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0

T4on

Dayton & Montgomery
Public Library

AU&24 1964

. 1407

d cu en : collection
o m t

Labor Mobility and
Private Pension Plans
A study of vesting, early retirement
and portability provisions

U N I T E D S T A T E S D E P A R T M E N T OF LABOR
W. W i l l a r d W i r t z , Secretary
Sponsored by

OFFICE OF M A N PO W ER , A U TO M A TI O N AND TRAINING
Seymour L. Wolfbein, Director
Prepared by

BUREAU OF LABOR STATISTICS
Ewan Clague, Commissioner







BUREAU OF LABOR STATISTICS REGIONAL OFFICES

BLS Bulletin No. 1407

Labor Mobility and
Private Pension Plan

A study of vesting, early retirement,
and portability provisions

U N ITE D S T A T E S D E P A R TM E N T O F LA BO R
W . W illa r d W ir t z , Secreta ry
Sponsored by

June 1964

OFFICE OF MANPOWER, AUTOMATION AND TRAINING
Seymour L. Wolfbein, Director

Prepared by
BUREAU OF LABOR STA TISTIC S
Ewan Clague, Commissioner

Digitized forFor sale by the Superintendent o f Documents, U .S . Government Printing Office, W ashington, D.C., 2 0 4 0 2 - Price 4 5 cents
FRASER





P r e fa c e
The Manpower Development and Training Act of 1962 directed the Secre­
tary of Labor to "establish a program of factual studies of practices of employers
and unions which tend to impede the mobility of workers or which facilitate mo­
bility. n Included among the studies requested was one of "early retirement and
vesting provisions and practices under private compensation plans. "
To fulfill this statutory directive, the Department of Labor’ s Office of
Manpower, Automation and Training requested the Department’ s Bureau of Labor
Statistics to undertake this study and supported it financially. Studies of the mo­
bility implications of other practices of employers and unions will be sponsored
by the Office of Manpower, Automation and Training.
This undertaking had two major parts: (l) To describe the private pen­
sion structure in its entirety— the prevalence of plans, the types of plans, and
types and characteristics of benefits provided, and (2) to set forth the implica­
tions for labor mobility inherent in the provisions and practices thus accounted
for, in all their variety. The study, however, does not attempt directly to m eas­
ure the effects of private pension plans on labor mobility.
An overall yet detailed view of the entire private pension structure, which
had never before been attempted, became a feasible project with the enactment
of the Welfare and Pension Plans Disclosure Act. This act brought into the cus­
tody of the Department of Labor a vast collection of basic documents and reports
dealing with welfare and pension plans in effect throughout the United States. It is
believed that this bulletin accounts for the selected provisions of virtually all pri­
vate pension plans covering more than 25 workers in effect at the time of the study.
Although this study concentrates on the vesting and early retirement pro­
visions of pension plans, it also brings into focus the pension credit portability
provided by multiemployer plans and, to a limited extent, the age and service
requirements for normal retirement. Other aspects of the private pension struc­
ture, such as disability retirement, level of benefits, and normal retirement,
which have general manpower implications, although not as directly related to
labor mobility as the practices selected for this study, will be covered in sep­
arate Bureau of Labor Statistics bulletins presently in process.
Some of the data obtained in the course of this study were made availa­
ble to the President's Committee on Corporate Pension Funds and Other Private
Retirement and Welfare Programs, and to the President's Advisory Committee
on Labor-Management Policy. Some data for major plans also appeared in the
Manpower Report of the President in 1963.
The Bureau of Labor Statistics is grateful for the assistance of the staff
of its cooperating agency, the Office of Manpower, Automation and Training, in
particular Mr. Robert E. Manifold. Both agencies appreciate the assistance of
the staff of the Office of Labor-Management and Welfare-Pension Reports respon­
sible for the Department's file of pension plan documents.
This study was undertaken in the Bureau's Division of Industrial and
Labor Relations, Joseph W. Bloch, Chief, under the general direction of
L. R. Linsenmayer, Assistant Commissioner for Wages and Industrial Rela­
tions.
The bulletin was prepared by Walter W. Kolodrubetz under the super­
vision of Donald M. Landay.




Hi

C o n te n ts
Page

Chapter I.
Introduction_____________________________________________________
Scope and method___________________________________________________________

1
2

Chapter II.
Selected characteristics of private pension plans_____________
Size of plans_________________________________________________________________
Industry and type of employer unit________________________________________
Collective bargaining_______________________________________________________
Financing___________________________________________________________________
Supplemental pension plans_____________________________________________
Geographic a r e a ____________________________________________________________
Type of worker covered____________________________________________________
Administration_____________________________________________________________
Implications for mobility___________________________________________________

4
6
6
7
7
7
8
8
8
9

Chapter III. V estin g__________________________________________________________
Prevalence of vesting______________________________________________________
Types of vesting____________________________________________________________
Requirements for vesting__________________________________________________
Deferred full vesting____________________________________________________
Deferred graded vesting________________________________________________
Prospects of vesting____________________________________________________
Type of separation______________________________________________________
Benefits payable under vesting____________________________________________
The value of vested benefits________________________________________________
Implications for mobility___________________________________________________

11
11
14
14
14
16
16
16
18
19
22

Chapter IV. Early retirem ent________________________________________________
Prevalence of early retirement provision_________________________________
Minimum requirements for early retirem ent_____________________________
Benefits payable under early retirem ent__________________________________
Social security adjustment option_______________________________________
Special early retirement___________________________________________________
Prevalence of special early retirement provisions____________________
Requirements for special early retirement____________________________
Benefits payable under special early retirement______________________
Implications for mobility___________________________________________________

24
25
26
28
30
30
31
32
33
33

Chapter V. Multiemployer plans_____________________________________________
Scope of plans_______________________________________________________________
Reciprocity between plans__________________________________________________
Restrictions on employment after termination____________________________
Implications for mobility___________________________________________________

36
37
38
39
39

Chapter VI. Prospects of benefits____________________________________________
Prevalence of protective provisions_______________________________________
The effects of age and service requirements______________________________

41
41
43

Outlook for private pension plans__________________________________________

51




iv

Contents— Continued
Page
C h a rts:
1.
2.
3.
4.

G ro w th in n u m b e r an d c o v e r a g e o f p r iv a t e p e n s io n p l a n s _____________
P e r c e n t o f p r i v a t e p e n s io n p la n s an d w o r k e r s w ith o u t v e s t in g a t
s p e c i f i e d a g e s f o r w o r k e r s h ir e d a t a g e 2 5 , w in te r 1962—6 3 ________
P e r c e n t o f p r iv a t e p e n s io n p la n s an d w o r k e r s w ith o u t an y b e n e f it s
( v e s t in g , e a r l y r e t i r e m e n t , n o r m a l r e t ir e m e n t ) a t s p e c i f i e d a g e s
f o r w o r k e r s h ir e d a t a g e 2 5 , w in te r 1962— 3 ___________ _____________
6
P e r c e n t o f w o r k e r s in p r i v a t e p e n s io n p la n s w ith o u t an y b e n e f it s
( v e s t in g , e a r l y r e t i r e m e n t , n o r m a l r e t ir e m e n t ) a t s p e c i f i e d a g e s
f o r w o r k e r s h ir e d a t a g e 2 5 , b y ty p e o f w o r k e r c o v e r e d ,
w in te r 1962— 3 ___________________________________________________________
6

5
17
47

48

T a b le s :
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

16.
17.
18.
19.

D is t r ib u t io n o f p r iv a t e p e n s io n p la n s b y —
D a te o f e s t a b l i s h m e n t _____________________________________________________
N u m b e r o f a c tiv e w o r k e r s c o v e r e d , w in te r 1962— __________________
63
I n d u s t r y g r o u p , w in te r 1962— __________________________________________
63
I n d u s t r y g r o u p an d ty p e o f e m p lo y e r u n it, w in te r 1962— 3 ____________
6
I n d u s t r y g r o u p an d c o ll e c t iv e b a r g a in in g s t a t u s , w in te r 1962— ____
63
I n d u s t r y g r o u p an d m e th o d o f fin a n c in g , w in te r 1962—6 3 ______________
I n d u s t r y g r o u p an d g e o g r a p h ic a r e a c o v e r e d , w in te r 1962— 3 ________
6
I n d u s t r y g r o u p an d ty p e o f w o r k e r c o v e r e d , w in te r 1962— 3 __________
6
F i n a l a u t h o r ity f o r b e n e fit d e t e r m in a t io n , w in te r 1962— 3 ____________
6
V e s t in g p r o v i s i o n s in—
P r i v a t e p e n s io n p la n s b y ty p e , c o n d itio n s fo r v e s t i n g , w in te r
1 9 6 2 - 6 3 ___________________________________________________________________
P r i v a t e p e n s io n p la n s b y ty p e o f e m p lo y e r u n it, m e th o d o f
fin a n c in g , an d c o ll e c t iv e b a r g a in in g s t a t u s , w in te r 1962— 3 ________
6
S in g le e m p lo y e r p r iv a t e p e n s io n p la n s b y n u m b e r o f a c tiv e
w o r k e r s c o v e r e d , w in te r 1962— _____________________________________
63
P r i v a t e p e n s io n p la n s b y in d u s t r y g r o u p , w in te r 1962— ____________
63
T y p e o f v e s t in g in p r iv a t e p e n s io n p la n s b y —
I n d u s t r y g r o u p , w in te r 1962— 3 __________________________________________
6
T y p e o f e m p lo y e r u n it, m e th o d o f fin a n c in g , an d c o ll e c t iv e
b a r g a in in g s t a t u s , w in te r 1962— 3 _____________________________________
6
M in im u m a g e an d s e r v i c e r e q u ir e m e n t s f o r —
D e f e r r e d f u ll v e s t in g in p r iv a t e p e n s io n p l a n s , w in te r 1962— 3 ________
6
D e f e r r e d fu ll v e s t in g in p r iv a t e p e n s io n p la n s b y
c o n d itio n s f o r v e s t in g an d ty p e o f w o r k e r c o v e r e d ,
w in te r 1962— 3 ___________________________________________________________
6
D e f e r r e d g r a d e d v e s t in g in p r i v a t e p e n s io n p la n s b y
p e r c e n t in i t ia ll y v e s t e d , w in te r 1962— 3 ______________________________
6
F u l l v e s t in g in p r i v a t e p e n s io n p la n s w h ich h av e
d e f e r r e d g r a d e d v e s t in g , w in te r 1962— _____________________________
63




v

52
52
52
53
53
54
54
55
55

55
56
56
57
57
58
58
59
62
63

Contents— Continued
Page
T a b le s— C o n tin u e d
20.
21.
22.
23.
24.

25.
26.
27.

28.
29.
30.

E a r l y r e t i r e m e n t p r o v i s i o n s in p r i v a t e p e n s io n p la n s b y —
T y p e o f e m p lo y e r u n it, m e th o d o f fin a n c in g , an d c o ll e c t iv e
b a r g a in in g s t a t u s , w in te r 1962— 3 _____________________________________
6
I n d u s t r y g r o u p , w in te r 1962— __________________________________________
63
M in im u m a g e an d s e r v i c e r e q u ir e m e n t s f o r e a r l y r e t i r e m e n t in
p r i v a t e p e n s io n p l a n s , w in te r 1962— ________________________________
63
S p e c i a l e a r l y r e t i r e m e n t p r o v i s i o n s in p r i v a t e p e n s io n p la n s b y
in d u s t r y g r o u p , w in te r 1962— 3 ________________________________________
6
M in im u m a g e an d s e r v i c e r e q u ir e m e n t s f o r s p e c i a l e a r l y
r e t i r e m e n t in p r i v a t e p e n s io n p l a n s , w in te r 1962— 3 ---------------------6
P r o v i s i o n s fo r —
V e s t in g an d e a r l y r e t i r e m e n t in p r iv a t e p e n s io n p la n s b y ty p e o f
e m p lo y e r u n it, ty p e o f v e s t i n g , an d c o n d itio n s f o r v e s t i n g ,
w in te r 1962— 3 ___________________________________________________________
6
V e s t in g , e a r l y r e t i r e m e n t , an d p o r t a b i l i t y in p r i v a t e p e n s io n
p la n s b y ty p e o f w o r k e r c o v e r e d , w in te r 1962— 3 ____________________
6
V e s t in g , e a r l y r e t i r e m e n t , an d p o r t a b i l i t y in p r i v a t e p e n s io n
p la n s b y in d u s t r y g r o u p , w in te r 1962— 3 ______________________________
6
E a r l i e s t a g e an d a s s o c i a t e d s e r v i c e a t w h ich th e w o r k e r q u a li f ie s
f o r v e s t i n g , e a r l y r e t i r e m e n t , o r n o r m a l r e t i r e m e n t in —
P r i v a t e p e n s io n p l a n s , w in te r 1962— 3 __________________________________
6
P r i v a t e p e n s io n p la n s b y in d u s t r y g r o u p , w in te r 1962— ______________
63
P r i v a t e p e n s io n p la n s b y ty p e o f w o r k e r c o v e r e d , w in te r 1962— 3 _____
6

A p p e n d ix :

S c o p e an d m e th o d o f s t u d y __________________________________________




vi

63
64
65
66
66

67
67
68

68
69
71
72

Labor M obility and Private Pension Plans
C h a p te r I.

In tr o d u c tio n

T h e p r e s u m p t io n th a t p e n s io n p la n s in h ib it w o r k e r m o b ilit y i s w id e ly a c ­
c e p te d .
In d e e d , a c o n t r a r y v ie w w o u ld ru n c o u n te r to on e o f the c h ie f r e a s o n s
fo r the e s t a b l i s h m e n t o f m a n y p e n s io n p l a n s . A lm o s t w ith o u t e x c e p t io n , h o w e v e r,
it i s a g r e e d th a t o th e r p r a c t i c e s —s e n i o r i t y , f o r e x a m p le — a r e in t e r m e s h e d w ith
the a c c u m u la tio n o f p e n s io n r ig h t s an d m a y , on b a l a n c e , b e m o r e s ig n i f ic a n t d e ­
t e r r e n t s to w o r k e r m o b ilit y .
In d e a lin g w ith the l a b o r m o b ilit y im p l ic a t i o n s o f p e n s io n p l a n s , i t is
im p o r t a n t to e m p h a s i z e th a t a p a r t i c u l a r ty p e o f m o b ilit y o f a p a r t i c u l a r c a t e g o r y
o f w o r k e r s is u n d e r c o n s id e r a t io n .
T h e m o b ilit y fu n c tio n upon w h ich p e n s io n
p la n s h a v e the g r e a t e s t e f f e c t c o n s i s t s l a r g e l y o f v o lu n t a r y s h i f t s f r o m on e e m ­
p lo y e r to a n o th e r , n o t n e c e s s a r i l y in v o lv in g g e o g r a p h ic o r o c c u p a t io n a l c h a n g e s .
T h e w o r k e r s p r i n c i p a l l y in v o lv e d in th is s it u a t io n a r e l a r g e l y th o se b e tw e e n the
a g e s o f a b o u t 35 o r 40 an d 55 o r 6 0 w ho h a v e a c c u m u la t e d y e a r s o f c r e d it e d
s e r v i c e u n d e r a p e n s io n p la n .
T h e m o b ilit y o f yo u n g w o r k e r s , o c c u p a t io n a l
m o b ilit y w ith in the c o m p a n y o r a t l a r g e , the m o b ilit y o f p e r m a n e n t ly d i s p l a c e d
w o r k e r s , g e o g r a p h ic m o v e m e n t , the m o b ilit y a m o n g w o r k e r s who do n o t s t a y
w ith an y e m p lo y e r lo n g e n o u g h to a c c u m u la te s ig n i f ic a n t p e n s io n r ig h t s — th e s e
m a n p o w e r - m o b ilit y s it u a t io n s a r e e it h e r n o t d i r e c t l y r e l a t e d to the e x i s t e n c e o f
p e n s io n p la n s o r a r e b e lie v e d to b e o f s e c o n d a r y im p o r t a n c e .
T h e in flu e n c e o f
p e n s io n p la n s on the w il lin g n e s s o f m id d l e - a g e d w o r k e r s to c h a n g e jo b s ( e m ­
p l o y e r s ) i s the k e y i s s u e .
M o b ility s t u d i e s in d ic a t e th a t v o lu n ta r y m o b ilit y a m o n g m id d l e - a g e d
w o r k e r s is low in the e c o n o m y a s a w h ole an d h a s b e e n d e c lin in g in r e c e n t
y e a r s . 1 E m p i r i c a l e v id e n c e a s to the r e a s o n s fo r th is r e l a t i v e im m o b ilit y a n d ,
m o r e p a r t i c u l a r l y , a s to the r o le o f p e n s io n p l a n s , r e q u i r e s p r o b in g in to w o r k e r
m o t iv a tio n s an d a tt itu d e s an d an a tt e m p t to s e p a r a t e th e m u ltip le s t r a n d s th a t
b in d w o r k e r s to the c o m p a n y an d c o m m u n ity , a d if f ic u lt a r e a f o r r e s e a r c h .
Y e t,
w ith r e g a r d to p e n s io n p l a n s , it m a y r e a s o n a b l y b e a r g u e d th a t t h e ir im p a c t upon
w o r k e r m o t iv a tio n s i s s t i l l d e v e lo p in g , a t l e a s t f o r p r o d u c tio n an d n o n s u p e r v is o r y
e m p lo y e e s.
A s p o in te d o u t in th is r e p o r t , th e p r i v a t e p e n s io n m o v e m e n t in it s
p r e s e n t f o r m i s r e l a t i v e l y n ew .
O n ly a b o u t 1. 2 m il lio n w o r k e r s w e r e a c t u a l ly
r e c e i v in g b e n e f it s o f an y a m o u n t in 1961 f r o m the p r iv a t e p e n s io n p la n s s t u d ie d ;
p o s s i b l e h a lf o f th is n u m b e r w e r e r e c e i v in g b e n e f it s 5 y e a r s e a r l i e r .
W ith so
fe w fe llo w w o r k e r s , n e i g h b o r s , o r r e l a t i v e s r e c e i v in g b e n e f it s o f an y s u b s t a n t i a l
a m o u n t, it i s q u e s t io n a b le w h e th e r the p r o s p e c t s o f p r i v a t e p e n s io n s h a v e y e t
su n k in to the c o n s c i o u s n e s s o f A m e r ic a n w o r k e r s a s a p r i m a r y m o t iv a tin g i n ­
flu e n c e .
M o r e o v e r , m a n y p e n s io n p la n s s t a r t e d w ith a l o w l e v e l o f b e n e f i t s ; a s
b e n e fit l e v e l s r i s e , a s th e y h a v e in r e c e n t y e a r s an d p r o m i s e to do in the fu t u r e ,
an d a s p r o t e c t iv e d e v i c e s b e c o m e m o r e p r e v a le n t , th e p r iv a t e p e n s io n b e c o m e s
m o r e o f a r e a l i t y an d a g o a l.
F i n a l l y , a s th is s tu d y s h o w s , p r iv a t e p la n s ten d
to b e c o n c e n t r a t e d in c e r t a i n i n d u s t r i e s ; v a r y g r e a t l y in t h e ir p r o v i s i o n s ; a n d , in
t o t a l, s t i l l c o v e r o n ly a m in o r it y o f A m e r ic a n w o r k e r s .

1 See "Job Mobility in 1961, " Monthly Labor Review, August 1963, pp. 897-906.




1

2

J u s t a s i t i s c o m m o n ly b e l ie v e d th a t p e n s io n p la n s in h ib it m o b ili t y , i t
i s b e l i e v e d th a t v e s t i n g , e a r l y r e t i r e m e n t , a n d p e n s io n c r e d i t p o r t a b i l i t y l o o s e n
th e t i e s o f th e w o r k e r to th e p e n s io n p la n w ith o u t s a c r i f i c i n g h is e q u ity a n d th u s
e n h a n c e m o b i l i t y . 2 T h e r e i s a te n d e n c y , h o w e v e r , to o v e r l o o k th e r e s t r i c t i v e
o r l im it i n g f e a t u r e s o f t h e s e p r o v i s i o n s , a s th e y a c t u a l l y e x i s t , a n d th e s e p a r a t e ,
i f l e s s e r , t i e s t h e s e p r o v i s i o n s c r e a t e in th e c o u r s e o f a w o r k e r ^ c a r e e r .
A l­
th o u g h th e p r i v a t e p e n s io n s y s t e m c a n n o t e m u la t e th e u n i v e r s a l c o v e r a g e an d
p o r t a b i l i t y o f th e s o c i a l s e c u r i t y s y s t e m , th o s e w ho a r e c o n c e r n e d w ith th e m o ­
b i l i t y o f A m e r ic a n w o r k e r s w ill c o n tin u e to a s s e s s th e e f f e c t s o f th e p r i v a t e
s y s t e m a g a i n s t t h o s e o f s o c i a l s e c u r i t y in th is r e g a r d .
P r i v a t e p e n s io n p la n s a r e b u t on e o f a n u m b e r o f o r g a n i z e d a n d t r a d i ­
tio n a l g r o u p a r r a n g e m e n t s d e s i g n e d an d d e v e lo p e d o v e r tim e in a n s w e r to th e
q u e st fo r se c u r ity .
T h e e c o n o m ic c l im a t e in w h ic h t h e ir g r e a t e s t g r o w th o c ­
c u r r e d , a n d in w h ic h th e y a s s u m e d t h e ir p r e s e n t s h a p e , i s in the p r o c e s s o f
ch ange.
I f r a p i d t e c h n o lo g ic a l c h a n g e w ill r e q u i r e m o r e f r e q u e n t jo b c h a n g e s ,
e v e n a m o n g m a t u r e , l o n g - s e r v i c e w o r k e r s , a s s<jm e e x p e r t s p r o p h e s y , a n d i f a
d e s i r e d r a t e o f e c o n o m ic g r o w th c a n n o t b e s u s t a i n e d b y th e p r e s e n t r a t e o f w o r k e r
m o b ili t y , a l l s u c h s e c u r i t y a r r a n g e m e n t s w ill n e e d r e e x a m i n a t io n .
The M an ­
p o w e r D e v e lo p m e n t an d T r a in in g A c t s u g g e s t s th a t t h is p r o c e s s o f e v a lu a t io n c a n ­
n o t b e g in to o s o o n .
T h e p u r p o s e o f th is s tu d y i s to d e s c r i b e th e p r i v a t e p e n s io n s t r u c t u r e
in i t s e n t ir e t y , f o c u s in g on th o s e a s p e c t s w h ic h h a v e an e s p e c i a l l y s i g n i f i c a n t
im p a c t on th e c a p a c i t y o f th e s t r u c t u r e to im p e d e o r e n h a n c e m o b ilit y . 3 T h e
s tu d y d o e s n o t a tt e m p t d i r e c t l y to m e a s u r e th e e f f e c t s o f p r i v a t e p e n s io n p la n s
on l a b o r m o b ilit y .
It m u s t b e e m p h a s i z e d th a t t h is s tu d y , in f o c u s in g on the
m o b ilit y a n d m a n p o w e r im p l ic a t i o n s o f p e n s io n p l a n s , e x c lu d e s e x a m in a t io n o f
e q u ity r ig h t s o f w o r k e r s , c o s t im p l ic a t i o n s f o r e m p l o y e r s , t a x im p l ic a t i o n s f o r
th e c o u n tr y , a n d m a n y o t h e r v a l u e s a n d c o n s i d e r a t i o n s in h e r e n t in th e p r i v a t e
p e n s io n s t r u c t u r e a s it now e x i s t s .
A ll t h e s e f a c t o r s m u s t a l s o b e ta k e n in to
a c c o u n t in a s s e s s i n g th e d e s i r a b i l i t y f o r c h a n g e .

S c o p e an d M e th o d
A p r i v a t e p e n s io n p la n , a s d e fin e d f o r th is s t u d y , i s a p la n e s t a b l i s h e d
b y a n e m p l o y e r , u n io n , o r b o t h ,t h a t p r o v id e s a c a s h in c o m e f o r lif e to q u a li f ie d
w o r k e r s upon r e tir e m e n t.
T h is d e fin it io n in c lu d e s p la n s in t r o d u c e d u n i l a t e r a l l y
b y e m p l o y e r s , jo in t l y b y e m p l o y e r s an d e m p l o y e e s , o r u n i l a t e r a l l y b y o r g a n i z e d
e m p lo y e e g r o u p s .
P r o f i t - s h a r i n g , s t o c k b o n u s , a n d s a v i n g s p la n s p a y in g o f f a t
r e t i r e m e n t a r e e x c l u d e d 4 b e c a u s e m o s t do n o t p r o v id e l i f e t i m e r e t i r e m e n t b e n e ­
f i t s an d th e a m o u n t o f b e n e f it s p a y a b le b y t h o s e th a t do a r e n o t d e f in it e ly a s c e r ­
t a in a b le in a d v a n c e . P l a n s o f g o v e r n m e n t an d n o n p r o fit o r g a n iz a t io n s (o th e r th a n
u n io n s) a r e a l s o e x c lu d e d f r o m the s c o p e o f th is s tu d y , a s a r e v e r y s m a l l (fe w e r
th a n 26 w o r k e r s ) p r i v a t e p l a n s .

2 For definition of vesting, early retirement, and pension credit portability, see pp. 11, 24, and 36, re­
spectively.
3 This study does not exhaust the manpower and mobility implications of private pension plans. Additional
studies now in progress will cover such aspects as disability retirement, benefit levels, participation requirements,
and normal retirement provisions. Some discussion of this issue along with other manpower aspects was included in
Private Pension Plans and Manpower Policy, BLS Bulletin 1359, May 1963.
4 Chiefly because of these exclusions, the number of plans and workers studied are not comparable to data on
"pension benefit plans" published by the Office of Labor-Management and Welfare-Pension Reports. See appendix
for details.




3

T h e c h ie f s o u r c e o f d a t a f o r th is s tu d y w e r e the r e p o r t s an d d o c u m e n ts
f i le d w ith th e U . S . D e p a r tm e n t o f L a b o r * s O ffic e o f L a b o r - M a n a g e m e n t an d W e l­
f a r e - P e n s i o n R e p o r t s , p u r s u a n t to the W e lfa r e an d P e n s io n P l a n s D i s c l o s u r e A c t,
b y p r iv a t e p e n s io n p la n s c o v e r in g m o r e th an 25 w o r k e r s .
B y the e n d o f I9 6 0 ,
f i n a n c i a l r e p o r t s (D -2 f o r m s ) h a d b e e n f i l e d f o r o v e r 2 5 , 000 p la n s p r o v id in g r e ­
t i r e m e n t b e n e f i t s . T h e p la n d e s c r i p t i o n s ( D - l f o r m s ) f i le d fo r t h e s e p la n s w e r e
the b a s i s f o r th is s tu d y .
T o r e d u c e t h e s e 2 5 , 000 r e p o r t s to a m o r e m a n a g e a b le n u m b e r f o r a n a l ­
y s i s , a s t r a t i f i e d r a n d o m s a m p l e w a s s e l e c t e d b a s e d on in d u s t r y an d s i z e o f p la n
(n u m b e r o f w o r k e r s c o v e r e d ) .
T h e s a m p l e w a s d e s ig n e d to p e r m i t p r e s e n t a t io n
o f d a t a b y in d u s t r y d iv is io n , an d in s o m e c a s e s , b y m a j o r in d u s t r y g r o u p .
W ithin
e a c h i n d u s t r y - s i z e g r o u p in g , th e s a m p le w a s s e l e c t e d to y ie ld th e m o s t r e l i a b l e
r e s u l t s . T h is w a s don e b y in c lu d in g in the s a m p le a h ig h e r p r o p o r t io n o f p la n s
c o v e r in g l a r g e n u m b e r s o f w o r k e r s . D a ta fo r e a c h s a m p l e r e p o r t w e r e a p p r o ­
p r i a t e l y w e ig h te d in a c c o r d a n c e w ith it s p r o b a b il it y o f s e l e c t i o n s o th a t the t a b le s
sh o w e s t i m a t e s fo r a l l p r i v a t e p e n s io n p la n s w ith f i n a n c i a l r e p o r t s on file fo r

I960. 5
T h e p e n s io n p la n s s t u d ie d w e r e lim it e d to th o s e s u b m ittin g f i n a n c i a l r e ­
p o r t s fo r I 9 6 0 .
C o v e r a g e d a t a , h o w e v e r , w e r e o b ta in e d f o r t h e s e p la n s f r o m
th e 1961 r e p o r t s .
T h e p la n p r o v i s i o n s w e r e a n a ly z e d in the w in te r o f 1962— 3 ,
6
an d w e r e c o n s id e r e d c u r r e n t a t th a t t i m e .
F o r f u r t h e r d e t a i l s o f s c o p e an d
m e th o d o f s tu d y , s e e a p p e n d ix .

® Of the 16,031 private pension plans studied covering 15.8 million active workers, 213 plans with 166,600
active workers were in the process of determining their plan provisions. For these plans, little information other
than size, industry, financing, and type of worker covered, were available at the time of the study. Thus, the
analysis of pension plan provisions, including vesting and early retirement provisions, and benefits provided under
certain assumed conditions, relate only to 15,818 plans.




C h a p te r II.

S e le c te d C h a r a c t e r is t ic s of P r iv a te P e n sio n P la n s

A b o u t 16, 0 0 0 p r iv a t e p e n s io n p la n s , a s d e fin e d b y t h is s tu d y , c o v e r in g
m o r e th a n 1 5 .6 m il lio n a c t iv e w o r k e r s a n d p a y in g b e n e f it s to a b o u t 1 .2 m illio n
r e t i r e d w o r k e r s , f i l e d f i n a n c i a l r e p o r t s w ith th e U . S . D e p a r tm e n t o f L a b o r f o r
I 9 6 0 . 6 A b o u t t w o - t h ir d s o f th e p la n s f o r w h ich th e d a t e s o f e s t a b li s h m e n t w e r e
kn ow n , w ith h a lf o f th e c o v e r a g e , w e r e e s t a b l i s h e d s in c e 1949 ( ta b le 1 a n d c h a r t 1).
A lth o u g h p e n s io n p la n s in th e U n ite d S t a t e s d a te b a c k to th e l a t e 19th
c e n t u r y , o n ly in r e c e n t y e a r s h a v e p r i v a t e p e n s io n p la n s b e c o m e a s ig n i f ic a n t
f o r m o f e m p lo y e e c o m p e n s a t io n a n d th u s a s ig n i f ic a n t f a c t o r in th e l a b o r m a r k e t .
O f th e p r i v a t e p la n s in e x i s t e n c e in I 9 6 0 , o n ly 2 p e r c e n t w e r e e s t a b l i s h e d in
th e f i r s t 4 d e c a d e s o f t h is c e n tu r y .
S in c e m a n y o f t h e s e e a r l y p l a n s , s u c h a s
th e te le p h o n e c o m p a n y p l a n s , a r e now l a r g e p l a n s , th e y now c o v e r a b o u t 15 p e r ­
c e n t o f th e w o r k e r s . T h e s e e a r l y p la n s w e r e n ot l im it e d to s a l a r y o r p r o d u c tio n
w o r k e r s ; r a t h e r , th e y u s u a l l y c o v e r e d a l l e m p l o y e e s . 7
S p u r r e d a t f i r s t by f a v o r a b l e F e d e r a l t a x l a w s , an d l a t e r b y w a r t im e
w a g e s t a b i l i z a t i o n m e a s u r e s , s u b s t a n t i a l g ro w th in p r i v a t e p la n s o c c u r r e d b e tw e e n
19 4 0 a n d 1 9 4 9 — a b o u t 30 p e r c e n t o f th e p la n s w ith a b o u t th e s a m e p r o p o r t io n o f
w o r k e r s w e r e e s t a b l i s h e d in th a t d e c a d e .
D u r in g t h i s p e r i o d , e s t a b li s h m e n t o f
p la n s s o l e l y f o r b l u e - c o l l a r w o r k e r s b e c a m e m o r e p r e v a le n t .
A s p u r t in th e in t r o d u c tio n o f p la n s to o k p la c e a f t e r 1 9 4 9 . T h i s g ro w th
w a s in l a r g e p a r t a t t r i b u t a b l e t o : (1) U n io n p r e s s u r e s f o r s e c u r i t y b e n e f it s a f t e r
th e f a v o r a b l e d e c i s i o n by th e S u p r e m e C o u r t in 1949 s u p p o r t in g th e N a t io n a l L a b o r
R e l a t io n s B o a r d ’ s d e t e r m in a t io n th a t p e n s io n s w e r e a p r o p e r i s s u e f o r c o l l e c t i v e
b a r g a in in g ; (2) th e S t e e l I n d u s t r y F a c t - F i n d i n g B o a r d ’ s r e c o m m e n d a t io n s in 1949
th a t th e in d u s t r y h a d a s o c i a l o b lig a t io n to p r o v id e w o r k e r s w ith p e n s i o n s ; (3) w a g e
s t a b i l i z a t i o n p o l i c i e s d u r in g th e K o r e a n c o n flic t p e r i o d ; a n d (4) th e u n io n d r i v e ,
m a in ly s in c e 1 9 5 4 , f o r n e g o t ia t e d m u l t ie m p lo y e r p e n s io n p la n s , p a r t i c u l a r l y in
th e c o n s t r u c t i o n t r a d e s a n d t r u c k i n g . F a v o r a b l e t a x t r e a t m e n t c o n tin u e d th r o u g h ­
ou t t h e s e y e a r s . B e c a u s e m o s t p la n s e s t a b l i s h e d iii t h is p e r i o d w e r e n e g o t ia t e d
b y u n io n s r e p r e s e n t i n g p r o d u c tio n w o r k e r s , a h ig h e r p r o p o r t io n th a n in e a r l i e r
p e r i o d s c o v e r e d o n ly b l u e - c o l l a r w o r k e r s .
O v e r t h r e e - f o u r t h s o f th e p la n s e s ­
t a b l i s h e d in t h is p e r i o d w e r e m e n tio n e d in c o l l e c t i v e b a r g a in in g a g r e e m e n t s . 8
A b o u t h a lf o f th e w o r k e r s b e lo n g e d to m u lt ie m p lo y e r p la n s c o v e r in g o n ly p r o d u c ­
tio n w o r k e r s .
8 S e e appen dix for a reco n ciliatio n o f these d ata w ith d a ta published by the S o c ia l Secu rity A d m in istration .
7 S e e M urray W. L atim er, Industrial Pension Sy stem s, Industrial R e latio n s C ounselors, I n c ., New Y ork, 1932, p. 63.
8 Follow ing the p recise lan g u age of the a c t, the D - l form asks this question: "Is the p lan m entioned in a c o l­
le c tiv e bargain in g a g re e m e n t?" A "n o " answer can b e presum ed to b e co n clu siv e, th at is, no part o f the p lan or its
co v erag e is su b ject to c o lle c tiv e ’b argain in g. A "y e s" answer would b e in d icated if part or a ll o f the em p lo y ees c o v ­
ered by the p lan w ere in the bargain in g unit covered by the agreem en t, and the ag reem en t "m en tio n ed " the plan .
A lthough a doubt arises as to whether "m en tio n ed " in the ag re em en t is tantam oun t to bargain in g on the plan , it can
reason ab ly be presum ed th at "m en tio n ed " in the agreem en t brings the p lan w ithin the scope of c o lle c tiv e barg ain in g ,
a t le a st w ith regard to continuing or chan ging the plan.
In this study, the c o lle c tiv e bargain in g co v erag e figures for sin g le-e m p lo y e r plans coverin g a ll em p loy ees of the
com pan y are overstated b e cau se they often include em ploy ees not covered by a c o lle c tiv e barg ain in g ag reem en t, w hile
the p lan itse lf w as su b ject to bargain in g.
Plans in the b a sic ste e l industry, for ex am p le , w ere n eg o tiated by the
Steelw orkers ’ union for m em bers o f its bargain in g units, but the sam e plan s o ften co ver a ll com pan y em p loy ees, in­
clu d in g profession al, e x e cu tiv e , sa le s, and other w h ite -c o llar em ploy ees not represen ted by the union.
On the other
hand, co v erag e under m u ltiem ploy er plans w ill' m ore p recisely accou n t for a ll workers in barg ain in g units.




4

Chart 1. GROWTH IN NUMBER AND COVERAGE OF PRIVATE PENSION PLANS
*
T h o u sa n d s of P lans
(cumulative)

M illio n s of A ctive W o rk e rs Covered
(cumulative)

16
15
14
13
12
1I

10
9

8
7

6
5
4
3
2
I

is. lc

0

Chart excludes 614 plans, covering 1.4 million workers, for which information was not available.
Active workers in 1961. see text.




6

S iz e o f P l a n s
T h e p r i v a t e p e n s io n p la n s a n a ly z e d r a n g e d in s i z e f r o m 26 a c t iv e an d
r e t i r e d w o r k e r s , th e s m a l l e s t r e q u ir e d to f i le r e p o r t s , to a p p r o x im a t e ly 3 7 0 , 000
a c t iv e w o r k e r s .
T h e n u m b e r o f p e r s o n s c u r r e n t l y d r a w in g b e n e fit s f r o m th e
p la n s r a n g e d f r o m n on e to o v e r 1 0 ,0 0 0 p e r s o n s an d t o t a le d a b o u t 1 .2 m illio n .
A lth o u g h m o s t p r iv a t e p e n s io n p la n s a r e s m a l l - s c a l e u n d e r t a k in g s , o v e r
60 p e r c e n t o f th e w o r k e r s w e r e c o v e r e d by p la n s w ith 5, 000 o r m o r e w o r k e r s
( ta b le 2 ). T h e 15 l a r g e s t p la n s — 7 m u l t ie m p lo y e r , 7 s in g l e e m p lo y e r , an d 1 u n io n o p e r a t e d — e a c h w ith o v e r 1 0 0 ,0 0 0 a c t iv e W o r k e r s, a lt o g e t h e r h ad o v e r a s ix t h o f
th e w o r k e r c o v e r a g e . N e a r ly 1 4 ,0 0 0 p la n s w ith fe w e r th a n 1 ,0 0 0 m e m b e r s a c ­
c o u n te d f o r a l m o s t 90 p e r c e n t o f th e p la n s , b u t\o n ly 15 p e r c e n t o f w o r k e r co v -.
e r a g e . O v e r 60 p e r c e n t o f th e p la n s h ad fe w e r th a h 200 a c t i v e m e m b e r s an d l e s s
th a n 5 p e r c e n t o f th e w o r k e r s .
I n d u s t r y an d T y p e o f E m p lo y e r U nit
P r i v a t e p e n s io n p la n s r e a c h w o r k e r s in a l l s e g m e n t s o f th e e c o n o m y ,
but th e e x te n t o f c o v e r a g e v a r i e s c o n s id e r a b l y f r o m in d u s t r y to in d u s t r y .
A bout
60 p e r c e n t o f th e p la n s an d w o r k e r s w e r e in m a n u fa c t u r in g i n d u s t r i e s , w h ile
a p p r o x im a t e ly 40 p e r c e n t o f th e p la n s an d w o r k e r s w e r e in n o n m a n u fa c tu r in g
( ta b le 3). T h is r a t io o f 3 to 2 c o n t r a s t s w ith a r a t i o o f 3 to 5 in t o t a l e m p l o y ­
m e n t a s b e tw e e n m a n u fa c tu r in g an d p r iv a t e n o n fa r m n o n m a n u fa c tu r in g .
C o n s t r u c t io n , t r a n s p o r t a t i o n , an d c o m m u n ic a tio n s an d p u b lic u t i l i t i e s a c ­
c o u n te d , in a l l , f o r o v e r 60 p e r c e n t o f th e w o r k e r c o v e r a g e o f p e n s io n p la n s in
n o n m a n u fa c tu r in g d i v i s i o n s . In m in in g , c o n s t r u c t io n , w h o le s a le t r a d e , an d m o t o r
t r a n s p o r t a t i o n — c h a r a c t e r i z e d by l a r g e n u m b e r s o f s m a l l e m p l o y e r s — m o s t c o v ­
e r e d w o r k e r s b e lo n g e d to m u lt ie m p lo y e r p la n s , w h ile in c o m m u n ic a tio n s an d
p u b lic u t i l i t i e s — w h e r e l a r g e c o m p a n ie s a r e c o m m o n — th e y b e lo n g e d to s i n g l e e m p lo y e r p la n s (ta b le 4 ).
In m a n u fa c t u r in g i n d u s t r i e s , p e n s io n p la n s in m e t a lw o r k in g , c h e m i c a l s ,
r u b b e r , an d p e t r o l e u m i n d u s t r i e s m a d e up 70 p e r c e n t o f w o r k e r c o v e r a g e .
M e ta l­
w o r k in g i n d u s t r i e s p e n s io n p la n s a c c o u n te d f o r o v e r a t h ir d of a l l w o r k e r s in
p r iv a t e p e n s io n p la n s an d a l m o s t 60 p e r c e n t o f m a n u fa c tu r in g in d u s t r y c o v e r a g e .
W hile o n ly a b o u t 1 ou t of 8 m a n u fa c tu r in g w o r k e r s w e r e c o v e r e d by m u lt ie m p lo y e r
p la n s , th e r e w a s a h e a v y c o n c e n t r a t io n in th e a p p a r e l , p r in tin g an d p u b lis h in g ,
an d fo o d ( e s p e c i a l l y b r e w in g an d d a i r y p r o d u c t s ) i n d u s t r i e s . W ith t h e s e e x c e p t io n s ,
s in g l e - e m p l o y e r p la n s d o m in a te d m a n u fa c tu r in g i n d u s t r i e s .
In g e n e r a l , m u lt ie m p lo y e r p la n s p r e d o m in a t e in i n d u s t r i e s th a t a r e
m a r k e d by m u lt ie m p lo y e r b a r g a in in g p a t t e r n s .
S u c h p la n s r e p r e s e n t ro u g h ly
t h r e e - f i f t h s o f th e c o v e r a g e of a l l m u lt ie m p lo y e r b a r g a in in g a g r e e m e n t s (e x c lu d in g
r a i l r o a d s ) . 9 S in g le e m p lo y e r p la n s d o m in a te in i n d u s t r i e s in w h ich th e b a r g a in in g
r e la t io n s h ip i s on an e s t a b li s h m e n t o r c o m p a n y b a s i s , a s w e ll a s in i n d u s t r i e s
w h e r e c o ll e c t iv e b a r g a in in g i s u n c o m m o n .

9
R ailro ad workers are covered by the R ailro ad R etirem en t A ct. M any firm s in the railroad industry, however,
have sin g le em ployer plans w hich u su ally provide ben efits g eared to earnings in excess of those recognized under the
a ct. S e e Supplem entary Pension Plans in The R ailro a d Industry, 1961, a d igest of represen tative plans prepared for
the S u b com m ittee on R ailro ad R e tire m en t o f the C o m m ittee on Labor and Public W elfare, United States Sen ate.




7

C o lle c t iv e B a r g a in in g
R e p o r t s f o r s lig h t l y m o r e th a n 1 ou t of 3 p la n s c o v e r in g a b o u t Z out o f
3 w o r k e r s in d ic a t e d th a t th e p la n w a s m e n tio n e d in a c o ll e c t iv e b a r g a in in g a g r e e ­
m e n t (ta b le 5).
T h e l a r g e n u m b e r of w o r k e r s b e lo n g in g to p la n s m e n tio n e d in
c o ll e c t iv e b a r g a in in g a g r e e m e n t s r e s u l t s to s o m e d e g r e e f r o m th e in c lu s io n o f
l a r g e m u lt ie m p lo y e r p la n s , n e a r l y a l l o f w h ich a r e s u b je c t to c o ll e c t iv e b a r ­
g a in in g , 10 a s w e ll a s th e l a r g e r s in g le - e m p lo y e r p la n s , a l l but a fe w o f w h ich a r e
s u b je c t to c o ll e c t iv e b a r g a in in g , a t l e a s t in p a r t , an d w h ich o fte n in c lu d e e m ­
p lo y e e s not in b a r g a in in g u n it s .
T h e e x te n t o f u n io n p a r t ic ip a t io n o r in flu e n c e v a r i e d c o n s id e r a b l y by i n ­
d u s t r y . W o rk e r c o v e r a g e in p la n s m e n tio n e d in c o ll e c t iv e b a r g a in in g r a n g e d f r o m
10 p e r c e n t o f c o v e r e d w o r k e r s in fin a n c e to 85 p e r c e n t o f th e c o v e r e d w o r k e r s in
th e c o n s t r u c t io n in d u s t r y .
S e v e n ty p e r c e n t o f th e c o v e r e d w o r k e r s in m a n u f a c ­
tu r in g w e r e in c lu d e d in p la n s m e n tio n e d in c o ll e c t iv e b a r g a in in g a g r e e m e n t s .
N o n m a n u fa c tu r in g i n d u s t r i e s s u c h a s s e r v i c e s , t r a d e , t r a n s p o r t a t i o n , an d
m in in g , w ith a l a r g e n u m b e r o f w o r k e r s in m u lti e m p lo y e r p la n s , h ad a h ig h p r o ­
p o r t io n o f w o r k e r s in c o ll e c t i v e l y b a r g a in e d p l a n s .
In c o m m u n ic a tio n s an d p u b lic
u t i l i t i e s , w h e r e th e te le p h o n e c o m p a n y p la n s p r e d o m in a t e , o v e r 80 p e r c e n t o f th e
c o v e r e d w o r k e r s w e r e in p la n s m e n tio n e d in c o ll e c t iv e b a r g a in in g a g r e e m e n t s .
F in a n c in g
E m p lo y e r s fin a n c e d th e e n t ir e c o s t of r e t i r e m e n t b e n e fit s (n o n c o n tr ib u ­
to r y ) of a b o u t 3 ou t o f 4 p la n s c o v e r in g a b o u t th e s a m e p r o p o r t io n o f w o r k e r s
(ta b le 6 ). A fo u r th o f th e p la n s w ith a b o u t a fo u r th o f th e w o r k e r s w e r e fin a n c e d
by jo in t e m p l o y e r - e m p lo y e e c o n tr ib u tio n s ( c o n t r ib u to r y ) , w h ile in a s m a l l n u m b e r
o f un ion s p o n s o r e d an d o p e r a t e d p la n s (1 1 0 ), w ith a b o u t a q u a r t e r m illio n w o r k e r s ,
th e w o r k e r s a lo n e fin a n c e d th e p la n s .
M o s t m u lt ie m p lo y e r p la n s w e r e n o n c o n ­
t r i b u t o r y , w h ile a b o u t 30 p e r c e n t o f th e s i n g l e - e m p l o y e r p la n s w ith ab o u t th e
s a m e p r o p o r t io n o f th e w o r k e r s r e q u ir e d th e e m p lo y e e s to c o n tr ib u te . M o r e o v e r ,
a h ig h e r p r o p o r t io n o f n o n b a r g a in e d p la n s th a n b a r g a in e d p la n s w e r e c o n t r ib u t o r y .
T h e i n d u s t r i a l p a t t e r n o f fin a n c in g r e f l e c t e d th e p a t t e r n o f b a r g a in in g ;
i n d u s t r i e s w ith m o s t l y n e g o t ia t e d p la n s h ad m o s t l y n o n c o n tr ib u to r y p la n s an d v ic e
v ersa.
N o n c o n tr ib u to r y p la n s w e r e , t h e r e f o r e , c o m m o n in s u c h m a n u fa c tu r in g
in d u s t r i e s a s a p p a r e l , an d p r in tin g an d p u b lis h in g , w ith a h e a v y c o n c e n t r a t io n
o f n e g o tia te d m u lt ie m p lo y e r p la n s , an d in th e h ig h ly o r g a n iz e d m e t a lw o r k in g
in d u s t r i e s .
On th e o th e r h an d , i n d u s t r i e s in n o n m a n u fa c tu r in g , s u c h a s fin a n c e ,
an d in m a n u fa c tu r in g , s u c h a s c h e m i c a l s , p e t r o le u m , an d t e x t i l e s , h ad a s i g n i f ­
ic a n t n u m b e r o f jo in t ly fin a n c e d a s w e ll a s s i n g l e - e m p l o y e r n o n b a r g a in e d p l a n s .
S u p p le m e n t a l P e n s io n P l a n s .
In c lu d e d in th e jo in t ly fin a n c e d p e n s io n
p la n s w a s a g r o u p o f 489 p la n s c o v e r in g a lm o s t 6 0 0 , 000 w o r k e r s in w h ich th e
e m p lo y e e m ig h t e le c t to m a k e c o n tr ib u tio n s to b u ild up l a r g e r b e n e fit s th a n a
n o n c o n tr ib u to r y p la n a lo n e o f f e r e d . U n d e r t h e s e p la n s , th e w o r k e r w a s g iv e n th e
o p tio n to m a k e c o n t r ib u t io n s , u s u a l ly b a s e d on e a r n in g s in e x c e s s o f a s p e c i f i e d
a m o u n t, w ith b e n e f it s u s u a l ly d e t e r m in e d on th e s a m e b a s i s . 11
10 T en percent of the m u ltiem ploy er plans were not under c o lle c tiv e bargain in g and none of those not under c o l­
le c tiv e bargaining had m ore than 5 ,0 0 0 workers.
11 See appendix for m ethod of allo c a tin g co verage betw een contributory and noncontributory plans.




8
G e o g r a p h ic A r e a
In 30 p e r c e n t o f th e p la n s c o v e r in g 70 p e r c e n t o f th e w o r k e r s , w o r k e r s
c o v e r e d by th e p la n s w e r e lo c a t e d in m o r e th a n on e S ta te ( ta b le 7).
T h is g r o u p
o f i n t e r s t a t e p la n s w a s d o m in a te d by p la n s o f l a r g e s i n g l e - e m p l o y e r f i r m s s u c h
a s th e G e n e r a l M o to r s C o r p . , G e n e r a l E l e c t r i c C o . , F o r d M o to r C o ., e t c . , an d
n a tio n a l a n d r e g i o n a l m u lt ie m p lo y e r p la n s s u c h a s th e I n t e r n a t io n a l B r o th e r h o o d o f
E l e c t r i c a l W o r k e r s P e n s io n B e n e fit T r u s t F u n d , a n d th e W e s te r n C o n fe r e n c e o f
T e a m s t e r s P e n s i o n F u n d . T h e 15 l a r g e s t p e n s io n p la n s , a l l i n t e r s t a t e p la n s , a c ­
c o u n te d f o r o v e r a fo u r th o f i n t e r s t a t e c o v e r a g e . On th e o th e r h an d , in th e c o n ­
s t r u c t io n in d u s t r y , w h e r e s m a l l m u lt ie m p lo y e r p la n s p r e d o m in a t e , o v e r h a lf th e
w o r k e r c o v e r a g e w a s in th e i n t r a s t a t e p la n s . In w h o le s a le an d r e t a i l t r a d e , a b o u t
t h r e e - f o u r t h s o f th e p la n s w e r e l im it e d to w o r k e r s in a s in g le S t a t e .
T y p e of W o rk er C o v e re d
P l a n s l im it e d to s a l a r i e d w o r k e r s an d e x e c u t iv e g r o u p s w e r e a m o n g th e
f i r s t to be c o m m o n ly e s t a b l i s h e d . O f th e p r iv a t e p la n s s tu d ie d , a fo u r th c o v e r in g
10 p e r c e n t o f th e w o r k e r s w e r e r e s t r i c t e d to t h e s e g r o u p s (ta b le 8 ).
A lm o s t a
t h ir d o f th e p la n s , w ith o v e r 45 p e r c e n t o f th e c o v e r a g e , w e r e p la n s f o r b l u e c o l l a r w o r k e r s , w h ile th e r e m a in in g p la n s , c o v e r in g 40 p e r c e n t of th e w o r k e r s ,
in c lu d e d b o th p r o d u c tio n an d s a l a r i e d w o r k e r s .
M an y o f t h e s e a l l - e m p l o y e e p la n s
w e r e o r i g i n a l l y l im it e d to w h it e - c o ll a r g r o u p s an d l a t e r w e r e b r o a d e n e d to i n ­
c lu d e p r o d u c tio n w o r k e r s .
T h e p la n s f o r s a l a r i e d w o r k e r s m o r e f r e q u e n t ly r e q u i r e d e m p lo y e e c o n ­
t r ib u t io n s th a n th e p la n s c o v e r in g p r o d u c tio n w o r k e r s o n ly ( s a l a r i e d p la n s c o v e r in g
a t h ir d o f th e w o r k e r s a s c o m p a r e d w ith p r o d u c tio n — o r k e r p la n s c o v e r in g l e s s
w
th a n a te n th ). In p la n s c o v e r in g b o th w o r k e r g r o u p s , r o u g h ly a t h ir d o f th e p la n s
w ith a b o u t th e s a m e p r o p o r t io n o f w o r k e r s w e r e c o n t r ib u t o r y , a p p a r e n t ly r e f l e c t i n g
th e in flu e n c e o f in c lu s io n o f s a l a r i e d w o r k e r s w ith in th e p la n .
O w ing to th e s m a l l n u m b e r o f u n io n iz e d s a l a r i e d e m p l o y e e s , fe w o f th e
p la n s l im it e d to s a l a r i e d e m p lo y e e s w e r e m e n tio n e d in c o ll e c t iv e b a r g a in in g
a g re e m e n ts.
On th e o th e r h an d , 90 p e r c e n t o f th e w o r k e r s in p la n s lim it e d to
p r o d u c tio n w o r k e r s w e r e in p la n s n o te d in c o ll e c t iv e b a r g a in in g a g r e e m e n t s .
F u r t h e r , in p la n s w ith b o th w h i t e - c o l l a r a n d b l u e - c o l l a r w o r k e r s , t w o - t h ir d s o f
th e w o r k e r s w e r e in p la n s m e n tio n e d in c o ll e c t iv e b a r g a in in g a g r e e m e n t s . 12
T h e ty p e o f w o r k e r c o v e r e d v a r i e d w id e ly by in d u s t r y , 2 ou t o f 5 w o r k ­
e r s in m a n u fa c tu r in g an d n o n m a n u fa c tu r in g w e r e in p la n s c o v e r in g a l l e m p l o y e e s .
In m a n u fa c tu r in g , o v e r 40 p e r c e n t o f th e w o r k e r s w e r e in p la n s c o v e r in g o n ly
p r o d u c tio n w o r k e r s an d l e s s th a n 20 p e r c e n t w e r e in p la n s lim it e d to s a l a r i e d
w o rk ers.
H a lf of th e w o r k e r s in n o n m a n u fa c tu r in g w e r e in p r o d u c tio n w o r k e r
p la n s , a c c o u n te d f o r in l a r g e p a r t b y l a r g e m u l t ie m p lo y e r p la n s in th e c o n s t r u c ­
tio n , t r a n s p o r t a t i o n , an d m in in g i n d u s t r i e s .

A d m in is t r a t io n
T h e a d m i n is t r a t io n o f b e n e f it s , i. e . , th e f i n a l d e t e r m in a t io n o f e l i g i ­
b ilit y , h a n d lin g o f a p p e a l s , an d f in a l d e c is io n , e t c . , w a s th e s o l e r e s p o n s i b i l i t y
o f th e e m p lo y e r in o v e r 4 out o f 5 p la n s c o v e r in g 3 ou t o f 5 w o r k e r s (ta b le 9 ).
B i p a r t i t e o r t r i p a r t i t e b o a r d s h ad f in a l a u t h o r ity in a b o u t a n e ig h th o f th e p la n s
12 T h ese figures overstate c o lle c tiv e bargain in g, as ex p lain ed in footnote 8.




9

with over a third of the workers.
Over half of these boards served in multi­
employer situations. The grievance procedure of the collective bargaining agree­
ment could be utilized in about 1, 000 plans— mostly those negotiated by the
Steelworkers— covering roughly a half million workers.
In a small number of
plans— union-operated plans— the union administered benefit determinations.
Implications for Mobility
The implications for labor mobility and manpower policy of the charac­
teristics of private pension plans highlighted above are examined in the following
chapters in relation to specific practices. Some general observations are offered
at this point.
The most striking feature of the private pension structure, in assessing
its influence on mobility, is its youth.
As has been seen, the period of greatest
growth began only 15 years ago.
The influence this development has had on
labor market practices, manpower policies, and worker attitudes is difficult to
assess partly because the effects have not yet fully evolved; many are still in
the developing stage.
Furthermore, most pension plans started with much more
limited benefits than they provide today. Typically, as private plans mature, they
grant larger benefits and a greater range of benefits to more workers and, thereby,
become increasingly influential.
Provisions protecting accrued pension credits,
particularly vesting and portability, are relatively new and are undergoing re­
vision in the light of experience.
As informal and formal communication regarding pension plans spreads
and workers’ awareness of the plans and their provisions increases, their impact
on employee attitudes and mobility decisions will undoubtedly become stronger.
Each year, more and more workers will be retiring with a private pension; their
firsthand knowledge of the benefits to be derived from private pensions will spread
to still active workers.
Thus, workers may less often view pensions as just
another segment of the security package based on service and more often recog­
nize them as unique benefits.
This evolution will probably affect production
and nonsupervisory employees— who comprise the greater part of private plan
coverage— more than executives and salaried employees. Studies of worker at­
titudes toward pensions should take account of these time and experience factors.
Because of variations in the impact of collective bargaining, and of other
forces affecting the growth and development of private plans, the coverage of
private pensions has become concentrated in ’’pockets of influence” in certain
industries and occupations.
In addition, as will be discussed later, concentra­
tions of plan provisions with particular mobility implications (vesting, early re­
tirement, and portability) have also emerged. The high degree of private pension
coverage in most manufacturing industries is attributable, in large measure, to
union efforts. Whether it preceded or followed coverage for production workers
white-collar coverage is also high in manufacturing.
On the other hand, the relatively slow and selected spread of pension
plan coverage in the nonmanufacturing sector has limited its influence to workers
in certain industries.
In some industries, such as public utilities and finance,
with a high proportion of professional and clerical workers, pension plans have
been in effect for a long time.
However, in the expanding trade and service
industries, marked by many small employers and by high turnover both among
employees and employers, there is relatively little private pension coverage.
Much of the coverage that exists is attributable to a limited number of collectively
bargained multiemployer plans.
Similarly, only in recent years has private
pension coverage been extended to significant groups of blue-collar workers in
transportation (excluding railroads) and construction through collectively bar­
gained multiemployer plans.




10

Concomitant with the unions’ influence in expanding private pension cov­
erage through collective bargaining, the unions' attitudes have, to a large degree,
helped to shape the present structure of plan provisions.
Essentially, unions
view the protective provisions of private plans— vesting, early retirement, and
portability— as equity devices to give their members an assurance of what is
rightfully earned rather than as manpower devices.
Recently, however, union
attitudes appear to be changing under the impact of technological change and un­
employment pressures.
For example, some unions have expressed an interest
in using private plans to help meet unemployment problems by facilitating earlier
retirements.
Collectively bargained multiemployer plans, which account for nearly a
fifth of the current private pension coverage, have different manpower effects
than single-employer plans. Their most rapid, growth began somewhat later than
single-employer plans and has been limited mostly to industries marked by multiemployer collective bargaining relationships. One of their more important charac­
teristics is that they have extended private pension coverage to many employers
who probably could not have provided such benefits on a single company basis.
Partly because of this, the characteristics and provisions of multiemployer plans
often differ sharply from those of single-employer plans. The unique character
of multiemployer plans is more fully examined in chapter V.
Some degree of flexibility and portability is also provided by multiestab­
lishment firms and financially related companies which allow employees trans­
ferring within the corporate complex to transfer or retain their pension credits.
The Bell Telephone System, for example, permits unlimited geographic and oc­
cupational shifts within the system without loss of plan coverage. The occupa­
tional and geographic shifts permitted within other large corporations, such as
General Motors, General Electric, and U. S. Steel, are mobility assets, particu­
larly to professional, salaried or executive groups. Even for production workers,
such intracorporate transfer possibilities may open a wider scope for readier
movement than small, localized multiemployer plans.
Even in smaller firms,
vertical mobility within a firm is enhanced by the existence of all-employee
pension plans which continue pension protection to those who remain with the
firm regardless of the position to which they may be promoted or transferred.
Even if the firm has separate plans for blue-collar and white-collar workers, a
change in status is almost always acpompanied by the transfer of service credits
or at least retention of accrued benefits.




Chapter III.

Vesting

Vesting is defined as a guarantee to the worker of a right or equity in
a pension plan based on all or part of his accrued retirement benefits should his
employment terminate before he becomes eligible for retirement benefits. If his
rights are vested, the worker is entitled to a future retirement benefit when he
reaches retirement age, regardless of where he may be at the time.
Through
vesting, a worker can build up retirement benefits from more than one employer.
Although the concept and use of vesting provisions in pension plans is
quite old, their incorporation into private pension plans has been limited until re­
cent years, especially in noncontributory and collectively bargained pension plans.
For example, the Bureau’s study of 300 large collectively bargained plans in
1952 showed that only 25 percent of the plans had vesting (of which three-fourths
were contributory); in 1958, the Bureau found that almost 60 percent of a sim i­
lar group of negotiated plans had vesting. 1 This rapid growth reflects mainly
3
the addition of vesting provisions to the noncontributory plans negotiated by the
Automobile Workers and Steelworkers.
Since 1958, the trend toward adding a
vesting provision to existing plans has continued, especially in bargained plans.
The attitudes and values of employers and unions have shaped the devel­
opment and nature of vesting provisions, including the rigidities and restrictions
built into them. From the employer’s viewpoint, the inherent contradiction be­
tween the concept of equity, flexibility, and mobility implied in vesting, on one
hand, and the traditional purpose of a retirement plan to attract and keep work­
ers on the job until normal retirement, on the other, is resolved mainly by re­
stricting vesting to workers who have attained a specified age and substantial
service. Unions concerned with workers' equities, and viewing pensions as de­
ferred wages, see vesting as a desirable protection, particularly necessary in
single employer plans.
In the formative years of negotiated plans, however,
vesting was largely set aside in favor of benefit levels, reasonable funding, bene­
fits for workers near retirement, and financing solely by employers. In recent
years, liberal vesting has been high on the list of union demands.
Prevalence of Vesting
Vesting was provided by 2 out of 3 private pension plans covering 3 out
of 5 workers (table 10). Vesting was far more common in single employer plans
Total

With vesting

Without vesting

Plans

Workers1
*
(thousands)

Plans

Workers 1
(thousands)

Plans

Workers 1
(thousands)

All plans studied--------------

15,818

15,621

10,634

9,307

5,184

6,313

Single employer-------------Multiemployer---------------

14,890
928

11,742
3,878

10,340
294

8,393
914

4, 550
634

3,349
2,964

Type of employer unit

1

Active workers in 1961.

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

I 3 Pension Plans Under Collective Bargaining, BLS Bulletin 1147 (1953), and Pension Plans Under Collective
Bargaining, Part I. Vesting Provisions and Requirements for Early Retirement; Part II. Involuntary Retirement Pro­
visions, Late 1958, BLS Bulletin 1259 (1959).




II

12

than in multiemployer plans, which provide portability of pension credits among
member employers. (See chapter V. ) About 7 out of 10 single employer plans
covering about the same proportion of workers had a vesting provision, as com­
pared to about 1 out of 3 multiemployer plans with about 1 out of 4 workers.
Almost 80 percent of the workers covered by contributory plans had
vesting protection, as against about 55 percent of the workers in noncontributory
plans.
Total

With vesting

Without vesting

Workers1
(thousands)

Plans

(thousands)

Plans

Workers1
(thousands)

All plans studied---------------- — 15,818

15,621

10,634

9,307

5,184

6,313

Noncontributory---------------- - 11,526
Contributory--------------------- -- 4,292

11,667
3,954

7,360
3,274

6,216
3,091

4,166
1,018

5, 450
863

Method of financing

Plans

Workers1

1 Active workers in 1961.
NOTE: Because of rounding, sums of individual items may not equal totals.

This disparity results from the heavy concentration in the latter group of noncon­
tributory multiemployer plans without vesting (table 11). If limited to single em­
ployer plans, 9 out of 10 workers in contributory plans had vesting as compared
to about 2 out of 3 in noncontributory plans.
Vesting in contributory pension plans is usually conditional, i. e. , the
worker must leave his contributions in the plan in order to retain a right to the
employer's portion.
If the worker terminates before vesting, or if no vesting
is provided, he is invariably entitled at least to the return of his own contri­
butions, usually with interest.
Many plans give these workers the option of
choosing between the return of contributions or a deferred annuity based on their
own contributions. Studies of the operation of vesting provisions show that most
workers prefer to receive a cash settlement at time of termination rather than
a deferred annuity, even at the sacrifice of a large employer-financed deferred
annuity. 1
4
Vesting was les*s prevalent for workers in negotiated than in nonnegotiated plans.
About 2 out of 3 plans mentioned in collective bargaining agree­
ments and covering 55 percent of the workers in such plans had vesting, as com­
pared to 2 out of 3 nonbargained plans with the same proportion of the workers,
as shown in the following tabulation.
Total
Collective bargaining status

Plans

All plans studied------------------ ■ 15,818
Mentioned in a collective
bargaining agreement----------- 5,795
Not mentioned in a collective
bargaining agreement----------• 10,023

With vesting______

____ Without vesting

Workers1
(thousands)

Plans

Workers1
(thousands)

Plans

Workers1
(thousands)

15,621

10,634

9,307

5,184

6,313

10,695

3,888

5,982

1,907

4,713

4,926

6,746

3,326

3,277

1,600

1 Active workers in 1961.
NOTE: Because of rounding, sums of individual items may not equal totals.

14

Forfeiture of Civil Service Retirement Benefits, " Social Security Bulletin, October 1961, pp. 18-21.




13

Most of this difference between bargained and nonbargained plans stemmed
from the low prevalence of vesting in multiemployer plans (almost entirely under
collective bargaining).
Among single employer plans, over 70 percent of the
workers in plans mentioned in collective bargaining agreements had vesting, as
compared to a like proportion of workers in nonbargained plans.
Plans for salaried workers only were more likely to have vesting than
plans for production workers, due to the large coverage of multiemployer plans
for production workers. Three-fourths of the plans covering white-collar work­
ers, with four-fifths of the workers, had vesting as compared to three-fifths of
the plans covering blue-collar workers, with fewer than half the workers. Simi­
larly, plans including both salaried and production workers had a much higher
proportion of workers with vesting than plans for production workers only— about
3 out of 5 plans with 2 out of 3 workers.

With vesting_____

Total________
Type of worker covered

Workers*
(thousands)

Plans

Workers1
(thousands)

Plans

Workers1
(thousands)

15,621

10,634

9,307

5,184

6,313

6,038
3,995
4,925

6,263
1,584
7,039

3,775
3,047
3,014

4,127
1,279
3,298

2,263
948
1,911

2,135
306
3,741

860

735

798

603

62

132

Plans

All plans studied------------------ 15,818
Salaried and production-------- Salaried only---------------------Production only------------------ Earning in excess of a
specified amount--------------

Without vesting

* Active workers in 1961.
NOTE: Because of rounding, sums of individual items may not equal totals.

Size of plans was not a significant factor in explaining variations in the
prevalence of vesting among single employer plans.
The proportion of single
employer plans with vesting was roughly similar for all the size groups (table 12).
Among major industry groups, vesting was common in manufacturing
(over 7 0 percent of plans and workers) mainly because of the high prevalence
of vesting in the metalworking industries (table 13).
In transportation, whole­
sale and retail trade combined, and service industries, because large propor­
tions of covered workers were in multiemployer plans without vesting, only 40
to 50 percent of the workers were in vested plans. In finance, where nonbar­
gained white-collar plans prevail, three-fourths of the plans and workers had
vesting. In both mining and construction (predominantly multiemployer coverage),
less than a third of the workers were in plans with vesting. In communications
and public utilities, about 2 out of 3 workers (800,000 workers) were covered by
plans of the Bell Telephone System or similar plans, which have no vesting pro­
visions. However, these plans allow the worker to retire on an immediate un­
reduced benefit at an early age with the approval of the company and at age 60
(55 for women) without company approval.
These and other partial substitutes
for vesting are discussed in chapters IV and V.




14

Types of Vesting
Three types of vesting provisions are found in pension plans, distin­
guished by the requirements the worker must fulfill to achieve a vested position.
Under deferred full vesting, eligible workers retain a right to all accrued bene­
fits upon meeting the specified requirements (e. g. , age 40 and 10 years of serv­
ice). Under deferred graded vesting, workers initially acquire a right to a cer­
tain percentage of accrued benefits upon fulfilling the stipulated requirements; the
percentage increases as additional requirements are fulfilled, until workers be­
come fully vested.
A plan might, for example, provide 50-percent vesting on
completing 10 years of service and an additional 10 percent for each additional
year of service, up to 100 percent for 15 years or more of service.
In con­
trast to these deferred methods, under immediate full vesting, all benefits are
fully vested as soon as they are earned, i. e. , starting from the day of partici­
pation. Of these three methods, deferred full vesting is the most common, fol­
lowed by deferred graded vesting.
Immediate full vesting is rare.

Plans
Type of vesting

Number

All plans with vesting-------------- 10, 634
Immediate f u l l --------------------Deferred f u l l -----------------------Deferred graded---------------------

14
7,198
3, 422

Workers1
Percent

Number
(thousands)

Percent

100.0

9,307

100.0

0.1
67.7
32.2

40
7,298
1,969

0 .4
78.4
21.2

1 Active workers in 1961.
NOTE: Because of rounding, sums of individual items may not equal totals.

Deferred full vesting was dominant in all industries except transporta­
tion (table 14), where one large multiemployer plan— the Western Conference of
Teamsters Pension Fund— had graded vesting. Because of this, over 40 percent
of the workers with vesting in multiemployer plans had graded vesting (table 15).
About a third of the single employer plans with vesting, covering about a fifth of
the workers, had deferred graded vesting. Many of these were large plans in the
aircraft and m issile industries.

Requirements for Vesting
Except for the few plans that vested workers immediately upon employ­
ment or upon plan membership, vesting provisions establish age and service re­
quirements which must be met to qualify. In addition, vesting may be conditioned
on the type of termination.
Deferred Full Vesting. Ten years of service or less was required for
deferred full vesting by about 45 percent of the plans covering the same fraction
of workers. Over half the plans with about the same fraction of workers required
15 years or more of service.




15

Percent
Minimum service requirements*
All plans with deferred full vesting---No service requirement--------------------Less than 10 y e a rs--------------------------10 years--------------------------------------11— years----------------------------------14
15 years--------------------------------------16“ 19 years----------------------------------20 years------------------------------------21— years----------------------------------24
25 years--------------------------------------26— years----------------------------------29
30 years---------------------------------------

Plans

Workers'

100.0

100.0

0.2
17.5
24.8
3.3
30.5
1.2
13.8
.2
7.6
.4
.4

0.2
7.7
37.9
2.6
37.3
1.0

8.1
.4
4.0
.3
.4

* For those plans which specify a period of employment to be served before
participation in the plan could begin, the minimum service requirement includes
the preparticipation service and the required plan membership service.
2 Active workers in 1961.
NOTE: Because of rounding, sums of individual items may not equal totals.

Thirty percent of the plans with 40 percent of the workers required 10
to 14 years of service. A heavy concentration of workers in plans requiring 10
(38 percent of the workers) or 15 (37 percent of the workers) years results mainly
from the vesting arrangements in plans in the metalworking industries, many of
which were negotiated by the Automobile Workers (10 years) and Steelworkers
(15 years), or were influenced by these plans. Only 1 out of 6 plans, covering
more than a half million workers, specified less than 10 years, while a fifth of
the plans, covering almost a million workers, required 20 years or more of
service.
In addition to service requirements, minimum age requirements were
specified by 7 0 percent of the plans with the same proportion of workers.
At­
tainment of age 40 was required by roughly a fourth of the plans covering over
45 percent of the workers.

Percent
Minimum age requirements 1

Plans

Workers

All plans with deferred full vesting------

100.0

100.0

No age requirement-----------------------Age 40 and u n d er------------------------Age 45--------------------------------------Age 50--------------------------------------Age 55--------------------------------------Age 60---------------------------------------

30.4
27.2
8.8
9.9
20.8
3.0

29.8
46.2
8.6
8. 1
6 .5
.8

* Some plans specified alternative requirements; for each case, the one with
the earliest age or no age requirements was selected.
2 Active workers in 1961.




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

16

Other common age requirements were 45, 50, and 55 years; the two latter ages,
as will be pointed out, were also commonly required for early retirement.
The combination of age 40 and 10 or 15 years of service (the minimum
requirements in plans negotiated by the Automobile Workers and Steelworkers,
respectively), applied to over 2 out of 5 workers covered by deferred full vest­
ing provisions (table 16). Another 30 percent of the workers were in plans that
had no age requirement. In these plans, service requirements of 10 or 15 years
were most common. In general, the service requirements were longer where no
age requirement was specified.
The service requirements for deferred full vesting were slightly more
liberal in salaried plans than in plans covering either blue-collar workers only
or both types of workers (table 17). Only 2 percent of the blue-collar workers
could vest with less than 10 years' service, against 1 out of 7 white-collar work­
ers. Where both groups were covered by the same plan, 8 percent of the work­
ers could vest with less than 10 years' service.
Age requirements were less
frequently stipulated for white-collar workers than for blue-collar workers; only
two-tenths of the latter did not have to meet such requirements, as compared
to three-tenths of the former.
Where both groups were included in the same
plan, the no age requirements were found in plans with four-tenths of the workers.
Deferred Graded Vesting.
The age and service requirements of plans
with deferred graded vesting were more heterogeneous than those with deferred
full vesting. Workers under the former procedure usually could qualify for vest­
ing at an earlier age with less service than under the latter, but, of course,
only part of the worker's equity was initially vested.
To become fully vested
under graded plans usually required longer service than under deferred full vest­
ing plans.
Ten or 15 years was most often required to vest the first step (i. e. ,
the smallest fraction) of the worker's equity in deferred graded plans (table 18).
The initial percent vested varied widely, ranging from 5 percent for 5 years'
service up to 75 percent for 10 years' service. The most common grading plan
vested 50 percent after 10 years of service. To become fully vested, 85 percent
of the workers under graded plans had to have 15 years or more of service (table
19).
More than half the workers were in plans with no age requirement, but
service requirements were usually 15 years or more.
Prospects of Vesting. The combined effect of the age and service re­
quirements for vesting, as well as the absence of vesting provisions, can be seen
readily by considering the probability of workers becoming vested upon entering
plans at a specified age. 1
5 Beginning at age 25, for example, only 1 out of 5
would vest by age 35, and 1 out of 2 by age 45 (chart 2).
Type of Separation. In about 95 percent of the vesting plans of all types,
with 85 percent of the workers, a worker meeting the age and service require­
ments would be entitled to his vested right if separated for any reason: Quit,
layoff, discharge, etc.

^ Strictly speaking, he would not be covered until a later age under plans with preparticipation service re­
quirements, but his employment would date from age 25. It should also be noted that vesting requirements other
than age and service, such as type of separation, have not been considered.




17

C A T 2. P R E T O P IV T P N N P A S A D W R E S W H U V S IN A SP C IE
HR
E C N F R A E E SIO L N N O K R IT O T E T G T E IF D
.




A E F R W R E S H E A A E 25, W T R 1962-63
G S O O K R IR D T G
IN E

18

Plans

Workers

1

Number

Percent

Number
(thousands)

Percent

All plans with vesting-------------

10,634

100.0

9,307

100.0

Any separation--------------------Involuntary separation-----------

9,993
641

94.0
6 .0

7,920
1,388

85.1
14.9

Conditions for vesting

1 Active workers in 1961.
NOTE: Because of rounding, sums of individual items may not equal totals.

Under the remaining plans, all workers who leave their jobs voluntarily forfeit
their pension rights. For example, plans in the basic steel and fabricated metals
products industries generally limited vesting to workers terminated as the result
of a permanent shutdown of a plant, department, or subdivision, or laid off and
not recalled in 2 years.
These restrictions were chiefly found in production
worker plans and in plans covering both white-collar and blue-collar workers.
Only 1 out of 7 workers in plans for white-collar workers with deferred full
vesting were affected compared to over 1 out of 4 in plans for blue-collar work­
ers and combined plans.
Four out of 5 of the plans with deferred full vesting
requiring that the separation be involuntary, also required the attainment of age
40 and 15 years of service.
Benefits Payable Under Vesting
The vested benefit is usually payable in the form of a monthly retire­
ment benefit— a life annuity— commencing at normal retirement age. In about 75
percent of the plans, covering 60 percent of the workers under vested plans, the
benefit was payable only in that form— the benefit usually commencing at age 65.
Plans_______
Time of benefit payment

Percent

Number
(thousands)

Percent

100.0

9,307

100.0

8,023

75.4

5,602

60. 2

207
2,057
23
324

2.0
19.3
.2
3 .0

1,732
1,740
103
131

18.6
18.7
1.1
1. 4

Number

All plans with vesting---------------- — 10,634
At normal retirement age only----- —
At normal retirement age or—
In prior 5-year period-----------In prior 10-year period-----------—
In prior 15-year period---------At any time requested by worker --

_____ Workers1

1 Active workers in 1961.
NOTE: Because of rounding, sums of individual items may not equal totals.

On the other hand, a fourth of the plans with two-fifths of the workers
allowed the vested worker to choose between starting his monthly benefits at an
earlier age (usually the early retirement age) in a reduced amount, or receiving
it in full beginning at the normal retirement age. The benefit could be received
5 years prior to the normal retirement age (generally age 65) in plans* covering
over 1 out of 6 workers, while another 1 out of 6 workers could receive it as




19

early as 10 years before the normal age. Vesting in these plans contained some
elements of regular early retirement, i. e. , the alternative to receive reduced
benefits at an earlier age than normal, although the worker initially qualified at
an earlier age (in some cases substantially earlier) under the vesting conditions.
A small group of plans with about 130,000 workers gave the vested worker the
option of receiving the benefit at any time he chose.
A few of these also al­
lowed an immediate lump-sum payment.
A lth o u g h th e s h a r p r e d u c t i o n of b e n e f i t s c o m m e n c i n g a t a n e a r l i e r a g e
th an n o r m a l — w h e r e 65 i s th e n o r m a l r e t i r e m e n t a g e , a 3 5 - p e r c e n t r e d u c t i o n a t
60 i s c o m m o n — d i s c o u r a g e s th e e l e c t i o n o f e a r l y b e n e f i t s , th e r e d u c e d b e n e f i t s
c a n p a r t l y r e p l a c e i n c o m e l o s s b e c a u s e of jo b t e r m i n a t i o n .
T h i s r e d u c t i o n in
a l m o s t a l l p l a n s f o l l o w e d th e f o r m u l a u s e d to d e t e r m i n e r e g u l a r e a r l y r e t i r e m e n t
b e n e f i t s , b u t o c c a s i o n a l l y t h e r e w a s s o m e v a r i a t i o n b e c a u s e th e w o r k e r w a s not
r e t i r i n g u n d e r r e g u l a r e a r l y r e t i r e m e n t c o n d i t i o n s . A s the r e s u l t , an a c t u a r i a l
r e d u c t i o n 16 w a s s p e c i f i e d in a b o u t 4 out of 5 p l a n s w ith v e s t i n g w ith t h i s o p tio n
c o v e r i n g m o r e th a n 2 ou t o f 5 w o r k e r s .
S p e c ifie d re d u ctio n f a c t o r s , such a s
s i x - t e n t h s , o n e - t h i r d , f i v e - n i n t h s , o f 1 p e r c e n t f o r e a c h m o n th th e w o r k e r ’s a g e
w a s u n d e r the n o r m a l a g e , w e r e s t i p u l a t e d in p l a n s c o v e r i n g 45 p e r c e n t of the
w o r k e r s . A fe w p l a n s m a d e no r e d u c t i o n i f the e m p l o y e r ' s c o n s e n t w a s o b t a in e d .
Plans

__________ Workers 1__________

Number

Percent

Number
(thousands)

Percent

All plans with vested benefit payable early-------

2,611

1 0 0 . 0

3,705

1 0 0 .0

No reduction for early retirement-----------------Actuarial----------------------------------------------l/ 4 of 1 percent for each month--------------------1 / 3 of 1 percent for each month--------------------5/ l 2 of 1 percent for each month-------------------V2 of 1 percent for each month--------------------5 / 9 of 1 percent for each month--------------------VlO of 1 percent for each month-------------------Table of reduction factors not uniform 3 ---------Other---------------------------------------------------

2,097
9
26
43
127
55
37
98
9

Reduction factor

1
2
3

1 1 0

4.2
80.3
(2 )
.1
. 2

4.9
2 . 1
1.4
3.8
(2)

24
1,619
23
300
75
176
452
670
125
241

0 . 6

43.7
. 6
8

.

1

2 . 0

4.8
1 2 .2

18. 1
3.4
6 .5

Active workers in 1961.
Less than 0.05 percent.
Not based on uniform monthly reduction; often an approximate actuarial reduction.

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

The v e s te d b e n e fit p a y a b le at n o r m a l r e tir e m e n t a g e w as u s u a lly d e t e r ­
m i n e d b y the n o r m a l r e t i r e m e n t f o r m u l a s , e x c e p t th a t the m i n i m u m n o r m a l b e n e ­
f i t f o r m u l a w a s o fte n n ot a p p l i c a b l e .
In m a n y p l a n s w h e r e the m i n i m u m w a s
a p p l i c a b l e to v e s t e d w o r k e r s , i t s u s e r e q u i r e d a d d i t i o n a l s e r v i c e b e y o n d th a t r e ­
q u i r e d f o r f u ll v e s t i n g u n d e r the " r e g u l a r " f o r m u l a .
T h e V a lu e of V e s t e d B e n e f i t s
When a w o r k e r a c h i e v e s a v e s t e d s t a t u s a f t e r th e y e a r s of s e r v i c e r e ­
q u i r e d b y m o s t p l a n s , he h a s b y t h is e v e n t s e c u r e d a v a l u a b l e a s s e t .
To i l l u s ­
t r a t e the v a l u e of t h i s a s s e t , i l l u s t r a t i v e b e n e f i t s e a r n e d up to th e p o in t o f v e s t ­
in g w e r e c o m p u t e d f o r a l l p l a n s w ith d e f e r r e d f u l l v e s t i n g f o r a s s u m e d c o n s t a n t

16 The actuarial equivalent of the normal benefit is a benefit whose ultimate cost is expected to be equal to
that of the normal benefit.




20
e a r n i n g s l e v e l s of $ 3 , 6 0 0 , $ 4 , 8 0 0 , $ 6 ,0 0 0 , a n d $ 8 , 4 0 0 a y e a r . 17 In m o s t c a s e s ,
t h e s e w o u ld b e m i n i m u m b e n e f i t s ; s e r v i c e a f t e r f u l f i l l i n g the v e s t i n g r e q u i r e m e n t s
u s u a l l y w o u ld b r i n g h i g h e r b e n e f i t s .
T h e d i s t r i b u t i o n of the m o n th ly p e n s i o n s p a y a b l e a t n o r m a l r e t i r e m e n t
a g e a s s u r e d to w o r k e r s e a r n i n g $ 4 , 8 0 0 a y e a r i s sh o w n b e l o w f o r p l a n s p r o ­
v id in g fu ll v e s t i n g a f t e r 10 y e a r s an d a f t e r 15 y e a r s of s e r v i c e . 18

Plans with full vesting after—

Monthly pension payable at normal retirement
age for workers earning $4,800 per yearl
T o tal 3

--------------------- ---------- ----------

No benefit4 ---------------------------------------------Under $10------------------------------------------------$ 1 0 and under $ 2 0 --------------------------------------$20 and under $30--------------------------------------$30 and under $40--------------------------------------$40 and under $50--------------------------------------$50 and under $60--------------------------------------$60 and under $70--------------------------------------$70 and under $80--------------------------------------$80 and under $90--------------------------------------$90 and under $100-------------------------------------$100 and under $125-----------------------------------$125 and o v er-------------------------------------------

15 years' service

years' service

1 0

Plans

Workers2
(thousands)

Plans

Workers 2
(thousands)

3,573

3,707

2,019

2,717

8 6

69

73

2 0

-

35
71
350
1,153
295
800
152
215
1 0

32
-

247
213

90
2,182
409
386
307
152
17
14

140
16
908
217
338
129
52
1 0 2

-

82
62
1,422
238
131
358
113
1 0 2

137

-

48

24

-

-

2 0

-

-

1
Computation of benefit amounts is based on future service formulas, assuming a constant level of earnings
and monthly primary social security benefits of $105 for workers earning $3,600 a year, and $127 for workers earning
$4,800, $6,000, and $8,400 a year.
2
Active workers in 1961.
^ Excludes 46 plans, covering 31,000 workers, with deferred full vesting in which plan benefits were not
computable.
4
These are plans in which no pension from the plan was provided because of the deduction of primary social
security benefits.

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

T h e a v e r a g e b e n e f i t 19 a m o u n t e d to $ 3 4 f o r 1 0 - y e a r p l a n s a n d $ 4 6 f o r 1 5 - y e a r
p l a n s , o r $ 3 . 4 0 f o r e a c h y e a r of s e r v i c e in th e 1 0 - y e a r p l a n s a n d $ 3 . 0 7 f o r
e a c h y e a r in th e 1 5 - y e a r p l a n s .

In th e s a m e m a n n e r , the a v e r a g e m o n th l y b e n e f i t s v e s t e d u p o n m e e t i n g
the s e r v i c e r e q u i r e m e n t s a r e sh o w n in th e t a b u l a t i o n on the n e x t p a g e f o r th e f o u r
a s s u m e d e a r n i n g s l e v e l s a n d th e p r i n c i p a l s e r v i c e r e q u i r e m e n t s o f d e f e r r e d f u l l
v e stin g p la n s.

For the computations the future service formula was used.
18 All plans with graded vesting have been excluded from the table, including those that grant full vesting
after 1 0 or 15 years of service.
19
Weighted by number of workers in the plans.
17




21
Average2 monthly pensions initially vested in
______ plans with full vesting after—________
Assumed annual earnings level1 10 years
$3,600------------------------------$4,800------------------------------$6,000------------------------------$8,400-------------------------------

15 years

20 years

25 years

$41
46
55
74

$54
72
98
148

$64
77
95
132

$28
34
42
59

1 Computation of benefit amounts is based on future service formulas, assuming
a constant level of earnings and monthly primary social security benefits of $105 for
workers earning $3,600 a year, and $127 for workers earning $4,800, $6,000, and
$8,400 a year.
2 Arithmetic mean of plan benefits weighted by number of active workers
covered.

A n o t h e r w a y of e v a l u a t i n g th e v e s t e d r i g h t a t th e t i m e the w o r k e r a c h i e v e s
it , i s to d e t e r m i n e h ow m u c h it w o u ld c o s t the w o r k e r to p u r c h a s e a n in d i v i d u a l
a n n u ity of the s a m e a m o u n t f r o m a n i n s u r a n c e c o m p a n y . In th e f o ll o w in g t a b u l a ­
tio n , the c o s t of p u r c h a s i n g a n n u i t i e s p a y a b l e a t 65, w ith in th e r a n g e of the a v ­
e r a g e s p r e s e n t e d in the p r e v i o u s t a b u l a t i o n , h a s b e e n c o m p u t e d f o r w o r k e r s m a k ­
ing s u c h p u r c h a s e s a t the a g e of 45 a n d a t 65. T h e s e e s t i m a t e s r e l a t e to m e n ;
c o s t s to w o m e n w o u ld b e h i g h e r b e c a u s e o f t h e i r l o n g e r l if e e x p e c t a n c y .
Cost of individual annuities purchased for
______________ a man when he is 1— ________
Monthly amount payable
at age 65

Age 45

Age 65

$20----------------------------------$30----------------------------------$40----------------------------------$50----------------------------------$60----------------------------------$70----------------------------------$80----------------------------------$90----------------------------------$100---------------------------------$120--------------------------------$140--------------------------------$160---------------------------------

$1,330
1,995
2,660
3,325
3,990
4,655
5,320
5,985
6,650
7,980
9,310
10,640

$2,840
4,260
5,680
7,100
8,520
9,940
11,360
12,780
14,200
17,040
19,880
22,720

1 Computed from the following nonparticipating individual premium rates of
a large life insurance company. For the purchase of immediate annuities of
$10 monthly at age 65, $1,420 for men and $1,630 for women, and deferred
annuities purchased at age 45 of $10 monthly commencing at age 65, $665 for
men and $835 for women.
T h u s , to t a k e a s p e c i f i c e x a m p l e , the 2 , 0 0 0 p e n s i o n p l a n s p r o v i d i n g f u ll
v e s t i n g a f t e r 15 y e a r s o f s e r v i c e , on the a v e r a g e , a s s u r e to w o r k e r s a t th e $ 4 , 8 0 0 a - y e a r e a r n i n g s l e v e l a m o n t h l y p e n s i o n of $ 4 6 p a y a b l e a t 65. It w o u ld c o s t m a l e
w o r k e r s $ 3 , 059 to p u r c h a s e an a n n u ity of t h i s a m o u n t a t 45 o r $ 6 , 532 a t 65.
In
o t h e r w o r d s , the a c t o f v e s t i n g a t 45 a s s u r e s to t h e s e w o r k e r s an a s s e t w o r t h ,
on the a v e r a g e , a b o u t t w o - t h i r d s of a y e a r ' s p a y ( m o r e i f th e y a r e o v e r a g e 45
w hen th e y v e s t ) . T h i s a s s e t , it m i g h t b e n o te d , e x c e e d s the a m o u n t th a t s e v e r ­
a n c e p a y p l a n s , on the a v e r a g e , p r o v i d e to w o r k e r s w ith 15 y e a r s of s e r v i c e .
It a m o u n t s to m o r e th a n a t h i r d o f the " v a l u e " of th e m a x i m u m p r i m a r y s o c i a l
s e c u r i t y b e n e f i t d ue the w o r k e r a t 65. T h e v a l u e of t h is v e s t e d a s s e t , o f c o u r s e ,
i n c r e a s e s a s m o r e y e a r s of s e r v i c e a r e a c c u m u l a t e d , a s the w o r k e r g e t s n e a r e r
to r e t i r e m e n t , a n d , a s i s t y p i c a l , a s the w o r k e r ' s e a r n i n g s l e v e l r i s e s .




22
Implications for Mobility
If p r i v a t e p e n s i o n p l a n s te n d to l i m i t l a b o r m o b i l i t y , th e n v e s t i n g t e n d s
to l o o s e n o r r e m o v e the b a r r i e r s a n d , t h u s , to i n c r e a s e m o b i l i t y .
E x c e p t fo r
p l a n s th a t l i m i t v e s t i n g to i n v o l u n t a r y t e r m i n a t i o n s , it d o e s t h i s b y g iv i n g a q u a l ­
i f i e d w o r k e r the c h a n c e to c h a n g e e m p l o y e r s w h ile h e i s a b l e to , w ith o u t s a c r i ­
f i c i n g h i s e q u ity in the p l a n . A v e s t i n g p r o v i s i o n a l s o a d d s f l e x i b i l i t y to th e p r i ­
v a t e p e n s i o n s y s t e m . It c a n e a s e the t r a n s i t i o n s in v o l v e d in t e c h n o l o g i c a l c h a n g e ,
f o r u n io n s a n d e m p l o y e r s , b y d e a l i n g e q u i t a b l y w ith th e p e n s i o n r i g h t s of d i s ­
p l a c e d w o r k e r s . V e s t i n g m a k e s i t p o s s i b l e f o r a w o r k e r to p i c k up p e n s i o n c r e d ­
i t s f r o m m o r e th a n one e m p l o y e r d u r i n g h i s w o r k i n g l i f e . A l l of t h e s e a d v a n t a g e s
of v e s t i n g a r e g i v e n a d d e d s i g n i f i c a n c e d u r i n g a p e r i o d of r a p i d e c o n o m i c c h a n g e .
P a r a d o x i c a l l y , v e s t i n g p r o v i s i o n s m a y a l s o c r e a t e s h o r t - t e r m b a r r i e r s to v o l u n ­
t a r y m o v e m e n t ; t h a t i s , a w o r k e r m a y f e e l " l o c k e d - i n " a p l a n d u r i n g th e p e r i o d
i m m e d i a t e l y b e f o r e he q u a l i f i e s f o r v e s t i n g b e c a u s e he i s s o c l o s e to a s s u r i n g
h i m s e l f of a r i g h t to a v a l u a b l e a s s e t .
B o th c o s t c o n s i d e r a t i o n s a n d th e c o n f l i c t b e t w e e n a t r a d i t i o n a l p u r p o s e
o f a p e n s i o n p l a n a n d the c o n c e p t s of m o b i l i t y a n d f l e x i b i l i t y r e s t r a i n th e p r e s ­
s u r e s fo r lib e r a l v e stin g .
S i n c e the c o s t of v e s t i n g d e p e n d s on m a n y f a c t o r s
( s u c h a s th e a g e a n d s e x c o m p o s i t i o n of the w o r k f o r c e , the r a t e of t u r n o v e r ,
a n d p l a n p r o v i s i o n s ) a n d s i n c e the a b o v e - m e n t i o n e d c o n f l i c t c a n b e r e s o l v e d
t h r o u g h c o u n t l e s s v a r i a t i o n s , w id e d i v e r s i t y in a g e , s e r v i c e , a n d o t h e r r e q u i r e ­
m e n ts fo r v e stin g p r e v a il.
T h e t h r e e t y p e s of v e s t i n g d i f f e r in t h e i r i m p l i c a t i o n s f o r m o b i l i t y . I m ­
m e d i a t e f u ll v e s t i n g o f f e r s the u l t i m a t e in p r o t e c t i o n of the w o r k e r ' s p e n s i o n
r i g h t s , an d h e n c e h i s m o b i l i t y , b u t, it i s b y f a r the c o s t l i e s t m e t h o d of v e s t i n g .
M o r e o v e r , it a s s u r e s b e n e f i t s f o r w o r k e r s w ith s h o r t s e r v i c e , a v i o l a t i o n of one
b a s ic p e n sio n p rin c ip le .
Its r a r i t y i s a t t r i b u t a b l e to t h e s e tw o f a c t o r s . U n d e r
d e f e r r e d f u l l v e s t i n g ( p r o v i d e d to m o s t w o r k e r s in v e s t i n g p l a n s ) , a w o r k e r m e e t ­
in g the n e c e s s a r y r e q u i r e m e n t s g a i n s th e a s s u r a n c e of h i s f u l l a c c r u e d b e n e f i t s .
Of c o u r s e , i f h e w i t h d r a w s , he s t a n d s to l o s e f u t u r e a c c r u a l s of p e n s i o n r i g h t s ,
u s u a l l y a t h i g h e r l e v e l s , b u t t h i s i s o n ly on e of the f a c t o r s th a t m a y e n t e r into
d e c i s i o n s on jo b c h a n g i n g . S i n c e u n d e r d e f e r r e d f u l l v e s t i n g , t h e r e i s t y p i c a l l y
a s i n g l e p o i n t of t i m e w h en the i n d i v i d u a l w o r k e r b e c o m e s v e s t e d , th e " l o c k - i n "
e f f e c t of t h i s ty p e o f v e s t i n g p r o v i s i o n i s p r e s u m a b l y g r e a t e r th a n u n d e r d e f e r r e d
g r a d e d v e s t i n g , u n d e r w h ich the w o r k e r i s e a s e d into a f u l l y v e s t e d s t a t u s . T h e
g r a d u a t i o n of v e s t i n g o v e r l o n g - s e r v i c e p e r i o d s p r o v i d e s a d d i t i o n a l r e w a r d s f o r
lo n g c o n tin u o u s s e r v i c e (the t r a d i t i o n a l p e n s i o n c o n c e p t ) , an d t e n d s to r e d u c e the
c o s t s of v e s t i n g , t h e r e b y i n c r e a s i n g i t s a t t r a c t i v e n e s s to e m p l o y e r s ; b u t if the
s e r v i c e r e q u i r e m e n t s a r e s o le n g th y a s to w ith h o ld a v e s t e d s t a t u s f r o m the
w o r k e r u n t il h e i s to o o ld to m a k e u s e of i t , the c o n t r i b u t i o n s to p o t e n t i a l w o r k e r
m o b i l i t y m a y b e l a r g e l y a n n u lle d .

S e r v i c e r e q u i r e m e n t s f o r v e s t i n g a r e u s u a l l y n ot s o g r e a t a s to n u l li fy
s o m e p o s i t i v e e f f e c t s on p o t e n t i a l m o b i l i t y . A b o u t 45 p e r c e n t of the w o r k e r s in
p l a n s w ith v e s t i n g n e e d c o m p l e t e 10 o r f e w e r y e a r s o f s e r v i c e to q u a l i f y a n d an
a d d i t i o n a l 2 out of 5 w o r k e r s b e l o n g to p l a n s r e q u i r i n g b e t w e e n 11 a n d 15 y e a r s .
H o w e v e r , the k e y e l e m e n t f o r a n in d i v i d u a l w o r k e r ' s p o t e n t i a l m o b i l i t y i s o fte n
th e a g e r e q u i r e m e n t — u s u a l l y 4 0 y e a r s o r m o r e . F o r e x a m p l e , the 1 0 - y e a r s e r v ­
i c e r e q u i r e m e n t in m a n y p l a n s m a y n o t b e a s i m p o r t a n t a r e s t r i c t i o n a s th e a t ­
t a i n m e n t of a g e 4 0 . S i m i l a r l y , p l a n s w h ic h r e q u i r e th e a t t a i n m e n t o f a g e 4 5 , 50,
o r 5 5 , m a y e f f e c t i v e l y d e n y v e s t i n g e v e n f o r w o r k e r s w ith 15 y e a r s o r m o r e of
serv ice .




23

S i n c e th e p r o p e n s i t y of w o r k e r s to c h a n g e j o b s u n d o u b te d ly d e c l i n e s a s
th e y g r o w o l d e r a n d a s th e y a c c u m u l a t e m o r e s e r v i c e ( h e n c e s e c u r i t y in t h e i r
e m p l o y m e n t s ) , h ig h a g e a n d lon g s e r v i c e r e q u i r e m e n t s in v e s t i n g p r o v i s i o n s c o u n ­
t e r a c t th e t h e o r e t i c a l m o b i l i t y p o t e n t i a l o f v e s t i n g . A g e r e q u i r e m e n t s , in p a r t i c ­
u lar,
a p p e a r to b e a r b i t r a r y ( p e r h a p s e v e n f r o m a c o s t s t a n d p o i n t ) , l a c k i n g the
g e n e r a l s o c i a l a c c e p t a b i l i t y a f f o r d e d the a g e o f n o r m a l r e t i r e m e n t .
If v e s t i n g
p r o v i s i o n s , in t h e i r i n c e p t i o n , a r e n ot d e s i g n e d b y p e n s i o n p l a n n e r s to e n c o u r a g e
v o l u n t a r y m o b i l i t y , a s s e e m s to b e th e c a s e , e x p e r i e n c e u n d e r the p l a n s m a y
s u g g e s t t h a t th e y do , in f a c t , h a v e s u c h a n e f f e c t . A lth o u g h p r e s s u r e s to r e v i s e
v e stin g p r o v is io n s , p a r tic u la r ly fro m co llec tiv e b a rg a in in g , a r e p r im a r ily p r o ­
t e c t i v e in n a t u r e , th e y a l s o h a v e m o b i l i t y i m p l i c a t i o n s .
T h e p r e c e d i n g r e m a r k s o b v i o u s l y do n ot a p p l y to p l a n s th a t l i m i t v e s t i n g
to in v o l u n t a r y t e r m i n a t i o n .
T h e se m u s t be view ed a s a s p e c i a l c a s e .
T hese
c o n d it i o n s h a v e a l l the e a r m a r k s of a s e v e r a n c e a r r a n g e m e n t ; th a t i s , th e y o p e r ­
a t e o n ly u n d e r c i r c u m s t a n c e s b e y o n d th e c o n t r o l of th e e m p l o y e e . A lth o u g h th e y
p r o t e c t the e q u it y of the i n v o l u n t a r i l y s e p a r a t e d w o r k e r m e e t i n g the a g e a n d s e r v ­
i c e r e q u i r e m e n t s , t h e i r c o n t r i b u t i o n to v o l u n t a r y m o b i l i t y i s n e g l i g i b l e .
A t th e p r e s e n t s t a g e of d e v e l o p m e n t o f p r i v a t e p e n s i o n p l a n s , it i s r e a ­
s o n a b l e to q u e s t i o n the d e g r e e to w h ich w o r k e r s u n d e r s t a n d th e v a l u e of v e s t i n g .
P l a n d o c u m e n t s d e s c r i b i n g p e n s i o n p l a n s to w o r k e r s r a r e l y , i f e v e r , s t r e s s the
d o l l a r v a l u e of v e s t i n g to w o r k e r s . If th e v a l u e s th a t m a y l o g i c a l l y b e a s s i g n e d
to v e s t i n g , a s th e y w e r e d e v e l o p e d in t h is c h a p t e r , o r to p e n s i o n r i g h t s in g e n ­
e r a l , w e r e m a d e m o r e w id e ly a v a i l a b l e to p e n s i o n p l a n p a r t i c i p a n t s , one m ig h t
e x p e c t a n i n c r e a s e in the h o ld in g p o w e r of p e n s i o n p l a n s ; a t l e a s t up to the p o in t
o f fu ll v e s t i n g .




Chapter IV.

Early Retirement

The early retirement age, like the normal retirement age, is defined by
each pension plan with an early retirement provision.
The technical definition
of early retirement differs from the popular concept which holds that any retire­
ment prior to age 65, the age when full social security benefits are payable, is
early retirement.
As the term is used in pension plans, and in this bulletin,
early retirement means retirement before reaching the plan*s normal retirement
age, whatever it may be.
The normal retirement age may be defined as the
earliest age at which a worker meeting the stipulated requirements can retire on
his own volition and receive the full amount of the benefits due him under the
plan*s normal retirement formula.
This age is usually 65, but it may be 60,
62, or even 68 or 70.
In over 100 plans, covering 1.6 million workers, the normal retirement
age was under age 65, usually age 60. Included in the coverage of these plans
were almost a million workers in plans, like those of the Bell Telephone System,
which also had early retirement provisions. Under some of these plans, including
the telephone plans, workers could retire on full benefits as early as age 55,
with the em ployees consent; only reduced benefits were provided by the others.
The remaining plans with normal retirement before 65, including the Electrical
Workers (IBEW) National Plan, the United Mine Workers, and the Central States
Teamsters Plan, did not have early retirement provisions. 2
0
The Social Security Act was amended in 1956 to provide permanently
reduced benefits for women retiring between ages 62 and 65, and in 1961 this
option was extended to men. Since most private plans already had provision for
early retirement, usually at earlier ages, the influence of this change in the So­
cial Security Act on private plan provisions has probably been negligible, although
it may have influenced the age at which early retirement actually occurs under
private plans. 2
1
Because provisions for disability retirement, which usually require that
a worker be totally and permanently disabled in addition to meeting age and serv­
ice requirements, have a special role in a retirement scheme, they have not
been considered in this study. They may, however, be deemed a form of early
retirement. These provisions, found in about 50 percent of the private plans with
about 70 percent of the workers, will be covered in detail in a subsequent Bu­
reau study.
Early retirement provisions permit workers meeting stipulated age and
service requirements, or both, to retire on an immediate, although usually re­
duced, annuity. Although the benefits are always payable immediately, some plans
allow the worker to defer benefits until he reaches normal retirement age when
they are payable in the full amount.

20 Provisions for disability retirement before the normal or early retirement age were provided by plans in both
groups.
21 National Industrial Conference Board, Inc. Corporate Retirement Policy and Practices (Studies in Personnel
Policy, No. 190). New York, 1964, pp. 28-30.




24

25

Because they protect the worker* s equity, early retirement provisions
are a partial substitute for vesting, where no vesting is provided. 22 In general,
however, age requirements for early retirement are stricter than for vesting.
In addition, the employer1s consent for early retirement may be required.232
4
One of the more recent innovations in private pension plans is special
early retirement provisions whereby the employer may compel a worker to retire
or, in some instances, the worker may be retired under 1,mutually satisfactory
conditions*' (i. e . , the em ployees, the un ion s, and presumably, the worker*s
consent is required). They usually grant substantially higher benefits than reg­
ular early retirement benefits and, in some plans, even more than normal re­
tirement benefits. Like other retirement provisions, specified age and service
requirements, or both, have to be met.
Prevalence of Early Retirement Provision
Approximately 3 out of 4 private pension plans, covering the same pro­
portion of workers, provided for early retirement (table 20). The provision was
far more prevalent among single employer plans than among multiemployer plans—
4 out of 5 for the former as against 2 out of 5 for the latter.

T o ta l

W ith esarly retirem en t

W ithout e arly retirem en t

Plans

W oikers1
(thousands)

Plans

W orkers1
(thousands)

Plans

W orkers1
(thousands)

A ll plan s stu d ied ----- ------------ -

1 5 ,8 1 8

15 ,6 2 1

1 2 ,0 9 9

1 1 ,7 8 6

3 ,7 1 9

3 ,8 3 5

Sin gle e m p lo y e r— ---------------M ultiem ployer --------------------

1 4 ,8 9 0
928

1 1 ,7 4 2
3 ,8 7 8

1 1 ,7 3 5
364

1 0 ,6 5 7
1 ,1 2 9

3 ,1 5 5
564

1 ,0 8 5
2 ,7 5 0

T ype o f em p lo y er unit

1 A c tiv e workers in 1961,
NOTE: B ecause o f rounding, sums o f individu al item s m ay not eq u al to tals.

This marked difference between single employer and multiemployer plans
reflected the greater prevalence of early retirement provisions in contributory
plans, in plans not mentioned in collective bargaining agreements, and in salaried
workers* plans.
The greater prevalence of early retirement provisions in in­
dustries in which single employer plans were predominant also reflected the in­
fluence of these factors (table 21).
Among the single employer plans without early retirement, most were
smaller noncontributory plans— chiefly in trade, service, and manufacturing in­
dustries. Early retirement provisions, or normal retirement before age 65, in
multiemployer plans were found mainly in industries characterized by heavy and
arduous working conditions, such as mining, motor transportation, and water
transportation. 2
*

22
23
a g e and
24

Se e ch apter VI.
Sin ce 19S7, plans requiring em ployer* s consent for early retirem en t had to provide vestin g under the sam e
serv ice requirem ents to re c e iv e Internal R even u e S e rv ic e approval (R ev en u e R u lin gs 57-1 6 3 and 58-1 5 1 ).
T h e sig n ific an ce of early retirem en t in m u ltiem ploy er plans is discussed in chapter V .




26

A number of private plans, accounting for less than a million workers,
allowed early retirement for women only, usually starting at age 62.
A large
proportion of these plans with most of the workers were in the apparel industry,
where a large number of women employees are found, and most of them were in
multiemployer plans negotiated by the Amalgamated Clothing Workers and the
International Ladies1 Garment Workers1 Union.
Minimum Requirements for Early Retirement
As in the case of vesting and other benefit requirements, a worker must
meet an age requirement, a service requirement, or both, to retire under an
early retirement provision. However, many plans have a requirement not found
in other benefit provisions, that is, early retirement may depend upon employer
approval or, in some plans, his request.
In general, the minimum length of employment for early retirement was
not significantly longer than for vesting. Specified minimum amounts of service,
however, were found more often in early retirement provisions than in normal
retirement.
Fifteen years was the most common service requirement for early re­
tirement— more than 1 out of 4 plans with over 1 out of 4 workers.

P ercen t
M in im um service req u irem e n ts1

P lans

W orkers2

A ll plan s w ith e arly retirem en t---------------------------

1 0 0 .0

1 0 0 .0

N o service r e q u ire m e n t------------------------------------Less than 10 y e a r s -------------------------------------------10 y e a r s --------------------------------------------------------1 1 -1 4 y e a r s ---------------------------------------------------15 y e a r s --------------------------------------------------------1 6-19 y e a r s ---------------------------------------------------20 y e a r s --------------------------------------------------------21— y e a r s ---------------------------------------------------24
25 y e a r s ------------------------------------------------------2 6 -2 9 y e ars----------------------------------------------------30 y e a r s ------------------------------------------------------O ver 30 y e ars---------------------------------------------------

4 .0
3 0 .9
1 7 .7
2 .3
2 7 .0
.3
1 2 .0
.1
3 .5
.4
1 .6
.2

18. 5
2 4 .3
1 .3
2 6 .8
.5
9 .6
.2
3 .0
.1
1 0 .8
.3

4 .7

1 F or those plan s w hich sp e cify a p erio d o f em p loy m en t to be served before
p a rticip atio n in the p lan co uld b e g in , the m in im u m service requ irem en t includes
the p rep articip atio n service and the required p lan m em bership se rv ic e.
2 A c tiv e workers in 1961.
NOTE: B ecause o f rounding, sum s o f ind ivid u al item s m a y not eq u al to tals.

Ten years was needed in a sixth of the plans with a fourth of the workers.
However, almost a third of the plans, with about a fifth of the workers, specified
less than 10 years and a fourth of the workers were in plans requiring 20 years
or more of service.




27

Minimum age requirements were more likely to be specified for early
retirement than for vesting and were also typically at a higher age. As shown
below, almost two-thirds of the plans with almost half the workers stipulated
age 55, while another two-fifths of the workers were in plans requiring age 60.
Less than 5 percent of the plans specified an age below 55.
_____________ P ercen t

_________

M in im um ag e req u irem e n ts1

P lans

W orkers2

A ll p lan s w ith e a rly retirem en t---------------------------

1 0 0 .0

1 0 0 .0

N o ag e r e q u ire m e n t----------------------------------------A ge 50 --------------------A g e 5 5 .................................... ........... - ..............— ..................
A ge 60 -----------------A ge 6 1 - 6 4 ------------------------------A ge 65 — ..................- ........... ...................................................

2 .4
1 .0
6 4 .1
3 0 .1
1 .1
1 .2

9 .5
2 .9
4 7 .3
3 8 .4
1 .7
.3

Som e plan s sp e c ifie d altern ativ e requirem ents; for e a c h c a s e , the one with
the e a r lie st ag e or no ag e requirem ents w as se le c te d .
2 A c tiv e workers in 1961.
NOTE: Because o f rounding, sum s o f ind ivid u al item s m ay not eq u al to tals.

The combinations of age 55 and 10 to 15 years1 service were stipulated
for over 20 percent of the workers covered by plans with early retirement, while
attainment of age 60 and 10 or 15 years was necessary for another 30 percent
(table 22).
The minimum age requirements for early retirement in plans with vesting
provisions were, in general, higher than in the plans that did not have vesting.
For example, a fourth of the workers with early retirement in nonvesting plans
had no age requirement to meet, while almost all the workers in plans with vesting
had such requirements. On the other hand, the service required under the early
retirement— vesting plans was less than in plans in which no vesting was provided.
The overall picture of age and service requirements of normal and early retire­
ment and vesting is discussed in chapter VI.
A requirement that the worker could retire only with the consent of, or
at the request of, the employer was contained in almost half of the plans with
early retirement, covering 2 out of 5 workers.
Woriters 1

Plans

N um ber

P ercen t

N um ber
(thousands)

P ercen t

A ll plans with e a rly retirem en t---------------- -------

1 2 ,0 9 9

1 0 0 .0

1 1 ,7 8 6

1 0 0 .0

S o le ly a t e m p lo y e e 's o p t io n --------------------------E m ployer's consent or requ est r e q u ir e d ------------With em p lo y er's consent---------------------------A t em p lo y er's re q u e st------------------------------A t em p lo y er's requ est or consent----------------Under m u tu ally satisfacto ry conditions---------O th er-----------------------------------------------------

6 ,3 2 7
5 ,7 7 2
5 ,3 6 9
89
247
55
12

5 2 .3
4 7 .7
4 4 .4
.7
2 .0
.5
.1

7 ,1 3 3
4 ,6 5 3
3 ,7 2 9
273
389
219
43

6 0 .5
3 9 .5
3 1 .6
2 .3
3 .3
1 .8
.4

C onditions for e arly retirem en t

1 A c tiv e workers in 1961.
NOTE: B ecause o f rounding, sums o f in d ivid u al item s m ay not eq u al to tals.




28

While multiemployer plans seldom required employer consent for early
retirement, it was common in single employer plans, particularly in nonmanu­
facturing industries* In addition, white-collar workers were more likely to need
employer consent to retire early than blue-collar workers.
Benefits Payable Under Early Retirement
Early retirement benefits were always payable immediately, but in half
the plans with over half the workers, the benefit could be deferred by the worker
until normal retirement age or, in some plans, any time up to that age.
_______ Plans_______
T im e o f b e n e fit pay m en t

N um ber

P ercent

N um ber
(thousands)

P ercen t

1 0 0 .0

1 1 ,7 8 6

1 0 0 .0

5 0 .1
2 2 .0
2 7 .9

5 ,6 0 5
4 ,1 1 0
2 ,0 7 1

4 7 .6
3 4 .9
1 7 .6

A ll p lan s with e arly retirem en t------- — 1 2 ,0 9 9
Im m e d iately o n ly ------------------------ —
Im m e d iate ly or a t ag e 6 5 --------------—
Im m e d iately or any tim e up to 65 — —

Woikers1 .

6 ,0 6 3
2 ,6 6 0
3 ,3 7 6

1 A c tiv e workers in 1961.
NOTE: Because o f rounding, sum s o f ind ivid u al item s m ay not eq u al to tals.

To avoid increasing costs excessively, early retirement benefits are almost
always less than normal retirement benefits for equivalent service, because of
the longer period of time over which they are likely to be paid. The worker who
chooses to retire early will receive a smaller benefit than he would receive if he
remained until the normal retirement age. For early retirement at age 60, the
actuarial equivalent2 of accrued benefits was payable as shown below, by two5
thirds of the plans with half the workers.
_ _________ P lans
R ed uction facto r for e arly
retirem en t a t ag e 60

___________ W orkers1

N um ber

P ercen t

N um ber
(thousands)

P ercen t

A ll plan s w ith ea rly retirem en t----------------------

1 2 ,0 9 9

1 0 0 .0

1 1 ,7 8 6

1 0 0 .0

No r e d u c tio n ---------------------------------------------A c t u a r i a l -------------------------------------------------U niform p ercen t for eac h m onth prior to
ag e 6 5 ---------------------------------------------------7 4 of 1 p ercen t--------------------------------------V3 o f 1 p ercen t--------------------------------------710 o f 1 p e r c e n t -----------------------------------V 2 o f 1 p ercen t--------------------------------------~/9 o f 1 percen t--------------------------------------/ l0 o f 1 p e r c e n t -----------------------------------5/ s o f 1 p ercen t--------------------------------------3/4 o f 1 p ercen t--------------------------------------T a b le o f reduction factors not u n iform 3 ---------T a b le o f reduced be n efit am ou n ts3 ---------------Other--------------------------------------------------------

2 169
8 ,0 6 7

1 .4
6 6 .7

1 ,1 6 2
5 ,8 2 1

9 .9
4 9 .4

2 ,8 3 7
32
52
62
934
179
1 ,0 0 6
520
52
836
31
159

2 3 .4
.3
.4
.5
7 .7
1 .5
8 .3
4 .3
.4
6 .9
.3
1 .3

4 ,1 9 3
108
545
193
1 ,2 4 5
710
1 ,2 9 0
71
31
419
91
102

3 5 .6
.9
4 .6
1 .6
1 0 .6
6 .0
1 0 .9
.6
.3
3 .6
.8
.9

1 A ctiv e workers in 1961.
2 Includes 57 p lan s, coverin g 966, OCX) workers, with norm al retirem en t a t ag e 60 and early
e a rlie r than 60.
3 N o t b ased on uniform m onthly reduction; often an approxim ate a c tu a ria l reduction.
NOTE: Because of rounding, sums o f in dividu al item s m ay not eq u al to tals.

25

Op. c i t . , footnote 16.




retirem en t

a t a g es

29

The actuarial reduction typically results in the male worker retiring at
age 60 receiving about two-thirds of the benefit amount payable at 65 for equivalent
service.
Thus, if he postponed receipt of benefits until normal age, he would
increase his monthly retirement income by about one-half. Most of the remaining
plans reduced benefits by other factors, ranging from one-fourth to three-fourths
of 1 percent for each month the pensioner was under age 65 when he retired.
These factors often resulted in a somewhat greater than actuarial reduction at
age 60. For example, more than 10 percent of the workers were in plans with
a reduction of six-tenths of 1 percent for each month under age 65, or a total
of 36 percent at age 60. On the other hand, over 1 million workers were in plans
which provided a reduction of 30 percent (one-half of 1 percent for each month
under age 65) for workers retiring at age 60.
Not all workers retiring at 60, however, would receive smaller benefits
than they would be entitled to at 65, apart from the reduction due to their serv­
ice.
About 1, 200,000 workers were in plans that did not require a reduction
in benefits at age 60; about a million were in plans with normal retirement at
60 (usually with early retirement at lower ages), and almost 200, 000 were in plans
that paid the same benefits at age 60 as at age 65. 2
6
The reduction of benefits for plans allowing early retirement as early as
age 55 generally followed the pattern for the reduction at age 60, i. e . , the ac­
tuarial equivalent of benefits was most frequently specified.

Plans
R ed uction facto r for early
retirem en t a t ag e 55

N um ber

A ll plan s with ea rly retirem en t-----------------------N o provision for e a rly retirem en t betw een
55 and 6 0 -------------------------------------------------A ll plan s w ith e a rly retirem en t a t ag e 5 5 ---------N o reduction-------------------------------------------A c tu a ria l------------------------------------------------Uniform, p erce n t for each m onth prior
to age 6 0 ---------------------------------------------V 3 o f 1 p e r c e n t-----------------------------------T 5 o f 1 p e r c e n t-----------------------------------o f 1 p e r c e n t-----------------------------------of 1 p ercen t----------------------------------o f 1 p e r c e n t------------------------------------'1 2 o f 1 p ercen t----------------------------------T ab le o f reduction factors not uniform 2 ------O th er------------------------------------------------------

W orkers1

P ercen t

N um ber
(thousands)

-

_
8 ,1 6 9

580

1 1 ,7 8 6

P ercen t
-

_

1 0 0 .0
1 .1
8 0 .7

4 ,7 2 6
7 ,0 6 0
878
4 ,1 4 9

1 0 0 .0
1 2 .4
5 8 .8

1 0 .9
.5
.9
5 .0
2 .1
2. 1
.2
7 .1
.2

1 ,5 6 5
305
241
561
212
174
72
377
92

2 2 .2
4 .3
3 .4
7 .9
3 .0
2 .5
1 .0
5 .3
1 .3

1 A c tiv e workers in 1961.
2 N o t b ased on uniform m onthly reduction; often an approxim ate a c tu a ria l reduction.
NOTE: Because o f rounding, sum s o f in d ivid u al item s m ay not e q u a l to tals.

T h e norm al retirem en t a g e in these plans w as 65 b ecau se the em ployer*s consent w as required to retire prior
to th at ag e.




30

The sharpness of the actuarial reduction of benefits at age 55— typically
over 50 percent for men—due to increased longevity and foregone interest suggests
that the provision of early retirement at that age is designed for extreme c ir­
cumstances. An even greater reduction was often required. For example, a r e ­
duction of one-half of 1 percent for each month under age 65 leaves the worker
at 55 with 40 percent of his accrued monthly benefit.
However, a significant number of workers belonged to plans permitting
retirement as early as 55 without a reduction because of age.
Most of these
workers were in telephone company plans, which require 25 years of service and
the employer*s consent for such a benefit.
They also have normal retirement
at age 60.

Social Security Adjustment Option.
In most plans, early retirement is
permitted prior to eligibility for benefits (full or reduced) under the Social Security
Act.
Consequently, the worker retiring early will usually suffer an immediate
and substantial reduction in income and then, a few years later, a substantial
increase, when social security becomes payable. To counteract these fluctuations,
more than a fourth of the plans with almost a third of the workers in plans with
early retirement offered a social security adjustment option. Under this option,
workers receive a larger-than-usual benefit before social security benefits are
payable, which they pay for by getting smaller benefits afterwards. The private
plan benefits are in such amounts that, when added to the social security bene­
fits, an approximately uniform combined benefit is received by the pensioner
throughout his life. Employers paid the cost of larger initial benefits in a few
plans that provided supplemental retirement benefits (usually equal to anticipated
social security) until social security benefits were payable.
These supplemen­
tal provisions are similar to special early retirement provisions discussed in
detail below.

Plans

Provision

N um ber

A ll plan s w ith e arly retirem en t— - 1 2 ,0 9 9
With le v e l incom e o p t io n --------- W ithout le v e l incom e option----- -

3 ,2 0 3
8 ,8 9 6

Workers

1

P ercen t

N um ber
(thousands)

P ercent

1 0 0 .0

1 1 ,7 8 6

1 0 0 .0

2 6 .5
7 3 .5

3 ,6 6 8
8 ,1 1 8

3 1 .1
6 8 .9

1 A c tiv e workers in 1961.
NOTE: Because o f rounding, sum s o f in d ivid u al item s m ay not e q u al to tals.

Special Early Retirement

In recent years, "special early" retirement provisions have been incor­
porated into many plans, mostly in manufacturing industries.
Because of their
compulsory nature, as opposed to the voluntarism usually associated with regular
early retirement; the worker is usually granted benefits substantially higher than




31

under regular early retirement. 2
7 In general, these special benefits have re­
sulted from union-management bargaining to meet special circumstances, rather
than unilateral employer action. For that reason, although they are found chiefly
in negotiated plans covering production workers or both salaried and production
workers, they have often been extended to plans for nonunion salaried workers
in the same firm.
Prevalence of Special Early Retirement Provisions.
A fifteenth of the
plans with over a sixth of the workers had special early retirement benefits.

Plans

P rovision

N um ber

A ll plan s stu d ied ---------------------- 1 5 ,8 1 8
With sp e c ia l e arly retirem en t----1 ,0 5 1
W ithout sp e c ia l early retirem en t— 1 4 ,7 6 7

W orkers1

P ercent

N um ber
(thousands)

P ercen t

1 0 0 .0

15,621

1 0 0 .0

6 .6
9 3 .4

2 ,6 7 4
1 2 ,9 4 7

1 7 .1
8 2 .9

1 A c tiv e workers in 1961.
NOTE: B ecause of rounding, sums of in d ivid u al item s m ay not equ al to tals.

They were concentrated in manufacturing (table 23) and single employer, noncon­
tributory plans in these industries, particularly metalworking, rubber products,
and food products (meatpacking).
They were most common in plans negotiated
by the Steelworkers, Automobile Workers, Rubber Workers, and United Packing­
house Workers unions.
The distribution of these special provisions were dominated by the pattern
plans in manufacturing industries. Plans following the steelworkers pattern, mostly
under collective bargaining, covered about a fourth of the workers with special
early retirement.
Under these plans, the worker could qualify at age 60 and
15 years of service (the same as regular early retirement at the worker*s re­
quest) if he retired under mutually satisfactory conditions, or at age 55 and 20
years of service, if terminated as result of a plant shutdown, layoff, or a dis­
ability not serious enough to qualify .under the regular disability retirement pro­
vision. 2
8 The normal benefit based on accumulated service is payable imme­
diately.
A variation was found in other Steelworkers plans permitting special
early retirement as early as age 50 and 15 years under mutually satisfactory
conditions, or layoff, and for age 55 and 15 years, in case of permanent shut­
down or partial disability, and/or age 60 and 30 years, under mutually satisfactory
conditions.
The normal benefit formula also applied.
In the automobile industry (Automobile Workers), special early retire­
ment usually requires the attainment of age 60 and 10 years of service (the same
as for regular early retirement at the worker*s request), but is conditioned upon

27 Em ployers m ay also in form ally supplem ent reg u lar early retirem en t ben efits to encourage som e workers to
retire.
Th e extent o f this p ra c tic e is unknown. H owever, fo rm al life tim e su pplem en tation of early retirem en t ben ­
efits for workers retirin g during sp e cifie d tim e periods, e. g . , 6 months, to encourage early retirem en t, has been used
by several firm s in the past few y ears. A lso see N ation al Industrial C onference Board, I n c ., op. cit. , pp. 3 0 -3 4 .
28 S p e c ia l early retirem en t for at le a st h alf of these workers has b e en im proved sin ce the inform ation for this
study was o b tain ed .
T he plans now provide early retirem en t with fu ll ben efits under the sam e conditions, but the
workers can q u alify if the com b in ation o f ag e plus serv ice equ als 75 (m in im um of a g e 50 and 15 years' se rv ic e), or
if a g e plus se rv ic e equ als 80 (a t any a g e ).




32

the employer*s request or upon mutually satisfactory conditions. In these plans,
with over a third of the workers (1 million) covered by special early retire­
ment, the special benefits are double the amount of accrued normal benefits.
They are payable from retirement until the worker is eligible for unreduced so­
cial security benefits (age 65, unless he qualified for disability benefits); after­
wards, the normal benefit is payable. Most salaried workers* plans in this in­
dustry allow both regular and special early retirement after age 55 and 10 years
of service.
However, to obtain the twice-normal special benefits, the salaried
worker has to retire under the same conditions as the production worker and be
at least 60.
If he is under 60, his benefit is reduced actuarially.
In the rubber products industry, as in the automobile industry, special
early retirement is possible only at the employer*s request or under mutually
satisfactory conditions. However, unlike automobile plans, the rubber plans re­
quire the attainment of age 55 and 20 years of service. They also provide double
the normal benefit for accrued service, until the worker is eligible for social
security, when the normal benefits are payable.
In the meatpacking industry,
more variation was evident. Some plans provided for double the normal benefit
at age 60 and 10 years, if retirement because of inability to perform work satis­
factorily was at employer* s request or worker*s option. In addition to this ben­
efit for workers over 60, other plans provided that those over age 55 with 20
years of service terminated because of plant shutdown, would be paid an amount
equal to or one and one-half times the normal benefit until eligible for social
security.
Requirements for Special Early Retirement. The minimum age and serv­
ice requirements for special early retirement2 were concentrated, like those
9
for regular early retirement, at age 55 and 20 years of service (a third of the
workers) and age 60 and 10 years of service (two-fifths of the workers) (table 24),
owing largley to the plans in the steel and auto industries described above.
Another tenth of the workers, altogether, could qualify at age 55 with 10 or 15
years of service.
Unlike regular early retirement, which usually was at the worker*s re­
quest, special early retirement usually depends, to some degree, upon the em­
ployer. Special early retirement was possible, as shown in the following summary,
at the employer*s request in plans covering over half the workers.
Total
W orkers1
(thousands)

C onditions for sp e c ia l early retirem en t

Plans

A ll p lan s w ith sp e c ia l e arly retirem en t--------

1 ,0 5 1

2 2 ,6 7 4

818
498
128

1 ,4 2 9
1 ,8 8 6
1 ,0 1 3

227
121
37

1 ,0 9 5
943
170

A t em p lo y e r's r e q u e s t --------------------------- —
U nder m u tu ally satisfactory co n d itio n s-------T e rm in ated as a resu lt o f p la n t sh u td o w n --—
D isab ility (n ot qu alify in g under reg u lar
d isab ility provision)-------------------- -------- L a y o ff--------------------- --------------------------- —
O th e r ------------- ----------- -------------- ----------

1 A c tiv e workers in 1961.
2 Because altern ativ e conditions m ay be sp e c ifie d , sum s o f ind ivid u al item s
do not e q u al to tals.

Where alte rn ativ e requirem ents were sp e c ifie d , the one with the e a rlie st a g e w as used for th is an aly sis.




33

A somewhat greater number of workers in plans with special early retirement
would qualify under mutually satisfactory conditions, i. e . , either the worker or
employer could request retirement, but the consent of the other party had to be
obtained. Termination because of the permanent shutdown of a plant, because of
permanent layoff, or because of disability not qualifying for a pension under the
regular disability provision— covered roughly a million workers each.
Benefits Payable Under Special Early Retirement. Half of the workers
were in plans providing the same special benefit as for normal retirement, and
a slightly lesser number of workers received double normal benefits until normal
age or until eligible for social security benefits. Most of the remainder belonged
to plans that gave benefits slightly in excess of the normal formula.

Workers 1

Plans
S p e c ia l e arly retirem en t
b e n efit am ount

N um ber

P ercen t

N um ber
(thousands)

P ercent

A ll p lan s with sp e c ia l early
retirem en t------------------------------- —

1 ,0 5 1

100.0

2 ,6 7 4

100.0

391
646
14

3 7 .2
6 1 .5
1 .3

1 ,3 3 7
1 ,3 0 3
34

5 0 .0
4 8 .7
1 .3

S am e as n o r m a l------------------------D ouble n o r m a l-------------------------D iffe ren t but larg e r than norm al —
1 A c tiv e workers in 1961.

NOTE: Because o f rounding, sum s o f individu al item s m ay not eq u al to tals.

Implications for Mobility
To some extent, an early retirement provision, like a vesting provision,
counteracts the potential immobilizing effects of a private pension plan by re­
taining the rights to accrued benefits for qualified workers who leave a job before
normal retirement age, regardless of whether they leave the labor force, become
self-employed, or go to work for another employer. Early retirement provisions
have other manpower or personnel management implications.
They introduce
flexible retirement ages into the pension system and complement the flexibility
imparted by optional early retirement after age 62 under social security. They
provide an equitable device for easing older workers into retirement when their
capacities deteriorate. These provisions also lead to the opening or retaining of
jobs for young workers when other opportunities are not available.
Thus, in
recent years, more and more attention has been given to early retirement, in
collective bargaining and in unilateral actions of management.
Early retirement partially substitutes for vesting in plans without a
vesting provision. Because of high age requirements, however, early retirement
is in most cases available only to an older worker with long service.
Thus,
workers vest through early retirement when their potential mobility has been sub­
stantially reduced. Since they are also apt to be high seniority employees with
a proven inclination to stay with the employer, the provision seems most valuable
in case of employer directed, rather than voluntary, termination. Therefore, the
potential lock-in effects observed for vesting hardly seem to apply to the same
degree to early retirement provisions.




34
One r e a s o n fo r the p r e v a le n c e of e a r ly r e t ir e m e n t p r o v is io n s in sin g le
e m p lo y e r p la n s i s th e ir low c o s t to the e m p lo y e r . S e ttin g a s i d e o th e r e m p lo y ­
m e n t an d r e p la c e m e n t c o s t s , it w ould s e e m th at the r e t i r e e s b e a r the e n tir e c o s t
o f e a r ly r e t ir e m e n t in m o s t p la n s , b e c a u s e th e ir b e n e fits a r e a c t u a r ia lly re d u c e d .
F u r t h e r , b e c a u s e it a p p lie s m o s tly to w o r k e r s a few y e a r s aw ay fr o m n o r m a l
r e t ir e m e n t , it i s c o n s is te n t w ith the t r a d it io n a l c o n ce p t o f p e n sio n s a s a r e w a r d
fo r lo n g s e r v ic e an d a s s u r a n c e , o f con tin u ed in c o m e . W ere th e s e the on ly f a c t o r s
to b e tak e n into ac c o u n t, e a r ly r e t ir e m e n t p r o v is io n s w ould p r o b a b ly b e u n iv e r s a l.
So m e e m p lo y e r s , h o w e v e r, d e s i r e to h o ld th e ir e m p lo y e e s u n til n o r m a l r e t ir e m e n t
a g e o r la t e r , an d often ju s t ify th e ir p e n sio n p la n s in su c h t e r m s . W here e a r ly
r e t ir e m e n t i s a u to m a tic a lly g r a n te d a t the w o r k e r ’ s r e q u e s t , w hich i s tr u e fo r
m o s t p r iv a te p la n s , the e m p lo y e r h a s r e lin q u ish e d , a s in v e stin g , so m e m e a s u r e
of c o n tr o l o v e r h is p e r so n n e l p o lic y . In m u ltie m p lo y e r p la n s , w h ere e a r ly r e ­
tir e m e n t p r o v is io n s a r e not co m m o n , a s i m i l a r c o n sid e r a tio n m a y in flu en c e e m ­
p lo y e r s , alth ou gh the u n io n s a r e m o r e lik e ly to b e gu id ed by the d e s ir e to r e w a r d
lo y a l, lo n g - s e r v i c e union m e m b e r s .
T he e m p lo y e r r e t a in s a m e a s u r e o f c o n tr o l o v e r h is lo n g s e r v ic e w o r k e r s
in p la n s w h ere h is c o n se n t i s n e c e s s a r y fo r e a r ly r e t ir e m e n t . W hether the e m ­
p lo y e r , in p r a c t i c e , d o e s e x e r c i s e h is p r e f e r e n c e am o n g a p p lic a n ts fo r e a r ly r e ­
tir e m e n t o r m u s t bow to ex p e d ie n c y an d t r e a t a l l a lik e a t any giv en tim e is not
known, but ev en if the la t t e r situ a tio n p r e v a ile d , an e le m e n t of fle x ib ilit y , fr o m
h is poin t of view , i s p r e s e r v e d .
T h a t i s , c o n se n t m a y b e lo o s e o r tig h t, d e ­
p en din g upon the c u r r e n t n e e d s o f the b u s in e s s .
F r o m the w o r k e r ’ s stan d p o in t, a s s u m in g h is c a p a c it ie s r e m a in u n ch an ged ,
th e r e u s u a lly i s litt le in ce n tiv e v o lu n ta rily to ap p ly fo r e a r ly r e t ir e m e n t .
R e­
tir e m e n t it s e l f , ev en a t a g e 65, b r in g s w ith it a s h a r p d ro p in in c o m e .
E a r ly
r e t ir e m e n t , a s d e m o n s tr a te d in th is c h a p te r , m e a n s a s u b s t a n t ia lly g r e a t e r l o s s ,
alth o u gh m an y p la n s allo w the w o r k e r to d e fe r b e n e fits u n til n o r m a l r e t ir e m e n t
a g e so th at he m a y b e a b le to a v o id the re d u c tio n of b e n e fits b e c a u s e o f a g e (but
not fo r s e r v ic e ) .
S o m e w o r k e r s , h o w e v e r, m a y d e s i r e o r m a y h a v e to r e t i r e
e a r ly , o r ch an ge jo b s , b e c a u s e o f r e d u c e d p h y s ic a l o r m e n ta l c a p a c ity , l o s s o f
s k ill, d iffic u lty in le a r n in g a new jo b , o r o th e r p e r s o n a l r e a s o n s . In so m e o c ­
c u p a tio n s an d in d u s t r ie s , o ld e r w o r k e r s m a y w ish to ch an ge h e av y jo b s fo r lig h te r
o n e s w hich w ould p e r m it th em to w o rk lo n g e r .
T o c o u n te r a c t the h e av y c o s t o f e a r ly r e t ir e m e n t to the w o r k e r an d to
m a k e v o lu n ta ry r e t ir e m e n t o r w ith d ra w a l d e s ir a b l e , o r a t l e a s t l e s s u n d e s ir a b le ,
the e m p lo y e r m a y , in so m e c ir c u m s t a n c e s , in fo r m a lly " s w e e t e n " the b e n e fit. In
the p a s t few y e a r s , so m e e m p lo y e r s h a v e e n c o u ra g e d v o lu n ta ry e a r ly r e t ir e m e n t
by p ro v id in g in c r e a s e d life t im e b e n e fits fo r w o r k e r s r e t ir in g d u rin g a p a r t ic u la r
p e r io d o f la b o r fo r c e a d ju stm e n t, o c c a s io n e d by te c h n o lo g ic a l ch an ge o r fo r o th e r
reaso n s.
T h e ex ten t o f th is p r a c t ic e i s unknown. T he s u b s t a n t ia l c o s t o f s u p ­
p le m e n tin g b e n e fits in th is w ay, h o w e v e r, d is c o u r a g e s it s g e n e r a l and e x te n s iv e
u s e , alth ou gh s e le c tiv it y , a s in the c a s e of s p e c ia l e a r ly r e t ir e m e n t p r o v is io n s ,
c o n tr o ls an d l e s s e n s t h e s e c o s t s .
D e sp ite s e r io u s d r a w b a c k s in e a r ly r e t ir e m e n t p r o v is io n s , so m e u n io n s
r e g a r d e a r ly r e t ir e m e n t a s an a p p r o p r ia t e , though lim ite d , d e v ic e to e n c o u ra g e
o r e n ab le o ld e r , h igh se n io r it y union m e m b e r s to r e t i r e e a r ly so a s to open up
jo b o p p o rtu n itie s fo r y o u n g er union m e m b e r s , p a r t ic u l a r ly in in d u s t r ie s u n d e r ­
go in g e x te n s iv e te c h n o lo g ic a l ch an ge o r d u rin g p e r io d s o f h igh u n e m p lo y m en t. 30

30 For e x a m p le , se e R esolu tions C o m m itte e , F in al R eport, 19th C onstitu tion al C onvention, U nited A u tom ob ile
Workers, M arch 2 0 -2 7 , 1964, A tlan tic C ity , New Je rse y , p. 11.




35
U n ions h ave a tte m p te d to tak e so m e of the b e n e fit- r e d u c tio n stin g out o f e a r ly
r e t ir e m e n t by n e g o tia tin g li b e r a l re d u c tio n s c h e d u le s . F o r e x a m p le , so m e of the
UAW n e g o tia te d p la n s ad o p ted le s s - t h a n - a c t u a r i a l re d u c tio n s c h e d u le s fo r e a r ly
r e t i r e e s , so th at e m p lo y e r s now s h a r e a g r e a t e r p a r t o f the c o s t o f r e g u la r e a r ly
r e t ir e m e n t w ith the w o r k e r .
W hile c o s t s , r a t h e r than m an p o w er c o n s id e r a t io n s , ac c o u n t fo r the s h a r p
b e n e fit- r e d u c tio n f a c t o r s in n e a r ly a l l r e g u la r e a r ly r e t ir e m e n t p r o v is io n s , the
r e v e r s e i s tru e in s p e c ia l e a r ly r e t ir e m e n t p r o v is io n s . T he m o r e g e n e r o u s b e n ­
e f it s p ro v id e d by th e s e p la n s w e re ad o p ted to so lv e m a n p o w e r - p e r so n n e l p r o b le m s
r e s i s t i n g o th er e q u ita b le an d c o n v en tio n al m e a n s o f r e so lu tio n .
On the w h ole,
s p e c ia l e a r ly r e t ir e m e n t p r o v is io n s w e re not d e s ig n e d to f o s t e r v o lu n ta ry jo b
ch an ge o r to e n c o u ra g e e a r ly r e t ir e m e n t .
R a th e r , they w e re d e sig n e d to h e lp
in v o lu n ta rily s e p a r a t e d w o r k e r s , and to p ro v id e a s u ita b le , e q u ita b le m eth o d of
e a s in g out w o r k e r s u n ab le by r e a s o n o f a g e to cop e w ith ch an ged jo b r e q u ir e m e n t s ,
p a r t ia lly d is a b le d w o r k e r s , an d w o r k e r s w ith o b so le te s k i l l s . M a n p o w e r-p e rso n n e l
p r o b le m s of th is n a tu re h a v e a lw a y s c o n c e rn e d m a n a g e m e n ts and u n io n s, and w ill
lik e ly b e c o m e ev en m o r e p r e s s i n g a s te c h n o lo g ic a l ch an ge b e c o m e s m o r e p e r ­
v a s iv e ; the unique fe a tu r e o f s p e c ia l e a r ly r e t ir e m e n t i s it s u s e o f the p e n sio n
m e c h a n ism a s a le v e r . T h e s e p r o v is io n s h av e giv en the e m p lo y e r a d d itio n a l f l e x ­
ib ility w ith in c r e a s e d p e n sio n c o s t s , but o ffse ttin g th e s e c o s t s a r e the r e la t iv e
c o s t s of o th er so lu tio n s (e. g . , r e t r a in in g w o r k e r s ) .
It m u s t b e e m p h a siz e d th at c o m p r e h e n siv e in fo rm a tio n on the p r a c t i c a l
a p p lic a tio n o f e a r ly r e t ir e m e n t p r o v is io n s i s not a v a ila b le . U n doubtedly, d u rin g
p e r io d s o f high u n e m p lo y m en t, p r e s s u r e s upon e m p lo y e r s , u n io n s, and w o r k e r s
to w ard e a r l i e r r e t ir e m e n t ten d to m ou n t. A r e c e n t stu d y of r e t i r e e s u n d er s e v e r a l
p la n s in the au to in d u stry in d ic a te d th at e a r ly r e t ir e m e n t s c o n stitu te d a h ig h e r
p r o p o rtio n o f to ta l r e t ir e m e n t s in r e c e n t y e a r s than h ad b e e n tru e in the p a s t . 31
W hether th is i s in d ic a tiv e o f a tre n d in the eco n o m y i s unknown.
A n oth er fa c t o r to b e tak en into ac c o u n t i s the in flu en ce of e a r ly r e t i r e ­
m en t u n d er the S o c ia l S e c u r ity A c t. In view o f the re d u c tio n in p e n sio n b e n e fits
e n ta ile d by e a r ly r e t ir e m e n t u n d er m o s t p r iv a te p la n s , the e ffe c tiv e o p e r a tio n o f
su ch p r o v is io n s d e p e n d s, in p a r t, on the e a r l i e s t r e t ir e m e n t a g e u n d er s o c i a l
s e c u r it y . S in c e s o c i a l s e c u r it y now a llo w s r e t ir e m e n t a t a g e 62, it w ould a p p e a r
th at th is m a y b e c o m e the a g e a t w hich e a r ly r e t ir e m e n t w ill o c c u r m o s t o ften
u n d er p r iv a te p la n s , alth ou gh a g e r e q u ir e m e n ts fo r e a r ly r e t ir e m e n t in p r iv a te
p la n s a r e u s u a lly lo w e r. If e a r ly r e t ir e m e n t u n d er s o c i a l s e c u r it y w e re lo w e re d
to a g e 60, r e t ir e m e n t a t th at a g e u n d er p r iv a te p la n s w ould p r o b a b ly be e n c o u r ­
a g e d , d e s p ite the re d u c tio n in b e n e fits in m o s t p la n s . B elo w th is a g e , the s h a r p
a c t u a r ia l re d u c tio n in both p r iv a te o r p u b lic p r o g r a m s w ou ld p ro b a b ly d is c o u r a g e
it s u s e in t y p ic a l s it u a t io n s .

31
H arold L. O rbach, " S o c ia l V alu es and In stitutionalization o f R etirem en t, " in R ich ard H . W illiam s, C lark
T ib b itts, and W ilm a Donahue (ed itors).
Processes o f A ging: S o c ia l and P sych ological P erspectives ( Prentice H a ll, I n c ., 1963) V o l.II, pp. 39 9 -4 0 0 .




C h a p te r V,

M u ltie m p lo y e r P la n s 32

T he u ltim a te in the p r o te c tio n o f the p e n sio n r ig h ts of w o r k e r s who t r a n s ­
f e r fr o m one e m p lo y e r w ith a p e n sio n p la n to an o th e r with a p e n sio n p la n i s to
allo w th em to c a r r y alo n g t h e ir p r e v io u s ly e a r n e d p e n sio n c r e d i t s , a s th ey do
u n d e r the n a tio n a l s o c i a l s e c u r it y s y s t e m .
A lthough s e v e r a l a p p r o a c h e s h a v e
b e e n s u g g e s t e d to a tta in th is o b je c tiv e , th ey h a v e b e e n lim ite d la r g e ly to th e o ­
r e t ic a l d is c u s s i o n s .
M u ltie m p lo y e r p la n s p r o v id e the c l o s e s t a p p r o a c h to the
a c h ie v e m e n t of fu ll p o r t a b ility of p e n sio n c r e d it s in p r iv a t e p e n sio n p la n s . W ork­
e r s b e lo n g in g to m u ltie m p lo y e r p la n s h a v e an a d v a n ta g e n ot e n jo y ed b y w o r k e r s
c o v e r e d b y sin g le e m p lo y e r p la n s— th ey m a y ch an ge jo b s and e m p lo y e r s a s f r e ­
q u en tly a s they w ish and g e t fu ll c r e d it fo r a l l t h e ir s e r v i c e , r e g a r d l e s s o f a g e ,
len g th o f s e r v i c e , o r ty p e of s e p a r a tio n , a s long a s t h e ir new e m p lo y m en t i s with
an e m p lo y e r p a r t ic ip a t in g in the p la n .
T he sc o p e of the p la n , i. e . , the e m ­
p lo y e r s p a r t ic ip a t in g , th u s e s t a b li s h e s the b o u n d a r ie s to it s p o r t a b ility f e a t u r e s .
M u ltie m p lo y e r p la n s c h a r a c t e r i s t i c a l l y w e re c r e a t e d out of e x istin g m u l­
tie m p lo y e r b a r g a in in g a r r a n g e m e n t s .
T h u s, th ey a s s u m e d th e ir p la c e am o n g
o th e r u n ifo r m c o n d itio n s of e m p lo y m e n t w hich w e re d e v e lo p e d out o f, and a c c o m ­
m o d a te d , the a b ility of w o r k e r s r e a d ily to sh ift fr o m one e m p lo y e r to an o th e r
w ithin the b a r g a in in g u n it. S in c e m u ltie m p lo y e r p e n sio n p la n s c o v e r only ab o u t
t h r e e - f ift h s of the w o r k e r s u n d e r m u ltie m p lo y e r c o lle c t iv e b a r g a in in g a g r e e m e n t s ,
so m e gro w th in p e n sio n p la n c o v e r a g e m a y b e e x p e c te d . In the lo n g e r ru n , how ­
e v e r , the s p r e a d of m u ltie m p lo y e r p e n sio n p la n s w ill d ep en d la r g e ly upon the
s p r e a d of m u ltie m p lo y e r b a r g a in in g .
M u ltie m p lo y e r p la n s a r e r e la t iv e ly yo u n g. L e s s th an 10 p e r c e n t o f the
p la n s w e r e e s t a b lis h e d b e fo r e 1950.
A s p u r t in d e v e lo p m e n t took p la c e a f te r
1954, s o th at 60 p e r c e n t of the p la n s w e re l e s s th an 6 y e a r s o ld in I9 6 0 .
As
th e s e r e la t iv e ly new p la n s m a t u r e , it i s lik e ly th at m an y w ill add e a r ly and d i s ­
a b ility r e t ir e m e n t b e n e fit s , a s sin g le e m p lo y e r p la n s d id . A lso so m e new c h a r ­
a c t e r i s t i c s an d p r o v is io n s th at a r e u n co m m o n to d ay a r e lik e ly to in c r e a s e . F o r
e x a m p le , w ith gro w in g a w a r e n e s s o f the d e s ir a b i lit y of ex ten d ed p e n sio n c r e d it
p r o te c tio n , p r e s s u r e fo r r e c ip r o c it y o f p e n sio n c r e d it s b etw een d iffe r e n t p la n s
m a y i n c r e a s e , p a r t ic u l a r ly am o n g p la n s c o v e r in g w o r k e r s in s i m i l a r o c c u p a tio n s
and u n io n s in the s a m e o r c o n tig u o u s g e o g r a p h ic a r e a s . W hether p r o v is io n fo r
v e s tin g w ill u ltim a te ly b e c o m e a s p r e v a le n t am o n g m u ltie m p lo y e r p la n s a s am on g
s in g le e m p lo y e r p la n s i s , h o w e v e r, an o th e r m a t t e r .
In g e n e r a l, m u ltie m p lo y e r p la n s a r e p r o c e d u r a lly m o r e fle x ib le than
n e g o tia te d s in g le e m p lo y e r p la n s b e c a u s e th e ir jo in t u n io n -m a n a g e m e n t b o a r d s a r e
u s u a lly a u th o riz e d to am en d the p la n a t an y t im e .
M any c h a n g e s can b e m a d e
th at do n ot dep en d upon fo r m a l c o lle c t iv e b a r g a in in g n e g o tia tio n s a t s p e c if ie d c o n ­
t r a c t e x p ir a tio n d a t e s . T h u s, w ithin the li m i t s of the b r o a d m a n d a te to p r o v id e
r e t ir e m e n t b e n e fit s , and the a v a ila b ilit y of fu n d s, a m u ltie m p lo y e r p la n m a y be
m o r e r e a d ily a d a p te d to h elp m e e t p a r t ic u l a r n e e d s and p r o b le m s of the c o v ­
e re d gro u p .

32
In ad d ition to the d ata presented in previous chapters, this chapter draws upon a com prehensive study of
m u ltiem ploy er plans presented in M u ltiem ployer Pension Plans Under C o lle c tiv e B argain ing, Spring 1960 (BLS B u lletin
1326, 1962).




36

37
S c o p e of P la n s
P o r t a b le p e n sio n c r e d it s , the d istin g u ish in g c h a r a c t e r i s t i c of m u lt i­
e m p lo y e r p la n s , m e a n s th at the in d iv id u a l w o r k e r r e m a in s c o v e r e d an d b u ild s up
s e r v ic e c r e d it s a s lo n g a s he i s e m p lo y ed by one of the e m p lo y e r p a r t ic ip a n t s ,
A s d i s c u s s e d la t e r , a d d itio n a l p r o te c tio n m a y b e p ro v id e d by the ad o p tio n of
r e c ip r o c it y a r r a n g e m e n ts betw een p la n s . B a s ic a lly , the la titu d e o f p o s s ib le jo b
ch an ge w ith u n im p a ir e d p e n sio n c r e d it c o v e r a g e d ep en d s on the sc o p e o f the p la n .
M u ltie m p lo y e r p e n sio n p la n s tend to p a r a l l e l the sc o p e of m u ltie m p lo y e r
c o lle c tiv e b a r g a in in g a g r e e m e n t s .
A n u m b er o f e m p lo y e r s u n d er a sin g le c o n ­
t r a c t w ith a union, o r in so m e c a s e s , a n u m b er of e m p lo y e r s u n d er s e p a r a t e
a g r e e m e n t s , c o n trib u te s p e c if ie d am o u n ts to a p o o le d c e n t r a l fund.
T y p ic a lly ,
a s h a s b een d is c u s s e d , t h e s e p la n s a r e found in in d u s t r ie s c h a r a c t e r iz e d by s e a ­
so n a l o r ir r e g u l a r em p lo y m en t, fre q u e n t jo b c h a n g e s o r tu rn o v e r in f i r m s , m ak in g
it d iffic u lt, if not im p o s s ib le , fo r a w o rk e r to r e m a in w ith a sin g le f i r m lo n g
enough to q u a lify fo r a p e n sio n . T h u s, m a jo r g r o u p in g s of c o v e r e d w o r k e r s w e re ,
found iii food an d a p p a r e l m a n u fa c tu r in g , in c o a l m in in g , c o n tr a c t c o n stru c tio n ,
m o to r tr a n s p o r ta tio n , s e r v i c e s , an d t r a d e .
M u ltie m p lo y e r p la n s v a r y w id ely in s i z e ; in th is stu d y , th ey r a n g e fr o m
26 w o r k e r s to o v e r 250, 000 w o r k e r s .
A lthough m an y m u ltie m p lo y e r p la n s a r e
la r g e s c a le e n t e r p r is e s — the e ig h t l a r g e s t c o v e r e d a th ir d of the w o r k e r s u n d er
m u ltie m p lo y e r p la n s— a th ir d c o v e r e d fe w e r than 500 w o r k e r s e a c h . T he l a r g e s t
m u ltie m p lo y e r p e n sio n p la n s, e a c h w ith o v e r 100, 000 w o r k e r s , w e re a s fo llo w s:
T he C e n tr a l S t a t e s , S o u th e a st and S o u th w est A r e a s P e n sio n F u n d ( T e a m s t e r s ) ;
W e ste rn C o n fe re n c e o f T e a m s t e r s P e n sio n F u n d ; T h e A m a lg a m a te d In su ra n c e
F u n d - P e n sio n F u n d (C lo th in g W o r k e r s); A m a lg a m a te d C otton G a rm e n t an d A llie d
I n d u str ie s R e tir e m e n t F u n d (C lo th in g W o r k e r s); In te rn a tio n a l B r o th e r h o o d o f E l e c ­
t r i c a l W o rk e rs P e n sio n B e n e fit T r u s t F u n d ; T h e In te rn a tio n a l L a d i e s 1 G a rm e n t
W o rk e rs* C lo a k an d S u it P e n sio n F u n d ; T h e U n ited M ine W o rk e rs o f A m e r ic a n
W e lfa re an d R e tir e m e n t F u n d (c o v e r in g the b itu m in o u s c o a l in d u str y ); and S t r u c ­
t u r a l Iro n W o rk e rs P e n sio n F u n d (a union o p e r a te d p la n ).
Only ab ou t 13 n a tio n a l u n io n s r e p r e s e n t e d a s m an y a s 5 0 ,0 0 0 o r m o r e
w o r k e r s in m u ltie m p lo y e r p la n s .
T h e T e a m s t e r s (I n d .), w ith p la n s m a in ly in
m o to r t r a n s p o r ta tio n , had the l a r g e s t n u m b er o f in d iv id u a l p la n s an d ab o u t a
fifth of the c o v e r a g e . T h e In te rn a tio n a l L a d i e s 1 'G a rm e n t W o rk e rs an d the A m a l­
g a m a te d C lo th in g W o rk e rs ac c o u n te d fo r a lm o s t a l l o f the p e n sio n p l a n s 1 c o v e r a g e
in the a p p a r e l m a n u fa c tu r in g in d u s t r ie s . In the c o n stru c tio n in d u stry , the C a r ­
p e n t e r s , E l e c t r i c a l W o rk e rs (IB EW ), B r i c k l a y e r s , P lu m b e r s , an d Iro n W o rk e rs
a l l w e re h e a v ily r e p r e s e n t e d in m u ltie m p lo y e r p la n s .
U n ion s in the m a r it im e
in d u stry h ad a h igh p ro p o r tio n o f th e ir m e m b e r s c o v e r e d by th e s e p la n s , but on ly
one (In te rn a tio n a l L o n g s h o r m e ^ s A sso c ia tio n ) r e p r e s e n t e d o v e r 5 0 ,0 0 0 w o r k e r s .
T he B r e w e r y W o r k e r s, both B a k e r y W o rk e rs* u n io n s, the R e t a il C le r k s , the R e ­
t a il, W h o le sa le an d D e p a rtm e n t S t o r e U nion, and the M e at C u tt e r s co m m o n ly n e ­
g o tia te d m u ltie m p lo y e r p la n s in th e ir r e s p e c t iv e in d u s t r ie s .
With th is h igh p r o p o r tio n o f in v o lv em en t in m u ltie m p lo y e r p la n s , an
e q u a lly h igh p ro p o r tio n o f m e m b e r s o f c e r ta in u n io n s h a v e m u ltie m p lo y e r p e n sio n
p lan p r o te c tio n . F o r e x a m p le , n e a r ly the e n tire m e m b e r s h ip o f the In te rn a tio n a l
L a d ie s * G a rm e n t W o r k e r s, A m a lg a m a te d C lo th in g W o r k e r s, an d U n ited M ine
W o rk e rs (In d .) (e x c lu d in g D is t r i c t 50), and s e v e r a l m a r in e u n io n s, b e lo n g e d to 3
33
A few plans allow the worker to continue his co v erag e if he contributes the em p loy er's share to the fund
in ca se o f u nem ploym ent.




t h e s e p la n s . In o t h e r s , su c h a s T e a m s t e r s (I n d .), both B a k e r y u n io n s, C a r p e n ­
t e r s , E l e c t r i c a l W o rk e rs (IB EW ), an d P lu m b e r s , union m e m b e r s h ip w a s s u b ­
sta n tia lly r e p r e s e n t e d in m u ltie m p lo y e r p la n s .
On the o th e r hand, so m e la r g e
u n ion s su ch a s the A u to m o b ile W o r k e r s, S te e lw o r k e r s , and E l e c t r i c a l W o rk e rs (IU E)
w e re r a r e ly in v o lv ed in m u ltie m p lo y e r p la n s .
N e a r ly h a lf the w o r k e r s in m u ltie m p lo y e r p la n s b e lo n g e d to p la n s th at
w e re lim ite d to a s in g le c r a f t , o c c u p a tio n a l g ro u p , o r in d u stry in a lo c a lit y . Of
the r e m a in d e r , w o r k e r c o v e r a g e w a s ab o u t e q u a lly d iv id e d b etw een r e g io n a l p la n s
an d in d u stry w id e n a tio n a l p r o g r a m s .
T he m o s t lim ite d m u ltie m p lo y e r p lan , an d the m o s t com m o n , i s a lo c a l
one w hich c o v e r s a c r a f t o r o c c u p a tio n a l g ro u p in a s p e c if ic in d u stry in a s p e ­
c ific c ity o r m e tr o p o lita n a r e a . T y p ic a lly , m u ltie m p lo y e r p la n s in the c o n s t r u c ­
tion , d a ir y , an d p rin tin g and p u b lish in g in d u s t r ie s a r e of th is ty p e .
In m an y
in s t a n c e s , v ir t u a lly a ll the w o r k e r s in the e n tir e in d u stry in the a r e a a r e in ­
clu d ed in a p lan o r p la n s ; in o th e r in s t a n c e s , h o w e v e r, on ly the u n io n ized se c tio n ,
w hich m a y e x c lu d e a s u b s t a n t ia l a r e a o f em p lo y m en t, i s c o v e r e d .
S o m e p la n s , su ch a s th o se u s u a lly found in the r e t a il, a p p a r e l m a n u fa c ­
tu rin g , an d s e r v ic e in d u s t r ie s , in clu d e a w ide r a n g e o f s k i l l s an d o c c u p a tio n s,
w h ile so m e in clu d e m o r e than one union, but t h e s e , to o , a r e u s u a lly con fin ed to
a lim ite d g e o g ra p h ic a r e a .
In so m e in d u s t r ie s an d o c c u p a tio n s, m u ltie m p lo y e r
p e n sio n p la n s h a v e ex p an d ed to c o v e r an e n tire r e g io n . T h e v e r y n a tu re o f the
h ir in g a r r a n g e m e n ts in the w a te r t r a n s p o r ta tio n in d u stry v ir t u a lly d ic t a t e s su c h
p la n s .
S i m ila r b r o a d r e g io n a l p la n s a r e found in the tru c k in g in d u stry .
A b r o a d e r o c c u p a tio n and in d u stry c o v e r a g e i s p ro v id e d by a few p la n s
w hich c o v e r w o r k e r s in a n u m b er of f i r m s e n g a g e d in d iffe r e n t in d u s t r ie s in the
a r e a . A p lan su c h a s the W e ste rn C o n fe re n c e o f T e a m s t e r s P e n sio n F u n d , w hich
c o v e r s e m p lo y e r s in d iffe r e n t in d u s t r ie s in d iffe r e n t a r e a s , p e r m it s the w o r k e r
to m o v e to an y s ig n a to r y e m p lo y e r an d s t i l l c a r r y h is a c c u m u la te d p e n sio n
p r o te c tio n .
N ation w ide p o r ta b ility o f p e n sio n c r e d it s w ith in an in d u stry i s p o s s ib le
on ly u n d er a few la r g e p la n s th at a r e n a tio n a l in s c o p e ; th ey in v o lv e ab ou t a
fo u rth o f a l l w o r k e r s u n d er m u lti e m p lo y e r p la n s .
A m on g th e s e a r e the M ine
W o rk e rs F u n d , the E l e c t r i c a l W o rk e rs (IBEW ) P e n sio n F u n d , p la n s o f both
B a k e r y W o rk e rs u n io n s, two p la n s o f the A m a lg a m a te d C lo th in g W o r k e r s, the
F u r n it u r e W o r k e r s, and the U p h o l s t e r e r s 1 In te rn a tio n a l U nion p la n s . In ad d itio n ,
union fin a n c e d an d o p e r a te d p e n sio n p la n s, su c h a s th o se o f the In te rn a tio n a l
T y p o g r a p h ic a l Union an d the Iro n W o r k e r s, in clu d e m e m b e r s th rou gh out the
N atio n .
R e c ip r o c it y B etw een P la n s
T he p o s s ib ilit y of m o v in g fr o m the c o v e r a g e o f one m u ltie m p lo y e r p lan
to an o th e r th rou gh r e c ip r o c a l a r r a n g e m e n ts p r o v id e s a d d itio n a l p o r ta b le p e n sio n
c r e d it p r o te c tio n . H o w e v e r, only ab ou t a tenth o f the p la n s h ad r e c ip r o c a l a r ­
r a n g e m e n ts an d t h e s e r a r e l y c o v e r e d p e n sio n p la n s e s t a b lis h e d by d iffe r e n t u n io n s.
R e c ip r o c a l a r r a n g e m e n ts u s u a lly p r o v id e th at the w o r k e r who d o e s not
q u a lify fo r a b e n e fit u n d er the r e q u ir e m e n ts of one fund c an u s e s e r v ic e a c c u ­
m u la te d in o th e r p r o g r a m s to a tta in e lig ib ilit y fo r r e t ir e m e n t b e n e fit s . In o t h e r s ,
the w o r k e r m a y a c t u a lly t r a n s f e r the m o n ie s a c c u m u la te d in h is a c c o u n t u n d er
one p lan to an o th e r fund w hich w ill p ay h im , on r e t ir e m e n t , a m on th ly b e n e fit




39

based on the amount transferred. 34 About a fourth of the workers covered by
multiemployer plans belonged to plans with reciprocity arrangements. However,
a large proportion of these workers were covered by the International Ladies*
Garment Workers* Union plans, which, in practice, operate as a large pension
plan covering nearly all members of the union.
The joint boards of trustees of a relatively few plans are specifically
empowered to work out reciprocal arrangements with plans of their own union,
and in some cases, other unions as well.
As has been pointed out, the joint
board administering a multiemployer pension plan usually has the power to for­
mulate and amend the pension plans, including, presumable, the power to enter
into reciprocal arrangements. Suitable arrangements, which may be difficult to
achieve, must first be negotiated.
Additional cost to the plan is also an im ­
portant deterrent.
Restrictions on Employment After Termination
After termination of employment because of retirement, single employer
plans rarely restrict the individual worker*s choice of employment, should he
wish to continue working, except that which would be injurious to the firm. Thus,
the retired worker is free to pursue a job quest, even in the same occupation or
industry.
On the other hand, multiemployer plans usually do not permit the
worker to remain in his trade or industry and still receive his pension.
The
employers as a group assume the role of single employers who, typically, do
not provide both employment and a pension benefit to workers at the same time.
The craft interests of national unions, moreover, would not be protected if re­
tired members were to compete with other members for jobs or were to carry
their skills into the nonunion sectors of the industry.
Implications for Mobility
Multiemployer pension plans were, in most cases, developed in industries
and employments where workers characteristically shift from employer to em­
ployer within the industry. Portability of pension rights, therefore, evolved as
a natural and readily acceptable feature of multiemployer plans.
The worker who feels destined to spend his entire work career in one
company and to retire at 65 or later may feel no need for vesting or early re­
tirement provisions or any other device to protect his pension credits before re­
tirement.
The same is true of a worker under a multiemployer plan, except
that it is likely that, in general, a substantially higher proportion of workers
actually will spend their working lives within the scope of the plan. For skilled
craftsmen or other specialized workers, the portability inherent in a multiem­
ployer plan may provide all of the protection against loss of pension credits
through mobility that the individual worker may need or desire during his working
life, barring a substantial change or decline in the sector of the industry in which
he is employed.
But such changes and declines do take place, as exemplified
by the experience of coal miners. Moreover, multiemployer plans also operate
in industries where there is little craft or trade attachment on the part of workers;
in these instances, turnover or the need for job change m aybe so high that port­
ability alone affords little pension protection to most covered workers.

34
T o a lesser exten t, the w o rk ers ag e a t the tim e o f the transfer, the earnings o f the fund, and other a c ­
tu a ria l considerations w ill also a ffe c t the size o f his ben efit.




40

The portability of pension credits inherent in all multiemployer pension
plans, desirable as it is, often tends to overshadow the possible restraints on
outward worker mobility implicit in the plans. No multiemployer plan answers
all criteria of truly portable pension credits, for the scope of portability is
limited, although a few grant substantial protection within the limits of existing
institutional and labor market practices. Reciprocity arrangements extend these
limits.
Basically, the right to portable credits was not designed to maintain
protection for, or enhance the movement of, workers beyond the area of the col­
lective bargaining relationship. In effect, multiemployer plans accommodate the
maximum amount of voluntary or involuntary movement within the scope of the
plan, but where they lack vesting and early retirement provisions, they discourage
movement to other industries, other areas, and, more generally, employers
outside the plan.
Although many single employer plans originated, in part, from a desire
to encourage workers to stay with the company until retirement, the widespread
adoption of vesting and early retirement provisions represents a substantial re­
laxation of this purpose. The growth of pension plans in multiemployer situations
may not have been motivated by a similar desire to hold workers, but it is con­
sistent with the concern on the part of an employers’ group to conserve its labor
force and on the part of the union to conserve its membership. These reasons
may be amplified in such industries as construction, where the unions, employers,
and workers often have a heavy investment in training. Reciprocity arrangements
typically represent a shift of these interests to a higher and broader level. Re­
strictions on employment after retirement reflect another facet of these concerns.
Just as the absence of vesting and early retirement provisions in single employer
plans, or rigidities and restrictions in these provisions, tend to tie the employed
worker to his company, a similar tendency would be present in multiemployer
plans, except that the worker’ s attachment would be to a particular group of em ­
ployers rather than a single employer.
The tendency to tie a worker to a particular group of employers is far
less significant where multiemployer plans cover all jobs in a particular industry
or occupation, since, in many cases, the worker is already bound to the employer
group by the specialized nature of his training or experience. For example, a
journeyman electrician in a large city, or a skilled cutter in a clothing center
may never contemplate the possibility of another career, or of moving elsewhere,
and may never have to. Such workers traditionally have a strong inclination to
cling to their trades and their markets, even after the likelihood of steady em­
ployment has passed. A pension plan without vesting and early retirement may r e ­
inforce these ties, especially among workers with a sizable stake in the plan. Thus,
it may well be that the immobilizing influence of a multiemployer pension plan
chiefly effects unemployed members rather than those employed. As in the case
of single employer plans, the better the plan (i. e. , benefit levels, e tc .), the
greater is its potential influence on workers* decisions on leaving its shelter.




Chapter VI.

Prospects of Benefits

The vesting, early retirement, portable credits, and normal retirement
provisions determine whether workers will eventually receive benefits from par­
ticipation in a pension plan. Two aspects of the interrelationships among these
provisions are discussed in this chapter: (1) The extent to which these provisions
supplement each other or substitute for another, and (2) the earliest ages, and
the required service, at which workers are assured of a benefit by the provisions
of the plans, whether in the form of a vested right or retirement income.
Prevalence of Protective Provisions
As previously mentioned, of the 15. 6 million workers in the pension plans
studied, 9. 3 million or 60 percent belonged to a plan with a vesting provision
(table 25). About 1 out of 7 workers in these vesting plans could qualify only if
involuntarily separated. However, slightly over half of the workers in plans with­
out vesting belonged to plans that had an early retirement feature, as shown below.
Almost a fifth of the workers had neither vesting nor early retirement.
Percent
Provision

Plans

Workers

100.0

A ll p lan s----------------------------------------With v estin g ------------------------------------ ----Any se p a ra tio n ---------------------------- ----Involuntary separation ------------------W ithout v e s tin g ------------------------------- ----With e a rly re tire m e n t-----------------------W ithout e arly r e tir e m e n t-------------- -----

6 7 .2
6 3 .2
4 .1
3 2 .8
1 8 .4
14 .4

5 9 .6
5 0 .7
8 .9
4 0 .4
2 1 .9
1 8 .5

A c tiv e workers in 1961.
NOTE; Because o f rounding, sum s o f in dividu al item s m ay not e q u al to tals.

In single employer plans without vesting (about 30 percent of the plans
with almost 30 percent of the workers), over 4 out of 5 workers had an early
retirement provision. An eighth of the single employer plans with about 600,000
workers (5 percent) had neither vesting nor early retirement.
Percent
Plans

Workers

A ll single em p loy er p lan s------------------

100.0

100.0

With v e s tin g ----------------------------------Any s e p a r a tio n --------------------------Involuntary se p a ra tio n -----------------W ithout v e s t i n g ------------------------------With e arly r e tir e m e n t-----------------W ithout early retirem en t---------------

6 9 .4
6 5. 2
4 .2
3 0 .6
1 8 .0

7 1 .5
5 9 .9

Provision




1 A c tiv e

12.6

11.6

2 8 .5
2 3 .4
5 .2

workers in 1961.

NOTE; Because o f rounding, sums o f individual items may not equal totals.

41

42
On the other hand, only 1 out of 4 of the workers in multiemployer plans
without vesting had an early retirement provision. More than 2 out of 5 multi­
employer plans, covering about 2 .3 million workers (3 out of 5 workers), had
neither vesting nor early retirement.
Percent
Plans

W orkers 1

A ll m u ltiem p lo y er p lan s-------------------

100.0

100.0

With v e s tin g ------------------------ ---------Any s e p a r a tio n ---------------------------Involuntary se p a ra tio n -----------------W ithout v e s t i n g ------------------------------With e a rly r e tir e m e n t-----------------W ithout e a rly retirem en t---------------

3 1 .7
3 0 .3
1 .4
6 8 .3
2 4 .8
4 3 .5

2 3 .6

Provision

1

22.8
.7
7 6 .4
1 7 .6
5 8 .9

A c tiv e workers in 1961.

NOTE: Because o f rounding, sum s o f in d ivid u al item s m ay not eq u al to tals.

Taking into account the portability features of multiemployer plans, the
degree of pension protection offered to all covered workers by their plans can be
arrayed, as illustrated below, in scale. At the bottom (least protection) are those
workers who must retain their employment with a single employer until normal
retirement age if they are to qualify for any retirement benefits. Failure to do
this, whether voluntarily or involuntarily, would cost them all of their pension
rights. Only about 4 percent of the workers were in this category. If workers
who must remain within the scope of a multiemployer plan, although not dependent
on one employer, were added to this, over a fifth of the workers would be in­
cluded. Protection of accrued pension rights after meeting early retirement qual­
ifications was available to another fifth of the workers. Vesting upon involuntary
separation after qualifying, a protection apparently lost upon voluntary job change,
was available to a tenth. Finally, enjoying the protection of vesting upon any type
of separation was half of the coverage of private plans. At all stages, protection
was usually conditioned on meeting age and service requirements.
W orkers 1
How workers b e co m e assured
o f pension benefits

N um ber
(thousands)

Percent

A ll w o rk e rs---------------------------------------------------------—

1 5 ,6 2 1

100.0

Must rem ain with p articu lar em ployer or w ithin
co v erag e o f m u ltiem p lo y er p la n u ntil—
Q u alifyin g for v e stin g 2------------------------------------ -—
4
*
Q u alify in g for vestin g and involuntary se p aratio n —
Q u alifyin g for e arly re tire m e n t-----------------------------N orm al retirem en t a g e ----------------------------------------Must rem ain w ith p articu lar (ind ivid ual) em ploy er
until norm al retirem en t a g e -------------------------------------

7 ,9 2 0
1 ,3 8 8
3 ,4 2 4
2 ,8 8 9

50. ,7
8 .9
2 1 .9
* 18. S

606

3 .9

1 A c tiv e workers in 1961.
2 About 3 m illio n workers w ere in contributory plans in w hich vestin g for
q u a lifie d workers was co nditioned upon nonwithdrawal o f em ploy er contributions.
2 N early a ll o f the workers in this categ o ry (about 1 ,3 0 0 ,0 0 0 ) b elo n g ed to
plan s w ith early retirem en t.
4 Includes categ o ry below .




NOTE: Sums o f individual items do not equal totals.

43
Plans covering salaried workers only, offered the highest degree of pension protection, followed closely by combined production and salaried worker
plans (table 26); only 2 .4 percent of salaried plan employee coverage and 4 .3
percent of the combined coverage lacked both vesting and early retirement. Pro­
duction worker plans, dominated by multiemployer plans, did not offer either
type of protection for over a third of total coverage, as shown below, offering
in their stead portability of credits to all but a small number of the workers.
(See table 26.)
S a la r ie d and
production workers
P ercent

Production
workers only

S a la rie d
workers only

P ercen t

P rovision

Plans

A ll p lan s--------------------------------

100.0

100.0

100.0

With vestin g--------------------------W ithout v e s tin g ----------------------With e a rly r e tire m e n t---------W ithout e a rly r e tir e m e n t-----

6 2 .5
3 7 .5
1 9 .8
1 7 .7

6 5 .9
3 4 .1
2 9 .8
4 .3

6 1 .2
3 8 .8
1 7 .4
2 1 .4

W orkers1

P lans

P ercent

W orkers1

Plans

Workers

100.0

100.0

100.0

4 6 .9
5 3 .1
1 7 .2
3 5 .9

7 6 .3
2 3 .7
1 9 .8
3 .9

8 0 .7
1 9 .3
1 6 .9
2 .4

1 A c tiv e workers in 1961.
NOTE: Because o f rounding, sums o f ind ivid u al item s m ay not e q u al to tals.

Industries differed substantially in the proportion of plans and covered
workers with neither vesting nor early retirement because of wide variations in
the relative importance of multi employer, production worker plans and of collec­
tive bargaining (table 27). The lowest degree of such protection for workers was
in the mining and construction industries, where most workers belonged to multi­
employer plans without vesting or early retirement, i . e . , they must qualify for
normal retirement to obtain any benefits. In transportation, services, and trade,
where collectively bargained multiemployer plans were less common, a smaller
proportion of employees— about a third, two-fifths, and a fifth, respectively— had
neither early retirement nor vesting. On the other hand, in other nonmanufac­
turing industries, such as finance (typically including contributory plans for sal­
aried workers) and communications and public utilities, the vast majority of work­
ers had either vesting, early retirement, or both.
In manufacturing industries, as a whole, a large proportion of workers
had vesting, early retirement, or both.
Only in the apparel industries where
multiemployer plans prevail, did a large proportion of workers have little pen­
sion credit protection other than portability and, in some industries, reciprocity.
The Effects of Age and Service Requirements
An evaluation of the significance of vesting and early retirement provi­
sions in terms of their protection of accumulated pension rights requires consid­
eration of minimum age and service requirements for benefits.
This is most
readily done by considering the earliest age and associated service (regardless
of other conditions such as restriction or type of termination, etc.) at which a
worker can qualify for a vested, early, or normal retirement benefit (excluding
disability retirement and special retirement benefits). This also eliminated the
sometimes artificial distinction between vesting and early and normal retirement
in the plans.




44
On th e w h o le , r e g a r d l e s s o f th e ty p e o f b e n e fit p r o v i s i o n s , o v e r tw o t h ir d s o f th e w o r k e r s in p r i v a t e p e n s io n p la n s w o u ld h a v e to s t a y w ith th e s a m e
f i r m o r p la n f o r 15 y e a r s o r m o r e in o r d e r to r e t a i n o r q u a lify f o r p e n s io n r ig h t s
( ta b le 2 8 ). N e a r ly a l l o f th e r e m a in in g w o r k e r s w o u ld q u a lify w ith 10 o r fe w e r
y ears.
P ercen t
M in im um service requirem ents 12
A ll p lan s stu d ied--------------------------------N o service re q u ire m e n t-----------------------Less than 10 y e a rs-------------------------------10 y e a r s -------------------------------------------11— y e a r s ---------------------------------------14
15 y e a r s --------------------------------------------1 6-19 y e a r s ---------------------------------------20 y e a r s -------------------------------------------2 1 -2 4 y e a r s ---------------------------------------25 y e a r s -------------------------------------------2 6 -2 9 y e a r s ---------------------------------------30 y e a r s -------------------------------------------O ver 30 y e a r s -------------------------------------

Workers

Plans

100.0

100.0

1.2

0 .9
5 .3
2 2 .3
2 .3
3 2 .0
1 .5
1 9 .2

1 3 .2
1 8 .3

2.8
3 1 .8

2.0

1 5 .8
2 .7
8 .7
2 .3
.9
.3

1.1
7 .0
.4
7 .7
.4

1 F or those plan s w hich sp e c ifie d a p eriod o f em p lo y m en t to be served before
p a rtic ip a tio n in the p la n co u ld b e g in , the m in im u m service requ irem en t includes
the p re p articip atio n service and the requ ired p la n m em bership se rv ic e.
2 A c tiv e workers in 1961.
NOTE: Because o f rounding, sum s o f ind ivid u al item s m ay not e q u al to tals.

A b o u t 2, 7 5 0 ,0 0 0 w o r k e r s , o r a b o u t a s ix th o f th e t o t a l h a d no a l t e r n a ­
t iv e b u t to a t t a in a g e 65 w ith t h e ir e m p lo y e r o r in th e s c o p e o f th e p la n in o r d e r
to r e t a in p e n s io n r i g h t s , A b o u t 10 p e r c e n t f i r s t q u a li f ie d f o r e a r l y o r n o r m a l r e ­
tir e m e n t at a g e 60.

P ercent
M in im um ag e req u irem en ts1

P lans

Workers

A ll plan s stu d ied ------------------------------

100.0

100.0

N o ag e re q u ire m e n t-------------------------U n der ag e 40----------------------------------A ge 4 0 --------------------------------- -------A ge 4 5 .................................................................
A ge 5 0 ------------------------------------------A ge 5 5 ------------------------------------------A ge 6 0 ------------------------------------------A ge 6 1 - 6 4 -------------------------------------A ge 6 5 ------------------------------------------O ver ag e 65-------------------------------------

3 0 .8
4 .0

2 6 .6

8.8

2 2 .4
5 .2
5 .1

4 .9
7 .8
2 0 .5

.6

12.6

8.2

9 .8

.4
1 4 .6

1 5 .4

(3 )

.1

2.1

1 Som e plan s sp e c ifie d altern ativ e requirem ents; for e a c h c a s e , the one with
the e a r lie st ag e or no ag e requirem ents w as se le c te d .
2 A c tiv e workers in 1961.
3 Less than 0 .0 5 percen t.




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

45
A n in th o f th e w o r k e r s , a s show n in th e fo llo w in g
th e c o m b in e d e f f e c t s o f a g e a n d s e r v i c e r e q u i r e m e n t s , h a d to
o f s e r v i c e an d a tt a in a g e 65 in o r d e r to q u a lify f o r b e n e f it s
th e o th e r h a n d , o v e r a t h ir d o f th e w o r k e r s w o u ld q u a lify f o r
a t t a in e d 15 y e a r s o f s e r v i c e an d a g e 4 0 .

ta b u la t io n in d ic a tin g
h a v e o v e r 15 y e a r s
in t h e ir p l a n s .
On
b e n e f it s i f th e y h ad

Minimum service requirements for workers2
Total
workers

10 years
and under

11-15
years

16-20
years

Over 20
years

Percent

Percent

Percent

Percent

Percent

All workers 3-----------------------------

100.0

28.4

34. 3

20.7

16.5

No age requirement--------------------Age 40 and under-----------------------Age 45-----------------------------------Age 50-----------------------------------Age 55-----------------------------------Age 60-----------------------------------Age 65------------------------------------

26.6
23.0
5.2
5.1

6.2
13.0
2. 1
.7

7.7
9. 1
2.4

3.7
.9
.5
1.4

8.9
(4)

Minimum age requirements 1

12.6

2.6

9.8
17.6

1.7

2.1

2.0
6.2
2.2
4.6

.2

1. 0

2.6

1.1

3.6
7.9

2.3
3.0

* Some plans specified alternative requirements; for each case, the one with the earliest age or no age requirements
was selected.
2 For those plans which specified a period of employment to be served before participation in the plan could begin,
the minimum service requirement includes the preparticipation service and the required plan membership service.
3 Active workers in 1961.
4 Less than 0.05 percent.
NOTE: Because of rounding, sums of individual items may not equal totals.

O th e r c o m m o n c o m b in a tio n s w e r e a g e 55 a n d 15 y e a r s o f s e r v i c e o r l e s s , an d
a g e 60 w ith m o r e th a n 15 y e a r s o f s e r v i c e .
G e n e r a l l y , lo n g s e r v i c e w a s r e ­
q u ir e d in p la n s w ith no a g e r e q u ir e m e n t .
T h e c o m p o s i t e o f a g e a n d s e r v i c e r e q u ir e m e n t s v a r i e d w id e ly a m o n g in ­
d u s t r i e s , r e f le c t in g d iv e r g e n t p a t t e r n s o f r e q u ir e m e n t s f o r v e s t in g an d e a r l y r e t i r e m e n t an d th e in d u s t r y d is t r i b u t io n o f m u lt ie m p lo y e r p la n s ( ta b le 2 9 ). In m a n u ­
fa c t u r in g i n d u s t r i e s a s a w h o le , o n ly a b o u t a se v e n th o f th e w o r k e r s h a d to r e a c h
a g e 65 in o r d e r to q u a lify fo r a b e n e f it , a s a g a i n s t a l m o s t a fo u r th o f th e w o r k e r s
in n o n m a n u fa c tu r in g i n d u s t r i e s . T h e h e a v i e s t c o n c e n t r a t io n o f t h e s e r e s t r i c t i v e
r e q u ir e m e n t s w a s in i n d u s t r i e s w ith a l a r g e n u m b e r o f c o ll e c t iv e l y b a r g a in e d
m u lt ie m p lo y e r p la n s f o r b l u e - c o l l a r w o r k e r s , s u c h a s c o n s t r u c t i o n , t r a n s p o r t a ­
tio n , w h o le s a le t r a d e , a n d s e r v i c e s . In m a r k e d c o n t r a s t , m o r e l i b e r a l p r a c t i c e s
fo r q u a lify in g f o r b e n e f it s p r e v a i l e d in the fin a n c e in d u s t r y , w h e r e c o n tr ib u to r y
p la n s fo r w h i t e - c o l l a r w o r k e r s w e r e c o m m o n . L i b e r a l r e q u ir e m e n t s w e r e a l s o
fo u n d in th e p la n s o f p u b lic u t i l i t i e s (in c lu d in g th e d o m in a tin g te le p h o n e c o m p a n y
p la n s ).
N e a r ly a l l o f th e w o r k e r s in s a l a r i e d w o r k e r p la n s c o m p a r e d to 2 ou t o f
3 w o r k e r s in p r o d u c tio n w o r k e r p la n s w o u ld q u a lify f o r b e n e f it s b e f o r e a g e 65
( ta b le 3 0 ). T h e s m a l l e r p r o p o r t io n in b l u e - c o l l a r p la n s s t e m s f r o m th e d o m in a n c e
o f m u lt ie m p lo y e r p la n s in th a t g r o u p . In p la n s c o v e r in g b o th s a l a r i e d an d p r o ­
d u c tio n w o r k e r s , 95 p e r c e n t o f th e w o r k e r s q u a li f ie d e a r l i e r th a n a g e 6 5 .
T h e a g e a n d s e r v i c e r e q u ir e m e n t s o f v e s t i n g , e a r l y , an d n o r m a l r e t i r e ­
m e n t, a s p r e v i o u s l y d i s c u s s e d , c a n b e in t e g r a t e d b y c o n s id e r in g th e a g e s a t w h ich
a w o r k e r h ir e d a t a g e 25 c a n f i r s t q u a lify f o r a b e n e fit u n d e r p la n p r o v i s i o n s .




46
F o r p u r p o s e s o f t h is r e p o r t , th e im a g e i s r e v e r s e d to p r e s e n t th e p r o p o r t io n o f
w o r k e r s h ir e d a t a g e 25 w ho s t i l l d o n ot q u a lify f o r b e n e f it s a s th e y a t t a in p r o ­
g r e s s i v e l y g r e a t e r a g e a n d s e r v i c e , w ith th e s a m e e m p lo y e r o r w ith in th e s c o p e
o f a m u l t ie m p lo y e r p la n .
A s c h a r t 3 i l l u s t r a t e s , b y a g e 5 0 , w ith 25 y e a r s o f
s e r v i c e , 45 p e r c e n t o f th e p la n s c o v e r in g a s lig h t l y h ig h e r p r o p o r t io n o f th e w o r k ­
e r s , p r o v id e no p r o t e c t io n to w o r k e r s ' e q u it i e s in th e p l a n s . B y a g e 6 0 , 13 p e r ­
c e n t o f th e w o r k e r s in 17 p e r c e n t o f th e p la n s r e m a in e d u n p r o t e c t e d .
T h e r e i s a m u c h b e t t e r c h a n c e th a t a m e m b e r o f a s a l a r i e d w o r k e r s
p la n w o u ld q u a lify f o r b e n e f it s a t an e a r l y a g e th a n a m e m b e r o f a p r o d u c tio n
w o r k e r s p la n .
(S e e c h a rt 4 .)
T h e c h a n c e s f a c in g w o r k e r s in c o m b in e d p la n s
a r e c l o s e l y r e l a t e d to th e s a l a r i e d w o r k e r s 1 p r o s p e c t s . O v e r 3 ou t o f 5 o f th e
p r o d u c tio n w o r k e r s w e r e in p la n s in w h ic h a w o r k e r w o u ld n o t q u a lify u n til a g e
50 c o n t r a s t e d w ith 1 o u t o f 4 s a l a r i e d w o r k e r s . B y a g e 6 0 , a l m o s t a l l s a l a r i e d
w o r k e r s a n d w o r k e r s in c o m b in e d s a l a r i e d - p r o d u c t i o n w o r k e r p la n s c o u ld q u a lify
u n d e r th e a s s u m e d c o n d it io n s , b u t o v e r a t h ir d o f th e p r o d u c tio n w o r k e r s w e r e in
p la n s w h e r e th e y s t i l l w o u ld n o t q u a lify .
G iv e n th e a g e a n d s e r v i c e r e q u ir e m e n t s f o r v e s t in g a n d r e t i r e m e n t , th e
c h a n c e s , e v e n u n d e r f a v o r a b l e a s s u m p t i o n s , a r e l e s s th a n 5 0 - 5 0 th a t w o r k e r s
w ill e a r n r ig h t s o r b e n e f it s in tw o p e n s io n p la n s b y th e t i m e th e y r e a c h a g e 6 5 .
A s w o r k e r s a c c u m u la t e s e r v i c e a n d a g e u n d e r a p e n s io n p la n , th e y i n c r e a s e t h e ir
c h a n c e s o f r e c e i v in g a b e n e fit f r o m th a t p la n , b u t, a s th e y a g e , t h e ir c h a n c e s o f
q u a lify in g f o r b e n e f it s u n d e r o t h e r p l a n s , s h o u ld th e y c h a n g e e m p l o y e r s , l e s s e n .
T o i l l u s t r a t e , a s s u m e th a t w o r k e r s b e g in n in g c o n tin u o u s p e n s io n p la n c o v e r a g e a t
a g e 25 a r e c o m p e lle d to c h a n g e e m p l o y e r s m id w a y in t h e ir c a r e e r s (b e tw e e n a g e s
40 a n d 50) a n d th a t th e y i m m e d i a t e ly o b ta in c o v e r a g e u n d e r a n o th e r p e n s io n p la n ,
w h e r e th e y r e m a in u n til r e t ir e m e n t a t a g e 65. 35 B y t h is t i m e , w ith p e n s io n p la n
c o v e r a g e o f a b o u t 40 y e a r s d iv id e d b e tw e e n tw o p l a n s , l e s s th a n h a l f w ill h a v e
b e e n a s s u r e d a p e n s io n b e n e fit b y b o th p l a n s . 36 S o m e a d d it io n a l w o r k e r s m a y ,
h o w e v e r , s e c u r e a s e c o n d p e n s io n b y w o r k in g b e y o n d a g e 6 5 .
T h e r e m a in d e r
m a y h a v e q u a li f ie d f o r b e n e f it s f r o m o n e o f th e p l a n s , b u t s o m e m a y n o t h a v e
q u a li f ie d in e it h e r p la n .
I m p l ic a t i o n s f o r M o b ility
T h i s s tu d y p r e s e n t s d a t a r e la t in g to p r i v a t e p e n s io n p la n s th a t s h o u ld b e
ta k e n in to a c c o u n t in a s s e s s i n g th e i m p l i c a t i o n s o f th e p e n s io n s t r u c t u r e f o r l a b o r
m o b ilit y ; in e v a lu a t in g p a s t s t u d i e s o f l a b o r m o b ilit y a n d w o r k e r s ' a t t it u d e s to w a r d
m o b ilit y d e t e r r e n t s ; a n d in f o r m u la t in g fu t u r e s t u d i e s in t h e s e a r e a s . It f o c u s e s
on th e p o s s i b l e d e t e r r e n t s f o r th e w o r k e r w ho h a s a c c u m u la t e d s u b s t a n t i a l p e n ­
s io n c r e d i t s — u s u a l l y w o r k e r s f r o m a g e s 35 to 40 a n d 55 to 60— v o lu n t a r ily to
c h a n g e j o b s . T h e s tu d y , h o w e v e r , d o e s n ot a tt e m p t d i r e c t l y to m e a s u r e th e e f ­
f e c t s o f p r i v a t e p e n s io n p la n s on l a b o r m o b ilit y .
A t th e o u t s e t , it w a s e m p h a s i z e d th a t th e in flu e n c e o f o t h e r p r a c t i c e s
r e l a t e d to s e r v i c e ( s e n i o r i t y , in p a r t i c u l a r ) i s in t e r t w in e d w ith th e in flu e n c e o f
p e n s io n p l a n s , a n d m a y , on b a l a n c e , o u tw e ig h c o n s id e r a t io n o f a c c u m u la t e d p e n ­
s io n c r e d i t s a s m o b ilit y d e t e r r e n t s . It w a s a l s o p o in te d ou t th a t a r a t h e r e l e ­
m e n t a l ty p e o f m o b ility w a s p r i m a r i l y in v o lv e d in t h is c o n s id e r a t io n o f p e n s io n
p l a n s , n a m e ly , th e a b i lit y o f w o r k e r s to c h a n g e e m p l o y e r s , a n d th a t o c c u p a t io n a l
o r g e o g r a p h ic m o v e m e n t w a s n o t n e c e s s a r i l y in v o lv e d .

35 It is assum ed in resp ect to both in itia l co v erag e and subsequent co v erag e th at th e workers are distributed
am ong the plans studied in proportion to the num ber of a c tiv e workers covered by th em .
36 T h is conclu sion is b ased not only on th e d ata in this study, but also on d ata relatin g to norm al retirem en t
requirem ents to be presented in a subsequent b u lletin .




47

C H A R T 3. P ER C EN T OF P R IV A TE PENSION P LA N S AND W O RKER S W ITH O U T A N Y B ENEFITS (V E S TIN G ,
EARLY R E T IR E M E N T, NO R M AL R ETIR E M E N T) A T SPECIFIED AGES FOR W ORKERS HIRED A T AGE 25,
W INTER 1962-63
Percen t

J / Based on a study of 15,818 private pen si on plans covering 15.6 million active workers in 1961,
2/ A few plans have requirements of age 68 or 70.




48

Chart 4 . P ER C EN T OF W ORKERS IN PR IV A TE PENSION PLANS W ITH O U T A N Y B EN E FITS (V E S TIN G ,
EARLY R E TIR E M E N T, NORM AL R ETIR EM EN T] A T SPECIFIED AGES FOR WORKERS HIRED A T AGE 25,
BY TY P E OF WORKER COVERED, W IN TE R 1962-63
Percent




49

Any d e t e r r e n t e f fe c t s o f a p e n sio n plan on m o b ility a r e o b v io u sly a ls o
r e la t e d to the v a lu e o f the p e n sio n b e n e fits to the in d iv id u a l w o r k e r and to h is
e v a lu a tio n o f h is c u r r e n t s t a t u s and o f h is fu tu re p r o s p e c t s . B oth a r e e s s e n t ia l ly
su b je c tiv e o r s p e c u la tiv e c o n s id e r a t io n s , the la t t e r m o r e so than the fo r m e r . The
e le m e n ts of p r iv a te p e n sio n p la n s th at p ro v id e the se ttin g fo r th e s e c o n s id e r ­
a tio n s a r e h ig h lig h te d in th is stu d y , a s a r e the e le m e n ts th at m ig h t c ir c u m s c r ib e
the a r e a o f c h o ic e w ithin w hich the w o rk e r d e c id e s .
T he a s p e c t s o f the p r iv a te p e n sio n s t r u c t u r e w hich a p p e a r to b e a r m o s t
sig n ific a n tly on m o b ility (and o th er m an p o w er) p r o b le m s a r e s u m m a r iz e d b elo w ,
co n clu d in g w ith the im p lic a tio n s of the in te g r a tio n o f p r o te c tiv e p r o v is io n s d e v e l­
oped in th is c h a p te r and a b r i e f sta te m e n t on the ou tlo o k . It m u st be e m p h a siz e d
th at th is su m m a r iz a tio n , e x p r e s s e d in g e n e r a l t e r m s , d o e s not ta k e into ac c o u n t
d if fe r e n c e s am o n g f i r m s and in d u s t r ie s in the p o s s ib le e f fe c t s of p e n sio n plan
p r o v is io n s .
1. T he p r iv a te p e n sio n m o v em en t i s a young in stitu tio n . T he im p a c t of
p r iv a te p la n s on w o r k e r a ttitu d e s and c o n s c io u s n e s s i s u ndou btedly s t i l l in the e m ­
b ry o n ic s t a g e . It i s lik e ly th at m an y w o r k e r s s t i l l do not fu lly r e a li z e the im p o r ­
tan c e and m o n e ta r y v a lu e o f the p e n sio n c r e d it s they a r e a c c u m u la tin g . A s p la n s
s p r e a d , a s b e n e fit le v e ls r i s e , a s v e stin g and o th er p r o te c tiv e f e a t u r e s im p r o v e ,
a s s e r v ic e u n d er p e n sio n p la n s in c r e a s e s , and a s the p e r s o n a l r e t ir e m e n t e x p e ­
r ie n c e s of f r ie n d s , r e la t iv e s , and n e ig h b o rs b e c o m e m o r e c o m m o n p la c e , p r iv a te
p e n sio n p la n s a r e lik e ly to b e c o m e a m o r e in flu e n tia l fo r c e a ffe c tin g the m o t iv a ­
tio n s of in d iv id u a l w o r k e r s .
2 . P r iv a t e p e n sio n p la n s a r e not d is tr ib u te d ev en ly th rou gh o u t the e c o n ­
o m y . R a th e r, p lan c o v e r a g e now te n d s to be c o n c e n tr a te d in c e r ta in in d u s t r ie s
and am o n g c e r ta in g r o u p s of w o r k e r s .
3. T h e t r a d e union m o v e m e n t h a s b een an in flu e n tia l fo r c e sh ap in g the
d e v e lo p m e n t of p e n sio n p la n s .
T y p ic a lly , union c o n c e rn s sh ift fr o m a c h ie v in g
’‘a d e q u a te " b e n e fit le v e l s , the f i r s t o b je c tiv e , to d e v e lo p in g p r o te c tiv e f e a t u r e s ,
su ch a s v e s tin g . F o r both e m p lo y e r s and u n io n s, a m an p o w er p o lic y o b je c tiv e
of m in im iz in g r e s t r a i n t s on v o lu n ta ry m o b ility m a y c o n flic y w ith o th er o b je c t iv e s .
4. V e stin g , found in tw o -th ir d s of the p la n s w ith t h r e e - f ift h s o f the w o r k ­
e r s , i s the k ey p r o v is io n fo r lo o se n in g the t ie s im p lic it in the p r iv a te p e n sio n
s t r u c t u r e . It p r o t e c t s the q u a lifie d w o r k e r 's fin a n c ia l sta k e in the p lan , th e re b y
en h an cin g h is p o te n tia l m o b ility .
H o w ev e r, b e c a u s e of c o s t c o n s id e r a tio n s and the o ften d iffe r in g a ttitu d e s
and v a lu e s of the p a r t ie s — e m p lo y e r , union, and e m p lo y e e — r ig i d it ie s an d r e s t r i c ­
tio n s a r e c o n ta in e d in v e stin g p r o v is io n s w hich tend to c o u n ter th is im p u ted m o ­
b ility a d v a n ta g e : (a) L o n g con tin u ou s s e r v ic e (co m m o n ly in e x c e s s o f 10 y e a r s )
and the a tta in m e n t o f m id d le a g e (u su a lly a g e 40, 45, o r o ld e r ) a r e r e q u ir e d to
q u a lify fo r v e stin g , (b) a w o r k e r c lo s e to m e e tin g the r e q u ir e m e n ts fo r v e stin g
m a y f e e l " lo c k e d - in " b e c a u s e he is c lo s e to s e c u r in g a v a lu a b le a s s e t , (c) the
p r a c t ic e of lim itin g v e stin g to in v o lu n tary te r m in a tio n in so m e p la n s fu r th e r r e ­
s t r i c t s the p r o m is e of the p r o v is io n s .
L e s s than 1 out o f 3 n e g o tia te d m u ltie m p lo y e r p la n s p ro v id e v e s tin g .
T h e se p la n s do h a v e a p a r t ia l su b stitu te — p o r ta b le p e n sio n c r e d it s — w hich a s s u r e
no im p e d im e n t to m o b ility am o n g p a r tic ip a tin g e m p lo y e r s .
5. V e stin g c o n fe r s v a lu a b le p e n sio n r ig h ts on w o r k e r s who q u a lify . F o r
e x a m p le , to buy an in d iv id u a l annuity p ro v id in g the a v e r a g e am o u n t v e s t e d a f t e r
15 y e a r s of s e r v ic e by w o r k e r s e a r n in g $ 4 ,8 0 0 a y e a r w ould c o s t a m a le w o r k e r




50
$ 3 ,0 0 0 at a g e 4 5 , o r n e a r ly tw o -th ir d s of a y e a r * s p ay . T he v a lu e of t h is a s s e t
i n c r e a s e s a s m o r e s e r v ic e i s c r e d it e d , a s the w o rk e r n e a r s r e t ir e m e n t , an d a s
th e w o rk e r* s e a rn in g le v e l r i s e s .
6.
E a r l y r e t ir e m e n t p r o v is io n s , alth o u gh d e s ig n e d fo r a d iffe r e n t p u r ­
p o se th an v e s t in g , a l s o en ab le q u a lifie d w o r k e r s to r e ta in t h e ir eq u ity in a p la n .
In m o b ility t e r m s , h o w e v e r, it i s a lim ite d su b stitu te fo r v e s tin g b e c a u s e it u s u ­
a lly a p p lie s only to w o r k e r s who h av e a tta in e d a g e 55 o r 60 an d lon g s e r v i c e . In
ad d itio n , the e m p l o y e e s c o n se n t i s often n eed ed . B e c a u s e it a d d s fle x ib ilit y to
the r e t ir e m e n t s y s t e m an d c o m p le m e n ts e a r ly r e t ir e m e n t u n d er s o c i a l s e c u r it y ,
e a r ly r e t ir e m e n t a l s o h a s im p o rta n t m an p o w er im p lic a tio n s . It p r o v id e s an e q ­
u ita b le d e v ic e to h e lp m o v e o ld e r w o r k e r s into fu ll r e t ir e m e n t o r into l e s s d e ­
m an d in g w o rk .
S p e c ia l e a r ly r e t ir e m e n t p r o v is io n s c an m e a n ev en m o r e fle x ib ilit y , but
only a t sh a r p ly in c r e a s e d c o s t to the e m p lo y e r . T h e se p r o v is io n s w e re d e sig n e d
to h e lp so lv e d iffic u lt m an p o w er an d p e r so n n e l p r o b le m s , su c h a s th o se ste m m in g
fr o m p lan t sh u td o w n s.
T he p r e s s u r e s o f m o r e r a p id te c h n o lo g ic a l ch an ge a r e
lik e ly to h a ste n the e x te n sio n of th e s e p r o v is io n s d e s p ite t h e ir c o s t .
7.
A s lon g a s the w o rk e r s t a y s in the sc o p e of a m u ltie m p lo y e r p la n ,
he m a y m o v e fr o m e m p lo y e r to e m p lo y e r an d s t i l l r e t a in h is p e n sio n c r e d it s .
T he p o r ta b le p e n sio n c r e d it s th u s p ro v id e d m a y a s s u r e the w o r k e r of a l l the m o ­
b ility he m a y n eed d u rin g h is w o rk in g life in m an y o c c u p a tio n s an d in d u s t r ie s in
w hich su ch p la n s a r e co m m o n . N o n e th e le ss, the p o te n tia l la titu d e of jo b m o v e ­
m en t b etw een e m p lo y e r s d ep en d s on the sc o p e o f the p la n . N e a r ly h a lf the w o r k ­
e r s b elo n g to p la n s lim ite d to a sin g le c r a f t , o c c u p a tio n , o r in d u stry in a s in g le
lo c a lit y .
T he r e m a in in g w o r k e r s a r e ro u g h ly e q u a lly d iv id e d b etw een r e g io n a l
an d n a tio n a l p la n s— m o s tly on an in d u stry b a s i s .
M u ltie m p lo y e r p la n s th ro u g h t h e ir g e n e r a l la c k of v e s tin g an d e a r ly r e ­
tir e m e n t p r o v is io n s m a y d is c o u r a g e v o lu n ta ry m o v e m e n t to e m p lo y e r s o u tsid e
the sc o p e o f the p lan . On the o th er hand, it i s p r o b a b le th at a h ig h e r p r o p o r ­
tion of w o r k e r s in m u ltie m p lo y e r p la n s th an in sin g le e m p lo y e r p la n s e x p e c t to
sp e n d t h e ir w o rk in g li v e s in the sc o p e of the p la n . M o st w o r k e r s in m an y in ­
d u s t r ie s w ith su c h p la n s tr a d it io n a lly h a v e str o n g t i e s to th e ir c r a f t s an d la b o r
m a r k e t s , ev en a f t e r the lik e lih o o d of ste a d y em p lo y m en t i s go n e.
T h u s, it i s
p o s s ib le th at the c h ie f im m o b iliz in g e ffe c t of m u ltie m p lo y e r p la n s , in the a b ­
se n c e of v e s tin g an d e a r ly r e t ir e m e n t , i s to h old an u n e m p lo y ed m e m b e r to
the p la n in a d e c lin in g in d u stry o r c r a f t a t a tim e when v o lu n ta ry jo b c h a n g e s
a r e d e s ir a b l e .
8.
T h e su m m a r y e v a lu a tio n in t h is c h a p te r of th e p r o v is io n s w hich
te r m in e w h eth er w o r k e r s w ill u ltim a te ly r e c e iv e r e t ir e m e n t b e n e fits— v e s t in g ,
e a r ly an d n o r m a l r e t ir e m e n t , an d p o r ta b ility — s u g g e s t s th at th ey m a y be too r e ­
s t r ic t e d to o ffs e t fu lly the p o te n tia l r e s t r a in in g e f fe c t s of p r iv a te p e n sio n p la n s .
T he b a la n c e sh e e t of p r o te c tiv e d e v ic e s sh ow s th at a t the b ottom of the s c a le
a r e the 5 p e r c e n t of the w o r k e r s c o v e r e d in p r iv a te p e n sio n p la n s who h ave to
s ta y w ith one e m p lo y e r u n til n o r m a l r e tir e m e n t to e a r n an y p e n sio n b e n e fits . If
th ey do n ot, th ey lo s e a l l t h e ir p e n sio n r ig h t s .
When th e w o r k e r s in m u lt ie m p lo y e r p la n s who m u st r e m a in w ithin the sc o p e of the p lan (alth ou gh not with
a sin g le e m p lo y e r) a r e ad d ed to th is g ro u p , a lm o s t a fifth o f the w o r k e r s a r e
in clu d ed . E a r l y r e t ir e m e n t p r o te c tio n i s a v a ila b le to an o th e r fifth o f the w o r k ­
e r s in p r iv a te p la n s .
V e stin g only fo r in v o lu n tary te r m in a tio n i s a v a ila b le to
slig h tly l e s s than a ten th of the w o rk e rs .
T h is le a v e s ab ou t h a lf of the w o r k ­
e r s , m o s tly in sin g le e m p lo y e r p la n s , who, if th ey q u a lify w ould upon v o lu n ta ry
te r m in a tio n b e p e r m itte d to r e t a in a c c r u e d p e n sio n b e n e fits th ro u g h v e s t in g .




de­

51
O v er tw o -th ir d s of the w o r k e r s in p r iv a te p e n sio n p la n s w ould h av e to
s ta y in the s a m e f i r m o r p la n fo r 15 y e a r s o r m o r e to q u a lify fo r v e stin g o r
r e tir e m e n t b e n e fits. A bout a fo u rth w ould q u a lify w ith 10 y e a r s o r l e s s . In a d ­
d itio n to a s e r v ic e r e q u ir e m e n t, about a six th of th e w o r k e r s w ould h ave to sta y
w ith th e ir e m p lo y e r o r in the sc o p e of the p lan u n til ag e 65 in o r d e r to r e ta in
p e n sio n r ig h t s .
A n o th er ten th w ould f i r s t q u a lify at ag e 60.
9.
D e sp ite the e x is te n c e of a w ide s p e c t r u m of p r o te c tiv e p e n sio n f e a ­
t u r e s , the p r o s p e c t s of the new ly h ir e d w o rk e r a c tu a lly r e a liz in g the p e n sio n
c r e d it s he i s b egin n in g to a c c u m u la te r e m a in so m ew h at r e m o te .
A s h a s b een
show n, 45 p e r c e n t of the w o r k e r s w e re in p r iv a te p la n s in w hich a w o r k e r h ire d
at a g e 25 w ould not q u a lify fo r any b en e fit by a g e 50 u n d er the p r o v is io n s o f the
p la n s . A bout 55 p e r c e n t o f the w o r k e r s w e re in p la n s in w hich su c h a w o r k e r
h ir e d at a g e 25 w ould not q u a lify fo r b e n e fits by a g e 45.
In m o b ility t e r m s ,
th is m e a n s th at only a s a w o r k e r a c c u m u la te s long s e r v ic e and a g e s in the
p r o c e s s d o e s the p o s s ib ilit y b rig h te n th at he w ill be en title d to a p e n sio n b en e fit
sh o u ld he m ov e to an o th e r e m p lo y e r d e s p ite h is a g e and a c c u m u la te d s e r v ic e .
M o r e o v e r , a s he a c c u m u la te s m o r e s e r v ic e and y e a r s of ag e th e l e s s lik e ly i s
the p o s s ib ilit y o f q u a lify in g fo r a p e n sio n fr o m an o th e r e m p lo y e r .
O utlook fo r P r iv a te P e n sio n P la n s
D u rin g the next 2 d e c a d e s , the c o v e r a g e of p r iv a te p e n sio n p la n s i s not
e x p e c te d to in c r e a s e at the sa m e r a t e it h a s in th e p a s t 2 d e c a d e s .
A s lo w ­
down in the r a t e of grow th i s a lr e a d y ev id en t. P r iv a t e p e n sio n c o v e r a g e , how ­
e v e r , w ill con tinu e to g ro w , p o s s ib ly doubling fr o m I9 6 0 to 1980 37— a r a t e of
in c r e a s e s u b s ta n tia lly g r e a t e r th an th e e x p e c te d r a t e of in c r e a s e in the la b o r
f o r c e . C o u n te ra c tin g to so m e exten t the m o b ility e f fe c t s of the s p r e a d o f p e n sio n
p la n s i s th e tre n d to w a r d s lib e r a liz a t io n and e x te n sio n o f v e stin g , e a r ly r e t i r e ­
m en t, and p o r ta b le p e n sio n c r e d i t s . F u r t h e r m o r e , in t e r e s t in s p e c ia l p r o v is io n s ,
su c h a s s p e c ia l e a r ly r e t ir e m e n t , th at a lle v ia t e d is p la c e m e n t s c a u s e d by te c h n o ­
lo g ic a l and o th e r ch an ge and p lan t shutdow n, m ay be e x p e c te d to i n c r e a s e .
T he r a t e of grow th o f c o lle c t iv e ly b a r g a in e d m u ltie m p lo y e r p la n s h a s
d e c lin e d sin c e the la te 19 5 0 fs . P e n sio n p la n s h av e b een n e g o tia te d in th e m o s t
lik e ly and e a s i e r s it u a t io n s ; th e r e la t iv e ly d iffic u lt a r e a s r e m a in . Not a ll m u lt ie m p lo y e r b a r g a in in g g r o u p s now w ithout a p la n a r e c a p a b le of su p p o rtin g and
w o rk in g out su c h a p r o g r a m , u n le s s s m a ll g r o u p s a r e co m b in ed into l a r g e r p la n s .
M o st o f the gro w th o f m u ltie m p lo y e r p la n s in the im m e d ia te fu tu re c an be e x ­
p e c te d to c o m e fr o m an in c r e a s e d c o v e r a g e of e x istin g p la n s , p a r t ic u la r ly th o se
in s e r v ic e , t r a d e , and o th e r in d u s t r ie s in w hich em p lo y m en t is ex p an d in g. B e ­
c a u s e m u ltie m p lo y e r p la n s a r e r e la t iv e ly new, th ey m ay be e x p e c te d to u n d ergo
s u b s ta n tia l c h a n g e s a s th ey m a tu r e . T he p r e s s u r e s to ex ten d the sc o p e o f c o v ­
e r a g e th ro u g h r e c ip r o c it y a g r e e m e n t s , m e r g e r s , and o th e r d e v ic e s w ill m ount
w h ere w o r k e r d is lo c a t io n b e c o m e s a p r o b le m . S i m ila r p r e s s u r e s m a y a l s o s t im u ­
la te the e x te n sio n and lib e r a liz a t io n o f v e stin g and e a r ly r e t ir e m e n t p r o v is io n s .

37 National Bureau of Economic Research, The Uses of Economic Research. 43d Annual Report, 1963, p. 58.




52
T a b l e 1.

D is t r i b u t i o n o f P r i v a t e P e n s i o n P l a n s b y D a t e o f E s t a b l i s h m e n t
( W o r k e r s in t h o u s a n d s )

Y e a r o f e s ta b lish m e n t

P la n s

W ork ers 1

Y e a r o f e s ta b lish m e n t

P la n s

Wo r k e r s 1

A l l p l a n s s t u d i e d ---------------------------

1 5 ,8 1 8

1 5 ,6 2 1

1 9 0 0 - 1 9 0 4 ____________________________
1 qrm —1 QftQ
...............................
1 9 1 0 - 1 4 ----------------------------------------1 qi c
;—1 q
1 9 2 0 - 2 4 ______________________________
-......... .....
19 2 5 —29 __
lQ ^n - ^4

14
5
34
19
14
24
134
118
75
424
199
742
715
52 5

172

1 9 4 6 _________________________________
1 9 4 7 -------------------------------------------1 9 4 8 _________________________________
1 Q4Q
........................................................
1 9 5 0 -------------------------------------------1 QR1
1 9 5 2 _________________________________
i q<^
1 9 5 4 . ....................................................
1 9 5 5 _________________________________
______________ _____________
19 5 6
1 9 5 7 ___________ _______ ________________
1 9 5 8 --------------------------------------------

418
53 2
579
28 7
939
949
433
1 ,3 5 1
694
1, 23 2
1, 194
642
528
1, 572
812
614

63 7
36 6
402
29 0
1 ,9 0 1
70 7
454
479
33 0
1 ,0 9 0
665
559
499
347
154
1 ,4 2 8

19 4 0
1 941

.............................. .

1 94 ^

................... .

1 q 44

1 9 4 5 ___________________________________

1

10
1 , 162

98
185
166
351
272
403
554
279
377
496
789

19 59... ................................................... ......
1960
.............................................

I n f o r m a t i o n n o t a v a i l a b l e -----------

A c t i v e w o r k e r s in 1 9 6 1 .

NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

T a b l e 2. D is t r i b u t i o n o f P r i v a t e P e n s i o n P l a n s b y
N u m b e r o f A c t i v e W o r k e r s C o v e r e d , W in te r 1 9 6 2 — 3
6

T a b l e 3. D i s t r i b u t i o n o f P r i v a t e P e n s i o n P l a n s
b y I n d u s t r y G r o u p , W in te r 1 9 6 2 —
63

^ W o r k e r s in t h o u s a n d s )
N um ber of
w o rk ers co v ered

^W^rkers^ju^housand^
W o rk ers 1

P la n s

N um ber P erc en t N um ber P erc en t

A l l p l a n s s t u d i e d ---------

1 5 ,8 1 8

100. 0

1 5 ,6 2 1

100. 0

U n d e r 2 0 0 ------------------2 0 0 a n d u n d e r 5 0 0 -------5 0 0 a n d u n d e r 1 , 0 0 0 ---1 ,0 0 0 a n d u n d e r
5, 0 0 0 -----------------------5, 000 an d u n d er
1 0 , 0 0 0 _________________
10, 000 an d u n d er
2 5 , 0 0 0 _________________
25, 000 and u n d er
5 0 , 0 0 0 _________________
5 0 ,0 0 0 an d u n d er
1 0 0 , 0 0 0 _______________
1 0 0 ,0 0 0 a n d o v e r ---------

9 ,9 1 4
2 , 59 5
1 ,3 3 6

62. 7
1 6 .4
8 .4

704
810
905

4. 5
5. 2
5 .8

1 ,4 9 0

9 .4

3, 22 9

20. 7

1. 5

1, 677

1 0. 7

145

.9

2 , 171

13. 9

65

.4

2, 20 9

14. 1

17
15

. 1
. 1

1, 172
2, 742

7. 5
17. 6

241

N O T E : B e c a u s e o f r o u n d in g ,
ite m s m a y not e q u al to ta ls .

N um ber

A l l p l a n s s t u d i e d --------A g r ic u ltu r e , fo r e s t r y ,
a n d f i s h e r i e s -----------M in in g ------------------------C o n tr a c t C o n s tr u c tio n M a n u fa c tu rin g —
T r a n s p o r t a t i o n ________
C o m m u n i c a t io n s a n d
p u b lic u t i l i t i e s ---------W h o le s a le a n d r e t a i l
t r a d e ------------------------W h o le s a le t r a d e ____
R e t a i l t r a d e -----------F in a n c e , in s u r a n c e ,
a n d r e a l e s t a t e ---------S e r v i c e s ________________

1

1 A c t i v e w o r k e r s in 1 9 6 1 .




P la n s

W ork ers 1

In d u str y

su m s

o f in d iv id u a l

1 5 ,8 1 8

75
31 6
449
9 , 25 7
673

P erc en t N um ber P erc en t

100. 0
0.
2-.
2.
58.
4.

1 5, 621

100. 0

5
0
8
5
2

26
327
1 ,0 7 2
9, 678
1 ,2 8 6

0. 2
2. 1
6 .9
62. 0
8. 2

849

5 .4

1 ,2 7 0

8. 1

1 ,6 2 7
1, 147
480

10. 3
7. 2
3. 0

920
479
440

5. 9
3. 1
2. 8

1 ,8 5 3
719

11. 7
4. 5

733
308

4. 7
2. 0

A c t i v e w o r k e r s in 1 9 6 1 .

N O T E : B e c a u s e o f r o u n d in g ,
it e m s m a y not e q u a l t o t a l s .

su m s

o f in d iv id u a l!

53
T a b le 4 .

D i s t r ib u t io n o f P r i v a t e P e n s io n P l a n s b y I n d u s t r y G r o u p a n d T y p e of E m p lo y e r U n it, W in te r 196 2 —63
( W o r k e r s in t h o u s a n d s )
T y p e o f e m p l o y e r u n it
A ll p la n s
S in g le e m p lo y e r

In d u stry
N um ber

A l l p l a n s s t u d i e d ______

____

__ __ _

__ __

A g r ic u lt u r e , f o r e s t r y , an d f i s h e r i e s
M in in g _ __ __ __
__ ____ __
__ __
__ _ __
C o n trac t c o n s tr u c tio n .
__ ______
M a n u f a c t u r i n g ___
_ ______ __ _ __ _____ _
T r a n s p o r t a t i o n __ __ _ _
_ _
_ __ ------- _
C o m m u n i c a t io n s a n d p u b lic u t i l i t i e s __
_ __ _
W h o le s a le a n d r e t a i l t r a d e . __
_
_
W h o le s a le t r a d e ________________________________
R e t a i l t r a d e _______
_
__
_ ___ _
F in a n c e , in s u r a n c e , an d r e a l e s t a t e .
S e r v ic e s.
_ _ __
_______ __

1

W o rk e rs 1

P la n s

W o rk e rs 1

M u lt ie m p l o y e r
P la n s

W o rk ers 1

3, 878

1 5 ,8 1 8

1 5 , 621

1 4 ,8 9 0

1 1 ,7 4 2

92 8

75
31 6
44 9
9 , 257
67 3
84 9
1 ,6 2 7
1, 147
480
1 ,8 5 3
71 9

26

327
1, 0 7 2
9 ,6 7 8
1 , 28 6
1, 2 7 0
920
479
440
733
30 8

72
30 0

18
89
23
8 ,4 2 6
516

3
16
38 9

60

8 ,9 9 5
549
-848
1, 540
1 , 082
458
1, 8 4 0
686

262

124

8

238
1, 049
1, 2 52
770

1,261

1

10

57 2
171
40 1
719
119

87
65

348
30 8
40
15

22

13
33

190

A c t i v e w o r k e r s in 1 9 6 1 .

NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

T a b le 5.

D i s t r ib u t io n of P r i v a t e P e n s io n P l a n s b y I n d u s t r y G r o u p a n d C o l l e c t i v e B a r g a i n i n g S t a t u s , W in te r 196 2 —63
j
^Worker,siiin it^
i
C o lle c tiv e b a r g a in in g s ta tu s
A ll p l a n s

M e n tio n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t

In d u str y
N um ber

A ll p l a n s s t u d i e d .

_ _ __

_____

A g r i c u l t u r e , f o r e s t r y , a n d f i s h e r i e s __ __ __ _
M in in g _ ____
_____
______ _ _ ___ __ __
C o n t r a c t c o n s t r u c t io n
___ ___
M a n u f a r h i r in o
. ... ___ ...
___
T r a n s p o r t a t i o n __
___
____ _ __ __
C o m m u n i c a t io n s an d p u b li c u t i l i t i e s
_ .....
W h o le s a le a n d r e t a i l t r a d e .
__ __
W h o le s a le t r a d e
_ ______
R e t a i l t r a d e __
__
__ __
________ _
F i n a n c e , i n s u r a n c e , a n d r e a l e s t a t e ____________
S e r v ic e s
___ ________ ...

1
2

1 5 ,8 1 8

75
31 6
44 9
9 , 257
673
849
1 ,6 2 7
1, 147
480
1 ,8 5 3
719

A c t i v e w o r k e r s in 1 9 6 1 .
I n c l u d e s 110 p l a n s , c o v e r i n g 2 7 2 , 0 0 0 w o r k e r s ,

NOTE:

B e c a u s e o f r o u n d in g ,




W ork ers 1

P la n s

W o rk ers 1

N o t m e n tio n e d in a
c o lle c tiv e b a r g a in in g
agreem en t
P la n s

W o rk ers 1

1.5, 6 2 1

5 , 79 5

1 0 ,6 9 5

2 1 0 ,0 2 3

4, 926

26

15
43
384
4 , 285
384
314
294
24 9
45

18
242

60
273
65
4 , 972
28 9
5 35
1, 333
898
435
1, 831
665

164
2 , 8 57
388
2 28
42 1
139
28 2
656
118

32 7
1 ,0 7 2
9 , 67 8
1 ,2 8 6
1, 2 7 0
920

479
440
733
30 8

2
2
54

908
6 , 821
898

1, 0 4 2
498
340
158
78
191

w h ic h w e r e u n io n s p o n s o r e d a n d o p e r a t e d .

s u m s of in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

8
86

54
T a b le 6.

D i s t r ib u t io n o f P r i v a t e P e n s i o n P l a n s b y I n d u s t r y G r o u p a n d M e th o d o f F in a n c i n g , W in te r 1 9 6 2 —
63

(W o rk e rs in thousands)
M ethod of fin an cin g
A ll p lans
C o n trib u to ry

N o n co n trib u to ry

In d u stry
N um ber

W o rk e r s 1

P la n s

W o rk e r s 1

A ll plans s tu d ie d -----------------------------------------------

15, 8 1 8

15, 621

1 1 , 526

1 1 ,6 6 7

A g ric u ltu r e , f o r e s t r y , and f i s h e r i e s --------------M ining___________________ -______________________
C o n tra c t c o n s tru c tio n --------------------------------------M an u fa ctu rin g --------------_ __________________
T ra n s p o rta tio n -------------------------------------------------C o m m u n ication s and pu blic u t i li t i e s ---------------W h o le sa le and r e t a i l t r a d e ------------------------------W h o le sa le t r a d e _____________________________
R e ta il t r a d e _________________________________
F in a n c e , in s u ra n c e , and r e a l e s t a t e ---------------

75
3 16
44 9
257
673
849
627
147
480
853
719

26
327
1, 072
9, 678
1 , 286
1, 270
920
47 9
440
733
308

1
2

9,
1,
1,
1,

W o rk e r s 1

P la n s

2 4,

292

3, 95 4
18
18
47 2
2, 387
307
186
171
63
108

60

8

15

305
37 3
7, 24 8
37 4
691
1, 279

30 9
60 0
7, 29 2
97 9
1, 08 4
749
416
333
442
204

11

896

383
1, 125
71

76
2, 009
299
158
348
251
97
728
648

292

104

A c tiv e w o r k e r s in 1 9 6 1 .
Includes 1 1 0 p la n s, c o v e rin g 27 2 , 00 0 w o r k e r s , w h ich w e r e union s p o n s o re d and o p e ra te d .

NOTE:

B e c a u se o f round in g, su m s of in d ivid u a l ite m s m a y not eq ual to ta ls .

T able 7.

D istrib u tio n of P r iv a t e P e n sio n P la n s by In d u stry G roup and G e o g ra p h ic A r e a C o v e re d , W in te r 1 9 6 2 —
63
(W o rk e rs in thousands)
A r e a c o v e re d
A ll p lans
In d u stry

In tra s ta te

I n te rs ta te

N um ber

W o rk e r s 1

P la n s

W o rk e r s 1

P la n s

W o rk e rs 1

A ll p lan s s tu d ie d ------------------------------------ — —

15, 8 1 8

15, 621

1 1 , 229

4, 7 6 6

4, 589

10, 855

A g ric u ltu r e , f o r e s t r y , and f i s h e r i e s ____ -____

75
316
44 9
257
673
849
627
147
48 0
853
719

26
327
1, 072
9, 678
1 286
,
1, 270

15
2 17
43 3
6, 4 7 9
43 3
717
1, 23 1
833
398
1, 360
34 4

18
54
571
2, 097
251
733
57 3
421
152
28 6
183

M in in g ______

__________________________

_________

C o n tra c t c o n s tru c tio n __________________________
M an u fa ctu rin g __________________________________
T ra n sp o rta tio n _________________________________
C o m m u n ication s and public u t i li t i e s ---------------W h o le sa le and r e t a i l t r a d e _____________________
W h o le sa le t r a d e _____________________________
R e ta il t r a d e --------------------- ---__ -----------F in a n c e , in s u ra n c e , and r e a l e s t a t e --------------S e r v i c e s -------------— __ _______ _____________ ___

1

9,
1,
1,
1,

90
2

47 9
44 0
733
308

A c tiv e w o r k e r s in 1 9 6 1 .

NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




6
0
1
6

99

2, 778
240
132
396
314
82
493
375

8
273
501
7, 581
1, 035
538
347
58
289
447
125

55
T a b le 8.

D i s t r i b u t i o n o f P r i v a t e P e n s io n P l a n s b y I n d u s t r y G r o u p a n d T y p e o f W o r k e r C o v e r e d , W in te r 1 9 6 2 —
63

(W o rk e rs in thousands)
Type o f w o rk e r c o v e re d
A ll plans

S a la r ie d and
p ro d u ctio n

In d u stry

P ro d u c tio n only

S a la r ie d only

E arn in g in
excess of a
s p e c ifie d
am ount

N um ber W o r k e r s 1 P lan s W o r k e r s 1 P lan s W o r k e r s 1 P la n s W o r k e r s 1 P lan s W o r k e r s 1

A ll p lan s s tu d ie d _________________________

15, 8 1 8

15, 621

A g ric u ltu r e , f o r e s t r y , and f i s h e r i e s ___
M ining____________________________________
C o n tra c t c o n s tru c tio n ____________________
M an u fa ctu rin g ____________________________
T ra n sp o rta tio n ------------------------- ------------C o m m u n ication s and pu blic u t i li t i e s ------W h o lesa le and r e t a i l t r a d e --------------------W h o le sa le t r a d e --------------------------------R e ta il t r a d e ----------------------------------------F in an ce, in su ra n c e , and
r e a l e s t a t e -------------------------------------------S e r v i c e s --------------------------------------------------

75
316
449
9, 257
673
849
1, 627
1, 147
480

26
327
1, 072
9, 678
1 , 286
1, 270
920
479
440

1, 853
7 19

733
308

263

4, 925

7, 039

66

12

55

6,

28
23
3, 95 1
182
368
63
305

9
50
389
3, 802
35 4
63
107
76
31

13
257
1, 049
4, 147
876
81
395
330
66

715
55 4
161

42 9
77

13
138

15
206

220

03 8

60
2,

392
14 4
78 5
697
417
280

1, 47 8
361

6,

192
1,

3, 995

1, 58 4

211

73 5

860

2,

42

_

_

-

-

_

359
133

1, 000

704
42
_
108
100
8

_
581
140
_
7
4
3

6

8

79
7
149
83

1

66

282
25

356

A c tiv e w o rk e rs in 1 9 6 1 .

1

NOTE: B e c a u se o f rounding, sum s o f in d ivid u a l ite m s m a y not eq ual to ta ls .

T able 10.

V e stin g P ro v is io n s in P r iv a t e P en sio n P la n s
by T ype, and C onditions fo r V estin g ,
W in te r 1 9 6 2 —
63
(W o rk e rs in thousands)

T able 9.

P la n s

D istrib u tio n o f P r iv a t e P en sio n P la n s by F in a l

W o rk e rs 1

Item

A u th o r ity f o r B e n e f i t D e t e r m i n a t io n ,

N um ber P e rc e n t N um ber P e rc e n t

W in te r 19 6 2 —
63
(W o rk e rs in thou sand s)

N um ber P e rc e n t N um ber P e rc e n t

A ll p lan s s tu d ie d --------

15, 8 1 8

100. 0

15, 62 1

100. 0

E m p lo y e r o n ly -----------B ip a rtite b o a r d ---------T rip a r tite b o a rd --------Union o n ly ------------------G rie v a n c e p ro c e d u re
o f c o lle c tiv e
b a rg ain in g
a g re e m e n t___________

1 2 , 729
2 , 001
8
110

80 . 5
12. 7
.1
.7

9, 2 9 8
5, 365
227
272

59 . 5
34. 3
1 .4
1 .7

1

970

6. 1

459

N O T E : B e c a u s e o f ro u n d in g ,
ite m s m ay not eq u al to ta ls .

15, 8 1 8

100..0

15, 62 1

W ith v e s t i n g ----------------

10, 6 3 4

67 . 2

9, 307

59. 6

D e fe rre d f u l l 2 -------A ny s e p a ra tio n __
In v o lu n ta ry
s e p a ra tio n --------

7, 2 1 2
6 , 681

45. 6
42. 2

7, 338
5, 977

47. 0
38. 3

531

3. 4

1, 361

8.

D e fe rre d g ra d e d ----A ny s e p a ra tio n —
In v o lu n ta ry
s e p a ra tio n _____

3, 422
3, 312

21. 6
20. 9

1, 969
1, 94 3

12. 6

110

.7

27

.2

5, 184

32. 8

313

4 0 .4

1
2

su m s

of

6,

7

1 2 .4

2 .9

A c tiv e w o r k e r s in 1 9 6 1 .




100. 0

A ll p lan s stu died ---------

W ithout v e s t i n g _______

W o rk e rs 1

P la n s
F in a l a u th o rity

in d iv id u a l

A c tiv e w o rk e rs in 1 9 6 1 .
Inclu des a fe w p lan s w ith im m e d ia te fu ll v e s tin g .

N O T E : B e c a u s e o f ro u n d in g ,
ite m s m ay not eq u al to ta ls .

su m s

of

in d iv id u a l

56
T a b le 11.

V e s t in g P r o v i s i o n s in P r i v a t e P e n s i o n P l a n s b y T y p e of E m p lo y e r U n it, M e th o d o f F in a n c i n g ,
an d C o l le c t iv e B a r g a i n i n g S t a t u s , W in te r 1 9 6 2 —63
( W o r k e r s in t h o u s a n d s )

A ll p lan s

W ith v e s tin g

W ithout v e s tin g

Item
N um ber

A ll p lan s s tu d ie d ____

_ __

_______ _

_ ____

Sin g le e m p lo y e r _ _______
_ __ _
— —
N o n c o n trib u to ry .
__
__
_
___ ___
M en tion ed in a c o lle c tiv e b a rg ain in g
a g r e e m e n t. _ __
__ ________
____ — __
Not m en tio n ed in a c o lle c tiv e b a rg ain in g
a g re e m e n t __
__
_______
. . .
C o n trib u to ry ________
______
________ __
M en tion ed in a c o lle c tiv e b a rg a in in g
ag r e em ent ____. . . _____ _______ ___ _________ ________ _
Not m en tio n ed in a c o lle c tiv e b a rg ain in g
a g r e e m e n t__ ______ _ __ __
___
___

1

P la n s

W o rk e rs 1

P la n s

W o rk e r s 1

1 5 ,8 1 8

_____

M u lt ie m p lo y e r ____ __
__
__ _______
____ . __ __ ____ — __
N o n co n trib u to ry . ___
M entioned in a c o lle c tiv e b a rg a in in g
a g r e e m e n t___ ____ ____
__
_
Not m en tio n ed in a c o lle c tiv e b a rg ain in g
a g re e m e n t
__________
___
C o n t r ib u t o r y .. ____ _ _ ____ _.
._
_
M en tion ed in a c o lle c tiv e b a rg ain in g
a g r e e m e n t. __ _ __
__ __
__
Not m en tio n ed in a c o lle c tiv e b a rg ain in g
a g r e e m e n t__
____ ____ . . .
.

W o rk e r s 1

15 , 621

1 0 ,6 3 4

9 ,3 0 7

5, 18 4

6,

1 4 ,8 9 0
1 0 ,6 5 7

1 1 ,7 4 2
8 ,4 5 4

1 0 ,3 4 0
7, 100

8,

4 , 550
3, 557

3 ,3 4 9
3, 056

3 ,9 3 3

5 ,6 6 8

2, 728

3 ,7 4 1

1, 205

1 ,926

6 ,7 2 4
4 , 233

2 ,7 8 7
3, 288

4 , 372
3, 240

1 ,6 5 7
2 ,9 9 5

2, 352
993

1, 130
293

1 ,0 3 4

1 ,4 9 5

892

1 ,3 8 4

142

111

3, 199

1 ,7 9 3

2 ,3 4 8

1,611

85 1

182

63 4
609

2, 9 6 4
2, 394

393
5 ,3 9 8

313

____
__ __

928
869

3 ,8 7 8
3, 2 1 2

294
260

914
818

__ __

810

3, 176

253

802

557

2, 374

59
59

36

__ __

666

7
34

16
96

52
25

570

20

_

18

3 56

15

54

3

302

. .

41

310

19

42

22

269

A c t i v e w o r k e r s in 1 9 6 1 .

NO TE;

B e cau se

o f r o u n d in g ,

T a b le 12.

s u m s of in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

V e s t in g P r o v i s i o n s in S in g le E m p lo y e r P r i v a t e P e n s i o n P l a n s b y N u m b e r o f
A c t iv e W o r k e r s C o v e r e d , W in te r 1 9 6 2 —63 1
( W o r k e r s in t h o u s a n d s )
A ll p l a n s

W ith v e s t i n g

W ith o u t v e s t i n g

N u m b e r of w o r k e r s c o v e r e d
N um ber

A l l s i n g l e e m p l o y e r p l a n s ______________________________________

J

1 nnn anrl Iinflpr s

, non

_r „
„

1 4 ,8 9 0

1 1 ,7 4 2

9 , 710
2 ,4 6 9
1 ,0 9 4
1 ,2 5 6
180

12
1
47
15
7

1

B a s e d on a s t u d y of 1 5 ,8 1 8 p r i v a t e p e n s io n p l a n s c o v e r i n g

NOTE:

B e cau se




o f r o u n d in g ,

P la n s

W o rk ers

W o rk ers

P la n s

W o rk ers

1 0 ,3 4 0

8 ,3 9 3

4 , 5 50

3 , 349

6 ,8 0 0
1 ,6 9 1
705
885
135
'7 6
33
9

449
55 2
487
1 ,8 7 1
944
1, 196
1, 130
616
1, 150

2,910

240
227
2 47
785
314
5 05
477
407
145

60
9
778
734
2 , 65 6
1, 2 58
1 ,7 0 1
1 ,6 0 7
1 ,0 2 3
1, 29 5

6

1 5 .6 m i l l i o n a c t i v e w o r k e r s in 1 9 6 1 .

s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

7 78
3 89
371
45
36
14

6
1

57
T a b le 1 3.

V e s t in g P r o v i s i o n s in P r i v a t e P e n s i o n P l a n s b y I n d u s t r y G r o u p , W in te r 1 9 6 2 —
63

(W o rk e rs in thousands)
W ithout v e s tin g

W ith v e s tin g

A ll plans
In d u stry
N um ber

A ll p lans s tu d ie d ------- --------------------------------------

15, 8 1 8

A g ric u lt u r e , f o r e s t r y , and f i s h e r i e s ---------------M ining------------------------ ------------ ---------------- ---C o n tra c t c o n s tru c tio n ----------------------------------------M an u fa ctu rin g -------- ------ -------------------- ---------_____ — ---T ra n sp o rta tio n ________ ________
C o m m u n ication s an d public u t i li t i e s --------- 1------W h o le sa le and r e t a i l t r a d e -------------------------------W h o le sa le t r a d e -------------------- ---- ---------R e ta il tra d e ------ — --------------------------- ---F in a n c e , in s u r a n c e , and r e a l e s t a t e ---------- --—

75
316
44 9
257
673
849
627
147
480
853
719

1

9,
1,
1,
1,

P la n s

W o rk e r s 1

P la n s

15, 621

10, 6 3 4

9, 307

5, 184

26

69
162
12 4

298

W o rk e rs 1

1,
9,
1,
1,

327
072
678
286
270
920

479
440
733
308

6 , 601

20

6,

303
48 3
1, 138
87 0
268
1, 4 1 9
33 5

6

94

154
325
2, 656
370
366
48 9
277

852
54 4
37 6
458
26 8

W o rk e rs 1

6,

3 13

5
233
77 4
2 , 826
742
895
46 1
211

190

212

250

532
133

434
384

201

176

A c tiv e w o r k e r s in 1 9 6 1 .

NOTE:

B e cau se of round in g, su m s o f in d ivid u a l ite m s m a y not eq ual to ta ls .

T able 14.

Type o f V e stin g in P r iv a t e P e n sio n P lan s by In d u stry G roup, W in te r 1 962— 1
63
(W o rk e rs in thousands)
Type o f v e s tin g
A ll plans
D e fe rre d fu ll 2

In d u stry

D e fe rre d g ra d ed

N um ber

A ll p lans w ith v e s tin g ------------------------------- ---------A g ric u ltu r e , f o r e s t r y , and f i s h e r i e s ---------------M ining__-___________________ _______ _____ __ _
C o n tra c t c o n s tru c tio n ----------------------------------------M an u fa ctu rin g ----------------------------------------------------T ra n sp o rta tio n ---------------------------------------------------C o m m u n ication s and public u t i li t i e s ____________
W h o le sa le and r e t a i l t r a d e -------------------------------W h o le sa le t r a d e -------------------------------------------R e ta il t r a d e ---------------------------------------------------F in a n c e , in s u ra n c e , and r e a l e s t a t e ---------------S e r v i c e s -------------------------------------------------------------

1
2

W o rk ers

P la n s

W o rk e r s

10, 6 3 4

9, 307

7, 2 1 2

7, 33 8

66

12

162

94

82

124

298

111

852
544
376
458
268
190
532
133

4, 6 1 2
136
272
832
646
186
767
33 4

81
228
5, 683

20

69
6 , 601

303
483
1 , 138
870
268
1, 4 1 9
335

6,

210

315
35 6
199
15.7
351
103

B a se d on a stu d y o f 15, 8 1 8 p r iv a te p e n sio n p lan s c o v e rin g 15 . 6 m illio n a c tiv e w o rk e rs in 1 9 6 1 .
Inclu des a fe w p lan s w ith im m e d ia te fu ll v e s tin g .

NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




P lan s

W o rk e rs

3, 422-

1, 969

3
80
13
1, 989
167

14
70
1, 170
334

8

211

60

306
224
82
652

103
70
33
181
30

1

58
T ab le 15.

T ype of V e stin g in P r iv a t e P e n sio n P la n s by T ype o f E m p lo y e r U n it, M ethod of F in an cin g ,
and C o lle c tiv e B a rg ain in g S ta tu s , W in te r 19 6 2 — 1
63
(W o rk e rs in thou sand s)
T ype o f v e s tin g
A ll p lan s
D e fe rre d f u l l 1
2

Item

D e fe rre d g ra d ed

N um ber

W o rk e r s

P la n s

W o rk e r s

P la n s

W o rk e r s

A ll p lan s w ith v e s tin g -----------------------------------------------------------

1 0 ,6 3 4

9, 307

7, 2 1 2

7, 338

3 ,4 2 2

1 ,9 6 9

S in g le e m p lo y e r
N o n c o n trib u to ry --------------------------------------------------------------M entioned in a c o lle c tiv e b a rg ain in g
a g r e e m e n t ---------------------------------------------------------------Not m en tio n ed in a c o lle c tiv e b a rg ain in g
a g r e e m e n t ---------------------------------------------------------------C o n trib u to ry --------------------------------------------------------------------M entioned in a c o lle c tiv e b a rg ain in g
a g r e e m e n t ---------------------------------------------------------- —
Not m en tio n ed in a c o lle c tiv e b a rg ain in g
a g r e e m e n t -----------------------------------------------------------

1 0 ,3 4 0
7, 100

8

, 393
5, 398

6 ,9 4 1
4 , 767

6 , 815
4 ,4 2 7

3, 399
2, 333

1, 578
971

634

578

1 ,6 9 9
1 ,0 6 6

393
607

1 18

231

266

M u ltie m p lo y e r---------------------------------------------------------------- _
N o n c o n trib u to ry -------------------------------------------------------- —
M entioned in a c o lle c tiv e b a rg ain in g
a g r e e m e n t ----------------------------------------------- -------------Not m en tio n ed in a c o lle c tiv e b a rg ain in g
a g re e m e n t ---------------------------------------------------------------C o n trib u to ry -----------------------------------------------------------M entioned in a c o lle c tiv e b a rg ain in g
a g r e e m e n t ------ -------- -------------------------------- —
Not m en tio n ed in a c o lle c tiv e b a rg ain in g
ag eem en t

1
2

2 ,7 2 8

3, 741

2, 094

3, 163

4 , 372
3 ,2 4 0

1 ,6 5 7
2 ,9 9 5

2 ,6 7 3
2, 174

1 ,2 6 4
2, 388

89 2

1 ,3 8 4

66 1

2 ,3 4 8

1 ,6 1 1

1, 513

1 ,2 7 0

83 5

341

294
260

914
818

271
244

523
483

23
16

391
335

253

802

237

467

16

335

7
34

16
96

7
27

16
41

7

56

1,

15

54

11

17

4

38

19

42

16

24

3

18

B a sed on a stu d y of 1 5 ,8 1 8 p r iv a te p e n sio n p lan s c o v e rin g 1 5 .6 m illio n a c tiv e w o r k e r s in 1 9 6 1 .
Inclu des a few p lan s w ith im m e d ia te fu ll v e s tin g .

NOTE:

B e c a u se o f round in g, sum s of in d iv id u a l ite m s m a y not eq u al t o t a ls .

T ab le 16.

M inim um A ge and S e r v ic e R e q u ire m e n ts fo r D e fe rre d F u ll V e s tin g in P r iv a t e
P e n sio n P la n s , W in te r 1 9 6 2 — 1
63
(W o rk e rs in thou sand s)

M inim um s e r v ic e
re q u ire m e n ts 2

M inim um age re q u ire m e n ts 3

A ll p lan s
Num­
ber

No age
re q u ire m e n t
W o rk ­
W o rk ­
P la n s
e rs
ers

A ll plans- w ith d e ­
f e r r e d fu ll v e s t in g 4__

7, 2 1 2

7, 338

No s e r v ic e r e q u i r e ­
m ent --------- -------------1— y e a r s --------------------4
5 y e a r s ------------------------6 9 y e a r s --------------------—
1 y e a r s ---------------------0
1 1 — y e a r s -----------------14
15 y e a r s ---------------------16— y e a r s -----------------19
2 y e a r s ------------------ __
0
2 1 — y e a r s -----------------24
25 y e a r s ---------------------26— y e a r s -----------------29
30 y e a r s ---- ,------------------

44
916
302
1 ,7 8 8
239
2, 198
87
998
18
547
31
32

1
2

17
32
233
297
2 ,7 7 8
190
2 ,7 3 7
73
593
32
295
28
33

2, 189

1
2
6
182
250
687
58
622

8

283
18
31
32

2, 186
17

2
2
108
185
537
104
781
29
208
32
130
33

40 and u n der

45

P la n s

W o rk ­
P la n s
ers

1 ,9 6 5

3, 388

634

50

W o rk ­
P la n s
ers
632

-

-

-

-

501

-

65

148
51
79
25
213
50

34
24
257
19

1
1
2
571
2

871

7
"

8
8

1 ,8 7 2
15
1 ,2 8 8

1
1

49
-

1
1

56

-

1

"

“

10
9
17
50
15
25
"

711
-

1
6
6
-

14
42
414
23
125
26
“

55

W o rk ­
P la n s
e rs
595

1 ,4 9 7

-

-

4

37
19

2
2
-

-

55
24
268

136

1
2

155
57
-

1

374
4
472
424
30
"

60

W o rk ­
ers

P la n s

W o rk ­
ers

478

216

59

_

_
-

_
-

6
4
52
5
192
4

11
2
90
3
"

-

-

1
11
0
4
-

10
0
1
0
-

■

6
24
16
_

1
0
3
"

1 B a se d on a stu d y o f 1 5 ,8 1 8 p r iv a te p e n sio n p lan s c o v e rin g 1 5 .6 m illio n a c tiv e w o r k e r s in 1 9 6 1 .
2 F o r th o se p lan s w hich sp e c ifie d a p e rio d o f em p lo ym en t to be s e r v e d b e fo re p a rtic ip a tio n in the plan could beg in ,
the m in im u m s e r v ic e re q u ire m e n t in clu d es the p r e p a rtic ip a tio n s e r v ic e and the r e q u ire d p lan m e m b e rs h ip s e r v ic e .
3 Som e p lan s s p e c ifie d a lte r n a tiv e re q u ire m e n ts ; fo r ea ch c a s e , the one w ith the e a r li e s t age o r no age re q u ire m e n ts
w a s s e le c te d .
4 Inclu des a fe w p lan s w ith im m e d ia te fu ll v e stin g .

NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




59
T a b le 17.

M in im u m A g e a n d S e r v i c e R e q u i r e m e n t s f o r D e f e r r e d F u l l V e s t in g in P r i v a t e P e n s i o n P l a n s b y
C o n d it io n s f o r V e s t in g a n d T y p e o f W o r k e r C o v e r e d , W in te r 1 9 6 2 —63 1

(W o rk e rs in th o u san d s)
M inim um age re q u ire m e n ts 5
M inim um s e r v ic e
re q u ire m e n ts 2

A ll p]Urns

No age
re q u ire m e n t
W o rk ­
P lan s
ers

40 and u n der
P la n s W o rk ­
e rs

P la n s

W o rk ­
e rs

711

595

1, 497

47 8

216

59

622

695

564

1, 48 8

42 8

216

59

-

4

37
19
136

4
52
5
172
4

-

-

1
1 01

24

4
-

16

12 1

100

10

-

-

61

10

-

34
24
252
19
186
17
50
15
25
-

7. 2 1 2

7. 338

2, 189

2.

186

1. 965

3. 388

63 4

632

A n y s e p a ra tio n -------- 6 , 681
No s e r v ic e
12
re q u ir e m e n t ---43
1— y e a r s ----------4
906
5 y e a r s --------------302
6—9 y e a r s ----------10 y e a r s ------------- 1, 761
1 1 —14 y e a r s -------239
15 y e a r s ----- ---- 1, 753
72
16—19 y e a r s -------2 0 y e a r s ------------99 0
21— y e a r s _____
24
18
542
25 y e a r s ------- 31
26— y e a r s ----29
30 y e a r s ------------12

5, 977

2, 136

2,

082

1, 5 1 4

2, 223

632

17
25
223
297
2, 7 1 2
190
1, 570

12

17

5
172
25 0

16

501

65

148
51
78
25

In vo lu n tary
s e p a ra tio n ------------No s e r v ic e
re q u ir e m e n t ---1— y e a r s ----------4
5 y e a r s --------------6—9 y e a r s ----------10 y e a r s ------------1 1 —14 y e a r s -------15 y e a r s ------------16—19 y e a r s -------2 0 y e a r s ___ ___
21— y e a r s -------24
25 y e a r s ------------26— y e a r s -------29
30 y e a r s -------------

531

In vo lu n ta ry
s e p a ra tio n - ______
No s e r v ic e
r e q u ir e m e n t ---1— y e a r s ----------4
5 y e a r s --------------6—9 y e a r s -----------10 y e a r s ------------11—14 y e a r s -------15 y e a r s ________
16—19 y e a r s -------2 0 y e a r s ------------21— y e a r s -------24
25 y e a r s ------------2 6 —2 9 y e a r s _____
30 y e a r s ________

1
66

8

280
18
31
12

1, 361

53

10 4

45 1

1, 165

2

10

16

32

9

-

-

60

1

1, 08 5
-

-

“

“

5
5
“

15
“

7
25
"

5
4
-

182
182

157
157

430
430

165
165

70
71
17
"

5

23

2

4

-

347
-

86

60

-

56

40

-

-

20

12

11

~

"

-

-

-

6
10

1
10

6
10

-

1

846

88

812
15
203

212

11

50
11

-

29
_
-

12

150
2
2

_
.

1,

-

-

66

1

1

-

56
-

5
-

7
41
54
-

18
3
-

20

10

20

10

25
421
5
“

620
1 ,8 8 3

436
39 2

501
437

1 ,4 0 7
1, 094

1, 592
96 5

36
1 , 108

63
43

23
167
15
116

13
826
126
■

1, 166

8

2,

362

21

-

1

1

125
25
-

369
4
47 2
42 0
30
-

8

1

1

6

-

3
■

-

3
"

50

-

-

29
"

“

-

78
73

174
128

10 4
104

31
31

-

-

-

-

15
57
-

1

5

“

51
“

~

“

- .
21

2

6

-

23
65
-

20

11

20

737

44

64

3 13

627

-

-

-

-

5

46

-

-

25
288
-

60
567
-

-

-

-

-

-

-

-

-

4

16
29
-

-

-

6

256
8

-

-

-

10

10

10

-

-

-

30 1
-

61
618
-

1

8

-

1

1

-

35
-

1

8

-

29
-

-

-

20

10

20

14
118
50
~

10

4

55
24
268
5
155
32
-

3

20

47 1
23
78
128
-

26

20

56

14
42
414

6

P la n s

500
477
117
"

10

12

-

-

.
S e e f o o t n o t e s a t e n d o f t a b le .




22

66

-

P ro d u c tio n w o rk e rs
o n ly __-____________ -_ 2, 637
A n y s e p a ra tio n -------- 2, 27 5
No s e r v ic e
r e q u ir e m e n t ---1— y e a r s ----------4
563
5 y e a r s ------------6—9 y e a r s ----------541
10 y e a r s ------------1 1 —14 y e a r s -------8
15 y e a r s ------------901
52
16—19 y e a r s -------2 0 y e a r s ------------160
21— y e a r s _____
24
25 y e a r s ------------39
26— y e a r s _____
29
11
30 y e a r s -------------

P la n s

551
32
241
28
23

58
604

1
10

27
44 5
15

P lan s

98
185
536
10 4
72 5
29
187
32
130
23

686

60
W ork ­
ers

W o rk ­
ers

W ork ­
e rs

W o rk ­
e rs

A ll p lans w ith d e f e r r e d fu ll v e s t in g 4—

55

50

45

Num­
ber

1

1

-

1

6

-

15
-

100

10

3

60
T a b le 17.

M in im u m A g e a n d S e r v i c e R e q u i r e m e n t s f o r D e f e r r e d F u l l V e s t in g in P r i v a t e P e n s io n P l a n s b y
C o n d itio n s f o r V e s t in g a n d T y p e o f W o r k e r C o v e r e d , W in te r 1 9 6 2 —63 1— C o n t in u e d

(W o rk e rs in th o u san d s)
M inim um a g e r e q u ir e m e n ts 3
M inim um s e r v ic e
re q u ire m e n ts 2

a ii

Num­
ber

pians
W o rk ­
ers

S a la r ie d w o rk e rs
o n ly --------------------------- 2 , 339
A n y s e p a ra tio n -------- 2, 242
No s e r v ic e
1
r e q u ir e m e n t ---1
1— y e a r s ----------4
166
5 y e a r s __________
51
6—9 y e a r s ----------10 y e a r s ---------889
21
1 1 —14 y e a r s -------236
15 y e a r s ------------2
16—19 y e a r s -------2 0 y e a r s ------------419
21— y e a r s _____
24
45 6
25 y e a r s ------------26 —2 9 y e a r s -------30 y e a r s ------------"
In v o lu n ta ry
s e p a ra tio n ------------No s e r v ic e
r e q u ir e m e n t ---1— y e a r s ----------4
5 y e a r s --------------6—9 y e a r s ----------10 y e a r s ------------1 1—14 y e a r s -------15 y e a r s ------------16—19 y e a r s -------2 0 y e a r s --------- --21— y e a r s -------24
25 y e a r s ------------26— y e a r s -------29
30 y e a r s -------------

50

55

W o rk ­
P la n s
e rs

W o rk ­
P la n s
ers

P la n s W o rk ­
e rs

404
32 4

336

6

1

6

4
99

-

-

-

2
1

20
1

52
-

130
91
-

106
25
-

529
123
57
5
-

"

97

20

363
9
205
11

1

309
12
2

216

121

32
11

288
287

211
206

103

-

-

-

100

12

50
37

19
90
9
41
28
7
-

63
4
13
7
-

21

32
-

88

1

P la n s

W o rk ­
ers

105
98

814
814

45
45

11
11

5
5

4
15
-

-

3
-

-

-

20

29
31
-

10

55
345
404
-

10

1

1

27
5
-

-

3
-

-

-

-

37
-

“

'

“

"

'

138

1

6

80

120

1

5

15

7

“

“

”

-

-

-

-

-

-

5
-

-

7
-

-

-

-

-

603
599

238
23 4

1
1

8
8

-

-

-

1

8

-

-

21

10

1

6

1

6

96
-

132
-

-

-

80
-

"

"

"

'

3, 240
2, 8 13

968

1, 243
1, 2 13

140
91

1, 192

11
16

_
57

10

11
22

82
157
1, 124
136
807
32
303
25
82
28
3

961
11

5
106
248
114
32

1

50
152
238
79
47 6
23
90
25
49
3

202
6
206

13
17
-

120

1

-

-

/
15
-

26 4
259

155
154

296

48

23
5
92

-

5
-

“

_
75 9
15
27
29
“

1

25
“

42
5
"

2

-

"
164
163

12
20

10

'

'

82 9

1

27
4
62
-

10

74
-

1

22

19

8

-

2

5
40
52
8

271

37
19
124

6

“

253
4
126
5
30
“

4
24
5
93
4
89
5
3
_

12
20

136
5
73
20

1

62

427

7

30

49

363

1

5

1

25

4

4

~

“

-

5
364

5

17

44

342

-

5
-

-

J-

4

4

-

-

1

53
7
1

-

S e e fo o tn o te s a t en d o f ta b le .




45

W o rk ­
P la n s
e rs

28 5
279

987
849

60

40 and u n der

719
718

S a la r ie d and p r o ­
d u ctio n w o r k e r s -------- 2, 031
A n y s e p a ra tio n -------- 1, 969
No s e r v ic e
11
r e q u ir e m e n t ---42
1— y e a r s ----------4
175
5 y e a r s --------------6—9 y e a r s ----------249
10 y e a r s ------------327
90
11—14 y e a r s -------15 y e a r s ------------589
18
16—19 y e a r s -------2 0 y e a r s ------------377
13
2 1 — y e a r s -------24
46
25 y e a r s ------------31
26— y e a r s -------29
30 y e a r s ------------1
In vo lu n ta ry
s e p a ra tio n ------------No s e r v ic e
r e q u ir e m e n t ___
1— y e a r s -----------4
5 y e a r s --------------6—9 y e a r s ________
10 y e a r s ------------1 1 —14 y e a r s -------15 y e a r s ------------16—19 y e a r s -------2 0 y e a r s ------------21— y e a r s -------24
25 y e a r s ------------26— y e a r s -------29
30 y e a r s -------------

No age
re q u ire m e n t
W o rk ­
P la n s
e rs

-

-

33
25
-

2

-

-

13
-

-

5
-

1

-

-

-

-

-

-

-

-

-

-

20

-

-

-

25
-

-

-

-

-

-

1

-

'

61

T a b le 17.

M in im u m A g e a n d S e r v i c e R e q u i r e m e n t s f o r D e f e r r e d F u l l V e s t in g in P r i v a t e P e n s i o n P l a n s b y
C o n d itio n s f o r V e s t in g a n d T y p e o f W o r k e r C o v e r e d , W in te r 1 9 6 2 —63 1— C o n t in u e d

(W o rk e rs in th o u san d s)
M inim um age re q u ire m e n ts 3
M inim um s e r v ic e
re q u ire m e n ts 2

A ll p lans
Num­ W o rk ­
ber
e rs

W o rk e r s ea rn in g in
e x c e s s of a
s p e c ifie d a m o u n t------A n y s e p a ra tio n -------No s e r v ic e
r e q u ir e m e n t ---1— y e a r s -----------4
5 y e a r s --------------6—9 y e a r s -----------10 y e a r s ------------1 1 —14 y e a r s -------15 y e a r s ----- ---16—19 y e a r s -------2 0 y e a r s ------------21— y e a r s -----24
25 y e a r s ________
26— y e a r s -------29
30 y e a r s ------------In vo lu n tary
s e p a ra tio n ________
No s e r v ic e
r e q u ir e m e n t ---1— y e a r s ----------4
5 y e a r s --------------6—9 y e a r s -----------10 y e a r s -------- —
1 1 —14 y e a r s -------15 y e a r s ------------16—19 y e a r s -------2 0 y e a r s ------------21— y e a r s -------24
25 y e a r s ------------26— y e a r s -------29
30 y e a r s -------------

No age
re q u ire m e n t
W o rk ­
P lan s
ers

205
195

49 1
43 2

66

-

5

-

65

50

45
P la n s

W o rk ­
e rs

268
212

-

-

-

-

"

4

120
116

-

25

20

27
34
5

88

23
14
5-

65
7

W o rk ­
ers

14
5

120

1
1

P la n s

156
153
4
32
9
41
53
7

2
2

40 and un der

1

88

3
-

106
18
-

"

1

-

-

60

W o rk ­
ers

P lan s

W o rk ­
ers

23
23

29
29

2
2

21
21

-

-

1

1

-

-

1

-

17
-

20

11

-

-

'

-

2

P lan s

100
100

'

10

-

-

-

100

1

12

-

-

-

'

-

-

55

P la n s

W o rk ­
ers

16
16

16
-

1

6

1

6

-

-

-

"

"

-

-

"

"

"

10

59

1

3

9

56

-

-

-

-

-

-

-

-

-

59
-

-

3
-

9
-

56
-

-

-

-

-

“
-

-

-

-

10

-

1

-

‘
-

"

-

1 B a s e d on a stu d y of 15, 818 p r iv a te p e n sio n p lan s co v e r in g 15. 6 m illio n a c tiv e w o r k e r s in 1961.
2 F o r th o se p la n s w hich s p e c if ie d a p e rio d of em p loy m en t to be s e r v e d b e fo r e p a r tic ip a tio n in the p lan co u ld b egin ,
m in im u m s e r v ic e re q u ire m e n t in c lu d e s the p r e p a r t ic ip a tio n s e r v ic e and the r e q u ir e d p lan m e m b e r sh ip s e r v ic e .
3

S o m e p l a n s s p e c i f i e d a l t e r n a t i v e r e q u i r e m e n t s ; f o r e a c h c a s e , , th e o n e w ith th e e a r l i e s t a g e o r

se le c te d .

4 In clu d es a few p la n s w ith im m e d ia te fu ll v e stin g .
NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




no

age

the

r e q u ir e m e n ts w a s

62
T a b le 18.

M in im u m A g e a n d S e r v i c e R e q u i r e m e n t s f o r D e f e r r e d G r a d e d V e s t in g in P r i v a t e P e n s i o n P l a n s
b y P e r c e n t I n it ia ll y V e s t e d , W in te r 1 9 6 2 — 3 1
6
( W o r k e r s in t h o u s a n d s )
P e r c e n t in itia lly v e s te d

M in im u m a g e a n d
s e r v ic e r e q u ir e m e n ts 2

A ll p l a n s
U n d e r 10
W o rk ­
P la n s
ers

10 4

593

28 3

132

152

5

474

98

374

90

498

218

108

59

2

42
9
4
4
15
24

50
137
60
27

-

-

28
56

-

16
-

47
51
-

14
9
36
-

-

474

N o a g e r e q u i r e m e n t ---No se r v ic e
r e q u i r e m e n t — ---1— y e a r s ____________
4
5 y e a r s ______________
6 ~ 9 y e a r s ____________
10 y e a r s _____________
11—14 y e a r s -----------15 y e a r s ----------------16—19 y e a r s _________
2 0 y e a r s _____________
2 1 — 4 y e a r s -----------2
O t h e r ---------- ---------

2, 871

1, 117

12

68

74
153
871
933
143
50 3
57

47
154
173
38 2
94
99
31
36

3

8

111

24

18
30
300
13
Ill

A g e 4 0 a n d u n d e r ------1— y e a r s ____________
4
5 y e a r s ______________
10 y e a r s ----------------11—14 y e a r s ------------

187

406
5
13
3 79
9

A g e 4 5 ___________________
10 y e a r s _____________
11—14 y e a r s _________
2 0 y e a r s _____________

214
1 94

A g e 5 0 ----------------------1— y e a r s ____________
4
10 y e a r s _____________
11—14 y e a r s _________
15 y e a r s ----------------2 0 y e a r s ----------------25 y e a r s -----------------

100
10
6
1
10
1

22

A g e 5 5 ___________________
5 y e a r s - ______________
15 y e a r s ----------------O th e r ---------------------

50

257
3
250
4

1

24

1

19

72

8

38
4

62
46
7
9

_

_

-

-

10

6

-

-

13
-

105
251
71
60
5
-

-

-

-

-

-

-

21
1

8

76
37
39
-

33
-

20

81
81
-

100

20

11

34
21

5
3

26

8

24
-

20

-

-

_

_

_

_

_

-

-

-

-

-

-

_
-

"

-

-

-

-

-

"

11
10

6
6

11

28
_
7

_

_

-

-

53
(3 )
28

-

-

"

~

(3 )
-

_

_

_

-

-

-

-

-

-

-

18

26

67

10

_

6

127

40 an d
u n d e r 50
W o rk ­
P la n s
ers

406

1, 9 6 9

41

30 an d
u n d e r 40
W o rk ­
P la n s
ers

98

3, 4 2 2

121

u n d e r 30
W o rk ­
P la n s
ers

P la n s

W o rk ­
ers

11

20 and

W o rk ­
ers

N um ­
ber

A ll p l a n s w ith d e fe r r e d grad e d
v e s t i n g _______________ -

10 a n d
u nder 20

1

-

1
10

22

-

-

-

8
8

3
3

-

-

-

-

4
4
- V
-

_

W o rk ­
ers

71

1 , 812

1 , 262

5

71

1, 4 1 2

581

-

-

10

1

66

4
_
-

4
"

135
738
52
403
57

26
80
56
22 9
44

_
-

_
-

-

_

_

-

-

-

-

-

-

_
11

-

8

6

3

_
_
-

_

86

31
21
8

-

-

70
4
62
4

284
4
273

214
19 4

62
46
7
9

1

19

11

50 a n d o v e r
P la n s

74
_

_
-

67
1

6

6

81
_
53
10

18

-

-

-

_

_

_

-

-

_

_

_

_

-

-

-

-

38
4

250
4

_

42

254

1 B a s e d on a s t u d y o f 15, 8 1 8 p r i v a t e p e n s io n p l a n s c o v e r i n g 1 5 .6 m i l l i o n a c t i v e w o r k e r s in 1 9 6 1 .
2 S o m e p l a n s s p e c i f i e d a l t e r n a t i v e r e q u i r e m e n t s ; f o r e a c h c a s e , th e o n e w ith th e e a r l i e s t a g e o r no a g e r e q u i r e m e n t s
w a s s e l e c t e d . F o r t h o s e p l a n s w h ic h s p e c i f i e d a p e r i o d o f e m p lo y m e n t to b e s e r v e d b e f o r e p a r t i c i p a t i o n in th e p la n c o u ld
b e g in , th e m in im u m s e r v i c e r e q u i r e m e n t in c lu d e s th e p r e p a r t i c i p a t i o n s e r v i c e a n d th e r e q u i r e d p la n m e m b e r s h i p s e r v i c e .
3 F e w e r th a n 5 0 0 w o r k e r s .

NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




63
T a b le 19.

M in im u m A g e a n d S e r v i c e R e q u i r e m e n t s f o r F u l l V e s t in g in P r i v a t e P e n s io n P l a n s W h ich H a v e
D e f e r r e d G r a d e d V e s t i n g , W in te r 1 9 6 2 — 3 1
6
( W o r k e r s in th o u s a n d s )
M in im u m a g e r e q u i r e m e n t s 3
A ll p la n s

M in im u m s e r v i c e
re q u ir e m e n ts 2

No age
re q u ir e m e n t
W o rk ­
P la n s
ers

N um ­
ber

W o rk ­
ers

—

3 ,4 2 2

1 ,9 6 9

2 , 589

1— y e a r s --------------------4
5 y e a r s -----------------------6—9 y e a r s --------------------10 y e a r s ________________
11—14 y e a r s ----------------1 5 y e a r s ---------------------16—19 y e a r s _____________
2 0 y e a r s ---------------------21—24 y e a r s ----------------25 y e a r s ________________
2 6 —29 y e a r s ----------------30 y e a r s ---------------------O v e r 30 y e a r s -------------

5

21
8

_
44

A l l p l a n s w ith d e fe r r e d grad e d
v e s t i n g -----------------

2

131
168
1 ,0 8 8
201

766
50 5
179
33 5
31

11

131
135
773
131
39 7
133
129
33
67
14

40 a n d u n d e r

45

55

50

W o rk ­
ers

W o rk ­
P la n s
ers

W o rk ­
ers

1 ,0 4 8

72

211

140

194

37 6

61

50

145

195

311

_

_

_

_

_

_

5

_

5
117

-

5

-

2

21
8

_

82

_
60

-

-

-

10

20

22

7

-

32
62
-

P la n s

P la n s

121

121

665

203

192

112

4

6

4

685
425
91
33 5

22 3

39
20

10
10

3

90
33
50
14

-

80
3
-

10

120

19
-

9

-

16
~

11

P la n s

P la n s

4
5

20

60 an d o v e r

W o rk ­
ers

Wo rk ers

1

8

37
59

154
5

~

"

"

-

-

186

9

1

50

7
7

68

11

11
~

1

-

22
“

2
10

6

1.72
-

257
-

10

22

-

18
-

1

“

1 B a s e d on a s t u d y o f 1 5 ,8 1 8 p r i v a t e p e n s io n p l a n s c o v e r i n g 1 5 .6 m i l l i o n a c t i v e w o r k e r s in 1 9 6 1 .
2 F o r t h o s e p l a n s w h ic h s p e c i f i e d a p e r i o d o f e m p lo y m e n t to b e s e r v e d b e f o r e p a r t i c i p a t i o n in th e p la n c o u ld b e g in ,
th e m in im u m s e r v i c e r e q u i r e m e n t in c lu d e s th e p r e p a r t i c i p a t i o n s e r v i c e a n d th e r e q u i r e d p l a n m e m b e r s h i p s e r v i c e .
3 S o m e p l a n s s p e c i f i e d a l t e r n a t i v e r e q u i r e m e n t s ; f o r e a c h c a s e , th e o n e w ith th e e a r l i e s t a g e o r no a g e r e q u i r e m e n t s
w a s se le c te d .

N OTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

T a b le 2 0 .

E a r l y R e t ir e m e n t P r o v i s i o n s in P r i v a t e P e n s i o n P l a n s b y T y p e o f E m p l o y e r U n it, M e th o d o f F in a n c i n g ,
a n d C o l l e c t i v e B a r g a i n i n g S t a t u s , W in te r 1 9 6 2 —
63
( W o r k e r s in th o u s a n d s^

N um ber

W ith o u t e a r l y
r e tir e m e n t

W ith e a r l y
re tir e m e n t

A ll p la n s
I te m
W o rk e rs 1

P la n s

W o rk e rs 1

P la n s

W o rk ers 1

A l l p l a n s s t u d i e d ----------------------------------------------------------------

1 5 ,8 1 8

1 5 ,6 2 1

1 2 ,0 9 9

1 1 ,7 8 6

3 , 71 9

3, 8 3 5

S in g le e m p l o y e r -----------------------------------------------------------------N o n c o n t r ib u t o r y ______________________________ _______ ■______
M e n tio n e d in a c o l l e c t i v e b a r g a i n i n g
a g r e e m e n t _____________________________ ______________
N o t m e n tio n e d in a c o l l e c t i v e b a r g a i n i n g
a g r e e m e n t ______________________________________________
C o n t r ib u t o r y ------------------------------------------------------------------M e n tio n e d in a c o l l e c t i v e b a r g a i n i n g
a g r e e m e n t -------------------------------------------------------------N o t m e n tio n e d in a c o l l e c t i v e b a r g a i n i n g
a g r e e m e n t --------------------------------------------------------------

1 4 ,8 9 0
10, 65 7

1 1 ,7 4 2
8 ,4 5 4

1 1 ,7 3 5
8 ,4 3 6

1 0 ,6 5 7
7 , 541

3 , 155

1, 0 8 5
91 3

M u l t i e m p l o y e r -------------------------------------------------------------------N o n c o n t r ib u t o r y ------------------------------------------------------------M e n tio n e d in a c o l l e c t i v e b a r g a i n i n g
a g r e e m e n t ______________________________________________
N ot m e n tio n e d in a c o l l e c t i v e b a r g a in i n g
a g r e e m e n t -------------------------------------------------------------C o n t r ib u t o r y ------------------------------------------------------------------M e n tio n e d in a c o l l e c t i v e b a r g a i n i n g
a g r e e m e n t -------------------------------------------------------------N o t m e n tio n e d in a c o l l e c t i v e b a r g a i n i n g
a g r e e m e n t --------------------------------------------------------------

1

3 ,9 3 3

5, 6 6 8

3, 207

5, 169

72 6

499

6 ,7 2 4
4 , 23 3

2 ,7 8 7
3, 288

5, 229
3 ,2 9 9

2, 372
3, 116

1 ,4 9 5
934

415
172

1 ,0 3 4

1 ,4 9 5

980

1 ,4 6 5

54

31

3 , 199

1 ,7 9 3

2 , 31 9

1 ,6 5 1

880

141

928
869

3, 878
3, 212

364
327

1, 129
1 ,0 4 8

564
542

2, 750
2 , 164

810

3 , 176

32 0

1 ,0 3 2

490

2, 144

59
59

36

7
37

16
81

52

20

666

22

586

18

356

4

14

14

34 2

41

31 0

33

67

8

24 4

A c t i v e w o r k e r s in 1 9 6 1 .

NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




2,221

64
T a b le 2 1 .

E a r l y R e t i r e m e n t P r o v i s i o n s in P r i v a t e P e n s io n P l a n s b y I n d u s t r y G r o u p , W in te r 1 9 6 2 —
63

(W o rk e rs in th o u san d s)
With e a r ly r e tir e m e n t

A ll p la n s

Without e a r ly r e tir e m e n t

In d u stry
N u m b er

W o rk ers 1

P la n s

W o rk ers 1

P la n s

W o rk e rs 1

A ll p la n s s t u d ie d -----------------------------------------

15, 818

15, 621

12, 099

11, 786

3, 719

3, 835

A g r ic u lt u r e , f o r e s t r y , and f i s h e r i e s __________
M inin g__________________________________________
C o n tra c t c o n str u c tio n __________________________
M a n u fa c tu rin g ---------------------------------------------T r a n s p o r t a tio n --------------------------------------------C o m m u n icatio n s and p u b lic u t ilit ie s -------------W h o lesale and r e t a il t r a d e --------------------------W h o lesale t r a d e -------------------------------------R e t a il t r a d e --------------------------------------------F in a n c e , in su r a n c e , and r e a l e s t a t e __________
S e r v i c e s ________________________________________

75
316
449
257
673
849
627
147
480
853
719

26
327
072
678
286
270
920
479
440
733
308

75
312
156
409
496
600
271
075
196
439
341

26
119
343
7, 981
644
1, 184
690
337
352
660
140

4
293
1, 848
177
249
356
72
284
414
378

208
729
1, 697
642
87
230
142
88
73
168

9,
1,
1,
'
1,

1,
9,
1,
1,

7,
1,
1,
1,

1 A c tiv e w o r k e r s in 1961.
N O T E : B e c a u s e of rou n din g, su m s o f in d iv id u al it e m s m a y not e q u al t o ta ls .




65
T a b le 22.

M in im u m A g e a n d S e r v i c e R e q u i r e m e n t s f o r E a r l y R e t i r e m e n t in P r i v a t e P e n s i o n P l a n s , W in te r 1 9 6 2 — 3 1
6

(W o rk ers in th o u san d s)
M inim u m ag e r e q u ir e m e n ts 3
A ll p la n s
M inim u m s e r v ic e r e q u ir e m e n ts 1
2

No age
re q u ire m e n t
W ork­
P la n s
ers

N u m ber

W ork­
ers

A ll p la n s w ith e a r ly
r e t ir e m e n t -------------------------------

1 2 ,0 9 9

11, 786

289

No s e r v ic e re q u ir e m e n t________
1— y e a r s ------------------------------4
5 y e a r s _________________________
6— y e a r s ------------------------------9
10 y e a r s -------------------------------11— y e a r s ____________________
14
15 y e a r s ________________________
16— y e a r s ---------------------------19
20 y e a r s ________________________
Z 1— 4 ye a r s _________ ________
2
25 y e a r s ____________*________ __
26— y e a r s ---------------------------29
30 y e a r s -------------------------------O ver 30 y e a r s __________________

489
2, 492
936
313
2, 140
273
3, 270
40
1, 446
10
429
49
191
21

552
1, 536
547
93
2, 859
155
157
57
1, 135
24
355
10
1, 273
33

P la n s w ith v e s t in g ---------------------No s e r v ic e re q u ir e m e n t________
1— y e a r s ------------------------------4
5 y e a r s ---------------------------------6— y e a r s ------------------------------9
10 y e a r s ________________________
11— y e a r s ____________________
14
15 y e a r s ________________________
16— y e a r s --------------------------19
20 y e a r s -------------------------------21— y e a r s ____________________
24
25 y e a r s ________________________
26— y e a r s ____________________
29
30 y e a r s ________________________
O ver 30 y e a r s ------------------------

9, 196
416
2, 312
719
313
1, 507
266
2, 464
16
917
7
93
49
116
1

P la n s w ithout v e s t i n g _____________
No s e r v ic e r e q u ir e m e n t_______
1— y e a r s _______________________
4
5 y e a r s _________________________
6— y e a r s _______________________
9
10 y e a r s ________________________
11— y e a r s ____________________
14
15 y e a r s -------------------------------16— y e a r s ____________________
19
20 y e a r s ________________________
21— y e a r s ____________________
24
25 y e a r s -------------------------------26— y e a r s --------------------------29
30 y e a r s ________________________
O ver 30 y e a r s __________________

2, 903
73
180
217
_
633
7
806
24
529
3
336
-

75
20

50

55

60

O ther

P la n s

W ork­
ers

P la n s

W ork­
ers

P la n s

W ork­
ers

P la n s

W o rk ­
ers

1, 120

115

345

7, 761

5, 567

3, 647

4, 522

287

233

12
157
11
1
1
_
4
3
19
61
20

43
52
23
7
_
4
_
16
_
45
7
907
16

15
17
1
51
16
8
5
2
-

14
58
5
57
66
_
61
_
20
63
-

379
1, 931
811
313
937
150
2, 108
29
867
7
150
30
48
1

378
1, 067
455
93
1, 019
106
1, 469
30
738
18
133
3
40
17

33
387
112
1, 045
121
1, 020
11
564
3
271
80
-

91
359,
55
1, 673
30
1, 556
26
305
5
158
263
-

50
_
1
106
2
125
3
_
-

25
10
103
18
62
15
-

8, 362
472
1, 441
474
93
2, 468
125
2, 119
46
733
18
163
10
181
17

201
11
127
11
_
1
_
1
_
3
1
19
27
-

208
30
48
23
_
7
_
4
_
11
34
7
44
-

80
15
17
1
26
_
13
2
5
1
-

238
14
58
5
_
40
_
51
25
20
25
-

6, 063
363
1, 783
705
313
648
144
1, 409
5
589
7
23
30
43
1

4, 212
356
1, 001
432
93
838
87
738
19
517
18
65
3
27
17

2, 731
27
385
1
_
828
121
926
11
323
64
45
-

3, 555
71
334
5
1, 507
30
1, 271
26
180
44
86
-

121
1
4
1
115
-

148
10
75
8
55
“

3, 424
80
95
73
_
392
29
1, 038

88
1
30
_
_
_

912
13
4
_
5
_

35
-

106
_

1, 698
16
148
106

1, 355
22
66
23

916
6
2
111

967
20
25
50

166
50
102

85
25
-

1

11

10
3
-

15
-

11

401
5
192
1, 093
16

1

_
2

34
20

11

863
16

-

_
25
3
_
6
_
1

-

17
15
36
_
38

-

289
6
699
24
278
_
127
5

-

-

-

181
19
731

217
94
241
3
207
35

166
284
126
5
114
177

11

221
_
67
14

-

27
7

1 B a s e d on a stu d y of 15, 818 p r iv a te p e n sio n p la n s c o v e rin g 15.6 m illio n ac tiv e w o r k e r s in 1961.
2 F o r th o se p la n s w hich sp e c if ie d a p e r io d of em p loy m en t to be s e r v e d b e fo r e p a r tic ip a t io n in the p lan cou ld b egin , the
m in im u m s e r v ic e re q u ire m e n t in c lu d e s the p r e p a r t ic ip a tio n s e r v ic e and the r e q u ir e d p lan m e m b e r sh ip s e r v ic e .
3 S o m e p la n s sp e c if ie d a lte r n a tiv e r e q u ir e m e n t s ; fo r eac h c a s e , the one w ith the e a r l i e s t a g e or no ag e r e q u ir e m e n ts
w as se le c t e d . *
NOTE:

B e c a u s e o f r o u n d in g ,




s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

66
T a b le 23.

S p e c ia l E a r ly R e tire m e n t P r o v is io n s in P r iv a t e P e n sio n P la n s
by In d u stry G rou p, W inter 1962—
63
(W o rk e rs in th o u san d s)
With s p e c ia l e a r ly
r e t ir e m e n t

A ll p la n s
In d u stry
N u m b er

W o rk ers 1
2

P la n s

A ll p la n s s t u d ie d ------------------------------------------

15, 818

15, 621

1, 051

2, 674

A g r ic u ltu r e , f o r e s t r y , and f i s h e r i e s ------------M in in g__________________________________________
C o n tra c t c o n str u c tio n ----------------------------------M a n u fa c tu rin g ---------------------------------------------T r a n s p o r t a tio n --------------------------------------------C o m m u n icatio n s and p u b lic u t ilit ie s --------------W h o lesale and r e t a il t r a d e ---------------------------W h o lesale t r a d e -------------------------------------R e t a il t r a d e --------------------------------------------F in a n c e , in su r a n c e , and r e a l e s t a t e ------------S e r v i c e s -----------------------------------------------------

75
316
449
257
673
849
627
147
480
853
719

34
2
992
2
4
7

Without s p e c ia l
e a r ly r e t ir e m e n t

18
7
2, 551
38
11
24

9,
1,
1,
1,

1,
9,
1,
1,
.

26
327
072
678
286
270
920
479
440
733
308

W o rk e rs 1

-

7
5
5

P la n s

W o r k e r s1

14, 767

12, 947

75
282
447
265
671
845
620
147
473
848
714

26
310
065
128
248
260
895
479
416
716
300

8,
1,
1,

-

24
17
8

1,

1,
7,
1,
1,

1 A c tiv e w o r k e r s in 1961.
N O T E : B e c a u s e o f rou n din g, su m s of in d iv id u al it e m s m a y not e q u al t o t a ls .

T a b le 24.

M inim um A ge and S e r v ic e R e q u ir e m e n ts fo r S p e c ia l E a r ly R e tir e m e n t
in P r iv a t e P e n sio n P la n s , W inter 1962— 3 1
6
(W o rk e rs

M inim um a g e and
s e r v ic e re q u ir e m e n ts 2

A ll p la n s
N u m ber

W ork ers

1, 051

2, 674

No a g e r e q u ir e m e n t ---------No s e r v ic e r e q u ir e m e n t.
5 y e a r s -----------------------10 y e a r s ________________
25 y e a r s ----------------------

9
4
3
1
1

32
4
5
19
4

A ge 50----------------------------15 y e a i r s ---------------------20 y e a r s ----------------------

78
76
2

132
128
3

A ll p la n s w ith s p e c ia l e a r ly
r e t ir e m e n t _________________

M inim um a g e and
s e r v ic e r e q u ir e m e n t s 2

A ll p la n s
N u m b er

W o rk ers

A ge 55-------------------------------------No s e r v ic e r e q u ir e m e n t--------10 y e a r s — ------------------------15 y e a r s --- ---------------- ------20 y e a r s ------------------------------25 y e a r s -------------------------------

191
5
4
72
105
5

1, 211
7
169
80
938
17

A ge 60_____________________________
5 y e a r s ----------------------- ------10 y e a r s _______________________
15 y e a r s — ------------------------20 y e a r s _______________________
25 y e a r s ------------------------------30 y e a r s -------------------------------

773
1
577
28 '
153
5
9

1, 299
5
1, 074
39
72
80
29

1 B a s e d on a stu dy o f 15, 818 p r iv a te p e n sio n p la n s c o v e r in g 15. 6 m illio n a c tiv e w o r k e r s in 1961.
2 S o m e p la n s sp e c if ie d a lte r n a tiv e r e q u ir e m e n t s ; fo r e ac h c a s e , the one w ith the e a r l i e s t a g e o r no a g e r e q u ir e m e n ts
w as s e le c t e d .
F o r th o se p la n s w hich sp e c if ie d a p e rio d o f em p loy m en t to be s e r v e d b e fo r e p a r tic ip a tio n in the p lan cou ld
b egin , the m in im u m s e r v ic e r e q u ir e m e n t in c lu d e s the p r e p a r t ic ip a tio n s e r v ic e and the r e q u ir e d p lan m e m b e r sh ip s e r v ic e .
NOTE:

B e c a u s e o f r o u n d in g ,




s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

67
T a b le 25.

P r o v is io n s fo r V e stin g and E a r ly R e tire m e n t in P r iv a t e P e n sio n P la n s by Type of E m p lo y e r Unit,
T y pe o f V e stin g , and C on d itio n s fo r V e stin g , W inter 1962—
63
(W o rk e rs in th o u san d s)
T y pe o f e m p lo y e r unit

T ype o f v e stin g and
co n d itio n s fo r v e stin g

A ll p la n s

S in g le e m p lo y e r
A ll p la n s

Num ­
ber

W ork­
P la n s
ers 1

W ork­
ers 1

M u ltie m p lo y e r

With e a r ly
Without e a r ly
A ll p la n s
r e tir e m e n t
r e tir e m e n t
W ork­
W ork­
W ork­
P la n s
P la n s
P la n s
ers 1
ers 1
ers 1

With e a r ly
r e t ir e m e n t
W ork­
P la n s
ers 1

Without e a r ly
r e tir e m e n t
W ork­
P lan s
ers 1

A ll p lan s s t u d ie d _____

15,818 15,621 14,890 11,742

With v e s t i n g -------------

10,634

9,307 10,340

8,393

D e fe r r e d f u ll2------Any s e p a r a t i o n in v o lu n tary
s e p a r a t io n ------

7,212
6,681

7,338
5,977

6,941
6,423

6,8 1 5
5,482

531

1,361

518

D e fe r r e d g r a d e d ---Any s e p a r a t i o n in v o lu n tary
s e p a r a t io n ------

3,422
3,312

1,969
1,943

3,399
3,289

110

27

110

27

no

27

"

-

-

-

-

-

-

-

Without v e s t i n g _______

5,184

6 ,313

4,550

3,349

2,673

2,7 4 3

1,877

606

634

2 ,9 6 4

230

681

404

2,2 8 3

11,735 10,657

3,155

1,085

928

3 ,878

7 ,9 1 4

1,278

479

294

6,623
6,127

6,491
5,186

318
296

324
297

271
258

1,333

496

1,305

22

28

1,578
1,552

2,439
2,329

1,424
1,397

960
960

155
155

9,062

364

1,129

564

2,7 5 0

9 14

134

447

160

467

523
495

121
119

380
378

150
139

143
117

13

28

2

2

11

27

23
23

391
391

13
13

68
68

10
10

323
323

1 A c tive w o rk e rs in 1961.
2 In c lu d es a few p la n s w ith im m e d ia te fu ll v e stin g .
N O T E : B e c a u s e of rou n din g, su m s of in d iv id u al it e m s m a y not eq u al t o ta ls .

T a b le 26.

P r o v is io n s fo r V e stin g , E a r ly R e tire m e n t, and P o r ta b ility in P r iv a t e P e n sio n P la n s
by Type of W ork er C o v e re d , W inter 1962—
63
(W o rk ers in th o u san d s)
P r o v is io n s
A ll p la n s

T y pe of w o rk e r c o v e re d
N u m b er

W ork­
ers 3

No e a r ly
re tir e m e n t
or v e stin g
W ork­
P la n s
ers 3

E a r ly
r e tir e m e n t 1

V e stin g 1

P la n s

W ork­
ers 3

P la n s

W ork­
ers 3

E a r ly
r e tir e m e n t
and v e stin g 1
W ork­
P la n s
ers 3

P o r ta b ility 2
P lan s

W ork­
ers 3

A ll p la n s s t u d ie d -----------------------

15,818

15,621

1,877

606

2,903

3 ,4 2 4

1,438

946

9 ,1 9 6

8,362

404

2 ,2 8 3

S a la r ie d and p r o d u c tio n ------------P ro d u ctio n on ly------------------------S a la r ie d o n ly _____________________
E a rn in g in e x c e s s of a
sp e c ifie d a m o u n t---------------------

6 ,038
4,925
3,995

6,263
7,039
1,584

1,068
652
155

269
247
38

1,195
855
793

1,866
1,211
268

984
234
142

281
536
82

2,791
2,780
2 ,9 0 5

3,846
2,7 6 2
1,196

404

2,2 8 3

-

-

860

735

2

52

60

80

78

46

720

557

-

-

1 M ay in clu d e a few p la n s p ro v id in g p o rta b le p en sio n c r e d it s .
2 T h e se p la n s had n o rm a l r e tir e m e n t only.
3 A ctive w o r k e r s in 1961.
NOTE:

B e c a u s e o f ro u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




68
T a b le 27.

P r o v is io n s fo r V e stin g , E a r ly R e tir e m e n t, and P o r ta b ilit y in P r iv a t e P e n sio n P la n s
by In d u stry G ro u p , W inter 1962—
63
(W o rk e rs in th o u san d s)
P r o v is io n s
A ll p la n s

No e a r ly
r e tir e m e n t o r
v e stin g
W o rk ­
P la n s
ers 3

In d u stry
N um ­
ber
A ll p la n s s t u d ie d -----------------------A g r ic u lt u r e , f o r e s t r y ,
an d f i s h e r i e s ---------------------------M inin g--------------------------------------C o n tra c t c o n s t r u c t io n ----------------M an u fa ctu rin g ---------- ---------------T r a n s p o r t a t i o n -------------------------C o m m u n icatio n s and p u b lic
u t i l i t i e s __________________________
W h o lesale and r e t a il t r a d e ---------W h o lesale t r a d e --------------------R e t a il t r a d e --------------------------F in a n c e , in su r a n c e , and
r e a l e s t a t e ------------------------------S e r v i c e s ------------------------------------

W ork ­
ers 3

1 5 ,8 1 8

1 5 ,6 2 1

1 ,8 7 7

75
316
449
9, 257
673

26
327
1 ,0 7 2
9 ,6 7 8
1 ,2 8 6

-

849
1 ,6 2 7
1, 147
480
1 ,8 5 3
719

E a r ly
r e t ir e m e n t 1

V e stin g 1

E a r ly
r e tir e m e n t
an d v e s t in g 1
W ork­
P la n s
ers 3

P la n s

W o rk ­
ers 3

P la n s

W o rk ­
ers 3

606

2, 903

3 ,4 2 4

1 ,4 3 8

946

9, 196

-

5
27
185
1 ,5 2 3
342

-

50
939
105

6
152
83
1 ,6 3 9
194

-

7
373
64

2
51
831
1

2
140
394
242

1, 270
920
479
440

222
147
32
115

61
51
9
41

144
288
211
77

834
282
103
178

27
155
6
149

733
308

54
360

30
20

380
17

171
55

360
11

-

P o r ta b ilit y 2
P la n s

W ork­
ers 3

8, 362

4 04

2, 283

69
160
73
5 ,7 7 0
302

20
92
157
6 ,4 5 8
302

2
192
78
71

206
582
930
336

26
51
34
16

456
983
864
119

349
408
234
174

54
34
20

43
47

1 ,0 5 9
324

489
85

7

-

129
98
31

-

-

-

100

1 M ay in clu d e a few p la n s p ro v id in g p o r ta b le p e n sio n c r e d it s .
2 T h e se p lan s had n o rm a l re t ir e m e n t only.
3 A c tive w o r k e r s in 1961.
NO TE:

B e c a u s e o f rou n d in g, su m s o f in d iv id u al ite m s m a y not e q u al t o ta ls .

T a b le 28.

E a r l i e s t A ge and A s s o c ia t e d S e r v ic e at W hich the W o rk er Q u a lifie s fo r V e stin g , E a r ly R e tir e m e n t,
o r N o rm a l R e tire m e n t in P r iv a t e P e n sio n P la n s , W inter 1962—
63
(W o rk e rs in th o u san d s)
M inim u m a g e r e q u ir e m e n ts 2

M inim um s e r v i c e
r e q u ir e m e n ts 1

A ll p la n s
No a g e r e q u ir e m e n t

40 and u n der

45

N u m ber
A ll p la n s s t u d ie d -----------------------L e s s than 5 y e a r s ----------------------5—10 y e a r s --------------------------------11—15 y e a r s -------------------------------16— y e a r s -------------------------------20
O ver 20 y e a r s -----------------------------

W o rk e rs 3

P la n s

W o rk e rs 3

P la n s

W o rk e rs 3

P la n s

W o rk e rs 3

1 5 ,8 1 8

1 5 ,621

4 ,8 7 0

4 , 157

2, 037

3, 599

774

811

730
4 ,4 4 4
5 ,4 6 5
2 ,8 2 3
2, 356

4,
5,
3,
2,

328
114
357
239
583

61
912
1 ,2 0 8
583
1 ,3 9 3

149
1, 163
1 ,4 6 6
1, 170
922

_

1 ,3 7 7
588
52
20

2, 029
1 ,4 2 0
147
3

_

.

321
382
81
27

279
335
75
85

M inim u m a g e r e q u ir e m e n ts 2
50

60

55

65

P la n s

W o rk e rs 3

P la n s

W o rk e rs 3

P la n s

W o rk e rs 3

P la n s

W o rk e rs 3

A ll p lan s s t u d ie d ------------------------

1 ,2 2 6

796

3, 242

1 ,9 7 2

1 ,2 9 4

1 ,5 3 4

2, 375

2 ,7 5 0

L e s s than 5 y e a r s ----------------------5— y e a r s ------------ -----------------10
11— 1 5 y e a r s _________________ ____
16— y e a r s -------------------------------20
O v er 20 y e a r s -------- ------------------

1
165
644
159
257

4
103
307
221
162

206
572
1 ,0 8 1
797
586

115
289
980
414
174

8
334
343
350
259

44
232
341
562
355

366
554
1 ,0 0 8
220
227

105
228
720
1 ,2 3 0
468

1 F o r th o se p la n s w hich sp e c if ie d a p e r io d of em ploy m en t to be s e r v e d b e fo r e p a r tic ip a tio n in the p lan co u ld b egin ,
the m in im u m s e r v ic e re q u ire m e n t in c lu d e s the p r e p a r t ic ip a tio n s e r v ic e and the r e q u ir e d p lan m e m b e r sh ip s e r v ic e .
2 So m e p la n s s p e c if ie d a lte r n a tiv e r e q u ir e m e n ts; fo r eac h c a s e , the one w ith the e a r l i e s t a g e o r no a g e r e q u ir e m e n ts
w as s e le c t e d .
3 A c tiv e w o r k e r s in 1961.
N OTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




69
T a b le 2 9 .

E a r l i e s t A g e a n d A s s o c i a t e d S e r v i c e a t W h ich th e W o r k e r Q u a l i f i e s f o r V e s t in g , E a r l y R e t ir e m e n t , o r
N o r m a l R e t i r e m e n t in P r i v a t e P e n s i o n P l a n s b y I n d u s t r y G r o u p , W in te r 1 9 6 2 —
63
(W orkers in thousands)
Industry
A ll plans

Minimum age and service
requirem ents 1

A g ricu ltu re,
fo restry , and
fisheries

Contract
construction

Mining

Manufacturing

Number

W orkers 2

Plans

W orkers 2

Plans

W orkers 2

Plans

W orkers 2

Plans

W o rk e rs 2

A ll plans studied_____________

15, 818

15, 621

75

26

316

327

449

1, 072

9, 257

9, 678

No age requirem ent-------------L e ss than 5 y e a rs________
5—1 0 y e a r s ------------------------11—15 yea rs-----------------------16— y ea rs-----------------------20
Over 20 y e a rs_____________

4, 870
149
1, 163
1, 466
1, 170
922

4, 157
61
912
1, 208
583
1, 393

69
66
3

20
12
8

35
2
7
22
4

32
3
19
6
5

43
22
14
4
3

154
32
27
52
43

2, 528
8
125
1, 029
826
540

2, 305
33
•562
930
311
469

Age 40 and under-------------------L e ss than 5 y e a rs------------5— years — ------------------10
11—15 yea rs_______________
16— y ea rs-----------------------20
Over 20 y e a rs-------------------

2, 037
1, 377
588
52
20

3, 599
2, 029
1, 420
147
3

_
-

_
-

37
37
-

25
_
25
-

4
_
4
-

5
5
-

-

-

-

-

1, 755
1, 209
500
26
20

3, 393
1, 913
1, 365
111
3

Age 45 -----------------------------------L e ss than 5 y ea rs________
5— y e a r s ________________
10
11—15 y ea rs_______________
16—20 y e a rs_______________
Over 20 y e a rs_____________

774
_
279
335
75
85

811
_
321
382
81
27

_
-

_
-

30
30

26
26

9
1
8

35
7
29

602
_
235
283
81
3

Age 50_________________________
L e ss than 5 yea rs------------5— y e a r s ------------------------10
11—15 y ea rs-----------------------16—20 y ea rs___________ —
Over 20 years
______ _

1, 226
1
165
644
159
257

796
4
103
307
221
162

Age 55 ------- ------------- --------L ess than 5 y ea rs------------5—1 0 y e a r s ---------------------11—15 y e a rs-----------------------16— y e a rs-----------------------20
Over 20 yea rs______ _______

3, 242
206
572
1, 081
797
586

1, 972
115
289
980
414
174

Age 60--------------------- — --------L e ss than 5 y ea rs------------5—10 y e a r s ---------------------11—15 y e a rs--------------------16— y e a rs- — -------------20
Over 20 y ea rs--------------------

1, 294
8
334
343
350
259

1, 534
44
232
341
562
355

Ago A
R
L ess than 5 y ea rs________
5—10 years
11—15 yea rs-----------------------16—
20 yea rs__________
Over 20 yea rs--------------------

2, 375
366
554
1, 008
220
227

2, 750
105
228
720
1, 230
468

See footnotes at end of table.




_

-

-

-

-

-

-

-

-

-

-

-

-

-

526
_
198
243
75
10

_

_
_
-

60
60
-

59

-

39
20

4634
12

651
1
23
467
104
56

409
4
48
153
139
65

172
15
151
6
-

1, 910
67
372
435
516
520

1, 110
33
191
485
284
117

-

-

-

10
10
-

6
6
_
-

5
5
-

152
2
150
-

27
1
26
-

_

_

_
_
_
-

_
_
-

-

-

-

-

-

19
1
17
1
-

2
_
_
2
-

206
_
206
-

64
60
3
1
-

69
39
24
7
-

711
2
167
176
328
38

521
16
111
206
68
120

251

590

1, 176
152
477
422
111
14

1, 339
57
135
242
770
135

-

-

_

_

_

-

-

-

-

-

-

_

-

-

-

69
38
8
136

39
76
307
169

_

_

_

-

-

_

_

-

-

70
T a b le 2 9 .

E a r l i e s t A g e a n d A s s o c i a t e d S e r v i c e a t W h ich th e W o r k e r Q u a l i f i e s f o r V e s t in g , E a r l y R e t i r e m e n t , o r
N o r m a l R e t i r e m e n t in P r i v a t e P e n s i o n P l a n s b y I n d u s t r y G r o u p , W in te r 1 9 6 2 — 3 — C o n tin u e d
6
(W orkers in thousands)
Industry

Minimum age and service
requirem ents 1

Transportation

C ommuni c ati on s
W holesale and retail trade
and public
utilities
W holesale trade
Retail trade

Finance,
insurance,
and real estate

Services

Plans W orkers 2 Plans W orkers 2 Plans W orkers 2 Plans W orkers 2 Plans W orkers 2 Plans W orkers 2

A ll plans studied______________

673

1, 286

849

1, 270

1, 147

479

480

440

1, 853

733

719

308

No age req uirem ent— ---------L e ss than 5 y e a rs-------------5—10 y e a r s _________________
11—15 y e a rs________________
16— y e a rs________________
20
Over 20 y e a rs______________

243
10
55
7
16
155

230
7
34
78
79
32

335
101
33
148
14
39

876
18
50
69
44
696

610
364
30
157
59

157
100
5
19
33

208
30
100
1
67
10

92
4
4
21
26
36

524
217
153
45
109

237
91
34
41
71

275
_
245
11
19
-

54
_
36
12
6
-

Age 40 and under--------------------L e ss than 5 y e a rs-------------5—1 0 y e a r s _________________
11—15 y e a rs------------------------16—
20 y e a rs------------------------Over 20 y ea rs______________

28
4
20
4

17
5
12

23

16

7

26
7
2
16
-

158
137
21

8
_
8
_
_

-

87
_
73
_
14
-

15
_
15
_

-

16
2
7
6
-

-

-

Age 45 __________________________
L e ss than 5 y ea rs_________
5—10 y e a r s _________________
11—15 y e a rs________________
16— y e a rs ------------------------20
Over 20 y e a rs______________

11
11

37
37

183

68

10

12

-

-

-

-

-

-

-

-

Age 50---------------------------------------L e ss than 5 y e a rs-------------5—1 0 year s _________________
11—15 y e a rs------------------------16— y e a rs________________
20
Over 20 y e a rs---------------------

25

32

39

-

-

-

-

-

-

9
23
-

12
32
24
34

-

-

-

6
14
17
2

3
31

6
5

Age 55---------------------------------------L e ss than 5 y e a rs_________
5—1 0 y e a r s _________________
11—15 y e a rs________________
16— y e a rs ------------------------20
Over 20 y e a rs---------------------

67
10

100
7

-

-

57

93

_

-

-

-

215
1
8
108
85
13

110
6
15
35
37
17

220
68
101
6
15
30

88
38
12
28
6
3

Age 60 ---------------------------------------L e ss than 5 y e a rs_________
5—10 year s -------------------------11—15 y e a rs________________
16— y e a rs------------------------20
Over 20 y e a rs______________

124
4
52
10
3
55

406
3
13
64
190
135

18

115

127

-

-

-

11

Age 65---------------------------------------L ess than 5 y e a rs-------------5—1 0 year s _________________
11—15 y e a rs________________
16— y e a rs------------------------20
Over 20 y e a rs---------------------

175
1
1
102
6
65

467
25
5
250
55
131

1
24

18

-

-

-

-

1
15

-

8
15
-

13
6
-

-

-

-

-

2
4
1
-

4
2
2

25
10
14

1
-

7
7

-

_

_

_

_

_

-

-

-

-

-

-

-

-

15
29

12

-

56
52

10

-

-

-

-

_

-

-

-

-

"

75

24

-

-

103

no

44

19

84

163

60

100

8

-

-

-

-

_

_

76

34

-

-

_

_

-

-

48

_

-

12
-

-

3
3

58
46

221

20

-

-

-

-

221

20

-

-

-

1

_

_

-

_

7
11
1

30
29
25

116
-

-

-

_

47

13

100

8

89

142

146
26
33
27
24
37

73

-

-

12
108
22
-

525
54
64
273
111
23

39

3
23
63
-

21
12
6
-

10
28
35
-

49

22

25

-

-

-

13
3
3
108

20
13
9
7

15
2
2
3

8
6
6
5

213
1
10
144
8
50

101
8
23
16
18
35

13
1
5
5

42
16
8
11

-

_

2

6

63
5
2
38
15
3

116
10
36
26
37
7

135

72

87
8

34
6

-

-

74
5

12
16

267
200
2
4
61

113
6
9
76
22

-

_

_

3
109
14
9

4
19
23
27

1 Some plans specified alternative requirem ents; for each case, the one with the earliest age or no age requirem ents
was selected. For those plans which specified a period of employment to be served before participation in the plan could begin,
the minimum service requirem ent includes the preparticipation service and the required plan m em bership service.
2 Active w orkers in 1961.
NO TE:

B e c a u s e o f r o u n d in g ,




s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .

71
T a b le 3 0 .

E a r l i e s t A g e a n d A s s o c i a t e d S e r v i c e a t W h ich th e W o r k e r Q u a l i f i e s f o r V e s t in g , E a r l y R e t i r e m e n t ,
R e t i r e m e n t in P r i v a t e P e n s i o n P l a n s b y T y p e o f W o r k e r C o v e r e d , W in te r 1 9 6 2 —
63

or N o rm al

(W orkers in thousands)
Type of worker covered
Minimum age and service
requirem ents 1

A ll plans

Number

Salaried and
production

W orkers 2 Plans

Production only

W orkers 2

Plans

Salaried only

W orkers 2 Plans

Earning in
excess of a
specified amount

W orkers 2 Plans

W orkers 2

A ll plans studied_____________________

1 5,818

15,621

6, 038

6, 263

4, 925

7, 039

3, 995

1, 584

860

735

No age req uirem ent_________________
L ess than 5 y e a rs________________
5—10 year s ________________________
11—15 y ea rs_______________________
16— y e a rs_______________________
20
Over 20 y ea rs--------------------------------

4, 870
149
1, 163
1, 466
1, 170
922

4, 157
61
912
1, 208
583
- -,3 9 3

2, 343
147
510
895
437
354

2, 744
49
501
742
301
1, 151

727
118
277
282
50

713
218
205
144
145

1, 211
2
533
149
316
211

442
12
156
135
67
73

589
2
145
135
307

257
36
126
71
24

Age 40 and under-------------------------------L ess than 5 y e a rs------------------------5—10 y e a r s ------------------------------------11—15 y e a rs_______________________
16— y e a rs_______________________
20
Over 20 y ea rs_____________________

2, 037
1, 377
588
52
20

3, 599
_
2, 029
1, 420
147
3

171
57
78
36
-

1, 304
759
419
126
-

1, 437
1, 006
407
4
20

1, 667
_
904
754
6
3

415
310
93
12
-

361
173
174
14
-

14
4
10

268
194
74

-

-

Age 45--------------------------------------------------L ess than 5 y e a rs ------------------------5—10 y e a r s ________________________
11—15 y e a rs_______________________
16— y e a rs_______________________
20
Over 20 y e a rs_____________________

774
279
335
75
85

811
321
382
81
27

170
_
77
69
5
19

289
125
129
27
8

238
14
174
50
-

272
70
185
17
-

365
188
91
20
66

246
_
126
64
37
19

1
1

4
4
-

-

-

Age 50_________________________________
L ess than 5 y e a rs________________
5— 0 y e a r s ------------------------------------1
11—15 y e a rs-----------------------------------16— y e a rs_______________________
20
Over 20 y e a rs_____________________

1, 226
1
165
644
159
257

796
4
103
307
221
162

383
_
22
220
56
85

425
_
22
167
110
126

531
5
349
56
121

183
23
91
40
30

229
1
137
13
27
51

156
4
56
29
60
7

83
_
1
62
20
-

32
_
1
20
11
-

Age 55--------------------------------------------------L ess than 5 y e a rs________________
5—10 y e a r s ------------------------------------11—15 y e a rs_______________________
16— y e a rs-----------------------------------20
Over 20 y ea rs--------------------------------

3, 242
206
572
1, 081
797
586

1, 972
115
289
980
414
174

1, 369
44
323
563
276
163

843
32
170
318
258
64

503
30
27
260
168
18

839
26
67
521
126
99

1, 307
131
220
206
345
405

220
56
36
89
27
12

63
1
2
52
8
-

71
1
16
51
3

Age 60--------------------------------------------------L e ss than 5 y ea rs________________
5—1 0 y e a r s ------------------------------------11—15 y e a rs-----------------------------------16— y e a rs-----------------------------------20
Over 20 y e a rs--------------------------------

1, 294
8
334
343
350
259

1, 534
44
232
341
562
355

491
2
35
176
221
57

396
12
64
71
110
140

380
2
136
54
119
69

952
29
122
227
452
122

314
160
13
10
131

126
38
28
(3 )
60

109
4
3
100
2

61
3
8
16
34

Age 65--------------------------------------------------L ess than 5 y ea rs________________
5—1 0 y e a r s ________________________
11—15 y e a rs_______________________
16— y ea rs-----------------------------------20
Over 20 y e a rs-____________________

2, 375
366
554
1, 008
2 20
227

2, 750
105
228
720
1, 230
468

1, 111
209
260
551
80
11

262
25
45
103
58
31

1, 109
155
244
356
138
216

2, 413
73
164
608
1, 130
437

154
2
50
101
1

34
6
18
8
1

1
_
1

42
_
42

-

-

-

-

-

1 Some plans specified alternative requirem ents; for each case, the one with the earliest age or no age requirem ents
was selected. For those plans which specified a period of employment to be served before participation in the plan could begin,
the minim um service requirem ent includes the preparticipation service and the required plan m em bership service.
2 Active w orkers in 1961.
3 Fewer than 500 w orkers.
NOTE:

B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .




Appendix: Scope and Method of Survey
T h e c h ie f s o u r c e s o f in fo r m a t io n f o r t h is stu d y w e r e r e p o r t s an d su p p o r tin g d o c u ­
m e n ts f ile d w ith th e U .S . D e p a r tm e n t o f L a b o r p u r s u a n t to th e W e lfa r e a n d P e n s io n P l a n s
D i s c l o s u r e A ct ( P L 8 5 - 8 3 6 , a s a m e n d e d ). T h e a d m i n i s t r a t o r s o f an y e m p lo y e e w e l f a r e o r
p e n sio n b e n e fit p la n , a s d e fin e d b y th e a c t , c o v e r in g m o r e th an 25 w o r k e r s w e r e r e q u ir e d
to f il e w ith th e D e p a r tm e n t tw o c o p ie s o f a d e s c r i p t io n of the p la n ( D - l fo rm ) w ith in 90 d a y s
a f t e r th e e f f e c t iv e d a te o f th e a c t ( J a n u a r y 1, 1959) o r p la n (w h ic h e v e r o c c u r s l a t e r ) , an d
two c o p ie s o f th e a n n u al fin a n c ia l r e p o r t (D - 2 fo r m ) w ith in 120 d a y s (now 150 d a y s ) a f t e r
th e end o f e a c h c a l e n d a r , p o lic y , o r o th e r f i s c a l y e a r .
B y th e f a l l o f I9 6 0 , an n u al r e p o r t s
h a d b e e n f ile d f o r o v e r 2 5 ,0 0 0 p e n sio n p la n s .
T h e p r iv a t e p e n sio n p la n an d w o r k e r c o v e r a g e e s t i m a t e s in th is r e p o r t d i f f e r su b ­
s t a n t ia lly f r o m s i m i l a r d a ta f o r p la n s on f ile w ith the D e p a r t m e n t 's O ffic e o f L a b o r - M a n a g e ­
m e n t an d W e lf a r e - P e n s io n P la n R e p o r t s fo r th e s a m e p e r i o d . A b ou t 30 p e r c e n t f e w e r p la n s
and ab o u t 12 p e r c e n t fe w e r w o r k e r s a r e in c lu d e d in th is stu d y . T h e fu n d a m e n ta l r e a s o n fo r
t h is d if f e r e n c e i s th a t m a n y p la n s r e p o r t in g th a t th e y p r o v id e d r e t ir e m e n t b e n e f it s w e r e r e ­
je c t e d f r o m the stu d y b e c a u s e th ey d id not p r o v id e p e n sio n b e n e f it s a s d e fin e d in th is stu d y . 38
M o st r e je c t e d p la n s w e r e d e f e r r e d p r o f i t - s h a r in g p la n s ; s o m e w e r e s t o c k b o n u s an d s a v in g s
p la n s . 39
S i m i l a r l y , c o v e r a g e e s t i m a t e s in t h is r e p o r t d i f f e r f r o m e s t i m a t e s o f p e n sio n b e n e ­
fit c o v e r a g e b y th e D e p a r tm e n t o f H e a lth , E d u c a tio n , an d W e lfa r e (H E W ). T h e HEW e s t i ­
m a t e s in c lu d e d e f e r r e d p r o f i t - s h a r in g p la n s , th o s e o f n o n p ro fit o r g a n iz a t io n s an d p la n s w ith
fe w e r th an 26 w o r k e r s , a l l o f w h ich w e r e e x c lu d e d f r o m th is stu d y .
H o w e v e r, a s in th is
stu d y , th e y a l s o do not in c lu d e s t o c k b o n u s an d s a v in g s p la n s .
T y p e s o f D o c u m e n ts S tu d ie d . T h e D - l d e s c r i p t io n p la n f o r m
low in g in f o r m a t io n an d d o c u m e n ts b e su b m itte d :

r e q u i r e s th a t th e f o l ­

1.
N a m e an d a d d r e s s o f th e p la n .
2.
A c c o u n tin g p e r i o d o f the p la n .
3.
T y p e o f p la n (i. e . , w e l f a r e , p e n s io n , o r c o m b in a tio n ).
4.
G r o u p (s ) c o v e r e d by th e p la n (h o u rly r a t e , s a l a r i e d , o r a l l e m p lo y e e s ) .
5.
In d u str y in w h ich m o s t p a r t i c i p a n t s a r e e m p lo y e d (8 in d u s tr y d iv is io n s a r e l i s t e d ) .
6.
W h eth er th e p la n i s m e n tio n e d in a c o lle c t iv e b a r g a in in g a g r e e m e n t .
7.
P a r t i e s m a k in g c o n trib u tio n s (e m p lo y e r , p a r t i c i p a n t s , u n io n ).
8.
T h e n a m e an d a d d r e s s o f th e a d m in is t r a t o r (in m u ltie m p lo y e r p la n s , u s u a l l y a
b o a r d o f t r u s t e e s ) an d th e n a m e s an d a d d r e s s e s o f p e r s o n ( s ) c o n s titu tin g th e a d m in is ­
t r a t o r , t h e ir o f f i c i a l p o s it io n s w ith r e s p e c t to th e p la n , t h e ir r e la t io n s h ip to the e m ­
p lo y e r an d e m p lo y e e o r g a n iz a t io n , an d an y o th e r o f f i c e s , p o s i t io n s , o r e m p lo y m e n t h e ld
by th e m .
9.
A d e t a ile d d e s c r i p t io n o f th e a d m in is t r a t io n o f th e p la n , in c lu d in g th e n a m e s of
th e p a r t y o r p a r t i e s p e r f o r m in g th e fo llo w in g fu n c tio n s: M a in ta in in g r e c o r d s ; d e t e r m in ­
in g e l i g i b il i t y ; p r o c e s s i n g c l a i m s ; m a k in g d e t e r m in a t io n on a p p e a l s ; a u th o r iz in g p a y m e n ts ;
m a k in g p a y m e n ts ; a u th o r iz in g e x p e n s e s ; s e le c t in g th e in s u r a n c e c a r r i e r , c o r p o r a t e
t r u s t e e , o r s e r v i c e o r g a n iz a t io n ; an d d e te r m in in g in v e s t m e n t p o lic y .
10.
T h e n a m e an d a d d r e s s o f th e p a r t y o r o r g a n iz a t io n th ro u g h w h ich b e n e f it s a r e
p r o v id e d .
11.
N a m e s , t i t l e s , an d a d d r e s s e s o f an y t r u s t e e ( s ) not m e n tio n e d u n d e r i t e m s
8 o r 10.
12.
C o p ie s o f p la n d o c u m e n ts u n d e r w h ich th e p la n i s e s t a b li s h e d an d o p e r a t e d ,
sc h e d u le o f p la n b e n e f i t s , an d a st a t e m e n t o f the p r o c e d u r e s to b e fo llo w e d u n d e r the
p la n in p r e s e n t in g c l a i m s f o r b e n e f it s an d f o r a p p e a lin g th e d e n ia l o f c l a i m s .

38 For definition of a pension plan used in this study, see p. 2.
39 In addition, since sec. 4(b)(4) of the act exempted plans with 25 or fewer employees (amended to "participants" by the 1962
amendments), they were omitted from the study even though reports were voluntarily filed for many of them.




72

73

T h e D -2 f o r m , w h ich in t h is stu d y w a s u s e d o n ly to o b ta in th e n u m b e r o f m e m b e r s
(a c tiv e a n d r e t ir e d ) c o v e r e d b y e a c h p la n , a l s o s h o w s , a m o n g o th e r i t e m s , th e a s s e t s , l i a b i l ­
i t i e s , c o n t r ib u t io n s , b e n e fit s p a id , a n d s a l a r i e s an d c o m m i s s io n s p a id .
T h e s t a n d a r d d o c u m e n ts u s e d in th is stu d y a r e b r i e f l y d e s c r i b e d b e lo w . A lth ough
t h e s e d o c u m e n ts a r e u s u a l l y n e c e s s a r y to p r o v id e a c o m p le te d e s c r ip t io n o f the e s t a b l i s h ­
m e n t an d o p e r a t io n o f a p e n sio n p la n a s r e q u ir e d b y the a c t , o th e r d o c u m e n ts o r d e s c r i p ­
t iv e m a t e r i a l s m a y h a v e b e e n an d o fte n w e r e s u b s t it u t e d .
1. C o lle c t iv e b a r g a in in g a g r e e m e n t b e tw e e n th e u n io n (s) an d the e m p lo y e r (s ) (o r a s ­
s o c ia t io n o f e m p lo y e r s ) d e s c r i b in g , a m o n g o th e r t h in g s , th e e m p l o y e r s ' o b lig a tio n e ith e r
to m a k e s p e c if i e d c o n tr ib u tio n s to a t r u s t fund o r p r o v id e s p e c if i e d p e n sio n b e n e fit s
o r b o th .
2. P e n s io n p la n s ta tin g in fu ll the p e n sio n p la n a d o p te d by th e b o a r d of t r u s t e e s o r
n e g o tia te d by the e m p lo y e r s an d u n io n , o r u n i l a t e r a l ly e s t a b li s h e d by th e e m p lo y e r . Only
s i m p l if i e d b o o k le t s i s s u e d to p la n p a r t i c i p a n t s , r a t h e r th an th e fu ll te x t o f the p la n , w e r e
t y p ic a lly a v a i la b l e fo r i n s u r e d p la n s .
3. M a s t e r g ro u p an n u ity c o n t r a c t se ttin g fo rth th e fu ll te x t o f the i n s u r e d p e n sio n
p la n an d o b lig a tio n s o f th e p a r t i e s .
4. In d iv id u a l c e r t i f i c a t e s o f p a r t i c i p a t i o n i s s u e d to p a r t i c i p a n t s u n d e r so m e in ­
s u r e d p la n s .
5 . T h e D - l an d D -2 f o r m s and a t ta c h m e n t s w h ich g iv e an o v e r a l l d e s c r ip t io n of
th e p la n an d s u m m a r y f in a n c ia l in fo r m a t io n .
F o r c e r t a in k e y c h a r a c t e r i s t i c s , a s e x p la in e d b e lo w , th e a n a l y s i s w a s b a s e d on s u p ­
p o r tin g d o c u m e n ts f ile d b y th e a d m i n i s t r a t o r s , r a t h e r th an on th e f o r m i t s e l f , su p p le m e n te d
by o th e r s o u r c e s o f in fo r m a t io n a v a i la b l e to th e B u r e a u o f L a b o r S t a t i s t i c s .
P la n a d m i n i s t r a t o r s in d ic a t e d on the D - l f o r m (ite m 5) th e in d u s tr y d iv is io n in w h ich
m o s t o f th e p a r t i c i p a n t s w e r e e m p lo y e d . E ig h t b r o a d d iv is io n s w e r e l i s t e d : M a n u fa c tu rin g ;
m in in g ; c o n s tr u c tio n ; t r a n s p o r t a t io n ; c o m m u n ic a tio n s an d u t i l i t i e s ; w h o le s a le an d r e t a i l t r a d e ;
fin a n c e , in s u r a n c e , an d r e a l e s t a t e ; an d s e r v i c e s . T o p r o v id e a m o r e in f o r m a t iv e an d m e a n ­
in g fu l b re a k d o w n o f th e p la n s s tu d ie d an d to c o r r e c t e r r o r s in r e p o r t in g (p r o b a b ly m o s t ly
du e to th e l a c k o f in d u s tr y d e fin itio n s ) , e a c h p la n w a s c l a s s i f i e d in to the 2 - d ig it in d u s tr y
g r o u p s o f th e S ta n d a r d I n d u s t r ia l C la s s i f i c a t i o n . 40 G u id a n c e fo r th is c l a s s i f i c a t i o n w a s o b ­
ta in e d f r o m th e D - l f o r m , an d w a s c h e c k e d a g a i n s t su p p o r tin g p la n d o c u m e n ts.
F o r so m e
p la n s it w a s a l s o n e c e s s a r y to c h e c k o th e r s o u r c e s a v a i la b l e to th e B u r e a u of L a b o r S t a t i s t i c s .
T im e P e r i o d s . D ue to a l a g in filin g an d p r o c e s s i n g r e p o r t s , the stu d y in v o lv e d s e v ­
e r a l t im e p e r i o d s . T h e r e p o r t s stu d ie d w e r e s e l e c t e d f r o m a l i s t o f a l l I9 6 0 D -2 r e p o r t s
f ile d w ith th e U . S . D e p a r tm e n t o f L a b o r — the l a t e s t c o m p le te l i s t a v a i la b l e a t the t im e o f
th e stu d y .
T h e w o r k e r c o v e r a g e d a t a , h o w e v e r, w e r e o b ta in e d f r o m th e l a t e s t an n u al f i ­
n a n c ia l r e p o r t (D - 2 fo rm ) on f i l e .
T h is u s u a lly sh o w e d a v e r a g e w o r k e r c o v e r a g e d u rin g
c a le n d a r y e a r 1961 o r a f i s c a l y e a r en din g in 1 9 6 1 .
H o w e v e r, th e m a jo r c h a r a c t e r i s t i c s
an d p la n p r o v i s i o n s r e la t e to 1962—6 3 , s in c e th e p la n p r o v is io n a n a l y s i s w a s b a s e d on the D - l
p la n d e s c r i p t io n f o r m w h ich w a s up to d a te a t t im e o f the a n a l y s i s , th e w in te r o f 1962—6 3 .41
S a m p lin g M e th o d . T h e stu d y w a s b a s e d on a s t r a t i f i e d r a n d o m s a m p l e . T h e s a m ­
p le w a s s t r a t i f i e d by tw o k e y c h a r a c t e r i s t i c s r e p o r t e d by p la n a d m i n i s t r a t o r s and ta b u la te d
b y th e O ffic e o f L a b o r - M a n a g e m e n t an d W e lf a r e - P e n s io n R e p o r t s : ( l ) T h e in d u s tr y d iv is io n
in w h ich m o s t p a r t i c i p a n t s a r e e m p lo y e d , an d (2) the n u m b e r o f a c t iv e an d r e t i r e d w o r k e r s .
A ll p la n s w ith 5, 000 p a r t i c i p a n t s o r m o r e w e r e in c lu d e d in th e stu d y , r e g a r d l e s s o f in d u s tr y .
In m in in g , a l l w ith 3, 000 p a r t i c i p a n t s o r m o r e w e r e in c lu d e d . A ra n d o m s a m p le o f r e p o r t s ,
s t r a t i f i e d b y in d u s tr y an d w o r k e r c o v e r a g e , w a s s e l e c t e d fo r th o s e w ith fe w e r w o r k e r s .
T h e l a r g e p la n s s e l e c t e d w ith c e r t a in t y r e p r e s e n t e d l e s s th an 3 p e r c e n t o f th e p la n s
an d o v e r 60 p e r c e n t o f th e w o r k e r s c o v e r e d b y p e n sio n p la n s th a t f ile d r e p o r t s w ith the
L a b o r D e p a rtm e n t f o r I9 6 0 . *
4

40 Bureau of the Budget, Standard Industrial Classification Manual, 1957.
4* Sec. 6(b), as amended, requires the reporting of amendments within 60 days after they have been effectuated.




74
Data fo r each plan selected in the sam ple w ere w eighted in accordan ce with the prob ­
ability of selectin g its rep o rt.
F o r exam ple, where 1 repo rt out of 5 w as sam pled in an
in d u stry -siz e group, it w as con sidered a s represen tin g it s e lf and four other plans and w as
given a weight of 5. T h erefore, if the plan provided vestin g, it would be counted a s 5 plans
providing vesting in the total e stim a te s.
B ecau se of le g a l, ad m in istrativ e, and financial arran gem en ts and p re fe re n ce s of ad ­
m in istr a to r s, the scope of the su b m ission s v arie d w idely. F o r exam ple, a firm with se p a ­
rate plan s for production and sa la rie d w orkers and common fin an cial and adm in istrativ e tech ­
niques might file only a single report. On the other hand, se p a ra te rep o rts m ight be m ade
for the two plans becau se different ad m in istrativ e arran g em en ts w ere u sed . F o r this study,
combined re p o rts of the fir s t type w ere exam ined and analyzed, and sep arate coverage fig ­
u re s (rep orted or estim ated) w ere a ssig n ed to each plan. On the other hand, if, a s in the
second c a s e , se p a ra te re p o rts w ere m ade, both plans w ere analyzed only if both w ere s e ­
lected for the sam p le.
In addition, som e firm s or m ajo r division s offer supplem ental plans to all or c e r ­
tain groups of w ork ers covered by a b a sic plan. A gain, sep arate su b m issio n s fo r each plan
might be m ade, or they mignt be combined. If the b a sic plan fell in the scope of the sa m ­
ple (whether by certain ity or chance) the subordinate plan w as a lso analyzed even if it w as
d e scrib e d in another rep o rt. However, if the report selected in sam pling w as that of a sub­
ordinate plan, it w as dropped from the sam ple and con sidered out of scope u n less the a s ­
sociated b a sic plan w as a lso selected . By this method, the plans for which there w ere two
su b m issio n s w ere not given a better chance of being selecte d than those where the b a sic and
subordinate plan w ere included in one su b m ission (in which both c a s e s w ere analyzed).
F o r plan s in which a b a sic and subordinate plan w ere analyzed, it w as found that
certain benefits w ere included in one plan but not the other and, in som e in stan ces, re q u ire ­
m ents for benefits w ere differen t, e . g . , the b a sic plan had vesting while the subordinate
plan did not. F o r the tabulations in this study, the requ irem en ts of the plan which applied
to and yielded the highest benefit for a w orker a ssu m e d to earn $500 a month w ere used.
A group of 286 plans with 475, 000 w ork ers had to be adju sted in this m anner. In the r e ­
m aining c a s e s the requ irem en ts for benefits of the b a sic and subordinate plans w ere iden­
tica l so that no adjustm ent w as needed.




☆ U. S. GOVERNMENT PRINTING O F F IC E : 1964 O - 735-359

Recent BLS Publications on Employee Benefit Plans
B u lletin
num ber

Pensions

Price

1284

Pension Plans Under C o lle c tiv e B argain in g: N orm al R e tirem e n t, Early
and D isa b ility R e tirem e n t, F a ll 1959.

40 cents

1307

D ig est o f O ne-H undred S e le c te d Pension Plans Under C o lle c tiv e
B argain in g, Spring 1961.

50 cents

1326

M u ltiem p lo yer Pension Plans Under C o lle c tiv e B argain in g, Spring 1960.

65 cents

1334

Pension Plans Under C o lle c tiv e B argain in g: Benefits for Survivors,
W inter 1960—
61.

25 cents

1373

D ig est o f 50 S e le c te d Pension Plans for S a la rie d Em ployees, Spring 1963.

35 cents

1394

U nfunded Private Pension Plans.

30 cents

R e ce n t C h an ges in N e g o tia te d Pension Plans.
M ay 1962. (R eprint 2 3 9 2 .)

M onthly Labor R ev iew ,

P relim in ary R e le a se : P revalen ce of M u ltiem p lo yer Pension Plans Under
C o lle c tiv e B argain in g, Spring 1960. (February 1 9 6 1 .)

F ree

F ree

H ealth and Insurance
1250

H ealth and Insurance Plans Under C o lle c tiv e B argain in g: A ccid e n t and
Sick n ess B en efits, F a ll 1958.

25 cents

1274

H ealth and Insurance Plans Under C o lle c tiv e B argain in g: H ospital
Benefits, Early 1959.

30 cents

1280

H ealth and Insurance Plans Under C o lle c tiv e B argain in g:
and M e d ica l B enefits, L ate S u m m er 1959.

S u rg ica l

30 cents

1293

H ealth and Insurance Plans Under C o lle c tiv e B argain in g:
M e d ica l B enefits, F a ll 1960.

M ajor

20 cents

1296

H ealth and Insurance Plans Under C o lle c tiv e B argain in g: Life Insurance
and A c c id e n ta l D eath and D ism em b erm en t B enefits, Early Su m m er 1960.

25 cents

1330

D igest o f One Hundred S e le c te d H ealth and Insurance Plans Under
C o lle c tiv e B argain in g, W inter 1961—
62.

$ 1 .2 5

1377

D ig est o f 50 S e le c te d H ealth and Insurance Plans for S a la r ie d
E m ploy ees, Spring 1963.

$ 1 .0 0

R e ce n t C h an ges in N e g o tia te d H ealth and Insurance Plans, M onthly
Labor R e v iew , S ep tem b e r 1962. (R ep rin t 2 4 0 2 .)

F ree

Other
1325

D ig est of P rofit-Sh arin g, Sav in gs, and Stock Purchase Plans,
W inter 1961—
62. (20 S e le c te d P la n s .)

30 cents

1365

D ig est o f N ine Su p p le m e n tal U n em p loym en t B en efit Plans, Early 1963.

25 cents

Health,- Insurance, and Pension Plan C o v e ra g e in U nion C on tracts,
Late 1960. BLS R epo rt 228.

F ree