e n c e .
H o w ever, by
the end of 19 6 3 , m a n y of the g e n e r a l t r u s t fund plans and g e n e r a l funds w ith
contingent l i a b i l i t y w e r e n e a r o r had r e a c h e d m a x im u m fin an cin g l e v e l s .
When
t h e i r m a x im u m l e v e l s w e r e attain ed , f u r t h e r a s s e t i n c r e a s e s w e r e c u r t a ile d .
M any of the o r ig in a l SUB plan s set m a x im u m s as a f l a t d o ll a r amount
p e r e m p lo y e e , ev e n though re d u c tio n s w e r e p ro v id e d f o r if b en efit e x p e r ie n c e
p ro v e d f a v o r a b le .
Subsequent a m en d m en ts u s u a ll y tied th em m o r e d i r e c t l y to
b e n e fit e x p e r i e n c e . F o r e x a m p le , f o r m o s t c u r r e n t UAW p lan s, m a x im u m funding
r e q u i r e m e n t s a r e a m u ltip le (u s u a lly 16 tim e s) of the p rod u ct of the a v e r a g e fu ll
w e e k ly b en efit and the n u m b er of c o v e r e d e m p lo y e e s .
The o r i g in a l s t e e l plans
u sed the p ro d u ct of a sp e c ifie d n u m b er o f cen ts ( u s u a lly 10 cents) and the to ta l
n u m b er of h o u rs w o rk e d by c o v e r e d e m p lo y e e s during a g iven 1 2 - m o n th p e rio d .
This a p p ro a c h has b een re ta in e d ; g r e a t e r fl e x ib i li t y , h o w e v e r , w a s a c h ie v e d
by adding an a lt e r n a t i v e com p u tation of 100 ti m e s the am ount of b e n e fits paid
during an a v e r a g e m onth.
The l e s s e r of the two d e te r m in e d the m a x im u m
fin an cin g l e v e l .







A ppendix.

Scope and M ethod o f Study

T h is stu dy a p p lie s to a ll em ployee b en efit p lan s p ro v id in g su p p le m e n ta ry
u n em p lo y m en t b e n e fits th a t a r e on file w ith th e L ab o r D epartm ent* s O ffice of
L a b o r-M a n a g e m e n t and W e lfa re -P e n sio n R e p o rts (LM W P). P u rs u a n t to th e
W elfare and P e n sio n P la n s D is c lo s u re A ct (P L 85-836 re v ise d ), a d m in is tra to rs
of p riv a te p lan s w ith m o re th a n 25 m e m b e rs a r e re q u ire d to file p lan d e s c rip tio n s
and su p p o rtin g d o c u m e n ts, as w ell a s ann ual fin a n c ia l r e p o r ts . A ran d o m sam p le
w as s e le c te d fro m th o se p la n s fo r w hich I960 fin a n c ia l r e p o r ts w e re file d . The
se le c te d p la n s w e re w eig h ted a c c o rd in g to the p ro b a b ility of th e ir se le c tio n . It
w as n e c e s s a r y to u se th e sa m e sam p le fo r e v e ry y e a r, b e c a u se m o re c u rre n t
lis tin g s of p lan s p ro v id in g u n em p lo y m en t b e n e fits w ere not a v a ila b le .
U se of a fix ed sa m p le in tro d u c e s a b ia s w hich ten d s to u n d e rs ta te SUB
grow th; n e v e rth e le s s , o th e r u n p u b lish ed BLS s ta tis tic s and in fo rm a tio n o b tain ed
fro m v a rio u s s o u rc e s in d ic a te th a t a g g re g a te c o v e ra g e and fin a n c ia l s ta tis tic s
have not b e e n su b s ta n tia lly in c re a s e d by new p la n s.
T he annual (D -2) r e p o r ts file d w ith LM W P g e n e ra lly c o v e re d a c a le n d a r
y e a r; h o w ev er, about 20 p e rc e n t of th e re p o rts w e re fo r a fis c a l y e a r w hich
d iffe re d by a m o n th o r m o re fro m the c a le n d a r y e a r. A lthough re p o rtin g y e a r
and c a le n d a r y e a r d ata o c c a sio n a lly v a rie d su b sta n tia lly fo r so m e in d iv id u al p la n s,
it w as not p ra c tic a l to re q u e s t c a le n d a r-y e a r d ata fro m a ll of th e co m p an ies
in v o lv ed . F u rth e rm o re , c a le n d a r e s tim a te s o r a v e ra g e s w ould not be a p p ro p ria te
fo r u s e in a ra tio a n a ly s is . P la n d a ta w e re co n seq u en tly an aly zed as re p o rte d .
O p e ra tin g s ta tis tic s g e n e ra lly re fle c t v a rio u s in te rre la tio n s h ip s b etw een
eco n o m ic co n d itio n s and p la n o p e ra tio n s. 15 Due to d iffe re n c e s in p e rtin e n t p lan
p ro v isio n s and v a ria tio n s in im m e d ia te econ om ic c o n d itio n s, e x p e rie n c e p a tte rn s
a ls o d iffe r. In o rd e r to c o m p a re th e s e d iffe re n c e s w ithout r e g a r d to p e rfo rm a n c e
in th e p re c e d in g y e a r, th e p e rc e n t by w hich ann ual p ay m en ts d e v ia te d fro m th e ir
1960—63 m e a n w as d e te rm in e d on an in d iv id u al p lan b a s is fo r c o n trib u tio n s and
b e n e fits . T h e ir a v e ra g e ann ual d e v ia tio n s d u rin g the 4 -y e a r p e rio d w e re g ro u p ed
fo r th is study a s follow s:
Stability group
Very stable-Stable--------Unstable-----Very unstable<

Percent deviation
Less than 30
30 but less than 50
50 but less than 70
70 and over

D ata o b tain ed fro m D -2 re p o r ts a re not n e c e s s a r ily id e n tic a l to th o se
o b tain ed fro m tra d e -u n io n and in d u s try r e p o r ts , even though th e re p o rtin g y e a r
is th e sa m e . D iffe re n t re p o rtin g te c h n iq u es m ay have b een u se d . C o n trib u tio n s
m a y have b e e n re p o rte d on e ith e r an in c u rre d o r d a te -o f-d e p o s it b a s is . D iffe r­
en c e s in th e re p o rtin g of a c c ru e d m on thly b e n e fits p ro c e s s e d b u t not p aid could
a ls o m ak e it d iffic u lt to re c o n c ile b e n e fits. W ith re s p e c t to c o v e ra g e , th e D -2
c a lls fo r a re p re s e n ta tiv e fig u re fo r the y e a r— it m ay be an a v e ra g e o r c o v e ra g e
a s of a sp e c ific d a te . D is s im ila r te c h n iq u es m ay have b een u se d in o th e r r e p o r ts .
15
Because its recent origin distorts the analysis of such relationships, data for the ILGWU plans are omitted
from text tabulations of contribution and benefit stability and of plan resources per worker.



15

16

Table 1.

Contributions, Benefits, and Assets o f SUB Plans, by Type of Funding, 1960-63

Funding provision

(In millions of dollars)
Contributions
1960
1961
1962

All plans---------------------------------------

$119.6

$107.1

General fund---------------------------------------Pooled fund-----------------------------------------General fund with contingent liability-----Individual employee accounts----------------Other-------------------------------------------------Unfunded--------------------------------------------Information not available-----------------------

$72.9
4.3
37.3
4.7
(*)
(*)
.4

$48.2
8.8
46.3
3. 3
<n
.i
.4

Benefits
1963

$157.5
$94.5
9. 1
49.9
3.7
.1
(M
.1

1960

$152.9

$91.3
$41.5
1.2
45.3
3.1
C1)
0)
.1

$88.2
8.8
51.4
4.4
(j)
(1)
.1

Benefits— ■ Continued

1961
$131.3
$72.2
4.4
50.7
3.5
.1
.1
.3

Assets 2

1962
All plans--------------------------------------General fund--------------------------------------Pooled fund-----------------------------------------General fund with contingent liability----Individual employee accounts----------------Other-------------------------------------------------Unfunded--------------------------------------------Information not available-----------------------

1963

I960

1961

1962

1963

$104.6
$44.5
6. 1
49.6
4.2
.1
(0
.1

$99.6

$339.9
$265.1
19.5
30.9
22.6
.5

$319.9
$245. 6
24.9
24.5
23.3
.4

$386.3

$446.9

$303. 4
28.4
29. 1
23.8
.4
1.2

$361.9
29.4
27.8
26.1
.3
1.3

$40. 1
7.0
50.2
2.1
.1
(}>
( 1)

1

.

1

Less than $0.05 million.
2 Excludes contingent liability.
NOTE:

Because of rounding, sums of individual items may not equal totals.




-

1.1

17
Table 2.

Contributions, Benefits, and Assets of SUB Plans, by Industry, 1960-63

Industry
All industries--------------------------------Manufacturing------------------------------------Rubber------------------------------------------Primary metals-------------------------------Ferrous-------------------------------------Nonferrous----- ----------------------------Fabricated metal products-----------------Machinery, except electrical------------Electrical machinery-----------------------Transportation equipment-----------------Apparel-----------------------------------------Other --------------------------------------------Nonmanufacturing--------------------------------

fin millions of dollars!
Contributions
1960
1961
1962

1963

1960

1961

$119.6

$107. 1

$157.5

$152.9

$131.3

$116. 1
4.3
33.2
28.9
4.3
3.9
9.2
1.9
58.5

$101.8
3.7
41.8
37. 1
4.8
2. 1
9.6
1. 0
34.5
4.9
4.2
5.4

$152.5
3.7
46.6
43.0
3.5
3.0
11.3
4.7
74. 1
5.1
3.8
5.1

$148.0
2.3
47.8
44.9
2.9
3.6
12.7
1.9
70.6
5.3
3.9
4.9

$91. 3
$89.2
1.9
41.4
37.6
3.7
3.8
11.7
2. 1
25. 1
3. 1
2. 1

1. 1

3.9
3.6

Benefits—■ Continued
1962
1963

Benefits

$125.9
4.0
44.2
38.5
5.7
3.3
10.8
3.2
55.0
1.5
3.9
5.4

Assets 1
1960

1961

1962

1963

All industries--------------------------------

$104.6

$99.6

$339.9

$319.9

$386. 3

$446.9

Manufacturing-----------------------------------Rubber-------- -----------------------------------Primary metals----------- - -------------------Ferrous--------------------------------------Nonferrous---------------------------------Fabricated metal products-----------------Machinery, except electrical------------Electrical machinery-----------------------Transportation equipment-----------------Apparel------------------- ----------------------Other---------------- •----------- --------------Nonmanufacturing---------------------------------

$99.5
2.4
46.3
43.7
2.6
3.3
9.6
1.8
30.6
2.7
2.9
5. 1

$93.5
2.0
45.7
42.5
3.2
3.2
5.6
1.6
28.7
2.7
4. 1
6.0

$329.4
24.5
27.8
24.6
3.2
12.0
42.7
16.4
182.4
8. 1
15.4
10.5

$309.1
24.5
23.3
21.0
2.3
11. 1
42.0
14.6
165. 3
12.7
15.6
10.8

$375.3
26.3
27.6
24.4
3.3
11. 1
45.0
18.3
214.8
15.7
16.6
11.0

$437. 3
26.6
26.0
23.0
3.0
11.4
55.7
19.2
263.9
18. 1
16.4
9.7

1

Excludes contingent liability.

NOTE:

Because of rounding, sums of individual items may not equal totals.




18

Table 3.

Contributions, Benefits, and Assets of SUB Plans, by Union, 1960-63

Union
All plans--------------------------------------Negotiated plans---------------------------------Auto workers-----------------------------------Rubber workers-------------------------------Steel workers----------------------------- -----Ladies’ garment workers--------------------Two unions or more-------------------------Other AFL-CIO unions----------------------Independent unions---------------------------Nonnegotiated plans-----------------------------

(In millions of dollars)
Contributions
1960
1961
1962
$119.6
$118.6
65.8
3. 1
35.4
1. 1
3.8
7.3
2. 1
1. 1

$107. 1
$106.1
42.4
2.9
43.6
4.9
3.9
6.8
1.6
1.0

$157.5
$156.1
83.8
3.0
48. 1
5. 1
3. 1
11.4
1.7
1.4

Benefits
1963

1960

1961

$152.9
$151.9
81.6
1.9
51.3
5.3
.9
8.2
2.7
1.0

$91.3
$90.6
34.3
1.6
43.1
3.4
6. 5
1.6
.7

$131.3
$130. 1
64. 5
3.3
46.6
1.5
4.0
8.4
1.8
1.2

Benefits—Continue d
1962
All plans--------------------------------------Negotiated plans---------------------------------Auto workers-----------------------------------Rubber workers--------------------------------Steel workers-----------------------------------Ladies' garment workers--------------------Two unions or more-------------------------Other AFL-CIO unions----------------------Independent unions---------------------------Nonnegotiated plans----------------------------1

$104.6
$100.7
37. 1
1.8
47.0
2.7
2.5
7. 2
2.5
3.9

1963
$99.6
$98.3
33.5
1.7
48.8
2.7
1.5
8.4
1.6
1.3

Assets 1
1960

1961

1962

1963

$339.9
$334. 7
225.7
21.0
28.7
8.1
4.8
38.3
8. 1
5.2

$319.9

$386.3
$383.3
261. 1
22.9
28.6
15.7
5.0
43.3
6.8
3.0

$446.9

$314.8
207.5
21.0
23.6
12.7
4.5
37.8
7.7
5. 1

Excludes contingent liability.

NOTE:

Because of rounding, sums of individual items may not equal totals.




$443.4
317,8
23.0
27.7
18. 1
4.5
45.7
6.5
3.6

19

Table 4. Average Yearly Expenses Charged to SUB Funds on a Per Employee Basis,
by Type of Expenses Paid, 1960-63
J^Wjorkers^ii^thousandsJ^

Range of charges per employee
None

Total

Expenses paid and group size

Plans
All plans-----------------------------No administrative expense --------------4, 000 workers or m ore---------------Less than 4, 000 workers--------------Trustee only----------------------------------4,000 workers or m ore---------------Less than 4, 000 workers--------------Trustee and audit--------------------------4, 000 workers or m ore---------------Less than 4, 000 workers-------------Trustee, audit, and salaries------------4,000 workers or more-----------------Less than 4, 000 workers-------------Other administrative-----------------------4, 000 workers or m ore----------------Less than 4, 000 workers--------------Not classified 1 -----------------------------4, 000 workers or m ore---------------Less than 4, 000 workers---------------

All plans--------------------------------No administrative expense ----------------4, 000 workers or m ore------------------Less than 4, 000 workers----------------Trustee only------------------------------------4, 000 workers or m ore------------------Less than 4, 000 workers----------------Trustee and audit----------------------------4, 000 workers or m ore------------------Less than 4, 000 workers------------------Trustee, audit, and salaries---------------4, 000 workers or m ore------------------Less than 4, 000 workers----------------Other administrative ------------------------4, 000 workers or m ore------------------Less than 4, 000 workers----------------Not classified 1 --------------------------------4, 000 workers or m ore------------------Less than 4, 000 workers-----------------

Workers

Plans

704
108
5
103
318
22
296
6
1
5
218
32
186
25
3
22
29
3
26

1,890
204
171
32
463
260
202
10
5
5
1,085
972
113
66
55
11
63
31
32

108
108
5
103
-

Less than $1

Workers
204
204
171
32
-

$3 but
less than
$5
84
87
.
.
10
45
10
45
30
68
52
6
24
16
12
5
5
12
-

Plans

Workers

243
789
_
_
178
413
251
21
157
162
31
284
8
265
18
23
34
7
2
31
3
5
27
58
3
31
24
27
$5 but
less than
$7

52
20
20
1
1
-

31
2

29
-

42
.
2
2
5
5
35
18
16
-

$1 but
less than
$3
Plans Workers
166
_
55
1
54
5
5
98
12
86
6
1
5
2
2

703
_
37
9
28
5
5
629
575
54
27
24
3
5
5

$7 and over
48
20
20
28
4

24
-

69

.
-

1
1
68
60
8
~

* Plans lacking consistency in the type of expenses charged to the fund.
NOTE: Because of rounding, sums of individual totals m ay not equal totals.




U.S. GOVERNMENT PRINTING OFFICE : 1966 0 - 217-204




BUREAU OF LABOR STATISTICS REGIONAL OFFICES