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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—63, and the second an analysis of SUB experience 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—63 p e rio d te s te d the ad eq u acy of 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 67 9 2,271 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—63 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 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 $152.9 $88.2 8.8 51.4 4.4 (j) (1) .1 Benefits— ■ Continued All plans--------------------------------------General fund--------------------------------------Pooled fund-----------------------------------------General fund with contingent liability----Individual employee accounts----------------Other-------------------------------------------------Unfunded--------------------------------------------Information not available----------------------- $91.3 $41.5 1.2 45.3 3.1 C1) 0) .1 $131.3 $72.2 4.4 50.7 3.5 .1 .1 .3 1962 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 Because of rounding, sums of individual items may not equal totals. 1961 Assets 2 Less than $0.05 million. 2 Excludes contingent liability. NOTE: 1960 - 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 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----------------- None Total Expenses paid and group size Plans 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
@FedFRASER