The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Bulletin No. 1199-2 O ctober 1956 Older Workers Under Collective Bargaining part n Health and Insurance Plans Pension Plans UNITED STATES DEPARTMENT OF LABOR James P. Mitchell, Secretary BUREAU O F LABOR STATISTICS Ewan Ciague, Commissioner Reports on the Department of Labor’ s Older Worker Program: Job Performance and Age: A Study in Measurement Older Workers under C ollective Bargaining: Part I. Hiring, Retention, Job Termination Older Workers under C ollective Bargaining: Part II. Health, Insurance, and Pension Plans Pension C osts in Relation to the Hiring of Older Workers Older Worker Adjustment to Labor Market P ractices: An Analysis of Experience in Seven Major Labor Markets Counseling and Placement Services for Older Workers How to Conduct an Earning-Opportunities Forum in Your Community Bulletin N o. 1199-2 O ctober 1956 Older Workers Under Collective Bargaining part I Health and Insurance Plans Pension Plans UNITED STATES DEPARTMENT O F James P. Mitchell, Secretary LABOR BUREAU OF LABOR STATISTICS E w a n C l a g u e , Commissioner For sale by the Superintendent of Documents, U. S. Government Printing Office, W ashington 25, D. C. Price 2 5 cents Preface As a part of the U. S. Department of Labor*s com prehensive program relating to employment problems of older workers, the Bureau of Labor Statistics has analyzed the status of older workers under collective bargaining agreements. The first report (Part I .— Hiring, Retention, and Job Termination) dealt with collective bargaining pro visions affecting the employment and job security of older workers. This report covers the ways in which selected aspects of collectively bargained health, insurance, and pension plans affect the status of older workers. The agreements and plans analyzed were selected from the Bureau*s current files which are maintained for public and governmental use in accordance with Section 211 of the Labor Management Relations Act of 1947. The incentive for these studies was provided by the Departments deep concern for the economic well-being of older workers. The purpose of these studies, however, was to investigate, not to influence, collective bargaining provisions relating to older workers. This study of health and insurance plans andpension plans was conducted in the Bureaus Division of Wages and Industrial Relations by Evan Keith Rowe and Donald M. Irwin, under the direction of Joseph W. Bloch. - iii - Contents Page Introduction ___________________________________________________________________________________________ 1 Part I . — Health and insurance p la n s ______________________________________________________________ S u m m a r y ___________________________________________________________________________________________ Scope of study _____________________________________________________________________________________ P revelance of benefits for active w orkers ___________________________________________________ L o ss or reduction of benefits to older active w o r k e r s ______________________________________ L o ss or reduction of benefits upon retirem ent ____________________________________________ _ Length of tim e retired w orkers receive b e n e fits ____________________________________________ Benefit le v e ls for retired w o rk e rs1 d ep en d en ts______________________________________________ Financing retired w o rk ers1 benefits __________________________________________________________ 3 3 4 5 7 7 10 10 13 Part I I .— Pension plans ____________________________________________________________________________ S u m m a ry ___________________________________________________________________________________________ Scope of study ____________________________________________________________________________________ Types of benefits _________________________________________________________________________________ Participation r e q u ir e m e n ts _____________________________________________________________________ Minimum qualifications for benefits ___________________ Joint survivor b e n e fits ___________________________________________________________________________ Vesting ____________________________________________________________________________________________ Com pulsory and automatic retirem ent _______________________________________________________ Service after norm al retirem ent a g e _____________________________ Recent m odifications ____________________________________________________________________________ 15 15 15 16 17 18 20 21 23 25 25 T ables: Health 1. 2. 3. 4. 5. and insurance plans— By industry division, worker coverage, and type of bargaining u n it ____________ Prevalence of benefits by groups covered __________________________________________ Maintenance of benefits for active w orkers ______________________ ^_________________ E ffect of age at hiring on availability or level of b e n e fits _________________________ Benefit le v e ls for w orkers retiring at age 65 com pared with those provided im m ediately prior to r e tir e m e n t_________________________________________ 6. Amount of life insurance provided men at ages 65 and 70 who retired at age 65 and earned $ 4 , 000 yearly prior to retirem ent ______________ 7. E ffect of length of service on amount of life insurance provided retired w orkers _____________________________________________________________________ 8. Length of tim e benefits available to retired w o r k e r s ______________________________ 9. Relationship of hospital, surgical, and m edical benefits of retired w orkers and their dependents _______________________________________________________ 10. Method of financing benefits for retired w orkers and their dependents ________ Pension plans— 11. By industry division, worker coverage, and type of bargaining u n it ___ T________ 12. Types of benefits provided by number of plans and w orkers _____________________ 13. M axim um ages before which w orkers must be hired to qualify for benefits _________________________________________________________________________________ 14. Minimum age and service requirem ents for n orm al, ea rly , and disability benefits ________________________________________________________________ 15. Vested and nonvested plans by type of vesting and method of financing ____________________________________________________________________________ 16. Providing deferred full vesting by requirem ents for v e s tin g _____________________ 17. With com pulsory and automatic retirem ent provisions by type of em ployer u n it _______________________________________________________________________ 18. With com pulsory retirem ent provisions by age specified and provision for automatic r e tir e m e n t_______________________________________________ _ 19. Distribution by specified norm al, com pulsory, and automatic retirem ent ages and by amount of service credited after norm al retirem ent age ________ 20 . Modifications in 61 selected plans, 1952 to late 1955 _____________________________ - v - 5 6 6 8 8 10 11 11 12 12 16 17 18 19 22 22 24 24 26 26 Older Workers Under Collective Bargaining Introduction During the past decade, probably no aspect of union-m anagem ent relations has been of m ore direct concern to the older worker than the development of health and insurance plans and pension plans. The number of w orkers covered by these employee w elfare plans under collective bargaining which are financed in whole or in part by the em ployer increased from le s s than 1 m illion under either type of plan in 1945 to m ore than 12 m illion under health and insurance plans and m ore than l l! z m illion under pension plans in late 1955. The development of private pension plans represen ts a voluntary movement by em ployers and unions to provide retirem ent annuities to supplement those available under the F ed eral o ld -age and survivors insurance p rogram and, hence, to provide greater economic security to w orkers upon retirem ent. The p rim ary purpose of health and insurance plans is to furnish protection to w orkers and their dependents against lo s s of income and expenses incurred as a result of o ff-th e -jo b in ju ries, illn e ss, or death. Financial protection against o n -th e -jo b disabilities is available to virtually all w orkers through workm en1s compensation legislation . Although the benefits provided by health and insurance p ro gra m s and the s e curity afforded by pension p rogram s are valued by w orkers of all a ges, they are of m ajor importance to older w o rk ers. Pension plans by their nature take on additional significance as w orkers grow older and approach retirem en t. Health and insurance p ro gra m s, although not related as directly to age as are pension plans, n everth eless, provide valuable and perhaps otherwise unobtainable financial insurance against the health hazards which frequently accompany advanced age. These p rogram s are particularly beneficial to older w ork ers, but certain plan ch ara cteristics may operate to their disadvantage. This study is directed to an exam ina tion of selected aspects of health and insurance plans and pension plans which are either esp ecially favorable or unfavorable to the older w orker. The meaning of the phrase "under collective bargaining" as used in this study requires a b rie f examination. Many em ployers and unions independently sponsored and financed insurance and pension plans for many years before they cam e under collective bargaining and a large number of w orkers are now covered by plans that are not c o l lectively bargained. Many of the program s now under collective bargaining were o r ig inally instituted by the em ployer and subsequently brought within the scope of the a g r e e ment with or without change. S im ilarly, union sponsored and financed p rogram s have been brought within the collective bargaining a rea, with the em ployer paying all or part of the co st. 1 In contrast with the long history of union efforts to obtain job s e curity for their m e m b e rs, as reflected in seniority and discharge p rovision s in union contracts, 2 bargaining on health, insurance, and pension plans is relatively new. Many p ro gra m s, particularly pensions, have been the subject of union-m anagem ent negotia tions only once or twice since their inception. M oreover, the technical p roblem s in herent in this development are new and form idable. It is important, th erefo re, to bear in mind the fact that a study of how em ployee welfare plans now treat the older worker may not reflect the lo n g -te rm objectives of either unions or m anagem ent. 1 F or the purpose of this study, plans under collective bargaining include: ( l ) Those established for the fir s t tim e as a result of collective bargaining; and (2) those originally established by either em ployer or union but since brought within the scope of the agreem ent, at le a st to the extent that the agreem ent establish es em ployer r e sponsibility to continue or provide certain benefits. 2 See Older W orkers Under Collective Bargaining, Part I . — Hiring, Retention, and Job Term ination, BLS B u ll. 1 1 9 9 -1 . (i) 3 Part I .— Health and Insurance Plans Summary Trade union interest in health and insurance p rogram s has been a m ajor force in the growth of voluntary insurance plans. Although unions have long been concerned with the health and security of their m em b ers and have provided some insurance through union-sponsored beneficial p ro gra m s, the past 10 y e ars have w itnessed a phenomenal growth of prepaid group p rogram s established through collective bargaining. It is e s ti mated that over 12 m illion w orkers are now covered by health and insurance plans under collective bargaining. 3 Health and insurance p rogram s are established on a group b a sis, applying to all w orkers in the bargaining unit and frequently to em ployees not under the agreem ent. These program s a ssu re all covered w orkers and, in many c a s e s , their dependents, at least partial protection against the financial hazards of illn e ss and death. The scope of coverage, coupled with the mandatory participation provisions in many of these p ro gra m s, has made this protection available to many w orkers who could not have otherwise ob tained such insurance because of physical or financial reasons or who would not have elected to do so. Although the im portance of these p rogram s to younger w orkers should not be undervalued, it is obvious that the plans have a special significance to older w ork ers, not only to those in active em ploym ent, but to those who have r e tir e d .4 Group coverage under collectively bargained plans m akes available to the older worker protection and benefits, the cost of which would be considerably g reater, and alm ost prohibitive in som e c a se s, if he had to purchase them on an individual b a s is . Older w orkers generally can expect to receive the same le v e l of benefits as younger w orkers under these plans. M o reover, eligibility requirem ents to participate in the program s are typically the sam e for all w orkers reg ard less of age or physical con ditions. M edical examinations are rarely a prerequisite to participation, a fact of special significance to newly hired older w ork ers, although the practice of prehiring physical examinations tends to weed out the poor insurance r is k s . In a newly estab lished health and insurance p rogram , older w orkers on the job are autom atically covered. Unlike the prevailing practice with regard to certain fringe benefits— e .g . , paid vacations— lo n g -s e r v ic e em ployees can ra rely expect to receive m ore lib e ra l health and insurance benefits on the strength of their longer se rv ic e . In som e plans, to be sure, the amount of life insurance may be graduated according to length of se rv ic e , but gen erally the m axim um amount is reached after a relatively short period— usually 10 y ears of service or le s s . H ow ever, life insurance and accident and sick n ess benefits are 3 F or a description of the growth and extent of health and insurance plans under collective bargaining, see Health, Insurance, and Pension Plans in Union Contracts, BLS B u ll. 1187. 4 A lbert J. A b ra m s, D irector, New York State Joint L egislative Com m ittee on P rob lem s of the Aging, cited the following reasons why these plans are important to older p erson s: n( l ) Chronic d ise a ses strike p articularly, though not so lely , at the older p erson s; (2) they generally attack when income is not at its peak, but has either tapered off or is at an alltim e low, that is , in old age; (3) the cost of m edical and hospital care is believed to be one of the m ajor factors in the im poverishm ent of older p erson s, in thrusting them on old -age assista n ce r o lls ; (4) prepayment or em p loyer-paid in su r ance plans may encourage o ld sters to have m edical examinations and thereby prevent m ore serious ailm ents fro m developing; and (5) such plans may speed up recovery by easing the ailing worker *s w o rries about his being a burden to his f a m ily .“ Source: New York State Joint L egislative Com m ittee on P rob lem s of the Aging, L egislative Document N o. 12, 1951 (p. 136). 4 commonly graduated according to earnings. This practice would tend to favor the older worker in those industries and occupations where peak skill and earnings le v e ls are reached in later y e a r s . On the other hand, if earnings d e c re a se , the graduated-earn ings approach would be a disadvantage to the older w orker. The growing m ovem ent to extend som e type of benefit protection to re tire e s rep resen ts a m ost desirable aspect of collectively bargained p ro gra m s, fro m the older w ork er1s viewpoint, and a practice that has no p arallel among other fringe benefits. Benefits for retired em ployees are being made available on an increasingly com prehen sive b a sis, often including a ll types of benefits available to active w orkers with the exception of those dependent upon an em p loyer-em ployee relationship, e . g . , com pen sation for wage lo s s due to sickn ess or accident. F u rth erm ore, the benefits available to retired w orkers are frequently the same as those provided active w orkers prior to retirem en t. Although the treatm ent of w orkers under health and insurance plans is gener ally not differentiated on the b asis of age, some plans have ch ara cteristics which are not favorable to active or retired older w ork ers. Em ployed older w orkers som etim es face age restriction s which prohibit them fro m receiving benefits, or find that benefits are discontinued at certain a g e s. Benefits may also be reduced during the course of their employm ent solely because of age. A s this study shows, such restriction s a f fecting employed older w orkers are not com m on. On the other hand, many plans cease to provide coverage to w orkers upon retirem ent, or reduce the level of benefits, or discontinue dependents1 coverage, or shift the burden of cost fro m the em ployer to the retired worker but perm it him to continue his group rate participation. Scope of Study To determ ine the extent and nature of these p ra ctic e s, the Bureau analyzed 300 selected health and insurance plans under collective bargaining. A ll the plans were in effect in late 1 9 5 5 .5 These program s included one or m ore of the following types of health and insurance benefits: Life insurance, accidental death and d ism e m berm ent benefits, accident and sickness benefits (excluding sick lea v e, State w o rk m en ^ compensation and tem porary disability paym ents), and cash or serv ice s covering h o s pital, su rgical, and m edical c a re . 6 A ll of these benefits may be insured with an under w riter or se lf-in su re d by the em ployer or fund to which he contributes. The 300 plans studied covered 4, 981, 000 w orkers or over 40 percent of all w orkers covered by health and insurance plans under collective bargaining (table l) . T w o-th ird s of the plans covering the same proportion of w orkers were in m anufac turing in d ustries. The plans varied in size from those applying to 1, 000 w orkers to those covering well over 100, 000. One-third of the plans, covering over tw o-fifth s of the w ork ers, were negotiated by m ultiem ployer groups. The plans included in the study were selected to provide a broadly representative picture of health and insurance bene fits under collective bargaining covering 1, 000 w orkers or m o re . In the selection of the plans, the factors given p rim ary consideration were industry, geographic location, union, type of bargaining unit, and s iz e . Life insurance benefits are of two m ajor types: A flat amount for all em p loyees, or an amount graduated according to earnings, serv ice, occupation, etc. Each type provides a cash payment in the event of death and frequently in the event of permanent and total d isability. Accidental death and dism em berm ent benefits also provide cash payments and are often linked to the amount of life insurance in effect for the indivi dual. This form of insurance m ay cover occupational a n d /or nonoccupational c a s e s . D ism em berm en t benefits vary with the extent of injury. 5 This study of p rovisions affecting older w orkers is part of a com prehensive analysis of all aspects of health and insurance plans. A forthcoming BLS bulletin will present the com plete resu lts, including additional data relating to older w o rk ers. 6 F or details of health and insurance plans, see Digest of 100 Selected Health and Insurance Plans Under C ollective Bargaining, 1954, BLS B u ll. 1180. 5 Accident and sickness coverage generally provides payments in the event of illn e ss to compensate for lo s s of wage income for a certain number of weeks per d is ability or per y ear. It applies to nonoccupational and, in an increasing number of plans, occupational c a s e s . This benefit is available only to active w orkers because it is dependent upon an em ploym ent relationship. Paid sic k -le a v e plans and com pen sation allowable for occupational or nonoccupational ca se s under p rovision s of State workmen*s compensation laws and tem porary disability legislation (effective in four States) are not analyzed in this study, since they are norm ally not considered part of health and insurance plans. TAB I.K 1 .— Distribution of health and insurance plans studied by industry division, worker coverage, and type of bargaining unit 1 Workers Plans Item (000*s) Total plans studied _______________ 300 4 ,9 8 1 218 82 3, 397 1, 584 148 57 32 25 22 5 11 393 389 374 451 749 329 2 ,2 96 200 100 2, 822 2, 159 Industry division M anufacturing--- ------ --------------Nonmanufacturing___________ _________ Worker coverage 1,000 - 4 ,9 9 9 ..................- ............ - — 5 ,0 0 0 - 9 ,9 9 9 __________ ______________ 10, 000 - 14,999 ..................... - ----------15,000 - 24 ,999 --------------------------------25, 000 - 4 9 ,9 9 9 _______________________ 50, 000 - 99, 999 __________ ____________ Over 100, 000 ______________________ Type of bargaining unit Single company Multiemployer __ ----------------- -------___________ _________ 1 A ll plans were in effect in late 1955. NOTE: Due to rounding, sums of individual item s do not neces sarily equal totals. Hospitalization, su rgical, and m edical benefits are provided by two m ajor types of plans— cash or se r v ic e . Cash plans provide stipulated amounts for hospital room and board and extra allowances or se rv ic e s and, in the event surgical and m edical benefits are provided, a schedule of payments for se rv ice s rendered. S ervice-type plans provide no cash payments to the individual, but pay for hospital, su rgical, and m edical care for specified periods of tim e and in certain locations. F or this study, attention was focused specifically on the following aspects of health and insurance plans: (l) The availability of benefits to active and retired w ork ers and to dependents of both groups; (?) the effect of hiring age on the a va il ability of benefits; (3) changes in the level of benefits during active employment on the b asis of age alone; and (4) the length of tim e benefits are provided to retired w orkers and their dependents. In addition, certain ch aracteristics of individual bene fits of interest to older w orkers were analyzed. P revalence of Benefits for A ctive W orkers A ll but a few of the plans studied provided hospital and surgical benefits and life insurance to active w orkers (table 2). Four out of 5 plans provided accident and sickness coverage and 2 out of 3 provided m edical benefits. About half of the plans included accidental death and dism em berm ent benefits. Hospital and surgical benefits were extended to dependents in the vast m ajority of plans; m edical benefits were le s s commonly extended to dependents. A few plans covered dependents with life insurance p o licie s. With the exceptions to be indicated la te r, all of these benefits were available to all em ployees re g a rd le ss of age. T A B L E 2 .— P r e v a le n c e o f b e n e fits u n d er h ea lth and in s u r a n c e plans b y g r o u p s c o v e r e d L ife in s u r a n c e G rou p c o v e r e d W orkers P la n s (0 0 0 * s ) A ll p la n s s tu d ie d W ith b e n e f i t s f o r : A c tiv e w o rk e r ........ _ _ D e p e n d e n ts o f a c t iv e w ork er _ ........ R e tir e d w o r k e r ___ D ep en d en ts o f r e t ir e d w ork er „ __ 1 2 .. W ork ers W orkers P la n s P la n s (0 0 0 * s ) (0 0 0 * 8 ) 300 4 ,9 8 1 300 4 ,9 8 1 284 4 , 352 1 154 2 ,2 5 0 2 239 3 ,6 9 5 293 4 ,9 0 8 294 7 146 215 3 ,1 0 8 5 58 _ 278 67 4 ,2 7 9 1 ,7 8 4 263 58 - - - - - 56 1 ,7 2 9 48 1 ,6 9 0 - 300 4 ,9 8 1 (0 0 0 * s) 300 4 ,9 8 1 4 ,9 1 7 193 3 ,6 8 3 4 ,1 9 0 1 ,7 4 5 145 35 2 ,7 7 4 31 1 ,3 4 6 1 ,4 9 1 o n ly . 3 , — M a in te n a n c e o f b e n e f i t s f o r a c t iv e w o r k e r s u n d e r h e a lth a n d in s u r a n c e p la n s W o rk e rs P la n s (0 0 0 * s ) A c c id e n t a l d e a th and d is m e m b e r m e n t b e n e fit s W o rk e rs P la n s (0 0 0 * s ) A c c id e n t a n d s ic k n e s s b e n e fit s W o rk e rs P la n s (0 0 0 * s ) H o s p ita l b e n e fit s S u r g ic a l b e n e fit s W o rk e rs P la n s M e d ic a l b e n e fits W o rk e rs P la n s (0 0 0 * s ) W ork ers P la n s ( 0 0 0 rs ) (0 0 0 *s) 284 4 ,3 5 2 154 2 ,2 5 0 2 23 7 3 ,6 7 5 29 3 4 ,9 0 8 294 4 ,9 1 7 193 3 ,6 8 3 153 2 ,2 4 3 18 2 3 ,2 5 7 287 4 ,6 6 5 290 4 , 711 184 3 ,5 2 0 _ 414 40 1 13 _ _ 6 1 2 _ 3 243 1 200 _ _ 42 3 1 2 _ _ 201 1 200 _ _ 9 8 1 _ _ 163 43 120 _ - 264 3 ,5 8 8 R e d u c e d a t s p e c if ie d age A g e 60 __ _ ........ . . A g e 65 ________________________________________ A g e 66 A g e 68 _ _ _ _ _ ____ A g e 70 . _ 19 17 1 1 761 752 2 7 - - D i s c o n t i n u e d a t s p e c i f i e d a g e . ... A g e 65 A g e 68 _ _. ____ A g e 70 _ ---- __ _________________________ 1 1 - 3 3 _ - - _ _ _ 54 53 1 _ _ - - - - 1 1 7 7 1 _ 1 5 _ _ 5 - - - _ _ _ _ _ - - - 1 _ 5 _ . _ _ _ _ _ _ 1 5 B a s e d o n a s tu d y o f 3 0 0 h e a lt h a n d i n s u r a n c e p la n s u n d e r c o l l e c t i v e b a r g a in in g c o v e r in g a p p r o x i m a t e ly 5 m i l l i o n w o r k e r s . E x c lu d e s p la n s p r o v id in g o n ly f o r o c c u p a t io n a l d is a b ilit y b e n e f it s . W orkers P la n s 4 ,9 8 1 P ro v is io n M a in t a i n e d a t c o n s t a n t l e v e l w it h o u t r e g a r d to a g e M e d ica l b e n e fits 300 L if e in s u ra n c e .................. S u r g ic a l b e n e fits H o s p it a l b e n e fits 4 ,9 8 1 O n e p la n d id n o t p r o v i d e f o r a c c id e n t a l d e a th b e n e fit,, T w o p la n s p r o v id e o c c u p a t io n a l a c c id e n t and s ic k n e s s b e n e fit s A l l p la n s p r o v i d i n g b e n e f i t s A c c id e n t and s ic k n e s s b e n e fits W orkers P la n s ( 0 0 0 *s) 300 TABLE 1 2 A c c id e n ta l d ea th and d is m e m b e r m en t b e n e fits W ork ers P la n s ( 0 0 0 *s) 7 L o s s o r R e d u ctio n o f B e n e fits to O ld e r A c t iv e W o r k e r s A n ou tsta n d in g c h a r a c t e r is t ic o f h e a lth and in s u r a n c e p la n s u n d e r c o l l e c t iv e b a rg a in in g , in s o fa r a s the o ld e r w o r k e r is c o n c e r n e d , is th e g e n e r a l a b s e n c e o f p r o v is io n s b a r r in g the p a r t ic ip a t io n o f o ld e r w o r k e r s , w h e th e r n e w ly h ir e d o r lo n g e m p lo y e d . O n ly 3 p la n s d is c o n tin u e d 1 o r m o r e b e n e fit s f o r th e e m p lo y e d w o r k e r at a c e r t a in a g e and e a c h a p p lie d th e ban to w o r k e r s at 65 y e a r s o r o ld e r (ta b le 3). A s lig h tly la r g e r n u m b e r o f p la n s ( l l ) w ith h e ld c o v e r a g e u n d e r 1 o r m o r e b e n e fit s f r o m w o r k e r s h ir e d a ft e r a s p e c if ie d a g e (ta b le 4 ). R e d u c tio n s in the le v e l o f b e n e fit s o r o th e r m o d ific a t io n s b a s e d on a g e a lo n e w ere m o re com m on . W h ere su ch lim it a tio n s o c c u r r e d , it w a s u s u a lly at a ge 60 o r 65 (ta b le 3). F o r e x a m p le , 17 p la n s r e d u c e d the a m ou n t o f li f e in s u r a n c e in e ff e c t f o r a c tiv e w o r k e r s at a g e 65. E ig h t p la n s r e d u c e d m e d ic a l b e n e fit s at a g e 60 b y s h ift ing the a llo w a n c e at that a g e f r o m a " p e r d is a b ilit y " b a s is to a " p e r y e a r " b a s is . F o r e x a m p le , a p lan p r o v id in g $ 2 f o r e a ch o f f ic e v is it and $ 3 f o r h o s p ita l v is it s stip u la te d a m a x im u m o f $ 150 f o r a ll v is it s d u rin g any one d is a b ilit y u ntil a g e 60, a ft e r w h ich the to ta l o f su ch p a y m e n ts w a s lim it e d to $ 150 in any c a le n d a r y e a r . R e d u ctio n o f b e n e fit s w a s m o s t fr e q u e n t f o r a c c id e n t and s ic k n e s s c o v e r a g e . A bou t o n e -q u a r t e r o f th e p la n s c o v e r in g s lig h tly m o r e than o n e -te n th o f the w o r k e r s r e c e iv in g a c c id e n t and s ic k n e s s b e n e fit s had a g e r e s t r i c t i o n s . With on e e x c e p tio n , the p la n s w ith a g e r e s t r i c t io n s s p e c if ie d a g e 60 a s th e tim e w hen a c c id e n t and s ic k n e s s b e n e fit s w e r e r e d u c e d . L ik e m e d ic a l p la n s , th e ch a n ge c o n s is t e d p r im a r ily o f s h ift ing the a llo w a n c e f r o m a " p e r d is a b ilit y " to a " p e r y e a r " b a s i s . F o r e x a m p le , 27 p la n s w h ich p r o v id e d b e n e fit p a y m e n ts f o r 26 w e e k s p e r d is a b ilit y p r i o r t o a g e 60 p r o v id e d p a y m e n ts f o r 26 w e e k s p e r y e a r a ft e r that a g e . T he r e d u c tio n s o r lim it a tio n s a p p lic a b le to e m p lo y e d o ld e r w o r k e r s a ls o a p p lie d to n ew ly h ir e d o ld e r w o r k e r s . In a d d itio n , s o m e p la n s r e d u c e d o r e lim in a te d c o v e r a g e fo r n ew w o r k e r s o n ly . T he c o m b in e d e ff e c t o f the tw o t y p e s o f r e s t r i c t i o n s is show n in ta b le 4 . C o n s id e r in g the n a tu re o f s o m e o f the r e d u c tio n s and the a g e s at w h ich th ey w e r e e ff e c t iv e , the im p a c t o f a g e d iffe r e n tia tio n on th e n e w ly h ir e d w o r k e r s e e m s , on the w h o le , to b e r e la t iv e ly m in o r . L o s s o r R e d u ctio n o f B e n e fits U pon R e tir e m e n t W hen the w o r k e r r e t i r e s , he l o s e s m u ch o f the p r o t e c t io n a ffo r d e d by th e s e p la n s w h ile he w a s a c t iv e (ta b le 2 ). A p p r o x im a t e ly h a lf o f th e p la n s c o n tin u e d li f e in s u r a n c e c o v e r a g e a ft e r r e t ir e m e n t , g e n e r a lly at a r e d u c e d le v e l . A su b sta n tia lly lo w e r p r o p o r t io n o f p la n s e x te n d e d h o s p ita l, s u r g ic a l, and m e d ic a l b e n e fit s to r e t i r e d w o r k e r s , and on ly a fe w c o n tin u e d a c c id e n t a l d ea th and d is m e m b e r m e n t p r o v is i o n s . H o w e v e r , w h e r e h o s p ita l, s u r g ic a l, and m e d ic a l b e n e fit s w e r e e x te n d e d , m o s t p la n s a ls o c o v e r e d the r e t i r e d w o r k e r rs d e p e n d e n ts. T he m a jo r it y o f p la n s e x ten d in g h o s p ita l, s u r g ic a l, and m e d ic a l b e n e fit s to r e t i r e d w o r k e r s m a in ta in e d the sa m e p r o v is io n s that w e r e a v a ila b le to the w o r k e r p r i o r to h is r e t ir e m e n t (ta b le 5 ). 7 T h u s, u n d e r su ch p la n s th e w o r k e r fa c e d n o r e d u ctio n in p r o t e c t io n w hen he r e t i r e d at 65. M o st p la n s , h o w e v e r , r e d u c e d the a m ou n t o f li f e in s u r a n c e f o r the r e t i r e d w o r k e r . 7 F o r th is a n a ly s is , b e n e fit s a v a ila b le to the w o r k e r r e t ir in g at a g e 65 w e r e c o m p a r e d w ith th o s e a v a ila b le to h im im m e d ia te ly p r i o r to r e t ir e m e n t ( i . e . , at a g e 6 4 ). It h as b e e n p r e v io u s ly n o te d (ta b le 3) that b e n e fit s f o r the a c t iv e w o r k e r m a y h ave b e e n r e d u c e d a s he r e a c h e d a c e r t a in a d v a n c e d a g e . OD T A B L E 4 , — E ffe c t o f a g e at h ir in g on a v a ila b ilit y o r l e v e l o f b e n e fit s u n d e r h e a lth a n d in s u r a n c e p la n s 1 A c c id e n t a l death and d i s m e m b e r m en t b e n e fits W ork ers W o rk e r s P la n s (000*s) (000*s) L ife in s u ra n c e P r o v is io n Plans A c c id e n t and. H o sp ita l s ic k n e s s b e n e fits b e n e fits W ork ers W ork ers P la n s P la n s (000*s) (000*s) M e d ica l b e n e fits S u r g ic a l b e n e fits W o rk e rs W ork ers P la n s P la n s (000*s) (000*s) A ll p lan s p ro v id in g b e n e fits _ __________________________ 284 4 ,3 5 2 154 2 ,2 5 0 z 237 3 ,6 7 5 293 4 ,9 0 8 294 4 ,9 1 7 193 3 ,6 8 3 A v a ila b ilit y o r le v e l o f b e n e fit not a ffe c t e d b y a ge at h ir in g ____________________________________________ 252 3* 330 148 1 ,8 0 3 179 2 ,7 7 0 286 4 ,6 2 8 288 4 ,6 7 3 182 3 ,4 8 2 R e d u c e d b e n e fit p r o v id e d i f h ir e d a fte r age _ ________ ____________________ _____________________________ 55' _ 60 _ _ ________________________ 6 5 _______________________________________________________ 66 .... .... . .. 68 _______________________________________________________ 70 ____ ... ___________ _________________ ______ 21 1 3 15 1 1 - 649 35 53 552 2 7 - 4 _ 2 2 - 25 16 9 - 56 _ 3 54 2 - 866 _ 3 438 428 - 7 2 2 3 280 3 38 200 42 4 2 2 - 238 3 38 200 - 10 3 9 1 - 200 3 80 120 - B e n e fit not a v a ila b le i f h ir e d a fte r a g e ________________ 50 . _______ ______________________________ 55 ... ______ ___________________________ 6)5 ^ ^ ^ _ __ »*„■, . . 68 ” "Z ™ _ _ __________________ ______ 70 .. ____ 7 1 3 3 _ - 225 10 12 203 - 2 _ 1 1 - 422 _ 415 7 - 2 1 _ 1 40 35 - _ - 6 1 - - - - 5 - - 2 1 1 5 1 1 - 1 1 - 4 148 - - - - - - - - - ZZZZZZ Z Z . O t h e r _______________________________________________________ 4 - 3 3 - 1 B a s e d o n a s tu d y o f 3 0 0 h e a lth a n d in s u r a n c e p la n s u n d e r c o l l e c t i v e b a r g a in in g c o v e r in g a p p r o x i m a t e ly 5 m il l io n w o r k e r s , 2 E x c lu d e s p la n s p r o v id in g o n ly f o r o c c u p a t io n a l d is a b ilit y b e n e fits ,, 3 I n c lu d e s 1 p la n c o v e r i n g 3 7 ,0 0 0 w o r k e r s w h ic h p r o v i d e s a r e d u c e d a m o u n t o f i n s u r a n c e i f h i r e d a f t e r a g e 6 0 f o r f i r s t 36 m o n t h s o f e m p l o y m e n t . T h e r e a f t e r , s a m e b e n e f it s a r e p r o v id e d a s f o r e r fip lo y e e h ir e d p r i o r to a g e 6 0 , 4 I n c lu d e s 2 p la n s c o v e r i n g 1 3 5 , 0 0 0 w o r k e r s p r o v id in g a r e d u c e d a m o u n t o f in s u r a n c e to w o r k e r s b e c o m in g u n io n m e m b e r s a f t e r a g e 55 a n d 2 p la n s c o v e r i n g 1 3 ,0 0 0 w o r k e r s th a t d o n o t p r o v i d e l i f e in s u r a n c e t o w o r k e r s b e c o m in g u n io n m e m b e r s a t a g e 56 o r la t e r ., NOTE: TABLE D ue to 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 d o n o t n e c e s s a r i l y e q u a l t o t a l s . 5 , — B e n e fi t l e v e l s u n d e r h e a lt h a n d i n s u r a n c e p la n s f o r w o r k e r s r e t i r i n g a t a g e 65 c o m p a r e d w it h t h o s e p r o v i d e d i m m e d i a t e l y p r i o r t o r e t i r e m e n t 1 L ife in s u r a n c e B e n e fit l e v e l f o r H o s p it a l b e n e fit s (0 0 0 l2 s) ( 0 0 0 *s) A l l p l a n s e x t e n d i n g b e n e f i t s t o r e t i r e d w o r k e r s ______ B e n e fits fo r r e t ir e d w o r k e r : S am e a s fo r a c tiv e w o r k e r b e fo r e r e t i r e m e n t ___________________________________________________ L e s s t h a n f o r a c t iv e w o r k e r in o n e o r m o r e r e s p e c t s ______________ ______ ____________________ 1 2 146 3 ,1 0 8 67 1 ,7 8 4 29 726 39 1 ,4 0 7 39 2, 383 28 377 sum s o f in d iv id u a l i t e m s d o not n e c e s s a r il y eq u a l t o t a ls . (0 0 0 * 8 ) 19 1 ,7 4 5 35 1 ,4 9 1 1 ,4 2 5 25 1 ,2 3 1 320 10 260 B a s e d o n a s tu d y o f 30 0 h e a lth a n d in s u r a n c e p la n s u n d e r c o l l e c t i v e b a r g a in in g c o v e r in g a p p r o x i m a t e ly 5 m i l l i o n w o r k e r s , m a in t a in e d s a m e l e v e l o f i n s u r a n c e o n r e t ir e m e n t f o r a s p e c i f i e d p e r i o d o n ly , e . g . , 1 y e a r , 2 I n c lu d e s 6 p la n s w h ic h N O T E : D ue t o r o u n d i n g , W orkers P la n s (0 0 0 * s ) 58 117 M e d ica l b e n e fits W orkers P la n s P la n s P la n s S u r g ic a l b e n e fits W ork ers W ork ers r e tir e d w o rk e r 9 T he ty p e o f p r o t e c t io n a v a ila b le u n d e r in d iv id u a l b e n e fit s m a y b e r e d u c e d in a n u m b e r o f w a y s . H o s p ita liz a tio n b e n e fit s a r e l e s s li b e r a l f o r r e t i r e d w o r k e r s than f o r a c t iv e w o r k e r s w hen the s c h e d u le d b e n e fit s (d a ily r o o m and b o a r d , e x tr a a llo w a n c e , and d u r a tio n ) a r e a v a ila b le to the a c t iv e w o r k e r f o r e a c h d is a b ilit y but r e p r e s e n t the m a x i m u m that th e r e t i r e d w o r k e r ca n r e c e iv e d u rin g h is e n tir e r e t ir e m e n t p e r io d . T o i l l u s tr a t e , a p la n p r o v id e s a d a ily r o o m and b o a r d a llo w a n c e o f $ 10 a day f o r 70 d a y s w ith an a llo w a n c e o f $ 2 0 0 f o r e x tr a h o s p ita l e x p e n s e s . T h e s e b e n e fit s w o u ld b e a v a ila b le to the a c t iv e w o r k e r f o r e a c h s e p a r a te d is a b ilit y . H o w e v e r , the r e t i r e d w o r k e r w ou ld r e c e i v e th e s e b e n e fit s o n ly o n c e d u rin g h is e n tir e p e r io d o f r e t ir e m e n t . S o m e tim e s the d a ily r o o m and b o a r d a llo w a n c e is l e s s f o r r e t i r e d w o r k e r s than fo r a c tiv e w o r k ers. S im ila r ty p e s o f r e d u c tio n s m a y a ls o a p p ly to s u r g ic a l b e n e fit s . W h e re a s a c t iv e w o r k e r s m a y r e c e i v e b e n e fit s u n d er a p la n w h ich s e ts fo r t h a sc h e d u le o f m a x i m u m a llo w a n c e s f o r e a c h o p e r a tio n the w o r k e r u n d e r g o e s , a r e t i r e d w o r k e r m a y fin d the sa m e m a x im u m a p p lic a b le not to e a c h o p e r a tio n but t o th e e n tir e p e r io d o f r e t ir e m e n t . One o p e r a tio n m a y ex h a u st th is c o v e r a g e . O f the 146 p la n s e x ten d in g li f e in s u r a n c e to r e t i r e d w o r k e r s , o n ly 29 d id not r e d u c e the am ou n t im m e d ia te ly u pon a w o r k e r * s r e t ir e m e n t at 65 and, o f th e s e , 6 m a in ta in e d th e sa m e le v e l o f in s u r a n c e f o r a lim it e d p e r io d , e . g . , a y e a r . T he r e s t o f the p la n s (1 1 7 ) p r o v id e d f o r an im m e d ia te r e d u c tio n upon r e t ir e m e n t . A bout th r e e fo u r th s o f th e s e p la n s im m e d ia te ly r e d u c e d the am ou n t o f in s u r a n c e in e f f e c t to a c o n stant le v e l w h ich h e ld th ro u g h o u t the r e t ir e m e n t p e r io d . F o r e x a m p le : U pon n o r m a l r e t ir e m e n t o f any e m p lo y e e a ft e r 20 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 th e p e n s io n p la n p r o v id e d f o r in th is c o n t r a c t , the in s u r a n c e c o v e r a g e h e r e in a b o v e p r o v id e d f o r s h a ll b e te r m in a te d , and su ch e m p lo y e e s s h a ll, t h e r e a ft e r , be c o v e r e d f o r the su m o f $ 5 0 0 in li f e in s u r a n c e , at the e x p e n s e o f the c o m p a n y . S o m e p la n s r e d u c e d the a m ou n t o f life in s u r a n c e in e ff e c t im m e d ia t e ly u pon r e t ir e m e n t and at s p e c if ie d in t e r v a ls t h e r e a ft e r . A p r o v is i o n o f th is ty p e s ta te s : If an in s u r e d e m p lo y e e is r e t i r e d by the c o m p a n y fr o m a c tiv e s e r v ic e a ft e r the e ff e c t iv e date o f th is p la n , th e a m ou n t o f h is in s u r a n ce p r i o r t o r e t ir e m e n t , w ill b e r e d u c e d 10 p e r c e n t on the d ay o f su ch r e t ir e m e n t , , and 10 p e r c e n t e a c h on the f i r s t , s e c o n d , th ir d , and fo u rth a n n iv e r s a r ie s t h e r e a ft e r ; th u s 4 y e a r s a ft e r r e t ir e m e n t , h is in s u r a n c e w i ll b e r e d u c e d to o n e -h a lf o f the a m ou n t w h ich w a s in e ff e c t p r i o r t o r e t ir e m e n t , and w h ic h am ou n t w ill b e c o n tin u e d t h e r e a ft e r . T h e a m ou n ts o f in s u r a n c e a v a ila b le u n d e r the 146 p la n s to m e n a ft e r r e t i r e m en t at 65 and the a m o u n ts s t ill in e ff e c t f o r th e s e m e n at 70 a r e sh ow n in ta b le 6, co m p u te d f o r a m an e a rn in g $ 4 , 000 p r i o r to r e t ir e m e n t — an a r b it r a r ily s e le c t e d e a r n in g s le v e l . O n ly tw o p la n s d is c o n tin u e d in s u r a n c e p r o t e c t io n b e tw e e n the a g e s o f 65 and 7 0 . F o r a ll p la n s f o r w h ich the a m ou n t o f in s u r a n c e c o u ld be c o m p u te d , the am ou n t a v a ila b le to th e n e w ly r e t ir e d w o r k e r at 65 w a s $ 1 ,6 8 4 , on the a v e r a g e . B y 70, th is a v e r a g e l e v e l had d r o p p e d to $ 1, 2 67, a 2 5 -p e r c e n t r e d u c t io n . U n lik e p e n s io n a n n u itie s , le n g th o f s e r v i c e is not an im p o r ta n t f a c t o r in d e te r m in in g th e am ou n t o f li f e in s u r a n c e a r e t ir e d w o r k e r m a y r e c e i v e (ta b le 7 ). T h is p r a c t i c e h a s p a r t ic u la r s ig n ific a n c e f o r w o r k e r s h ir e d at an a d v a n c e d a g e an d u n a b le t o a c c u m u la te m a n y s e r v i c e c r e d it s . 10 T h e p r e v a le n c e o f th e p r a c t i c e o f r e d u c in g th e a m ou n t o f life in s u r a n c e f o r r e t ir e d w o r k e r s m a y b e a ttr ib u te d to s e v e r a l f a c t o r s . T he c o s t o f p r o v id in g fu ll c o v e r a g e w hen p a y m e n t is a c e r ta in t y , a s it w o u ld b e in the c a s e o f li f e in s u r a n c e , m a y be e x c e s s i v e in c o m p a r is o n w ith the c o s t o f o th e r b e n e fit s that m ig h t b e o b ta in e d . T h e r e m a y b e l e s s n e e d to p r o v id e in c o m e f o r a s u r v iv in g d e p e n d e n t. F in a lly , su ch T A B L E 6 . — Amount of life insurance provided m e n 1 at ages 65 and 70 who re tire d at age 65 and earned $ 4 ,0 0 0 yearly prior to re tire m e n t 2 Amount of insurance for man earning $ 4 ,0 0 0 a year A ll plans extending life insurance to retired w orkers at sp ecified age Amount of insurance based on factors other than earnings alone Am ount of insurance based on earnings alone ______________ Under $50 0 insurance _ _ $ 5 0 0 and le s s than $ 1 ,0 0 0 _ _ _ ............... . $ 1 ,0 0 0 and le s s than $ 1 ,5 0 0 ___ . __ .. .. _ _ $ 1 ,5 0 0 and le s s than $ 2 ,0 0 0 ...... ..... _ _.. . _ $ 2 ,0 0 0 and le s s than $ 2 ,5 0 0 __ _ .... _ _ ___ .. . $ 2 ,5 0 0 and le s s than $ 3, 000 __ _ _ .............. ... . _ . _ $ 3 ,0 0 0 and le s s than $ 3 ,5 0 0 __ ... $ 3 ,5 0 0 and le s s than $ 4 ,0 0 0 ______________________________ $ 4 ,0 0 0 and le s s than $ 4 ,5 0 0 ................................ . . $ 4 , 500 and le s s than $ 5 ,0 0 0 . . __ _ _ _ _. _ .. $ 5 ,0 0 0 and le s s than $ 7 ,5 0 0 ______________________________ . ___ _ ___ _ __ $ 7 , 500 and over __ ____ A v e ra g e insurance for $ 4 , 0 0 0 -a -y e a r -m a n at sp ecified age 3 _______________________________________________ Im m ediately after retiring at age 65 W o rk e rs Plans (000»s) R etired w orker at age 70 W ork ers Plans (000 *s) 146 3 ,1 0 8 144 3 ,0 7 9 29 117 1 17 50 7 17 2 2 6 3 1 7 4 1 ,0 2 0 2 ,0 9 0 7 541 992 80 185 6 4 80 13 3 141 38 29 115 1 18 54 8 15 2 3 4 5 2 3 1 ,0 2 0 2 ,0 6 1 7 548 1 ,0 0 3 160 219 6 16 40 39 8 15 $1 ,6 8 4 - - $1, ,2 6 7 1 F ive plans covering 5 3, 000 w ork ers provided lower benefits for w om en. 2 B ased on a study of 300 health and insurance plans under co lle ctiv e bargaining covering approxi m ately 5 m illion w o rk e rs. A rith m etica l av erag e; amount of insurance provided to a $ 4 , 0 0 0 -a -y e a r -m a n by each plan was weighted by total number of w ork ers covered by that insurance plan. NOTE: Due to rounding, sums of individual item s do not n e c e ssa r ily equal to ta ls. L en g th o f T im e R e t ir e d W o r k e r s R e c e iv e B e n e fits A lth ou g h m an y w o r k e r s stan d to lo s e a ll h e a lth and in s u r a n c e p r o t e c t io n upon r e t ir e m e n t and o t h e r s a r e s u b je c t to r e d u c e d p r o t e c t io n upon r e t ir e m e n t , r a r e ly d o e s a p la n e x te n d e d to r e t ir e d w o r k e r s d is c o n tin u e a b e n e fit d u rin g th e r e t ir e m e n t p e r io d (ta b le 8 ). T h u s, a s lo n g a s a w o r k e r so c o v e r e d is in a r e t i r e d sta tu s, w h ich g e n e r a ll y m e a n s a s lo n g a s he li v e s , he n e e d n ot fe a r l o s s o f a b e n e fit b e c a u s e o f h is a g e . B e n e fit L e v e ls f o r R e t ir e d W o r k e r s 1 D e p e n d e n ts In a lm o s t a ll p la n s e x te n d in g c o v e r a g e to the d e p e n d e n ts o f r e t i r e d w o r k e r s , the le v e l o f a llo w a n c e s p r o v id e d f o r d e p e n d e n ts w a s the s a m e a s that f o r r e t i r e d w o r k e r s (ta b le 9 ). T h e fe w p la n s w h ich p r o v id e d lo w e r b e n e fit s f o r r e t ir e e s * d e p e n d e n ts a ls o p r o v id e d lo w e r b e n e fit s f o r the d e p e n d e n ts o f a c tiv e w o r k e r s . T he o n ly b e n e f i c ia r y o f d ep en d en ts* c o v e r a g e f o r a r e t i r e d w o r k e r w o u ld n o r m a lly b e h is w ife s in c e c h ild r e n a r e g e n e r a lly c l a s s i f i e d a s d e p e n d e n ts u n d e r h ea lth and in s u r a n c e p la n s up to th e a g e o f 18. T A B L E 7 . — E ffe c t o f le n g th o f s e r v ic e on a m o u n t o f lif e in s u r a n c e p r o v id e d r e t ir e d w o r k e r s 1 W orkers P r o v is io n P la n s (0 0 0 ‘ s) A l l p la n s e x t e n d in g l if e in s u r a n c e to r e t ir e d w o r k e r s ................ . _ A m o u n t n o t a f f e c t e d b y s e r v i c e _______ G r a d u a t e d b y s e r v i c e (tw o o r m o r e g r a d u a tio n s ) _ ._ _ S m a l l e r a m o u n t i f s e r v i c e l e s s th a n s p e c i f i e d p e r i o d __________________________ O th e r _______ _ ... __ „ 146 3, 108 119 2, 097 14 872 4 12 127 9 1 B a s e d o n a s tu d y o f 3 0 0 h e a lth a n d in s u r a n c e p la n s u n d e r le c t iv e b a r g a in in g c o v e r in g a p p r o x im a t e ly 5 m illio n w o r k e r s . TABLE 8 . — L e n g th o f t im e b e n e fits a v a ila b le to r e t ir e d w o r k e r s 1 u n d e r h e a lth a n d in s u r a n c e p la n s L ife in s u r a n c e H o s p it a l b e n e fits W orkers B e n e fits a v a ila b le P la n s S u r g ic a l b e n e fits W ork ers P la n s M e d ic a l b e n e fits W ork ers P la n s ( 0 0 0 ‘ s) ( 0 0 0 * s) A ll p la n s e x te n d in g b e n e fits to r e t ir e d w o r k e r s _ __ c o l W orkers P la n s (0 0 0 * s ) (0 0 0 *-s) ________ 146 3, 1 0 8 67 1, 7 8 4 58 1 ,7 4 5 35 1, 4 9 1 F o r d u r a t i o n o f r e t i r e m e n t _________________ F o r s p e c i f i e d p e r i o d __________________________ 144 2 3, 079 29 63 4 1 ,7 4 7 37 54 4 1, 7 0 8 37 32 3 1, 4 5 7 34 1 B a s e d o n a s tu d y o f 300 h e a lth a n d in s u r a n c e p la n s u n d e r c o l l e c t i v e b a r g a in in g c o v e r i n g a p p r o x i m a t e ly 5 m il l io n w o r k e r s . T A B L E 9 . — R e la tio n s h ip o f h o s p ita l, s u r g ic a l, and m e d ic a l b e n e fits o f r e t ir e d w o r k e r s and th e ir d ep en d en ts 1 M e d ic a l b e n e fits S u r g ic a l b e n e fits H o s p it a l b e n e fit s W ork ers W ork ers W ork ers P r o v is io n P la n s P la n s P la n s (0 0 0 * s ) (0 0 0 * s ) (0 0 0 * s ) A ll p la n s e x te n d in g b e n e fits to r e t ir e d w o r k e r s a n d d e p e n d e n t s ________________________________________________ 56 1 ,7 2 9 48 1 ,6 9 0 31 1 ,3 4 6 S a m e D e n e fits p r o v i d e d r e t i r e d w o r k e r a n d d e p e n d e n t s ________________________________________________ 52 1 ,7 0 2 47 1 ,6 8 7 28 1 ,3 2 3 4 27 1 3 23 D iffe r e n t b e n e fits p r o v id e d ^ e tir e d w o r k e r an d d e p e n d e n t s _________________________________________________ 1 B ased on a stu d y of 300 h e a lth an d — in s u r a n c e p la n s under 3 c o lle c t iv e b a r g a in in g c o v e r in g a p p r o x im a t e ly 5 m illio n w ork ers. TABLE 1 0 .— M e th o d o f fin a n c in g b e n e fits f o r r e t i r e d w o r k e r s a n d t h e ir d e p e n d e n ts u n d e r h e a lth a n d i n s u r a n c e p la n s 1 D e p e n d e n t s o f i• e t i r e d w o r k e r s R e tir e d w o r k e r s E m p l o y e r o n l y _____________________ E m p lo y e r an d r e t ir e d w o r k e r _____________________________ E m p lo y e r a n d a c t iv e w o r k e r _______________________________ R e t i r e d w o r k e r o n l y _____________ O t h e r _________________________________ 146 3 , 108 67 1 ,7 8 4 58 1 ,7 4 5 35 1 ,4 9 1 56 1 ,7 2 9 48 1 ,6 9 0 31 1 ,3 4 6 97 2 ,2 9 5 29 746 22 713 16 744 18 657 15 647 11 559 16 128 14 11 9 13 1 18 6 52 11 104 11 104 6 52 17 896 1 12 17 678 1 26 17 950 1 21 17 922 1 13 17 717 16 7 10 495 94 96 1 23 17 901 1 22 B a s e d o n a s tu d y o f 3 0 0 h e a lth a n d in s u r a n c e p la n s u n d e r c o l l e c t i v e b a r g a in in g c o v e r i n g a p p r o x i m a t e ly 5 m il l io n w o r k e r s . NOTE: D ue to r o u n d in g , (0 0 0 »s ) (0 0 0 * s ) ( 0 0 0 *s j (0 0 0 * s ) (0 0 0 * s ) (0 0 0 * s ) W ork ers P la n s P la n s P la n s P la n s P la n s P la n s (0 0 0 * s ) A l l p la n s e x t e n d in g b e n e f i t s to r e t i r e d w o r k e r s _____________________ W ork er s W orkers W orker s P la n s W ork ers W ork ers W orkers M e d ica l S u r g ic a l H o s p it a l M e d ica l S u r g ic a l H o s p it a l L ife M e th o d o f fin a n c in g b e n e fit s s u m s o f in d iv id u a l i t e m s d o n o t n e c e s s a r i l y e q u a l t o t a l s . 13 F in a n cin g R e t ir e d W o r k e r s 1 B e n e fits U n d er m o s t p la n s e x te n d in g c o v e r a g e to r e t ir e d w o r k e r s , the e m p lo y e r c a r r i e d a ll o r p a rt o f the c o s t o f p r o v id in g th e s e b e n e fit s to the r e t i r e d w o r k e r and h is d e p e n d en ts (ta b le 10). W ith the e x c e p tio n o f li f e in s u r a n c e , h o w e v e r , l e s s than h a lf o f the p la n s r e q u ir e d the e m p lo y e r to b e a r the e n tir e c o s t o f the in d iv id u a l b e n e fit s . A lth o u g h a su b sta n tia l p r o p o r t io n o f p la n s r e q u ir e d the r e t i r e d w o r k e r to p ay the p r e m iu m s f o r h o s p ita l, s u r g ic a l, and m e d ic a l b e n e fit s i f he w is h e d to co n tin u e h is c o v e r a g e f o r h im s e lf and h is d e p e n d e n ts , the r e t i r e e g a in e d the a d v a n ta g e o f g r o u p -r a t e p a r tic ip a tio n w h ich o th e r w is e m ig h t not h ave b e e n a v a ila b le to h im b e c a u s e o f h is a g e . T he e x te n s io n o f li f e in s u r a n c e w a s , in m o s t c a s e s , an e m p lo y e r - fin a n c e d b e n e fit. S ig n ific a n tly , u n d e r 16 life in s u r a n c e p la n s c o v e r in g a lm o s t o n e -h a lf m illio n w o r k e r s , the e m p lo y e r and the a c t iv e w o r k e r s h a r e d the c o s t o f the in s u r a n c e w h ich b e c a m e a v a ila b le to the w o r k e r on r e t ir e m e n t w ith ou t a d d itio n a l p r e m iu m . T h is p r o v i sio n m a y r e f l e c t an a w a r e n e s s o f w o r k e r s that, if th ey a r e to c o n tr ib u te to the c o s t o f h ea lth and in s u r a n c e b e n e fit s , it is e a s ie r to pay w h ile th ey a r e a c t iv e ly e m p lo y e d f o r the b e n e fit s th ey w is h to r e c e iv e in a r e t i r e d sta tu s. 15 Part I I .— Pension Plans S u m m a ry M o re than 13 m illio n w o r k e r s a r e c o v e r e d b y p r iv a te p e n s io n p la n s that su p p le m e n t the F e d e r a l o ld - a g e and s u r v i v o r s 1 in s u r a n c e p r o g r a m 0 O f th e se w o r k e r s , a p p r o x im a t e ly 60 p e r c e n t a r e p a r tic ip a n ts in p la n s u n d er c o l l e c t iv e b a rg a in in g * The s p r e a d o f su ch p la n s d u rin g the p a s t d e c a d e u n d ou b ted ly h as c o n s titu te d the m o s t s ig n ifica n t a c tio n o f th is p e r io d on the p a r t o f u n ion s and e m p lo y e r s d ir e c t e d s p e c if ic a ll y to the p r o b le m s o f agin g w o r k e r s o T h is d e v e lo p m e n t is im p o r ta n t not o n ly b e c a u s e it p r o m i s e s to p r o v id e an in c r e a s in g n u m b e r o f o ld e r p e o p le w ith g r e a t e r e c o n o m ic s e c u r ity on r e t ir e m e n t , but b e c a u s e it m a y p r o v id e , fo r the e m p lo y e r and the u n io n , an eq u ita b le s o lu tio n to the o n - t h e - jo b d iffic u lt ie s e n c o u n te r e d b y the su p e ra n n u a te d o r d is a b le d w o rk e r ,. The p r im a r y p u r p o s e o f a p e n s io n plan is to p r o v id e an in c o m e fo r life to the e m p lo y e e on re tir e m e n t,, U nder m o s t p la n s , the w o r k e r r e a c h in g r e t ir e m e n t a g e q u a l if ie s fo r an annuity i f he h as fu lfille d the stip u la te d l e n g t h - o f - s e r v i c e r e q u ir e m e n t s „ T he am ou n t o f m o n e y he is to r e c e iv e m o n th ly g e n e r a lly d e p e n d s on h is len gth o f s e r v ic e an d , u n d er m an y p la n s , h is le v e l o f e a rn in g s* O r d in a r ily , the r e t i r e d w o r k e r g e ts the m a x im u m r e tu r n w hen he q u a lifie s fo r n o r m a l r e t ir e m e n t b e n e fit s , that i s , he has r e a c h e d the d e s ig n a te d n o r m a l r e t ir e m e n t a g e an d , i f r e q u ir e d b y the p la n , h as c o m p le te d the m in im u m s e r v ic e r e q u ir e m e n t s „ A lth ou g h a b o o n to the w o r k e r w ho r e a c h e s r e t ir e m e n t a g e with the n e c e s s a r y q u a lific a tio n s and w h o w an ts to r e t i r e , a p e n s io n p lan m a y p r e s e n t o r con tin u e s o m e p r o b le m s fo r the o ld e r w o r k e r w ho is s e e k in g a jo b , fo r the w o r k e r w h o can n ot q u a lify fo r r e t ir e m e n t p a y , and fo r the w o r k e r who d o e s not w ant to r e tir e ,, F o r e x a m p le , an o ld e r jo b a p p lica n t m a y b e fa c e d b y a h ir in g -a g e lim it a tio n b a s e d on p e n s io n c o s t c o n s id e r a t io n s , w h e th e r r e a l o r fa n cied ,, The n e w ly h ir e d w o r k e r m a y fin d that he can n ot p a r tic ip a te in a p e n s io n p la n b e c a u s e o f h is age o r he m a y not be a b le to w o r k lon g en ou g h to q u a lify fo r b e n e fit s * The e m p lo y e d o ld e r w o r k e r m a y be s e p a r a te d fr o m h is jo b th ro u g h n o fa u lt o f h is own and lo s e a ll o f h is a c c r u e d eq u ity in the p e n s io n p r o g r a m * F in a lly , upon r e a c h in g a c e r ta in a g e , a w o r k e r m a y be c o m p e lle d to r e t ir e u n d er p la n p r o v is io n s although he m a y b e e c o n o m ic a l ly o r p s y c h o lo g ic a l ly n ot r e a d y fo r r e tir e m e n t* S cop e o f Study A ll a s p e c t s o f a p e n s io n p la n a r e r e le v a n t to a d is c u s s i o n o f the statu s o f o ld e r w o r k e r s , T h r e e a s p e c t s , h o w e v e r , w e r e s e le c t e d f o r e x a m in a tio n in th is r e p o r t : (1) H ow the w o r k e r q u a lifie s fo r p e n s io n b e n e fits u n d er c o l l e c t i v e l y b a r g a in e d p la n s ; (2) c e r ta in p r o v is io n s o f th e s e p la n s w h ich a ffe c t the o ld e r w o r k e r b e fo r e h is r e t i r e m en t; and (3) in v o lu n ta ry r e tir e m e n t* A tte n tio n is d ir e c t e d , a m on g o th e r m a t t e r s , to the ty p e s o f r e t ir e m e n t b e n e fit s a v a ila b le to o ld e r w o r k e r s and the c o n d itio n s w h ich m u st be m e t in o r d e r to q u a lify fo r b e n e fit s ; the ex ten t o f and q u a lific a tio n s fo r v e stin g b e n e fit s ; and c o m p u ls o r y and a u to m a tic r e t ir e m e n t p r o v is io n s „ The p r o b le m o f p e n s io n c o s t s a ctin g as a d e te r r e n t to the h ir in g o f o ld e r w o r k e r s is d is c u s s e d in a n oth er U . So D ep a rtm e n t o f L a b o r r e p o r t * 8 F o r th is stu d y , the B u re a u a n a ly z e d 75 s e le c t e d p e n s io n p la n s u n d er c o ll e c t iv e b a r g a in in g , in e f f e c t in 1 9 5 5 *9 T h e s e p la n s c o v e r e d a lm o s t 3 m illio n w o r k e r s , 10 o r See P e n s io n C o s ts in R e la tio n to the H irin g o f O ld e r W o r k e r s , D e p a rtm e n t o f L a b o r , B u rea u o f E m p lo y m e n t S e cu rity * 9 . F o r p r e v io u s stu d ie s in th is f i e ld , se e P e n s io n P la n s U n der C o lle c t iv e B a r g a in mg, B L S Bull* 1147; and H e a lth , In s u r a n c e , and P e n s io n P la n s in U nion C o n t r a c t s , B LS B ull 1187* 10 In m an y c a s e s , the p la n s a r e e x te n d e d u n ifo r m ly to c o v e r w o r k e r s o u tsid e the s c o p e o f the co n tr a c t* In e v e r y in s t a n c e , h o w e v e r , the fig u r e s r e p r e s e n t o n ly the total n u m b er o f w o r k e r s u n d er c o ll e c t iv e b a rg a in in g a g r e e m e n ts c o v e r e d b y the plan* 16 somewhat le s s than 40 percent of the total coverage of pension plans under collective bargaining (table ll)o Of the 75 p lans, 55 were in effect in manufacturing industries (covering 2 , 158, 000 w orkers) and 2 0 in nonmanufacturing industries (7 7 5 ,0 0 0 workers)» They varied in size from plans covering well over 1 0 0 ,0 0 0 w orkers to plans applying to a m inim um of l , 0 0 0 o N early a third of the plans involved m ultiem ployer groupSo F ou r-fifth s of the plans, covering alm ost the same proportion of w o rk e rs, were financed solely by em ployer contributions (noncontributory p la n s)0 The rem ainder were con tributory, usually with the em ployer paying the greater share of the co sto 11 TABLE 11.— D istribution of pension plans studied by industry division, w orker cov era g e, and type of bargaining unit W orkers Item A ll plans stu d ie d ____________________ Plans (000*s) 75 2,932 55 20 2,158 775 22 30 10 4 9 66 394 380 269 1,823 51 24 1,726 1,206 Industry division M anufacturing________________________ N onm anufacturing____________________ W orker coverage 1,000 - 4,999 ................................ -.......... 5, 000 - 24,999 .......................................... 25,000 - 4 9 ,9 9 9 ......................................... 50,000 - 9 9 ,9 9 9 ................. .................... Over 100,000 _ __ __________________ Type of bargaining unit Single e m p lo y e r---------------------------------Multi e mpl o y e r . _____________________ NOTE: Due to rounding, sums of individual item s do not n e c e s sa rily equal totals* The 75 plans were so selected as to yield Insight into collectively bargained pension arrangem ents in broad segm ents of industry. In their selection , the factors given p rim ary consideration were industry, geographic location, union, type of b a r gaining unit, and s iz e . Since the sample is com paratively s m a ll, how ever, the results should be viewed as indicative rather than conclusive0 Types of Benefits Under pension p lans, w orkers may qualify for benefits under three types of provisions— n orm al, e a rly , and disability retirem en t. Virtually every pension- plan contains a norm al retirem ent provision under which the worker becom es entitled to a benefit, having otherwise qualified, upon reaching the normal retirem ent age specified in the plan. In gen eral, this age is defined as the e a rliest age at which a w ork er, having qualified for b en efits, may choose to retire and receive the maxim um monthly payment to which his length of service or amount of earnings, or both, entitles him under the norm al retirem ent provisions of the plan. Under an early retirem ent provision a worker can retire prior to the specified norm al retirem ent age and receive a reduced annuity, since, among other re a son s, he would be expected to receive an annuity for a longer period of tim e . In contrast to norm al retirem en t, how ever, the right to early retirem ent m ay be contingent upon the e m p lo y e r ^ consent. 11 Some plans provided for a basic noncontributory pension and w orkers were given an opportunity to contribute to a supplementary annuity. In these c a s e s , only the noncontributory plan was analyzed. A few plans were noncontributory for w orkers earning le s s than a specified amount, e . g . , $ 3 ,0 0 0 a y e a r, and contributions were required from those earning over that amount. These plans were cla ssified as con tributory p ro gra m s. 17 The p rim ary purpose of a disability provision is to perm it those w orkers who becom e permanently and totally disabled and who do not qualify for benefits under other pension plan provisions to retire on an im mediate benefit,. Each of the 75 plans studied made provision for norm al retirem ent (table 12). E arly retirem ent was provided for in nearly tw o-thirds of the p la n s. A sim ila r p ro portion provided for disability benefitsTA B LE 12o— T ypes o f pen sion ben efits p ro v id e d by n um ber o f plans and w o rk e rs T ypes of re tire m e n t ben efits W o rk e rs Plans E a rly N orm a l X X X X X _ X X _ X - - A ll plans studied N O TE: (000*s) D isa b ility 28 19 20 8 1,173 159 972 628 75 2 ,9 3 2 x denotes b en efits provided,. Both early and disability provisions are of particular significance to older w orkers who desire to retire before norm al retirem ent age, or who may lose their jobs at an advanced age for reasons beyond their control, or who become totally d is abled,, Under these alternative retirem ent p ro v isio n s, w orkers are assured of an im mediate income which otherwise would have been deferred until norm al retirem ent or lo st entirely. For exam ple, the health of an older worker may be poor but not bad enough to be cla ssified as disabling„ An early retirem ent provision would enable this worker to retire and receive an im m ediate benefit. Participation Requirem ents Participation in a pension plan m ay be a condition of employm ent or a m atter of choice for newly hired w o rk ers. H ow ever, under som e plans participation may depend upon the worker having completed a specified period of em ploym ent, or having reached a certain m inim um age, or being below a specified age. W here minimum participation age requirem ents e x ist, they generally range from ages 25 to 35 , and, th erefore, are not of prim ary concern to older w o rk ers. On the other hand, if a plan stipulates that a worker cannot becom e a plan m em ber unless hired before a specified age , e . g „ , 55 y e a r s , the older worker is directly affected, since a worker hired after the age specified would be permanently excluded from plan b en efits. The effects such a provision may have on e m p lo y e rs1 hiring practices may differ considerably. It has been claim ed by some that the exclusion of older workers from the pension plan m a y facilitate their hiring since the higher pension cost often attributed to this group would be elim inated. Some e m p lo y e rs, in contrast, have indicated a reluctance to hire older w orkers who cannot qualify for plan benefits upon r e tir e m e n t.12 In addition to disqualifying a newly hired older worker through the inclusion of a stipulated m axim um participation age, plans may exclude the older worker through the requirem ents to qualify for benefits. For exam ple, a plan may require that a worker have at lea st 15 years of service upon retirem en t, with a further requirement that retirem ent is automatic at a specified age or that service cannot be credited b e yond a specified age. For exam ple: 12 For an analysis of these points of view , see Pension Costs in Relation to the Hiring of Older W o rk e rs, op. cit. 18 On and after the effective date of the plan from the service of the employing company date, which shall be the fir st day of the birthdayo » 0 . No em ployee who retires pensioner unless he has completed fifteen or service to his normal retirem ent date. an employee shall retire on his normal retirem ent month following his 65th for age shall become a m ore years of continuous Under this plan a worker would have to be hired not later than age 50 in order to qualify for any benefits whatsoever 013 If, in addition, this plan required the worker to be employed for a period of tim e in order to participate, the age before which he m ust be hired in order to qualify for benefits would be even lo w e r0 For exam ple, if the w orker had to be employed 2 years before participating in the plan cited above and service was credited only from the date of participation, he would have to be hired not later than age 48 in order to qualify for benefits,, More than half of the 75 plans studied (41) had a maxim um hiring age above which w orkers cannot qualify for pensions (table 13), Of th ese, about a third estab lished a definite age for participation and the remaining included benefit eligibility r e quirements which operated to establish maxim um ages in the manner described above. These ages ranged from below 50 under 2 plans to age 65 in 1 plan. The significance of these data lies in their disclosu re of the fact that plans covering about 30 percent of all w orkers in the study established a maxim um qualifying age below 60 y e a r s „ TABLE 13o— Maximum ages b efore which w orkers must be hired to qualify for pension benefits 1 W orkers Maximum age Plans (000ls) A ll p la n s _______________________________ 41 1,219 Age: L ess than 50 50 but le s s than 5 5 _________________ 55 but le s s than 60 ........ _ 60 but le s s than 6 5 _________________ 6 5 ----------------------------------------------------- 2 8 14 16 1 59 119 728 301 12 1 Based on a study of 75 pension plans under collectiv e bargaining covering approxim ately 3 m illion w ork ers. Minimum Qualifications for Benefits Virtually every pension plan has m inimum requirem ents which the worker must m eet in order to qualify for retirem ent b en efits. These are usually expressed in term s of age or age and years of s e r v ic e . These qualifications are important to older w ork ers who have been with their em ployer for a long period of time as well as to those who are seeking employment or have recently changed jo b s. In the case of lo n g -se r v ic e w o rk e rs, the ea rlie st age at which they may retire and the conditions under which retirem ent is perm itted would be of p rim ary concern since ^presumably they would have met the minimum service requirem ents of the plan. The newly hired older workers and those seeking work would be particularly concerned as to whether they would be able to m eet the minim um qualifications to receive benefits in the event of voluntary or forced retirem en t. 13 It should be em phasized that the operation of these features relate p rim arily to a newly hired w orker. Where such provisions are included in newly established plans, older w orkers are usually protected in a number of w ays. Credit may be a l lowed for all or a specified amount of past service credit (that service perform ed prior to establishm ent of plan) thus making qualification p o ssib le . Special provisions may be made exempting older w orkers from the minimum service requirem ents to qualify for benefits. Exceptions to the age lim itations on accruing service may be provided thus enabling older w orkers to qualify. TABLE 1 4 . — 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 n o r m a l , e a r l y , a n d d i s a b i l i t y p e n s i o n b e n e f i t s Minimum age at which workers can qualify for benefits 2 All plans (000 *s) (000*s) (000*s) (000*s) Age 60 Workers Workers Workers Plans Plans (000*s) (000*s) Age 70 Age 65 Workers Plans Plans Plans Plans Plans Number Age 55 Workers Workers Workers Workers Age 50 Age 45 None Minimum service needed to qualify for benefits 1 (000*s) (000*s) Normal retirement 3 All plans ________________ None specified 1 - 4® 9 years _ _________ 5 - 9.9 years 10 - 14.9 y e a r s _________ 15 - 19.9 years _________ 20 - 24.9 years __ ______ 25 - 29 o9 year s _________ 30 years and o v e r ________ 75 22 2 19 19 9 3 1 2,932 518 10 686 660 976 79 4 . . _ _ _ _ _ _ 4 259 " _ ■ _ " _ - _ - _ - _ _ - 2 2 “ 7 252 - 70 2,670 1 5 22 2 17 19 6 3 1 518 10 680 660 719 79 4 “ 1 - ■ 5 - “ Early retirement 3 All plans 47 1,332 5 168 1 4 1 45 22 271 18 844 _ _ _ _ None sp ecified ____________ 1 - 4 , 9 years ____________ 5 - 9.9 years ...................... 10 - 14.9 years _________ 15 - 19o9 years _ _ ___ 20 - 2 4 . 9 years _________ 25 - 29.9 years _________ 30 years and over 14 16 6 9 1 1 137 784 260 146 2 3 2 1 1 1 22 23 120 - _ 1 - _ 4 “ 1 - _ 45 - 12 4 6 - - - “ _ _ 10 4 3 1 ” _ 693 136 13 2 - _ ~ _ “ _ - ■ 115 23 133 “ _ “ - - 3 " Disability retirement A ll plans _________________ 48 2, 145 29 923 2 43 6 601 3 83 8 497 _ _ _ _ None specified____________ 1 - 4.9 years 5 - 9.9 years _ 10 - 14.9 years 15 - 19.9 years ............. 20 - 24.9 years __ 25 - 29.9 years 1 2 7 29 7 2 4 7 105 1,502 476 53 _ 2 5 19 2 1 _ 7 42 739 117 18 _ 2 _ - _ - _ - _ 1 1 _ 13 35 1 1 1 5 ~ 4 50 84 359 _ - _ - _ - _ - - - 43 - _ 6 - ~ - 601 - - ~ 1 - 35 - - - - - - - - - - - - - - - - ■ " 1 F o r t h o s e p la n s w h ic h s p e c if ie d a p e r i o d of 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 i n th e p la n c o u ld b e g i n , th e s e r v i c e r e q u ir e m e n t i n c lu d e s b o th th e p r e p a r t i c i p a t i o n p e r i o d a n d th e r e q u i r e d m in im u m p la n m e m b e r s h i p p e r io d ,, 2 I n a f e w p l a n s , a l t e r n a t i v e 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 w e r e s p e c i f i e d ; i n e a c h c a s e , t h a t w i t h th e l o w e r a g e w a s s e le c t e d ,, 3 A g e r e q u i r e m e n t s to q u a l if y f o r b e n e f i t s w e r e l o w e r f o r w o m e n t h a n f o r m e n i n a n u m b e r o f p l a n s „ F i v e p la n s s p e c i f i e d a d i f f e r e n t i a l f o r n o r m a l r e t i r e m e n t — 5 y e a r s i n a l l e x c e p t 1 p la n w h ic h s t i p u la t e d 10 y e a r s ; 3 p la n s s p e c i f i e d a d i f f e r e n t i a l o f 5 y e a r s f o r e a r l y r e t i r e m e n t , , N O TE: D u e to r o u n d in g , s u m s o f i n d iv i d u a l it e m s do n o t n e c e s s a r i l y e q u a l to ta ls® 20 With few exceptions, the plans studied provided that a worker must reach age 65 in order to qualify for normal retirement benefits (table 14)c For workers other wise qualified, this means that in order to realize the maximum benefit to which their service or earnings entitles them they must continue in employment until age 65c In the absence of vesting, early retirement, or disability provisions (discussed below), this also means that workers would lose all of their pension rights should their em ployment be terminated before age 650 In addition to age requirem en ts, specific service requirem ents also had to be m et under m ore than tw o-thirds (53) of the plans studied in order to qualify for norm al pensions o Ten and 15 years of service were the m ost common requirem ents* In 51 of the 75 p lans, a worker m ust have been employed for 10 or m ore years to m eet the minim um eligibility requirem ents for normal retirem ent benefits® On the other hand, 22 plans did not specify a minimum service requirem ent. H ow ever, maxim um age participation requirem ents under some of these plans had the sam e effect as the establishm ent of minimum service requirem ents®14 E a rly and disability retirem ent p ro vision s, as pointed out above, are of p a r ticular im portance to older w orkers who may desire to retire prior to norm al r e tir e ment age on a reduced annuity or are com pelled to retire because of physical reasons® A s in norm al retirem en t, 10 and 15 y e a r s 1 service were common requirem ents for early retirement® Although the qualifying age m ost frequently specified was 55 (in 22 out of 47 plans providing for early retirem en t), m ore than 60 percent of the w orkers were under plans which perm itted retirem ent at age 60 at the earliest® An example of an early retirem ent clause follow s: On or after June 1, 1955, any employee (not retired date) who shall make due application therefor after (i) his 60th birthday but not his norm al retirem ent age, 10 or m ore years of creditable s e r v ic e , m ay retire and shall be eligible for an early retirem ent benefit A rticle V , Section 2, of the Plan® prior to such having reached and (ii) having at his option, as provided in Unlike norm al and early retirem ent p ro vision s, a large proportion (29) of the 48 plans which provided for disability pensions did not establish any age as a basis for qualification. The absence of such a requirement is undoubtedly attributable, in large part, to the fact that total and permanent disability is not a voluntary action on the part of the w ork er. F u rth erm ore, where the attainment of a specific age was required for disability p ensions, it was generally lower than that for early retirement® H ow ever, minimum service requirem ents were m ore prevalent for disability r e tir e ment than for norm al and early retirements® A ll plans except 1 of the 48 with d is ability provisions made service a prerequisite to qualification for benefits whereas about a third of the plans contained no such requirem ent for norm al or early benefits® Age requirem ents to qualify for benefits were lower for women than for men in a number of plans® Five plans specified a differential for norm al retirem ent— 5 years in all except for 1 plan which stipulated 10 y e a rs; 3 plans specified a dif ferential of 5 years for early retirement® Joint Survivor b e n e fits Pension payments under collectively bargained plans generally cease upon the death of the retired worker® In recent y e a r s , how ever, a number of program s under collective bargaining have been amended to include a provision allowing the w ork er, before retirem en t, to choose to have payments continued to a designated beneficiary— usually the surviving spouse. This provision is known as a joint survivor option® 14 It is possible that the hiring practices of the companies involved may likew ise made unnecessary a minimum service period in order to qualify for benefits in that w orkers were not hired above a certain age® have 21 To select this option, the worker is generally required to accept a lower amount than he norm ally would have been entitled to in order to provide for his su r viving b en eficiary. The worker must make such a choice usually not later than 5 years prior to r e tir e m e n t Exception to this preretirem ent period is som etim es m ade, but is conditioned upon proof of good health,, The value of this provision to the older worker would, of co u rse , depend upon individual circum stances* A worker in good health with little or no financial re sp on si b ilities presum ably would not select such an option, preferring rather to obtain the m axim um benefit for which he is qualified under the plan. On the other hand* the value of this provision is enhanced to a m arried worker who is approaching retirem ent age in poor health,, The right to provide an income for his wife would receive serious consideration in view of the p ossibility that he may live but a few years upon retirem ent* Of the 75 plans studied, 3 2 contained survivor option p ro v isio n s. The clauses varied considerably, and it was not uncommon to find alternatives presented to plan m em bers* For exam ple, one plan offered the following choice: (l) A reduced pension payable without change in amount during the retired em p loyeers lifetim e and, after his death, during the lifetim e of his ben eficiary, if surviving or (2) a la rg er pension payable during the retired e m p lo y e e ^ lifetim e and, after his death, payable at the rate of on e-h alf during the lifetim e of his b eneficiary, if surviving. Vesting M anagem ent and unions have recently been giving increasing attention to vestingo Vesting m ay be defined as the guarantee to a worker of an equity in a pension plan (based on the e m p lo yerrs contribution) 15 should his employment be terminated before he becom es eligible for retirem en t. This equity, of cou rse, would not be as large as if he had worked until his norm al retirem ent age. Vesting is a valued practice to all w ork ers, but is of special significance to older w o rk e rs. If w orkers have vested pension rights and should lose their jobs for any reason after qualifying for vestin g, they are guaranteed at le a st a partial pension, usually deferred until norm al retirem ent age. When seeking employment elsew h ere, an older worker may find an em ployer m ore favorably inclined to hire him if the e m ployer knows that the applicant already has vested pension rights with another firm * The inclusion of vesting provisions in pension agreem ents has becom e an im portant issue for collective bargaining. Cost is one of the reasons given against adopting vesting p ro vision s. In addition, vesting privileges may cause greater labor turnover, thus increasing em ployer costs in other ways* It is also argued that the inclusion of vesting provisions tends to m inim ize the reasons em ployers frequently give for estab lishing pensions— that i s , rewards to long service w orkers and the desire to retain experienced w o rk e rs. Because of the cost factor, and p ossibly a preference for other p ro vision s, e . g * , higher benefit le v e ls , many unions which m ay have desired vesting were unable to secure it when they fir st negotiated pension p r o g r a m s. Yet it is ap parent from recent collective bargaining developments that the obtaining of vested rights for their m em bership is a m ajor goal of many u n io n s .1* Over tw o-fifths of the plans studied provided for vesting (table 15). With one exception, these plans provided for deferred full vesting— a provision under which all rights to future pension payments are deferred until a Worker attains a certain age a n d /or has completed a specified period of employment or participation in the plan. 15 Contributions made by an employee under a plan financed by both the company and the employee are alm ost invariably returned to the w ork er, with or without in terest, should his employm ent be term inated prior to retirem ent, x* Among the unions which have negotiated vesting provisions during the past 2 or 3 years are the United Steelworkers of A m e ric a ; United A u tom obile, A irc ra ft and Agricultural Implem ent W orkers of A m e ric a ; International Union of E le c tr ic a l, Radio and Machine W o rk ers; and the United Rubber, Cork, Linoleum and P lastic W orkers of A m e r ic a . See page 27. 22 The one exception provided for deferred graded vesting; that i s , the em ployer *s con tributions were vested on a graduated b a s is , depending on length of s e r v ic e . A p p roxi m ately a third of the noncontributory plans were vested; all but one contributory plan w as T A B L E 1 5 .— V ested and n on vested pen sion plans b y type o f vestin g and m ethod o f financing N on con trib u tory plans A ll plans W ork ers V esting p r o v is io n C on trib u tory plans W ork ers W ork ers Plans Plans (000*s) Plans (000*s) (000*s) A ll plans s tu d ie d ____________________ 75 2 ,9 3 2 59 2 ,2 9 0 16 642 With vestin g p r o v is io n s ____________ 33 1,143 18 801 15 342 D e fe r r e d full vesting D e fe rre d gra d ed v e s t in g ________ 32 1 1,111 32 18 - 801 - 14 1 310 32 Without vestin g p r o v is io n s _____ ___ 42 1 ,7 90 41 1 ,4 90 1 300 N O TE: Due to rou nding, sums of individual item s do not n e c e s s a r ily equal to ta ls . Both age and service requirem ents were specified in 19 of the 32 plans with deferred full vesting (table 16). Age 40 and 10 y e a r s 1 service was the provision cov ering the la rg e st proportion of w o rk e rs. For exam ple: An em ployee who, on or after August 1, 1955, and on or after his 40th birthday and before his 60th birthday shall have lost his credited service under A rticle II and who at the time of such lo s s shall have had 10 or m ore years of credited service and who not e a rlie r than 90 days prior to his 65th birthday nor later than his 70th birthday shall have filed application therefor with the Board, shall be eligible for a deferred vested retirem ent benefit; . . . TA B LE 16. -P e n sio n plans providin g d e fe r r e d full vestin g by req u irem en ts fo r vestin g 1 W ork ers Plans R eq u irem en ts fo r vesting (000*s) A ll plans with d e fe r r e d full v e s tin g . __ _____ __ __ _____ __ __ 32 1,111 S e rv ice only _ _ ____ 5 y e a r s _ ___ ________________ 10 y e a r s _ ____________ ___ ______ 15 y e a r s _ _____ _ _____ __ 13 4 8 1 265 A ge and s e r v i c e . . ___ _ ___________ A g e 40 and 10 y e a rs* s e r v i c e _____ A ge 40 and 15 y ea rs* s e r v i c e ____ A ge 45 and 5 y e a rs* s e r v ic e _____ A ge 45 and 10 y ea rs* s e r v i c e _____ A ge 45 and 15 y e a rs* s e r v ic e A ge 50 and 15 y e a rs * s e r v ic e A ge 50 and 20 y e a rs * s e r v i c e _____ A ge 50 and 25 y e a rs * s e r v i c e __ _ A ge 52 and 15 y ea rs* s e r v ic e 19 6 3 1 1 2 1 3 1 1 846 642 52 5 5 4 15 94 19 10 1 B a sed on a study of 75 p en sion plans under gaining cov erin g a p p rox im a tely 3 m illio n w o rk e r s . 77 185 3 c o lle c t iv e bar 23 A ls o protecting the accrued rights of workers are industry or areawide plans under collective bargaining. These plans generally involve a fund to which a number of em ployers under contract with a union contribute a specified amount. A s long as the worker is em ployed by one of these e m p lo ye rs, he continues to build up credit under the plan. The distinction between this type of pension right protection and that provided by vesting is that under the latter the equity once vested is never lo s t. The worker can move to another em ployer not covered by the plan or quit work and still be assu red of an eventual benefit. Under a m ultiem ployer plan without a vesting p ro v isio n , the worker generally m ust continue in employm ent with one of the participating em ployers until he qualifies for retirem ent b en efits. Although the large m ajority of m ultiem ployer plans cover only em ployers within a particular industry a re a , thus restricting to a degree the movem ent of w o rk ers, a number of program s have been extended a c ro ss industry lin e s . A recently established plan of this type is that of the W estern Conference of T e a m s te r s . Not only can w ork ers under this plan move from em ployer to em ployer within a particular industry without losing their pension righ ts, but they can also move to em ployers under con tract with the International Brotherhood of T ea m sters in many other industries in the W est Coast a re a . Other unions, such as the International L a d ie s 1 Garment W o rk e rs, have developed reciprocity arrangem ents between the various segm ents of the w om enIs and childrenTS apparel industry so that a worker in the cloak and suit branch, for exam p le, may be able to secure em ploym ent in the dress segm ent and not lose his pension righ ts. Variations such as these have been increasing in num ber, thus p ro viding greater pension right protection to w orkers and affording older w orkers the op portunity to accru e, in effect, a vested right which may facilitate their reem ploym ent. Com pulsory and Autom atic Retirem ent Com pulsory and automatic retirem ent are two form s of involuntary retirem ent based on age alone. A com pulsory retirem ent provision stipulates an age at which the worker lo se s the privilege of deciding whether he should retire or continue on his jo b . He m ay, how ever, be perm itted to continue in employment on a y e a r -to -y e a r b asis in some c a s e s , subject to passing annual physical examinations or meeting standards of job perform an ce. For exam ple: Any m em ber in service who shall have attained age 65 prior to January 1, 1946, shall be retired on a normal retirem ent allowance on February 1, 1946, and any m em ber in service who shall attain age 65 on or after January 1, 1946, shall be retired on a normal retirem ent allowance on the fir st day of the calendar month next following; provided, how ever, that any m em ber m ay, upon the request of the company and with the assent of the employee filed with the retirem ent board, be continued in service after the norm al r e tir e ment date for a period of 1 y e a r , and upon like request and assent filed as a fo resaid , for su ccessive 1 -y e a r p erio d s. Notwithstanding the continuation of a m em ber !s service after he shall have attained age 65, the m em ber shall be retired during any such continuation on a norm al retirem ent allowance on a date to be fixed by the retirem ent board not le s s than 30 nor m ore than 90 days following receipt by the retirem ent board of written application therefor by the m em ber or by the company. An automatic retirem ent provision, on the other hand, stipulates an age at which a worker m ust cease his employment with a fir m , the plan having irrevocably established this age as a m axim um . Attitudes toward involuntary retirem ent based on age alone are currently being reexamined in view of changing p hysical, econom ic, and social fa c to r s . In general, unions presently view the practice of com pulsory retirem ent as one to be discouraged. They cite the im proved health of older w orkers as evidenced by an increasing life 24 expectancy. In addition* unions believe that the right of a man to a job should be p ro tected against b a rr ie rs such as an arbitrary retirem ent a ge . F urth erm ore, they claim that many w orkers are not financially able to retire at age 65 even with the benefits of private pension plans and in creased social security b en efits. The continued em ploy ment of older w o rk e rs, it is m aintained, would have certain additional advantages to the econom y in general. Many em p lo y e rs, on the other hand, believe that com pulsory retirem ent p ro visions are desirable for the following re a so n s, among others: M ost business firm s need turnover to encourage the advancement of younger e m p lo yees. Productivity in cre a se s frequently reduce the need for manpower in individual establish m ents. An inflexible retirem ent age provision d ecreases problem s presented when there is an e x cess supply of la b o r . A com pulsory or automatic retirem ent age, m o re o v e r, provides an objective standard which is not subject to favoritism and does not reflect upon the capabilities of the individuals involved. Of the 75 pension plans analyzed, 43 included com pulsory retirem ent p ro vi sions (table 17). Of these 43 p lans, 20 also provided for automatic retirem ent at specified a g e s . M ost m ultiem ployer plans had no com pulsory or automatic retirem ent p ro vision s. Age 65 was the m ost common com pulsory retirem ent age, followed by age 68 (table 18). The retirem ent ages specified in all 75 plans studied are shown in table 19. TA B L E 17 o— P en sion plans with co m p u lso r y and autom atic re tire m e n t p r o v is io n s by type o f e m p lo y e r unit S in g le -e m p lo y e r plans A ll plans W ork ers P r o v is io n Plans Plans M u ltiem p loyer plans W ork ers W ork ers Plans (000*s) (000*s) (000*s) A ll plans studied __________________ 75 2 ,9 3 2 51 1 ,7 26 24 1,2 06 With co m p u lso r y r e t ir e m e n t _____ 43 1,4 13 39 1,331 4 82 With autom atic r e t ir e m e n t ____ Without autom atic re tire m e n t _ _________________ 20 460 16 379 4 82 23 952 23 952 - - Without co m p u lso r y r e t ir e m e n t __ 32 1 ,5 20 12 396 20 1 ,1 2 4 NOTE: Due to rounding, sums of individual item s do not n e c e s s a r ily equal to ta ls . TA B LE 1 8 .— P en sion plans with co m p u lso ry re tire m e n t p r o v is io n s by age s p e c ifie d and p r o v is io n fo r a u tom atic re tire m e n t 1 Without autom atic retirem en t A ll plans C o m p u lsory R etirem ent age W ork ers Plans With autom atic re tire m e n t W ork ers Plans (000 *s) W ork ers Plans (0 0 0 Ts) (000 *s) A ll plans with co m p u lso ry re tire m e n t 43 1,413 23 952 20 460 65 66 67 68 70 25 1 1 15 1 660 21 5 717 10 17 511 8 1 1 9 1 149 21 5 275 10 y e a rs ;ars y e a rs ... .......... y e a rs years . _ _ ___ . . .. _ - 6 - 442 - 1 B ased on a study of 75 pen sion plans under c o lle c t iv e b a rg a in in g , co v e rin g a p p rox im a tely 3 m illio n w ork ers. N OTE: Due to rou nding, sum s o f individual item s do not n e c e s s a r ily equal to ta ls . 25 Service After N orm al Retirem ent Age To an older worker approaching norm al retirem ent age and covered by a plan which perm its him to continue working beyond that age, the question of whether his service will be credited during the extended period may be extrem ely important., He m ay be able to qualify for pension benefits only by being able to receive credit for these y e a rs. For exam ple, a plan may require that a worker have 20 years of service upon reaching norm al retirem ent age in order to qualify for b e n e fits. If this worker reaches age 65 (the norm al retirem ent age) with le s s than 20 years * s e r v ic e , and service cannot be credited beyond that age, he would never qualify for a benefit., On the other hand, the worker may be able to qualify for benefits at a later age if the plan allows him to accumulate service credits beyond age 65 . Although the worker who m eets the m inim um requirem ents upon reaching norm al retirem ent age is not faced with a problem of qualifying, the ability to accrue additional credit will add to his future pension in com e, which is also an important co n sid e ra tio n .17 Full credit for all service beyond normal retirem ent age was provided in 48 p lans, but 23 allowed no credit at all (table 19). Significantly, of the 48 crediting all se rv ic e , 26 did not have com pulsory retirem ent p ro v isio n s. Thus, it would be possible for nearly half of the w orkers covered by this study to rem ain at work as long as they d esired , or were able to, with the assurance that their additional s e r v ic e , if needed, would be credited. Recent Modifications Of the 75 plans included in this study, 61 were also analyzed by the Bureau of Labor Statistics in 1952 as part of a larger study of pension plans under collective bargaining. 18 A com parison of these 61 p lans, covering 2 ,7 3 0 ,0 0 0 w o rk e rs, between 1952 and late 1955 gives some indication of the changes companies and unions have made in their pension a greem en ts in recent years which are of special significance to older w orkers (table 20). E a rly retirem ent provisions were added to 4 plans covering 5 8 ,0 0 0 w o rk e rs, and 8 plans covering 2 8 5 ,0 0 0 w orkers were amended by making m ore liberal the early retirem ent provisions which were in effect in 1952. Of the changes which were made in early retirem ent provisions already in effect, alm ost all related to lowering the service requirem ent for eligib ility. Six plans established 60 years of age and 10 years of service as the eligibility requirem ent; fo r m e r ly , 1 plan required 30 years of s e r v ic e , 3 required 25 y e a r s , and 2 required 15 years at age 60. Concerning disability retirem ent b en efits, 6 plans covering 1 9 9 ,0 0 0 workers added such cla u se s, and 8 plans covering 233, 000 w orkers amended existing p ro vision s. Most plan amendments rem oved a rigid age requirement below which a worker was ineligible to receive disability benefits. Since 1952, vesting provisions were added to 11 plans covering 7 7 3 ,0 0 0 w orkers and amended in 2 p lans, covering 1 2 5 ,0 0 0 w o rk e rs, to libera lize p ro v isio n s. Of those plans which had vesting added to the agreem ent, 40 years of age with 10 years of service was the m ost common requirem ent for achieving vesting rig h ts. Fewer changes were made in provisions for com pulsory retirem ent than in other benefits affecting older w o rk e rs. Under two plans, provisions for com pulsory retirem ent were added; under one plan this provision was deleted. One plan increased the compulsory retirem ent age from 65 to 67. 17 Under som e plans, the m inim um requirem ents to qualify for benefits entitle the worker to the m axim um benefits p o ssib le . A ls o , some plans s e t a m axim um s e r v ice requirement for m axim um benefits. Any service beyond the stipulated m aximum would not increase the w o r k e r ^ pension. 18 Health, Insurance, and Pension Plans in Union Contracts, op. cit. to On TABLE 19o— D is t r ib u t io n o f p e n s io n p la n s b y s p e c i f i e d n o r m a l, c o m p u l s o r y , a n d a u t o m a t ic r e t ir e m e n t a g e s a n d b y am ou n t o f s e r v ic e c r e d it e d a fte r n o r m a l r e tir e m e n t a g e S e r v ic e S p e c ifie d r e tir e m e n t a g e 1 N one N orm al C o m p u ls o r y W ork ers W ork ers ( 0 0 0 *s) (0 0 0 * s) _ _ 65 68 65 65 65 65 66 67 68 68 70 _ _ 5 _ 75 - _ 10 _ 257 _ 4 1 _ 95 32 _ 1 18 21 5 _ 65 67 68 70 66 70 68 72 70 A l l p l a n s ___ 1 1 _ _ _ 1 _ 4 21 1 7 3 - 8 1 1 271 4 10 4 27 1 17 6 4 1 1 2 1 1 8 1 1 20 48 1 ,9 9 4 75 _ _ _ _ 414 . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 3 4 - _ 259 1 ,1 6 1 5 253 27 _ _ - 1 1 3 1 _ _ _ _ _ _ _ _ _ _ _ _ - _ - - - - - - - - - 23 503 3 414 1 (0 0 0 * s) ( 0 0 0 *s) 20 3 _ _ _ _ N um ber P la n s (0 0 0 * s) 2 60 65 70 65 65 65 65 65 65 65 65 65 65 65 W orkers W orkers P la n s P la n s P la n s A ll s e r v ic e U n t il a g e 7 2 U n t il a g e 6 8 W ork ers A u to m a tic A l l p la n s s tu d ie d c r e d it e d a fte r n o r m a l r e t ir e m e n t a g e _ 5 _ 1 259 1 ,2 5 6 5 510 441 95 32 3 19 21 5 27 1 4 10 2 ,9 3 2 F iv e p la n s s p e c i f i e d a l o w e r n o r m a l r e t ir e m e n t a g e f o r w o m e n th a n f o r m e n . T h is d i f f e r e n t i a l w a s 5 y e a r s in 4 c a s e s , a n d 10 y e a r s in th e o t h e r . O n e o f t h e s e p la n s p e r m it t e d s e r v i c e to b e a c c r u e d a f t e r a g e 60 u n til a t o t a l o f 20 y e a r s w a s a c c u m u l a t e d . 3 O n e o f th e s e p la n s p e r m it t e d s e r v i c e t o b e a c c r u e d a f t e r n o r m a l r e t ir e m e n t u n til a to t a l o f 30 y e a r s w a s a c c u m u la t e d . 4 T w o o f th e s e p la n s p e r m it t e d s e r v i c e t o b e c r e d it e d a f t e r n o r m a l r e t ir e m e n t u n til a to ta l o f 30 y e a r s w a s a c c u m u l a t e d . 8 T h r e e o f t h e s e p la n s p r o v i d e d th a t w o r k e r s m a y a c c u m u la t e c r e d i t e d s e r v i c e u n til a g e 6 8 o r a s t ip u la t e d n u m b e r o f y e a r s o f c r e d it e d s e r v i c e . The a m o u n t s o f c r e d i t e d s e r v i c e w e r e 15 y e a r s i n 1 c a s e , 2 5 y e a r s * s e r v i c e i n t h e o t h e r 2 c a s e s . NOTE: D ue to r o u n d in g , s u m s o f in d iv id u a l ite m s d o n o t n e c e s s a r i l y e q u a l t o t a l s . TABLE 2 0 . — M o d i f i c a t i o n s in 6 l M o d i f i c a t io n A l l p l a n s __________________________________________________________ E a r l y re tire m e n t: E a r l y r e t ir e m e n t ad d ed Q u a l if y i n g a g e r e d u c e d ..... Q u a l if y i n g s e r v i c e r e d u c e d ________________________ No chang e _ ___ _ D is a b ilit y r e t ir e m e n t : 1 D i s a b i l i t y r e t i r e m e n t a d d e d ____ Q u a l if y i n g a g e r e d u c e d Q u a l if y i n g s e r v i c e r e d u c e d . .............. N o chang e __ _ ___________ F i g u r e s a r e n o n a d d itiv e ; 2 p la n s m a d e s e le c t e d p e n s io n p la n s , 195 2 to la te 1955 M o d i f i c a t io n P la n s P la n s 61 4 2 6 49 6 6 4 47 V e s t in g : V e s t in g p r o v i s i o n a d d e d V e s t in g p r o v i s i o n l i b e r a l i z e d ............................. . N o c h a n g e ______________________ _________________________ C o m p u ls o ry r e t ir e m e n t : C o m p u l s o r y r e t i r e m e n t p r o v i s i o n a d d e d ___ C o m p u ls o ry r e t ir e m e n t p r o v is io n e li m in a t e d ....... .......................... A g e o f c o m p u ls o ry r e t ir e m e n t r a is e d N o chang e 2 changes each 11 2 48 2 1 1 57 27 Three plans in the current study which provided different retirem ent ages for men and women in 1952 were amended to provide one normal retirem ent age common to all employee So This com parison of 1952 and 1955 plans does not, of co u rse , take into account the introduction of vesting and early retirem ent in the steel industry in August 1 9 5 6 „19 The U , S. Steel C orp 0 and the United Steelworkers of A m erica agreed to the inclusion of a vesting provision which enables w orkers age 40 or over with 15 years of service to qualify for a deferred pension if their service is broken by layoff or permanent shutdown. The early retirem ent provision p erm its a w ork er, at his own volition, to retire at age 60 with 15 years of service and receive either an im m ediate reduced annuity or a deferred pension at age 65 in the full amount based on his service to date of actual retirem en t. The Uo S. Steel plan has no provision for com pulsory or automatic retirem en t. 19 This sum m ary is based on the text of the U . S, Steel agreem ent as published by the Bureau of National A ffa ir s , I n c ,, August 6 , 1956, ☆ U. S. GOVERNMENT PRINTING OFFICE : 1956 O - 404264
@FedFRASER