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PRIVATE
W. Willard Wirtz, Secretary
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BUREAU OF LABOR STATISTICS
Arthur M. Ross, Commissioner
Bulletin No. 1485
June 1966
PRIVATE
PENSION
PLAN
BENEFITS
UNITED STATES DEPARTMENT OF LABOR
W. Willard Wirtz, Secretary
BUREAU OF LABOR STATISTICS
Arthur M. Ross, Commissioner
rsi
Nf J
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 2 0 4 0 2 - Price 55 cents
Preface
T his b u lle tin co n clu d es a s e rie s of stu d ies p re p a re d by the B u reau of
L a b o r S ta tis tic s d e s c rib in g the p riv a te p en sio n p lan s of U .S . in d u stry as a W hole,
th e f ir s t su ch u n d e rta k in g sin c e p riv a te p en sio n p lan s b eca m e a sig n ific a n t fe a tu re
of the A m e ric a n econom y and of em ployee w e lfa re . T he p re s e n t study d eals
p r im a r ily w ith th e ty p es and le v e ls of b en efits av a ila b le fo r n o rm a l, d isa b ility ,
and e a rly re tire m e n t. A lso c o v e re d a re v estin g p ro v isio n s, su p p le m e n ta ry p en sio n
p la n s , and d e a th b e n e fits.
V estin g , e a rly r e tire m e n t, and p o rta b ility p ro v is io n s , and th e ir im p lic a
tio n s fo r la b o r m o b ility w e re an aly zed in L ab o r M o bility and P riv a te P e n sio n
P la n s (BLS B u lletin 1407, 1964). A sp e c ia l study a p p earin g in th e volum e of
r e s e a r c h m a te r ia ls acco m p any ing th e Ju n e 1965 re p o rt of the S e c re ta ry of L ab o r
to th e C o n g re ss, e n title d "T h e O ld er A m e ric a n W o rk er: Age D isc rim in a tio n in
E m p lo y m e n t," in clu ded a g g re g a te d a ta on n o rm a l re tir e m e n t b en efit fo rm u la s,
in v o lu n ta ry r e tire m e n t p r o v is io n s , s e rv ic e c re d itin g a fte r n o rm a l re tire m e n t ag e,
and m ax im u m p a rtic ip a tio n age p ro v isio n s.
T he p la n s a n aly zed fo r th is study w e re th o se in effect d u rin g the w in ter
1962—63. The changes in p la n s n eg o tiated in m a jo r in d u s trie s , p a r tic u la r ly a u to
m o b ile s and b a s ic s te e l, in 1964 and 1965, w e re of su ch an o rd e r as to m odify
sig n ific a n tly m uch of th e d a ta p re s e n te d in th is stu d y . In ad d itio n , im p o rta n t
chan ges in o ld -a g e , s u r v iv o r s , and d isa b ility in su ra n c e b en efits w e re en acted in
1965. T h ese chan ges could not be in c o rp o ra te d in th is stu dy . T he ex p ected
in te ra c tio n and s p re a d of th e se changes d u rin g the n ex t few y e a rs is lik ely to
a lte r m a rk e d ly th e sh ap e of th e p riv a te p en sio n sy ste m as a w hole. T his stu dy ,
th e n , s e rv e s as a b e n c h m a rk a g a in st w hich th e se chan ges can be m e a s u re d . The
d ig e sts of se le c te d p e n sio n p la n s is s u e d by th e B u re a u of L ab o r S ta tis tic s at
2- o r 3 -y e a r in te rv a ls p ro v id e c u rre n t in fo rm a tio n on the fe a tu re s of m a jo r p la n s.
T h at th e B u re a u of L a b o r S ta tis tic s had the fin a n c ia l re s o u rc e s to an aly ze
the p riv a te p e n sio n sy ste m as a w hole, th ro u g h th is b u lle tin and th e p re v io u s
re p o rts m en tio n ed abo ve, w as to a la rg e ex ten t fo rtu ito u s. The M anpow er D e
v elo p m en t and T ra in in g A ct of 1962 called upon th e U .S . D e p a rtm e n t of L ab o r
to stu dy th e m o b ility im p lic a tio n s of p en sio n p la n s, and funds w e re advanced to
th e B u re a u of L a b o r S ta tis tic s , by th e D e p a rtm e n ts O ffice of M an po w er, A u to
m a tio n and T ra in in g , to u n d e rta k e th is stu dy . The in te r e s t of th e U .S . D e p a rt
m e n t of H e a lth , E d u c a tio n , and W elfare in d isa b ility re tir e m e n t p ro v isio n s led to
its su p p o rt of a c o m p re h e n siv e stu dy by the B u reau of th is fe a tu re of p riv a te
p e n sio n p la n s. U n der se c tio n 715 of th e C ivil R ights A ct of 1964, th e C o n g ress
d ire c te d th e S e c re ta ry of L a b o r to stu dy "th e fa c to rs w hich m ig h t tend to re s u lt
in d is c rim in a tio n in em ploym en t b e c a u se of a g e ," and p a r t of the funds allo c a te d
by th e C o n g re ss fo r th is study su p p o rted th e B u re a u in its stu dy of th o se e le
m e n ts in p e n sio n p la n s th a t c o n trib u ted to the p ro b le m s of aging w o rk e rs . By
adding its own lim ite d re s o u rc e s to th o se of o th e r ag en cies in te re s te d in p en sio n
p la n s , th e B u re a u w as ab le to co m p lete the p ic tu re in th is b u lletin .
T he B u re a u is a lso g ra te fu l fo r the co o p e ra tio n of the O ffice of L a b o rM an agem ent and W e lfa re -P e n s io n R e p o rts, w hich is re sp o n sib le fo r th e D e p a rt
m e n ts file of p e n sio n p la n d o cu m en ts.
T his stu d y w as u n d e rta k e n in the B u re a u ’s D iv isio n of In d u s tria l and L ab o r
R e la tio n s, J o se p h W. B loch, C hief, u n d er th e g e n e ra l d ire c tio n of L . R. L in se n m a y e r, A s s is ta n t C o m m iss io n e r, O ffice of W ages and In d u s tria l R e la tio n s. T his
b u lle tin w as p re p a re d by W a lte r W. K o lo d ru b etz, D onald J . S ta a ts, and S tan ley S.
S acks u n d e r th e su p e rv is io n of D onald M . L anday.
Hi
Contents
Page
C h ap ter I. In tro d u c tio n --------------------------------------------------------------------------------------1
Scope and m eth od -------------------------------------------------------------------------------------------1
C h ap ter II. N o rm a l r e tire m e n t -------------------------------------------------------------------------R e q u ire m e n ts fo r p lan p a r tic ip a tio n -------------------------------------------------------------Age and s e rv ic e re q u ire m e n ts fo r p a rtic ip a tio n -------------------------------------C red itin g p re p a rtic ip a tio n s e r v i c e -----------------------------------------------------------M inim um re q u ire m e n ts fo r n o rm a l r e tir e m e n t--------------------------------------------N o rm a l re tir e m e n t b e n e fit f o rm u la s -------------------------------------------------------------T ypes of b e n e fit f o rm u la s --------------------------------------------------------------------------M inim um b e n e fit f o rm u la s ------------------------------------------------------------------------P a s t s e rv ic e b e n e fit f o r m u la s ------------------------------------------------------------------A d ju stm en t of p riv a te p lan b e n e fits to so c ia l se c u rity b e n e f its _________
L evel of b e n e fits ----------------------------------------------------------------------------------------------A s s u m p tio n s -----------------------------------------------------------------------------------------------A ll p lan s ------------------------------------------------------------------------------------------------------C om bined b e n e fits --------------------------------------------------------------------------------------M ethod of fin a n c in g ------------------------------------------------------------------------------------Type of em p lo y e r u n it -------------------------------------------------------------------------------C o llectiv e b a rg a in in g ---------------------------------------------------------------------------------Type of w o rk e r c o v e r e d ----------------------------------------------------------------------------I n d u s tr y ----------------------------------------------------------------------------
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C h ap ter III. D isa b ility r e tire m e n t -------------------------------------------------------------------P re v a le n c e of d is a b ility re tire m e n t p r o v is io n ---------------------------------------------M inim um re q u ire m e n ts fo r d isa b ility r e tir e m e n t----------------------------------------D efin ition of d is a b ility -------------------------------------------------------------------------------Age and s e rv ic e r e q u ire m e n ts ------------------------------------------------------------------W aiting p e r io d ---------------------------------------------------------------------------------------------D isa b ility re tir e m e n t b e n e fit f o rm u la s ---------------------------------------------------------In te g ra tio n w ith so c ia l s e c u rity and w o rk m e n 's
c o m p en satio n b e n e fits -----------------------------------------------------------------------------------A d m in istra tiv e p ro c e d u re s ----------------------------------------------------------------------------L e v e ls of d is a b ility b e n e fits __________________________________________________
W o rk ers q u alified fo r p riv a te p la n b e n e fit and so c ia l
s e c u rity b e n e f it----------------------------------------------------------------------------------------W o rk e rs q u alified fo r p riv a te p lan b en efits o n ly ------------------------------------M ethod of fin a n c in g ------------------------------------------------------------------------------------Type of e m p lo y e r u n it--------------------------------------------------------------------------------C o llectiv e b a rg a in in g ---------------------------------------------------------------------------------T ypes of w o rk e rs c o v e r e d -------------------------------------------------------------------------I n d u s tr y --------------------------------------------------------------------------------------------------------
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C h ap ter IV. E a rly r e tir e m e n t---------------------------------------------------------------------------P re v a le n c e of e a rly r e tire m e n t p ro v isio n and
m in im u m r e q u ire m e n ts --------------------------------------------------------------------------------B en efits pay ab le u n d e r e a rly r e tir e m e n t------------------------------------------------------L evel of b e n e fits ---------------------------------------------------------------------------------------------S ocial s e c u rity a d ju stm e n t o p tio n -------------------------------------------------------------------
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Contents— Continued
C h a p te r V. O th er f e a tu r e s ---------------------------------------------------------------------------------V ested b e n e fits -------------------------------------------------------------------------------------------------C o m b in atio ns of m a jo r b e n e fit p ro v is io n s ----------------------------------------------------P re v a le n c e of m a jo r b e n e fit p r o v is io n s ---------------------------------------------------S u p p lem en tary p la n s ----------------------------------------------------------------------------------------B e n e fits p ay ab le u n d e r su p p le m e n ta ry p l a n s ------------------------------------------D eath b e n e f its --------------------------------------------------------------------------------------------------C h a rts:
1. P e n sio n b e n e fits fo r w o rk e rs e a rn in g $ 3 , 600 ann ually w ith
20 and 30 y e a rs of s e r v ic e ---------------------------------------------------------------------2. P e n sio n b e n e fits fo r w o rk e rs e a rn in g $ 4 ,8 0 0 an n u ally w ith
20 and 30 y e a rs of s e r v ic e ---------------------------------------------------------------------3. P e n sio n b e n e fits fo r w o rk e rs e a rn in g $ 6 , 000 an n ually w ith
20 and 30 y e a rs of s e r v ic e ---------------------------------------------------------------------4. P e n sio n b e n e fits fo r w o rk e rs e a rn in g $ 8 ,4 0 0 ann ually w ith
20 and 30 y e a rs of s e r v ic e ---------------------------------------------------------------------5. M onthly n o rm a l re tire m e n t b e n e fits, by s e le c te d a ssu m e d annual
e a rn in g s le v e ls and s e rv ic e p e rio d s, w in te r 1962—6 3 -------------------------6 . M onthly d isa b ility re tire m e n t b en efits fo r w o rk e rs e lig ib le fo r
so c ia l s e c u rity d isa b ility b e n e fits, by s e le c te d a ssu m e d ann ual
e a rn in g s le v e ls and s e rv ic e p e rio d s , w in te r 1962—6 3 -------------------------7. M onthly d isa b ility r e tire m e n t b en efits fo r w o rk e rs in e lig ib le fo r
so c ia l s e c u rity d isa b ility b e n e fits, by s e le c te d a ssu m e d annual
e a rn in g s le v e ls and s e rv ic e p e rio d s, w in te r 1962—6 3 -------------------------8 . M onthly e a rly re tire m e n t b e n e fits fo r w o rk e rs re tirin g a t
age 60, by se le c te d a ssu m e d annual e a rn in g s le v e ls and
s e rv ic e p e rio d s , w in te r 1962—6 3 -----------------------------------------------------------9. M onthly e a rly r e tire m e n t b e n e fits fo r w o rk e rs re tirin g at
age 55, by se le c te d a ssu m e d annual ea rn in g s le v e ls and
s e rv ic e p e rio d s , w in te r 1962—6 3 -----------------------------------------------------------10. M onthly v estin g b e n e fits , by s e le c te d a ssu m e d ann ual ea rn in g s
le v e ls and s e rv ic e p e rio d s , w in te r 1962—63 ----------------------------------------T a b le s:
1. D istrib u tio n of p riv a te p en sio n p lan s by in d u stry and type of
e m p lo y e r u n it, w in te r 1962—6 3 __________________________________________
2 . D istrib u tio n of p riv a te p e n sio n p lan s by in d u stry and co llectiv e
b a rg a in in g s ta tu s , w in te r 1962—6 3 --------------------------------------------------------3. P ro v isio n s fo r p a rtic ip a tio n re q u ire m e n ts in p riv a te p en sio n p lan s
by type of e m p lo y e r u n it, m eth od of fin an cin g , and co lle c tiv e
b a rg a in in g s ta tu s , w in te r 1962—6 3 --------------------------------------------------------4. P ro v isio n s fo r p a rtic ip a tio n re q u ire m e n ts in p riv a te p en sio n p lan s
by in d u stry , w in te r 1962—6 3 ------------------------------------------------------------------5. M inim um age and s e rv ic e re q u ire m e n ts fo r p a rtic ip a tio n in
p riv a te p en sio n p la n s, w in te r 1962—63 -------------------------------------- ----------6 . C red itin g of p re p a rtic ip a tio n s e rv ic e fo r n o rm a l b en efit co m
p u tatio n and fo r s e rv ic e q u a lificatio n fo r b e n e fits in p riv a te
p en sio n p la n s , by m eth od of finan cin g, w in te r 1962—63 ____ ____-_____
W
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Contents— Continued
P age
T able s— C ontinued
7. M inim um age and s e rv ic e re q u ire m e n ts fo r n o rm a l r e tire m e n t
in p riv a te p e n sio n p la n s , w in te r 1962—63 -----------------------------------------8 . M inim um age re q u ire m e n ts fo r n o rm a l re tir e m e n t in p riv a te
p e n sio n p la n s, by in d u stry , w in te r 1962—63 -------------------------------------9. E a rn in g s b a se u tiliz e d in e a rn in g s fo rm u la s in p riv a te p en sio n
p la n s , by in d u stry , w in te r 1962—63 --------------------------------------------------10. M onthly p riv a te p e n sio n p la n n o rm a l re tire m e n t b e n e fits by
s e le c te d a ssu m e d annual e a rn in g s le v e ls and s e rv ic e
p e rio d s , w in te r 1962—63 ---------------------------------------------------------------------11. D isa b ility r e tire m e n t p ro v isio n s in p riv a te p en sio n p lan s by
type of e m p lo y e r u n it, m eth od of finan cin g, and co lle c tiv e
b a rg a in in g s ta tu s , w in te r 1962—63 -----------------------------------------------------12. D isa b ility r e tire m e n t p ro v isio n s in p riv a te p en sio n p lan s by
in d u stry , w in te r 1962—63 --------------------------------------------------------------------13. D isa b ility re tire m e n t p ro v isio n s in p riv a te p en sio n p lan s by
n u m b er of a c tiv e w o rk e rs c o v ered , w in te r 1962—63 ------------------------14. M inim um age and s e rv ic e re q u ire m e n ts fo r d isa b ility r e tire m e n t
in p riv a te p e n sio n p la n s, w in te r 1962—63 -----------------------------------------15. W aiting p e rio d fo r d is a b iltiy re tire m e n t b en efits in p riv a te
p en sio n p la n s by in d u stry , w in te r 1962—63 ---------------------------------------16. P ro v isio n s fo r d ed uction of s o c ia l s e c u rity d isa b ility
b e n e fits and w o rk m e n 's co m p en satio n b e n e fits fro m p riv a te
p e n sio n p lan d is a b ility b e n e fits, by in d u stry ,
w in te r 1962—63 ------------------------------------------------------------------------------------17. M onthly p riv a te p e n sio n plan d isa b ility r e tire m e n t b e n e fits fo r
w o rk e rs e lig ib le fo r so c ia l s e c u rity d isa b ility b e n e fits, by
s e le c te d a ssu m e d annual e a rn in g s le v e ls and s e rv ic e p e rio d s ,
w in te r 1962—63 -------------------------------------------------------------------------------------18. M onthly p riv a te p en sio n p lan d isa b ility re tire m e n t b e n e fits fo r
w o rk e rs in e lig ib le fo r s o c ia l s e c u rity d isa b ility b e n e fits, by
se le c te d a ssu m e d ann ual e a rn in g s le v e ls and s e rv ic e
p e rio d s , w in te r 1962—63 ---------------------------------------------------------------------19. M edian m onthly p riv a te p en sio n p lan d isa b ility b e n e fits fo r
w o rk e rs e lig ib le fo r so c ia l s e c u rity d isa b ility b e n e fits, a t
s e le c te d a ssu m e d annual e a rn in g s le v e ls and s e rv ic e p e rio d s ,
by in d u stry , w in te r 1962—6 3 ----------------------------------------------------------------20. M edian m on thly p riv a te p en sio n p lan d isa b ility b e n e fits fo r
w o rk e rs in e lig ib le fo r so c ia l s e c u rity d isa b ility b e n e fits, a t
s e le c te d a ssu m e d annual e a rn in g s le v e ls and s e rv ic e p e rio d s ,
by in d u stry , w in te r 1962—63 ---------------------------------------------------------------21. E a rly re tir e m e n t p ro v isio n s in p riv a te p en sio n p lan s by
in d u stry , w in te r 1962—6 3 --------------------------------------------------------------------22. M inim um age and s e rv ic e re q u ire m e n ts fo r e a rly re tire m e n t
in p riv a te p en sio n p ia n o , w in te r 1962—63 ____________________________
23. T im e of b e n e fit pay m ent io r e a rly re tire m e n t in p riv a te p en sio n
p lan s by type of e m p lo y e r u n it, m eth od of fin an cin g , and
co lle c tiv e b a rg a in in g s ta tu s , w in te r 1962—63 -----------------------------------24. T im e of b e n e fit p ay m en t fo r e a rly re tire m e n t in p riv a te
p en sio n p la n s by in d u stry , w in te r 1962—6 3 -----------------------------------------
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Contents— Continued
Page
Tab le s— C ontinue d
25. M onthly p riv a te p en sio n p lan e a rly re tir e m e n t b en efits fo r
w o rk e rs re tirin g a t age 60 by se le c te d a ssu m e d ann ual e a rn in g s
le v e ls and s e rv ic e p e rio d s , w in te r 1962—63 _________________________
26. M onthly p riv a te p en sio n p lan e a rly re tire m e n t b en efits fo r
w o rk e rs re tirin g a t age 55 by se le c te d a ssu m e d ann ual
e a rn in g s le v e ls and s e rv ic e p e rio d s , w in te r 1962—6 3 ----------------------27. P ro v isio n s fo r m a jo r su p p le m e n tal b e n e fits in p riv a te p en sio n
p la n s by type of em p lo y er u n it, m eth od of fin an cin g , and
c o lle c tiv e b a rg a in in g s ta tu s , w in te r 1962—6 3 ------------------------------------28. P ro v is io n s fo r m a jo r su p p le m en tal b e n e fits in p riv a te p en sio n
p la n s , by n u m b er of a ctiv e w o rk e rs co v e re d , w in te r 1962—63 _____
29. P ro v isio n s fo r m a jo r su p p le m en tal b e n e fits in p riv a te p en sio n
p la n s by type of w o rk e rs c o v e re d , w in te r 1962—63 __________________
30. P ro v is io n s fo r m a jo r su p p le m en tal b e n e fits in p riv a te p en sio n
p la n s by in d u stry , w in te r 1962—6 3 ------------------------------------------------------31. D eath b e n e fit p ro v isio n s in p riv a te p en sio n p lan s by type of
e m p lo y e r un it, m eth od of fin an cin g , and co lle c tiv e b a rg a in in g
s ta tu s , w in te r 1962—6 3 -------------------------------------------------------------------------32. D eath b e n e fit p ro v isio n s in p riv a te p en sio n p lan s by in d u stry ,
w in te r 1962—63 -------------------------------------------------------------------------------------A ppendixes:
A. Scope and m eth od of s u r v e y --------------------------------------------------------------------
v iii
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Private Pension Plan Benefits
Chapter I. Introduction
A u n iv e rs a l pu blic re tir e m e n t sy ste m cannot tak e into acco u n t a ll the im
p o rta n t d iffe re n c e s am ong w o rk e rs , o ccu p atio n s, and in d u s trie s . T his is one
of th e re a s o n s a v a rie ty of m eth o d s of com puting and p rov id ing r e tir e m e n t b e n e
fits, h as b een d ev elo p ed in p riv a te p en sio n p lan s th a t su p p lem en t th e o ld -a g e ,
s u rv iv o rs , and d isa b ility (h e re a fte r r e f e r r e d to as so c ia l se c u rity ) p ro g ra m .
A n o v erw h elm in g n u m b e r of p riv a te p lan s re fle c t, in th e ir plann ing , the e x p e c ta
tio n th a t th e ir b e n e fic ia rie s w ill re c e iv e so c ia l s e c u rity b e n e fits.
A view of the p riv a te p en sio n s y ste m a s a w hole re v e a ls a s p e c ts not a p
p a re n t a t c lo s e r q u a rte r. A s th is stu dy sho w s, the g r e a te r p a rt of th e r e t i r e
m e n t in co m e of m o s t w o rk e rs c o v e re d by p riv a te plan s in effect d u rin g th e e a rly
1960*s w as to be p a id by s o c ia l s e c u rity . Only fo r w o rk e rs w ith high e a rn in g s
and long s e rv ic e did p riv a te plan b e n efit am o u n ts com m only begin to ap p ro ach
the ex p ected s o c ia l s e c u rity p a y m e n ts. O v e ra ll, h o w ev er, p o te n tia l p riv a te
p lan b e n e fits in re la tio n to p r e r e tir e m e n t e a rn in g s le v e l ex h ib ited one b a sic
c h a r a c te r is tic of the so c ia l s e c u rity sy ste m in fav o rin g lo w er p aid w o rk e rs .
A c c o rd in g ly , w hen p u b lic and p riv a te b en efits w e re com b ined , th is ten d en cy
w as a c c e n tu a te d .
C h a p te r 2 of th is b u lle tin d e s c rib e s the m a jo r c h a r a c te r is tic s of n o rm a l
re tir e m e n t p ro v isio n s and le v e ls of n o rm a l r e tire m e n t b e n e fits. O th er a sp e c ts
of n o rm a l r e tir e m e n t d e a lt w ith in th is c h a p te r in clu de re q u ire m e n ts fo r plan
p a rtic ip a tio n , b en efit fo rm u la s and re q u ire m e n ts fo r re c e ip t of b e n e fits. 1 D is a
b ility r e tir e m e n t p ro v is io n s , including m in im u m age and se rv ic e re q u ire m e n ts
and o th e r e le m e n ts of the b e n e fit p ro v isio n , a re an a ly z e d in d e ta il in c h a p te r 3;
d is a b ility b e n e fit am o u n ts u n d e r c e rta in a ssu m e d con ditio ns w e re com p uted . C hap
te r 4 in c lu d e s b e n e fits co m p u tatio n s fo r h y p o th etical c a s e s of e a rly re tire m e n t. 2
F in a lly , c h a p te r 5 s u m m a riz e s data on the le v e ls of v e ste d b e n e fits, p ro v id e s an
o v e ra ll view of th e p re v a le n c e of m a jo r ty p es of re tir e m e n t b e n e fits, and a n a ly z e s
su p p le m e n ta l p lan s and d eath b e n e fits.
Scope an d M ethod
A p riv a te p e n sio n p la n , a s d efin ed fo r th is stu d y , is a plan e s ta b lish e d by
an e m p lo y e r, union, o r bo th , th a t p ro v id e s a c a sh in co m e fo r life fo r q u alified
r e tir e d w o rk e rs . T his d efin itio n in clu d ed p lan s in tro d u c e d u n ila te ra lly by e m
p lo y e rs , jo in tly by e m p lo y e rs and e m p lo y e e s, o r u n ila te ra lly by o rg a n iz e d e m
ploy ee g ro u p s. A ll p ro fit-s h a rin g , sto ck bo nu s, and sav in g s p la n s, including
th o se paying out am o u n ts a t o r a fte r a w o rk e r1s re tir e m e n t, w e re exclud ed b e
c a u se m o s t su ch p lan s do not p ro v id e life tim e r e tir e m e n t b en efits an d , f u rth e r,
1 The implications of benefit formulas and of requirements for normal retirement for employment of older workers
are examined in The Older American Worker: Age Discrimination in Employment (Report of the Secretary of Labor
to the Congress under Section 715 of the Civil Rights Act of 1964), June 1965.
2 A previous study, Labor Mobility and Private Pension Plans (BLS Bulletin 1407, 1964), concentrated on the
vesting and early retirement provisions of pension plans.
1
2
the am ou nts of th e b e n e fits p ay able by th o se th a t do a re n o t d efin itely a s c e r
tain a b le in ad v an ce. 3 P la n s of g o v ern m en t and n o n p ro fit o rg a n iz a tio n s (o th er
th an unions) w e re a lso exclud ed fro m th e scope of th is stu dy , as w ere v e ry sm a ll
p riv a te p lan s w ith few er th an 26 p a rtic ip a n ts .
The ch ief so u rc e of d ata fo r th is study w as th e r e p o rts file d w ith the
U .S . D e p a rtm e n t of L a b o r s O ffice of L a b o r-M a n a g e m e n t an d W e lfa re -P e n sio n
R e p o rts , p u rsu a n t to the W elfare and P e n sio n P la n s D isc lo su re A ct. By the
end of I960, fin a n c ia l re p o rts (D -2 fo rm s) h ad b een filed fo r o v er 25,000 p riv a te
p lan s p ro v id in g re tir e m e n t b e n e fits. The p lan d e sc rip tio n s (D -1 fo rm s) and su p
p o rtin g d o cu m en ts file d fo r th e se p lan s w e re the b a sis fo r th is study.
To re d u c e th e se 25, 000 re p o rts to a m o re m an ag eab le n u m b er fo r a n a ly s is ,
a ra n d o m sam p le s tra tifie d by in d u stry and siz e of plan (num b er of a c tiv e w o rk
e r s co v ered ) w as se le c te d . The sam p le w as d esig n ed to p e rm it p re s e n ta tio n of
data by in d u stry d iv isio n , and in som e c a s e s , by m a jo r in d u stry g ro u p . W ithin
each in d u s try -s iz e g ro u p in g , the sa m p le w as se le c te d to y ield th e m o s t re lia b le
r e s u lts . T his w as done by including in the sam p le a h ig h e r p ro p o rtio n of la rg e
p lan s than of s m a ll. D ata fo r each sam p le re p o rt w e re w eigh ted in a c c o rd a n c e
w ith its p ro b a b ility of se le c tio n so th a t the ta b le s show e s tim a te s fo r a ll p riv a te
p en sio n p lan s w ith fin a n c ia l re p o rts on file fo r I9 6 0 .4
T he p en sio n p lan s stu d ie d w e re lim ite d to th o se fo r w hich fin a n c ia l re p o rts
w e re su b m itte d fo r I960. C o verage d ata, h o w ev er, w e re o b tain ed fro m the r e
p o rts fo r 1961. The p lan p ro v isio n s an aly zed w e re th o se in effect in the w in te r
of 1962—63 and w e re c o n sid e re d c u r r e n t a t th a t tim e . (See appendix A .)
F in a n c ia l re p o rts fo r about 16,000 p riv a te p en sio n p la n s, 5 a s defined fo r
th is study, w e re file d w ith the U .S . D e p a rtm e n t of L ab o r fo r I960. O v er 60 p e r
cen t of the w o rk e rs involved w e re m e m b e rs of p lan s applying to 5, 000 w o rk
e r s o r m o re . A lto g e th e r, the 15 la r g e s t p la n s, each w ith o v er 100,000 a c tiv e
w o rk e rs , had o v e r a six th of the c o v e ra g e . O v er 60 p e rc e n t of the plans had
fe w e r than 200 a c tiv e m e m b e rs , but acco u n ted fo r le s s th an 5 p e rc e n t of the
to ta l c o v e ra g e .
A bout 60 p e rc e n t of the p lan s and w o rk e rs w e re in m an u factu rin g in d u s
tr ie s , a p p ro x im a te ly 40 p e rc e n t in n o n m an u factu rin g in d u s trie s (table 1). In
g e n e ra l, m u ltie m p lo y e r p lan s p re d o m in a te d in in d u s trie s m a rk e d by m u ltie m
p lo y e r b arg ain in g p a tte rn s , such a s the c o n stru c tio n , m in in g , w h o lesale tra d e ,
and m o to r tra n s p o rta tio n in d u s trie s .
E m p lo y e rs fin an ced the e n tire c o st of re tir e m e n t b en efits in about 3 out of
4 p lan s and th e se n o n c o n trib u to ry p lan s c o v e re d about the sam e p ro p o rtio n of
w o rk e rs . The in d u s tria l p a tte rn of finan cin g re fle c te d b arg ain in g p a tte rn s; in d u s
tr ie s w ith m o stly n e g o tia te d p lan s had m o stly n o n co n trib u to ry plans and v ice v e rs a
(tab le 2).
3 Chiefly because of these exclusions, the numbers of plans and workers studied are not comparable to data on
"pension benefit plans" published by the Office of Labor-Management and Welfare-Pension Reports, or to estimates of
coverage published by the Social Security Administration.
4 About 30 percent fewer reports were included in this study than the number reported for the same period by
the Department's Office of Labor-Management and Wei fare-Pens ion Reports. See footnote 3 for explanation.
5 Of the 16,031 private pension plans studied, covering 15.8 million active workers, 213 plans v*ithl66,000 active
workers were in the process of determining their plans provisions. For these plans, little iniormation other than size,
industry, financing, and type of worker covered, were available at the time of the study. Thus, the analysis of
pension plans and benefits provided under certain assumed conditions, relate only to 15,818 plans.
3
Table 1.
Distribution of Private Pension Plans by Industry and Type of Em ployer Unit, Winter 1962—63
(W orkers in thousands)
Type of em ployer unit
A ll plans
Single em ployer
Industry
Number
W o rk ers1
M ultiem ployer
Plans
W o rk ers1
Plans
W o rk e rs1
A ll plans studied----------------------------------------
2 15, 818
2 15, 621
1 4 ,8 9 0
1 1 .7 4 2
928
3 ,8 7 8
M in in g ---------------------------------------------------------Contract con stru ction -----------------------------M anufacturing--------- -------------------------------T ran sp o rtatio n ------------------------------------------Communications and public u t i lit i e s ----W holesale and retail tra d e ---------------------W holesale tra d e-----------------------------------Retail trade-------------------------------------------Finance, insurance, and real esta te ----S e r v ic e s -------------------------------------------------------
316
449
9, 257
673
849
1,627
1, 147
480
1,8 5 3
719
327
1 ,0 7 2
9, 678
1, 286
1, 270
920
479
440
733
308
300
60
8 ,9 9 5
549
848
1,5 4 0
1,0 8 2
458
1 ,8 4 0
686
89
23
8 ,4 2 6
516
1,261
572
171
401
719
119
16
389
262
124
1
87
65
22
13
33
238
1, 049
1, 252
770
10
348
308
40
15
190
J
j
j
1
1
|
!
'
1 Active w orkers in 1961.
2 Includes industries for which data are not shown separately.
NOTE:
Because of rounding, sum s of individual item s may not equal totals.
Table 2.
Distribution of Private Pension Plans by Industry and Collective Bargaining Status, W inter 1962—63
(W orkers in thousands)
Collective bargaining status
A ll plans
Mentioned in a collective
bargaining agreem ent
Industry
M in in g ------ -----------------------------------------------Contract construction-------------------------------M anufacturing-------------------------------------------T ran sportation------------------------------------------Communications and public utilities-----W holesale and retail tra d e ---------------------W holesale tra d e_______________________
Retail t r a d e ------------------------------------------Finance, insurance, and real esta te ----S e r v ic e s-------------------------------------------------------
i
Plans
W o rk ers1
2 15, 818
2 15, 621
5 ,7 9 5
10,695
3 1 0,023
4 ,9 2 6
316
449
9, 257
673
849
1 ,627
1, i47
480
1 ,853
719
327
1, 072
9 ,6 7 8
1, 286
1, 270
920
479
440
733
308
43
384
4, 285
384
314
294
249
45
22
54
242
908
6 ,8 2 1
898
1 ,0 4 2
498
340
158
78
191
273
65
4 ,9 7 2
289
535
1 ,333
898
435
1,831
665
86
164
2, 857
388
228
421
139
282
656
118
i
I
!
i
j
|
1 Active w orkers in 1961.
2 Includes industries for which data are not shown separately.
3 Includes 110 plans, covering 2 7 2 ,0 0 0 w orkers, which were union sponsored and operated.
N O TE:
Because of rounding, sum s of individual item s may not equal totals.
Plans
W o rk ers1
W o rk ers1
Numbe r
A ll plans studied----------------------------------------
Not mentioned in a
collective bargaining
agreem ent
Chapter II. Normal Retirement
N o rm a l re tir e m e n t p ro v isio n s of p riv a te p en sio n p la n s co n tain th e b a sic
a s s u ra n c e of life tim e re tir e m e n t b e n e fits fo r elig ib le w o rk e rs and c o n stitu te the
foundation on w hich o th e r p ro v isio n s a re b a se d . T his c h a p te r fo c u se s on th re e
m a jo r e le m e n ts of n o rm a l r e tire m e n t p ro v isio n s: (1) M inim um age and s e rv ic e
re q u ire m e n ts fo r p lan p a rtic ip a tio n and re c e ip t of b e n e fits, (2) fo rm u la s u se d
to com pute b e n e fits, and (3) am ou nt of b en efits th e se fo rm u la s p ro v id e. The
n o rm a l r e tire m e n t age is u su a lly defin ed a s the e a r lie s t age a t w hich a w o rk e r
m ay r e tir e a t h is own re q u e s t and re c e iv e im m e d ia te ly the fu ll (unredu ced) b e n e
fit p ay ab le fo r h is c re d ite d s e rv ic e and e a rn in g s up to th a t tim e . N o rm al r e t i r e
m e n t fo rm u la s c o m p rise s e v e ra l e le m e n ts, b u t th e b a sic c o n sid e ra tio n s in co m
puting b e n e fits a re c re d ite d s e rv ic e o r e a rn in g s, o r both, and th e re la tio n sh ip
of p lan b e n e fits to s o c ia l s e c u rity b e n e fits.
R e q u ire m e n ts fo r P la n P a rtic ip a tio n
In m any p e n sio n p la n s, p a rtic ip a tio n of new em p lo y ees is a u to m atic— i . e . ,
th e y beco m e m e m b e rs w hen th e y co m p lete a b rie f p ro b a tio n a ry p e rio d and ach iev e
re g u la r fu ll-tim e s ta tu s , and, u n d e r c o n trib u to ry p lan s w hich allow an option,
w hen th ey a g re e to c o n trib u te . T he m a jo rity of p la n s, h o w ev er, sp ecify e ith e r
an age re q u ire m e n t o r a le n g th -o f-s e rv ic e re q u ire m e n t, o r both; a con ditio n
w hich m ay w ithhold p e n sio n c o v e ra g e fro m a new ly h ire d w o rk e r. Such p a r tic i
p atio n re q u ire m e n ts have b een ju s tifie d ch iefly on g ro u n d s of a d m in istra tiv e c o sts
and d iffic u ltie s in vo lved in co v e rin g young w o rk e rs and new em p lo y ees w hose
te n u re is u n c e rta in . In m o st p lan s w ith p a rtic ip a tio n re q u ire m e n ts , ho w ev er,
s e rv ic e b e fo re p a rtic ip a tio n is not cou nted in d e te rm in in g an em ployee*s e lig ib ility
fo r a p e n sio n o r in com p uting h is p en sio n b en efit, o r both; adoption of a p a r tic i
p a tio n re q u ire m e n t sig n ifie s som eth in g m o re th a n a d m in is tra tiv e co n v en ien ce.
A lm o st 3 out of 5 p lan s (applying to 3 out of 10 w o rk e rs) had p a rtic ip a tio n
re q u ire m e n ts 6 (table 3). T h e se re q u ire m e n ts w e re com m on in s in g le -e m p lo y e r
p lan s but r a r e in m u ltie m p lo y e r p la n s. F ew m u ltie m p lo y e r p lan s had p a r tic i
p atio n re q u ire m e n ts , 7 as c o m p a re d to th re e -fifth s of th e sin g le -e m p lo y e r p la n s.
A m ong th e la tte r p la n s, h o w ev er, m o st w o rk e rs w e re in p lan s w ithout p a r tic i
p a tio n re q u ire m e n ts .
P a rtic ip a tio n re q u ire m e n ts w e re m o re p re v a le n t in c o n trib u to ry th a n in
n o n c o n trib u to ry p la n s. A m ong s in g le -e m p lo y e r p la n s, 4 out of 5 c o n trib u to ry
p lan s (w ith a c o m p a ra b le p ro p o rtio n of w o rk e rs) had p a rtic ip a tio n re q u ire m e n ts ,
as c o m p a re d to slig h tly m o re th a n h alf of th e n o n c o n trib u to ry p lan s (w ith only a
fifth of th e w o rk e rs ).
C hiefly re fle c tin g th e in c lu sio n of m u ltie m p lo y e r p la n s, only 3 out of 10 p lan s
m en tio n ed in c o lle c tiv e b a rg a in in g a g re e m e n ts had th e s e re q u ire m e n ts , as c o m
p a re d to 3 out of 4 p la n s (ty p ically c o n trib u to ry ) not so m en tio n ed . A m ong jo in tly finan ced p la n s, a g ro u p w hich ex clu d es m o st m u ltie m p lo y e r p la n s, about eq u al
6 Plan participation may be restricted to members of certain worker groups, e. g ., those earning in excess of a
specified amount. Although these restrictions are not specifically covered in this analysis, their magnitude may be de
rived from data in BLS Bulletin 1407, op. cit., p. 13. It shows, for example, that 860 plans covering about 735,000
workers were limited to workers earning in excess of a specified amount.
7 For details of participation requirements in multiemployer plans, see Multiemployer Pension Plans Under Col
lective Bargaining, Spring 1960 (BLS Bulletin 1326, 1962).
5
6
p ro p o rtio n s of p la n s '’m e n tio n e d " and "n o t m en tio n ed " in c o lle c tiv e b a rg a in in g
a g re e m e n ts had p a rtic ip a tio n r e q u ire m e n ts .8
In m a n u fa c tu rin g in d u s trie s (w h e re a few la rg e m u ltie m p lo y e r p la n s w e re
in e ffe c t) m o re th an h a lf of the p lan s h ad p a rtic ip a tio n re q u ire m e n ts , b u t they
c o v e re d le s s th an a th ird of the w o rk e rs (tab le 4). In th e c o n stru c tio n in d u stry ,
w h e re m u ltie m p lo y e r p la n s p re v a ile d , few w o rk e rs h ad to m e e t p a rtic ip a tio n r e
q u ire m e n ts . In c o n tra s t, in the fin an ce in d u stry , w h ere s in g le -e m p lo y e r co n
trib u to ry p la n s p re d o m in a te d , su ch p ro v isio n s w e re found in a lm o st 90 p e rc e n t
of th e p la n s w ith 60 p e rc e n t of th e w o rk e rs . S im ila rly , am ong o th e r n o n m an u
fa c tu rin g in d u s trie s , th e in c id e n c e of m u ltie m p lo y e r p la n s w as a k ey fa c to r.
T elephone com pany p la n s d id not have p a rtic ip a tio n re q u ire m e n ts , b u t a la rg e
p ro p o rtio n of p la n s in o th e r p u b lic u tilitie s did.
Age and S e rv ic e R e q u ire m e n ts fo r P a rtic ip a tio n . A ll b u t abo ut 6 p e r
cen t of th e p la n s w ith p a rtic ip a tio n re q u ire m e n ts h ad a m in im u m s e rv ic e r e
q u ire m e n t and 3 out of 5 p la n s had a m in im u m age re q u ire m e n t (table 5). A
co m b in atio n of m in im u m age and s e rv ic e w as sp e c ifie d m o re fre q u e n tly th an an
age re q u ire m e n t o r a s e rv ic e re q u ire m e n t alo n e. H o w ev er, a h ig h e r p ro p o rtio n
of w o rk e rs w e re in p la n s w ith only a s e rv ic e re q u ire m e n t th an in p lan s w ith only
an age re q u ire m e n t, a s show n below :
Percent
Plans
Workers
Provision
All plans with participation
requirements----------------------------100.0
100.0
Age only ----------------------------------5.6
9.8
Service only ------------------------------40.9
50.3
Age and service -------------------------53. 5
40.0
NOTE: Because of rounding, sums of individual items may not
equal totals.
S e rv ic e p e rio d s ran g ed fro m 1 to 5 y e a rs , th e m ax im u m p a rtic ip a tio n r e q u ir e
m e n t p e rm is s ib le to p lan s q u a lifie d 9 u n d er the In te rn a l R evenue Code (SS 401(a)(3).
(See ta b le 5 .) O v er a th ird of the p la n s w ith a fifth of the w o rk e rs re q u ire d
5 y e a rs of s e rv ic e , and a fifth of th e p lan s w ith o v e r tw o -fifth s of the w o rk e rs
re q u ire d 1 y e a r. E m p lo y m en t re q u ire m e n ts of 2 o r 3 y e a rs w e re found in o v e r a
th ird of th e p la n s. M inim um ag es ran g ed fro m u n d e r 20 to 40, w ith 25 and
30 th e m o s t com m on re q u ire m e n ts . The m o s t com m on age and s e rv ic e c o m
b in a tio n s, m e a s u re d in te rm s of n u m b e rs of c o v e re d w o rk e rs , w e re age 25 w ith
1 y e a r of s e rv ic e , and age 30 w ith 1, 3, and 5 y e a rs of s e rv ic e .
8 Following the precise language of the act, the D-l form asks this question: "Is the plan mentioned in a col
lective bargaining agreement?" A "no" answer can be presumed to be conclusive; that is, no part of the plan or its
coverage is subject to collective bargaining. A "yes" answer would be indicated if part or all of the employees
covered by the plan were in the bargaining unit covered by the agreement, and the agreement "mentioned" the plan.
Although a doubt arises as to whether 1‘mentioned" in the agreement is tantamount to bargaining on the plan, it can
reasonably be presumed that "mentioned" in the agreement brings the plan within the scope of collective bargaining,
at least with regard to continuing or changing the plan.
In this study, the collective bargaining coverage figures for single-employer plans covering all employees of the
company are overstated because they often include employees not covered by a collective bargaining agreement,
although the plan itself was subject to bargaining. Plans in the basic steel industry, for example, were negotiated
by the Steelworkers union for members of its bargaining units, but the same plans often covered all company em
ployees, including professional, executive, sales, and other white-collar employees not represented by the union. On
the other hand, coverage under multiemployer plans will more precisely account for all workers in bargaining units.
9 To qualify for special tax treatment, pension plans must not discriminate in favor of officers, stockholders,
supervisors, or highly paid individuals. For an analysis of these and other requirements, see for example, Dan M.
McGill, Fundamentals of Private Pensions, Homewood, 111., Richard D. Irwin, Inc., 1964.
7
C red itin g P re p a rtic ip a tio n S e rv ic e . T h re e -fo u rth s of the p lan s w ith p a r tic
ip atio n re q u ire m e n ts u sed len g th of p lan m e m b e rsh ip r a th e r th an len g th of s e r v
ice to com pute b e n e fits, i. e. , p re p a rtic ip a tio n s e rv ic e w as not counted (tab le 6).
T his p ra c tic e w as n e a rly as p re v a le n t am ong non c o n trib u to ry a s am ong co n
trib u to ry p la n s , although the p ra c tic e c o v e re d a m uch la r g e r p ro p o rtio n of the
w o rk e rs in c o n trib u to ry (88 p e rc e n t) th an in non c o n trib u to ry p la n s (67 p e rc e n t).
C ounting p re p a rtic ip a tio n em p lo y m en t to qualify w o rk e rs fo r r e tir e m e n t w as
m o re com m on; o v e r tw o -fifth s of the p lan s w ith p a rtic ip a tio n re q u ire m e n ts w ith
o n e -th ird of th e w o rk e rs c re d ite d such s e rv ic e fo r e lig ib ility . O v er tw o -fifth s
of the w o rk e rs in non c o n trib u to ry p lan s w ith p a rtic ip a tio n re q u ire m e n ts could
count such s e rv ic e c o m p a re d to o n e -fo u rth of the w o rk e rs in c o n trib u to ry p la n s.
T hus, of the 15.6 m illio n w o rk e rs co v e re d by th e p lan s in th is stu dy , 20 p e r
cen t belon ged to p la n s in w hich tfoey could lo se b e n e fits b e c a u se th ey had to
w o rk fo r a p e rio d of tim e th a t w as not c re d ite d to w ard s d e te rm in in g the am ou nt
of th e ir b e n e fits. T his lo ss is often sig n ific a n t. If, fo r ex am p le, 3 y e a rs of
p re p a rtic ip a tio n em p lo y m en t a re not c re d ite d , th e b e n e fits of w o rk e rs re tirin g
a fte r 15 y e a rs of em p lo y m en t w ould be red u ced by 20 p e rc e n t. On the o th e r
hand, 80 p e rc e n t of th e w o rk e rs w e re in p lan s w hich gave c re d it fo r a ll e m
ploy m en t (often su b je c t to a m ax im u m on n u m b e r of y e a rs c re d ite d ), in d e
te rm in in g e lig ib ility fo r and com p utatio n of b e n e fits.
M inim um R e q u ire m e n ts fo r N o rm a l R e tire m e n t
At the tim e of th is su rv e y (w in ter 1962—63), age 65 continued to be the
sta n d a rd m in im u m re q u ire m e n t fo r n o rm a l re tire m e n t in a ll b u t a few p riv a te
p la n s (table 7). 10 M o re than 10 p e rc e n t of th e w o rk e rs , h o w ev er, w e re in p lan s
p ro v id in g n o rm a l re tire m e n t a t age 60, ch iefly telep h o n e com pany p lan s and som e
la rg e m u ltie m p lo y e r p la n s , such as th e U nited M ine W o rk ers of A m e ric a W elfare
and R e tire m e n t F un ds and th e C e n tra l S ta te s, S o u th east, and S outhw est A reas
P e n sio n F und of the T e a m s te rs (table 8 ) .11
The s e rv ic e re q u ire m e n ts fo r n o rm a l re tire m e n t w ere about a s lib e r a l as
th o se need ed to qu alify fo r b e n e fits u n d e r o th e r p lan p ro v isio n s— v e stin g , e a rly
re tire m e n t, and d is a b ility re tire m e n t. H alf of the p la n s, w ith o v e r tw o -fifth s
of the w o rk e rs , sp e c ifie d a m in im u m se rv ic e p e rio d of e ith e r 10 (o r 15) y e a rs .
O v er a th ird of the p la n s, w ith slig h tly le s s th an a th ird of the w o rk e rs, r e
q u ire d le s s th an 10 y e a r s . A six th of the w o rk e rs w e re in p lan s th a t re q u ire d
20 y e a rs of s e rv ic e to qu alify; a lm o st h a lf of th is group' w e re in telep h o n e co m
pany p la n s having a n o rm a l re tir e m e n t age of 6 0 .12 In o th e r p la n s, n o rm a l r e t i r e
m e n t b e fo re 65 a lso u su a lly m e a n t m eetin g a long s e rv ic e re q u ire m e n t.
N o rm a l R e tire m e n t B e n e fit F o rm u la s
The p e n sio n (benefit) a q u a lifie d w o rk e r w ill re c e iv e upon re tire m e n t is d e
te rm in e d by th e b e n e fit fo rm u la of th e p lan . The p rin c ip a l e le m e n ts m aking up
the fo rm u la u su a lly a re y e a rs of c re d ite d s e rv ic e o r e a rn in g s o r both. The
A number of plans had a lower normal retirement age for women than men. These special provisions for
women are not treated in this study.
11 Significant downward adjustments in normal retirement age resulted from some major negotiations in 1964
and 1965.
12 The telephone plans have since reduced the service requirement to 15 years for workers retiring at age 65.
8
p la n m ay d istin g u ish b etw een s e rv ic e ac c u m u la te d b e fo re th e p lan w as e s ta b
lish e d o r am end ed (u su ally c a lle d "p a st s e rv ic e " ) and s e rv ic e a fte r th a t d ate
(" c u rre n t" o r "fu tu re " s e rv ic e ). A n other ele m e n t so m e tim e s e x p lic it in th e p lan
fo rm u la is th e am ou nt of so c ia l s e c u rity b e n e fits to w hich the w o rk e r is e n
title d . F in a lly , m in im u m and m ax im u m lim its m ay b e s e t on b e n e fits, e ith e r
d ire c tly (sp e c ifie d d o lla r lim its ) o r in d ire c tly (by m in im u m and m ax im u m s e r v
ic e c re d its o r by a lte rn a te fo rm u la s).
T ypes of B e n e fit F o rm u la s . A w ide v a rie ty of m eth o d s to com pute r e t i r e
m e n t b e n e fits a r e found am ong th e th o u san d s of p riv a te p en sio n p lan s an aly zed .
M ost fo rm u la s , h o w e v e r, can be c la s s ifie d in to one of th e follow ing c a te g o rie s ,
depending upon the v a ria b le s involved: B en efits v ary in g by both len gth of s e rv ic e
and e a rn in g s; b e n e fits v a ry in g by len g th of s e rv ic e alo ne; b e n e fits v ary in g by
e a rn in g s alo ne; and u n ifo rm o r fla t b en efits fo r sp e c ifie d s e rv ic e .
E a rn in g s and s e rv ic e b e n e fit fo rm u la s a re th e m o st com m on type u se d in
p riv a te p la n s .13 T hey a r e u su a lly e x p re s s e d a s the p ro d u c t of th re e fa c to r s :
E a rn in g s , c re d ite d s e rv ic e , and a p e rc e n ta g e fa c to r, e . g . , a m o n th ly b e n e fit
eq u al to 1 p e rc e n t of a v e ra g e m on thly e a rn in g s tim e s y e a rs of c re d ite d s e rv ic e .
T he d efin itio n of e a rn in g s u se d to com pute b e n e fits in v o lv es bo th th e sco p e of
e a rn in g s (e. g. , w h e th e r o v e rtim e e a rn in g s a re to be in clu d ed , e tc . ) and th e
p e rio d o v e r w hich th ey a re to be a v e ra g e d . T w o -th ird s of th e p la n s w ith fo rm u la s
b a s e d on e a rn in g s , co v erin g h a lf the w o rk e rs , u se d c a r e e r e a rn in g s , i. e. , e a r n
in gs fo r a ll y e a rs of c re d ite d s e rv ic e (tab le 9). The re m a in d e r com p uted b a sic
b e n e fits by u sin g e a rn in g s of high o r te rm in a l y e a r s , u su a lly th e 5 o r 10 h ig h e st
o r th e la s t 5 o r 10 y e a r s . U n der n o rm a l p a tte rn s of advancing c a r e e r e a rn in g s
and a ris in g w age le v e l, im p o rta n t a d v an tag es a c c ru e to w o rk e rs in p la n s u sin g
th e la tte r m eth o d , a ll o th e r fa c to rs being eq u al, b e c a u se th e ir b e n e fits w ill be
m o re c lo se ly re la te d to p r e r e tir e m e n t e a rn in g s.
T he d efin itio n of c re d ite d s e rv ic e u su a lly in v o lv es the scop e of th e p lan
(i. e. , em ployee g ro u p s co v ered ) and th e tre a tm e n t of p re m e m b e rsh ip s e rv ic e ,
lay o ffs, d isa b ility , le a v e s of a b se n c e , m ilita r y s e rv ic e , and o th e r e le m e n ts. E ach
p la n d efin es c re d ite d s e rv ic e in its own w ay.
P e rc e n ta g e fa c to rs w e re found to c o n c e n tra te in the ran g e of 1 to 2 p e rc e n t.
M any p la n s u se d " s te p - r a te " fo rm u la s , u n d e r w hich a la r g e r fa c to r is ap p lied to
e a rn in g s in e x c e ss of a sp e c ifie d am ou nt (u su ally th e m ax im u m e a rn in g s c o n
sid e re d in com puting s o c ia l s e c u rity b e n e fits a t the tim e the p lan w as ado pted
o r am ended) th an to th o se below th a t am ou nt. F o r ex am p le, a 2 -p e rc e n t fa c to r
w as often ap p lied to e a rn in g s o v e r $ 4 ,8 0 0 a y e a r and 1 p e rc e n t to th o se below .
Som e com m on s te p -r a te fo rm u la s u sed p e rc e n ta g e fa c to rs of 1.5 and 1 p e rc e n t
and 0.75 and 0.5 p e rc e n t. A n o th er v a ria tio n w as to pay no b e n e fit on the lo w er
p o rtio n of e a rn in g s and up to 1.5 p e rc e n t on th e u p p e r .14
T he n ex t m o s t com m on type of fo rm u la re la te d b e n e fits so le ly to s e rv ic e by
m u ltip ly in g a sp e c ifie d d o lla r am ou nt by th e n u m b e r of y e a rs of c re d ite d s e rv ic e
( e .g ., m on thly p e n sio n eq u als $ 2 .8 0 tim e s y e a rs of c re d ite d s e rv ic e ). At th e
tim e of th is s tu d y ,15 th e d o lla r am ou nts a p p e a re d to be c o n c e n tra te d b etw een
$2 and $3 a m onth. As in o th e r ty p es of fo rm u la s , w ide v a ria tio n in the d efin itio n
of c re d ite d s e rv ic e e x iste d . M any fo rm u la s of th is type a lso lim ite d c re d ite d
13
About 50 percent of the workers in this study were in plans whose basic formulas considered earnings and
service or earnings alone, and the remainder were in plans with uniform benefits or formulas based on service alone.
1* Sec. 401(a)(5) of the Internal Revenue Code sets this limit. It also prohibits the difference between the
percentages from exceeding 1.5 percent.
15 In the settlement negotiated in the Fall of 1964, the automobile and farm equipment industries increased
their benefits to $4. 25 (formerly $2. 80) a month for each year of service.
9
se rv ic e (u su ally to 25 o r 30 y e a rs ) w hen com puting b e n e fits. T y p ically , th e se
fo rm u la s w e re u sed to d e te rm in e b e n e fits in n eg o tiated p lan s and m in im u m b e n e
fits in n o n n eg o tiated p la n s.
F o rm u la s p ro v id in g a u n ifo rm p e rc e n ta g e of e a rn in g s fo r a ll w o rk e rs m e e t
ing r e tire m e n t re q u ire m e n ts a re now uncom m on in p riv a te p la n s. T y p ically ,
th e s e fo rm u la s p ro v id e a p en sio n eq u al to a sp ecified p e rc e n ta g e of th e e a rn in g s
o v e r the la s t few y e a rs of em p lo y m en t, e .g . , 25 p e rc e n t of a v e ra g e m onthly
e a rn in g s d u ring th e la s t 10 y e a rs .
B en efit fo rm u la s in w hich u n ifo rm am ou nts a re p ro v id ed fo r a ll w o rk e rs
w ith th e re q u ire d s e rv ic e a re v irtu a lly r e s tric te d to m u ltie m p lo y e r p la n s, but
th ey a re im p o rta n t th e re . U n der th e se fo rm u la s, no fu rth e r b e n e fits a c c ru e once
se rv ic e re q u ire m e n ts have b een m e t; thus the b e n e fit is both a m in im u m and a
m ax im u m b e n e fit, e . g . , $50 fo r 20 y e a rs o r m o re of c re d ite d s e rv ic e .
M inim um B en efit F o rm u la s . M any p riv a te p en sio n p lan s p ro v id e fo r a
m in im um le v e l of b e n e fits, e ith e r th ro u g h a se p a ra te m in im u m fo rm u la o r th ro u g h
the o p e ra tio n of th e m in im u m s e rv ic e re q u ire m e n ts in th e b a s ic fo rm u la . M inim um
fo rm u la s a re u su a lly b a se d so lely on se rv ic e o r sp ecify a fla t m in im u m p en sio n
fo r th o se w ith a c e rta in am ount of c re d ite d s e rv ic e , w hich is often m o re th an th a t
needed fo r the b a s ic n o rm a l re tir e m e n t b e n e fit. W hen the b a sic fo rm u la is b a se d
on both e a rn in g s and s e rv ic e , the m in im u m fo rm u la u su a lly ap p lies to lo w er in
com e w o rk e rs ; w hen th e b a s ic p lan h as a so c ia l s e c u rity o ffset, th e m in im u m
ap p lies to n e a rly a ll s h o rt s e rv ic e w o rk e rs , r e g a rd le s s of e a rn in g s. F o r e x
am p le, th e b e n e fit fo rm u la s in the b a sic s te e l in d u stry p ro v id e d the g r e a te r of
(1) 1 p e rc e n t of a v e ra g e m on thly e a rn in g s in th e la s t 120 m on ths of em ploym en t
tim e s y e a rs of s e rv ic e , le s s $80 fo r so c ia l s e c u rity , o r (2) $ 2 .6 0 tim e s y e a rs
of s e rv ic e . The f ir s t fo rm u la ap p lies only to h ig h e r p aid w o rk e rs and to th o se
w ith long s e rv ic e . 16
The secon d type of m in im um — th at stem m in g fro m th e s e rv ic e r e q u ire
m e n ts in the b a s ic fo rm u la — d en ies b en efits to w o rk e rs who do not fu lfill the
se rv ic e re q u ire m e n ts . T h ese fo rm u la s in clu d e a ll fo rm u la s th a t stip u la te a
m in im u m s e rv ic e p e rio d a s q u a lific a tio n fo r b e n e fits.
P a s t S e rv ic e B e n e fit F o rm u la s . B en efits b a se d on p a st s e rv ic e fo rm u la s
a re often le s s th an th o se b a se d on c u rre n t o r fu tu re s e rv ic e fo rm u la s, chiefly
b e c a u se the e m p lo y e r had no sta te d ob lig atio n and thus had m ad e no c o n trib u
tion s as the b e n e fits a c c ru e d . The p a s t s e rv ic e o b lig atio n , th e re fo re , ty p ic a lly
re s u lts in th e ac c u m u la tio n of an a c c ru e d lia b ility w hich, in m any c a s e s , a p p e a rs
la rg e re la tiv e to th e p la n 's re s o u rc e s . N e v e rth e le s s, m o st p lan s g ra n te d fu ll o r
p a r tia l c re d it fo r such s e rv ic e ; only ra re ly w as no c re d it g ra n te d .
M u ltiem p lo y er p lan s a lm o st alw ays g ra n te d the sam e b e n e fit fo r each y e a r
of p a s t s e rv ic e a s fo r each y e a r of c u rre n t s e rv ic e . In sin g le -e m p lo y e r p la n s,
h o w ev er, p a s t s e rv ic e b e n e fit fo rm u la s w e re fre q u e n tly b a se d on d iffe re n t fa c to rs
and p ro v id ed s m a lle r b e n e fits fo r eq u iv alen t se rv ic e and e a rn in g s th an the c u rre n t
se rv ic e fo rm u la s . F o r ex a m p le , a p lan m ay p ro v id e a w o rk e r w ith a b e n e fit of
$2 a m onth fo r each y e a r of c re d ite d se rv ic e b e fo re the date of the e sta b lish m e n t
of the p lan , and $2 . 50 a m onth fo r each y e a r th e re a fte r. B ecau se p riv a te p lan s
a re re la tiv e ly new , it is p ro b a b le th a t the m a jo rity of w o rk e rs re tirin g fro m
sin g le -e m p lo y e r p la n s in the n ex t decade w ill re c e iv e b e n e fits d e te rm in e d , at
le a s t in p a r t, by lo w er p a s t s e rv ic e fo rm u la s.
In ad d itio n , m any p lan s u tiliz e d iffe re n t p e rc e n ta g e fa c to rs o r, o c c a sio n a lly ,
a d iffe re n t fo rm u la fo r s e rv ic e a fte r e sta b lish m e n t of th e p lan b u t b e fo re the
More specifically, the first formula applies to workers with 30 years of service and average monthly earnings
over $527, to those with 20 years and earnings over $660, and to those with 10 years and earnings over $1,060.
10
effectiv e date of an in c re a s e in b en efit le v e ls, i . e . , fo r ’’in te rm e d ia te s e r v ic e ,"
As e a rn in g s le v e ls r is e and p lan b en efits a re lib e ra liz e d , th e se in te rim fo rm u la s
u su a lly y ield lo w e r b e n e fits th a n c u rre n t s e rv ic e fo rm u la s. A lthough, as fa r as
ex istin g p lan s a re c o n c e rn e d , th e effects of p a st s e rv ic e fo rm u la s w ill d im in ish
in im p o rta n c e o r d is a p p e a r in th e fu tu re , th e in te rm e d ia te s e rv ic e b e n e fits w ill
p ro b ab ly be a sig n ific a n t fa c to r as long as p lan s a re su b ject to am en d m en t.
A d ju stm en t of P riv a te P la n B en efits to S ocial S e c u rity B e n e fits. B en efits
paid u n d er th e so c ia l s e c u rity p ro g ra m m ay be d ire c tly in clu d ed in th e n o rm a l
re tire m e n t fo rm u la by th e follow ing m eth o d s:
U nder th e o ffse t m ethod, th e p lan p ro v id e s th a t a ll o r p a rt of the
e m p lo y e e 's s o c ia l s e c u rity b en efit is to be ded u cted fro m th e am ount c o m
puted a c c o rd in g to th e b en efit fo rm u la of th e p riv a te p lan . U su ally th e
w ife ’s b en efit is ig n o re d and only th e p rim a ry so c ia l s e c u rity b en efit r e
ceiv ed by th e w o rk e r is c o n sid e re d . U nder th is m eth od of in te g ra tio n ,
im p ro v e m e n ts in s o c ia l s e c u rity b en efits a r e w ithheld, at le a s t p a rtly ,
fro m th e p e n sio n e r u n le ss th e siz e of th e o ffset re m a in s fixed , as in th e
S te e lw o rk e rs p la n s. T he o ffset m ethod is g ra d u a lly being e lim in a te d o r,
as in th e s te e l and co m m u n icatio n s in d u s trie s , atte n u a te d so as to m ake
it le s s d isad v an tag eo u s to p ro sp e c tiv e r e t i r e e s .17
U nder th e s te p -r a te m ethod, th e b en efit fo rm u la p ro v id e s h ig h e r
b e n e fits fo r e a rn in g s above a sp e cified am ou nt. T h is am ount is u su a lly
equal to th e m ax im u m e a rn in g s u sed to com pute so c ia l s e c u rity b en efits
at th e tim e th e fo rm u la w as ado pted. In som e p la n s, no p lan b e n e fits w e re
pay able on e a rn in g s below th e sp e c ified am ount. T h is m eth od of in te g ra tio n
a tte m p ts to e q u alize th e ra tio of to ta l re tire m e n t b en efits (p riv a te p lan plus
so c ia l se c u rity ) to p r e r e tir e m e n t e a rn in g s fo r lo w er and h ig h e r paid w o rk e rs
w ithout a p p e a rin g , ^s th e o ffse t plans do, to w ithhold som eth in g fro m the
p e n sio n e r. T he re la tiv e advantage of th is fo rm u la fo r h ig h er paid w o rk e rs
d im in ish e s as h a s hap pen ed in som e s te p -r a te p la n s; th e lo w est e a rn in g s
to w hich th e h ig h e r p e rc e n ta g e fa c to r a p p lies a re not in c re a s e d w hen th e
so c ia l s e c u rity ta x a b le w age b a se is in c re a s e d .
L ev el of B en efits
N o rm al r e tire m e n t b en efit fo rm u la s ap p licab le to c u rre n t and fu tu re s e rv ic e
re a d ily p e rm it th e co m p u tatio n of th e am ount of m oney p ro m ise d by p riv a te p lan s
to w o rk e rs at any given e a rn in g s and s e rv ic e le v e l. T he com b ined p riv a te and
public p ro m is e can be com p uted by adding to p riv a te p lan b en efits th e p rim a ry
so c ia l s e c u rity b en efit due q u a lifie d r e tir e e s at a ssu m e d e a rn in g s le v e ls u n d er
c u rre n t law s. Such co m p u tatio n s do not re v e a l b en efit am o u n ts th a t in d iv id u al
w o rk e rs w ould re c e iv e on re tire m e n t. T hey a re m o d ified to th e ex ten t th a t p riv a te
p lan s d e te rm in e re tire m e n t b e n e fits p a rtly on th e b a sis of p a st and in te rm e d ia te
s e rv ic e fo rm u la s, th a t p lan s have not b een in e x iste n c e long enough fo r any w o rk e r
to a c c u m u late long y e a rs of s e rv ic e , and th a t public b en efit am o u n ts, lik ew ise,
fa ll sh o rt of th e a ssu m e d f ig u r e s .18 M o reo v er, w ith ch an g es ex p ected in both
public and p riv a te p lan s in th e fu tu re , no one can p ro p h e sy w hat b en efit fo rm u la s
m ay be ap p lied 10, 20, o r 30 y e a r s fro m now . H ow ever, th e cotnp uted fig u re s
w ith w hich th is study d e a ls a re , in o th e r co n tex ts, m ean in g fu l.
17 In the Steelworkers plans, the offset has been a fixed amount since 1954, when it was $85 a month. It was
reduced to $80 a month in 1960 when all benefits were increased by $5 a month. In August 1966, the $80~social
security offset will be reduced to $60. In 1962-63, in the communications industry, it was reduced from one-half
of social security benefits to one-third.
Because the social security benefit computation is usually based on average covered earnings since 1951, ex
cluding those in the 5 years of lowest earnings, few workers currently qualify for the maximum primary monthly benefit.
11
U nder u n ifo rm a ssu m p tio n s, a ll p lan s a re p la c e d fo r c o m p a riso n on a co m
m on footing , so th a t w ith re s p e c t to b e n e fits, p re v a ilin g d iffe re n tia ls and c e n tra l
te n d e n c ie s a re re v e a le d . The com puted b e n e fits p ro v id e b e n c h m a rk s a g a in st w hich
change can be m e a s u re d . In p ra c tic a l te r m s , th ey r e p re s e n t th e p ro m is e to
new ly h ire d w o rk e rs of r e tire m e n t in com e of the sam e n a tu re as o th e r lo n g -te rm
em p lo y m en t p ro m is e s su b je c t to change ( c a re e r la d d e rs , 4 w eeks* v aca tio n a fte r
20 y e a rs of s e rv ic e , and o th e rs).
A ssu m p tio n s. The follow ing con ditio ns and q u alificatio n s w e re assu m e d
in com puting h y p o th e tic a l c u rre n t s e rv ic e b en efit am o u n ts fo r each plan :
1. The w o rk e r w ill r e tir e a t age 6 5 .19
2. B e n e fits a re com puted fo r ann ual e a rn in g s le v e ls of $ 3 ,6 0 0 ,
$ 4 ,8 0 0 , $ 6 ,0 0 0 , and $ 8 ,4 0 0 , a t se rv ic e in te rv a ls of 10, 15, 20, 25, and
30 y e a rs . 20 Since th e se e a rn in g s le v e ls a r e u se d both in fo rm u la s b a se d
on a v e ra g e c a r e e r e a rn in g s and fo rm u la s b a se d on a v e ra g e te rm in a l e a r n
ings (such a s th e a v e ra g e of the la s t 10 y e a rs ), w hat m ay b e an im p o rta n t
d iffe re n c e b etw een p la n s u sin g b e n efit fo rm u la s b a se d on e a rn in g s is not
tak en into acco u n t. 21
3. C u rre n t p rim a ry so c ia l s e c u rity b e n e fits w ill be re c e iv e d by each
r e tir e e . T h ese w e re $105 a m onth fo r a v e ra g e e a rn in g s of $ 3 ,6 0 0 and
$127 a m on th fo r a v e ra g e e a rn in g s of $ 4 ,8 0 0 o r m o re in 1962—63.
4. M ed ian s, q u a rtile s , and d e c ile s a re b a se d on the a r r a y of w o rk
e r s r a th e r th an p la n s, b e c a u se of the la rg e siz e d iffe re n c e s am ong p la n s.
S lig htly le s s than 3 out of 5 w o rk e rs a r e in p lan s in w hich th ey could
qualify fo r n o rm a l re tire m e n t a t age 65 w ith 10 y e a rs of s e rv ic e . C om
p u tatio n of a v e ra g e b e n e fits a t th e 1 0 -y e a r s e rv ic e le v e l th us w ould exclude
a siz a b le n u m b e r of p lan s and w o rk e rs . A p p ro x im ately 8 out of 10 w o rk
e rs a re in p lan s in w hich they could qualify w ith 15 y e a rs of s e rv ic e ;
v irtu a lly a ll could qualify w ith 20, 25, and 30 y e a rs of s e rv ic e .
Cumulative percent
Service to qualify for normal
retirement benefit
Plans
Workers
All plans studied -------------------------100.0
100.0
10 years or le ss-----------------------------65. 3
56.6
15 years or less ----------------------------93. 4
77.8
20 years or le ss-----------------------------97. 7
95.6
25 years or le s s -----------------------------99. 0
99.4
30 years or le ss-----------------------------99. 0
99.5
NOTE: Because of rounding, sums of individual items may not
equal totals.
A lthough b e n e fit le v e ls could be com puted fo r a ll e a rn in g s le v e ls , th e p o s
sib ility of w o rk e rs a v e ra g in g $ 8 ,4 0 0 a y e a r, o r even $ 6 ,0 0 0 , u n d e r som e p lan s
w as re m o te . Since such p lan s often p ro v id ed b e n e fits th a t w e re , in re la tio n to th o se
A number of plans, covering approximately 100,000 workers, had a later normal retirement age. These plans,
however, have been included in the computations, using their normal retirement formula.
20 Current service as used in this study refers to the period of continuous employment. Thus, if a plan had a
participation requirement of 3 years* employment for which credit was not given, benefits were computed for 7, 12,
17, 22, and 27 years of plan membership.
21 This distinction may mean a difference of as much as 30 percent in monthly pensions, where benefits were
based on earnings and service. Of course, the influence on benefit levels would be least for 10 years of service
and greatest for 30 years of service. The distinction would be reduced to the extent that career average plans used
an average of earnings in the post-war period or a similar cutoff period instead of an average of all years.
12
s a la r ie s , u n u su ally s m a ll and sin ce such p la n s could not be e lim in a te d , a certain?
d e g re e of u n d e re s tim a tio n of b e n e fits a t th e h ig h e r w age le v e ls w as in ev itab le.
A ll P la n s . A lthough m o st p e n sio n p lan s reco g n ize th e p rin c ip le th a t lo n g er
se rv ic e m e rits a la r g e r p e n sio n , and m any reco g n ize th a t h ig h e r p ay m e rits a
h ig h e r p e n sio n , th e g re a t v a ria tio n am ong p lan s in the ap p licatio n of th e se p r in
cip le s ten d s to o b sc u re th e se re la tio n sh ip s am ong a ll p lan s com bined. 22 The
w ide ran g e in b e n e fit am ou nts fo r given s e rv ic e and e a rn in g s le v e ls , as show n
in ta b le s 10 to 14 and in c h a rts 1 to 4 h as a c h a r a c te r is tic s im ila r to th a t of
the N ation*s co m p en satio n s tru c tu re re v e a le d by o ccu p atio n al w age stu d ie s. M o re
o v e r, ju s t a s the range of w age ra te s ten d s to w iden to w ard s the u p p e r end of
the sk ill o r w age la d d e r, so does th e range of p en sio n b e n e fits w iden w ith lo n g er
s e rv ic e and h ig h e r pay.
N e v e rth e le s s , on the a v e ra g e , p en sio n b e n e fits in c re a s e w ith y e a rs of
se rv ic e and w ith pay le v e ls (c h a rt 5). F o r ex am p le, m ed ian m onthly b e n e fits
fo r 20 y e a rs of s e rv ic e (the s h o rte s t s e rv ic e le v e l a t w hich n e a rly a ll w o rk e rs
w ould qu alify fo r b e n e fits) ro se fro m $52 at the $ 3 ,6 0 0 le v e l to $76 at th e $ 8 ,4 0 0
lev e l. S im ila rly , fo r w o rk e rs e a rn in g $ 4 ,8 0 0 a y e a r , m ed ian m onthly b en efits
in c re a s e d fro m $54 fo r 20 y e a rs of s e rv ic e to $78 fo r 30 y e a r s . M edian am ou nts
fo r o th e r e a rn in g s le v e ls and s e rv ic e p e rio d s a r e show n below , along w ith the
ran g e of b e n e fits p ro v id e d to th e m id d le 50 p e rc e n t of the w o rk e rs (in te rq u a rtile
ran g e). The m e d ia n re p re s e n ts the m id -p o in t of th e w o rk e r d istrib u tio n .
_________________________ Annual earning__________________________
$3.600
$4.800
$6,000
$8,400
InterInterInterInter
quartile
quartile
quartile
quartile
Service periods (years)
Median range Median range Median range Median range
101 ......................—-............ —
$25 $20-$30 $28 $23-$40 $35 $25-$53 $50 $28-$90
151 —-------------------------3930-4642 34- 60 50 38- 76 70 39-125
52 43- 63 54 48- 80 60 50-100
76 52-155
20 ----------------------------------------25 ........................................... —
63 50- 75 68 50- 99 72 61-125 111 63-194
75 57- 90
78 56-115 86 70-150 130 75-231
30 ----------------------------------------1 Excludes a substantial number of workers in plans with higher service requirements.
The p riv a te p en sio n sy ste m a s a w hole— lik e the so c ia l s e c u rity sy ste m —
a p p e a rs to fa v o r low -w age w o rk e rs , la rg e ly b e c a u se of th e g r e a te r co v erag e of
p la n s th a t re la te b e n e fits to s e rv ic e alo ne and b e c a u se of th e fla t b en efit p la n s,
w hich m o re th an c o u n te rb a la n c e p la n s w ith s te p - r a te fo rm u la s. F o r ex am p le,
the 1 5 -p e rc e n t d iffe re n tia l in the m ed ian b en efits fo r th e $ 3 , 600- and $ 6 ,0 0 0 -a y e a r w o rk e r w ith 20 y e a rs of s e rv ic e stan d s in sh a rp c o n tra s t to the 67-p e rc e n t
d iffe re n c e in th e ir e a rn in g s.
T h e re is , h o w e v e r, a c lo s e r c o rre la tio n b etw een s e rv ic e and b e n e fits. The
d iffe re n c e b etw een 20 and 30 y e a rs of s e rv ic e (50 p e rc e n t) m ay be co m p ared
w ith d iffe re n tia ls of fro m 40 to 45 p e rc e n t up to $ 6 ,0 0 0 and 71 p e rc e n t a t the
$ 8 ,4 0 0 le v e l. 23 T his re la tio n sh ip is m o re c le a rly illu s tra te d by reducing m ed ian
b e n e fit am ou nts to th e ir m onthly eq u iv alen ts fo r each y e a r of s e rv ic e , 24 as show n
22 For some of the discussions relating to pension theory and philosophy, see McGill, op. cit.
23 The 10- and 15-year levels cannot be compared with the longer service periods in this manner because of the
substantial number of plans under which workers cannot qualify at these lower service levels.
24 Derived by dividing a monthly benefit by the years of service used to compute it. Benefits were related
thus, to total service and, where credited service was less than the period of employment, monthly equivalents would
be smaller than if based on plan membership alone.
13
in the ta b u la tio n below . The in flu en ce of p lan s p ro v id in g fla t am o u n ts fo r s p e c i
fied s e rv ic e and p la n s w ith a m ax im u m lim it on s e rv ic e c re d its (e. g. , 25 y e a rs )
acco u n ts fo r th e o v e ra ll d eclin e of m on thly eq u iv alen t b en efits p e r y e a r of s e rv ic e
a s s e rv ic e in c re a s e d .
_________Annual earnings__________
$3,600 $4,800 $6,000 $8,400
Service periods (years)
101 _____________ _______ — $2.50 $2.80 $3.50 $5.00
151 — ------- -------- 2.60 2.80 3. 33 4.66
2.60 2.70 3.00 23.80
2 0 ------------------------------------2 5 ------------------------------------2. 52 2. 72 2. 88 4.44
2.50 2.60 2.86 4.33
3 0 ------------------------------------Excludes a substantial number of workers in plans with higher
qualifying service requirements.
2 The sharp decline as compared to the 15-year level is accounted
for by some large plans providing uniform benefits for workers with
20 years or more of service.
The fo rm u la s u se d in com puting b e n e fits h ad , of c o u rs e , d iffe re n t effects
on the b e n e fit d is trib u tio n s and com puted m e d ia n s. F o rm u la s b a se d on both
e a rn in g s and s e rv ic e p u sh ed m ed ian le v e ls u p w ard as e a rn in g s and s e rv ic e in
c re a s e d , w hile fo rm u la s b a s e d on s e rv ic e alone cau sed th em to r is e as s e rv ic e
in c re a s e d , bu t had the op p o site e ffe c t as e a rn in g s in c re a s e d . U n iform b e n e fit
fo rm u la s ten ded to r a is e m e d ia n b e n e fits a t the lo w er le v e ls of s e rv ic e and e a r n
in g s, but d e p re s s e d th em as e a rn in g s and s e rv ic e in c re a s e d .
M odifying p ro v isio n s in n o rm a l re tire m e n t fo rm u la s a lso a ffe c t th e ran g e
of b e n e fits and a v e ra g e le v e ls . A m in im u m b e n e fit p ro v isio n , u su a lly b a se d
on s e rv ic e , c r e a te s a flo o r below w hich the b e n e fit cannot fa ll. In th e a g g re
g a te , such p ro v isio n s p u sh ed m e d ia n s up w ard a t the lo w e r e a rn in g s le v e ls and,
in p la n s w ith fla t b e n e fits and o ffse t fo rm u la s, a t s h o rte r se rv ic e p e rio d s . On
the o th e r h an d, fla t b e n e fits, m ax im u m se rv ic e c re d its , and m ax im u m p en sio n
b e n e fits (seldo m ap p lic a b le u n d e r th e a ssu m p tio n s of th is study) s e t b en efit
ce ilin g s th a t te n d e d to ho ld down m e d ian s a t the h ig h e r e a rn in g s le v e ls and lo n g e r
s e rv ic e p e rio d s .
C om bined B e n e fits . E x cep t fo r long se rv ic e w o rk e rs w ith high e a rn in g s,
p r im a r y so c ia l s e c u rity b e n e fits of $105 a t the $ 3 ,6 0 0 -a -y e a r e a rn in g s lev el
and $127 a t th e $ 4 ,8 0 0 le v e l and above g re a tly ex ce ed ed m ed ian p riv a te p lan
b e n e fits. As show n below , 70 p e rc e n t of th e m ed ian com b ined b e n e fit of $181
fo r th e $ 4 , 8 0 0 -a -y e a r w o rk e r w ith 20 y e a rs of se rv ic e w as acco u n ted fo r by
so c ia l s e c u rity .
_________Annual earnings__________
Service periods (years)
$3,600 $4,800 $6,000 $8,400
101 ------------------------------------ $130
$155 $162 $177
i s 1 -----------------------------------144
169
177
197
2 0 ------------------------------------157
181
187
203
2 5 ------------------------------------168
195
199
238
30
--------------180
205
213
257
* Excludes a substantial number of workers in plans with higher
qualifying service requirements.
Since the s o c ia l s e c u rity p ay m en t re p re s e n ts a la r g e r p ro p o rtio n of p r e
re tire m e n t e a rn in g s fo r w o rk e rs w ith low ea rn in g s th an fo r th o se w ith high e a r n
ings and sin ce p riv a te p la n s a ls o ten d ed in th e sam e d ire c tio n , lo w er p aid w o rk
e r s c le a rly re c e iv e d a la r g e r to ta l b e n e fit in re la tio n to p re v io u s e a rn in g s th an
14
h ig h e r p aid w o rk e rs . F o r ex a m p le , a t an a ssu m e d e a rn in g s le v e l of $ 3 ,6 0 0
w ith 30 y e a rs of s e rv ic e , about 9 out of 10 w o rk e rs w ould be elig ib le fo r a c o m
b in ed b e n e fit of a t le a s t h a lf th e ir p r e r e tir e m e n t e a rn in g s, w h e re a s at $ 8 ,4 0 0 a
y e a r, only abo ut 3 out of 10 w ould s e c u re th a t ra tio o r m o re . The p ro p o rtio n s
a t th e o th e r e a rn in g s and s e rv ic e le v e ls a re show n below :
Annual earnings
$3,600 $4.800 $6.000 $8,400
Service periods (years)
Percent
3.1
1.3
0.7
101 ......... - .............. - .......... 7.1
5.2
1.5
151 — - ............................... 30.1
15.0
6.8
20 — ....................- ............ 74.5 28.5 14.2
2 5 ....... ................................. 84.0 41.5 26.3 16.9
3 0 ......................................... 90.6 62.7 34.9 28.3
1 Excludes a substantial number of workers in plans with
higher qualifying service requirements.
T he m ed ian p la n b e n e fit fo r the $ 3 ,6 0 0 -a -y e a r w o rk e r w ith 20 y e a rs of
s e rv ic e w ould be only a six th of h is a ssu m e d p re v io u s e a rn in g s, b u t w ith th e
ad d itio n of p rim a ry so c ia l s e c u rity , the com bined b e n e fit w ould am ou nt to slig h tly
m o re th an h a lf of p r e r e tir e m e n t e a rn in g s. 25 H o w ev er, the m ed ian p lan b en efit
fo r the $ 8 ,4 0 0 -a -y e a r w o rk e r w ith th e sa m e am ou nt of s e rv ic e w as about a ninth
of h is e a rn in g s , w hile h is com bined b e n e fit am ou nted to le s s th an a th ird of p r e
re tire m e n t e a rn in g s . T his ten den cy as show n below w as c o n siste n t am ong o th e r
e a rn in g s le v e ls .
Item
Including primary social
security benefit:
Monthly amount ----Percent of earnings -Excluding primary social
security benefit:
Monthly am ount----Percent of earnings --
Annual earnings and selected service periods
$3,600
$4.800
$6,000
$8. 400
20 years 30 years 20 years 30 years 20 years 30 years 20 years 30 years
$157
52.3
$180
60.0
$181
45.2
$205
51.2
$187
37.4
$213
42.6
$203
29.0
$257
36.7
$52
17.3
$75
25.0
$54
13.5
$78
19.5
$60
12.0
$86
17.2
$76
10.9
$130
18.6
M ethod of F in a n c in g . C o n trib u to ry p lan s p ro v id e d , on the w hole, h ig h e r
p e n sio n s th an n o n c o n trib u to ry p la n s, re fle c tin g , fo r the m o st p a rt, w o rk e r p a y
m e n ts to w a rd s b e n e fit c o s ts . In ad d itio n , sin c e b e n e fit fo rm u la s (and em ployee
c o n trib u tio n s) in c o n trib u to ry p lan s w e re u su a lly g e a re d to e a rn in g s, the d if
fe re n tia l b etw een c o n trib u to ry and n o n co n trib u to ry p lan b e n e fits w as g r e a te s t at
th e h ig h e r e a rn in g s le v e ls . F u r th e rm o re , th e re w as a w id e r d is p e rs io n of b e n e
fits a t each e a rn in g s le v e l in c o n trib u to ry th an n o n co n trib u to ry p la n s, e sp e c ia lly
a t th e h ig h e r e a rn in g s le v e ls .
M edian m onthly b e n e fits in c o n trib u to ry p lan s ran g ed fro m $27 fo r th e
$ 3 ,6 0 0 -a -y e a r w o rk e r w ith 10 y e a rs of s e rv ic e to $267 fo r the $ 8 ,4 0 0 w o rk e r
25
Primary social security benefits, under the assumed conditions, represented 35 percent of annual earnings of
$3,600, 31.75 percent of $4,800, 25.40 percent of $6,000, and 18.14 percent of $8,400.
15
w ith 30 y e a rs of s e rv ic e . In c o n tra s t, m ed ian b en efits in n o n c o n trib u to ry p lan s
ra n g e d fro m $25 to $ 109 a m onth, re v e a lin g s m a lle r d iffe re n c e s in b e n e fits b e
tw een e a rn in g s le v e ls th an in c o n trib u to ry p la n s.
__________ Service periods (years)___________
Annual earnings and
method of financing
10 1 I S 1
20
25
30
$3,600:
Noncontributory —— $25
$39
$52
$63
$75
Contributory----- -—
27
42
54
70
84
$4,800:
Noncontributory----28
39
52
65
75
Contributory---------37
60
76
98
119
$6,000:
Noncontributory ——
28
42
53
65
84
Contributory —------52
84
105
130
157
$8,400:
Noncontributory ----34
42
70
95
109
Contributory----- -—
91
130
175
221
267
1 Excludes a substantial number of workers in plans with higher quali
fying requirements.
W hen p r im a r y so c ia l s e c u rity b en efits w ere tak en into acco unt, the d if
fe re n c e s b etw een b e n e fits e x p re s s e d as a p e rc e n t of p r e r e tir e m e n t e a rn in g s w ere
no t as g re a t b e c a u se so c ia l s e c u rity added a siz a b le u n ifo rm am ou nt to p riv a te
p la n b e n e fits. F o r bo th c o n trib u to ry and n o n c o n trib u to ry p lan s a t a ll s e rv ic e
le v e ls , the ra tio of a v e ra g e r e tire m e n t in com e to p r e r e tir e m e n t e a rn in g s d e
clin e d a t h ig h e r e a rn in g s le v e ls .
_________Annual earnings
$3.600 $4.800 $6.000 $8.400
Method of financing
and service periods
Percent
Noncontributory:
10 years----------43.0 38.5 31.0 23.0
15 years----------47.7 41.5 33.6 24.1
20 years----------52.0 44. 5 36.0 28.0
25 years----------56.0 47.8 38.4 31.6
59.7 50.5 42.2 33.7
30 years----------Contributory:
43.7 40.8 35.8 31.0
10 years----------15 years----------49.0 46.5 42.0 36.6
20 years----------53.0 50.5 46.2 43.0
25 years----------58.0 56.0 51.2 49.6
62.3 61.2 56.6 58.1
30 years-----------
Type of E m p lo y e r U n it. S in g le -e m p lo y e r p lan s g e n e ra lly p ro v id e d la r g e r
b e n e fits th an m u ltie m p lo y e r p la n s, e s p e c ia lly at the h ig h e r e a rn in g s le v e ls . T his
w as ch iefly due to th re e fa c to rs : (1) The ex ten siv e u se by m u ltie m p lo y e r p lan s
of fla t b e n e fits and of b e n e fits v a ry in g by se rv ic e alo n e, w hich p ro v id e s u b sta n tia l
b e n e fits re la tiv e to e a rn in g s fo r w o rk e rs at lo w er e a rn in g s le v e ls ; (2) the e x
te n siv e u se b y sin g le -e m p lo y e r p la n s of e a r n in g s - re la te d b e n e fit fo rm u la s w hich
p ro d u ce la r g e r b e n e fits fo r w o rk e rs w ith a b o v e -a v e ra g e e a rn in g s ; and (3) the
p re v a le n c e of em ployee c o n trib u tio n s in sin g le -e m p lo y e r p lan s and th e ir ab sen ce
16
fro m m u ltie m p lo y e r p la n s. The m ed ian b e n e fit in m u ltie m p lo y e r p lan s fo r the
w o rk e r w ith 20 y e a rs of s e rv ic e w as $ 5 0 a t b o th th e $ 4 ,8 0 0 and $ 8 ,4 0 0 e a r n
in gs le v e ls . In sin g le -e m p lo y e r p la n s, h o w ev er, the b e n e fit a t the $ 8 ,4 0 0 le v e l
w as n e a rly tw ice th a t a t the $ 4 ,8 0 0 le v e l. A s show n below , n o n c o n trib u to ry
sin g le -e m p lo y e r p la n s and m u ltie m p lo y e r p lan s h ad about the sam e m ed ian b e n e
fit fo r w o rk e rs w ith $ 4, 800 e a rn in g s and 20 y e a rs of s e rv ic e ; $5 2 and $ 5 0 , r e
sp e c tiv e ly . D iffe re n c e s b etw een m ed ian b en efits in c o n trib u to ry and n o n c o n trib u
to ry sin g le -e m p lo y e r p lan s w e re fa r g r e a te r .
Median monthly benefits
Assumed-service periods, annual
Single employer
earnings levels, and method of financing
20 years of service:
$56
$4,800..........................................................
52
Noncontributory--------------------------79
Contributory-------------------------------105
$8,400 ------------------------------------------Noncontributory--------------------- ----75
Contributory —----------------------------176
30 years of service:
84
$4,800 ----------------------------------- ------Noncontributory--------------------------76
Contributory--------------------------- -—
120
$8,400 ------------------- ----------------------163
Noncontributory --------------------------145
267
Contributory-------------------------------1 Number of workers not sufficient for selection of median.
Multiemployer
$50
50
0)
50
51
(l)
63
65
(1)
65
65
( J)
C o llectiv e B a rg a in in g . N onbar gain ed p lan s p ro v id e d sig n ific a n tly h ig h e r
r e tir e m e n t b e n e fits th a n b a rg a in e d p la n s, la rg e ly due to the h eav y c o n c e n tra tio n
of sin g le -e m p lo y e r c o n trib u to ry p la n s, ty p ic a lly w ith b e n e fits b a se d on e a rn in g s .
F o r e x a m p le , in n o n b arg ain ed p la n s, the m ed ian m o n th ly b e n e fit fo r 20 y e a rs
of s e rv ic e fo r w o rk e rs a t the $ 4 ,8 0 0 le v e l w as $6 8 c o m p a re d w ith $5 2 in p lan s
u n d e r c o lle c tiv e b a rg a in in g . A s ex p ected , the re la tiv e as w ell as ab so lu te d if
fe re n c e in the m e d ia n b e n e fits of b a rg a in e d and n o n b arg ain ed p lan s w as g r e a te r
a t the $ 8 ,4 0 0 le v e l. N o n c o n trib u to ry p lan s u n d er c o lle c tiv e b a rg a in in g had slig h tly
lo w er m e d ia n b e n e fits th a n n o n c o n trib u to ry n o n b arg ain ed p lan s a t the $ 4 , 800 le v e l,
b u t a t the $ 8, 400 le v e l, the d iffe re n c e w as su b sta n tia l.
___________ Median monthly benefits_____
Mentioned in a
Not mentioned in
Assumed service periods, annual
collective bar
a collective bar
earnings levels, and method of financing gaining agreement gaining agreement
20 years of service:
$4,800 ......................................................
$52
$68
Noncontributory-------------------------51
58
Contributory------------------------------65
85
$8,400 --------------- ----------....................
60
150
Noncontributory-------------------------58
138
Contributory------------------------------172
181
30 years of service:
$4,800 ------------------- ------- -------------75
101
Noncontributory-------------------------74
89
Contributory-----------------------------102
126
100
$8,400 ..........- ...........................................
225
Noncontributory------------------------ 84
203
Contributory------------------------------265
273
L a rg e c o lle c tiv e ly b a rg a in e d p la n s, su ch as th o se in the auto and s te e l
in d u s trie s and th e telep h o n e com pany, h ad a su b sta n tia l e ffe c t on o v e ra ll p lan
17
le v e ls .
A t the tim e o f th is study, p lan s follow in g the S te e lw o rk e rs p a tte rn (which
in clu d ed a p p ro x im a te ly a m illio n w o r k e r s ) p ro v id e d a m o n th ly b e n e fit o f $ 5 2 fo r
a w o rk e r ea rn in g $ 4 , 8 0 0 w ith 20 y e a r s of s e r v ic e .
F o r the sa m e e a rn in g s and
s e r v ic e , A u to m o b ile W o rk e rs p lan s (also c o v e rin g about a m illio n w o r k e r s ) p r o
v id e d a b e n e fit o f $ 56 and telephone com p an y p lan s (c o v e rin g a p p ro x im a te ly
9 0 0 , 0 0 0 w o r k e r s ) , a b e n e fit o f $ 5 1 .
The u n u su al b e n e fit am ount at the $ 3 , 6 0 0
le v e l (and 20 y e a rs* s e r v ic e ) under telephone com p an y p lan s r e f le c t s the e ffe c t
of the s o c ia l s e c u r ity o ffs e t.
Illustrative monthly private plan pensions for selected pattern plans at annual earnings of—
$3,600______________ $4, 800______________ $6,000______________ $8,400
Current serv
ice periods
TeleTeleTeleTele(years)
Steel Auto phone Steel Auto phone Steel Auto phone Steel Auto phone
10 ------------$28
- $28
$28
- $28
42
- $39 42
- $39 42
$39 42
15 ------------- $39
20 ------------- 52
56 $63
52 56
$51
52 56 $51
60
56 $76
25 ------------- 65
70
63
65 70
51
65 70
61
95
70 111
84
68
78 84
56
78 84
86 130 84 146
30 ------------- 78
1
Normal retirement formulas for current and future service at the time of this study (winter 1962—63)
for steel, auto, and telephone plans were as follows:
Steel—1 percent of average monthly earnings during 120 months immediately preceding retirement
times years of service, less $80 for primary social security benefit. Minimum: $2.60 times years of
service.
Auto—$2. 80 times years of service.
Telephone—1 percent of average monthly earnings during 5 consecutive years of highest earnings
times years of service, less one-half primary social security benefit when eligible. Minimum—prior to
age 65 with less than 30 years' service at date of retirement—$115; at age 65 with 30 but less than
40 years' service at date of retirement—$120; at age 65 with 40 or more years' service at date of
retirement__$125; less one-half primary social security benefit when eligible.
Type of W o rk e r C o v e re d . S a la r ie d w o rk e rs cou ld g e n e r a lly lo o k fo r w a r d
to h ig h e r p a ym en ts fro m p riv a te p en sio n p lan s than p ro d u ctio n w o r k e r s w ith the
sa m e s e r v ic e and e a rn in g s .
This w as m a in ly b e c a u se s a la r ie d w o r k e r s often
c o n trib u te d to w a rd th e ir p en sion s (u su a lly b a se d on e a rn in g s and s e r v ic e ) , w h ile
p ro d u ctio n w o r k e r s and w o rk e rs in p lan s c o v e rin g both p ro d u ctio n and s a la r ie d
w o r k e r s w e re m o re lik e ly to be in n o n c o n trib u to ry p lan s th at b a se d p en sio n s on
s e r v ic e alo n e.
A t the $ 4 , 8 0 0 le v e l, fo r ex a m p le, p lan s c o v e rin g s a la r ie d w o r k
e r s o n ly p ro v id e d a m ed ian m on th ly b e n e fit o f $ 6 4 fo r 20 y e a r s o f s e r v ic e w h ile
p lan s c o v e rin g p ro d u ctio n w o rk e rs o n ly (m ain ly m u ltie m p lo y e r p la n s) p ro v id e d
$ 5 0 and th o se c o v e rin g both s a la r ie d and p ro d u ctio n w o r k e r s p ro v id e d $ 6 0 .
Median monthly private plan pension
for workers with 20 years of service
and annual earnings of—
Type of worker
$8,400
covered
$4,800
$60
$139
Salaried and production -50
55
Production only------------147
64
Salaried only----------------
18
E ven if th e c o m p a riso n is lim ited to n o n c o n trib u to ry p la n s, p lan s th at in
cluded s a la rie d w o rk e rs g e n e ra lly p ro v id e la r g e r b en efits— e s p e c ia lly a t h ig h e r
ea rn in g s le v e ls— th an th o se th a t w e re confined to p ro d u ctio n w o rk e rs only.
Selected annual earnings
and service periods
$4.800__________$8.400
20 years 30 years 20 years 30 years
Method of financing and
type of worker covered
Noncontributory:
$146
$76
$77
Salaried and production — $51
75
55
73
50
Production o n ly ------------89
140
207
58
Salaried o n ly ---------------Contributory:
119
175
267
Salaried and production — 78
Production o n ly ------------C1)
( 1)
( 1)
(*>
198
297
141
93
Salaried o n ly ---------------1 Number of workers not sufficient for selection of median.
In d u s try . N o rm a l re tir e m e n t b en efit le v e ls v a rie d w idely am ong in d u s
tr ie s as a r e s u lt of su b s ta n tia l d iffe re n c e s in the p re v a le n c e of em p lo y ee co n
trib u tio n s and m u ltie m p lo y e r p la n s. The b e n e fit le v e ls a lso re fle c te d the in fluence
of the ty p es of fo rm u la s u se d to com pute b e n e fits and the p a tte rn b a rg a in in g in
c e r ta in in d u s trie s .
L o w est b e n e fits w e re p ro v id e d in in d u s trie s m a rk e d by n o n c o n trib u to ry
m u ltie m p lo y e r p lan s co v e rin g b lu e -c o lla r w o rk e rs , w hose p e n sio n s w ere m o st
fre q u e n tly b a s e d on fla t-b e n e fit fo rm u la s. In the c o n stru c tio n in d u stry , fo r e x
am p le, the m e d ia n b e n e fit fo r the $ 4, 8 0 0 -a -y e a r w o rk e r w ith 20 y e a rs of s e rv ic e
w as $ 4 0 a m on th. S im ila rly , in the s e rv ic e in d u s trie s it w as $ 50 a m onth.
Selected annual earnings
and service periods_____
$4. 800_____________$8,400
Industry
20 years 30 years 20 years 30 years
All industries1 ----------------------$54
$78
$76
$130
M ining------------- -----------------75
75
75
75
40
Contract construction —----------60
40
56
52
Manufacturing----------------------78
75
130
72
Transportation----------------------90
80
100
Communications and public
utilities----------------------------51
56
76
146
Wholesale and retail trad e-----60
90
93
146
Wholesale trade---------------62
80
67
98
Retail trade-------------------60
140
98
188
Finance, insurance, and
real estate------------------------96
150
210
313
50
Services------------- ----------------75
52
75
1 Includes industries for which data are not shown separately.
B ecau se of the p red o m in an ce of b e n e fit fo rm u la s b a s e d on se rv ic e alo ne,
m ed ian b e n e fits in b o th th e se in d u s trie s show ed a ty p ic a l in c re a s e as m o re s e r v
ice w as a ccu m u lated , b u t no t as e a rn in g s in c re a s e d . One la rg e c o n trib u to ry p lan
in th e e le c tr ic a l c o n stru c tio n in d u stry w ith a $ 30 b e n e fit fo r 20 y e a rs of s e rv ic e
($50 fo r 30 y e a rs o r m o re ) e x e rte d su b sta n tia l in fluence on th e m ed ian and if
19
th is p la n w e re e x clu d ed , the m ed ian b e n e fits fo r a ll p lan s in the in d u s try w ould
be c lo s e to th at show n fo r n o n c o n trib u to ry p lan s in the fo llo w in g tab u latio n .
1
00
Median monthly private plan pensions by method
of financing at selected annual earnings
___________ and service periods of—____________
Noncontributory
Contributory
$4,:800
$8,400
$4, 800
Industry
20 years 30 years 20 years 30 years 20 years 30 years 20 years 30 years
$54
All industries1 --------------$78
$76
$78
$130
$98
$175
$267
Mining -----------------------75
75
75
75
(2)
(2)
(2)
(2)
Contract construction ----52
65
52
65
(2)
(2)
(2)
(2)
Manufacturing---------------51
75
60
100
73
116
175
267
Transportation---------------72
75
90
89
90
138
179
268
Communications and
146
38
56
76
public u tilities------------92
140
209
312
Wholesale and retail
trade -------------------------60
86
105
70
67
106
140
213
Wholesale trade---------54
78
67
98
125
80
140
210
60
146
175
64
Retail trade--------------90
102
135
213
Finance, insurance, and
real estate------------------95
136
291
200
100
153
220
330
45
36
36
45
120
Services-----------------------140
140
210
1 Includes industries for which data are not shown separately.
2 Number of workers not sufficient for selection of median.
N o n co n trib u to ry b e n e fits in the s e r v ic e in d u s trie s w e re c o n s id e ra b ly lo w e r
than th o se in an y o th e r in d u s try , but b e c a u se o f the c o n trib u to ry p lan s in the
a m u sem en t in d u s trie s , m ed ian b e n e fits fo r the in d u s try group as a w hole w e re
c o m p a ra b le to th o se in o th e r in d u s trie s .
In c o n tr a s t to the r e la t i v e ly low b e n e fit le v e ls in the c o n stru c tio n and s e r v
ic e in d u s trie s , high m ed ian b e n e fits at the $ 4 , 8 0 0 le v e l w e re p ro v id e d in the
m ining and tr a n s p o rta tio n in d u s trie s , w h e re m u ltie m p lo y e r p lan s a re a ls o p r e
d om inant.
The U nited M ine W o rk e rs p la n s, w h ich p ro v id e d a m o n th ly p en sio n
o f $ 75 26 fo r 20 y e a r s o r m o re o f s e r v ic e , accou n ted fo r the r e la t i v e ly high
b e n e fits in m in in g.
In the tra n s p o rta tio n in d u s try , m ed ian b e n e fits w e re s tro n g ly
in flu en ced b y the W e s te rn C o n fe re n c e o f T e a m s te rs p lan , w h ich p ro v id e d about
$ 7 2 a m onth and the C e n tra l S ta te s T e a m s te rs p lan w h ich p ro v id e d a b e n e fit a v
e ra g in g about $ 122 a m onth. 27 A s w as ty p ic a l fo r o th e r in d u s trie s , c o n trib u to ry
p la n s in the tra n s p o rta tio n in d u s try (m o stly in the r a ilr o a d in d u stry ) p ro v id e d
s u b s ta n tia lly h ig h e r b e n e fits than n o n c o n trib u to ry p la n s, e s p e c ia lly at h ig h e r
e a rn in g le v e ls .
Recently revised in the bituminous plan to provide $100 a month.
27
Benefit amounts for workers retiring under the Central States Teamsters plan varied with the weekly contribution
rate. The amount most commonly contributed by employers was $6 a week for each worker (winter 1962-63). At
this rate, a worker retiring at age 60 would receive $200 a month for the first 60 months of retirement and $90 a
month thereafter or, given a life expectancy of about 17 years at age 60, an average benefit of $122 a month. The
Western Conference of Teamsters provided monthly benefits of 1. 76 percent of total contributions made on the work
er's behalf, up to a maximum of $82.50 times the quota rating. The quota rating was $1 for a worker in whose
behalf the contribution rate was 10 cents an hour for 125 hours a month from May 1, 1955, to retirement date. For
the purposes of this study, computations were based on the assumption of 2,080 hours during each year, using the above
contribution rate, quota rating, and maximum benefit.
20
In pu blic u tilitie s , the m ed ian b e n efit w as h e a v ily in flu en ced by the n o nco n
trib u to ry teleph one com p any p la n s, w hich c o v e re d about 5 out of 8 w o rk e rs in
the in d u stry . F o r e x a m p le , the m ed ian b en efit fo r the $ 4 , 8 0 0 -a -y e a r w o rk e r w ith
20 y e a rs of s e rv ic e w as $51 a m onth. The n o n c o n trib u to ry p lan s in o th e r public
u tilitie s p ro v id e d b e n e fits c o m p a ra b le to the teleph one com p any p lan s at the sam e
e a rn in g s and s e rv ic e le v e ls . H ow ever, about a th ird of th e w o rk e rs in o th e r
pu blic u tilitie s w e re in c o n trib u to ry p lan s th a t h ad sig n ific a n tly h ig h e r b e n e fits
th an th o se p ro v id e d b y the n o n c o n trib u to ry p lan s— $9 2 fo r 20 y e a rs of s e rv ic e a t
the $ 4 , 800 le v e l and m o re th an double th a t am ount a t th e $ 8 ,4 0 0 le v e l.
The la r g e s t m on th ly b e n e fits w ere p ro v id ed in th e fin an ce, in su ra n c e ,
and r e a l e s ta te in d u s try due to bo th the g r e a te r p re v a le n c e of c o n trib u to ry p lan s
and the u n u su a lly high le v e l of b e n e fits p ro v id ed by n o n c o n trib u to ry p la n s w ith
e a rn in g s -b a s e d fo rm u la s ; b e n e fits ra n g e d fro m $ 1 0 0 to o v e r $ 3 25 a m o n th and
c o v e re d about 40 p e rc e n t of the w o rk e rs in th is in d u stry .
B en efit le v e ls in r e ta il tra d e w ere g e n e ra lly h ig h e r th an th o se in w h o le
sa le tra d e (as w e ll as th o se in m an y o th e r in d u s trie s ) b e c a u se the fo rm e r w e re
ty p ic a lly c o n trib u to ry p lan s w hile the la tte r u su a lly w e re n o n c o n trib u to ry m u lti
e m p lo y e r p la n s w ith s e rv ic e o r fla t b e n e fit fo rm u la s.
B enefit le v e ls v a rie d w idely am ong m an u factu rin g in d u s trie s , a s show n below .
Industry
Durable goods:1
Stone, clay, and glass
products---------------Primary metals -------Machinery---------------Electrical equipment —
Transportation
equipment:
Motor vehicles----Aircraft--------------Nondurable goods:1
Food ----------------------Tobacco-----------------Apparel------------------Printing------------------Chemicals --------------Petroleum---------------Rubber --------------------
Median monthly private plan pensions
for workers with 20 years of service
_____ and annual earnings of—
$4,800
$8,400
$45
52
56
54
$55
60
56
112
56
50
56
130
92
73
175
96
50
50
111
50
154
76
222
100
76
50
1 Includes industries for which data are not shown separately.
The re la tiv e ly high b e n e fits in the food, to b acco , c h e m ic a ls, and p e tro le u m in
d u s trie s la rg e ly re fle c t the p re v a le n c e of em ployee co n trib u tio n s and b e n e fit
fo rm u la s b a se d on e a rn in g s . F o r ex am p le, about th re e -fo u rth s of the w o rk e rs
in the p e tro le u m in d u s try p lan s w e re in c o n trib u to ry p lan s w ith lib e ra l e a rn in g s b a s e d fo rm u la s , w h ich p ro v id e d m ed ian m on thly b e n e fits of $1 00 and $222 fo r
the $ 4 ,8 0 0 and $ 8 ,4 0 0 le v e ls . M edian b e n e fits a t the $ 4 ,8 0 0 e a rn in g s le v e l in
the re m a in in g in d u s trie s w e re c lo s e ly c lu s te re d , re fle c tin g the in fluence of n o n
c o n trib u to ry p la n s and m in im u m b e n efit p ro v is io n s , w hile a t the $ 8 ,4 0 0 le v e l,
m o re v a ria tio n w as ev id e n t, la rg e ly due to the in flu en ce of e a rn in g s -b a s e d f o r
m u la s as w ell as m in im u m b e n e fits b a se d on s e rv ic e .
21
A n a n a ly sis of so m e of th e se in d u s trie s re v e a le d the in flu en ce of do m inan t
p a tte rn p la n s. In the m o to r v e h ic le s and the m a c h in e ry in d u s trie s , d o m in ated
by p lan s n e g o tia te d b y the A utom obile W o rk e rs, the m ed ian b e n e fits fo r 20 y e a rs
of s e rv ic e a t b o th e a rn in g s le v e ls show n w as $56— the b e n e fit p ro v id e d fo r
20 y e a rs of s e rv ic e r e g a rd le s s of e a rn in g s. In the a p p a re l in d u stry , the m ed ian
b e n e fit of $ 5 0 re s u lte d fro m p lan s n e g o tiated by the C lothing W o rk e rs and L a d ie s 1
G a rm e n t W orkers* un io n s.
In the ru b b e r p ro d u c ts in d u stry , the R u b b er W o rk e rs p lan s u su a lly h ad a
p e n sio n b e n e fit b a s e d so le ly on len g th of s e rv ic e , b u t b e c a u se of a lte rn a tiv e
p e rc e n t-o f-e a rn in g s fo rm u la s w hich o p e ra te d on ly a t the h ig h e r e a rn in g s le v e ls,
m e d ia n b e n e fits ro s e fro m $ 50 fo r w o rk e rs at lo w er le v e ls to $76 a t the $ 8 ,4 0 0
le v e l. S im ila rly , in the* p r im a r y m e ta ls in d u stry , the d iffe re n c e b etw een the
m e d ia n b e n e fits of $52 and $60 a t the $ 4 ,8 0 0 and $ 8 ,4 0 0 le v e ls , re sp e c tiv e ly ,
re s u lte d fro m the a p p lic a tio n of the a lte rn a tiv e b e n e fit fo rm u la s in p lan s n eg o tiated
by the S te e lw o rk e rs.
The re m a in in g in d u s trie s w e re s im ila rly d istin g u ish e d by n o n c o n trib u to ry
p lan s p ro v id in g u n ifo rm b e n e fits (p rin tin g ) and p lan s b a sin g b e n e fits on se rv ic e
alone a t the lo w er e a rn in g s le v e ls (sto n e, clay , and g la ss p ro d u c ts) and the m o re
lib e ra l c o n trib u to ry p la n s b a sin g b e n e fits on e a rn in g s as w ell as se rv ic e a t the
h ig h e r e a rn in g s le v e ls (e le c tric a l m a c h in e ry ).
Chart 1. P ension Benefits for W orkers Earning $3,600 Annually W ith 20 and 30 Years of Service
W o rkers
W o rk e rs
(in th o u s a n d s )
5,000
(in th o u s a n d s )
"
5 ,0 0 0
M o n th ly b e n e fit
Mot e:
T hi s cl . a r t s h o w s t h e
n u m b e r of w o r k e r s
at th e d iff e r e n t se rvi ce
b e l o n g i n g to pe ns io n plans p r o v i d i n g t h e n o r m a l
a n d b e n ef i t leve ls.
1 5 .6 m illio n ac tnve w o rk e rs m 19 61 .
T h e d a t a a r e b a s e d on t h e
norm a!
r e t ir e m e n t be ne fit am ou nt s indicated for 2 0 and 30 year s of se rv ic e.
It d oe s n ot s h o w t h e a c t u a l n u m b e r of w o r k e r s
r e t i r e m e n t b e n e f i t f o r m u l a s in e f f e c t in t h e w i n t e r of 1 9 6 2 - 6 3 f o u n d in a s t u d y of 1 5 , 8 1 8 p r i v a t e p e n s i o n
plans co ve ri ng
Chart 2. P ension Benefits for W orkers E arning $4,800 Annually W ith 20 and 30 Years of Service
W o rke rs
W o rke rs
(in th o u s an d s)
(in th o u s a n d s )
5 ,0 0 0
5 ,0 0 0
4 ,0 0 0
3 ,0 0 0
—
3 ,0 0 0
2,000
1,000
1,000
U nder
$10
$10
$20
$30
$4 0
$50
$60
$70
to
to
to
to
to
to
to
to
to
to
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$80
$90
$110
$100
to
$120
$130
$120
to
$130
$140
$150
$160
to
to
to
to
and
$140
$150
$170
over
$160
$170
M o n th ly b e n e fit
Note:
This
at
c h a r t s h o w s t h e n u m b e r of w o r k e r s b e l o n gi n g to p e n s i o n
the different service and be nefit levels
15 6 m illion active w orkers in 19 61 .
pla ns
prov idin g the norm al
T h e d a t a ar e ba se d on t h e n o r m a l
ret ir e m e n t
retirem e nt
bene fit
a m ounts in d ic a te d
b e n e f i t f o r m u l a s in e f f e c t
in
t he
f o r 2 0 a n d 3 0 y e a r s of s e r v i c e .
w i n t e r of 1 9 6 2 - 6 3
found
in a s t u d y
It d o e s n o t s h o w t h e a c t u a l n u m b e r of w o r ke r s
of
15 ,8 1 8
p r i v a t e p e ns io n p la n s c o ve r i ng
10
*
Chart 3. Pension Benefits for Workers Earning $6,000 Annually With 20 and 30 Years of Service
W o rk e rs
W orke rs
U nder
$20
$20
$40
to
$60
$8 0
$100
$120
$140
$160
$180
$200
$220
to
to
to
to
to
to
to
to
to
to
and
$40
$60
$80
$100
$140
$160
$180
$200
$220
$240
o ver
$120
$240
M o n th ly b e n e fit
N o te :
T h is c h a r t sh o w s th e n u m b e r o f w o r k e rs b e lo n g in g to p e n s io n p la n s p r o v id in g th e n o r m a l r e t ir e m e n t b e n e f it a m o u n ts in d ic a te d fo r 2 0 a n d 3 0 y e a rs o f s e rv ic e .
a t th e d if f e r e n t s e rv ic e a n d b e n e fit le v e ls . T h e d a ta a re ba se d on th e n o r m a l r e t ir e m e n t b e n e fit fo rm u la s in e f f e c t in th e w in t e r o f 1 9 6 2 - 6 3 fo u n d in a
1 5 .6 m illio n a c tiv e w o rke rs in 19 61 .
It d o e s n o t sh o w th e a c tu a l n u m b e r o f w o r k e rs
stu d y of 1 5 ,8 1 8 p r iv a te p e n s io n p la n s c o v e rin g
Chart 4. Pension Benefits for W orkers Earning $8,400 A nnually W ith 20 and 30 Years o f Service
W o rke rs
(in th o u s an d s)
W o rke rs
(in th o u s a n d s )
5 ,0 0 0
5 ,0 0 0
4 ,0 0 0
3 ,0 0 0
2,000
—
—
Under
$20
$20
$40
$60
$8 0
to
to
to
to
$40
$60
$80
$100
$100
to
$120
$120
$140
$160
$180
$200
$220
$240
$260
$280
to
to
to
to
to
to
to
to
to
$140
$160
$180
$200
$220
$240
$260
$280
$300
$300
to
$320
1,000
$320
and
over
M o n th ly b e n e fit
N o te :
T h is c h a r t sh ow s th e n u m b e r o f w o r k e rs b e lo n g in g to p e n sio n p la n s p ro v id in g th e n o rm a l r e t ir e m e n t b e n e f it a m o u n ts in d ic a te d fo r 2 0 and 3 0 y e a rs o f s e rv ic e .
It d o e s n o t sh ow th e a c tu a l n u m b e r o f w o rk e rs
a t th e d if f e r e n t s e rv ic e and b e n e fit le v e ls . T h e d a ta a re b a se d on th e n o r m a l r e t ir e m e n t b e n e fit fo rm u la s in e ffe c t in th e w in te r o f 1 9 6 2 - 6 3 fo u n d in a s tu d y o f 1 5 ,8 1 8 p riv a te p e n sio n p la n s c o v e rin g
1 5 .6 m illio n active w orkers in 1961
N>
U1
26
C hart 5. M onthly Normal R etirem ent B en efits,1 by Selected Assum ed
A n nu al Earnings Levels and S ervice P eriods, W in te r 19 6 2 -6 3
Monthly benefit
SERVICE
IN YEARS
10
15
20
25
30
0
$50
$100
$150
$200
$250
$300
$350
27
T a b l e 3. P r o v i s i o n s f o r P a r t i c i p a t i o n R e q u i r e m e n t s in P r i v a t e P e n s i o n P l a n s b y T y p e of E m p l o y e r U n it,
M e th o d of F i n a n c i n g , a n d C o l l e c t i v e B a r g a i n i n g S t a t u s , W i n t e r 1 96 2—6 3
...........
( W o r k e r s in thousands)
......................1
With participation
requi rem en ts
A ll plans
Item
Workers 1
Numb e r
A ll plans st u d ie d ---------------------------------------------
15,818
15,621
Single e m p l o y e r ---------------------------------------------N o n c o n t r ib u to r y ----------------------------------------Mentioned in a c ol le ct iv e
bargaining a g r e e m e n t -----------------Not me ntioned in a co lle cti ve
bargaining a g r e e m e n t -------------------C on tr ib ut ory -----------------------------------------------Mentioned in a co lle ct iv e
bargaining a g r e e m e n t --------------------Not mentioned in a c ol le cti ve
bargaining a g r e e m e n t ------------------ —
14,890
10,657
11,742
8,455
M u l t i e m p l o y e r ------------------------------------------------N o n c o n t r ib u to r y ---------------------------------------Mentioned in a co lle ct iv e
bargaining a g r e e m e n t --------------------Not mentioned in a c ol le cti ve
bargaining a g r e e m e n t ---------------------Contr ib uto ry -----------------------------------------------Mentioned in a co lle ct iv e
bargaining a g r e e m e n t -------------------Not mentioned in a col le cti ve
bargaining a g r e e m e n t ---------------------
1
i
Plans
9, 129
!
i
9, 100
5,6 93
Without participation
r eq u ir em e nt s
1
Plans
Workers1
W orkers1
!
4,4 60
6,689
j
4,3 29
1,777
5,790
4,9 64
i
i i, 161
;
7,4 14
6, 678
3, 933
5,668
802
569
3, 131
;
5, 099
6, 724
4, 233
2, 787
3, 288
4,8 91
3,407
1,208
2,5 5 2
1,833
826
{
|
1, 579
736
1,034
1,495
850
1,235
184
|
261
3, 199
1,793
2, 557
j
928
869
3, 878
3, 212
29
10
!
810
3, 176
5
59
59
36
666
5
19
18
356
3
8
15
41
310
16
26
25
j
j
1,317
642
131
899
859
476
3, 747
3,115
!
i
!
97
!
83
805
3, 093
14
34
54
40
22
632
i
!
;
348
:
284
Active workers in 1961.
N O T E : B e c a u s e of ro u n d in g , s u m s o f in d iv id u a l i t e m s m a y not e q u a l t o t a ls .
T ab le 4.
P r o v is io n s for Parti ci pa tio n Re q ui r e m en ts in P r iv at e P en sio n P lans by Industry,
Indust ry
A ll plans st u d i ed --------------------------------------------Mining --------------------- -----------------------------------------C o n t r a c t c o n s t r u c t i o n ----------------------------------M an uf a c t u r i n g ------------------------- ----------------------T r a n s p o r t a t i o n ----------- ------------------------------------C o m m u n i c a t i o n s and p ubl ic u t i l i t i e s ------W ho l es ? . l e and r e t a i l t r a d e ----- -------------------W h ol es al e t r a d e ---------------------------------------Retail t r a d e -------------- -----------------------------Fin an c e, in s ur an ce , and rea l e s t a t e ____
S e r v i c e s ------------------------------------------------■
-------------
( W o r k e r s in thousands)
I
With pa j rtic ipation
A ll plans
1
requi rements
T'
"
Workers1 !
Numb e r
Plans
|
W orkers1
21 5 ,818
316
44 9
9, 257
67 3
84 9
1, 627
1, 147
480
1,853
719
j
;
1
!
!
i
21 1 5 , 6 2 1
3 27
1,072
9,6 78
1,2 86
1, 27 0
920
47 9
44 0
733
308
!
P lans
!
Wo rke r s 1
4,46 0
6,6 89
11, 161
1 38
60
4, 938
285
39 1
i , 352
94 3
419
1, 622
258
62
23
2,838
2 14
386
501
193
308
445
35
178
38 9
4,319
266
l , 049
b, 840
1, 072
98 5
418
286
132
288
24 3
Activ e w o r k e r s in 1961.
Includes in du stries for which data are not shown sep ara te ly.
N O T E : B e c a u s e of r o u n d i n g , s u m s of i n d iv id u a l i t e m s m a y n o t e q u a l t o t a l s .
Without par 'ticipation
require ments
9,129
.
!
j
f
|
!
!
J_____
1
2
Wi nte r 1962- 63
1
388
4 58
265
204
61
231
461
i
I
___________________ L_
28
T a b le 5.
M in im u m A g e and S e r v ic e R e q u ir e m e n ts fo r P a r tic ip a tio n in P r iv a t e P e n s io n P la n s , W in te r 1962—6 3 1
(W orkers in thousands)
Minimum age requirem ents2
All plans
Minimum service
requirements (years)
None
Numbe r
W ork
ers
Plans
Wo rke rs
A ll plans with participation
req u irem en ts------- ------------------------
9, 129
4 ,4 6 0
3, 731
2, 242
No service requirement — ------1 ----------- ------ ------------------------------------2 ------------------ ---------------------------------3 ----------------------- --------- ------ ---------------4 _____________________________________
5 _________________________________
512
1,8 8 2
1, 170
2, 300
30
3, 235
_
435
1 ,957
1 ,082
563
515
628 :'
598
24
30
901
1, 458
_
1,2 3 3
244
255
24
486
20
or under
| W ork
Plans
ers
.................. J
No service req u irem en t------------------1
.............
2 __________ ____________________ ______
3 -------------------------- ------------------------------ .—
4 _______ _______________________________
5 ------------------------------------------------------------
---------
23
W ork
ers
1
Plans
W ork
ers
55 :
72
95
84
9
11
3
2
50
-
51
14
7
-
31
1
53
10
-
48
5
15
15
-
_
_
1
8
-
5
6
-
-
-
-
-
-
28
All plans with participation
re q u irem en ts-----------------------------------
21
Plans
29
-
30
25
W ork
ers
Plans
1,601
706
277
252
179
412
481
145
304
72
99
85
35
40
47
15
204
13
3, 118
1 ,036
253
237
16
44
_
.
.
37
10
-
8
6
-
204
-
_
13
-
-
-
146
339
109
203
240
12
7
66
28
140
22
34
60
31
90
2
14
-
"
187
523
222
1, 030
1, 156
23
21
_
-
-
1 Based on a study of 1 5,818 private pension plans covering 15 .6 m illion active w orkers in 1961.
2 Some plans specified alternative requirem ents; for each case , the one applying to a worker hired at age 25 was used.
NOTE;
Because of rounding, sum s of individual item s may not equal totals. 1
Table 6.
Crediting of Preparticipation Service for N orm al Benefit Computation and for Service Qualification
for Benefits in Private Pension Plans, by Method of Financing, Winter 1962—63 1
(W orkers in thousands)
Method of financing
All plans
Item
A ll plans with participation
req u irem en ts------------------------------------------Benefit computation:
Preparticipation service in clu d ed __
Preparticipation service excluded__
Service qualification for benefits:
Preparticipation service in clu d ed __
Preparticipation service excluded__
Noncontributory
Number
W orkers
Plans
W orkers
Plans
W orkers
9, 129
4 ,4 6 0
5, 703
1,875
3 ,4 2 6
2, 585
2, 359
6 ,7 7 0
943
3, 517
1, 562
4, 141
623
1, 252
797
2 ,6 2 9
320
2, 265
3, 977
5, 152
1,473
2, 987
2, 346
3, 357
769
1, 106
1, 631
1,795
704
1,881
1 B ased on a study of 1 5,818 private pension plans covering 15. 6 m illion active w orkers in 1961.
N O TE:
Because of rounding, sum s of individual item s m ay not equal totals.
Contributory
29
T a b le 7.
M in im u m A ge and S e r v ic e R e q u ir e m e n ts fo r N o r m a l R e tir e m e n t in P r iv a te P e n sio n P la n s ,
W in te r 1962—63
(W orkers in thousands)
M in im u m s e r v i c e
requirem ents1
(years)
M in im u m age r e q u i r e m e n t s 2
A l l p la n s
60
1
W orkers 3
Plans
A l l p la n s s t u d i e d ____________________
1 5 ,8 1 8
15, 621
103
1 ,6 1 4
No s e r v i c e r e q u i r e m e n t ___________
1 - 4 .......................................... ...............................
5„
. ________________ ______________
6-Q
..................
.
....................
in
1 1 - 1 4 ....... .....................................................
15 ______________________________________
16- 1 9 __________________________________
2 0 ______________________________________
2 1 - 2 4 ______
_____ __________
1, 078
2, 652
2, 038
310
4, 067
860
3, 682
1
692
1, 617
2 ,2 7 7
946
84
3, 794
153
3, 042
9
2, 844
2
19
3
59
3
10
3
12
3
5
25
.
...
3 0 ............................ ...
Ove r 3 0 ____ ___ __
______
...... .............. .
___
- ------
-
-
-
1, 267
2
23
2
15
2
i
:
i!
28
204
15
!
1|
1
1. 026
2, 621
2. 028
307
4, 055
759
3, 577
1
599
1 ,5 8 9
2, 205
933
80
3, 766
134
2, 980
9
1, 546
3
5
292
1
i
Plans I W ork ers3
_______________|
13, 807
446
200
W orkers3
1 5 ,2 6 9
24
39
587
248
Plans
-
3
-
394
39
j
O th e r
65
W orkers3 i
Numbe r
1
;
;
t
i
1
|
50
12
io
25
12
13
2
101
102
16
19
38
|
54
_
31
552 [
6
100
-
l
-
_
8
38
-
^
1 For those plans which specified a period of employment to be served before participation in the plan could begin, the
minimum service requirement includes the preparticipation service and the required plan m em bership service.
2 Some plans specified alternative requirem ents; for each case, the one with the ea rliest age or no age requirem ents
was selected.
3 Active workers in 1961.
N OTE:
Because of rounding,
Table 8.
sum s of individual item s m ay not equal totals.
Minimum Age Requirements for N orm al Retirem ent in Private Pension Plans, by Industry, Winter 1962—6 3
(W orkers in thousands)
Minimum age requirem ents1
60
Industry
A ll plans studied___________________
M ining_________________________
Contract con stru ction -------------------M anufacturing______________________
T ran sp o rtatio n -------------------------------Communications and
public u tilitie s____________________
W holesale and retail tra d e-----------W holesale tra d e ________________
Retail trade _____________________
Finance, insurance, and
real e sta te ________________________
S e r v ic e s --------------------------------------------
B e c a u se o f roun d ing,
W ork ers2
Plans
15,269
1 3,807
446
314
444
8, 961
639
121
1, 037
9, 161
1, 011
267
14
708
23
12
11
773
1,6 1 8
1, 139
479
555
892
46 3
429
50
3
3
-
7
5
5
-
12
12
1,836
609
715
289
10
100
6
8
Number
W ork ers2
Plans
315, 818
315, 621
103
1 ,6 1 4
316
449
9, 257
673
327
1, 072
9, 678
1,286
2
3
29
20
206
24
405
224
849
1 ,627
1,147
480
1, 270
920
479
440
26
6
5
1
1 ,8 5 3
719
733
308
7
10
su m s
Plans
W o rk ers2
1 Some plans specified alternative requirem ents; for each case,
was selected.
2 Active workers in 1961.
3 Includes industries for which data are not shown separately.
NOTE:
Other
65
W o rk ers2
200
2
;1
11
112
50
the one with the earliest age or no age requirements
o f in divid u al ite m s m a y not eq u al t o ta ls .
30
T a b l e 9. E a r n i n g s B a s e U t i l i z e d in E a r n i n g s F o r m u l a s in P r i v a t e P e n s i o n P l a n s , b y I n d u s t r y , W i n t e r 1962—63 1
( W o r k e r s in thousands)
Ea rn in gs b as e
A ll plans
A ll plans with b as ic b e n e
fit f o r m u la s b as ed on
e a r n i n g s --------------------------------.
L a s t or high
5 years
WorkP lan s
e rs
Career
Industry
Num
be r
Worke rs
W ork
ers
2 1 0 , 531
29 , 238
7, 002
4, 753
310
64
5, 527
422
11 1
21
5,997
486
143
60
3, 704
160
68
17
3, 359
150
42 9
P la n s
L a s t or high
10 y e a r s
WorkPlan s
e rs
|
L e s s than
2 formulas:
5 years
different b a s es
|W o r k 1W o r k Plans
Plans
J e rs
i
er s
1
1
1,714
1,714
1, 236
2, 1 10
1
652
135
3
711
65
106
30
831
71
349
254
743
29
35
12
23
96
77
19
120
38
103
150
223
477 ,
438
10
4
1
M i n i n g --------------------------------------Contract co nstruction -------M a n u f a c t u r i n g -----------------------Tra n sp or ta ti on — --------------Co m m u ni c at io ns and public
u t i l i t i e s _________________ _____
W h o le s a l e and retail
trade --------------------------------------W h o le sa l e t r a d e ---------------Retail t r a d e ----------------------Fin an c e, in su r an ce , and
real e s t a t e ----------------------------S e r v i c e s ------------------------------------
1
2
783
1,227
1,310
875
435
543
162
381
1, 117
760
357
317
103
214
50
31
19
1,653
387
7 24
102
1,210
104
40 9
58
297
277
1,698
193
74
4
58
11
60
4
266
1
52 !
29
3
44
68 !
62
23
10
7
3
82
21
61
11
6
36
6
-
-
I
-
-
86
26
60
37
37
23
73
32
87
-
-
-
~
171
67
B a s e d on a study of 15, 818 pr ivate pen sion plans c ove ri ng 15. 6 m il li on active w o r k e r s in 1961.
Includes indu str ie s fo r which data are not shown sep ar at el y.
NOTE:
B e c a u s e of rounding,
s u m s of individual it em s m a y not equal tota ls .
T a b le 10. M o n th ly P r i v a t e P e n s i o n P l a n N o r m a l R e t i r e m e n t B e n e f it s 1 b y S e l e c t e d A s s u m e d
Annual E ar nin gs L e v e ls and S er vi c e P e r i o d s ,
Winte r 1962—63 2
( W o r k e r s in thousands)
A s s u m e d annual earnings
$ 3 , 600
Monthly benefit
Plans
$ 4 , 800
Workers
Plans
$ 6 , 000
Workers
Plans
$ 8, 400
Workers
Plans
Workers
10 y e a rs of s e r v ic e
T o t a l ---------------------------------- ------------- None 3------------------------------------ ----------------Under $ 1 0 _____________________________
$ 1 0 and under $ 2 0 __________________
$ 2 0 and under $ 3 0 -------------------------$ 3 0 and und er $ 4 0 --------------------------$ 4 0 and under $ 5 0 __________________
$ 5 0 and under $ 6 0 --------------------------$ 6 0 and under $ 7 0 __ _____________
$ 7 0 and under $ 8 0 —-------- ---------------$ 8 0 and under $ 9 0 __________________
$ 9 0 and under $ 1 0 0 -------------------------$ 1 0 0 and under $ 1 2 5 ___________ ____
$ 125 and under $ 1 5 0 ----------------------$ 150 and under $ 1 7 5 _______________
$ 17 5 and under $ 200 _______________
$ 200 and o v e r ________________________
See footnotes at end of table.
10, 335
8, 839
10, 335
8, 839
10, 335
8, 839
10, 335
8, 839
210
526
3, 109
3, 517
1, 239
293
199
42 2
150
4
200
4 466
417
237
1,423
4 , 132
1, 598
604
182
91
45
8
9
93
245
41 4
2, 342
2, 809
1, 327
966
664
385
43
2 04
136
545
29
4 226
185
368
330
91 2
227
788
023
86 3
281
194
9
423
277
201
29
225
265
168
5 34
2, 621
1,312
1, 155
9 37
917
473
152
59
128
38
16
23
40
134
3 34
1, 074
1, 668
716
I, 478
661
559
703
457
382
970
321
87
154
637
202
105
410
2, 166
691
581
603
420
1. 007
338
794
1, 114
177
95
52
85
-
-
-
-
41 0
137
812
3, 4 8 9
1, 526
1, 205
659
2 52
1 19
77
31
51
23
47
-
~
■
"
~
-
-
1,
2,
1,
1,
31
Table 10.
Monthly Pri vat e P en sio n Plan N o r m a l R e ti re m e n t Benefits 1 b y S ele cte d A s s u m e d
Annual E ar nin gs L e v e ls and Se rv ic e P e r io d s , Winte r 1962—6 3 2— Continued
( W o r k e r s in thousands)
—
Plans
*
t"
j
Workers
$ 4, 800
!
I
J Workers
Plans
|
W or k e r s 1
Plans
$ 8 , , 40 0
*
°
$ 3, 600
Monthly benefit
o
o
A s s u m e d annual earnings
Plans
'
Workers
j
12, 161
15 y e a r s of s e r v i c e
T o t a l ___________________________________
. .-1.1*777.
_
204
193
1,735
2, 696
4, 374
2, 056
647
1,456
435
75
180
6 64
4 62
-
N o n e 3— - --------------------- ------- ------------Un der $ 1 0 - ___________________________
$ 1 0 and under $ 2 0 --------------------------$ 2 0 and under $ 3 0 --------------------------$ 3 0 and under $ 4 0 - —--------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and under $ 7 0 --------------------------$ 7 0 and under $ 8 0 -----------------------$ 8 0 and under $ 9 0 ------------ -------------$ 9 0 and under $ 1 0 0 -------------------------$ 100 and under $ 125-----------------------$ 125 and under $ 150----- ------------------$ 150 and under $ 175--------- -------------$ 175 and under $ 2 0 0 -----------------------$ 200 and under $ 2 2 5 -----------------------$ 2 2 5 and under $ 250 -----------------------$ 250 and o v e r ------------------------------------
12, 161
j
14,777
12, 161
359
84
6 06
281
588
599
036
889
4 34
71
61
92
60
-
)
j
j
j
268
137
1,091
1,722
3, 770
2, 142
1, 173
1, 674
617
325
557
761
227
4 313
397
26
417
891
3, 440
2, 687
964
1, 327
791
452
361
258
55
93
-
1,
4,
2,
i,
-
j
I
|
|
!
|
!
-
|
!
14,777
-
226
104
1, 006
596
3, 142
2, 224
1, 297
1, 587
951
536
542
1 , 4 54
530
67
214
4 301
-
-
-
|
;
1
!
;
1
12, 161
14,777
261
28
468
519
2,887
1,890
811
1,343
1,065
544
757
1,114
291
88
26
69
213
i
■
_
j
1, 028
450
2, 1 12
858
402
1, 673
1, 584
682
630
1,983
978
853
446
202
357
326
15,462
1
14,947
'
15,462
152
3
372
8 32
756
1,661
2, 172
1,878
886
8 56
1, 243
2, 22b
1, 068
531
173
498
!
j
1
.
6
4 149
-
|
!
277
13
180
419
9 18
2 38
374
745
858
9 20
142
796
175
550
164
94
10
73
1
1
j
i
I
1
j
:
;
i
1
1
!
!
!
j
1
I
j
!
;
!
!
'
221
364
498
2, 345
1,557
626
450
572
367
437
1,676
, 177
1, 115
371
182
58
106
i
20 y e a r s of s e r v ic e
r
15,462
T o t a l ----------------------------------------------------None 3_____________________ _________ —
Under $ 1 0 ------------------------------------------$ 1 0 an d u n d e r $ 2 0 ------------ -------------$ 20 and u n d e r $ 3 0 ------------------ --------$ 3 0 a n d u n d e r $ 4 0 --------------------------$ 4 0 an d u n d e r $ 5 0 ------------------ -------$ 5 0 a nd u n d e r $ 6 0 -------------------------$ 6 0 and u n d e r $ 7 0 --------------------------$ 7 0 a nd u n d e r $ 8 0 _ -----------------------$ 8 0 an d u n d e r $ 9 0 -- -------- ------------$ 9 0 an d u n d e r $ 1 0 0 _________________
$ 1 00 and u n d e r $ 1 2 5 --------------------$ 1 25 and u n d e r $ 1 5 0 ----------------------$ 1 5 0 an d u n d e r $ 1 7 5 ----------------------$ 175 and u n d e r $ 2 00 _______________
$ 2 00 and u n d e r $ 225 __ ----------------$ 225 and u n d e r $ 250 ----------------------$ 2 5 0 and u n d e r $ 27 5 --------------------$ 27 5 an d u n d e r $ 3 00 ----------------------$ 300 an d o v e r ------------------------------------
S e e f o o t n o t e s at e nd o f t a b l e .
!
!
162
161
- 5 37
1,818
2, 40 6
2,736
2, 629
1,969
60 3
204
770
1,307
6
97
19
4 38
-
!
J
'
1
j
|
I
j
I
14,947
15,462
335
133
253
561
1 , 4 09
2, 592
4, 606
2, 195
935
781
379
6 26
23
69
7
42
-
188
102
374
1, 265
1,472
2,557
2, 1 11
1,843
875
1,004
1,390
1, 180
171
7 75
5
94
4 35
-
'
j
1
1
j
i
!
|
j
|
1
!
|
i
j
!
1
14,947
408
37
204
402
1, 154
1,718
4,8 3 5
1,408
994
926
960
1, 387
260
165
9
37
43
-
1,
4,
1,
1,
1,
|
i
!
132
355
791
659
1, 236
945
810
409
708
1, 149
2, 182
1,450
1, 650
856
887
328
228
315
372
14,947
:
233
93
361
784
1,110
2, 382
1, 156
1, 647
363
2 69
1 ,1 11
1,11Q
1, 391
928
1,05 3
438
2 58
123
124
32
Table 10. Monthly Private Pension Plan Norm al R etirem ent Benefits 1 by Selected Assum ed
Annual Earnings Levels and Service P eriods, Winter 1962—63 2— Continued
(W orkers in thousands)
A s s u m e d annual earning:s
$ 4 , 80 0
$ 3 , 600
Monthly benefit
P lans
Wo rk e rs
Plan s
$ 6 , 000
! Workers
1
1
Pla ns
|
Workers
J
$8 , 400
Plans,
Workers
15,659
15,541
25 y e a rs of s e r v i c e
T o t a l ------------------------------------------------------
15,659
15,541
15,659
15, 541
None 3---------------------- --------------------------Und er $ 1 0 ------------------------------------------$ 1 0 and under $ 2 0 --------------------------$ 20 and under $ 3 0 --------------------------$ 30 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and under $ 7 0 --------------------------$ 7 0 and under $ 8 0 --------------------------$ 8 0 and under $ 9 0 --------------------------$ 90 and under $ 1 0 0 -------------------------$ 100 and under $ 1 2 5 ----------------------$ 125 and under $ 15 0 ----------------------$ 150 and under $ 1 7 5 _______________
$ 175 and under $ 200 ----------------------$ 200 and under $ 225 _______________
$ 225 and under $ 250 ----------------------$ 2 5 0 and under $ 2 7 5 ----------------------$ 275 and under $ 300 ----------------------$ 300 and under $ 350 ----------------------$ 3 50 and o v e r ------------------------------------
124
26
251
1, 337
1,260
1,957
2,700
2,848
1,464
737
362
1,893
166
45 3
43
4 28
-
311
20
122
42 6
798
1, 351
2, 741
4 , 083
2, 318
806
775
1,311
285
102
49
43
-
147
13
184
798
1, 014
1,029
2, 116
2,411
1, 167
1,403
981
2, 535
46 3
884
91
143
224
4 56
-
276
35
188
321
583
1, 096
2,9 98
2, 429
2, 218
805
715
2, 185
934
46 6
125
94
28
4 44
-
I
158
22
140
328
506
925
1,645
2, 975
1,769
523
486
2, 148
1,458
1, 135
66 0
355
157
85
66
-
■
-
[
-
15,659
110
10
139
686
630
562
1,679
1,684
1, 183
1,032
85 0
2,790
1,427
1, 355
336
682
289
132
48 3
15,541
-
82
764
629
48 0
1, 322
85 2
261
559
359
2, 300
1, 003
1,782
1, 374
1,023
1,050
49 3
591
501
139
95
91
254
43 0
922
1, 572
974
1, 381
354
1, 128
1,840
849
692
1,24 3
1, 194
549
709
589
43 4
208
15,660
15,547
15,660
15,547
SZ
12
34
47 2
808
556
715
1, 328
1, 187
913
1,075
1,973
2,457
1, 173
859
1, 151
387
251
77
150
129
14
35
275
369
770
1, 384
881
1,965
2, 336
731
1, 339
1, 333
1,468
850
823
377
248
80
140
82
_
129
_
15
309
885
438
405
1, 172
662
658
267
846
1,643
1, 189
1, 574
957
, 181
944
831
978
357
267
16
160
324
696
1, 344
822
967
1, 185
412
869
2, 269
593
64 3
810
90 0
1,047
436
, 188
47 6
261
129
-
30 y e a r s of s e r v i c e
T o t a l ------------------------------------------------------
15,660
15,547
None 3___________________________________
Un d er $ 1 0 ____________________________
$ 1 0 and unde r $ 2 0 --------------------------$ 2 0 and under $ 3 0 --------------------------$ 3 0 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ - 6 0 --------------------------$ 6 0 and under $ 7 0 --------------------------$ 7 0 and unde r $ 8 0 --------------------------$ 8 0 and under $ 9 0 -------------------------$ 9 0 and under $ 1 0 0 -------------------------$ 100 and under $ 1 2 5 _______________
$ 125 and under $ 15 0 ----------------------$ 150 and under $ 17 5 ----------------------$ 175 and under $ 2 0 0 ----------------------$ 2 0 0 and under $ 225 ----------------------$ 225 and under $ 250 ----------------------$ 250 and under $ 275 ----------------------$ 275 and under $ 300 ----------------------$ 300 and under $ 350 ----------------------$ 350 and under $ 40 0 ----------------------$ 40 0 and ov e r --------------------------------------
116
26
189
897
99 4
1,088
2, 120
2, 729
1,815
1,579
944
1,588
942
392
208
63
289
16
96
329
43 6
983
1,786
2, 821
3, 040
1, 726
1, 183
1,776
672
230
75
90
4
-
-
-
-
-
-
-
15,660
137
20
119
44 9
1, 134
531
1,240
1,776
2, 080
1,286
1,051
2, 286
1,646
889
41 3
192
338
73
4
15, 547
254
44
78
197
339
853
2, 557
1, 361
2, 295
1,517
1, 139
1,970
1, 333
872
364
172
114
87
-
-
-
-
-
-
-
-
■
"
~
1
!
4
-
-
-
-
1
1 Computation of benefit amounts was based on current benefit form ulas, assuming a constant level of earnings.
2 Based on a study of 15, 818 private pension plans covering 15. 6 m illion active workers in 1961.
No pension was provided because of the deduction of assum ed social security benefits.
4
Where higher benefit amounts w ere relatively few and widely scattered they were accumulated in this interval.
NOTE:
Because of rounding, sums of individual item s m ay not equal totals.
1
Chapter III. Disability Retirement
D is a b ilit y b e n e fits , lik e o ld -a g e b e n e fits , su p p lem en t s o c i a l s e c u r i t y (OASDI)
b e n e fits; to g e th e r th ey a r e expected to p ro v id e an in com e which re a s o n a b ly m e e ts
the needs of the d is a b le d w o r k e r and his fa m ily .
A lm o s t h a lf of the p la n s ,
h o w e v e r , c o v e rin g 3 out of 10 w o r k e r s , did not p ro v id e d is a b ility r e t i r e m e n t
b e n e fits .
When p ro v id e d , the amount of d is a b ility b en efits is s o m e tim e s too
s m a l l to be a sig n ifican t su p p lem en t to s o c i a l s e c u r i t y b e n e fits. This is e s p e
c i a lly tr u e f o r s h o r t - s e r v i c e w o r k e r s .
M o r e o v e r , the re q u ir e m e n t s f o r s o c ia l
s e c u r i t y d is a b ility b en efits a r e often m o r e r e s t r i c t i v e than those f o r p r i v a t e
p lan b e n e fits , so that w o r k e r s e lig ib le f o r the l a t t e r m a y not be elig ib le fo r the
fo rm er.
W hile the d iffe r e n c e b etw een in com e b e fo r e and a ft e r d is a b ility f o r
w o r k e r s re c e iv in g both p r i v a t e and public b en efits is u s u a lly s u b sta n tia l, fo r
those not elig ib le f o r s o c i a l s e c u r i t y it i s , of c o u r s e , f a r g r e a t e r .
D is a b ility r e t i r e m e n t p r o v i s io n s u s u a lly r e q u i r e that a w o r k e r be to t a lly
and p e rm a n e n tly d is a b le d (as defined in the plan) b e fo r e n o r m a l r e t i r e m e n t age,
to q u alify f o r a life t im e b en efit com m encing a ft e r a s h o rt waiting p e rio d . They
apply c h ie fly to w o r k e r s who a r e so s e v e r e l y in ca p a cita ted that, with fe w e x
cep tion s, they m u st w ith d ra w f r o m the la b o r f o r c e .
A s with o th e r b e n e fits ,
such as e a r l y r e t i r e m e n t and v e s tin g , the attain m en t of a c e r t a in amount of
s e r v i c e o r a sp e c ifie d age, o r both, m a y a ls o be r e q u ire d .
The b en efits to
be paid a r e m o s t often r e la te d to the n o r m a l r e t i r e m e n t fo r m u la , but m o r e
l i b e r a l d is a b ility f o r m u la s a r e fr e q u e n tly p ro v id e d , e s p e c i a ll y f o r w o r k e r s who
do not q u alify f o r public d is a b ility b e n e fits . In addition, d is a b ility b en efits p a y
able under the S o c ia l S e c u r i t y A c t a r e often taken into account in the b en efit
fo r m u la of the p r i v a t e plan.
The S o c ia l S e c u r i t y A c t w as amended in 1 9 5 6 to p ro v id e m on th ly d is a b ility
r e t i r e m e n t b en efits to to t a lly and p e rm a n e n tly d is a b le d w o r k e r s b etw een ages 50
and 65 who w e r e c o v e r e d by the a c t f o r at le a s t 5 of the 10 y e a r s p r i o r to
d is a b ility .
A I960 am en d m en t r e m o v e d the m in im u m age re q u ire m e n t.
Since
m an y p r i v a t e p lans a lr e a d y had a d is a b ility r e t i r e m e n t p r o v i s io n b e fo r e th e s e
ch an ges, the in flu en ce of the S o c ia l S e c u r i t y A c t on extending the c o v e r a g e in
p r i v a t e p lan s is d iffic u lt to gage.
A BLS study of 300 negotiated p en sion
p l a n s , 28 f o r e x a m p le , showed v e r y litt le change in the p r e v a le n c e of d is a b ility
r e t i r e m e n t p r o v i s io n s in the p e rio d 19 5 3 —58.
N e v e r t h e l e s s , by in c r e a s in g the
a w a r e n e s s of the p r o b le m , the act has p ro b a b ly s tim u la te d p r e s s u r e f o r the
in c lu sio n of p e rm a n e n t and to ta l d is a b ility b en efits in p r i v a t e p la n s , both n e
gotiated and nonnegotiated.
Two d i r e c t in flu en ces of s o c i a l s e c u r i t y d is a b ility
b en efits on p r i v a t e p la n s , as w ill be shown, a r e m o r e e a s i ly d e te rm in e d : (1) The
extent of d is a b ility re q u ir e d to q u alify fo r p r i v a t e p lan b e n e fits , and (2) the
in t e r r e la t i o n s h ip of b e n e fits .
Sin ce a d is a b ility p r o v i s io n p r o v id e s a p e rm a n e n t, though p a r t i a l , r e p l a c e
m en t of lo s t wage in c o m e , it is a d e s i r a b le and v a lu a b le a sp e c t of a p r i v a t e
p en sio n p lan . The p ro t e c tio n affo rd e d by s o c ia l s e c u r i t y (and o th er p ublic p r o
g ra m s ) is often re g a r d e d by w o r k e r s and t h e ir unions as inadequate. F r o m the
e m p l o y e r ’s view p oin t, the co st of d is a b ility p ro te c tio n has to be weighed a g ain st
28
Pension Plans Under C ollective Bargaining: Normal Retirement, Early and Disability Retirem ent, Fall 1959
(BLS Bulletin 1284, 1961).
33
34
the cost of re ta in in g d is a b le d w o r k e r s on the p a y r o l l o r , in its stead , the p r o b
le m of te rm in a tin g th em w ithout the su p p lem en t to public benefits p r o m is e d by
the p en sion plan as a w hole.
P la n s not having d is a b ility r e t i r e m e n t p r o v i s io n s fr e q u e n tly p ro v id e e a r l y
r e t i r e m e n t o r v e stin g . A s w i l l be shown l a t e r , the l a t t e r a r e often p o o r s u b s t i
tu te s , b e c a u se v e stin g does not c o n fe r im m e d ia te b e n e fits , which a r e needed by
the d is a b le d w o r k e r , and e a r l y r e t i r e m e n t b en efits a r e u s u a lly s m a l l e r than
d is a b i li ty b e n e fits.
P r e v a l e n c e of D is a b ilit y R e tir e m e n t P r o v i s i o n
O v e r h a lf of the p lan s studied, with about 7 out of 10 w o r k e r s , contained
d is a b i li ty r e t i r e m e n t p r o v i s io n s (table 11).
T h r e e - f o u r t h s of the m u lti e m p lo y e r
p lan s p ro v id e d fo r d is a b i li ty r e t i r e m e n t , c o m p a re d to only h a lf the s i n g l e e m p lo y e r p la n s. H o w e v e r, a h ig h e r p r o p o rt io n of w o r k e r s in a s i n g l e - e m p lo y e r
p la n s than in m u lt i e m p lo y e r plan s w e r e c o v e r e d , b e c a u s e s e v e r a l of the l a r g e s t
m u lt i e m p lo y e r p lan s (such as th ose n egotiated by the United Mine W o r k e r s , the
Clothing W o r k e r s , and the C e n tr a l S ta te s T e a m s t e r s ) had no d is a b ility p r o v i s io n . 29
With disability
Without disability
________ Total______________retirement_________retirement______
Type of employer
unit
_____________________________ Percent
Plans
Workers
Plans
Workers
Plans
Workers
All plans stu d ied -----------
100.0
100.0
51. 8
69. 7
48 .2
30.3
Single em p lo y e r ----------M ultiemployer - .............-
100.0
100.0
100.0
100.0
50.3
76.4
74.0
56 .9
4 9 .7
23 .6
2 6 .0
43.1
NOTE: Because of rounding, sums of individual items may not equal totals.
A h ig h e r p ro p o rtio n of n o n c o n trib u to ry plan s had a d is a b ility p r o v i s io n
than c o n tr ib u to r y p la n s.
This d is p a r it y s t e m s , in p a r t , fr o m the la c k of d i s
a b ility p ro te c tio n in c o n tr ib u to r y p lans c o v e rin g s a l a r i e d w o r k e r s (for whom this
p ro te c tio n often has a low p r i o r i t y ) . 30
With disability
Without disability
Total_____________ r e tir e m e n t________ retirem ent___
Percent
Method of financing
Plans
Workers
Plans
Workers
Plans
Workers
All plans stu d ied-------------
100.0
100.0
51. 8
69. 7
48. 2
30.3
Noncontributory--------------C ontributory-------------------
100.0
100.0
100.0
100.0
5 4 .0
4 5 .9
73.5
5 8 .6
4 6 .0
54.1
26.5
4 1 .4
NOTE: Because of rounding, sums of individual item s may not equal totals.
B e c a u se of the high p r e v a l e n c e of the p r o v i s io n in la r g e negotiated plan s
and its low in cid en ce in the s m a l l e r , m o r e n u m ero u s (ty p ic a lly w h i t e - c o ll a r )
29 Several large multiem ployer plans provided disabled workers with deferred pensions which were not payable
until age 65 (Clothing Workers) or cash term ination benefits for disability (Central States Teamsters). These bene
fits were not regarded as disability retirement provisions in this study.
30 Other em ployee benefit plans may provide substantial short-term disability protection for these workers
(e. g . , accident and sickness insurance), and long-term disability incom e insurance.
35
p la n s , the p r o v i s io n w as m o r e com m on in p lan s m entioned in a c o lle c t i v e b a r
gaining a g re e m e n t than in th ose not so m en tion ed .
C ollective bargaining
status
With disability
Without disability
________ Total_____________ retirement___________ retirement______
Percent
Workers
Plans
Workers
Plans
Plans Workers
69. 7
48 .2
100.0
51 .8
All plans stu d ied------------- 100.0
Mentioned in a collective
6 4 .4
74. 1
35.6
100.0
bargaining agreement — 100.0
Not mentioned in a
collective bargaining
55 .5
4 4 .5
60.3
100.0
100.0
agreem ent-------------------NOTE: Because of rounding, sums of individual item s may not equal totals.
30.3
25 .9
39. 7
R eflectin g the l e s s e r em p h asis of d is a b ility r e t i r e m e n t p r o v i s io n s f o r w h ite c o l la r w o r k e r s , d is a b ility p ro t e c tio n w as m o r e p r e v a l e n t in p ro d u ctio n w o r k e r
plan s than in plans fo r s a l a r i e d w o r k e r s only.
_
Type of worker
covered
With disability
Without disability
Total_________ retirement
__________ retirement_____
Percent
-------------------------------------------------------------------------------------------------Plans Workers
Plans Workers
Plans Workers
All plans stu d ied ------------- 100.0
100. 0
51. 8
69. 7
48. 2
30. 3
Salaried and production— 100.0
100.0
41.1
70.0
58 .9
3 0 .0
Production o n ly -----------— 100. 0
100. 0
69. 5
69. 1
30. 5
30. 9
Salaried only ------ — —
100.0
100.0
3 7 .0
5 9 .8
6 3 .0
40 .2
NOTE: Because of rounding, sums of individual items may not equal totals.
Am ong m a j o r in d u s t r y g ro u p s, d is a b i li ty p r o v i s io n s w e r e m o s t com m on
in m a n u factu rin g (o v e r h a lf of the p lan s with o v e r t h r e e - f o u r t h s of the w o r k e r s ) ,
re fle c t in g th e i r in c lu sio n in the la r g e n egotiated p lans in the m e ta lw o rk in g in d u s
t r i e s (table 12). The p ro p o r t io n of c o v e r e d w o r k e r s p ro te c te d in each m a n u f a c t u r
ing i n d u s t r y r a r e l y f e l l b elo w 60 p e r c e n t (except fo r p rin tin g ). H o w ever, c h ie fly
b e c a u se m a n y s m a l l p lan s did not p ro v id e it, le s s than h a lf the p lan s i n c h e m ic a ls ,
in s tr u m e n t s , and p a p e r p ro d u c ts , and l e s s than a th ird of the plan s in the e l e c
t r i c m a c h i n e r y , l e a t h e r , r u b b e r, t e x t il e , t r a n s p o r ta t io n equipm ent, and stone,
c la y , and g la s s p ro d u cts in d u s t r ie s had the p r o v i s io n . On the o th er hand, a lm o s t
a ll of the p lan s in the to b acco , lu m b e r , fu r n it u r e , and m is c e lla n e o u s m a n u f a c t u r
ing in d u s trie s had the p r o v i s io n .
Although m u lti e m p lo y e r p lans p re d o m in a te d ,
p lans in the a p p a re l in d u s try ty p i c a lly p ro v id e d d is a b ility r e t i r e m e n t .
Both in
t r a n s p o r ta t io n and in com m u n ication s and public u t i li t ie s , t h r e e - f o u r t h s of the
w o r k e r s w e r e in p lans with d is a b i li ty r e t i r e m e n t .
In the f o r m e r in d u s t ry , the
w o r k e r s without such p ro t e c tio n w e r e m o s t ly in m u lti e m p lo y e r p lans in the t r u c k
ing in d u stry .
In the l a t t e r , m o s t of the c o v e r e d w o r k e r s belonged to the t e l e
phone com pany p la n s.
Only about 40 to 50 p e r c e n t of the w o r k e r s in the tr a d e and the s e r v i c e
in d u s trie s had d is a b ility p ro te c tio n .
In m ining, b e c a u se the p lan s negotiated
by the United Mine W o r k e r s had no d is a b ility r e t i r e m e n t p r o v i s io n , only a s m a l l
p ro p o rtio n of w o r k e r s w e r e c o v e r e d . D e sp ite t y p i c a lly h e a v y and arduous w o r k
ing conditions, 45 p e r c e n t of the w o r k e r s in the m u lt i e m p lo y e r p lan s in the
c o n stru c tio n in d u s try w e r e w ithout d is a b ility p ro te c tio n .
On the o th e r hand, in
the fin an ce in d u s t r y , w h e re a lm o s t a ll w o r k e r s a r e in s a l e s , c l e r i c a l , and o th e r
36
w h i t e - c o l l a r o ccu p atio n s, only a slig h tly s m a l l e r p ro p o rt io n (40 p ercen t) of the
w o r k e r s w e r e u n p ro te cted .
The h ig h e r p r e v a l e n c e in la r g e p lan s of d is a b ility p r o v i s io n s is shown in
tab le 13.
About t h r e e - f o u r t h s of the la r g e p lan s ( 5 , 0 0 0 w o r k e r s and o v e r) and
w o r k e r s — m o s t ly negotiated p la n s— had the p r o v i s i o n , w h ile only about h a lf of the
s m a l l e s t plan s (under ZOO w o r k e r s ) , c o v e r in g tw o -fifth s of the w o r k e r s , had it.
M inim um R e q u ire m e n ts f o r D is a b ility R e tir e m e n t
K e y ele m e n ts of d is a b ility r e t i r e m e n t p r o v i s io n s a r e the definitions of d i s
a b ility and the age and s e r v i c e r e q u i r e m e n t s .
O r d in a r i ly , b en efits a r e c o n
tinued only as long as a w o r k e r re m a in s d is a b le d , as defined.
D efinition of D i s a b il it y .
Most plans defined d is a b ility in t h e i r own t e r m s ,
w hich r e s e m b le d but w e r e not id e n tic a l to the w ord in g of the S o c ia l S e c u r i t y
A c t's d efin ition which, p r i o r to J u l y 30, 19 6 5 , re a d as fo llo w s :
"Inability to e n
gage in any s u b sta n tia l gainful a c tiv it y by r e a s o n of any m e d ic a lly d e te r m in a b le
p h y s ic a l o r m e n ta l im p a irm e n t w hich can be exp ected to r e s u l t in death o r to be
a lon g-con tin u ed and indefinite d u ratio n . " The re m a in in g plan s e ith e r u sed the
ac t's d efinition, o r d ele gated s u b sta n tia l d is c r e t i o n to the plan a d m i n is t r a t o r
(u su ally the e m p lo y e r ) . The a c t's d efin ition w as m ost fr e q u e n tly u sed in plan s
un d er c o lle c ti v e b arg ain in g . On the o th e r hand, except fo r s e v e r a l la r g e m u l t i
e m p lo y e r plans in the g a rm e n t in d u stry , 31 a lm o s t a ll plans using the d i s c r e t i o n
a r y p r o c e d u r e w e r e n on b argain ed .
Mentioned in a co l- Not mentioned in a
lective bargaining collective bargaining
Total______________agreement___________ agreement_____
___________ ________ _____
Definition of disability
Plans
A ll plans with disability
retirem en t-------------------- 1100.0
Social Security A ct’s
definition -------------------Private plans own
definition -------------------Discretionary — no
d e fin itio n --------------------
Workers
Percent_____________________________
Plans
Workers
Plans
Workers
1100.0
UOO.O
1100.0
100.0
100.0
8 .7
5 .5
15.8
6 .5
2 .8
2 .8
71. 1
86 .6
7 6 .5
88.3
6 6 .6
82.2
17.6
7 .3
2. 1
4 .5
30 .6
15.0
1
Includes 211 plans, covering 61, 000 workers, for which information on definition of
disability was not available.
NOTE: Because of rounding, sums of individual items may not equal totals.
The s o c ia l s e c u r i t y d efin ition and the b ro a d , d i s c r e t i o n a r y d efin ition of
d is a b ility w e r e m o s t ly r e s t r i c t e d to s i n g l e - e m p l o y e r p la n s .
A re c e n t study by the S o c ia l S e c u r i t y A d m in i s t r a t io n a n alyz ed the d efin ition
of d is a b i li ty in p r i v a t e p en sion p lan s in d e ta il. 32 The stu d y, which w as b ased
31 Plans in the garment industry were generally administered by tripartite boards composed of union, employer,
and neutral representatives. The documents filed for these plans under the Welfare and Pension Plans Disclosure
Act, which are the basis for this analysis, did not include a definition of disability, although standards may have
been established in plan operation.
32 Joseph Krislov, "Definition of Disability in Private Pension Plans. " Social Security Bulletin. May 1964,
pp. 13-19.
37
on d ata supplied by the B u re a u of L a b o r S t a t i s t i c s , showed that w h e r e plan s
defined d is a b i li ty , m o s t w o r k e r s w e r e in p lan s ’’that p ro v id e b en efits f o r a
m e m b e r who is unable to w o rk at any job and w h ose d is a b i li ty is judged to
be p e rm a n e n t o r lo n g -la s tin g ----rou gh ly the sa m e in d ivid u al who is li k e ly to be
able to q u alify f o r b en efits f r o m the S o c ia l S e c u r i t y A d m in is tr a tio n . ” The a r
ti c le cautioned, h o w e v e r , that litt le is known about the p r a c t i c a l ap p lication
of the p lan defin ition .
I n te rp re ta tio n s m a y v a r y w id e ly with the r e s u l t that
" d ecision s . . . w il l d if f e r f r o m one p lan to an oth er even though the d efin ition s
of d is a b ility m a y be id e n tic a l. ”33
In 19^ 5, the scop e of the so cial, s e c u r i t y d efin ition w as b road en ed by e l i m i
nating the r e q u i r e m e n t that a w o r k e r ’ s d is a b i li ty m u s t be exp ected to be of lon gcontinued and in d efin ite d u ration ; it is now su ffic ie n t that the d is a b i li ty is expected
to la s t f o r a continuous p e rio d of not l e s s than 12 m o n t h s . 34 M any p en sion
e x p e rts p r e d i c t that p r i v a t e p en sio n p lan s w il l a l t e r t h e i r defin ition s to co n fo rm
to this change, e s p e c i a ll y sin ce it w i l l not a ffe c t m o s t a lt e r n a t e d is a b i li ty i n
com e p r o g r a m s . 35
The m ain d iffe r e n c e b etw een p r i v a t e p l a n s ’ and S o c ia l S e c u r i t y A c t ’ s d e f i
nitions r e l a t e d to the extent to w hich an applicant m u st be d isa b led .
For ex
am p le, the act r e q u i r e s that the c la im a n t be unable to p e r f o r m any job, w h ile
about a seven th of the p r i v a t e plans w ith about a fo u rth of the w o r k e r s , r e q u i r e d
only that the w o r k e r be unable to p e r f o r m a job f o r w hich he is q u alified o r any
job in the com pany o r in d u s try .
P r e s u m a b ly , such w o r k e r s would not be p r o
hibited f r o m obtaining an o th er type of em p lo ym en t. (L ib e r a li z a tio n of the s o c ia l
s e c u r i t y d efin ition in 1 9 6 5 p e rm itt e d w o r k e r s d is a b le d b ecau se of b lin d n ess to
c o lle c t b en efits w h ile w ork in g at o th e r e m p lo ym en t. )
_________Percent____________
Extent of disability
A ll plans with disability
retirem ent-------------------------Unable to perform any job L Unable to perform own or
related j o b -----------------------Unable to perform any job in
the company or industry---No specific reference to
exten t2 -----------------------------
Plans
Workers
100.0
100.0
52.6
59.3
8 .6
10.3
5 .5
15.5
33.3
14.8
1 Includes plans following the Social Security Act definition.
^ Includes "discretionary" plans and plans for which informa
tion on extent of disability was not available.
NOTE: Because of rounding, sums of individual items may not
equal totals.
F u r t h e r m o r e , s o c ia l s e c u r ity b en efits a r e p ro v id e d f o r both p h y s ic a l and
m e n ta l d is a b i li t i e s , r e g a r d l e s s of ca u se, w h ile p r i v a t e p lans w e r e u s u a lly silen t
as to w h e th e r th ey c o v e r d is a b ilitie s stem m in g f r o m m e n ta l d i s o r d e r s ( t h r e e 33
Ibid. , p. 14 . This is illustrated by the changes in Social Security Administration's own interpretation and
application of its definition. See, for exam ple, Social Security Regulation 404. 1502(c).
^ For a fuller summary of the changes, see Wilbur J. Cohen and Robert M. Ball, "Social Security Amend
ments of 1965: Summary and Legislative History, " Social Security Bulletin, September 1965, pp. 3—21.
35 Long-term disability insurance programs are likely to be affected by the amended social security definition
because they are commonly integrated with both social security and applicable private pension plans. For a dis
cussion of the effects of recent changes in the social security definition on disability insurance programs, see
Richard J. M ellman, "Impact of New Social Security Disability Definition on Existing Employee Benefits, " Pension
and Welfare News, New York, N. Y. , January 1966, pp. 49-61.
38
fo u rth s of the plan s w ith 4 out of 5 w o r k e r s ) and fr e q u e n tly did not gran t b e n e
fits f o r s e l f - i n f l i c t e d in j u r ie s o r w illfu l m iscon d u ct 36 (about 2 out of 5 plans*
and w o r k e r s ) .
__________ Percent
Cause of disability
All plans with disability
retirem ent1 -----------------------------------Physical and m e n ta l--------------------------Physical, excluding m en tal---------------Physical, silent on m en tal-----------------Discretionary------------------------------------As prescribed by the Social
Security A c t -----------------------------------No specific reference to c a u s e -----------
Plans
Workers
100.0
100.0
14. 7
.5
3 1 .4
17.6
15.2
1. 7
39. 3
7.3
8. 7
24. 5
5 .5
30 .5
1 Includes a few plans for which information on cause of dis
ability was not available.
NOTE: Because of rounding, sums of individual items may not
equal totals.
A ge and S e r v i c e R e q u i r e m e n t s . A s in the c a s e of o th e r p lan p r o v i s i o n s ,
age o r s e r v i c e re q u i r e m e n t s , o r both, w e r e e s s e n t i a l p a r t s of d is a b ility r e t i r e
m en t p r o v i s io n s .
T h r e e - f o u r th s of the p la n s , lik e s o c ia l s e c u r i t y , had no age r e q u i r e m e n t s .
W h e re they e x iste d , they w e r e u s u a lly low enough to p e r m i t c o v e r a g e of m o s t
p e rm a n e n t and to ta l d i s a b i l i t i e s , 37 and w e r e g e n e r a l ly lo w e r than those ap p licab le
to e a r l y r e t i r e m e n t . 38 Age 50, the e a r l i e s t age at which s o c i a l s e c u r i t y d i s
a b ility b en efits w e r e p a y a b le u ntil I 9 6 0 , w as the m o s t com m on age r e q u i r e m e n t
f o r d is a b i li ty r e t i r e m e n t , as c o m p a re d with age 55 o r 60 fo r e a r l y r e t i r e m e n t .
____________Percent____________
Minimum age requirements 1
Plans
Workers
A ll plans with disability
retirem en t------------------------------------
100.0
100.0
Without age requirements-----------------
74 .8
71 .3
With age requirements-------------------45 and u n d e r ----------------------------- -—
50 — ............. — ...........................................
55 — — ...........- ..........................- ................
60 and o v e r ------------------------------------
25 .2
2 .4
12.3
8 .6
1.9
28.7
3.8
14.9
7 .6
2 .4
1 Some plans specified alternative requirements; for each case.
the one with the earliest age or no age requirements was selected.
NOTE: Because of rounding, sums of individual items may not
equal totals.
S e r v i c e re q u ir e m e n t s f o r d is a b ility r e t i r e m e n t w e r e a ls o g e n e r a l ly lo w e r
than fo r o th e r r e t i r e m e n t b e n e fits . F o r t y - f i v e p e r c e n t of the p la n s , with a lm o s t
Included within this area is alcoholism , addiction to narcotics, and criminal activity.
37 Social security data show that 70 percent of the disabilities among men occur after age 49 and 82 percent
after age 44. See Social Security Administration, Actuarial Note No. 18 (April 1965).
See BLS Bulletin 1407, 1964, op. c it ., p. 27.
39
3 out of 5 of the w o r k e r s , r e q u ire d 15 y e a r s of s e r v i c e .
This c o n c e n tra tio n
w as c h ie fly due to plan s negotiated by the A u tom ob ile W o r k e r s and S t e e l w o r k e r s ,
and to the plan s in the com m u n ication s in d u s t r ie s .
The on ly o th e r la r g e con
c e n tr a tio n of w o r k e r s (1 out of 5) was in the plan s that re q u ire d 10 y e a r s of
service.
N e a r ly a th ird of the p la n s , c o v e rin g on ly a tenth of the w o r k e r s ,
r e q u ir e d fe w e r than 10 y e a r s of s e r v i c e , w hile only a seven th of the w o r k e r s
w e r e in p lan s re q u irin g o v e r 15 y e a r s .
Minimum service requirements1
(years)
All plans with disability
retirem ent---------------------------------------No service requirement
Less than 5 y ea rs--------5 ..................— ------------6 - 9 ...........— --------------1 0 -----------------------------11-14 ------------------------1 5 -----------------------------16-19 ------------------------2 0 -------------------------2 5 -----------------------------26-29 ------------------------3 0 ------------------------------
__________ Percent__________
Plans
Workers
100.0
100.0
3. 8
10.4
17.6
1. 9
11.6
.8
45. 1
1. 8
4. 7
2 .0
3 .8
2. 9
2. 2
.4
19.0
1.2
57 .0
1.2
8. 7
2. 7
.2
.7
(\)
<
l2)
For those plans which specify a period of employm ent to be
served before participation in the plan could begin, the minimum
service requirement includes the preparticipation service and the
required plan membership service.
^ Less than 0. 05 percent.
The m o s t com m on com binations of age and s e r v i c e w e r e 15 y e a r s of s e r v
ic e and ages 50 to 55, w hich, a lt o g e th e r, applied to a seven th of the w o r k e r s
(table 14).
P la n s without age r e q u ire m e n t s t y p i c a lly had s e r v i c e re q u ire m e n t s
of 10 to 15 y e a r s .
Waiting P e r i o d .
D is a b ility r e t i r e m e n t b en efits w e r e p a y a b le by 3 out of 5
p la n s , w ith 2 out of 3 w o r k e r s , only a f t e r a w aiting p e rio d had elap sed .
_________ Percent__________
Provision
All plans with disability
retirem ent1 --------------------------------No waiting p eriod --------------------------1 and less than 6 m o n th s----------------6 m o n th s--------------- ----------------------7 and less than 12 m o n th s--------------When accident and sickness
benefits cease -----------------------------
Plans
Workers
100 . 0
100.0
39.3
7 .7
35.6
5. 9
33 .2
8 .5
4 6 .0
4 .2
8. 8
7.6
1 Includes a few plans for which information on waiting period
was not available.
NOTE: Because of rounding, sums of individual item s may not
equal totals.
In n e a r l y a ll in d u s t rie s the w aiting p e rio d u s u a lly ra n 6 m onths f r o m the
o n set of d is a b i li ty (the sam e w aiting p e rio d r e q u ir e d to q u alify f o r s o c i a l s e c u r i t y
d is a b i li ty b e n e fits), although in som e plans it w as as s h o r t as a month and in
o th e r s as long as a y e a r (table 15).
40
W aiting p e rio d s w e re often re la te d to the d u ra tio n of accid en t and sic k n e ss
b en efits (te m p o ra ry d is a b ility b e n e fits). In th e s te e l in d u stry p la n s , fo r ex am p le,
d is a b ility p e n sio n b e n e fits beg an a fte r 6 m o n th s, d u rin g w hich tim e te m p o ra ry
d is a b ility b en efits w e re u su a lly p ay ab le. O th er p lan s re la te d the tim in g of the
two b e n e fits even m o re c lo se ly by sp ecify in g th a t p en sio n s w ould be p ay ab le only
a fte r a c c id e n t and sic k n e ss b e n e fits w e re e x h a u s te d .39
D isa b ility R e tire m e n t B en efit F o rm u la s
F o r w o rk e rs e lig ib le fo r so c ia l s e c u rity d isa b ility b e n e fits, m o st p lan s
u sed th e sa m e fo rm u la fo r d isa b ility b en efits as th ey u sed fo r n o rm a l r e t i r e
m e n t b e n e fits. F o r in e lig ib le w o rk e rs , h o w ev er, m any n eg o tiated sin g le -e m p lo y e r
p la n s— ch iefly th o se in the m etalw o rk in g in d u s trie s — had a s p e c ia l d isa b ility
fo rm u la . F o r e x am p le, in ste a d of b en efits b a se d on the n o rm a l b en efit co m p u
ta tio n , the A utom obile W o rk e rs ’ p lan s p ro v id ed double th e n o rm a l b en efit and
the S te e lw o rk e rs p la n s p ro v id e d $100 a m on th. O th er sin g le -e m p lo y e r p lan s
(u su ally no nb arg ained ) seld o m u sed a d iffe re n t o r sp e c ia l fo rm u la fo r w o rk e rs
in e lig ib le fo r s o c ia l s e c u rity , but w hen they d id , th ey u su a lly added the am ount
of th e p o te n tia l so c ia l s e c u rity b e n e fit, as th ey a lso did fo r e a rly r e tir e m e n t.40
T y p ically , m u ltie m p lo y e r p lan s app lied th e sa m e fo rm u la r e g a rd le s s of th e so c ia l
s e c u rity s ta tu s of the w o rk e r.
In te g ra tio n W ith S o cial S e c u rity and W o rk m en ’s C o m p en satio n B en efits
F e d e ra l s o c ia l s e c u rity b e n e fits a re often in c o rp o ra te d into d isa b ility r e
tire m e n t b e n e fit fo rm u la s in th e sa m e m a n n e r as in n o rm a l re tire m e n t b en efit
fo rm u la s , i. e. , by s te p - r a te fo rm u la s o r by d ire c t o f f s e t.41 F u rth e rm o re ,
w h e re a p p lic a b le , w o rk m e n ’s co m p en satio n b en efits a re a lm o st alw ays d ed ucted
in fu ll. B e c a u se d is a b ility r e tir e e s g e n e ra lly hav e lo w er e a rn in g s and le s s s e r v
ic e th an n o rm a l r e tir e e s , the a p p lic atio n of d ire c t o ffse ts affects th e ir b en efits
m o re a c u te ly . In fa c t, the o ffse ts m ay red u ce the p lan b en efits to z e ro . Som e
p la n s , th e re fo re , have a lte rn a te b en efit fo rm u la s not su b je c t to ded uction s fo r
sta tu to ry b e n e fits.
T he b e n e fits p ro v id e d by slig h tly m o re th an tw o -fifth s of the p lan s w ith
d is a b ility r e tire m e n t, w ith o v e r h a lf th e w o rk e rs , w e re d ire c tly in te g ra te d w ith
e ith e r so c ia l s e c u rity b e n e fits o r w o rk m en ’s c o m p en satio n , o r w ith bo th , by
th e o ffse t m eth od (tab le 16). A bout h alf th e se p lan s d ed u cted only w o rk m e n 's
co m p en satio n , as c o m p a re d w ith about a fo u rth th a t ded u cted only so c ia l s e c u rity
b e n e fits; each group of p la n s c o v e re d about 2 ou t of 5 w o rk e rs belonging to
p la n s w ith o ffse t fo rm u la s . T he re m ain in g fo u rth of th e p lan s ded u cted both.
In add ition to ded ucting a ll w o rk m en ’s c o m p en satio n b e n e fits, o v e r 7 out
of 10 of th e se la tte r p la n s , w ith a s im ila r p ro p o rtio n of w o rk e rs , a lso ded ucted
a ll s o c ia l s e c u rity b e n e fits; the r e s t d ed u cted h a lf .42
for illustrative information on accident and sickness benefits see Digest of One Hundred Selected Health
and Insurance Plans Under Collective Bargaining, Winter 1961-62 (BLS Bulletin 1330, 1962), and Digest of 50 Selected
Health and Insurance Plans for Salaried Employees, Spring 1963 (BLS Bulletin 1377, 1964).
40 See p. 75 , for a discussion of social security adjustment options.
41 See p. 10.
42 The 1965 amendments to the Social Security Act have limited the concurrent receipt of social security disa
bility benefits and workmen's compensation to 80 percent of a worker's average monthly earnings credited to his social
security account before he became disabled.
41
Plans
Provision
A ll plans with disability
retirement 1 -------------------------Plans without offset formulas---Plans with offset form u las-------Deducting social security
benefits o n ly -------------------Deducting workmen's com pensation only ----------------Deducting both social
security and workmen’s
com p en sation -------------------
_______ Workers
Number
Number Percent (thousands) Percent
8,193
-
10, 895
-
4,405
3,459
100.0
5, 040
5, 773
100.0
815
23.6
2,43 7
42.2
1,673
4 8 .4
2,265
39.2
971
28.1
1, 071
18.6
_
_
1 Includes 329 plans covering 79,000 workers for which data were not
available.
NOTE: Because of rounding, sums of individual items may not equal totals.
Recognizing that w o r k e r s and e m p lo y e r s con trib u te eq u ally to the s o c ia l
s e c u r ity s y s t e m , plan b en efits f o r about 2 out of 5 w o r k e r s in p lans with o ffs e t
fo r m u la s w e r e red u ced by o n e - h a lf of s o c ia l s e c u r i t y d is a b ility b en efits— the
amount a ttrib u ta b le to the e m p l o y e r s ’ c o n trib u tio n s.
T h ree out of 10 w o r k e r s
w e r e in plans deducting a l l so c ia l s e c u r i t y b e n e fits. A s i m i l a r p ro p o rtio n w e r e
in plans that follow ed the b asic s t e e l in d u s try p a tte rn of reducing b en efits c o m
puted u n d er the b a sic b en efit fo r m u la by $ 80 a month.
M o st of th ese la t t e r
plans had an a lt e r n a t e m in im u m b en efit fo r m u la without a deduction fo r public
b en efits (i. e. , the n o r m a l m in im u m b en efit of $ 2 . 50 o r $ 2. 60 a month f o r each
y e a r of s e r v i c e ) .
Percent
Provision
All plans with social security
d ed u ctio n ---------------------------------------All social security disability
benefit deducted ----------------------------O ne-half social security disability
benefit deducted ----------------------------$80 for social security disability
benefit deducted ----------------------------Other1 -----------------------------------------------
Plans
Workers
100.0
100.0
55. 2
31 .4
23 .4
38.6
20 .9
.5
29.6
.4
1 Various deductions ranging between 50 and 100 percent of the
social security disability benefit.
NOTE: Because of rounding, sums of individual items may not
equal totals.
O ffsets w e r e m o r e com m on in the m an u factu rin g in d u s t rie s (about h a lf the
plans) than in the nonm an u factu ring in d u s t r ie s (about a th ird of the plan s). (See
table 16. ) H o w e v e r, owing to the s o c ia l s e c u r i t y deduction in the telephone
com pany plans and the fre q u e n t deductions of w o r k m e n ’ s com p en sation p aym en ts
in the t r a n s p o r ta t io n and finance i n d u s t r i e s ’ p lan s, o v e r 3 out of 5 w o r k e r s in
the nonm an u factu ring in d u s t r ie s , as c o m p a re d to about h a lf in the m a n u fa ctu rin g
in d u s t r ie s , w e r e in plans w ith o ffs e t p r o v is io n s .
The deduction of $ 80 f o r s o c ia l s e c u r it y w as found a lm o s t e x c l u s iv e l y in
plans in the p r i m a r y m e t a ls in d u s t r ie s .
M ost m an u factu rin g plans w ith offsets,
42
h o w e v e r, r e d u c e d p la n b e n e fits o n ly fo r w o rk m e n 1s c o m p e n s a tio n b e n e fits (th re e fifth s o f th e p la n s w ith a b o u t 2 o u t of 5 w o r k e r s ) , w h ile th e re m a in in g p la n s
e i t h e r d e d u c te d o n ly s o c ia l s e c u r ity (a b o u t a s ix th o f th e p la n s w ith 2 o u t of 5
w o rk e rs ) o r d e d u c te d b o th (a fifth o f th e p la n s a n d w o r k e r s ) .
In n o n m a n u fa c tu rin g , a s a w h o le , th e m o s t c o m m o n d e d u c tio n s w e re o n e h a lf th e s o c ia l s e c u r ity b e n e fit an d th e e n tir e w o rk m e n ’s c o m p e n s a tio n b e n e fit.
T o g e th e r, th e y a c c o u n te d fo r a b o u t tw o -fifth s of th e p la n s a n d a b o u t th r e e - f o u r th s
of th e w o r k e r s .
A d m in is tr a tiv e P r o c e d u r e s
A d e te r m in a tio n of th e e x te n t an d e x p e c te d d u ra tio n of d is a b ility , a s d e fin e d
by th e p la n , is re q u ir e d ; h e n c e , m o s t p la n s s e t fo rth a d m in is tr a tiv e p r o c e d u r e s
g o v e rn in g th is d e c is io n .
T h e d e te r m in a tio n w a s m a d e b y a d o c to r s e le c te d by th e e m p lo y e r o r a d
m i n i s t r a t o r in 45 p e r c e n t of th e p la n s ; by th e c la im a n t in 12 p e rc e n t; an d by a
b ip a r tite b o a rd in a s m a ll n u m b e r of p la n s . A lth o u g h a m e d ic a l d e te r m in a tio n
w as r e q u ir e d , th e p a r ty m a k in g th e s e le c tio n of th e d o c to r w as n o t id e n tifie d in
17 p e r c e n t of th e p la n s . T h e re m a in in g 23 p e r c e n t of th e p la n s h a d no fo r m a l
p r o c e d u r e d e s c r ib e d in th e d o c u m e n ts on file .
Percent
Party providing m edical evidence
Plans
Workers
All plans with disability
retirem ent-------------------------------------------
100.0
100.0
Claimant's doctor --------------------------------Company or plan doctor -----------------------Neutral doctor---------------------------------------Bipartite co m m itted --------------------------Doctor— no information on selection ------Information not a v a ila b le ----------------------
11. 7
45. 1
.1
3 .2
17.1
22. 8
4 .6
4 6 .0
.4
2.3
30. 2
16 .4
1 Includes a few plans in which a doctor is appointed by a tri
partite board.
NOTE: Because of rounding, sums of individual item s may not
equal totals.
If a n a p p lic a tio n w as d e n ie d on th e b a s is of m e d ic a l e v id e n c e , an a p p e a l
co u ld u s u a lly be m a d e to th e e m p lo y e r (o r h is r e p r e s e n ta tiv e s ) in s in g le - e m p lo y e r
p la n s , o r to a b ip a r tite b o a rd in m u ltie m p lo y e r p la n s . T h e n o r m a l g r ie v a n c e
p r o c e d u r e w as u s e d by so m e la r g e p la n s . A b o u t an e ig h th o f th e p la n s h a d a
s p e c ia l p r o c e d u r e fo r m a k in g th e fin a l d e c is io n . F o r e x a m p le , th e S te e lw o r k e r s
p la n p ro v id e d th a t in c a s e of d is a g r e e m e n t—
The em ployee shall be exam ined by a physician appointed for the purpose by the Company and a
physician appointed for the purpose by a duly authorized representative of the Union. If they shall
disagree concerning whether the em ployee is permanently incapacitated, that question shall be sub
m itted to a third physician selected by such two physicians. The m edical opinion of the third
physician, after exam ination of the em ployee and consultation with the other two physicians, shall
decide such question.
43
Percent
Appeals channels
Plans
Workers
All plans with disability
retirem ent1 ------------------------------
100. 0
100.0
E m ployer-------------------- ----------------Bipartite board ----------------------------Grievance procedure -------------------Trio of doctors, 1 neutral 2 ---- -----Clinic ------------------------------------------
82. 4
2. 7
1.3
13. 0
.1
70.0
8 .4
6. 7
13. 5
.2
1 Includes a few plans for which information was not available.
2 Appeals are directed to a panel of doctors consisting of 1 em
ployer designated doctor and 1 em ployee designated doctor.
If they
cannot agree the 2 doctors selected a neutral doctor whose decision is
final.
NOTE: Because of rounding, sums of individual items may not
equal totals.
E x c e p t fo r la r g e n e g o tia te d p la n s , th e e m p lo y e r ^ d e te r m in a tio n w as fin a l
in m o s t p la n s .
Percent
Final authority for appeals
Plans
Workers
All plans with disability
retirem ent1 --------------------------------------
100.0
100.0
82 .4
13. 5
2. 1
59.4
35. 5
.7
.7
.8
2 .4
.7
E m ployer-----------------------------Bipartite b o a r d -------------------Insurance com pany---------------Union em ployees-bipartite
board; nonunion em ployeesemployer --------------------------Other ------------------------------------
1 Includes a few plans for which information was not available.
NOTE:
equal totals.
Because of rounding, sums of individual items may not
L e v e ls of D is a b ility B e n e fits
W o r k e r s f o r c e d in to r e t i r e m e n t b e c a u s e of to ta l d is a b ility an d w ho a ls o
q u a lifie d fo r s o c ia l s e c u r ity b e n e fits w o u ld u s u a lly r e c e iv e th e s a m e a m o u n t of
b e n e f its , r e g a r d l e s s of t h e ir a g e a t r e t i r e m e n t , a s th e y w o u ld be e n title d to fo r
th e s a m e e a rn in g s a n d s e r v ic e a t n o r m a l r e t i r e m e n t a g e . 43 H o w e v e r, b e c a u s e
so m e p la n s re d u c e d b e n e fits on a c c o u n t of a g e (i. e. , p ro v id e d th e a c tu a r ia l
e q u iv a le n t of th e a c c r u e d n o rm a l b e n e f i t 44), a v e r a g e b e n e fits fo r a ll c o v e re d
w o rk e rs w e r e s o m e w h a t lo w e r th a n th e c o rre s p o n d in g a v e r a g e n o r m a l r e t i r e
m e n t b e n e fits .
43 Although benefit levels for both normal and disability retirement have increased since the date of this
study, the relationship between the two, as discussed in this report, is still valid.
44 The actuarial equivalent of the normal benefit is a benefit whose ultim ate cost is expected to be equal
to that of the normal benefit.
44
O n th e o th e r h a n d , w o r k e r s q u a lifie d fo r d is a b ility b e n e fits u n d e r a p r iv a te
p la n , b u t n o t u n d e r s o c ia l s e c u r ity , w o u ld r e c e iv e s u b s ta n tia lly h ig h e r b e n e fits ,
on th e a v e r a g e , th a n th o s e p ro v id e d u n d e r n o r m a l r e t i r e m e n t p r o v is io n s . T h e
g e n e ro u s b e n e fits p a y a b le u n d e r su c h c ir c u m s ta n c e s by m a n y n e g o tia te d s in g le
e m p lo y e r p la n s in th e a u to m o b ile , s te e l, a n d r u b b e r in d u s tr ie s la r g e ly a c c o u n t
fo r th e d if f e r e n c e .
A lth o u g h p r iv a te p la n s on th e w h o le g e n e r a lly p ro v id e d d is a b ility b e n e fits
ro u g h ly e q u a l to n o r m a l r e t i r e m e n t b e n e fits fo r th e s a m e e a rn in g s an d s e r v ic e
le v e ls , a s d is c u s s e d b e lo w , th e r e w e re im p o r ta n t v a r ia tio n s a m o n g g ro u p s of
p la n s d e p e n d in g u p o n w o r k e r c o n tr ib u tio n s , c o lle c tiv e b a rg a in in g s ta tu s , an d
in d u s tr y .
T o c o m p a r e d is a b ility r e t i r e m e n t b e n e fit le v e ls a m o n g p la n s an d to r e la te
th e le v e ls of b e n e fits to p r e d is a b le m e n t e a r n in g s , i ll u s tr a ti v e b e n e fits w e r e c o m
p u te d u n d e r th e s a m e c o n d itio n s a s th o s e fo r n o r m a l r e t i r e m e n t (s e e p a g e 11 ),
e x c e p t th a t d is a b ility r e t i r e m e n t w a s a s s u m e d to be a t ag e 60. 45 B e c a u s e m a n y
p r iv a te p la n s k e y e d th e b e n e fit to th e r e c e ip t of s o c ia l s e c u r ity b e n e fits , th e
c o m p u ta tio n s w e re m a d e u n d e r tw o a lte r n a tiv e a s s u m p tio n s : (1) T h e w o rk e r
r e c e iv e s b o th p la n b e n e fits an d s o c ia l s e c u r ity b e n e fits , a n d (2) th e w o rk e r
r e c e iv e s o n ly p la n b e n e fits .
W o r k e r s Q u a lifie d fo r P r iv a te P la n B e n e fit an d S o c ia l S e c u rity B e n e f it. T h e
d is tr ib u tio n s of d is a b ility b e n e fits e x h ib ite d th e s a m e c h a r a c t e r i s t i c s a s th o s e
fo r n o r m a l r e t i r e m e n t . F o r e x a m p le , a s sh o w n in ta b le s 21—25, d is tr ib u tio n s
of d is a b ility b e n e fits , lik e th o s e fo r n o r m a l r e t i r e m e n t , s h ifte d u p w a rd w ith i n
c r e a s e s in b o th e a rn in g s a n d s e r v ic e . 46 S in c e th e i n c r e a s e s in b e n e fits w e re
le s s th a n p r o p o r tio n a te , th e lo w e r p a id an d s h o r t s e r v ic e w o r k e r s f a r e d r e la tiv e ly
b e t te r th a n h ig h e r p a id a n d lon g s e r v ic e w o r k e r s .
C h a r t 6 sh o w s th a t b e n e fits w e re g r e a t e r a t th e h ig h e r e a rn in g s an d s e r v
ic e le v e ls , a s w e ll a s m o r e w id e ly d is p e r s e d . F o r e x a m p le , th e b e n e fit fo r th e
m id d le 80 p e r c e n t of th e w o r k e r s ra n g e d fro m $ 2 0 to $ 9 1 a m o n th fo r a w o rk e r
w ith a v e r a g e a n n u a l e a rn in g s of $ 4 , 800 an d 20 y e a r s o f s e r v ic e . On th e o th e r
h a n d , th e ra n g e w as $ 3 7 —$ 1 7 2 a m o n th fo r a w o r k e r w ith e a rn in g s of $ 8 ,4 0 0
a n d th e s a m e a m o u n t of s e r v ic e .
T h e d is tr ib u tio n s w e re m a r k e d by c o n c e n tra tio n s of w o r k e r s in c o lle c tiv e ly
b a r g a in e d p la n s , p a r t ic u l a r l y in m a n u fa c tu rin g i n d u s tr ie s . P la n s n e g o tia te d by
th e S te e lw o r k e r s (w h ich c a u s e d a c o n c e n tra tio n o f w o r k e r s a t th e $ 3 9 , $ 5 2 ,
$ 6 5 , an d $ 7 8 m o n th ly b e n e fit le v e l fo r 15, 20, 25, an d 30 y e a r s o f s e r v ic e ,
r e s p e c tiv e ly ) , p ro v id e d b e n e fits b a s e d on th e n o r m a l m o n th ly b e n e fit fo rm u la :
1 p e r c e n t o f a v e r a g e m o n th ly e a rn in g s in th e 10 y e a r s p re c e d in g d is a b ility tim e s
y e a r s o f s e r v i c e , l e s s $ 8 0 — th e s o c ia l s e c u r ity o ffs e t— b u t a m in im u m of $ 2 .5 0
o r $ 2. 60 a m o n th tim e s y e a r s of s e r v ic e . T h e m in im u m fo rm u la g e n e r a lly
a p p lie d e x c e p t fo r w o r k e r s w ith e a rn in g s of $ 8 ,4 0 0 a y e a r an d 20 y e a r s 1 s e r v ic e
Retirement at age 60 was selected so that a maximum number of plans would be included in the com pu
tation. Few plans had a higher age requirement. Furthermore, a report by the Social Security Administration,
Arthur E. Hess, "Five Years of Disability Insurance Benefits; A Progress Report, " Social Security Bulletin, July 1962,
found that, prior to the 1960 amendments to the act, more than 80 percent of the workers receiving social security
disability payments were over age 50 when the onset of disability occurred and had a median age of 59. Later
studies of the Social Security Administration ("Disability Applicants, 1962, Selected Data"; Division of the Actuary,
April 1964 and Actuarial Note 18) showed a decrease in the median age of applicants at the tim e of the onset of
disability.
4^ A few plans covering special classes of highly paid em ployees (e. g . , airline pilots) paid even higher bene
fits than those shown in the distributions.
45
Chart 6. Monthly Disability Retirement Benefits1 for Workers Eligible
for Social Security Disability Benefits, by Selected Assumed Annual
Earnings Levels and Service Periods, Winter 1962*63
SERVICE
annual
0
$50
$100
Monthly benefit
$150
$200
$250
$300
IN YEARS
10
15
20
25
30
M ed ia n m o n th ly b enefits and ranges w ithin which fe ll 5 0 p e rc e n t and 8 0 perc en t of the workersu
2 Based on a study of 1 5 ,8 1 8 p riv a te pension plans covering 15 .6 m illion activ e w o rk ers in 1 9 6 1 .
$350
46
o r m o re . 47 S im ila r ly , th e n o r m a l f o rm u la ($ 2 . 80 a m o n th tim e s y e a r s of s e rv ic e )
w as u s e d in th e d is a b ility r e tir e m e n t c o m p u ta tio n in th e p la n s n e g o tia te d by th e
A u to m o b ile W o rk e rs . 48
T h e d is tr ib u tio n of m e d ia n
c le a r ly sh o w s th e e ffe c ts of th e
M e d ia n m o n th ly b e n e fits u n d e r th e
$ 3 ,6 0 0 , 1 0 -y e a r le v e l to $ 1 2 5 a t
m o n th ly b e n e fits in th e fo llo w in g ta b u la tio n
fo rm u la ty p e s , a s w e ll a s of p a tte r n p la n s .
a s s u m e d c o n d itio n s ra n g e d fro m $2 8 49 a t th e
th e $ 8 ,4 0 0 , 3 0 - y e a r le v e l.
____________________________________ Annual earnings__________________________________
$3,600______________ $4, 800_______________$6,000_______________$8,400
InterInterInterInter
quartile
quartile
quartile
quartile
Median range
Median range
Median range
Median range
Service periods (years)
1 0 1 -----------------------------------------15 ------------------------------------------------20 ------------------------------------------------25 ------------------------------------------------30 -------------------------------------------------
$28
38
50
58
68
$18-$30
30- 45
35- 56
40- 70
45- 84
$28
39
51
64
75
$20-$38
26- 50
37- 62
46- 75
53- 84
$28
42
52
65
84
$25-$42
30- 61
42- 80
54- 98
61-111
$30
42
65
95
125
$28-$62
39- 86
50-115
63-141
69-173
1 Excludes a substantial number of workers in plans with higher qualifying service requirements.
T h e p ro p o r tio n of p r e d is a b le m e n t in c o m e r e p r e s e n t e d by m e d ia n b e n e fits
w as s o m e w h a t g r e a t e r a t th e $ 3 ,6 0 0 le v e l th a n a t th e o th e r le v e ls , due m a in ly
to th e in flu e n c e , a s p re v io u s ly n o te d , of r e la tiv e ly h ig h d is a b ility b e n e fits p r o
v id e d by p la n s w ith m in im u m b e n e fits an d fla t b e n e fit f o r m u la s . F o r e x a m p le ,
a s sh o w n in th e ta b u la tio n b elo w , p la n d is a b ility b e n e fits r e p la c e d a b o u t a fifth
of p re v io u s e a rn in g s fo r th e w o r k e r s w ith 25 y e a r s of s e r v ic e e a rn in g $ 3 ,6 0 0
a y e a r an d a b o u t a s e v e n th a t e a rn in g s le v e ls of $ 6, 000 a y e a r an d a b o v e .
Annual earnings
$3,600
$4,800
15 20
■
25 ■
30 ■
$8,400
Percent
Service periods (years)
101-
$6,000
9. 3
12. 7
16. 7
19.3
22. 7
7.0
9. 8
12 . 8
16.0
18. 8
5.6
8 .4
10.4
13 .0
16. 8
4.3
6 .0
9.3
13.6
17.9
* Excludes a substantial number of workers in plans with higher qualifying
service requirements.
E x c e p t fo r w o r k e r s w ith h ig h e a rn in g s an d lo n g s e r v ic e , p la n b e n e fits w e re
g e n e ra lly f a r l e s s th a n s o c ia l s e c u r ity d is a b ility b e n e fits w h ic h , a t th e tim e of
th e stu d y , w e re $ 1 0 5 a m o n th fo r w o r k e r s e a rn in g $ 3 ,6 0 0 a y e a r an d $ 1 2 7 fo r
th o s e e a rn in g $ 4 ,8 0 0 a y e a r an d o v e r. G e n e ra lly , s o c ia l s e c u r ity b e n e fits
a m o u n te d to f r o m t h r e e - f i f t h s to f o u r - f if th s of c o m b in e d r e t i r e m e n t in c o m e .
47 The basic formula applies to workers with 30 years of service and earnings over $527 a month, 20 years
of service and earnings over $660 a month, and 10 years of service and earnings over $1,060 a month. These
plans also had a minimum disability benefit of $100 a month, including social security, but it is generally applicable
only to those not qualifying for social security.
The disability formula in the plans negotiated by the Automobile Workers has been substantially liberalized
since the tim e of the study. These changes as w ell as others have not been incorporated in the computation. A l
though they w ill affect the distributions of benefit amounts, they do not significantly affect the median benefits.
49
Because few workers belong to plans that provide disability benefits for 10 years or less of service, median
benefits for workers earning $6,000 a year or less chiefly reflected the amounts provided by the Automobile Work
ers plans.
47
R e tir e m e n t in c o m e a t th e low e a rn in g s le v e ls w as m o s tly a c c o u n te d fo r by s o c ia l
s e c u r ity b e n e f its .
C o m b in e d m e d ia n m o n th ly b e n e fits — th e su m of m e d ia n p r iv a te p la n d i s a
b ility b e n e fits an d s o c ia l s e c u r ity d is a b ility b e n e fits — ra n g e d fro m $ 1 3 3 to $ 2 5 2
u n d e r th e a s s u m e d c o n d itio n s .
Annual earnings
Service periods (years)
101 --------------- -------------------1 5 ------ ------------------------------2 0 ----------------- -------- -------25 ----------------------------------------3 0 ---------------------- _ ---------1 Excludes a substantia]
service requirements.
num ber
$3,600
$4, 800
$6,000
$8,400
$133
143
155
163
173
$155
166
178
191
202
$155
169
179
192
211
$157
169
192
222
252
of workers in plans with higher qualifying
B o th th e s o c ia l s e c u r ity d is a b ility b e n e fits an d p r iv a te p la n b e n e f its , f o r
th e m o s t p a r t , w e re h ig h e r f r a c tio n s fo p re v io u s e a rn in g s f o r w o r k e r s a t th e
lo w e r e a rn in g s le v e ls th a n a t th e h ig h e r e a rn in g s le v e ls . 50 T he c o m b in e d m e d ia n
b e n e fits of w o r k e r s w ith a n n u a l e a rn in g s of $ 3 ,6 0 0 a n d $ 4 ,8 0 0 w e re , t h e r e
f o r e , a l a r g e r p ro p o r tio n of t h e ir p r e d is a b le m e n t m o n th ly in c o m e th a n fo r th o s e at
h ig h e r e a rn in g s le v e ls .
______________ Annual earnings_____________
$3,600
Service periods (years)
1 0 1 ---------------------------------------15
--------------------------------2 0 -----------------------------------------25 ------------- ---------------------3 0 ------------- ------------------------
$4,800
$6,000
$8,400
Percent
44. 3
47. 7
51. 7
54. 3
57. 7
38.8
41 .5
44. 5
4 7 .8
50.5
3 1 .0
33. 8
35. 8
38 .4
42. 2
22 .4
24.1
27 .4
31. 7
3 6 .0
* Excludes a substantial number of workers in plans with higher qualify
ing service requirements.
W o rk e rs Q u a lifie d fo r P r iv a te P la n B e n e fits O n ly .
S in c e n o t a ll w o r k e r s
q u a lifie d fo r d is a b ility r e tir e m e n t u n d e r a p r iv a te p e n s io n p la n w ill re c e iv e
O A SD I d is a b ility b e n e f its , c o m p u ta tio n s w e re m a d e fo r th e s a m e p la n s a s s u m in g
th e w o r k e r w o u ld n o t q u a lify fo r s o c ia l s e c u r ity b e n e f i t s .51 A n o th e r r e a s o n f o r
m a k in g th is d is tin c tio n w as th a t, a s p re v io u s ly n o te d , s o m e of th e l a r g e r p la n s
p ro v id e d s p e c ia l d is a b ility p la n b e n e fits fo r w o r k e r s n o t re c e iv in g s o c ia l s e c u r ity
b e n e f its . It m u s t b e e m p h a s iz e d th a t th e s e s p e c ia l d is a b ility p e n s io n s w e re
u s u a lly t e m p o r a r y , an d th a t th e p e n s io n r e v e r te d to th e r e g u la r d is a b ility f o rm u la
c o m p u ta tio n if e lig ib ility fo r s o c ia l s e c u r ity b e n e fits w as e s ta b lis h e d . H o w e v e r,
th e s e fo r m u la s w e re th e e x c e p tio n ; m o s t p la n s u s e d th e s a m e d is a b ility fo r m u la ,
r e g a r d l e s s of th e w o r k e r ’s s o c ia l s e c u r ity s ta tu s .
50 Maximum social security disability benefits were 35. 0, 31.8, 25 .4 , and 18.1 percent of the average annual
earnings of $3, 600, $4, 800, $6, 000, and $8, 400, respectively.
51 See "Assumptions," p. 11. A study of disability retirees in the automobile companies showed that a fifth
of those qualified for the private pension did not qualify for social security. See "Disability Insurance Under Social
Security, " by Jerome Pollack, in Occupational Disability and Public Policy, Earl Cheit and Margaret Gordon, editors
(John W iley and Son, New York, 1963), p. 175. The recent liberalization of the disability definition in the auto
m obile company plans should cause this fraction to increase.
48
U n d e r th e g iv e n a s s u m p tio n s , th e d is tr ib u tio n s o f m o n th ly p la n b e n e fits
(ta b le 18) w e re a t s u b s ta n tia lly h ig h e r le v e ls th a n th o s e f o r th e s a m e p la n s fo r
w o r k e r s e lig ib le f o r s o c ia l s e c u r ity b e n e f its , m a in ly b e c a u s e of th e s p e c ia l d i s
a b ility p e n s io n s p ro v id e d in m a n u fa c tu rin g i n d u s tr ie s . P la n s fo llo w in g th e A u to
m o b ile W o rk e rs an d R u b b e r W o rk e rs p a t te r n s , f o r e x a m p le , p ro v id e d d o u b le th e
a m o u n t c o m p u te d b y th e r e g u la r d is a b ility f o r m u la . P la n s fo llo w in g th e S te e l
w o r k e r s p a tte r n p ro v id e d a s p e c ia l d is a b ility b e n e fit of $ 1 0 0 a m o n th .52 A n o th e r
la r g e g ro u p o f p la n s — th e te le p h o n e c o m p a n y p la n s — b a s e d t h e ir b e n e fits on th e
g r e a t e r of (1) 1 p e r c e n t of a v e ra g e m o n th ly e a r n in g s 5354 tim e s y e a r s of s e r v ic e ,
o r (2) $ 8 5 . 54
T h e ra n g e s of p r iv a te p la n b e n e fits f o r th e m id d le 80 p e r c e n t of th e w o r k e r
d is tr ib u tio n , a s sh ow n in c h a r t 7, w e re c o n s id e ra b ly h ig h e r a s w e ll a s w id e r
th a n th e b e n e fits f o r w o r k e r s e lig ib le fo r s o c ia l s e c u r ity d is a b ility b e n e f its . (See
c h a r t 6 .) B e c a u s e of th e p r e v io u s ly c ite d s p e c ia l d is a b ility f o r m u la s , 9 o u t of
10 w o r k e r s w e re in p la n s th a t h ad b e n e fits of $ 4 8 a m o n th o r m o re fo r w o r k e r s
e a rn in g $ 4 ,8 0 0 , $ 6 , 00 0, o r $ 8 ,4 0 0 a n n u a lly w ith 25 o r 30 y e a r s of s e r v ic e .
M ed ian b e n e fits u n d e r th e s e a s s u m p tio n s w e re a b o u t $ 30 a m o n th h ig h e r
th a n th e b e n e fits p ro v id e d b y th e s a m e p la n s to w o r k e r s e lig ib le f o r s o c ia l s e
c u r ity b e n e fits . M ed ian b e n e fits ra n g e d fro m $ 5 6 to $ 1 5 0 a m o n th fo r w o r k e r s
in e lig ib le fo r s o c ia l s e c u r ity , a s c o n tr a s te d to a ra n g e of $ 2 8 to $ 1 2 5 f o r w o r k
e r s w ho q u a lifie d .
____________________________________ Annual earnings _________________________________
Service periods (years)
$3,600_______________$4, 800_______________$6,000_______________$8,400________
InterInterInterInter
quartile
quartile
quartile
quartile
Median range
Median range
Median range
Median range
101 -----------------------------------------$56
$20-$56
$56
$25-$60
$56
$34-$70
15 ------------------------------------------------64 45- 84
68
50- 90
75
50-100
20 ------------------------------------------------85 50-100
85
50-100
100
56-112
25 ------------------------------------------------85 53-113
100
63-125
113
70-140
30 ------------------------------------------------90 61-128
100
68-150
125
75-165
1 Excludes a substantial number of workers in plans with higher qualifying service requirements.
$56
90
100
1 26
150
$46-$101
55- 105
65- 140
75- 175
80- 210
O n th e w h o le , h o w e v e r, p r iv a te p la n b e n e fits w e re n o t s u ffic ie n tly h ig h e r
to o ffs e t th e a b s e n c e of s o c ia l s e c u r ity b e n e fits w h ic h , a s n o te d a b o v e , w e re
$ 1 0 5 o r $ 1 27 a m o n th fo r w o r k e r s e a rn in g $ 3 , 600 an d $ 4 , 800 a y e a r o r o v e r, r e
s p e c tiv e ly . A s a r e s u l t, m e d ia n b e n e fits r e p r e s e n te d — d e p e n d in g u p on le n g th of
s e r v ic e — o n ly 35 to 60 p e r c e n t (m o s t o fte n ab o u t 50 p e r c e n t) of th e a m o u n t p r o
v id e d by p r iv a te p la n s an d s o c ia l s e c u r ity c o m b in e d .
T h e p r o te c tio n a ffo rd e d by s o c ia l s e c u r ity b e n e fits an d th e fa v o rin g of
lo w e r p a id w o r k e r s b y p r iv a te p la n s a r e s tr ik in g ly ill u s tr a te d by r e la tin g m e d ia n
d is a b ility b e n e fits to p r e r e t i r e m e n t e a r n in g s . N ot m o r e th a n 30 p e r c e n t of p r e
v io u s e a rn in g s c o u ld be e x p e c te d by w o r k e r s in e lig ib le fo r s o c ia l s e c u r ity b e n e fits
u n d e r th e a s s u m e d c o n d itio n s , an d o n ly lo n g s e r v ic e , lo w e r p a id w o r k e r s c o u ld
g e n e ra lly r e c e iv e o n e - f o u r th o r m o re of t h e ir e a r n in g s .
52 Only workers with long service and high earnings would get more. In the illustrative examples used in
this bulletin, only the $ 8 ,400-a-year worker with 30 years of service would be in that group.
53 Based on average monthly earnings during the 5 consecutive years im m ediately preceding retirement or, at
the discretion of the benefit com m ittee, the 5 consecutive years of highest earnings.
54 For disabled workers with 20 years or more of service only.
49
Chart 7. Monthly Disability Retirement Benefits1 for Workers Ineligible
for Social Security Disability Benefits, by Selected Assumed Annual
Earnings Levels and Service Periods, Winter 1962-632
,
SERVICE
IN YEARS
10
ANNUAL
0
$50
$100
Monthly benefit
$150
$200
$250
$300
E A R N IN G S
$3,600
4,800
6,000
^ 8,400
15
$3,600
4,800
<
6,000
8,400
$3,600
4.800
20
6,000
8,400
$3,600
4.800
25
6,000
v 8,400
r
30
<
$3,600
4.800
6,000
v 8,400
1 M e d ia n m o n th ly b e n e fits and ranges w ith in w h ic h fe ll 5 0 p e rc e n t and 8 0 p e rc e n t o f the w o rk e rs .
2 Based on a s tu d y o f 1 5 ,8 1 8 p riv a te pension plans c o v e rin g 1 5 .6 m illio n a c tiv e w o rk ers in 1 9 6 1 .
$350
60
In c o n tra s t, fo r w o rk e rs e lig ib le fo r s o c ia l s e c u rity , to ta l r e tire m e n t b en efits
(p riv a te p lan plus s o c ia l s e c u rity benefit) ran g ed fro m 22 p e rc e n t to a lm o st
60 p e rc e n t of p r e r e tir e m e n t e a rn in g s. (See tab u latio n on p. 4 7 .)
Annual earnings
$3,600 $4,800 $6,000 $8,400
Service periods (years)
Percent
18. 7
14.0
11.2
8.0
10 1 — ------------ ---------------------21.3
17.0
15.0
12.9
15 —----------------- -------------------28.3
21.3
20.0
14.3
2 0 ........................................... ............
25.0
18.0
28.3
22.6
2 5 ------------------------------- --------3 0 ----------------------------------------30.0
25.0
25.0
21.4
* Excludes a substantial number of workers in plans with higher qualify
ing service requirements.
M ethod of F in an cin g , J u s t a s jo in tly fin an ced p lan s h ad h ig h e r n o rm a l
b en efits th an e n tire ly e m p lo y e r-fin a n c e d p la n s, th ey a lso had h ig h e r d isa b ility
b e n e fits. B en efits in c o n trib u to ry p lan s w e re m o stly com p u ted on th e b a s is of
e a rn in g s and s e rv ic e fo rm u la s (a p e rc e n ta g e of e a rn in g s o r c o n trib u tio n s), 55 w hile
n o n c o n trib u to ry p lan s re fle c te d the com p utatio n of b en efits by fo rm u la s s tre s s in g
se rv ic e (u n ifo rm am o u n ts fo r sp ecified se rv ic e o r a fixed d o lla r am ou nt m u lti
p lied by y e a rs of se rv ic e ) o r by a p e rc e n ta g e -o f-e a rn in g s fo rm u la w hich w as
g e n e ra lly red u ced in w hole o r in p a rt by so c ia l s e c u rity .
W o rk e rs a t the $ 4 ,8 0 0 , 2 0 -y e a r lev el who a lso q u alified fo r so c ia l s e c u rity
b en efits w ould re c e iv e m ed ian b en efits of $4 9 a m on th fro m n o n c o n trib u to ry p lan s
as c o m p a re d w ith $62 fro m c o n trib u to ry p la n s. The d is p a rity w as fa r g r e a te r
fo r $ 8, 4 0 0 -a -y e a r w o rk e rs w ith s im ila r s e rv ic e — $5 9 and $1 4 7 , re sp e c tiv e ly .
Selected annual earnings
and service periods
$4,800:
10 years 1-----------------------15 years -----------------------20 years-------------------------25 years-------------------------30 years -----------------------$8,400:
10 years 1-----------------------15 years ------------------------ - *
20 years-------------------------25 years-------------------------30 years--------------------------
Workers eligible for social Workers ineligible for social
security disability benefit
security disability benefit
Noncontributory Contributory Noncontributory Contributory
$40
$28
$51
$55
39
43
65
81
49
62
84
96
74
63
118
97
73
100
87
135
28
70
88
54
41
108
84
110
147
59
99
153
183
78
110
190
88
220
130
226
1 Excludes a substantial number of workers in plans with higher qualifying service requirements.
B oth c o n trib u to ry and n o n c o n trib u to ry p lan s p ro v id ed g r e a te r b en efit am ou nts
fo r w o rk e rs in e lig ib le fo r so c ia l s e c u rity th an fo r e lig ib le w o rk e rs . Ow ing,
h o w ev er, to the in c lu sio n in the n o n c o n trib u to ry p lan s of the A utom obile W o rk e rs
and S te e lw o rk e rs p lan s th a t p ro v id e d sp e c ia l d isa b ility b e n e fits, the p e rc e n ta g e
d iffe re n c e s w e re g r e a te r th an in c o n trib u to ry p la n s.
A lthough c o n trib u to ry p lan s a lm o st alw ays p ro v id ed a h ig h e r p ro p o rtio n of
p r e r e tir e m e n t e a rn in g s th an n o n c o n trib u to ry p la n s, the p ro p o rtio n p ro v id ed the
55
Since worker contributions are mostly based on yearly earnings, any computation of benefits based on such
contributions would be considered as being based on earnings.
51
$ 8 , 4 0 0 w o r k e r in both c o n trib u to ry and n o n c o n trib u to ry plan s w as s m a l l e r than f o r
the $ 4 , 8 0 0 w o r k e r , as shown b elow .
This ste m m e d , as it a ls o does in n o r m a l
r e t i r e m e n t b e n e fits , f r o m p r o v i s io n s in m any p lans fa v o rin g lo w e r paid w o r k e r s .
Workers eligible for social
security disability benefit
Selected annual earnings
and service periods
$4, 800 per year:
10 years 1 -------------------------20 years --------------------------30 years ---------------------------$8, 400 per year:
10 years----------------------------20 years----------------------------30 years-----------------------------
Workers ineligible for social
security disability benefit
Noncontributory Contributory ]M oncontributory Contributory
Percent
38. 8
4 4 .0
5 0 .0
41. 8
47 .2
53 .5
12.8
2 1 .0
25 .0
13.8
24 .0
33 .8
22.1
26. 6
30. 7
28. 1
39. 1
49 .6
7. 7
14.1
18.6
12.6
21.8
32 .2
1 Excludes a substantial number of workers in plans with higher qualifying service requirements.
Type of E m p lo y e r Unit.
Median b en efits p ro v id e d by s in g le -e m p lo y e r plan s
f o r w o r k e r s writh 20 y e a r s of s e r v i c e and a ls o e lig ib le f o r s o c ia l s e c u r i t y b e n e fits w e r e much g r e a t e r at the h ig h e r e a rn in g s l e v e l ( $ 8 , 4 0 0 ) than those p ro v id e d
by m u lt i e m p lo y e r p la n s ; o v e r a l l , at the $ 4 , 800 e a rn in g s l e v e l , th ey w e r e about the
sa m e .
As shown below , m u ltie m p lo y e r plans paid about the sam e b en efits at the
two e a rn in g s le v e ls b ecau se they u s u a lly p ro v id e d u n ifo rm b en efits fo r a l l p e n sio n e r s with the sam e am ount of se rv ic e o r f o r a ll who qu alified f o r a pension.
Selected service periods,
annual earnings, and
method of financing
15 years:
$4, 800 per year --------------Noncontributory----------Contributory----------------$8, 400 per y e a r ----------------Noncontributory----------Contributory----------------20 years:
$4, 800 per y e a r ----------------Noncontributory----------Contributory----------------$8, 400 per y e a r ----------------Noncontributory----------Contributory-----------------
Workers eligible for social
security disability benefit
Single
employer
M ultiemployer
$39
39
44
42
41
110
$42
42
52
52
61
50
50
147
n
76
60
(*)
45
42
(M
n
50
50
Workers ineligible for social
security disability benefit
Single
employe r
Multiemployer
$76
76
84
100
100
111
$46
46
90
90
100
112
112
156
50
50
(M
46
46
(M
(')
50
50
(*)
* Number of workers not sufficient for selection of median.
The method of financing a ls o had li t t le e ffe c t on b en efit l e v e l s in s in g le e m p lo y e r p lan s.
Only the m ed ian b en efit f o r the $ 8 , 4 0 0 , 2 0 - y e a r m an elig ib le
f o r s o c ia l s e c u r it y re f le c t e d the in flu en ce of c o n tr ib u to r y p lan s.
S in g l e - e m p l o y e r p lan s p ro v id e d sig n ific a n tly h ig h e r b en efits f o r w o r k e r s
in elig ib le f o r s o c ia l s e c u r i t y b en efits than f o r qu alified w o r k e r s . F o r e x a m p le ,
b en efits f o r in elig ib le w o r k e r s with 15 y e a r s of s e r v i c e w e r e about tw ice those
p ro v id e d elig ib le w o r k e r s .
A s i m i l a r but s m a l l e r d iffe r e n c e w as found at the
2 0 - y e a r le v e l.
As p r e v i o u s ly noted, th ese d if fe r e n c e s r e f le c t , f o r the m o s t
p a r t , s p e c ia l d is a b ility b en efits p ro v id e d in s i n g l e - e m p lo y e r p a tt e r n p lans n e
gotiated by the Autom obile W o r k e r s , S t e e l w o r k e r s , and R ubber W o r k e r s .
On
the o th e r hand, sin ce m u lt i e m p lo y e r p lan s r a r e l y took s o c ia l s e c u r i t y b en efits
52
into account in the d is a b ility b en efit fo r m u la , b en efits w e r e id e n tic a l w h e th e r
the w o r k e r w as e lig ib le o r in elig ib le f o r s o c ia l s e c u r i t y b e n e fits.
A s a r e s u l t , to ta l d is a b ility r e t i r e m e n t in com e (plan b en efit plus s o c ia l s e
c u rity ) f o r the $ 4 , 8 0 0 - a - y e a r w o r k e r w ith 20 y e a r s of s e r v i c e w as about 45 p e r
cent of p re d is a b le m e n t incom e under both s i n g l e - e m p lo y e r and m u ltie m p lo y e r
p la n s.
On the o th e r hand, at the $ 8 , 4 0 0 earn in g s l e v e l (which would include
few b l u e - c o l l a r w o r k e r s c o v e r e d by m u ltie m p lo y e r p lan s), s i n g l e - e m p lo y e r p lans
p ro v id e d a lm o s t 30 p e r c e n t of p r e d is a b le m e n t ea rn in g s w h ile m u l t i e m p lo y e r plans
p ro v id e d only about 25 p e rc e n t.
F u r t h e r m o r e , the p ro p o rtio n of p r e r e t i r e m e n t
ea rn in g s p ro v id e d w o r k e r s in e lig ib le f o r s o c ia l s e c u r i t y b en efits w as c o n s id e ra b ly
lo w e r in m u lt i e m p lo y e r p la n s.
S in g l e - e m p l o y e r p lan s p ro v id e d a m o r e f a v o r a b le
p o rtio n of p r e r e t i r e m e n t e a rn in g s f o r the in elig ib le group, but only about h a lf
of the to tal r e t i r e m e n t incom e p ayab le to w o r k e r s in the sa m e plan s who q u a li
fied f o r s o c i a l s e c u r i t y b e n e fits.
Selected service periods,
annual earnings, and
method of financing
15 years:
$4, 800 per y e a r -------------------Noncontributory--------------Contributory-------------------$8,400 per y e a r -------------------Noncontributory----------------Contributory-------------------20 years:
$4, 800 per y e a r -------------------Noncontributory--------------Contributory-------------------$8,400 per y e a r ---------------------Noncontributory--------------Contributory--------------------
Workers eligible for social Workers ineligible for social
security disability benefit_____ security disability benefit
Single
Single
employer
M ultiemployer
employer
Multi em ploy er
Percent
41. 5
4 1 .5
42. 8
24. 1
2 4 .0
3 3 .9
42 .2
42.2
(l )
24.6
24.1
(')
44. 8
44. 8
4 7 .0
2 9 .0
26. 7
39.1
44 .2
44 .2
(*)
25.3
25.3
(*)
* Number of workers not sufficient for selection of m edian.
19 .0
19 .0
2 1 .0
14.3
14.3
15 .9
11.5
11.5
22 .5
22 .5
2 5 .0
1 6 .0
16 .0
22.3
12 .5
12 .5
(M
7.1
7.1
n
( l )
6 .6
6 .6
(l )
C o lle c tiv e B a rg a in in g .
B e n e fits in non b argain ed p lan s w e r e g r e a t e r than in
b a rg a in e d plans f o r w o r k e r s with the sa m e s e r v i c e and e a rn in g s , excep t f o r p r o
duction w o r k e r s earn in g $ 4 , 8 0 0 a y e a r .
D i ff e re n c e s w e r e m uch m o r e p r o
nounced, f o r w o r k e r s q u alified f o r s o c ia l s e c u r it y , at the $ 8 , 400 l e v e l than at
the $ 4 , 800 le v e l .
Workers eligible for social Workers ineligible for social
security disability benefit_____ security disability benefit
Selected service periods,
annual earnings, and
method of financing
15 years:
$4, 800 per y e a r --------------Noncontributory---------Contributory--------------$8,400 per y e a r --------------Noncontributory---------Contributory--------------20 years:
$4, 800 per y e a r --------------Noncontributory---------Contributory--------------$8,400 per y e a r --------------Noncontributory---------Contributory--------------
Mentioned in Not m entioned Mentioned in Not mentioned
a collective in a collective a collective in a collective
bargaining
bargaining
bargaining
bargaining
agreement
agreement
agreement
agreement
$39
39
38
41
41
110
$40
34
56
86
68
113
$75
68
88
84
84
110
$64
60
65
105
100
140
51
50
54
60
56
147
56
50
76
113
94
158
85
85
107
100
100
140
80
75
86
141
140
187
53
T hese d if f e r e n c e s , as w as p r e v i o u s ly d e m o n s tra te d , w e r e a ttrib u ta b le to the
g r e a t e r p r e v a le n c e of fo r m u la s b a se d on s e r v i c e only in n egotiated p lans and the
m o r e fr e q u e n t in c lu sio n of em p loyee contributions in nonnegotiated p lan s.
B e c a u s e of the s p e c ia l d is a b ility b en efits in la r g e n egotiated p la n s , b en efits
f o r $ 4 , 8 0 0 - a - y e a r w o r k e r s in e lig ib le f o r s o c ia l s e c u r it y p a ym en ts did not d if f e r
sig n ific a n tly in b a rg a in e d as in n onbargained p la n s .
On the o th e r hand, at the
$ 8 , 4 0 0 le v e l, b en efits f o r in e lig ib le w o r k e r s in nonb argain ed plan s w e r e su b
s t a n t ia lly h ig h e r than those in b a rg a in ed p la n s.
On the w h ole, b en efits f o r i n
elig ib le w o r k e r s in nonb argain ed p lans re fle c t e d the le v e l set by the ap p lication
of the sta n d a rd 1 - p e r c e n t fo r m u la ( e . g . , $ 6 0 and $ 8 0 m on th ly f o r the $ 4 , 8 0 0 a - y e a r w o r k e r and $ 1 0 5 and $ 1 4 0 m on th ly f o r the $ 8 , 4 0 0 - a - y e a r w o r k e r with
15 and 20 y e a r s of s e r v i c e , re s p e c tiv e ly ) .
The sligh t d e c r e a s e in b e n e fits f o r
w o r k e r s in n on b argain ed plans at the $ 4 , 8 0 0 l e v e l w as due to the ab sen ce of
the p r e v i o u s ly m en tion ed s p e c ia l b en efits p ro v id e d w o r k e r s in b a rg a in ed p la n s ,
w h ile , at the $ 8 , 4 0 0 le v e l , b en efits w e r e 33 to 40 p e r c e n t g r e a t e r .
As a r e s u l t , total r e t i r e m e n t b e n e fits (p riv a te p lan plus s o c ia l s e c u r ity )
at the $ 4 , 8 0 0 , 2 0 - y e a r l e v e l, as shown b elow , w e r e c lo se to 45 p e r c e n t of p r e
r e t i r e m e n t ea rn in g s f o r w o r k e r s elig ib le f o r s o c ia l s e c u r i t y p a y m e n ts in both
b a rg a in ed and nonb argain ed p lan s.
W o r k e r s in elig ib le f o r s o c ia l s e c u r i t y in
both types of plans would, on the a v e r a g e , r e c e i v e about h a lf this amount.
Workers eligible for social
security disability benefit
Selected service periods,
annual earnings, and
method of financing 15*20
15 years:
$4, 800 per year ------------Noncontributory---------Contributory -------------$8, 400 per y e a r --------------Noncontributooy — -----Contributory--------------20 years:
$4, 800 per y e a r --------------Noncontributory--------Contributory--------------$8,400 per y e a r --------------Noncontributory--------Contributory---------------
Workers ineligible for social
security disability benefit
Mentioned in Not mentioned Mentioned in Not mentioned
a collective in a collective a collective in a collective
bargaining
bargaining
bargaining
bargaining
agreement
agreement
agreement
agreement
Percent
4 1 .5
4 1 .5
41. 2
2 4 .0
2 4 .0
3 3 .9
41. 8
40 .2
45. 8
30 .4
27 .8
34.3
18.8
17 .0
2 2 .0
12 .0
1 2 .0
15. 7
16. 0
15 .0
16.2
15. 0
14.3
2 0 .0
4 4 .5
44. 2
4 5 .2
26. 7
26. 1
39.1
45. 8
44 .2
50 .8
34.3
31 .6
4 0 .7
21.2
21.2
26.8
14.3
14.3
2 0 .0
2 0 .0
18.8
2 1 .5
20.1
2 0 .0
26. 7
Types of W o r k e r s C o v e r e d . P lan s e x c l u s iv e l y f o r s a l a r i e d w o r k e r s — m o s t ly
nonb argain ed c o n tr ib u to r y p lan s— p ro v id e d l a r g e r d is a b ility b e n e fits than those
f o r p rod u ction w o r k e r s o r those fo r both s a l a r i e d and prod u ction w o r k e r s ,
c h ie fly due, as p r e v i o u s ly d is c u s s e d , to the d if fe r e n c e s in fo r m u la s u sed to
compute b e n e f i t s .
54
_______Type of worker covered
Selected service periods,
annual earnings, and
method of financing
15 years:
$4, 800 per y e a r ----------------Noncontributory----------Contributory----------------$8,400 per y e a r ----------------Noncontributory------------Contributory----------------20 years:
$4, 800 per y e a r ----------------Noncontributory-----------Contributory----------------$8,400 per y e a r ----------------Noncontributory — -------Contributory-----------------
Salaried
and
production Production
$38
34
39
42
41
110
$39
39
51
48
60
76
76
147
50
50
n
56
55
1 Number of workers not
(M
42
41
(X)
(M
Salaried
$43
41
65
81
75
124
60
56
90
108
86
171
for selection of median.
D is a b ility p lan b e n e fits f o r w o r k e r s in e lig ib le f o r s o c ia l s e c u r i t y b e n e fits
w e r e g r e a t e r , as shown by com p arin g the tab u lation b elo w with the p r e v i o u s
one, than f o r e lig ib le w o r k e r s , in a l l c a s e s b ecau se of the in flu en ce of the
s p e c ia l d is a b ility b en efits a lr e a d y d is c u s s e d .
The d if fe r e n c e f o r p ro d u ctio n
w o r k e r plans (excep t f o r th ose with 15 y e a r s of s e r v i c e o r le s s ) w a s u s u a lly
s m a l l e s t b e c a u s e a la r g e p ro p o rtio n of the w o r k e r s in such p lan s belong to m u l t i
e m p lo y e r p la n s, w hich g e n e r a l ly p ro v id e d the sa m e b en efits f o r both e lig ib le
and in elig ib le w o r k e r s .
_____ Type of worker covered_____
Selected service periods,
annual earnings, and
method of financing 15*20
15 years:
$4, 800 per y e a r -------------Noncontributory----------Contributory-------------$8,400 per y e a r -------------Noncontributory--------Contributory-------------20 years:
$4, 800 per y e a r -------------Noncontributory--------Contributory-------------$8,400 per y e a r -------------Noncontributory--------Contributory--------------
Salaried
and
production Production
$60
60
89
105
105
110
$70
70
n
75
75
85
85
100
140
140
150
70
66
( X)
(M
Salaried
$75
75
90
113
106
147
90
88
95
150
142
195
75
74
n
1 Number of workers not sufficient for selection of median.
R eflectin g th ese f a c t o r s , the h ig h est p r o p o rt io n s of p r e d i s a b il it y ea rn in g s
would be p ro v id e d by s a l a r i e d w o r k e r p la n s , r e g a r d l e s s of s o c ia l s e c u r it y s ta tu s;
the lo w e s t p r o p o rt io n s would be p ro v id e d b y p lan s c o v e rin g prod u ction w o r k
e r s only.
I n d u s try .
As in the c a s e of n o r m a l r e t i r e m e n t b en efit l e v e l s , the p a tte rn
of b en efits b y in d u s t ry group showed wide d is p a r it y .
In d u strie s d istin gu ish ed
by c o lle c ti v e b a rg a in in g , e n tire financing by e m p lo y e r , and m u l t i e m p lo y e r p lan s
f o r p ro d u ctio n w o r k e r s that u s u a lly b a se d b e n e fits on s e r v i c e a lo n e , g e n e r a lly
55
r e v e a le d the lo w e s t b e n e fits .
In d u stries with a la r g e n u m b e r of nonb argain ed ,
c o n tr ib u to r y , s i n g l e - e m p lo y e r p lan s, t y p i c a lly with b e n e fits b a se d on e a rn in g s
as w e ll as s e r v i c e , u s u a lly r e v e a le d the h ig h est b e n e fits.
F o r e x a m p le , b e n e
fi t s f o r w o r k e r s q u alified f o r s o c ia l s e c u r it y in the finance in d u s t ry ( p r i m a r i l y
nonb argain ed plans) w e r e the highest and showed the w id e st d is p e r s io n at the
s e le c te d ea rn in g s l e v e l s (table 19).
The c o n stru c tio n in d u stry (dom inated by
m u ltie m p lo y e r plans) g e n e r a lly had the lo w e s t b en efits and showed li t t le v a r i a
tion in b en efits at the se le c te d earn in g s le v e l s .
A s i m i l a r p a tte rn of b en efits p r e v a i le d f o r w o r k e r s not elig ib le f o r so c ia l
s e c u r it y b en efits (table 20).
The d is p a r it y b etw een b en efits p ro vid ed elig ib le
as c o m p a re d to in e lig ib le w o r k e r s w as lik e w is e c h ie fly due to fo r m u la d if fe r e n c e s .
F o r e x am p le, in the co m m u n ication s in d u s try (p red o m in an tly telephone com pany
p lans), the ap p lication of the unred u ced n o r m a l o r m in im u m f o r m u la s (page 48)
r e s u lte d in th r e e tim e s the benefit p ro v id e d elig ib le w o r k e r s w ith 15 y e a r s of
se rvic e .
The re m a in in g in d u s t r ie s , except f o r mining, m an u factu rin g , and f i
nance, showed litt le v a r i a t i o n f r o m ben efits p ro v id e d elig ib le w o r k e r s , due m a in ly
to the high p r e v a le n c e of plans with ben efits b ased on s e r v i c e alon e.
In one
in d u stry — w h o le s a le t r a d e — b en efits f o r in elig ib le w o r k e r s d eclin ed slig h tly b e
cause som e plans did not pay b en efits u n le s s the w o r k e r w as als o elig ib le fo r
s o c ia l s e c u r it y .
Total r e t i r e m e n t incom e (p riv a te plan b en efit plus s o c ia l s e c u r i t y benefit)
as a p ro p o rtio n of p re d is a b le m e n t incom e fo llo w ed the sam e p a tt e rn as p r i v a t e
plan b e n e fits.
The p ro p o rtio n s at the 1 5 - y e a r s e r v i c e le v e l ranged f o r the
$ 4 , 8 0 0 - a - y e a r w o r k e r , as shown below , fr o m 40 p e r c e n t in the c o n stru ctio n
in d u s try to 50 p e r c e n t in fin an ce; f o r the $ 8 , 4 0 0 - a - y e a r w o r k e r , fr o m n e a r l y
25 p e r c e n t to 40 p e r c e n t , r e s p e c t i v e ly .
Selected annual earnings and service periods
$4,800
15 years
$8,400
20 years
Industry
15 years
20 years
Percent
All industries1 ---------------------------
41 .5
44.3
24. 1
2 7 .4
M in in g -------------------------------------Contract construction----------------M anufacturing--------------------------Transportation--------------------------Communications and public
u tilitie s ---------------------------------Wholesale and retail trade -------Wholesale trad e-------------------Retail tr a d e ------------------------Finance, insurance, and
real e sta te ------------------------------S e rv ice s------------------------------------
41. 3
40. 8
41.3
44. 3
44. 8
4 3 .8
44. 5
44.3
23. 7
23.3
2 4 .0
25.3
29. 0
25. 0
26. 7
25.3
3 7 .0
41 .5
41.3
4 2 .0
37. 0
4 1 .8
41.3
45. 3
24. 0
23 .8
23. 7
31. 0
2 9 .0
25. 8
23. 7
3 4 .0
48. 8
3 7 .8
55 .5
43.3
40. 7
21.6
4 8 .0
26.1
* Includes industries for which data are not shown separately.
The p ro p o rtio n s of p r e d i s a b i l i t y incom e re p la c e d , a ssu m in g the w o r k e r
w as in elig ib le f o r s o c ia l s e c u r i t y b e n e fits , w e r e , excep t in fin an ce, m uch lo w e r —
r a r e l y exceeding 25 p e r c e n t .
56
T a b le 11.
D is a b ility R e tire m e n t P r o v is io n s in P r iv a t e P e n sio n P la n s by T y p e o f E m p lo y e r Unit,
M ethod of F in a n c in g , and C o lle c t iv e B a r g a in in g S ta tu s, W in te r 1962—63
(W orkers in thousands)
—
Item
Number
Without disability
retirement
With disability
retirem ent
A ll plans
W ork ers12
Plans
W ork ers1
Plans
W o rk ers1
8 ,1 9 3
10, 895
7 ,6 2 5
4, 726
All plans studied----------------------------------------
15,818
15, 621
Single em p loy er___________________________
N oncontributory_______________________
Mentioned in a collective
bargaining a g re e m e n t----------------Not mentioned in a collective
bargaining a g re e m e n t----------------C ontributory----------------------------------------Mentioned in a collective
bargaining a g re e m e n t----------------Not mentioned in a collective
bargaining ag re e m e n t-----------------
1 4,890
10,657
11,742
8 ,4 5 4
1
:
7 ,4 8 4
5 ,5 4 4
8, 688
6, 595
7 ,4 0 6
5, 113
3, 055
1,859
3 ,9 3 3
5 ,6 6 8
|
2 ,6 4 3
4, <; 22
1, 290
746
,
;
2 ,7 8 7
3 ,2 8 8
;
2 ,901
1,9 4 0
1 ,674
2, 093
3, 823
2, 293
1, 113
1, 195
1 ,495
452
994
582
502
3 ,1 9 9
|
1,7 9 3
1 ,488
1,099
1,711
693
M ultiem ployer-------------------------------------------Non contributory-----------------------------------Mentioned in a collective
bargaining a g re e m e n t----------------Not mentioned in a collective
bargaining ag re e m e n t----------------C ontributory----------------------------------------Mentioned in a collective
bargaining ag re e m e n t----------------Not mentioned in a collective
bargaining ag re e m e n t-----------------
928
869
1
j
3 ,8 7 8
3 ,2 1 2
709
679
2, 207
1,984
219
190
1,671
1,228
810
3, 176
625
1 ,962
185
1 ,214
59
59
36
666
54
30
22
223
5
29
14
443
18
356
14
48
4
308
41
310
16
175
25
135
1
6 ,7 24
4 ,2 3 3
1 ,034
Active workers in 1961.
N OTE:
Because of rounding, sums of individual item s may not equal totals.
Table 12.
Disability Retirement Provisions in Private Pension Plans by Industry, Winter 1962—63
(W orkers in thousands)
With disability
retirem ent
A ll plans
Industry
W ork ers1
Plans
A ll plans studied__________________________
215,8 18
215,621
8, 193
10,895
7 ,6 2 5
4, 726
M in in g--------------------------------------------------------Contract con struction-----------------------------Manufacturing--------------------------------------------T ran sp o rtatio n ____________________________
Communications and public u tilitie s ----W holesale and retail trad e---------------------W holesale trad e-----------------------------------Retail trade -----------------------------------------Finance, insurance, and real e sta te ----S e r v ic e s-------------------------------------------------------
316
449
9, 257
673
849
1,627
1, 147
480
1,853
719
327
1,0 7 2
9, 678
1 ,286
1,2 7 0
920
479
440
733
308
153
301
5, 183
448
215
533
412
121
1,001
350
52
597
7, 342
962
944
386
24 3
143
436
163
163
148
4, 074
225
634
1,094
735
359
852
369
275
475
2, 336
324
326
5 34
236
298
298
145
1 Active workers in 1961.
2 Includes industries for which data are not shown separately.
NOTE:
B e c a u s e of rounding,
su m s of in divid u al it e m s m a y not eq u al to ta ls .
W ork ers1
Without disability
retirem ent
Number
Plans
W ork ers1
57
T a b le 13.
D is a b ilit y R e tire m e n t P r o v is io n s in P r iv a t e P e n sio n P la n s by N u m b e r of A c tiv e
W o r k e r s C o v e r e d , W in te r 1962—63
(W orkers in thousands)
|
With disability
*
1
retirem ent
1
Number
Worke r s 1
Plans
W ork ers1
Without disability
retirem ent
1
Plans
W o rk ers1
A ll plans
Number of workers covered
A ll plans studied----------------------------------------
15,818
15,621
Under 2 0 0 __________________________________
200 and under 500 ------------------------------------500 and under 1 ,0 0 0 --------------------------------1,0 0 0 and under 5 ,0 0 0 ----------------------------5, 000 and under 10, 0 0 0 ---------------------------1 0,000 and under 2 5 ,0 0 0 ------------------------25, 000 and under 50, 000 ------------------------5 0 ,0 0 0 and under 1 0 0 ,0 0 0 -----------------------100, 000 and o v e r ------- -------------------------------
9 ,9 1 4
2, 595
1, 336
1,4 9 0
241
145
65
17
15
7 04
810
905
3, 229
1,677
2, 171
2, 209
1, 172
2, 742
8, 193
10, 895
7 ,6 2 5
4, 726
4 ,7 0 9
1,3 9 6
781
955
159
114
56
13
10
297
445
529
2, 143
1, 117
1,6 8 5
1 ,923
913
1,8 4 3
5, 205
1, 199
555
535
82
31
9
4
5
407
366
377
1,086
560
486
286
259
899
1 Active workers in 1961.
NOTE:
Because of rounding, sums of individual item s may equal totals.
Table 14.
Minimum Age and Service Requirements for D isability Retirement in Private Pension Plans, Winter 1962—631
(W orkers in thousands)
Minimum service
requirements 2
(years)
Minimum age requirem ents34
5
A ll plans
Number W orkers
No age
requirement
Plans
W orkers
45 and under
Plans
50
W orkers
55
Plans
W orkers
Plans
60
Worke rs
Plans
W orkers
A ll plans with d is
ability retirem ent —
8, 193
10,895
6, 127
7 ,7 6 6
4 194
419
1,011
1,6 2 4
708
823
153
263
No service req uire
m ent______ _________
L ess than 5
5 ______________________
6 -9 -----------------------------1 0 ............................
11—14 _________________
15 ___________________ .
16-19 _________________
20 ___________________ ..
25
26—29 _________________
30 ---------------------------------
309
857
1 ,445
156
947
70
3 ,6 9 5
150'
384
170
1
9
410
317
236
42
2, 074
128
6 ,2 1 4
132
944
301
25
72
263
612
1,3 9 9
156
743
42
2, 507
45
207
145
8
328
197
203
42
1 ,683
107
4 ,4 0 1
27
558
191
31
1
11
13
7
-
-
15
156
10
45
70
7
15
78
36
18
42
27
15
_
_
_
7
6
2
123
_
-
66
-
108
-
6
2
~
-
143
-
161
55
39
-
“
-
105
27
533
103
39
21
51
1
-
207
16
1, 074
42
63
34
25
42
-
26
1
541
9
2
-
-
-
6
_
_
5
61
63
127
_
_
-
-
“
-
36
5
516
142
38
1 Based on a study of 1 5,818 private pension plans covering 1 5 .6 m illion active workers in 1961.
2 For those plans that specified a period of employment to be served before participation in the plan could begin, the
minimum service requirement includes the preparticipation service and the required plan m em bership service.
3 Some plans specified alternative requirem ents; in each case, the one with the earliest age or no age requirements
was selected.
4 Includes 11 plans, covering 10,000 workers that specified age 25, and 5 plan s, covering 34,000 workers that specified age 40.
5 This plan specified age 47.
NOTE:
B e c a u s e o f roun d ing, su m s o f in divid u al ite m s m a y not equal t o ta ls .
58
T a b le 15.
W aitin g P e r io d fo r D is a b ilit y R e tir e m e n t B e n e fits m P r iv a t e P e n s io n P la n s by In d ustry, W in te r 1 9 6 2 —6 3 1
(W orkers in thousands)
Waiting period
A ll plans
No waiting
period
Industry
A ll plans with disability
retirem en t -----------------------------
1
Mining ---------------------------------------Contract construction ------------Manufacturing -------------------------Transportation ------------------------Communications and
public u tilitie s -----------------------W holesale and retail trade —
W holesale tr a d e -----------------Retail trade-------------------------Finance, insurance, and
real estate -----------------------------S e r v ic e s -------------------------------------
1 and less than
6 months
N um
ber
W ork
ers
Plans
W ork
ers
38 , 193
3 1 0 ,8 9 5
3,219
3,6 1 9
153
301
5 ,1 8 3
448
52
597
7, 342
962
64
58
1,681
284
14
230
1 ,7 5 5
412
112
230
25
58
765
26
215
533
412
121
944
386
243
143
162
164
63
101
794
148
75
72
21
211
209
2
12
40
23
17
1,001
350
436
163
477
329
198
67
31
"
17
Plans
633
7 and less than
1 2 months
6 months
When accident
and sickness
benefits cease
W ork
Plans
ers
W ork
ers
Plans
W ork
ers
Plans
9 26
2 ,9 2 3
5 ,0 1 2
486
454
85
124
! 2 ,2 5 6
1 30
1
20
127
115
12
28
287
3,8 5 9
482
4
165
4
10
21
291
7
H9
1 36
106
30
3
5
1
4
10
23
9
14
4
26
24 !
2
159
16
48
48
291
2
85
6
43
3
_
-
7
W ork
ers
721
823
.
_
-
4640
5
-
612
36
8
39
29
10
88
41
1 Based on a study of 15, 818 private pension plans covering 15. 6 m illion active workers in 1961.
2 Include 211 plans, covering 6 1 ,0 0 0 w orkers, for which information was not available.
3 Includes industries for which data are not shown separately.
4 Includes 2 plans, covering 106, 000 w orkers, that deferred payment until permanent and total disability benefits under the
com pany's group life insurance program were exhausted.
N O T E:
Because of rounding, sums of individual item s may not equal totals.
59
Table 16.
Provisions for Deduction of Social Security Disability Benefits and W orkm en's Compensation Benefits
From Private Pension Plan D isability Benefits, by Industry, Winter 1962—63 1
(W orkers in thousands)
Plans deducting social security only
A ll plans
No deductions
Industry
Total
N um
ber
A ll plans with disability
retirem ent -----------------------------Mining ------------------------------------------Contract construction — ----------Manufacturing ----------------------------Transportation ---------------------------Communications and public
u tilitie s --------------------------------------W holesale and retail tr a d e -------W holesale tr a d e --------------------Retail trade ---------------------------Finance, insurance, and real
estate ----------------------------------------S e r v ic e s ----------------------------------------
W ork
ers
38, 193 31 0 , 895
153
301
5 ,1 8 3
448
52
597
7, 342
215
533
412
121
1,001
350
Plans
W ork
ers
4 ,4 0 5
5 ,0 4 0
10
962
4
262
2 ,4 6 4
309
499
3, 384
437
944
386
243
143
156
276
167
109
113
301
183
118
436
163
693
238
159
128
Plans
815
21
37
423
80
45
17
17
-
87
105
W ork
ers
2,4 3 7
20
18
1,531
81
6
6
703
-
20
58
A ll social
security
disability
benefits
W ork
Plans
ers
307
2
21
155
79
2
2
4
357
Mining ---------------------------------------------------Contract construction ------------------------Manufacturing -------------------------------------Transportation ------------------------------------Communications and public utilities
W holesale and retail trade ---------------W holesale trade ----------------------------Retail trade ------------------------------------Finance, insurance, and real estateS e r v ic e s -------------------------------------------------
1
2
3
4
971 1> 0 7 i
680
111
17
546
25
10
212
799
60
108
30
30
280
25
3
200
200
62
5
49
8
56
5
212
111
745
127
2
-
1
45
8
33
-
( 4)
(4 )
291
-
22
12
328
48
"
25
1 ,6 7 3
Because of rounding, sums of individual item s may not equal totals.
18
223
-
1 ,007
-
-
8
683
!
36
-
1,051
35
-
306
5
-
381
15
15
-
12
66
-
100
8
-
-
Information
not available
2 ,2 6 5
329
79
8
69
1 ,4 3 7 1 ,5 7 2
34
383
4
19
26
41
16
14
25
12
165
155
10
313
56
1
193
7
12
12
85
25
25
Based on a study of 15, 818 private pension plans covering 1 5.6 m illion active workers in 1961.
Includes 8 plans covering 12, 000 workers that used other deductions, such as $ 85 a month.
Includes industries for which data are not shown separately.
Fewer than 500 w orkers.
N OTE:
-
Plans
deducting
workm en's
comp ensation
only
17
606
60
23
5
5
1 ,0 30
-
-
39
5
$ 80 a month
(subject to
minimum
form ula)1
23
W ork
Plans
ers
.
18
218
76
Plans deducting social security and
workmen's compensation
A ll social
One -half
security
social security
disability
benefits and
benefits and
w orkm en's
workmen's
compensation
compensation
All plans with disability retirem ent
O ne-half
social
security
benefits
W ork
Plans
ers
2
6
10
60
T ab le 17. M on th ly P r iv a te P e n sio n P la n D is a b ilit y R e tir e m e n t B e n e fits 1 fo r W o r k e r s E lig ib le f o r t
S o c ia l S e c u r ity D is a b ility B e n e fit s , by S e le c te d A s s u m e d A nn ual E a r n in g s L e v e ls
and S e r v ic e P e r io d s , W in te r 1962—6 3 2
(W orkers in thousands)
A s s u m e d annual earnings
Monthly benefit
$ 4 , 80 0
$ 3 , 600
Pla ns
Workers
P la n s
J
$ 6 , 000
Workers
P lan s
$8 , 400
W or k e rs
Plan s
Workers
10 y e a r s of s e r v ic e
T o t a l ____________________________________
3,774
None 3 ___________________________________
Un der $ 1 0 _____________________________
$ 10 and unde r $ 2 0 ----------— $ 2 0 and under $ 3 0 ------------- -----------$ 30 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 ---------------------------$ 6 0 and under $ 7 0 ------------$ 7 0 and under $ 8 0 —
$ 8 0 and under $ 9 0 ---------------------------$ 90 and unde r $ 1 0 0 -------------------------$ 100 and under $ 1 2 5 --------------------------$ 125 and und er $ 150 __ ------$ 150 and und er $ 1 7 5 ----------------------$ 175 and und er $ 200 _ ------- ----$ 2 0 0 and o v e r
_ — -------- _ —
i
3,116
3, 774
3, 116
3,774
3, 116
3,7 7 4
3, 116
216
887
554
566
285
644
212
143
44
5
200
4 18
-
244
185
398
1,483
314
218
82
38
88
13
9
45
-
262
117
1, 172
452
340
685
193
207
13
69
10
4 254
-
237
109
302
1,487
215
294
149
67
116
49
16
77
-
232
116
788
626
399
592
375
213
82
10
6
86
36
4 213
-
164
110
208
1,404
386
162
79
194
175
31
23
137
23
20
-
~
-
-
-
-
226
95
36
623
759
709
358
208
83
63
139
132
27
10
41
265
109
70
94
1,251
231
307
225
131
138
28
65
270
79
16
41
63
i
15 y e a r s of s e r v i c e
T o t a l __________________________________
7, 643
9, 605
7, 643
9,6 05
7, 643
9,605
7, 643
9, 605
N o n e 3 __ -------------------- ------- ------------Un der $ 10--------------------------------------------$ 10 and unde r $ 2 0 --------------------------$ 20 and under $ 30 - ----------------------$ 3 0 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 ------- ----------------$ 6 0 and under $ 7 0 --------------------------$ 7 0 and under $ 8 0 --------------------------$ 8 0 and under $ 9 0 ------- ----------------$ 9 0 and under $ 1 0 0 -------------------------$ 100 and under $ 1 2 5 ----------------------$ 125 and under $ 15 0 ----------------------$ 150 and under $ 1 7 5 ----------------------$ 175 and under $ 200 ----------------------$ 2 0 0 and under $ 2 2 5 ----------------------$ 225 and under $ 250 ----------------------$ 250 and ove r --------------------------- -----
601
103
1, 561
644
1,846
943
507
746
103
124
192
4 27 3
-
857
109
583
705
3,532
1,884
821
305
41 9
126
132
131
_
-
650
119
601
1, 141
1,760
993
47 2
1,061
126
203
193
50
230
4 44
-
850
77
273
1,489
2, 744
1,679
649
721
372
311
159
186
54
39
-
555
122
153
1,0 60
1,881
766
852
918
375
242
259
141
26
40
4 25 3
-
523
123
43 6
1, 197
2, 285
1,710
765
713
395
375
43 9
393
105
90
58
-
552
22
65
249
1, 262
1, 096
945
903
332
390
569
560
247
64
20
89
215
-
~
-
-
-
63
417
42
190
465
2, 033
2, 374
736
350
385
224
291
995
330
403
146
122
30
70
~
20 y e a r s of s e r v i c e
T o t a l ------------------------------------------------------
7,9 30
None 3 ---------------------------------------------------Und er $ 1 0 ____________________________
$ 10 and unde r $ 2 0 --------------------------$ 2 0 and under $ 3 0 --------------------------$ 3 0 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and under $ 7 0 ---------- -------------$ 7 0 and under $ 8 0 --------------------------$ 8 0 and under $ 9 0 --------------------------$ 90 and unde r $ 1 0 0 -------------------------$ 100 and under $ 1 2 5 ----------------------$ 125 and under $ 1 5 0 ----------------------$ 150 and under $ 1 7 5 ----------------------$ 175 and under $ 2 0 0 ----------------------$ 2 0 0 and under $ 2 2 5 ----------------------$ 2 2 5 and under $ 2 5 0 ----------------------$ 2 5 0 and under $ 2 7 5 ----------------------$ 2 7 5 and under $ 3 0 0 ----------------------$ 3 0 0 and o v e r ------------------------------------
421
227
744
1,055
746
945
1, 330
1,07 3
169
187
562
412
15
4 44
-
See footnotes at end of table.
-
10, 603
7, 930
10, 603
545
162
332
47 4
1,482
1, 524
3, 788
891
353
529
173
278
32
39
-
526
107
158
695
1, 399
731
1, 359
936
260
491
663
279
39
229
14
4 44
579
60
178
1,222
700
935
3, 985
709
421
540
509
520
110
78
18
39
-
-
-
-
-
-
-
-
-
-
"
"
“
-
~
7,930
49 3
26
38
233
831
1, 343
1,485
703
333
438
842
643
181
40
23
225
10
4 43
-
“
10, 603
7,930
10, 603
45 8
71
109
361
1, 348
749
3, 630
640
438
671
395
893
47 3
196
55
69
16
480
20
14
127
256
531
889
1,487
44 4
338
1, 067
655
655
319
162
151
330
30
78
318
33
18
63
-
220
“
67
58
75
30
333
616
2, 551
1, 242
1, 342
294
386
561
692
736
254
436
210
61
T a b le 17. M on th ly P r iv a te P e n sio n P la n D is a b ilit y R e tire m e n t B e n e fits 1 fo r W o r k e r s E lig ib le for
S o c ia l S e c u r ity D is a b ility B e n e fits , b y S e le c te d A s s u m e d A n n ual E a r n in g s L e v e ls
and S e r v ic e P e r io d s , W in te r 1962—6 3 2— C ontinued
(W orkers in thousands)
A s s u m e d annual earnings
Monthly benefit
$3
Plan s
600
$ 4 ;, 8 0 0
Workers
Pla ns
$ 6 , 000
Pla ns
Workers
$8 ,4 0 0
W or k e rs
Pla ns
Workers
25 ye a r s of s e r v i c e
T o t a l ------------------------------------------------------
8, 080
10, 811
8, 080
10, 811
8, 080
10, 811
8, 08 0
10, 81 1
N o n e 3--------------------------- ----------------------Under $ 10 ------------------------------------------$ 1 0 and unde r $ 2 0 --------------------------$ 2 0 and under $ 3 0 --------------------------$ 3 0 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and unde r $ 7 0 --------------------------$ 7 0 and under $ 8 0 --------------------------$ 8 0 and under $ 9 0 --------------------------$ 9 0 and under $ 100 -----------------------$ 100 and under $ 1 2 5 ----------------------$ 125 and und er $ 1 5 0 ----------------------$ 150 and under $ 1 7 5 ----------------------$ 175 and unde r $ 200 ----------------------$ 2 0 0 and under $ 2 2 5 ----------------------$ 2 2 5 and under $ 250 ----------------------$ 2 5 0 and under $ 2 7 5 -------- — ----$ 2 7 5 and under $ 3 0 0 ----------------------$ 300 and under $ 35 0 ----------------------$ 3 5 0 and o v e r ------------- --------------------
436
66
505
1,010
868
445
985
1,482
584
502
125
835
40
153
4 44
-
49 0
151
145
508
1, 301
602
2, 224
2, 011
1,866
505
294
519
112
38
43
-
443
22
178
544
808
911
779
1,418
611
564
208
1, 039
95
364
22
31
4 43
591
39
145
234
1, 346
438
1,780
2, 170
1, 709
44 7
210
1, 089
342
131
37
66
37
-
-
-
391
30
179
294
301
332
517
724
604
464
302
074
661
397
303
93
46
102
-
-
-
-
-
-
-
-
409
20
129
132
565
388
1,204
1,404
693
523
291
1, 218
422
298
81
214
12
4 77
-
-
-
-
377
20
137
99
246
84
585
1,028
41 0
795
733
1, 288
440
407
621
265
114
67
255
29
80
361
30
71
202
269
250
1,400
802
1, 293
245
1, 101
1,711
510
283
996
347
142
252
303
141
103
i
-
1,
2,
1,
1,
|
-
-
30 y e a r s of s e r v i c e
T o t a l ----------
— — —
-------
None 3 -------------------------- ----------------Und er $ 1 0 ----------- — -------- -------$ 10 and unde r $ 2 0 --------------------------$ 2 0 and under $ 30 . _ _ ----$ 30 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and und er $ 7 0 ------------- ----------$ 7 0 and unde r $ 8 0 --------------------------$ 8 0 and under $ 9 0 --------------------------$ 9 0 and under $ 1 0 0 ------------------------$ 1 00 and und er $ 1 2 5 ----------------------$ 125 and under $ 1 5 0 ----------------------$ 1 50 and under $ 1 7 5 -----------$ 175 and under $ 200 ----------------------$ 2 0 0 and under $ 2 2 5 ----------------------$ 2 2 5 and under $ 2 5 0 ----------------------$ 2 5 0 and under $ 2 7 5 -------------- ----$ 2 7 5 and under $ 3 0 0 -------------------$ 3 0 0 and under $ 350 ----------------------$ 3 5 0 and und er $ 4 0 0 ----------------------$ 4 0 0 and o v e r ------------------------------------
1
2
3
4
8, 084
1 0, 87 1
8,0 84
10, 871
8,084
10,871
8 , 084
10,871
41 8
12
41 9
45 8
1, 138
589
561
1,031
1,201
74 0
296
42 9
565
26
157
4 44
496
16
136
352
1, 372
558
1, 294
1,457
1, 968
1,474
651
720
217
58
58
43
457
174
72
256
299
383
2, 147
1,000
2, 110
1,482
507
844
588
242
141
79
90
385
43
11
200
510
329
541
919
1, 180
785
45 6
577
1, 174
316
270
262
29
20
10
4 67
313
100
40
305
245
305
1, 228
697
1, 692
2, 282
565
761
821
567
360
250
143
81
28
90
366
31
7
184
178
172
233
803
607
628
453
854
1, 158
41 4
698
409
217
182
27 2
105
27
86
305
86
29
196
198
252
1, 061
601
754
1, 195
261
479
2, 304
439
40 0
680
511
225
104
490
160
142
-
42 2
42
9
545
638
356
905
831
1, 157
90 0
448
614
693
262
168
27
4 67
-
-
-
-
-
-
_
-
-
-
-
-
-
-
-
-
-
~
“
~
“
-
“
-
-
Computation of benefit amounts was based on current benefit form ulas, assuming a constant level of earnings.
Based on a study of 15,8 1 8 private pension plans covering 1 5 .6 m illion active workers in 1961.
No pension was provided because of the deduction of assum ed social security disability benefits.
Where higher benefit amounts were relatively few and widely scattered they were accumulated in this interval.
N OTE:
Because of rounding,
sums of individual item s may not equal totals.
62
T a b le 18.
M on th ly P r iv a te P e n sio n P la n D is a b ilit y R e tir e m e n t B e n e fits 1 fo r W o r k e r s In e lig ib le fo r
S o c ia l S e c u r ity D is a b ilit y B e n e fit s , b y S e le c t e d A s s u m e d A n n ual E a r n in g s L e v e ls
and S e r v ic e P e r io d s , W in te r 1962—6 3 2
(W orkers in thousands)
A s s u m e d annual earn ing s
$ 3 , 600
Monthly benefit
Plans
$ 4 , , 800
Workers
Plans
$ 6 , 000
Workers
Plans
$ 8 , 40 0
[
Workers
!
Plans
j
Workers
10 y e a r s of s e r v i c e
Tot al -------------------------------------------------------
3, 774
3, 116
3, 774
3, 116
3, 774
3, 116
3,774
3, 116
None 3 --------------------------------------------------Under $ 1 0 -------------------------------------------$ 1 0 and under $ 2 0 --------------------------$ 2 0 and under $ 3 0 --------------------------$ 3 0 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and under $ 7 0 __________________
$ 7 0 and under $ 8 0 __________________
$ 8 0 and under $ 9 0 --------------------------$ 9 0 and under $ 1 0 0 -------------------------$ 100 and under $ 1 2 5 ----------------------$ 125 and under $ 1 5 0 ----------------------$ 150 and under $ 1 7 5 ----------------------$ 175 and under $ 2 0 0 ----------------------$ 2 0 0 and under $ 2 2 5 ----------------------$ 2 2 5 and under $ 2 5 0 ----------------------$ 2 5 0 and under $ 2 7 5 ----------------------$ 2 7 5 and under $ 3 0 0 ----------------------$ 3 0 0 and under $ 3 5 0 ----------------------$ 3 5 0 and o v e r ------------------------------------
695
812
499
48 4
280
135
289
137
45
7
215
152
3
7
4 14
-
181
137
373
302
161
95
1, 288
153
106
74
36
126
13
56
16
-
695
38
1, 175
370
333
180
238
194
25
87
10
40 4
1
2
2
4 20
-
181
52
281
340
192
110
1, 118
111
227
161
16
231
11
13
6
67
154
60
135
359
223
122
1,093
136
148
91
100
298
76
31
24
13
43
11
-
680
20
30
558
754
186
40 3
123
146
66
134
291
36
16
48
262
145
27
55
236
201
184
1,089
108
186
90
17
326
172
110
54
38
11
1
19
46
-
-
-
-
-
-
-
-
684
39
764
555
391
77
44 0
186
85
21
7
247
43
211
4
1
6
4 13
-
-
-
-
-
“
-
!
;
1
i
!
-
j
,
j
j
|
!
1
6
7
7
15 y e a r s of s e r v i c e
T o t a l ------------------------------------------------------
7,6 43
9, 605
7,6 43
9, 605
7,643
9, 605
7,643
9, 605
None 3 ---------------------------------------------------Und er $ 1 0 -------------------------------------------$ 10 and unde r $ 2 0 --------------------------$ 2 0 and under $ 3 0 --------------------------$ 3 0 and und er $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and under $ 7 0 --------------------------$ 7 0 and under $ 8 0 ---------------------------$ 8 0 and under $ 9 0 --------------------------$ 90 and und er $ 100 -----------------------$ 100 and under $ 1 2 5 ----------------------$ 1 2 5 and under $ 1 5 0 ----------------------$ 150 and under $ 1 7 5 ----------------------$ 175 and under $ 2 0 0 ----------------------$ 2 0 0 and under $ 2 2 5 ----------------------$ 2 2 5 and under $ 2 5 0 ----------------------$ 2 5 0 and under $ 2 7 5 ---------------------$ 2 7 5 and under $ 3 0 0 ----------------------$ 3 0 0 and under $ 3 5 0 ----------------------$ 350 and o v e r ------------------------------------
683
41
1,219
567
937
628
795
790
707
182
396
520
13
149
4 16
269
21
43 0
534
866
1,415
942
689
948
1,239
625
1,446
36
114
29
683
51
477
886
932
672
651
1, 107
699
261
429
335
252
179
7
8
4 14
269
38
175
544
751
530
930
1,596
767
1,458
499
1, 593
209
140
26
55
24
668
51
68
848
1,001
43 0
1,017
671
1, 142
330
431
447
41
207
266
2
2
6
46
233
38
167
348
71 2
49 4
880
527
1,831
1,286
583
1,630
306
335
136
15
11
43
35
668
21
49
120
544
731
910
637
857
418
789
968
223
267
32
99
226
53
233
35
128
262
576
369
87 1
395
712
1, 07 1
423
2,975
262
481
278
27 2
53
109
See footn otes at end of ta b le .
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
'
■
“
“
-
-
-
-
"
31
-
100
63
T a b le 18.
M on th ly P r iv a te P e n sio n P lan D is a b ilit y R e tir e m e n t B e n e fits 1 fo r W o r k e r s In e lig ib le fo r
S o c ia l S e c u r ity D is a b ilit y B e n e fit s , b y S e le c te d A s s u m e d A nn ual E a r n in g s L e v e ls
and S e r v ic e P e r io d s , W in te r 1962—6 3 2— C ontinu ed
(W orkers in thousands)
A s s u m e d annual earnings
$ 3 , 600
Monthly benefit
Pla ns
$ 4 , 80 0
Workers
|
Pla ns
$ 6 , 000
| Workers
P lans
$8 , , 40 0
Workers
P lan s
| Workers
20 y e a r s <
of s e r v ic e
T o t a l ------------------------------------------------------
7,930
10, 603
7, 930
10, 603
7, 930
10, 603
7,9 30
10,603
None 3 ---------------------------------------------------Un der $ 1 0 ------------------------------------------$ 1 0 and unde r $ 2 0 --------------------------$ 2 0 and under $ 3 0 — ----------------------$ 3 0 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and under $ 7 0 --------------------------$ 7 0 and under $ 8 0 --------------------------$ 8 0 and under $ 9 0 --------------------------$ 9 0 and under $ 1 0 0 -------------------------$ 100 and under $ 1 2 5 ----------------------$ 125 and under $ 1 5 0 ----------------------$ 150 and under $ 17 5 ----------------------$ 175 and under $ 200 ----------------------$ 2 0 0 and under $ 2 2 5 ----------------------$ 225 and under $ 2 5 0 ----------------------$ 2 50 and under $ 275 ----------------------$ 275 and under $ 300 ----------------------$ 3 0 0 and under $ 35 0 ----------------------$ 350 and under $ 4 0 0 —--------------------$ 4 0 0 and o v e r ________________________
624
60
561
930
578
795
360
1, 539
314
414
436
974
36
152
9
135
4 13
-
229
26
221
347
514
748
1,418
897
542
1,451
489
3, 077
423
150
36
23
11
-
624
50
77
542
1, 212
620
473
1, 107
428
749
427
964
52
389
23
173
5
1
4 14
-
229
33
68
241
536
550
1, 372
761
531
1, 541
511
3, 072
43 9
49 4
81
96
14
13
22
-
606
25
18
152
67 3
1, 032
672
606
20
44 9
564
490
1, 317
297
214
38
394
19
43
15
-
160
64
60
200
363
40 8
1,451
626
411
460
526
4 , 168
628
367
227
319
43
87
36
-
-
“
-
96
197
423
239
1, 573
360
398
712
1, 106
692
613
153
331
54
19
240
20
45
25
160
30
63
175
291
358
1, 222
5 34
382
320
46 4
2, 518
1,767
788
40 3
299
242
134
231
80
84
57
912
4
-
8
25 y e a r s of s e r v i c e
T o t a l ------------------------------------------------------
8, 080
10,811
8, 080
10,811
8, 080
10,811
8, 080
10, 811
None 3 ---------------------------------------------------Und er $ 1 0 -------------------------------------------$ 10 and unde r $ 2 0 --------------------------$ 20 and under $ 3 0 --------------------------$ 3 0 and under $ 4 0 --------------------------$ 4 0 and under $ 5 0 --------------------------$ 5 0 and under $ 6 0 --------------------------$ 6 0 and unde r $ 7 0 --------------------------$ 7 0 and under $ 8 0 --------------------------$ 8 0 and under $ 9 0 --------------------------$ 9 0 and unde r $ 1 0 0 -------------------------$ 100 and under $ 1 2 5 ----------------------$ 125 and under $ 1 5 0 ----------------------$ 150 and under $ 1 7 5 ----------------------$ 175 and under $ 200 ----------------------$ 2 0 0 and under $ 2 2 5 ----------------------$ 225 and under $ 250 ----------------------$250
$ 2 7 5 ----------- ----------$ 2 7 5 and under $ 3 0 0 ----------------------$ 300 and under $ 350 -------------------$ 3 5 0 and under $ 4 0 0 ----------------------$ 4 0 0 and ov e r ---------------------------------
623
10
414
681
661
381
875
712
883
641
480
784
570
74
39
105
4 147
-
227
13
106
241
384
422
1,644
464
1,072
1,362
506
1,894
1,916
436
49
50
27
-
623
20
53
361
641
689
706
681
847
526
396
1,034
76 2
336
48
171
16
155
*15
-
227
30
53
115
334
319
1,529
45 3
765
605
20
9
63
49 2
329
1,084
49 4
776
523
607
77 5
1, 173
354
155
329
40
199
159
30
85
109
219
237
1, 375
470
689
349
358
1,730
3, 387
532
301
167
237
286
20
73
-
586
20
22
33
182
150
30
36
93
201
216
1, 310
361
532
302
337
1,465
1,617
327
2, 147
341
236
209
242
294
266
and u n d e r
See footn otes at end of ta b le .
'
444
371
3, 176
2, 002
325
244
325
37
27
35
-
7
4 46
-
"
66
524
637
619
808
574
870
721
357
734
502
125
289
254
43
54
60
99
64
T a b le 18.
M on th ly P r iv a te P e n s io n P la n D is a b ilit y R e tir e m e n t B e n e fits 1 fo r W o r k e r s In e lig ib le fo r
S o c ia l S e c u r ity D is a b ilit y B e n e fit s , b y S e le c te d A s s u m e d A nn ual E a r n in g s L e v e ls
and S e r v ic e P e r io d s , W in te r 1962—6 3 2— C ontinu ed
(Workers in thousands)
Assum ed annual earnings
$ 4 , 800
$ 3 , 600
Monthly benefits
Plans
Worke rs
Plans
$6,
W orkers
Plans
000
$8,,400
W orkers
Plans
W orkers
10,871
8, 084
10, 871
30 years of service
T o ta l________________________________
None 3 -----------------------------------------------Under $ 1 0 ---------------------------------------$ 10 and under $ 2 0 ------------------------$ 2 0 and under $ 3 0 ------------------------$ 30 and unde r $ 4 0 ------------------------$ 4 0 and under $ 5 0 ------------------------$ 5 0 and under $ 6 0 ------------------------$ 6 0 and under $ 7 0 ------------------------$ 70 and under $ 8 0 ------------------------$ 8 0 and under $ 9 0 ------------------------and under $ 1 00-----------------------$ 100 and under $ 1 2 5 --------------------$ 125 and under $ 1 5 0 --------------------$ 150 and under $ 1 7 5 --------------------$ 175 and under $ 200 --------------------$20 0 and under $225 --------------------$225 and under $ 2 5 0 --------------------$ 250 and under $ 275 -----------------$ 275 and under $ 300 --------------------$ 300 and under $35 0 --------------------$ 350 and under $40 0 --------------------$400 and under $50 0 --------------------$ 500 and o v e r ------ ------------------------
$90
8. 084
10
625
363
293
712
497
549
, 112
616
537
759
879
216
578
54
14
270
-
1
4
10.871
279
13
74
139
312
339
1, 340
797
639
333
1,817
1,7 7 4
732
1,8 5 4
312
38
79
8, 084
20
624
3
339
560
193
765
841
575
716
781
872
330
971
85
77
136
15
181
10,871
238
30
63
97
233
260
1 ,2 1 9
653
546
341
722
2 ,9 1 4
629
1 ,9 8 0
267
275
263
56
-
-
-
86-
-
-
-
-
-
-
-
-
“
~
-
-
-
4
8, 084
202
605
32
493
225
548
860
492
579
874
606
741
923
299
296
187
68
14
4170
50
-
1 See footnote 1, table 17.
2 See footnote 2, table 17.
3 No pension was provided to workers ineligible for social security disability benefits.
4 See footnote 4. table 17.
NOTE: Because of rounding, sums of individual items may not equal totals.
159
30
21
150
202
204
1 ,2 0 9
441
547
263
635
1 ,477
710
3, 287
386
198
313
207
151
205
78
-
~
202
586
150
30
19
167
93
242
830
356
476
687
81
175
157
1, 119
447
470
216
419
562
1, 219
1, 592
370
1 ,7 7 4
561
255
148
428
312
269
95
666
660
767
688
367
416
292
259
328
55
55
53
21
Table 19. M edian M onthly P rivate P en sion Plan D isab ility B enefits for W orkers E ligib le for
S ocial Security D isab ility B enefits, at S elected A ssum ed Annual Earnings L evels
and Service P eriod s, by Industry, W inter 1962—63
Industry
All industries1 ------------------------------------------------M ining-----------------------------------------------------------Contract con stru ction ------------------------------------M anufacturing------------------------------------------------T ransportation-----------------------------------------------Communications and public u tilities---------------W holesale and retail tra d e-----------------------------W holesale tra d e-----------------------------------------Retail tr a d e -----------------------------------------------Finance, insurance, and real e sta te ---------------S e r v ic e s----------------------------------------------------------
Assumed annual earnings levels and service periods
$4, 800
$8, 400
15 years
15 years
20 years
20 years
$39
39
36
39
50
21
39
38
42
75
24
$51
52
48
52
50
21
40
40
55
100
46
$42
39
36
42
50
41
42
39
91
165
24
$65
76
48
60
50
76
54
40
111
209
56
1 Includes industries for which data are not shown separately.
NOTE: Because of rounding, sums of individual item s may not equal totals.
Table 20. Median Monthly Private Pension Plan D isability Benefits for W orkers Ineligible for
Social Security D isability Benefits, at Selected Assum ed Annual Earnings Levels
and Service P eriods, by Industry, Winter 1962—63
Industry
All industries1------------------------------------------------M in in g------------------------------------------------------------Contract con stru ction ------------------------------------M anufacturing------------------------------------------------T ransportation-----------------------------------------------Communications and public u tilities---------------W holesale and retail tra d e-----------------------------W holesale tra d e-----------------------------------------Retail trade—----- ———— -------—---- ----- --------—
Finance, insurance, and real estate---------------Services ----------------------------------------------------------
Assum ed annual earnings levels and service periods
$8,400
$4, 800
15 years
20 years
15 years
20 years
-$68
90
36
80
50
60
36
29
42
120
30
$85
100
48
90
50
85
40
36
56
133
60
1 Includes industries for which data are not shown separately.
NOTE: Because of rounding, sums of individual item s may not equal totals.
$90
100
38
90
50
105
39
30
94
210
50
$100
100
50
100
50
140
51
36
120
233
73
Chapter IV. Early Retirement
In c o n tra s t to d isa b ility re tire m e n t, w hich m ay be re g a rd e d a s a sp e c ia l
type of e a rly re tire m e n t d esig n ed e x p re s s ly fo r w o rk e rs who a r e p e rm a n e n tly
in c a p a c ita te d , re g u la r e a rly r e tire m e n t p ro v isio n s c o v e r situ a tio n s w h e re , fo r
o th e r re a s o n s , re tir e m e n t b e fo re n o rm a l re tir e m e n t age (u su ally age 65) a p p e a rs
d e s ira b le o r n e c e s s a ry . F o r ex am p le, som e w o rk e rs m ay d e s ire to r e tir e e a rly
b e c a u se of ill h e a lth , lo ss of sk ill, o r o th e r p e rso n a l re a s o n s . F o r th e se and
o th e r re a s o n s re la te d to ch an g es in m anp ow er re q u ire m e n ts , e m p lo y e rs m ay a lso
w ish to r e tir e w o rk e r^ b e fo re the n o rm a l r e tire m e n t age.
E a rly r e tir e m e n t p ro v isio n s p e rm it w o rk e rs m eetin g sp e c ifie d age o r s e r v
ic e re q u ire m e n ts , o r both, to r e tir e on an im m e d ia te , re d u c e d m onthly r e t i r e
m en t b en efit pay able fo r life . 56 The b en efits a r e u su a lly m uch le s s th an th o se
fo r d is a b ility r e tire m e n t b e c a u se , a s po in ted out in the p re v io u s c h a p te r, d is
a b ility r e tire m e n t b e n e fits a re fre q u en tly equal to o r g r e a te r than n o rm a l r e
tire m e n t b e n e fits fo r eq u iv alen t e a rn in g s and s e rv ic e . A lthough e a rly re tir e m e n t
b en efits a r e alw ays p ay able im m e d ia te ly , som e p lan s allow the w o rk e r to d e fe r
the re c e ip t of b e n e fits u n til he re a c h e s n o rm a l r e tir e m e n t ag e, w hen they a re
payable in the fu ll am ount.
P r e v a len ce of E a rly R e tire m e n t P ro v isio n and M inim um R e q u ire m e n ts 57
A bout 3 out of 4 p riv a te p en sio n p la n s, w ith th e sam e p ro p o rtio n of w o rk e rs ,
p ro v id e d e a rly re tire m e n t (table 21). The p ro v isio n w as fa r m o re com m on am ong
sin g le -e m p lo y e r p lan s th an am ong m u ltie m p lo y e r p lan s. T his m a rk e d d ifferen ce
w as a lso re fle c te d in the g r e a te r p re v a le n c e of e a rly re tire m e n t p ro v isio n s in
c o n trib u to ry p la n s, in p lan s not m en tio n ed in c o lle c tiv e b arg ain in g a g re e m e n ts, and
in s a la rie d w o rk e rs 1 p la n s. The p re v a le n c e of e a rly re tir e m e n t p ro v isio n s am ong
in d u s trie s w as a lso stro n g ly in flu en ced by the p re s e n c e of m u ltie m p lo y e r p lan s.
In g e n e ra l, le n g th -o f-s e rv ic e re q u ire m e n ts fo r e a rly r e tire m e n t w e re not
sig n ific a n tly d iffe re n t fro m th o se fo r d isa b ility re tire m e n t. F ifte e n y e a rs of
se rv ic e w as the m o st com m on re q u ire m e n t fo r e a rly re tire m e n t a s it w as fo r
d isa b ility re tire m e n t— m o re than 1 out of 4 p lan s and w o rk e rs (tab le 22). T en
y e a rs w e re n eed ed in a six th of the p lan s w ith a fo u rth of the w o rk e rs . A fo u rth
of th e w o rk e rs w e re in p lan s re q u irin g 20 y e a rs o r m o re of s e rv ic e , and a fifth
of th e w o rk e rs w e re in p lan s specify ing le s s than 10 y e a rs .
M inim u m age re q u ire m e n ts , on the o th e r hand, w e re m uch m o re com m on
fo r e a rly than fo r d is a b ility re tire m e n t, and w h ere sp e c ifie d , w ere a t h ig h e r
a g e s . A lm o st 95 p e rc e n t of the plans w ith e a rly re tire m e n t, w ith o v er 85 p e rc e n t
of the w o rk e rs , stip u la te d age 55 o r 60. The co m b in atio n s of age 55 and 10 o r
15 y e a rs of s e rv ic e w ere sp e c ifie d in p lan s w ith o v er 20 p e rc e n t of the w o rk e rs.
A n o th er 30 p e rc e n t w e re in p lan s re q u irin g the a tta in m e n t of age 60 and 10 o r
15 y e a rs of s e rv ic e .
^ If the full accrued benefit is payable before the normal retirement age specified in the plans, it is regarded
in this study as a normal retirement benefit unless the employer's consent is required. (See definition of normal re
tirement age on p. 5.)
57 This section summarizes detailed data appearing in BLS Bulletin 1407, 1964, op. cit. , pp. 24-35.
67
68
The e m p lo y e r's co n sen t o r h is re q u e s t— a con ditio n n o t p re s e n t in d isa b ility
re tire m e n t— w as re q u ire d by a lm o st h alf the p lan s w ith e a rly re tire m e n t, c o v e r
ing tw o -fifth s of the w o rk e rs .
Plans ___
Workers
Number
Number Percent (thousands) Percent
Conditions for early retirement
11, 786
100.0
12,099
100.0
All plans with early retirement ----------------------60.5
6,327
52.3
7,133
Solely at employee's option -------------------------47. 7
39.5
5, 772
4,653
Employer's consent or request required------------44.4
5,369
3,729
31.6
With employer's consent--------------------------273
2.3
At employer's request-------------------------------89
.7
3.3
389
At employer's request or consent ---------------247
2.0
55
.5
219
1.8
Under mutually satisfactory conditions -------.1
43
12
.4
Other-----------------------------------------------------NOTE: Because of rounding, sums of individual items may not equal totals.
A lm o st a ll of th e se plans w e re s in g le -e m p lo y e r p la n s, b eca u se only a sm a ll
n u m b er of m u ltie m p lo y e r p lan s had e a rly r e tire m e n t p ro v isio n s. F u r th e rm o re ,
in m u ltie m p lo y e r p lan s w ith e a rly re tir e m e n t p ro v isio n s, th e re w ould be g re a t
d ifficu lty in d eciding w hich e m p lo y e r’s co n sen t m u st be ob tain ed .
B en efits P ay ab le U nder E a rly R e tire m e n t
To c o m p e n sa te fo r the lo n g e r p e rio d of tim e o v er w hich they a re lik ely
to be p aid , e a rly r e tire m e n t b e n e fits w e re u su a lly com p uted by red u cin g the
a c c ru e d n o rm a l r e tire m e n t b en efit by a fa c to r d e te rm in e d by the w o rk e r's age
a t re tire m e n t. In ad d itio n , e a rly r e tire m e n t b en efits w e re s m a lle r than n o rm a l
b e n e fits b e c a u se the w o rk e r w ould, of c o u rs e , have le s s se rv ic e acc u m u la te d
a t e a rly re tire m e n t. H o w ev er, not a ll w o rk e rs re tirin g a t age 60 w ould re c e iv e
s m a lle r b en efits than they w ould be e n title d to a t 65, a p a rt fro m the red u ctio n
due to s h o rte r s e rv ic e . A bout 1 ,2 0 0 ,0 0 0 w o rk e rs w ere in plans th a t did not
re q u ire a re d u c tio n in b e n e fits at age 60; about a m illio n w e re in p lan s w ith
n o rm a l r e tire m e n t a t 60 (u su ally w ith e a rly re tire m e n t a t lo w er ag es); and a lm o st
2 0 0 , 000 w ere in p lan s th a t p aid the sam e b en efits a t age 60 as a t age 65. 58
E a rly re tir e m e n t b en efits w e re alw ays pay able im m e d ia te ly upon re tire m e n t,
and in about h alf the p la n s, c o v erin g the sam e p ro p o rtio n of w o rk e rs , m onthly
b en efits had to s ta r t a t th a t tim e . 59 T he rem ain in g plan s p e rm itte d the w o rk e r
to d e fe r the re c e ip t of b e n e fits u n til n o rm a l r e tire m e n t age o r, in som e p la n s,
u n til any e a r lie r age a t w hich he w as elig ib le.
________________ Percent
Time of benefit payment
Plans
All plans with early retirement-------------------------100.0
Immediately only--------------------------------------------50.1
Immediately or at age 6 5 ---------------------------------22.0
Immediately or any time up to age 6 5 ---------------27.9
NOTE: Because of rounding, sums of individual items may not equal totals.
Workers
100.0
47.6
34.9
17.6
58 The normal retirement age in these plans was 65 because the employer's consent was required to retire prior
to that age.
59 Includes 169 plans with 1. 2 million workers which provided unreduced benefits. Since benefits are not
increased (except for service) in the event of postponement, in most instances, workers retiring early in these plans
would receive benefits immediately.
69
The ch ief adv antage of postponing the re c e ip t of b en efits u n til n o rm a l r e
tire m e n t age is , of c o u rs e , th a t a h ig h er b en efit w ould be paid. F o r ex am p le,
an a c tu a ria l eq u iv alen t 60 ty p ic a lly r e s u lts in a m a le w o rk e r re c e iv in g a t age
60 roug hly tw o -th ird s of the b en efit pay able a t age 65. If the b en efit w as d e
f e r r e d u n til age 65, he w ould re c e iv e the fu ll b en efit b a se d on s e rv ic e to e a rly
r e tire m e n t d a te , an in c re a s e of about 50 p e rc e n t.
The type of em p lo y e r u n it and the m eth o d of financing did not a p p e a r to
be re la te d to th e a v a ila b ility of the d e fe rm e n t p riv ile g e ; about h alf the p lan s of
each type p e rm itte d d e fe rm e n ts (table 23). B en efits could not be d e fe rre d , how
e v e r, in a th ird of the n e g o tia te d p lan s and in th re e -fifth s of th o se not u n d er
c o lle c tiv e b arg ain in g . In m o st in d u s trie s , a t le a s t h alf the p lan s p e rm itte d d e
fe rm e n t (table 24). H o w ev er, in c o n stru c tio n , tra n s p o rta tio n , and w h o lesale and
r e ta il tra d e , tw o -fifth s o r le s s of the p lan s p e rm itte d it. S till few er p lan s in
th e co m m u n icatio n s and pu blic u tilitie s in d u stry p e rm itte d a ch o ice, ch iefly b e
c au se the d e fe rm e n t of b e n e fits w ould not r e s u lt in la r g e r m on thly b e n e fits.
The siz e of the re d u c tio n of the n o rm a l b en efit p ay able a t age 65 v a rie d
w idely fo r r e tire m e n t betw een ag es 60 and 65. A c tu a ria l re d u c tio n s w e re m o st
com m on, accounting fo r tw o -th ird s of the p lan s and n e a rly h a lf the w o rk e rs.
A n other fo u rth of the p lan s w ith o v er a th ird of the w o rk e rs p ro v id ed b en efits
red u c e d by a u n ifo rm p e rc e n ta g e fa c to r, m o st fre q u e n tly o n e -h a lf of 1 p e rc e n t
o r s ix -te n th s of 1 p e rc e n t fo r each m onth p r io r to n o rm a l r e tire m e n t age. (See
ta b le s in appendix B. ) F o r the re m a in d e r, a tab le of fa c to rs fo r re d u c e d b en efit
am ou nts w as u su a lly a p p lied th a t show ed no u n ifo rm ity fro m age to ag e. 61
___________________Percent__________________
Plans
Workers
100.0
100.0
1.4
9.9
49.4
66. 7
23.4
35.6
6.9
3.6
.3
.8
.9
1.3
Reduction factor for early retirement at age 60
All plans with early retirement -----------------------No reduction1 -----------------------------------------------Actuarial-----------------------------------------------------Uniform percent for each month prior to
age 6 5 ------------------------------------------------- ----Table of reduction factors not uniform 2 -----------Table of reduced benefit amounts 2 ------------------Other ----------------------------------------------------------1 Includes 57 plans, covering 966,000 workers, with normal retirement at age 60 and early retire
ment at ages earlier than 60.
2 Not based on uniform monthly reduction; often an approximate actuarial reduction.
NOTE: Because of rounding, sums of individual items may not equal totals.
T he re d u c tio n fa c to rs fo r r e tire m e n t a s e a rly as age 55 w e re u su a lly the
sam e as a t age 60 sin c e m o s t p lan s a p p lied a u n ifo rm red u ctio n fa c to r re g a rd le s s
of age at e a rly re tire m e n t. A m ong p lan s using d iffe re n t fa c to rs , h o w ev er, m any
plans u sin g a u n ifo rm p e rc e n ta g e fa c to r a t age 60 ap p lied an a c tu a ria l re d u c tio n
to d e te rm in e b e n e fits below th a t age.
A s p re v io u sly d is c u s s e d , full b en efits w e re p ro v id ed a t age 60 by 169 p lan s
co v e rin g 1. 2 m illio n w o rk e rs , o r abo ut 1 out of 10 w o rk e rs in p lan s w ith r e t i r e
m en t a t age 60. 62 In som e of th e se p la n s, such a s th o se in the B ell T elephone
S y ste m , w o rk e rs could a ls o r e tir e on full b en efits as e a rly a s age 55 (p ro v id ed
se rv ic e re q u ire m e n ts a r e m et).
60 For definition of actuarial equivalent, see footnote 44.
61 For greater detail on actuarial factors, see BLS Bulletin 1407, 1964, op. cit., pp. 28-29.
62 Some plans, such as the Electrical Workers (IBEW) National Plan, the United Mine Workers, and the Central
States Teamsters Plan, did not have early retirement but had normal retirement at age 60 or earlier. These are
not included in the discussion above.
70
Illu s tra tio n s of e a rly r e tire m e n t b e n e fits com p uted w ith s e v e ra l ty p es of r e
duction fa c to rs a r e show n below a s a p e rc e n ta g e of th e n o rm a l r e tire m e n t b en efit.
Retirement age
65 (normal)----------------------6 4 ..............—.................. ...........
63 — ------------------- ----------62 — ......... ...................... .........
6 1 ..............................................
6 0 ---------- ------------------------5 9 ................................- ..........5 8 ...............................................
5 7 ------- --------------- -----------56 — ..........- ..........- .................
5 5 ...............................................
Type of reduction and percent of normal retirement benefit
0. 25 percent
per month ages
Actuarial 0. 6 percent 65-60; 0.583 per Table of
(other per month cent per month factors (not
Actuarial
ages 59-55
uniform)
plan)
(steel)
(auto)
Percent
100. 00
100.00
100.00 100.00
100.00
97.00
90. 59
90.90
92.80
91.84
94.00
82. 36
84.60
82. 90
85. 60
91.00
75.14
75.90
78.40
79.14
72.36
69. 70
71.20
88.00
68. 76
63.12
67. 18
64. 20
64.00
85.00
78.00
58.09
59. 40
71.00
55.00
53.61
64.00
51.10
49. 59
45. 98
57.00
47.60
50.00
42.72
44.40
_
_
_
_
-
-
-
-
-
R eduction fa c to rs in s in g le -e m p lo y e r p lan s d iffe re d sh a rp ly fro m th o se in
m u ltie m p lo y e r p la n s. S in g le -e m p lo y e r p lan s u su a lly p ro v id ed th a t the a c tu a ria l
eq u iv alen t be p aid to e a rly r e tir e e s , w hile m u ltie m p lo y e r p lan s m o st fre q u e n tly
sp e c ifie d the p e rc e n ta g e re d u c tio n . T his d iffe re n c e in tre a tm e n t of e a rly r e
tire m e n t b e n e fits w as a lso re fle c te d in the d istrib u tio n s by c o lle c tiv e b arg ain in g
sta tu s and m eth o d of finan cin g. P la n s u n d e r c o lle c tiv e b arg ain in g u su a lly u se d
u n ifo rm re d u c tio n fa c to rs , and n o n b arg ain ed p lan s u su a lly u se d an a c tu a ria l r e
duction. (See app end ix B. ) S im ila rly , n o n c o n trib u to ry p lan s u su a lly sp e c ifie d
p e rc e n ta g e re d u c tio n fa c to rs w hile c o n trib u to ry p lan s m o re fre q u e n tly u se d a c tu
a r ia l re d u c tio n s.
L ev el of B en efits
B en efits w e re com p uted fo r r e tire m e n t a t ag e s 60 and 55 u n d er a ssu m p tio n s
s im ila r to th o se p re v io u sly u s e d fo r n o rm a l and d isa b ility re tire m e n t. (See p. 11.)
In ad d itio n , w h ere b en efits w e re re d u c e d a c tu a ria lly and the fa c to rs to be ap p lied
w e re no t sta te d , the a c tu a ria l re d u c tio n fa c to rs com m on ly u se d fo r m a le w o rk e rs
w e re ap p lied (32. 8 p e rc e n t a t age 60 and 5 1 .8 p e rc e n t a t age 55).
R e tire m e n t b e n e fits a t age 60 fo r a ssu m e d e a rn in g s le v e ls and s e rv ic e
p e rio d s 63 a re show n in ta b le 25. The d is p e rs io n of e a rly re tir e m e n t b en efits
a t age 60 fo r the m id dle 50 p e rc e n t and m id d le 80 p e rc e n t of the w o rk e r d is
trib u tio n re se m b le d th a t fo r n o rm a l re tire m e n t b en efits (c h a rt 8). B en efits fo r
the m id d le 80 p e rc e n t of w o rk e rs w ith 20 y e a rs of s e rv ic e and earn in g $ 4 ,8 0 0 ,
fo r ex am p le, ra n g e d fro m $ 26 to $ 89 a m on th, w hile the m id d le 50 p e rc e n t of
the ra n g e w as b etw een $3 5 and $ 70 a m onth. T h ese ra n g e s (the m id d le 50 and
m id d le 80 p e rc e n t) w e re , of c o u rs e , w id er a t h ig h e r e a rn in g s and se rv ic e le v e ls.
S im ila rly , c h a rt 9 and tab le 26 show the ran g e of b en efits fo r w o rk e rs re tirin g
a t age 55 a t v a rio u s e a rn in g s and s e rv ic e le v e ls . T he s m a lle r b e n e fits p ro v id ed
fo r re tire m e n t a t age 55 ten d ed to n a rro w the ra n g e of b en efits; n e v e rth e le s s ,
th e re d u c tio n s in the siz e of b e n e fits w e re , on the w hole, too slig h t to have m u ch
effe c t on the ra n g e .
63
Includes some plans with normal retirement at age 60 and early retirement at earlier ages, and a few plans
with normal retirement at age 60 and no early retirement provisions. However, money purchase plans and other
plans for which benefits could not be computed were excluded.
71
Chart 8. Monthly Early Retirement Benefits' for Workers Retiring
at Age 60, by Selected Assumed Annual Earnings Levels
and Service Periods, Winter 1962-632
0
SERVICE
ANNUAL
IN YEARS
E A R N IN G S
$50
$100
Monthly benefits
$150
$200
$250
$300
" $3,600
$4,800
10
$ 6,000
^ $8,400
15
"$3,600
$4,800
$
6,000
^ $8,400
20
"$3,600
$4,800
$ 6,000
v $8,400
25
'$3,600
$4,800
$ 6,000
$8,400
30
"$3,600
$4,800
$ 6,000
^$8,400
^ M ed ia n
2
m o n th ly b e n e fits and ran g e s w ith in w h ic h fe ll 50 p e rc e n t and 8 0 p e rc e n t of th e w o rk e rs .
B ased on a stu d y of 1 5 ,8 1 8 p riv a te pension p lan s c o v e rin g
1 5 ,6 m illio n a c tiv e w o rk ers in 1 9 6 1 .
$350
72
Chart 9. Monthly Early Retirement Benefits1 for Workers Retiring
at Age 55, by Selected Assumed Annual Earnings Levels
and Service Periods, Winter 1962-632
ANNUAL
S E R V IC E
IN YEAR S
10
EARN IN G S
<
^ $3,600
4,800
6,000
8,400
0
$50
$100
Monthly benefit
$150
$200
M
[M J
cm
$250
i
LEGEND
wmmI
F irs t Q u a r tile
F irs t D ecile
t
I
\
$300
N in th D ecile
T h ird Q u a rtile
M e d ia n
t
/
/
$3,600
4,800
15
6,000
8,400
$3,600
4,800
20
CM]
6,000
8,400
$3,600
4.800
25
6,000
8.400
V
r
$3,600
4.800
6,000
8.400
o
M e d ia n m o n th ly b e n e fits an d ra n g e s w ith in w h ic h fe ll 5 0 p e rc e n t an d 8 0 p e rc e n t o f th e w o rk e rs ,
* B ased on a s tu d y o f 1 5 ,8 1 8 p riv a te p e n s io n p la n s c o v e rin g 1 5 .6 m illio n a c tiv e w o rk e rs in 1 9 6 L
$350
73
M e d ia n m o n th ly b e n e fits u n d e r th e a s s u m e d c o n d itio n s ra n g e d f r o m $ 1 8 to
$ 122 fo r r e t i r e m e n t a t a g e 60.
Annual earnings
$3,600
Service periods (years)
Median
Inter
quartile
range
1 0 1 __________________________
$18
$13-$20
1 5 1 ______________________________
27 22- 33
36 30- 56
2 0 _______________________________
25 ----------------------------------------------46 38- 70
3 0 _______________________________
54 46- 79
$6,000
$4, 800
Median
Inter
quartile
range
$19
28
42
54
65
$16-$29
25- 44
35- 70
44- 88
50-106
$8,400
Median
Inter
quartile
range
Median
Inter
quartile
range
$23
34
58
74
82
$18-$42
26- 57
35- 92
45-116
53-136
$37
50
85
107
122
$18-$66
26- 88
39-136
50-171
59-208
Excludes a substantial number of workers in plans ith higher qualifying service requirements.
T h ey ra n g e d o n ly s lig h tly le s s (i. e. , fro m $ 12 to $ 1 1 3 ) fo r r e t i r e m e n t a t
a g e 55.
M e d ia n e a r ly r e t i r e m e n t b e n e fits a f t e r 30 y e a r s o f s e r v ic e d id n o t e x c e e d
18 p e r c e n t o f p r e r e t i r e m e n t e a rn in g s a t a g e 60.
Annual earnings
$3,600
$4,800 $6,000 $8,400
Service periods (years)
Percent
1 0 ! ......... ............- .................. —•
6.0
4. 8
4. 6
5.3
151 — - ..............- ......................
9.0
7.0
6.8
7.1
2 0 ---------------------------- -------- 12.0
10.5
11.6
12.1
2 5 --------------------------- ----------- 15.3
13.5
14.8
15.3
3 0 -------------------------------------- 18.0
16.3
16.4
17.4
1 Excludes a substantial number of workers in plans with higher qualify
ing service requirements.
B e c a u s e of th e lo n g e r tim e o v e r w h ic h p a y m e n ts a r e to be m a d e , a s h a s
b e e n d is c u s s e d , e a r ly r e t i r e m e n t p a y m e n ts a r e g e n e r a lly lo w e r th a n n o r m a l r e
tir e m e n t p a y m e n ts . M e d ia n e a r ly r e t i r e m e n t b e n e fits , h o w e v e r, w e re g e n e r a lly
h ig h e r th a n th e y w o u ld b e if a c c e p te d a c tu a r ia l f a c to r s w e re u s e d . A c tu a r ia lly
re d u c e d p e n s io n s c o m m e n c in g a t ag e 60 a r e u s u a lly ab o u t tw o - th ir d s of th e n o r m a l
r e t i r e m e n t b e n e fit p a y a b le a t ag e 65, an d a b o u t h a lf th e n o r m a l p e n s io n if th e y
b e g in a t ag e 55. T h e r e a s o n s fo r th e h ig h e r - th a n - e x p e c te d e a r ly r e t i r e m e n t b e n e
fit le v e ls a r e : ( l) A b o ut 10 p e r c e n t of th e w o r k e r s w e re in p la n s th a t d id n o t
r e d u c e b e n e fits ; (2) ab o u t 5 p e r c e n t of th e w o r k e r s w e re in p la n s th a t re d u c e d
b e n e fits by le s s th a n th e a c tu a r ia l e q u iv a le n t; an d (3) a s m a ll n u m b e r of w o r k e r s
w e re in p la n s p ro v id in g s u p p le m e n ts u n til th e w o r k e r w a s e lig ib le fo r s o c ia l
s e c u r ity b e n e f its .
S im ila r ly , th e m e d ia n b e n e fits p a y a b le a t ag e 55 w e re h ig h e r th a n if th e
a c t u a r i a l f a c to r s w e re u s e d in c o m p u ta tio n s fo r a ll p la n s , c h ie fly b e c a u s e m a n y
la r g e in d u s try w id e p la n s p ro v id in g b e n e fits to w o r k e r s r e t i r in g v o lu n ta rily a t a g e
60 d id n o t p ro v id e fo r v o lu n ta ry e a r ly r e t i r e m e n t a t ag e 55. A s a r e s u l t, m e d ia n
b e n e fits a t ag e 55 r e f le c te d to a g r e a t e r d e g re e th e g e n e ro u s b e n e fits p ro v id e d
by c o n tr ib u to r y p la n s .
74
F o r the f ir s t few y e a rs of e a rly re tire m e n t, the w o rk e r often m u st re ly on
plan b en efits plus em ploym en t incom e and sav in g s sin ce so c ia l se c u rity b en efits
a re not p ay able u n til age 62, w hen the w o rk e r m ay e le c t to re c e iv e a p e rm a n e n tly
red u c e d b en efit. Since p rim a ry so c ia l s e c u rity b en efits payable a t age 62 w ere
$84 and $ 1 0 1 .6 0 a m onth to w o rk e rs a v erag in g $ 3 ,6 0 0 and $ 4 ,8 0 0 a y e a r o r
m o re a t the tim e of th is study, the com bined public and p riv a te b en efits at age
62 p ro v id ed a m ed ian m onthly incom e ran g in g fro m $102 to $ 224. 64
Annual earnings
Service periods (years)
1 0 1 -------------------------------------15 1 ---------------------------------------2 0 -----------------------------------------2 5 -----------------------------------------3 0 ------------------------------------------
$3,600
$4,800
$6,000
$8,400
$102
111
120
130
138
$121
130
144
156
167
$125
136
160
176
184
$139
152
187
209
224
* Excludes a substantial number of workers in plans with higher qualify
ing service requirements.
T h u s, p e n sio n e rs who r e tir e d at age 60 w ould re c e iv e , upon attain in g age
62, fro m 20 to 46 p e rc e n t of th e ir p r e r e tir e m e n t e a rn in g s. D eferm en t of p r i
m a ry so c ia l s e c u rity b en efits un til age 65 w ould r a is e the ran g e an ad d itio n al
5 to 10 p e rc e n t.
R e tire m e n t b en efits p ay able a t age 60 d iffe re d w idely am ong in d u s trie s ,
in flu en ced by m eth ods of financing and ty pes of fo rm u la s, as w ell a s by p a tte rn
p lan s in som e in d u s trie s . The h ig h est b en efits w ere p ro v id ed in th e t r a n s
p o rta tio n , co m m u n icatio n s and public u tilitie s, and fin an ce, in su ra n c e , and re a l
e s ta te in d u s trie s .
Selected annual earnings and service periods
$4,800
Industry
$8,400_______
20 years 30 years
20 years 30 years
All industries 1 ----------------------
$42
$65
$85
$122
M in in g----------------------------------Contract construction------------M anufacturing-----------------------Transportation-----------------------Communications and public
u tilitie s ------------------------------W holesale and retail trade-----Wholesale tra d e----------------Retail tr a d e ---------------------Finance, insurance, and
real e sta te --------------------------S e rv ice s--------------------------------
75
32
36
80
75
42
55
90
75
32
66
118
75
42
112
109
80
43
45
37
119
57
66
59
138
75
45
84
20S
113
84
122
69
50
107
76
147
88
221
133
* Includes industries for which data are not shown separately.
64 Had the worker actually retired at age 62, his private plan pension based on actuarial factors would most
likely be about 13 percent greater. Private plan benefits for retirement at age 62 were not computed. The in
clusion of plans paying normal retirement benefits and supplemental benefits in the computations of benefits for retire
ment at age 60 does not lend itself to application of an across-the-board actuarial increase.
75
Two of th e se in d u s trie s ran k ed high b eca u se they in clu ded m any p lan s th at
paid u n re d u c e d b en efits a t age 60. The $80 m ed ian b en efit in the c o m m u n ic a
tion s in d u stry fo r 20 y e a rs of s e rv ic e and annual e a rn in g s of $ 4 , 800, fo r ex am p le,
w as la rg e ly d e te rm in e d by the $85 b en efit p ro v id ed by the teleph one com pany
p la n s. T he la rg e T e a m s te rs and ra ilro a d p lan s w hich a lso p ro v id ed n o rm a l b e n e
fits at age 60 e x e rte d a s im ila r influence in the tra n s p o rta tio n in d u stry .
G e n e ra lly , b en efits fo r 30 y e a rs of se rv ic e w ere about 50 p e rc e n t h ig h e r
than b en efits fo r 20 y e a rs . In the tra n s p o rta tio n in d u stry , h o w ev er, m ed ian
b e n e fits fo r the lo n g e r s e rv ic e p e rio d s w e re not p ro p o rtio n a te ly h ig h e r th an
fo r th e s h o rte r s e rv ic e p e rio d s b e c a u se th e fo rm e r in clu ded a n u m b er of la rg e
p lan s w hich p ro v id ed no b en efit fo r le s s th an 25 y e a rs of s e rv ic e . B ecau se
the M ine W o rk e rs p lan s p ro v id ed a u n ifo rm b en efit of $75 fo r 20 o r m o re y e a rs
of s e rv ic e only, the m ed ian b en efit in the m ining in d u stry a t the v a rio u s e a rn in g s
and s e rv ic e le v e ls w as $75— high in re la tio n to the b en efits a t the lo w er e a rn in g s
le v e l, p ro v id e d in o th e r in d u s trie s . On the o th e r hand, b en efits in the finance
in d u stry , m a rk e d by c o n trib u to ry p la n s, w ere am ong the h ig h e st d e sp ite the fact
th a t they w e re u su a lly a c tu a ria lly re d u ced .
B en efits in m a n u fa c tu rin g , tra d e , and s e rv ic e in d u s trie s w e re som ew hat
lo w er than in the in d u s trie s ju s t d is c u sse d m ain ly b eca u se m o st p lan s had a c tu
a ria lly re d u c e d b e n e fits. M edian b en efits ra n g e d fro m $37 fo r 20 y e a r s 1 s e rv ic e
to $ 133 a m onth fo r 30 y e a rs . The c o n stru c tio n in d u stry , d o m in ated by no n
c o n trib u to ry m u ltie m p lo y e r p la n s, had the lo w est b en efits.
A t the $3, 600 and $4,800 earn in g s le v e ls , the in d u s tria l p a tte rn of m ed ian
b en efits pay able a t age 55 w as g e n e ra lly s im ila r to th at pay able a t age 60, i. e. ,
the sam e in d u s trie s had re la tiv e ly high m ed ian b e n e fits. A few v a ria tio n s did
o c c u r a t the high e a rn in g s and low s e rv ic e le v e ls , m ain ly b eca u se som e la rg e
p la n s, su ch a s the T e a m s te rs 65 and M ine W o rk ers p la n s, did not p ro v id e r e t i r e
m en t b en efits a t age 55. O ther p la n s, su ch as the teleph one com pany p lan s,
re q u ire d such long s e rv ic e to qu alify fo r b en efits a t age 55 th at they a r e in clu ded
only in d ata fo r long s e rv ic e w o rk e rs.
S ocial S e c u rity A d ju stm e n t O ption
A bout a fo u rth of the plans w ith e a rly re tire m e n t, co v erin g a p p ro x im a te ly
a th ird of the w o rk e rs , p ro v id ed a ns o c ia l s e c u rity a d ju stm e n t option, n 66 u n d er
w hich w o rk e rs m ay e le c t to re c e iv e la rg e r-th a n -u s u a l b en efits fro m the plan
b e fo re so c ia l s e c u rity b en efits a re p ay ab le, in r e tu rn fo r receiv in g s m a lle r b e n e
fits a fte rw a rd s .
P riv a te plan b e n e fits a r e a d ju ste d so th a t, when added to so c ia l se c u rity
b e n e fits, the p e n sio n e r re c e iv e s an ap p ro x im a te ly u n ifo rm com b ined b en efit fo r
life . F o r ex am p le, if the option is e le c te d by a w o rk e r re tirin g a t age 60 w hen
elig ib le u n d e r the plan fo r a m onthly b en efit of $95 u n til age 65, h is m on thly
plan b en efit w ill be in c re a s e d to $189 u n til age 65 and re d u c e d to $6 2 th e re 65 After this study was completed the Central States Teamsters plan was amended to permit retirement as early
as age 47, For details, see Digest of 100 Selected Pension Plans Under Collective Bargaining, Late 1964 (BLS Bulletin
1435, 1965), p. 62.
66 May be referred to in a plan as a " level income option," "adjustment for Federal old-age benefit," "early
retirement equalization income, " etc.
76
a f te r (w hen th e $ 127 s o c ia l s e c u r ity b e n e fit is p a y a b le ). T h u s , in s te a d of s ta r tin g
w ith a lo w e r b e n e fit an d h av in g to ta l in c o m e in c r e a s e d s h a rp ly a t a g e 65, th e
e le c tio n of th e o p tio n g iv e s th e p e n s io n e r a le v e l in c o m e of $ 189 c o m m e n c in g a t
a g e 60 an d c o n tin u in g fo r life .
In a n u m b e r of p la n s , th e e m p lo y e r p a id th e e n tir e c o s t of th e l a r g e r in itia l
b e n e fits (u s u a lly e q u a l to a n tic ip a te d s o c ia l s e c u r ity b e n e fits ) u n til s o c ia l s e c u r ity
b e n e fits w e re p a y a b le . A few p la n s w ith n o r m a l r e t i r e m e n t b e fo re ag e 65, su c h
a s th e C e n tr a l S ta te s T e a m s t e r s p la n , h a v e an a p p ro x im a tio n to th e s o c ia l s e c u r ity
a d ju s tm e n t b u ilt in to th e n o r m a l r e t i r e m e n t b e n e fit fo rm u la . 67
M o re th a n a fo u rth of th e s in g le - e m p lo y e r p la n s w ith e a r ly r e t i r e m e n t a s
c o m p a r e d to n e a r ly tw o -fifth s of th e m u ltie m p lo y e r p la n s p ro v id e d a le v e l i n
c o m e o p tio n .
Without social
With social security security adjustment
Total______ adjustment option__________ option______
____
Type of employer unit
_________ Percent
Plans
Workers
Plans
Workers
Plans
Workers
All plans with early
retirem ent----------------------------
100.0
100.0
26. 5
31. 1
73.5
68. 9
Single em p lo y e r -------------------M ultiemployer ----------------------
100.0
100.0
100.0
100.0
26. 1
3 7 .9
31 .6
26.3
73.9
62.1
6 8 .4
73. 7
NOTE: Because of rounding, sums of individual items may not equal totals.
T h e p r e v a le n c e of th e o p tio n w a s h ig h e r in c o n tr ib u to r y p la n s th a n in n o n
c o n tr ib u to r y p la n s .
Without social
With social security security adjustment
Total__________adjustment option ______ option_______
_____
Method of financing
Percent
Plans
Workers
Plans
Workers
Plans
Workers
All plans with early
retirement --------------------------
100.0
100.0
26.5
31. 1
73.5
68. 9
Noncontributory -------------------Contributory --------------------------
100.0
100.0
100.0
100.0
23.3
34. 7
28 .9
37. 1
76. 7
65.3
71.1
6 2 .9
NOTE: Because of rounding, sums of individual item s may not equal totals.
^7 The Central States Teamsters plan provided $200 a month for the first 60 months of retirement and $90 a
month thereafter.
77
A g r e a te r p e rc e n ta g e of c o lle c tiv e ly b a rg a in e d p lan s th an n o n b arg ain ed plan s
co n tain ed a le v e l in com e p ro v isio n , but th e p ro p o rtio n of w o rk e rs c o v e re d w as
slig h tly h ig h e r in th e la tte r p la n s.
Without social
With social security security adjustment
Total__________adjustment option__________ option______
Percent
C ollective bargaining status
Plans
Workers
Plans
Workers
A ll plans with early
retirem ent---------------------------
100.0
100.0
26. 5
100.0
100.0
100.0
100.0
Mentioned in a collective
bargaining agreement —.-----Not mentioned in a col
lective bargaining
agreem ent----------------------------
_______ _____
Plans
Workers
31. 1
73.5
6 8 .9
37.2
3 0 .4
6 2 .8
69 .6
20. 1
32 .6
80 .0
6 7 .5
NOTE: Because of rounding, sums of individual items may not equal totals.
The d istrib u tio n of th e option by in d u stry w as fa irly u n ifo rm ; about a th ird
of the p lan s in th e m a n u factu rin g , tra n s p o rta tio n , and r e ta il tra d e in d u s trie s p r o
vided th e option. H ow ever, a p p ro x im ately 45 p e rc e n t of th e p lan s w ith only about
20 p e rc e n t of the w o rk e rs in th e c o n stru c tio n in d u stry had th e option. O nly about
20 p e rc e n t of the p la n s in m ining, co m m u n icatio n s and public u tilitie s , and s e r v
ic e in d u s trie s had th e p ro v isio n .
Without social
With social security security adjustment
Total_______ adjustment option _______option______
___
Industry
All plans with early
retirement1---------------------------Mining --------------------------------Contract construction------------M anufacturing-----------------------Transportation-----------------------Communications and public
u tilitie s ------------------------------Wholesale and retail trade-----Wholesale tra d e----------------Retail tr a d e ---------------------Finance, insurance, and
real e sta te --------------------------Services --------------------------------1 Includes industries for which
___
Percent______________________________
Plans
Workers
Plans
Workers
100.0
100.0
26.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Plans
Workers
31. 1
73.5
68 .9
21.5
46.2
30. 9
33. 1
22. 7
21. 9
33 .9
30. 7
78.5
53. 8
69.1
66 .9
77.3
78. 1
66. 2
69.3
100.0
100.0
100. 0
100.0
19.0
14. 2
11.6
28.1
16 .0
34. 9
35. 3
34 .9
8 1 .0
85 .8
88 .4
71.9
83 .9
65. 1
6 5 .0
65. 1
100. 0
100.0
12.0
21. 1
26. 2
27. 1
88 .0
78.9
73.8
72.9
data are not shown separately.
NOTE: Because of rounding, sums of individual items may not equal totals.
78
T a b le 21. E a r ly R e t i r e m e n t P r o v i s i o n s in P r i v a t e P e n s i o n P l a n s by I n d u st r y , W in te r 1962—63
(W o r k e r s in th o u s a n d s )
A ll p la n s
With e a r l y r e t i r e m e n t
In d u stry
W ithout e a r l y r e t i r e m e n t
Num ber
W orkers1
Plans
W orkers1
A ll p la n s stu d ie d ----------------------------------------
2 15, 818
2 1 5 ,6 2 1
1 2 ,0 9 9
1 1 ,7 8 6
3, 719
3 ,8 3 5
M i n i n g ----------------------------------------------------------C o n tr a c t c o n s t r u c t i o n ------------------------------M a n u f a c t u r i n g --------------------------------------------T r a n s p o r t a t io n ----------------------------------------C o m m u n ic a t io n s and p u b lic u t i l i t i e s -----W h o le s a l e and r e ta il t r a d e ----------------------W h o le s a l e t r a d e ------------------------------------R e ta il tr a d e -------------------------------------------F i n a n c e , i n s u r a n c e , and r e a l e s t a t e -----S e r v i c e s --------------------------------------------------------
316
449
9, 257
673
849
1 ,6 2 7
1, 147
480
1 ,8 5 3
719
327
1 ,0 7 2
9 ,678
1, 286
1 ,2 7 0
92 0
479
440
733
308
312
156
7 ,4 0 9
496
60 0
1 ,2 7 1
1 ,0 7 5
196
1 ,4 3 9
341
119
343
7 ,9 8 1
644
1, 184
690
337
352
66 0
140
4
293
1 ,8 4 8
177
249
356
72
284
414
378
208
729
1, 697
642
87
230
142
88
73
168
Plans
W orkers1
1 A c t i v e w o r k e r s in 1961.
2 In c lu d e s in d u s t r i e s f o r w h ic h data a r e not sh o w n s e p a r a t e l y .
N O T E : B e c a u s e o f rou n d in g , s u m s of in d iv id u a l i t e m s m a y not e q u a l t o t a l s .
T a b le 22. M in im u m A g e and S e r v i c e R e q u ir e m e n t s fo r E a r l y R e t i r e m e n t in P r i v a t e P e n s i o n P l a n s , W in te r 1962—6 3 1
M in im u m s e r v i c e
requirem ents2
(years)
( W o r k e r s in th o u s a n d s )
M in im u m a g e r e q u i r e m e n t s 3
A ll p la n s
N o ag e
55
50
60
requirem ent
rkN u m b e r Weorrsk P l a n s Weorrsk P l a n s W oe rr ks P l a n s Weorrsk P l a n s Weors
O th er
P l a n s Weorrsk
A ll p la n s w ith e a r l y
r e t i r e m e n t ------------------------------
12, 099
11, 786
289
1, 120
115
345
7 ,761
5, 567
3, 647
4 , 522
287
233
No s e r v i c e r e q u i r e m e n t ______
1 4 ________________________________
5 ___________________________________
6 - 9 ________________________________
1 0 _________________________________
1 1 - 1 4 _____________________________
15 _________________________________
1 6 - 1 9 -------------------------------------------2 0 _________________________________
2 1 - 2 4 ______________________________
2 5 _________________________________
2 6 - 2 9 ____________________________
3 0 _________________________________
O v e r 3 0 ___________________________
489
2 ,4 9 2
936
313
2, 140
27 3
3, 270
40
1 ,4 4 6
10
429
49
191
21
552
1, 536
547
93
2, 859
155
3, 157
57
1, 135
24
355
10
1, 27 3
12
157
11
1
1
43
52
23
7
15
17
1
51
14
58
5
57
66
379
1 ,9 3 1
811
313
937
150
2, 108
29
867
7
150
30
48
1
378
1, 067
45 5
93
1, 019
106
1 ,4 6 9
30
738
18
133
33
387
112
1, 045
121
1, 020
11
564
91
359
55
1 ,6 7 3
30
1, 556
26
305
5
158
263
“
50
1
106
2
125
25
‘ 10
103
18
62
15
~
33
-
4
3
19
61
20
-
-
4
16
16
45
7
907
16
8
-
5
-
2
"
-
61
20
63
“
3
40
17
3
271
80
'
-
3
“
1 B a s e d on a stu d y o f 1 5 ,8 1 8 p r iv a t e p e n s i o n p la n s c o v e r i n g 1 5 .6 m i l l i o n a c t iv e w o r k e r s in 1961.
2 F o r t h o s e p la n s w h ic h s p e c i f i e d a p e r io d of e m p l o y m e n t to b e s e r v e d b e f o r e p a r t ic ip a t io n in the p la n co u ld b e g i n , th e
m i n i m u m s e r v i c e r e q u i r e m e n t in c lu d e s th e p r e p a r t ic i p a t i o n s e r v i c e and th e r e q u i r e d p la n m e m b e r s h i p s e r v i c e .
3 S o m e p la n s s p e c i f i e d a l t e r n a t iv e r e q u i r e m e n t s ; f o r e a c h c a s e , th e o n e w ith th e e a r l i e s t a g e o r no a g e r e q u i r e m e n t s
was selected .
NOTE:
B e c a u s e o f roun d ing,
su m s of in d ivid u al it e m s m a y not eq u al to ta ls .
79
T a b le 23. T i m e o f B e n e f it P a y m e n t fo r E a r l y R e t i r e m e n t in P r i v a t e P e n s i o n P l a n s by T y p e of E m p l o y e r Un it,
M e th o d o f F i n a n c in g , and C o ll e c t iv e B a r g a in in g S t a t u s , W in te r 1 9 6 2 —6 3 12
( W o r k e r s in th o u s a n d s)
T i m e of b e n e fit p a y m e n t
A l l p la n s
Ite m
A l l p la n s w ith e a r l y r e t i r e m e n t -----
I m m e d i a t e l y or
at a g e 65
I m m e d ia t e ly
o n ly
I m m e d ia t e ly o r any
t im e up to a g e 65
Num ber
W orkers
Plans
W orkers
Plans
W orkers
Plans
W orkers
1 2 ,0 9 9
1 1 ,7 8 6
6 ,063
5 ,6 0 5
2, 660
4 , 110
3, 376
2 ,0 7 1
1 1 ,735
364
1 0 ,6 5 7
1 ,1 2 9
5 ,8 7 6
187
4, 829
778
2, 596
64
3 ,8 9 7
213
3, 263
113
1 ,9 3 1
140
8 ,7 6 3
3, 336
8, 589
3 ,1 9 7
4, 325
1 ,7 3 8
3, 842
1 ,7 6 3
1, 922
738
3 ,4 4 5
665
2, 516
860
1 ,3 0 2
769
Typ e of e m p l o y e r unit
S in g le e m p l o y e r --------------------------------M u l t i e m p l o y e r ------------------------------------
i
M e th o d of fin a n c in g
N o n c o n t r i b u t o r y --------------------------------C o n tr ib u to r y ---------------------------------------C o ll e c t iv e b a r g a in in g sta tu s
M e n tio n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t -------------------N o t m e n t io n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t --------------------
4 ,5 1 1
7 ,680
1 ,5 7 1
3 ,5 8 7
1 ,6 2 4
3 ,0 9 0
1 ,3 1 6
1 ,0 0 3
7 ,5 8 8
4 ,1 0 6
4 ,4 9 2
2 ,018
1 ,0 3 6
1 ,0 2 0
2 ,0 6 0
1 ,0 6 8
1 B a s e d on a s tu d y o f 15, 818 p r iv a te p e n s i o n p la n s c o v e r i n g 1 5 .6 m i l l i o n a c tiv e w o r k e r s in 1961.
N O T E : B e c a u s e o f r o u n d in g , s u m s of in d iv id u a l it e m s m a y not e q u a l t o ta ls .
T a b le 24.
T i m e of B e n e f it P a y m e n t fo r E a r ly R e t i r e m e n t in P r i v a t e P e n s i o n P l a n s by I n d u s t r y , W in te r 1962—6 3 1
( W o r k e r s in th o u s a n d s)
T i m e of b e n e fi t p a y m e n t
In d u stry
A l l p la n s
I m m e d ia t e ly
on ly
I m m e d i a t e l y or
at a g e 65
I m m e d i a t e l y o r any
t i m e up to a g e 65
Num ber
W orkers
Plans
W orkers
Plans
W orkers
Plans
W orkers
A ll p la n s w ith e a r ly r e t i r e m e n t —
2 1 2 ,0 9 9
2 1 1 ,7 8 6
6 ,0 6 3
5 ,6 0 5
2, 660
4 ,1 1 0
3, 376
2 ,0 7 1
M in in g --------------------------------------------------C o n tr a c t c o n s t r u c t i o n ---------------------M a n u f a c t u r in g -----------------------------------T r a n s p o r t a t io n -----------------------------------C o m m u n ic a t io n s and p u b lic
u t i l i t i e s ---------------------------------------------W h o le s a l e and r e t a il t r a d e ------------W h o le s a l e t r a d e --------------------------R e ta il tr a d e ---------------------------------F i n a n c e , i n s u r a n c e , and
r e a l e s t a t e ---------------------------------------S e r v i c e s -----------------------------------------------
312
156
7 ,4 0 9
496
119
343
7 ,9 8 1
644
104
95
3 ,4 6 6
324
43
313
2 ,9 9 4
476
15
4
2 ,2 7 7
95
17
3
3, 536
82
193
57
1 ,6 6 6
77
59
27
1 ,4 5 1
87
600
1 ,2 7 1
1 ,0 7 5
196
1 ,1 8 4
690
337
352
484
919
791
128
1 ,0 3 8
347
170
177
32
131
121
10
76
221
123
98
84
221
163
58
70
121
44
77
1 ,4 3 9
341
660
140
613
49
337
45
98
8
137
38
728
284
186
57
1 B a s e d on a s tu d y o f 15, 818 p r iv a t e p e n s i o n p la n s c o v e r i n g 15. 6 m i l l i o n a c tiv e w o r k e r s in 1961.
2 In c lu d e s i n d u s t r i e s fo r w h ic h d a ta a r e n o t sh o w n s e p a r a t e l y .
NOTE:
B e c a u s e o f roun d ing,
su m s o f in d ivid u al it e m s m a y not eq u al t o ta ls .
80
T a b le 25 . M on th ly P r iv a te P e n sio n P la n E a r ly R e tir e m e n t B e n e fits 1 fo r W o r k e r s R e tirin g at A g e 60
b y S e le c t e d A s s u m e d A nn ual E a r n in g s L e v e ls and S e r v ic e P e r io d s , W in te r 1962—6 3 2
(W o r k e r s in th o u s a n d s)
A s s u m e d an nu al e a r n i n g s
$ 4 , 800
$ 3 , 600
M o n th ly b e n e fi t
Plans
W orkers
Plans
$ 6 , 000
W orkers
Plans
$ 8 ,4 0 0
W orkers
Plans
W orkers
5 ,722
6, 502
5 ,7 2 2
110
183
2, 140
932
655
992
274
149
57
51
19
15
45
-
104
374
1 ,4 8 1
1 ,2 7 9
823
402
556
221
529
191
16
212
57
257
72
122
1 ,7 6 3
574
452
437
518
514
676
157
81
189
101
66
10 y e a r s <o f s e r v i c e
T o ta l ________________________________ „
N o n e 3 __________________________________
U n d e r $ 10 ---------------------------------------$ 1 0 and u n d e r $ 2 0 -------------------------$ 2 0 and u n d e r $ 3 0 -------------------------$ 3 0 and u n d e r $ 4 0 -------------------------$ 4 0 and u n d e r $ 5 0 -------------------------$ 5 0 and u n d e r $ 6 0 -------------------------$ 60 and u n d e r $ 7 0 -------------------------$ 7 0 and u n d e r $ 8 0 -------------------------$ 8 0 and u n d e r $ 9 0 -------------------------$ 9 0 and u n d e r $ 1 0 0 -----------------------$ 1 0 0 and u n d e r $ 1 2 5 ---------------------$ 1 2 5 and u n d e r $ 1 5 0 ---------------------$ 150 and o v e r ----------------------------------
6, 502
246
1 ,4 0 4
2 ,889
897
562
103
136
10
224
4 20
-
5 ,722
180
479
3, 372
1 ,1 2 2
236
78
55
115
27
58
-
6, 502
181
1 ,1 5 8
2, 368
1 ,1 4 3
812
275
123
178
1
8
24
4 231
-
-
-
-
-
"
-
-
5, 722
6, 502
169
254
2 ,7 2 9
1 ,1 9 4
731
240
104
189
19
9
18
68
~
153
418
2, 593
911
925
660
226
117
51
183
1
36
4 228
-
1 5 y e a r s of s e r v i c e
T o t a l ---------------------------------------------------
9 ,6 4 7
8 ,9 4 7
9 ,647
8 ,9 4 7
9 ,6 4 7
8 ,9 4 7
9 ,6 4 7
8 ,9 4 7
N o n e 3 --------------------------------------------------U n d e r $ 1 0 ----------------------------------------$ 1 0 and u n d e r $ 2 0 -------------------------$ 2 0 and u n d e r $ 3 0 -------------------------$ 3 0 and u n d e r $ 4 0 -------------------------$ 4 0 and u n d e r $ 5 0 -------------------------$ 5 0 and u n d e r $ 6 0 -------------------------$ 6 0 and u n d e r $ 7 0 -------------------------$ 7 0 and u n d e r $ 8 0 -------------------------$ 8 0 and u n d e r $ 9 0 -------------------------$ 9 0 and u n d e r $ 1 0 0 -----------------------$ 100 and u n d e r $ 1 2 5 ---------------------$ 1 2 5 and u n d e r $ 1 5 0 ---------------------$ 1 5 0 and u n d e r $ 1 7 5 ---------------------$ 1 7 5 and u n d e r $ 2 0 0 ---------------------$ 200 and o v e r ----------------------------------
243
642
1 ,9 2 3
3 ,6 6 4
1 ,5 5 5
843
430
57
224
2
8
38
4 18
"
213
138
1 ,0 8 7
4, 633
1 ,2 7 2
680
273
131
180
28
9
277
24
191
352
1 ,4 8 3
2, 896
1 ,8 4 9
1 ,6 5 1
385
363
125
30
55
213
7
4 47
“
207
50
775
3 ,9 0 9
1 ,2 2 4
1 ,1 0 6
592
342
115
150
90
329
16
43
-
169
218
687
2 ,8 0 2
1 ,5 9 3
1 ,5 1 3
1 ,0 7 0
546
184
382
119
97
205
15
4 29
-
143
40
434
3 ,4 8 2
761
1 ,1 6 7
791
628
425
300
141
420
149
25
43
-
163
215
535
1 ,6 7 2
886
1 ,4 0 6
1 ,1 3 5
496
603
750
311
826
284
85
18
262
119
32
380
3 ,0 0 1
407
430
568
571
637
606
366
1, 146
293
197
104
89
-
-
20 y e a r s of s e r v i c e
T o t a l -------------------------------------------------
1 1 ,2 7 2
11 ,4 2 2
1 1 ,2 7 2
1 1 ,422
11,2 7 2
1 1 ,4 2 2
1 1 ,2 7 2
1 1 ,422
N o n e 3 ------------------------------------------------U n d e r $ 1 0 ---------------------------------------$ 1 0 and u n d e r $ 2 0 -----------------------$ 2 0 and u n d e r $ 3 0 -----------------------$ 3 0 and u n d e r $ 4 0 -----------------------$ 4 0 and u n d e r $ 5 0 -----------------------$ 5 0 and u n d e r $ 6 0 -----------------------$ 6 0 and u n d e r $ 7 0 -----------------------$ 7 0 and u n d e r $ 8 0 -----------------------$ 8 0 and u n d e r $ 9 0 -----------------------$ 9 0 and u n d e r $ 1 0 0 ----------------------$ 1 0 0 and u n d e r $ 1 2 5 -------------------$ 1 2 5 and u n d e r $ 1 5 0 -------------------$ 1 5 0 and u n d e r $ 1 7 5 -------------------$ 1 7 5 and u n d e r $ 2 0 0 -------------------$ 2 0 0 and u n d e r $ 2 2 5 -------------------$ 2 2 5 and u n d e r $ 2 5 0 -------------------$ 2 5 0 and u n d e r $ 2 7 5 -------------------$ 275 and o v e r ---------------------------------
205
92
1 ,3 1 2
2 ,836
3 ,1 6 7
1 ,5 5 6
922
520
331
42
190
51
18
4 30
-
161
130
441
1 ,7 2 3
4 , 316
1 ,2 1 9
826
483
408
928
201
268
267
49
-
122
51
90 2
2, 271
2, 199
2 ,026
1 ,4 7 1
743
264
283
455
377
35
29
15
4 29
"
234
39
261
1 ,2 9 9
3 ,4 5 5
1 ,2 2 1
861
96 8
782
1 ,234
265
377
337
21
26
42
•
105
5
449
1 ,4 9 5
1 ,9 7 1
1 ,7 7 5
1 ,4 1 4
789
904
729
463
691
335
73
1
36
4 37
”
183
12
258
675
3 ,1 4 0
780
721
1 ,1 2 7
850
738
514
1 ,6 6 9
429
216
19
45
34
“
105
425
1 ,0 2 5
1 ,0 3 3
861
1 ,1 3 4
616
849
851
704
1 ,6 2 5
952
530
178
274
28
5
77
183
179
609
1 ,9 3 4
1 ,1 2 7
375
411
611
423
562
1 ,6 1 3
2, 156
473
361
157
131
26
91
S ee fo o tn o te s at end o f ta b le .
-
-
81
T a b le 2 5 . M on th ly P r iv a te P e n sio n P la n E a r ly R e tir e m e n t B e n e fits 1 fo r W o r k e r s R e tirin g at A g e 6 0
b y S e le c te d A s s u m e d A nnual E a r n in g s L e v e ls and S e r v ic e P e r io d s , W in te r 1962—6 3 2— Continued*
(W o r k e r s in th o u s a n d s)
A s s u m e d annual e a r n i n g s
M o n th ly b e n e fi t
$ 3 , 600
Plans
$ 4., 800
W orkers
Plans
$ 6 ,, 000
W orkers
Plans
$ 8 ,4 0 0
W orkers
Plans
W orkers
25 y e a r s of s e r v i c e
T o ta l -------------------------------------------------
1 1 ,6 7 7
1 1 ,7 9 1
1 1 ,6 7 7
1 1 ,7 9 1
1 1 ,6 7 7
1 1 ,7 9 1
1 1 ,6 7 7
1 1 ,7 9 1
N o n e 3 ------------------------------------------------U n d er $ 1 0 ---------------------------------------$ 1 0 and u n d e r $ 2 0 -----------------------$ 20 and u n d e r $ 3 0 -----------------------$ 3 0 and u n d e r $ 4 0 -----------------------$ 4 0 and u n d e r $ 5 0 -----------------------$ 5 0 and u n d e r $ 6 0 -----------------------$ 6 0 and u n d e r $ 7 0 -----------------------$ 7 0 and u n d e r $ 8 0 -----------------------$ 8 0 and u n d e r $ 9 0 -----------------------$ 9 0 and u n d e r $ 1 0 0 ----------------------$ 1 0 0 and u n der $ 1 2 5 -------------------$ 1 2 5 and u n d e r $ 1 5 0 -------------------$ 1 5 0 and u n d e r $ 1 7 5 -------------------$ 1 7 5 and u n d e r $ 2 0 0 -------------------$ 2 0 0 and u n d e r $ 2 2 5 -------------------$ 2 2 5 and u n d e r $ 2 5 0 -------------------$ 2 5 0 and u n der $ 2 7 5 -------------------$ 2 7 5 and u n d e r $ 3 0 0 -------------------$ 300 and o v e r ---------------------------------
117
80
746
1 ,8 4 3
2, 476
2 ,7 4 0
1 ,4 1 4
728
934
193
86
226
39
23
11
4 21
-
186
37
243
882
1 ,7 7 4
3 ,8 7 6
1 ,1 5 6
638
843
1 ,0 8 4
157
510
291
50
22
40
-
118
25
316
1 ,2 8 5
1 ,9 8 7
1 ,9 6 1
1 ,7 0 4
1 ,2 3 8
1 ,2 2 8
439
365
740
109
105
5
22
4 30
165
109
158
510
1 ,2 4 2
3, 219
1 ,0 6 4
848
1 ,0 6 4
651
328
1 ,7 5 4
398
150
45
38
48
97
20
261
535
1 ,3 7 8
1 ,4 6 6
1 ,7 0 9
693
1 ,6 9 3
860
559
1 ,4 3 3
674
131
63
51
115
97
106
344
722
2 ,9 6 6
7 38
43 4
1 ,0 8 5
910
461
1 ,4 1 6
1 ,7 3 8
257
248
77
78
-
72
10
256
526
965
791
633
638
1 ,0 2 7
649
437
2 ,0 8 2
1 ,3 2 9
745
766
42 4
138
55
74
60
101
75
77
292
654
1 ,7 0 9
350
1 ,0 2 7
528
328
427
1 ,3 2 5
1 ,2 8 9
727
1 ,8 0 6
406
237
129
211
93
-
-
-
-
-
-
-
-
-
-
4 54
-
30 y e a r s of s e r v i c e
T o ta l -------------------------------------------------
1 1 ,8 0 2
12, 205
1 1 ,8 0 2
12, 205
1 1 ,802
12, 205
1 1 ,802
12, 205
N o n e 3 ------ -----------------------------------------U n d er $ 1 0 ---------------------------------------$ 1 0 and u n d e r $ 2 0 -----------------------$ 2 0 and u n d e r $ 3 0 -----------------------$ 3 0 and u n d e r $ 4 0 -----------------------$ 4 0 and u n d e r $ 5 0 -----------------------$ 5 0 and u n d e r $ 6 0 -----------------------$ 6 0 and u n d e r $ 7 0 -----------------------$ 7 0 and u n d e r $ 8 0 -----------------------$ 8 0 and u n d e r $ 9 0 -----------------------$ 9 0 and u n d e r $ 1 0 0 ---------------------$ 1 0 0 and u n d e r $ 1 2 5 -------------------$ 1 2 5 and u n d e r $ 1 5 0 -------------------$ 1 5 0 and u n der $ 1 7 5 -------------------$ 1 7 5 and u n d e r $ 2 0 0 -------------------$ 2 0 0 and u n d e r $ 2 2 5 -------------------$ 2 2 5 and u n d e r $ 2 5 0 -------------------$ 2 5 0 and u n d e r $ 2 7 5 -------------------$ 2 7 5 and u n d e r $ 300 -------------------$ 3 0 0 and u n d e r $ 350 -------------------$ 350 and o v e r -------------------------------
147
32
639
1 ,0 8 0
1 ,7 1 7
2, 261
2, 716
1, 179
608
716
237
188
192
47
11
4 32
_
“
292
24
178
392
926
1 ,7 4 3
3 ,7 1 1
1 ,0 7 9
843
459
1 ,2 2 1
751
188
307
30
62
_
_
_
144
20
254
661
1, 101
2 ,0 3 5
1 ,9 8 7
1 ,0 8 0
1 ,0 6 5
1 ,2 6 5
7 30
853
329
141
51
46
4 40
_
_
265
44
99
327
714
1 ,1 8 3
2 ,9 8 3
948
875
735
685
2 ,1 4 9
490
421
138
87
61
_
_
_
-
93
27
252
326
719
1 ,2 3 3
1 ,5 1 9
1 ,0 3 5
728
1 ,5 0 0
792
1 ,6 3 3
1 ,2 3 3
322
190
68
48
44
4 40
151
22
125
329
376
736
2, 767
598
790
604
669
1 ,5 0 2
993
1 ,7 4 6
330
143
191
74
60
-
93
230
298
398
1 ,114
958
525
97
911
289
1 ,5 2 3
1 ,5 2 0
1 ,2 4 8
1 ,0 0 3
821
295
243
63
85
88
151
58
276
311
657
1 ,6 5 6
234
506
1 ,0 7 1
169
1 ,1 0 2
978
996
611
1 ,9 4 4
537
357
196
289
107
1
2
3
4
_
~
C o m p u ta tio n o f b e n e fit a m o u n ts w a s b a s e d on c u r r e n t b e n e fit f o r m u l a s , a s s u m i n g a c o n s ta n t l e v e l of e a r n i n g s .
B a s e d on a stu d y of 1 5 , 8 1 8 p r iv a t e p e n s i o n p la n s c o v e r i n g 15. 6 m i l l i o n a c t iv e w o r k e r s in 1961.
No p e n s i o n w a s p r o v i d e d b e c a u s e of th e d e d u c tio n o f a s s u m e d s o c i a l s e c u r i t y b e n e f i t s .
W h e r e h ig h e r b e n e fi t a m o u n ts w e r e r e l a t i v e l y fe w and w i d e l y s c a t t e r e d th ey w e r e a c c u m u la t e d in th is i n t e r v a l.
NOTE:
B e c a u s e o f rou n d in g, su m s of in divid u al ite m s m a y not equ al t o ta ls .
82
T a b le 2 6 . M on th ly P r iv a te P e n sio n P la n E a r ly R e tir e m e n t B e n e fits 1 fo r W o r k e r s R e tirin g at A ge 55
b y S e le c te d A s s u m e d A nn ual E a r n in g s L e v e ls and S e r v ic e P e r io d s , W in te r 1962—6 3 2
( W o r k e r s in th o u s a n d s )
A s s u m e d a n nu a l e a r n i n g s
$ 3 , 600
M o nth ly b e n e fi t
$ 4 , 800
W ork e rs
Plans
Plans
$ 6 , 000
W or k e rs
Plans
$ 8 ,4 0 0
W orkers
Plans
W orkers
10 y e a r s o f s e r v i c e
T o t a l ---------------------------------------------------
4 , 651
3, 397
4 , 651
3, 397
4 , 651
3, 397
4 , 651
3 ,3 9 7
N o n e 3 ------------------------------------------------U n d e r $ 1 0 ----------------------------------------$ 10 and u n d e r $ 2 0 -------------------------$ 20 and u n d e r $ 3 0 -------------------------$ 3 0 and u n d e r $ 4 0 _________________
$ 4 0 and u n d e r $ 5 0 _________________
$ 5 0 and u n d e r $ 6 0 -------------------------$ 6 0 and u n d e r $ 7 0 -------------------------$ 7 0 and u n d e r $ 8 0 -------------------------$ 8 0 and u n d e r $ 9 0 -------------------------$ 9 0 and u n d e r $ 100 ----------------------$ 100 and u n d e r $ 1 2 5 ---------------------$ 125 and o v e r ----------------------------------
104
1 ,8 0 4
1 ,7 4 1
538
217
1
219
4 27
-
136 '
829
1 ,8 5 1
464
53
19
16
28
-
139
1, 346
1, 5 8 5 %
855 '
252
197
31
29
4 217
-
128
389
1 ,5 9 2
915
229
76
23
19
26
-
121
841
1 ,4 7 6
909
601
185
110
161
79
220
1, 133
847
758
213
57
33
72
49 9
732
1, 206
662
287
498
138
93
166
51
29
218
40
135
567
627
617
580
493
119
116
22
24
19
38
-
-
-
-
-
-
-
-
-
-
-
29
4 218
-
-
19
38
15 y e a r s o f s e r v i c e
T o t a l ---------------------------------------------------
6, 90 4
5, 057
6 ,9 0 4
5, 057
6, 904
5 ,0 5 7
6, 904
5 ,0 5 7
N o n e 3 ------------------------------------------------U n d e r $ 1 0 ----------------------------------------$ 10 and unde r $ 2 0 -------------------------$ 2 0 and u n d e r $ 3 0 -------------------------$ 3 0 and u n d e r $ 4 0 ------------------------$ 4 0 and u n d e r $ 5 0 -------------------------$ 5 0 and u n d e r $ 6 0 -------------------------$ 6 0 and u n d e r $ 7 0 -------------------------$ 7 0 and unde r $ 8 0 -------------------------$ 8 0 and u n d e r $ 9 0 -------------------------$ 9 0 and u n d e r $ 1 0 0 -----------------------$ 100 and u n d e r $ 125----------------------$ 125 and u n d e r $ 1 5 0 ---------------------- $ 150 and o v e r ----------------------------------
89
965
3 ,4 0 8
1 ,4 9 3
520
138
231
12
12
4 36
-
132
305
2, 187
1 ,5 1 2
627
154
17
66
32
24
137
503
2, 334
2, 262
772
407
121
78
240
2
11
4 37
-
130
156
1 ,3 9 7
1 ,6 5 6
936
42 4
113
111
20
59
21
35
-
122
165
2, 099
1 ,4 8 0
1, 317
720
27 0
334
88
29
30
213
4 37
-
72
86
1 ,0 0 8
970
1, 123
782
485
230
104
69
4
89
35
122
157
1 ,0 8 1
896
889
929
926
481
485
312
203
128
248
47
72
65
632
494
462
651
674
520
659
340
122
211
107
47
-
-
-
-
-
*
20 y e a r s of s e r v i c e
T o t a l ---------------------------------------------------
7, 833
5 ,898
7, 833
5 ,8 9 8
7 ,8 3 3
5 ,8 9 8
7, 833
5, 898
N o n e 3--------------------------------------------------U n d e r $ 1 0 ___________________________
$ 10 and unde r $ 2 0 _________________
$ 2 0 and u n d e r $ 3 0 -------------------------$ 3 0 and u n d e r $ 4 0 -------------------------$ 4 0 and u n d e r $ 5 0 -------------------------$ 5 0 and u n d e r $ 6 0 ------------ ---------$ 6 0 and u n d e r $ 7 0 -------------------------$ 7 0 and u n d e r $ 8 0 -------------------------$ 80 and u n d e r $ 9 0 -------------------------$ 90 and unde r $ 100 ----------------------$ 100 and u n d e r $ 1 2 5 ______________
$ 125 and u n d e r $ 1 5 0 ---------------------$ 150 and u n d e r $ 1 7 5 --------------------$ 175 and u n d e r $ 200 ______________
$ 200 and o v e r ----------------------------------
51
441
2, 296
3, 580
593
274
306
188
41
24
10
4 30
81
183
1, 193
2 ,4 4 1
1 ,0 2 0
607
116
96
15
86
12
50
47
66
1, 606
2 ,4 9 4
1 ,7 4 4
843
268
302
295
76
1
52
20
4 20
75
71
867
1 ,4 8 3
1 ,2 2 7
1, 127
41 4
262
104
123
42
15
655
2, 138
1, 181
1 ,2 5 3
930
800
193
177
88
27 0
52
21
4 18
-
51
32
497
1 ,0 2 8
647
1 ,2 8 5
673
809
242
256
117
122
79
38
23
"
42
14
578
1 ,0 3 3
278
935
918
97 2
7 24
858
210
772
370
29
37
63
51
7
348
632
355
404
416
614
706
514
496
83 0
274
99
80
73
S e e fo o tn o te s at eftd of ta b le .
-
.
-
-
-
-
-
-
-
5
79
27
35
-
-
83
T a b le 26 .
M on th ly P r iv a te P e n sio n P lan E a r ly R e tir e m e n t B e n e fits 1 fo r W o r k e r s R e tirin g at A g e 55
b y S e le c te d A s s u m e d A nn ual E a r n in g s L e v e ls and S e r v ic e P e r io d s , W in te r 1962—6 3 2— C ontinu ed
(W o r k e r s in th o u s a n d s)
A s s u m e d a n nu a l e a r n i n g s
Plans
$6,, 000
$ 4 ,, 8 0 0
$ 3 600
M o nth ly b e n e fi t
W ork e rs
Plans
W orkers
Plans
$8 ,4 0 0
W orkers
Plans
| W orkers
7, 030
8, 025
7, 030
51
27
206
552
898
597
1 ,0 8 9
746
541
534
224
423
1 ,0 2 5
76
43
-
42
4
332
590
716
357
629
1, 039
488
1, 07 0
313
1, 160
846
203
164
35
37
51
5
167
390
45 5
304
40 4
389
305
576
610
1, 095
767
304
1 ,0 7 0
32
108
25 y e a r s of s e r v i c e
T o ta l --------------------------------------------------
8, 025
7, 030
8, 025
7, 030
8, 025
N o n e 3-_________________________________
U n d e r $ 1 0 ----------------------------------------$ 10 and unde r $ 2 0 -------------------------$ 2 0 and u n d e r $ 3 0 -------------------------$ 3 0 and u n d e r $ 4 0 -------------------------$ 4 0 and u n d e r $ 5 0 -------------------------$ 5 0 and u n d e r $ 6 0 -------------------------$ 6 0 and unde r $ 7 0 -------------------------$ 7 0 and unde r $ 8 0 -------------------------$ 8 0 and u n d e r $ 9 0 -------------------------$ 9 0 and u n d e r $ 100 ----------------------$ 100 and u n d e r $ 1 2 5 ---------------------$ 125 and u n d e r $ 1 5 0 ---------------------$ 150 and u n d e r $ 17 5 ---------------------$ 175 and u n d e r $ 2 00 ---------------------$ 2 0 0 and u n d e r $ 2 2 5 ---------------------$ 225 and o v e r ----------------------------------
51
76
1 ,3 6 6
2, 808
2, 354
455
448
123
233
60
15
5
4 31
81
65
629
1 ,6 1 6
1 ,7 6 4
909
589
169
148
910
26
66
59
-
47
64
756
1, 966
1 ,9 7 0
1 ,2 9 8
776
231
497
137
78
161
12
4 32
-
75
52
378
859
1 ,4 6 9
1. 059
809
616
320
160
63
1 ,0 5 1
56
63
-
42
14
343
1 ,0 5 4
1 ,6 2 6
1, 046
1 ,0 4 8
1 ,0 2 1
450
558
171
455
153
15
4 29
-
-
-
-
-
-
!
30 y e a r s o f s e r v i c e
T o ta l -------------------------------------------------
8, 121
7 ,094
8, 121
7 , 094
8, 121
7 ,0 9 4
8, 121
7, 094
N o n e 3 ------------------------------------------------U n d e r $ 1 0 ___________________________
$ 10 and unde r $ 2 0 -------------------------$ 2 0 and u n d e r $ 3 0 -------------------------$ 30 and u n d e r $ 4 0 -------------------------$ 4 0 and u n d e r $ 5 0 - ---------------------$ 5 0 and u n d e r $ 6 0 -------------------------$ 6 0 and u n d e r $ 7 0 -------------------------$ 7 0 and u n d e r $ 8 0 -------------------------$ 8 0 and u n d e r $ 9 0 -------------------------$ 9 0 and u n d e r $ 100 ----------------------$ 100 and u n d e r $ 1 2 5 ---------------------$ 125 and u n d e r $ 1 5 0 ---------------------$ 150 and u n d e r $ 1 7 5 ______________
$ 175 and u n d e r $ 200 ---------------------$ 2 0 0 and u n d e r $ 2 2 5 ---------------------$ 2 2 5 and u n d e r $ 2 5 0 ---------------------$ 2 5 0 and u n d e r $ 2 7 5 ---------------------$ 275 and o v e r ----------------------------------
50
26
1 ,0 3 6
2, 197
2, 555
975
654
148
102
101
239
5
2
4 31
81
34
421
1 ,2 1 8
1 ,6 6 8
1 ,2 7 7
535
430
169
144
978
36
44
69
47
14
516
1 ,2 7 6
2, 231
1, 194
917
564
602
237
196
279
14
4
5
425
75
27
214 !
831
949
1, 185
757
695
564
231
204
1, 183
75
24
46
37
42
4
220
735
1, 141
1, 349
903
1, 096
627
293
622
745
199
112
7
2
42
51
5
152
436
639
728
513
827
653
572
450
619
339
1 ,0 0 5
28
46
31
42
4
210
370
912
457
116
47 4
440
1, 107
732
1, 345
768
702
228
148
29
3
34
51
5
130
313
362
362
269
248
316
377
298
1, 320
799
641
3 35
1 ,0 7 4
87
47
61
1
2
3
4
See
See
See
See
fo o tn o te
fo o tn o te
fo o tn o te
fo o tn o te
1.
2,
3.
4,
ta b le
ta b le
ta b le
ta b le
-
-
-
-
-
-
-
-
-
-
-
-
"
25.
25.
25.
25.
N O T E : B e c a u s e o f ro u n d in g , s u m s o f in d iv id u a l i t e m s m a y n o t e q u a l t o ta ls .
-
-
-
-
Chapter V. Other Features
P riv a te p en sio n plan s a re ta ilo re d to m e e t the n eed s of p a r tic u la r in divid ual
w o rk e rs and g ro u p s of w o rk e rs , p a rtic u la r co m p an ies, and sp e c ia l situ a tio n s,
su ch as th ose a ris in g out of tech n o lo g ical change. T his c h a p te r d eals w ith v e s t
ing, a n o th e r m a jo r ben efit; the co m b in atio n s of b en efit p ro v isio n s in plans; the
p ra c tic e of p ro v id in g su p p le m e n ta ry p en sio n s; and fin ally , death b en efits. W hile
th is c h a p te r does not e x h au st the unique fe a tu re s of p riv a te p en sio n p la n s, it
illu s tra te s th e ir p o te n tia l fle x ib ility , and h ig h lig h ts s e v e ra l im p o rta n t and grow ing
fa c e ts of p riv a te p la n s.
V ested B en efits 68
V esting p ro te c ts the w o rk e r1s equity in w hat m ay be one of h is m o re v a lu
ab le a s s e ts — the rig h t to a d e fe rre d p en sio n b en efit if h is em ploym en t te rm in a te s
b e fo re he is e lig ib le fo r re tire m e n t. In ad d itio n , v estin g m ay p e rm it the w o rk e r
to a c c u m u la te and , th u s, bu ild up pen sio n b en efits fro m m o re than one plan.
C hances of a c q u irin g rig h ts to b e n e fits fro m m o re than one p en sio n p lan , h o w ev er,
a r e lim ite d by age and s e rv ic e re q u ire m e n ts and by the f a r- fr o m -u n iv e r s a l ad o p
tion of p riv a te p la n s. 69
T h e re is a c lo se re la tio n s h ip betw een v e ste d and n o rm a l r e tire m e n t b en efit
am ou nts b e c a u se both b e n e fits a re a lm o st alw ays com p uted by the sam e fo rm u la.
T hu s, v e ste d and n o rm a l re tire m e n t b en efits w ill be equal if e a rn in g s and len gth
of s e rv ic e a re the sa m e . In som e in sta n c e s, h o w ev er, the v e ste d p en sio n w ill
be le s s th an the n o rm a l p en sio n , even if e a rn in g s and se rv ic e a re the sa m e , b e
c a u se so m e p lan s p ro v id e g ra d e d v e stin g , and the w o rk e r m ay no t qu alify fo r a
fu ll b en efit at te rm in a tio n . In ad d itio n , som e p lan s se t a m in im u m b en efit fo r
n o rm a l b en efits but have none fo r v estin g .
F o r th is study, v e ste d b en efits w e re com puted fo r each p lan u sin g the sam e
assu m p tio n s as fo r n o rm a l re tire m e n t b en efits. It w as a lso a ssu m e d th a t v e ste d
b e n e fits w ould be pay able a t n o rm a l re tire m e n t ag e, although a fo u rth of the p lan s
w ith tw o -fifth s of the w o rk e rs p ro v id ed th at w o rk e rs could e le c t to re c e iv e v e ste d
b en efits in a re d u c e d am ou nt (usually the a c tu a ria l equivalent) a t an e a r lie r ag e,
m o st fre q u e n tly 10 y e a rs b efo re n o rm a l age.
A t the 10-y e a r s e rv ic e le v e l, b en efits w e re com p utab le fo r a lm o st th r e e fifth s of the p lan s w ith v estin g co v erin g slig h tly m o re th an h alf the w o rk e rs .
In m o re th an 4 out of 5 p la n s, co v erin g 9 out of 10 w o rk e rs , v estin g w as p o s
sib le w ith 15 y e a rs of s e rv ic e .
Percent
Service to qualify for vesting
All plans with vestin g--------------------------------------------
10 years or l e s s ---------------------------------------------------15 years or l e s s ---------------------------------------------------20 years or l e s s ---------------------------------------------------25 years or l e s s -----------------------------------------------------30 years or l e s s ----------------------------------------------------
Plans
(cum ulative)
Workers
(cum ulative)
100.0
57.4
83.8
91.8
99.1
99.6
100.0
54.1
89.1
96.5
99.6
99.8
00 This section supplements detailed data appearing in BLS Bulletin 1407, op. c it ., pp. 11—23.
69 Ibid., p. 46.
86
A s ex p ected , v e ste d b en efits ran g ed w idely a t the d iffe re n t se rv ic e and
e a rn in g s le v e ls display in g the sam e c h a r a c te r is tic s ex h ib ited by the n o rm a l b e n e
fit d is trib u tio n s . F o r the m id dle 80 p e rc e n t of the w o rk e rs earn in g $ 4 ,8 0 0 w ith
20 y e a rs of se rv ic e , the ran g e w as $38 to $105 a m onth (c h a rt 10). In co n
tr a s t, a t the $ 8 ,4 0 0 le v e l, w ith the sam e s e rv ic e , the ran g e w as $48 to $219 a
m onth.
M edian b en efits ran g ed fro m $25 fo r a w o rk e r earn in g $ 3 , 600 w ith 10 y e a rs
of s e rv ic e to $169 fo r a w o rk e r earn in g $ 8,400 w ith 30 y e a rs of s e rv ic e .
______________________________Annual earnings___________________________
$3,600_______________$4,800_______________$6,000_______________$8,400
Service periods (years)
1 0 1 --------------------------------------15 1 ---------------------------------------2 0 ........................................................
2 5 -----------------------------------------3 0 ------------- ----------------------------1 Excludes a substantial number
Median
Inter
quartile
range
$25
39
52
65
78
$16-$28
34- 45
45- 63
56- 80
68- 90
Median
Inter
quartile
range
$28
42
56
70
84
$22-$36
38- 60
50- 82
63-108
75-127
Median
Inter
quartile
range
Median
Inter
quartile
range
$28
50
72
90
105
$25-$48
39- 78
52-110
65-139
78-165
$37
68
106
140
169
$28-$81
39-125
56-175
70-221
84-267
of workers in plans with higher qualifying service requirements.
The point of in itia l v estin g m a rk s an im p o rta n t m ile sto n e in the w o rk e r's
c a r e e r b e c a u se he has gained the rig h t to a v alu ab le a s s e t. The value of the
m ed ian v e ste d b en efit to the $ 3, 6 0 0 -a -y e a r m ale w o rk e r w ith 10 y e a rs of s e r v
ice w ould be abo ut $ 1,662 if it w e re p u rc h a se d fo r h im at age 45, o r $ 3, 550 if
p u rc h a se d a t age 65. 70 A t the o th e r end of the sc a le , the $ 8, 4 0 0 -a -y e a r w o rk er
w ith 30 y e a rs of s e rv ic e w ould have the rig h t to an a s s e t am ounting to $ 11,238 if
the m ed ian b en efit w e re p u rc h a se d a t age 45, o r $ 23, 998 if p u rc h a se d a t age 65.
O th er illu s tra tiv e am o u n ts can be d e riv ed fro m the follow ing tab u latio n .
Monthly amount payable
at age 65
$20
$30
$40
$50
$60
$70
$80
$90 ■
$100
$120
$140
$160
Cost of individual annuities purchased for
__________ a man when he is---------------------Age 45
Age 65
$1,330
1,995
2, 660
3, 325
3, 990
4, 655
5,320
5, 985
6, 650
7, 980
9,310
10,640
$2, 840
4, 260
5, 680
7, 100
8,520
9, 940
11,360
12,780
14,200
17,040
19, 880
22,720
70
Computed from the following nonparticipating individual premium rates of a large life insurance company.
For the purchase of im m ediate annuities of $10 monthly at age 65, $1,420 for m en and $1,630 for women, and
deferred annuities purchased at age 45 of $10 monthly com m encing at age 65, $665 for men and $835 for women.
87
Chari 10. Monthly Vesting Benefits,1 by Selected Assumed Annual
Earnings Levels and Service Periods, Winter 1962-632
SER V IC E
annual
o
$50
$100
Monthly benefit
$150
$200
$250
$300
IN YEARS
10
15
20
25
30
1
M e d ia n
m o n th ly b e n e fits and ran g e s w ith in w h ic h fe ll 5 0 p e rc e n t and 8 0 p e rc e n t o f th e w o rk e rs .
^ Based on a s tu d y o f 1 5 ,8 1 8 p riv a te pension p lans c o v e rin g 1 5 .6 m illio n
a c tiv e w o rk e rs in 1 9 6 1 .
$350
88
Com binations of M a jo r B en efit P r o v i s io n s
The com binations of m a j o r b enefit p r o v i s io n s — n o r m a l, d is a b ility , and e a r l y
r e t i r e m e n t , and v e stin g — d e te r m in e the extent of p ro te c tio n a ffo rd e d c o v e r e d
w o r k e r s by p r i v a te pen sion p lan s. Although one r e t i r e m e n t p r o v is io n m a y s e r v e
as a su b stitu te fo r a n o th er— fo r e x am p le, e a r l y r e t i r e m e n t f o r d is a b ility r e t i r e
m e n t, o r e a r l y r e t i r e m e n t f o r vestin g — the su b stitu tion u s u a lly la c k s a k ey e l e
m en t that m a y be of g r e a t im p o rta n c e in in d ivid u al situ a tio n s.
The independent d e c is io n s of thousands of e m p lo y e r s and unions r e s p o n s ib le
f o r p r i v a t e pen sion plans le d to wide v a r i e t y in plan p r o v i s io n s . Union i n t e r e s t
at the inception of a plan u s u a lly c e n te r s on n o r m a l r e t i r e m e n t benefit le v e l s .
L a t e r , in the light of plan e x p e rie n c e and d evelo p m en ts in o th er p la n s, i n t e r e s t
s p re a d s to o th e r p r o v i s io n s , such as to ta l d is a b ility p ro te c tio n . S i m i l a r l y , nonn egotiated plans have expanded the v a r i e t y of b e n e fits. R e g a r d le s s of the p r e s
ence o r ab se n c e of c o lle c t i v e b a rg ain in g , c o s ts continue to be the o v e rr id in g
c o n s tr a in t on such pension planning d e c is io n s .
P r e v a l e n c e of M a jo r B en efit P r o v i s i o n s . A t le a s t one of the m a j o r b en efits
supplem enting n o r m a l r e t i r e m e n t — e a r l y and d is a b ility r e t i r e m e n t and vestin g —
w as found in m o s t plans (table 27). In about a tenth of the p la n s, h o w e v e r , with
about a tenth of the w o r k e r s , a w o r k e r had to r e a c h n o r m a l r e t i r e m e n t age to
r e c e i v e any plan b en efits.
On the o th er hand, a high d e g re e of p ro te c tio n was
a ffo rd e d by 30 p e r c e n t of the plans with 40 p e rc e n t of the w o r k e r s that had a ll
th re e m a j o r b en efits that supplem ent n o r m a l r e t i r e m e n t .
A n o th e r sixth of the
plans w ith o v e r a fifth of the w o r k e r s had d is a b ility r e t i r e m e n t plus ve stin g o r
e a r l y r e t i r e m e n t , w hile a s m a l l n u m b er had d is a b ility r e t i r e m e n t only.
In a l
m o s t 40 p e rc e n t of the plan s with a fifth of the w o r k e r s , a d isab led w o r k e r had
to su b stitu te, if p o s s ib le , e a r l y r e t i r e m e n t o r ve stin g f o r the r e g u l a r d is a b ility
p ro v is io n .
Major benefits provided
in addition to normal
retirement
___________ Percent
Plans
Workers
A ll plans studied -----------------------------
100.0
100.0
No other benefit -----------------------------
9 .4
10.0
30 .9
39. 1
Disability, early and vesting ----------9 .9
17.2
Disability and early -----------------------6 .0
4 .9
Disability and vesting ---------------------8 .5
5 .0
Disability o n l y --------------------------------14.4
27. 3
Early and vesting ----------------------------8 .5
4 .7
Early only ---------------------------------------3. 1
Vesting only -----------------------------------1. 1
NOTE: Because of rounding, sums of individual item s may not
equal totals.
M u ltie m p lo y e r plans w e r e le s s li k e ly to h a ve m a j o r su p p lem en tal b en efits
than s in g l e - e m p lo y e r p lans; about an eighth of the m u lt i e m p lo y e r p lans with about
a th ird of the w o r k e r s p ro v id e d only n o r m a l r e t i r e m e n t b en efits as c o m p a re d to
l e s s than 10 p e rc e n t of the s in g l e - e m p lo y e r plans with f e w e r than 5 p e rc e n t of
the w o r k e r s .
89
Major benefits provided
in addition to normal
retirement
Single employer______Multiemployer
Percent
------------------------------------------------------ “
Plans Workers
Plans Workers
All plans studied ----------------------
100.0
100.0
100.0
100.0
No other benefit ----------------------
9 .2
2 .2
12.8
33.6
Disability, early and vesting ---Disability and e a r ly -----------------Disability and vesting --------------Disability only ------------------------Early and vesting ---------------------Early only --------------------------------Vesting only -----------------------------
32. 1
9.3
5 .4
3 .4
28.7
8 .6
3. 2
49 .7
18.5
2.8
3 .0
17.7
4 .8
1.3
10.8
19.0
15.9
30.7
3.7
5.8
1.3
7 .0
13.4
11.3
25.3
4 .6
4 .2
.7
totals.
NOTE: Because of rounding, sums of individual items may not equal
The h ig h est d e g re e of p ro te c tio n w as found in s i n g l e - e m p lo y e r p lans— 1 out
of 3 s in g l e - e m p lo y e r plans with 1 out of 2 w o r k e r s , c o m p a re d to only 1 out of
10 m u ltie m p lo y e r plans with about the sam e p ro p o rtio n of w o r k e r s , had a ll m a j o r
su p p lem en tal b e n e fits.
M u ltie m p lo y e r plans c o n c e n tra te d on p rovid in g at le a s t
d is a b ility b en efits— 30 p e rc e n t of the m u ltie m p lo y e r plans with a fou rth of the
w o r k e r s had only d is a b ility r e t ir e m e n t .
M a j o r su p p lem en tal b en efits w e r e m o r e p r e v a le n t in c o n trib u to ry p lan s,
a lm o s t a ll of which a r e s in g l e - e m p lo y e r p lans. About 50 p e r c e n t of the w o r k e r s
in c o n tr ib u to r y p lan s, c o m p a re d to about 35 p e rc e n t in n o n c o n trib u to ry p lan s,
had a ll m a j o r b enefit p r o v i s io n s . On the o th er hand, about equal p ro p o rtio n s of
w o r k e r s — 10 p e rc e n t— in both types of plans had no m a j o r su p p lem en tal b en efits.
M ost of the rem ain in g c o n tr ib u to r y plans p ro vid e d e a r l y r e t i r e m e n t , o r v e stin g ,
o r both, w hile the n o n c o n trib u to ry plans showed w id e r v a r i a t i o n s in pension b e n e
fits , t y p i c a lly including d is a b ility r e t i r e m e n t p ro te c tio n .
Noncontributory
Major benefits provided
in addition to normal
retirement
Contributory
__________________Percent
Plans
Workers
Plans
Workers
All plans studied --------------------
100. 0
100.0
100.0
100.0
No other b e n e fit----------------------
10. 1
9 .8
7. 5
10. 5
Disability, early and vesting---Disability and e a r ly ----------------Disability and vesting ------------Disability o n l y -----------------------Early and vesting -------------------Early only ------------------------------Vesting only ---------------------------
30 .6
11. 8
6.3
5 .4
24. 8
8. 9
2. 2
36. 2
21. 7
5. 8
9. 7
10.2
5 .4
31. 7
4. 9
5. 1
4. 1
33 .9
7. 1
5. 5
47 .5
3 .9
2.2
4. 9
26.9
2 .5
1.6
totals.
1 .0
NOTE: Because of rounding, sums of individual items may not equal
About 10 p e r c e n t of the w o r k e r s in plans m en tion ed in c o lle c tiv e b a r g a i n
ing a g r e e m e n ts — m o s t ly m u ltie m p lo y e r p lans— as c o m p a r e d to about 5 p e rc e n t of
the w o r k e r s in n on b argain ed plans had only n o r m a l r e t i r e m e n t .
90
A bout 4 0 p e rc e n t of the w o r k e r s in c o l le c t i v e l y b a rg a in e d plan s had a l l
m a j o r su p p lem en tal b en efits (m o stly accou n ted f o r by plans n egotiated by the
A u to m o b ile W o r k e r s and S t e e lw o r k e r s ) a s a g a in st about a th ird of the w o r k e r s
in n on b argain ed p lan s. P la n s not m en tion ed in c o l le c t i v e bargain in g a g r e e m e n ts
u s u a lly had a t l e a s t v e stin g and e a r l y r e t i r e m e n t (about a fo u rth of the w o r k e r s
w e r e c o v e r e d ) , w h ile plans m entioned in c o l le c t i v e b argain in g a g r e e m e n ts u s u a lly
added e a r l y and d is a b ility r e t i r e m e n t (about a fifth of the w o r k e r s ) .
Mentioned in a collective
bargaining agreement
Major benefits provided
in addition to normal
retirement
Not m entioned in a collective
bargaining agreement
___________________________ Percent
Plans
Workers
Plans
Workers
A ll plans studied ----------------------
1 00 .0
1 00 .0
1 00 .0
1 00.0
No other benefit ----------------------
1 0 .4
1 2.7
8.8
4 .2
Disability, early and v e s t in g ---Disability and early ----------------Disability and vesting --------------Disability only ------------------------Early and vesting ---------------------Early only --------------------------------Vesting only -----------------------------
4 2 .3
10.8
3 .6
7 .8
20.8
4 .0
0 .4
4 0 .3
1 8.7
5.7
9 .4
9 .5
3.3
0 .4
2 4 .3
9 .4
7 .4
3 .4
3 1.0
11 . 1
4 .6
3 6 .4
1 4 .1
3.3
6 .5
2 5.3
7 .6
2.6
NOTE: Because of rounding, sums of individual items may equal totals.
S m a ll plan s w e r e l e s s li k e ly than la r g e ones to p ro v id e su p p lem en ta l b e n e
fits .
Ten p e rc e n t of the plans w ith u n d er 1 , 0 0 0 w o r k e r s as c o m p a re d to le s s
than 5 p e rc e n t of the l a r g e r plans p ro vid e d only n o r m a l r e t i r e m e n t (table 28).
A l l t h r e e m a j o r b en efits— e a r l y and d is a b ility r e t i r e m e n t and v e stin g — w e r e p r o
vided by 2 out of 5 of the l a r g e s t p lan s; by o v e r 1 out of 3 of the plans in the
1 , 0 0 0 —5 , 0 0 0 s iz e group; and by l e s s than 1 out of 3 of the s m a l l e r p lan s.
About
1 out of 5 of the l a r g e r plans had e a r l y r e t i r e m e n t and d is a b ility , c o m p a r e d to
only 1 out of 10 plans with fe w e r than 1 , 0 0 0 w o r k e r s .
S a la r i e d w o r k e r s ’ p lans g e n e r a l ly p ro v id e d m o r e typ es of su p p lem en tal
ben efits than those c o v e rin g only p rod u ction w o r k e r s . C h iefly re fle c t in g the la c k
of p r o t e c t i v e p ro v is io n s in m u ltie m p lo y e r p la n s, a fifth of the w o r k e r s in b lu e c o l l a r plans w e r e in plans with only n o r m a l r e t i r e m e n t (table 29).
H o w ever,
b l u e - c o l l a r plans c o m m o n ly p ro v id e d a l l m a j o r su p p lem en tal b en efits (plans w ith
a th ird of the w o r k e r s ) . Many had only d is a b ility r e t i r e m e n t (plans w ith a six th
of the w o r k e r s ) o r e a r l y and d is a b ility r e t i r e m e n t (plans w ith a seven th of the
w o r k e r s ) . On the o th e r hand, only a few s a l a r i e d w o r k e r s ’ plans had only n o r m a l
r e t i r e m e n t , w h ile h a lf the w o r k e r s w e r e c o v e r e d by plans w ith a ll th r e e m a j o r
su p p lem en tal b en efits. A n o th e r tenth of the w o r k e r s in w h i t e - c o l l a r plan s w e r e
p ro t e c te d by at le a s t a d is a b ility r e t i r e m e n t p ro v is io n .
W h e re both w h ite - and
b l u e - c o l l a r w o r k e r s w e r e c o v e r e d in the sam e plan, 2 out of 5 w o r k e r s w e r e in
plans w ith a ll m a j o r su p p lem en tal b en efits. N e a r ly a l l of the re m a in in g w o r k e r s
belonged to plans with e a r l y r e t i r e m e n t plus e ith e r ve stin g o r d is a b ility r e t i r e m e n t .
The in d u s try d is trib u tio n of su p p lem en tal b en efits exhibited wide d i v e r s i t y ,
c h ie fly accounted f o r by the p a tte rn of c o v e r a g e of c o l le c t i v e l y b a rg a in e d p lan s,
p a r t i c u l a r l y m u lti e m p lo y e r plans (table 30).
91
S u p p le m e n ta ry P la n s
Since s o c ia l s e c u r i t y o ld -a g e b en efits c o m p r is e a l a r g e r fr a c ti o n of the
r e t i r e m e n t in com e of lo w e r paid than of h ig h er paid w o r k e r s , m an y p r i v a t e p la n s 1
c o u n te r a c t this im b alan ce by making ad d ition al pension b en efits a v a ila b le to h ig h e r
paid w o r k e r s . A s has been d is c u s s e d in c h a p te r II, the n o r m a l b en efit fo r m u la
m a y be design ed to in te g ra te with s o c ia l s e c u r it y by the o ffs e t m ethod o r the
s t e p - r a t e m ethod.
A n o th e r m ethod s i m i l a r to the s t e p - r a t e m ethod p ro v id e s
e x tr a r e t i r e m e n t b en efits to elig ib le e m p lo y e e s c o v e r e d by a b a sic pension plan
(which is u s u a lly n on con trib u tory) who e le c t to m ake v o lu n t a ry co n trib u tion s to
a su p p le m e n ta ry plan.
This method has the advantage of p e rm ittin g a change
in the s o u r c e s of financing, which is not u s u a lly p ra c t ic a b le in a sin gle plan.
M o r e o v e r , the b a s ic plan is often the r e s u l t of c o lle c t i v e bargain in g w hile the
s u p p le m e n ta ry plan is not. Although som e su p p le m e n ta ry plan s a r e a v a ila b le to
a l l e m p lo y e e s , they a r e u s u a lly lim ite d to w h i t e - c o l l a r w o r k e r s o r to em p lo y e e s
with ea rn in g s exceeding the amount su b je ct to s o c ia l s e c u r i t y taxes ( $ 4 , 800 a
y e a r at the tim e of the study).
A bout 600, 000 w o r k e r s w e r e c o v e r e d by m o r e than one plan of a single
e m p lo y e r.
About 75 p e rc e n t of th ese w o r k e r s w e r e in p lans with o v e r 5 , 0 0 0
w o r k e r s — a g r e a t e r co n cen tra tio n than w as found in b asic p lans.
Workers
Percent (thousands) Percent
Number of workers covered
Plans
A ll supplementary plans ----------
489
100.0
596
100.0
Under 200 ...................................—
200 and under 500 -----------------500 and under 1,000 --------------1, 000 and under 5,000 ----------5, 000 and under 10,000 ---------10,000 and under 25,000 -------25,000 and under 50,000 -------50,000 and o v e r ----------------------
260
154
15
37
8
10
3
2
53 .2
31.5
3.1
7 .6
1.6
2 .0
.6
23
42
12
67
57
139
102
154
3 .9
7 .0
2 .0
11.2
9 .6
23.3
17.1
25.8
(>)
1 Less than 0. 05 percent.
totals.
NOTE: Because of rounding, sums of individual item s may not equal
S u p p le m e n ta ry p lans w e r e m o s t com m on in m an u factu rin g in d u s t r ie s — a lm o s t
70 p e r c e n t of th e p la n s w ith o v e r 90 p e r c e n t of th e w o r k e r s in s u p p le m e n ta r y p la n s .
Among m an u factu rin g in d u s t r ie s , la r g e f i r m s in the au to m o b ile, s t e e l, c h e m ic a l,
and ru b b e r p ro d u cts o ffe re d th ese plans to s a l a r i e d em p lo y e e s o r , l e s s fr e q u e n tly ,
to a l l e m p lo y e e s with ea rn in g s o v e r a c e r t a in amount. In n on m an u factu ring, such
plans w e r e m o s t com m on in public utilities., c o v e rin g both s a l a r i e d and p ro d u c
tion w o r k e r s .
Only a s m a l l n u m b e r o f s u p p le m e n ta ry p lan s c o v e r e d o n ly prod u ction w o r k e r s ;
w h e re they did, a s e p a r a t e plan w as u s u a lly a v a ila b le to s a l a r i e d w o r k e r s . About
tw o -fifth s of the plans w ith a t h ir d o f the w o r k e r s w e r e com bined prod u ction and
s a l a r i e d w o r k e r p lan s, and the r e m a in d e r w e r e lim ite d s o l e l y to s a l a r i e d w o r k e r s .
____________ Percent____________
Type of worker covered
A ll supplementary plans ------------—
Salaried and production -------------- .............
Salaried only ------------------------------ --------Production only -------------------- -— .............
totals.
Plans
Workers
100.0
100.0
37.6
60.1
2 .2
34.1
62.8
3.1
NOTE: Because of rounding, sums of individual items may not
92
R e g a r d le s s of the type of w o r k e r c o v e r e d , th ese plans u s u a lly r e q u ire d that
p a rtic ip a tin g e m p lo y e e s e a r n in e x c e s s of a sp e c ifie d amount and con trib u te a
sp e c ifie d p e rc e n ta g e of t h e ir ’’e x c e s s e a rn in g s . " B en efits in tu rn w e r e a ls o b ased
s o l e ly on e x c e s s e a rn in g s .
The m in im u m e a rn in g s l e v e l v a r i e d w id e ly b eca u se
the m a x im u m amounts u se d to compute s o c ia l s e c u r i t y b en efits at the tim e the
p lan s w e r e adopted o r am ended h ave ran g ed f r o m $ 3 , 0 0 0 to $ 4 , 8 0 0 . H o w ever,
th e r e w e r e a ls o s e v e r a l plans that b ased both con trib u tio n s and su p p le m e n ta ry
b en efits on a ll e a rn in g s .
B en efits P a y a b le U n d er S u p p le m e n ta ry P l a n s . W hile the b en efit p r o v is io n s
and the age and s e r v i c e r e q u i r e m e n t s of the optional s u p p le m e n ta ry plan t y p i c a ll y
d if fe r e d f r o m those of the a s s o c i a te d b asic plan, r e q u i r e m e n t s and o th e r p r o
v is io n s (although not the b en efit amounts) w e r e id e n tic a l in 180 plan s w ith about
1 2 0 , 0 0 0 w o r k e r s . T hese s u p p le m e n ta ry plans m e r e l y added on ad d ition al b e n e
fits fo r c o v e r e d e m p lo y e e s .
The o th e r s u p p le m e n ta ry p lan s often had m o r e
l i b e r a l p r o v is io n s than th e ir a s s o c ia te d b a sic plan.
F o r e x a m p le , 20 p e rc e n t
of the w o r k e r s in b asic plans a s s o c ia te d with s u p p le m e n ta ry plans did not have
a v e stin g p r o v is io n , but f o r h a lf th e s e w o r k e r s , the s u p p le m e n ta ry plan did have
v e stin g . A lm o s t a ll of th ese p lan s without vestin g had an e a r l y r e t i r e m e n t p r o
v is io n . H o w e v e r, sin ce e a r l y r e t i r e m e n t r e q u i r e d the a tta in m e n t of a la t e r age
than v e stin g , to v e s t in fu ll in both plans m e m b e r s would p ro b a b ly have to w ait
until they q u alified f o r e a r l y r e t i r e m e n t u n d er the b asic plan.
N o rm a l r e t i r e m e n t b en efit am ounts w e r e u s u a lly g e a r e d to e a rn in g s as w e ll
as s e r v i c e . F o r ex a m p le, f o r w o r k e r s earning $ 8 , 4 0 0 a y e a r they ran ged f r o m
$ 1 . 5 0 to o v e r $ 8 fo r each y e a r of p a rtic ip a tin g s e r v i c e .
In m o s t p lan s, the
s u p p le m e n ta ry plan b en efits equaled o r exceed ed those p ro v id e d by the b asic plan
at the sa m e ea rn in g s l e v e l e s p e c i a ll y w h e r e , as co m m o n ly o c c u r r e d , the b a sic
fo r m u la w as b ased s o l e ly on s e r v i c e , w hile the s u p p le m e n ta ry plan fo r m u la was
b ased on both e a rn in g s and s e r v i c e .
Death B en e fits
P r i v a t e pension p la n s, a s a r u l e , do not ap p ro a c h the p ro te c tio n a ffo rd e d
s u rv iv in g dependents u n d er the F e d e r a l s o c ia l s e c u r i t y s y s t e m . 7127 But a su b
s ta n tia l n u m b er of p r iv a te plans do o ffe r two m e a n s of p ro te c tin g the s u r v i v o r s
of r e t i r e d as w e ll as a c tiv e plan m e m b e r s . In som e plan s the w o r k e r d i r e c t l y
b e a r s the e n tire b urden of p ro te c tio n by electin g a p ension with s u r v i v o r b en efits
(an option^ in p lace of h is e a rn e d annuity at the c o st of a red u ced annuity f o r
h im s e lf . 7 In o th er plan s p en sion s a r e a u to m a tic a lly continued to the s u r v i v o r s
upon the death of r e t i r e d o r a c tiv e w o r k e r s .
The two m o s t com m on options p ro v id e d by p r i v a t e pension plans a r e joint
and s u r v i v o r and p e r i o d - c e r t a i n .
Under the f i r s t typ e, the w o r k e r r e c e i v e s a
red u ced annuity until his death, a f t e r which a s p e c ifie d annuity is paid fo r the
life t im e of a d esign ated jo in t annuitant.
A p e r i o d - c e r t a i n option a s s u r e s a r e
duced annuity fo r a sp e c ifie d n u m b er of p a y m e n ts, but if the p e n s io n e r l i v e s b e
yond the g u aran te e p e rio d , he continues to r e c e i v e re d u c e d m on th ly am ounts.
71 In addition to providing lump-sum death benefits, OASDI provides extensive survivors’ benefits. See, for
exam ple, U. S. Department of Health, Education, and Welfare, Social Security Administration, Your Social Security
(OASDI-35, May 1963).
72 In some plans, notably those negotiated by the Automobile Workers, the worker only pays part of the cost
if he names his spouse as a joint annuitant because the reduction in his benefit is less than actuarial; i. e ., the joint
and survivor benefit he may elect is of greater actuarial value than the straight life annuity payable if he makes
no election.
93
The a n a ly s is in this study was lim ite d to the second of the two m ethods
that p r i v a t e plan s u se to p r o t e c t s u r v i v o r s of c o v e r e d w o r k e r s , i. e. , to the type
not dependent upon the w o r k e r s 1 electio n . This includes: (l) L u m p -s u m p aym en ts
m ade to a w o r k e r ' s b e n e fi c ia r y , (Z) au tom atic life t im e continuation of pension
p a ym en ts to s u r v i v o r s of a c tiv e and r e t i r e d w o r k e r s , and (3) au to m atic con tin u
ation of pension p aym en ts to s u r v i v o r s f o r a g u a ra n te ed p e rio d of tim e (paym ent
c e r t a in g u a ra n te e). 73
L ife in s u r a n c e p ro te c tio n u n der a s e p a ra t e h ealth and in s u r a n c e plan is
g e n e r a l ly p ro v id e d f o r a c tiv e w o r k e r s c o v e r e d by p r i v a t e pension p lans but le s s
fr e q u e n tly fo r s u r v i v o r s of r e t i r e d w o r k e r s . 74 In addition, w o r k e r s in c o n t r ib
u to r y p en sion plan s a r e a ffo rd e d som e p ro te c tio n through g u a ra n te e d r e t u r n of
th e ir own con trib u tion s to the plan.
Death b en efit p r o v i s io n s , as defined ab ove, w e r e found in a th ird of the
pen sion plans c o v e rin g slig h tly m o r e than a th ird of the w o r k e r s (table 31). W hile
about equal p ro p o rtio n s of s in g l e - e m p lo y e r and m u ltie m p lo y e r plans had them , a
som ew h at h ig h e r p e rc e n ta g e of w o r k e r s in m u ltie m p lo y e r plans had this added
p ro te c tio n .
With death
Without death
________ Total_______________benefits______________ benefits______
Percent
Type of employer unit
Plans
Workers
Plans
Workers
Plans
Workers
All plans -----------------------------------
100.0
100.0
33.1
35.0
66 .8
65.0
Single employer ---------------------M ultiemployer --------------------------
100.0
100.0
100.0
100.0
3 3 .0
3 4 .2
33.5
39 .6
6 6 .9
6 5 .7
66 .4
60.3
NOTE: Because of rounding, sums of individual items may not equal totals.
Death b en efits w e r e , h o w e v e r, le s s com m on in n egotiated p lans than in plans
not u n der c o lle c t i v e b a rg a in in g . D espite th is fac t, owing to the g r e a t e r f r a c t i o n of
w o r k e r s in m u lti e m p lo y e r plans with death b en efits about equal p ro p o rtio n s of
w o r k e r s in p lan s of both typ es had som e death b en efit p ro te c tio n . (See tab le 3 1 . )
With death
Without death
_______ Total________________benefits______________benefits_______
Percent
C ollective bargaining status
Plans
Workers
A ll plans -----------------------------------
100.0
100.0
Mentioned in collective
bargaining agreem ent------------Not mentioned in collective
bargaining agreem ent--------------
100.0
100. 0
Plans
Workers
Plans
Workers
33. 1
35.0
66 .9
65.0
100.0
20 .5
34.2
7 9 .5
65.8
100.0
4 0 .4
36 .8
60 .0
63. 1
NOTE: Because of rounding, sums of individual items may not equal totals.
73 Optional survivor benefits were not included in the analysis for this study. For details of the options in a
selected group of 300 negotiated plans, see Pension Plans Under Collective Bargaining, Benefits For Survivors, Winter
1960-61 (BLS Bulletin 1334, 1962).
74 For exam ple, see Health and Insurance Plans Under Collective Bargaining, Life Insurance and Accidental
Death and Dismemberment Benefits, Early Summer 1960 (BLS Bulletin 1296, 1961).
94
A lthough jo in tly -fin a n c e d p lans i n v a r ia b l y p r o m is e at l e a s t the re t u r n of
w o r k e r con trib u tion s in the fo r m of pension p a ym en ts o r lump sum s (u su ally with
in te re s t) in c a s e of death, a s lig h tly h ig h e r p o rp o rt io n of c o n tr ib u to r y plans had
death b en efits than did e n t i r e l y e m p lo y e r - fin a n c e d p lan s.
With death
Without death
_______ Total_________________benefits______________benefits_______
Percent
Method of financing
Plans
Workers
Plans
Workers
Plans
Workers
All p lan s------------------------------------
100.0
100.0
33.1
35 .0
67 .7
65 .0
Noncontributory -----------------------Contributory -----------------------------
100.0
100.0
100.0
100.0
3 1 .4
3 7 .8
34 .2
37 .6
6 8 .6
6 2 .2
65.8
62 .4
NOTE: Because of rounding, sums of individual items may not equal totals.
The in d u s try p a tte rn s of death b en efits p r o v is io n s show ed wide d if f e r e n c e s .
P la n s in m an u factu rin g in d u s t rie s had the lo w e s t p r e v a le n c e of death b en efits; le s s
than 30 p e rc e n t of the plans and w o r k e r s (table 32).
In c o n t r a s t , in c o m m u n ic a
tions and public u t i li t i e s , a th ird of the plans with o v e r tw o -t h ir d s of the w o r k e r s
had them , c h ie fly b ecau se they w e r e p ro v id e d by a l l of the telephone com p an y
p lan s. B e c a u se s e v e r a l la r g e T e a m s t e r plans had death b e n e fits , a lm o s t 30 p e r
cent of the p lan s with o v e r h a lf the w o r k e r s in the t r a n s p o r ta t io n in d u s try had
this p ro te c tio n . In fin an ce, o v e r h a lf the plans w ith a s lig h tly lo w e r p ro p o rtio n
of w o r k e r s had a death b en efit. In the m ining in d u s try , b ecau se the Mine W o r k e r s
plan p ro v id e s death b en efits f r o m an o th er p a r t of the w e lf a r e and r e t i r e m e n t fund,
only a lim ite d n u m b er of w o r k e r s w e r e in plan s w ith s u r v i v o r protection,. W h ile
only 30 to 40 p e rc e n t of the w o r k e r s in c o n s tr u c tio n , tr a d e , and s e r v i c e in d u s
t r y plan s w e r e in plans with death b e n e fits, the p ro p o rtio n w as g r e a t e r than in
p lan s in m an u factu rin g in d u s t r ie s .
95
T a b le 2 7 .
P r o v is io n s fo r M a jo r S u p p lem en tal B e n e fits in P r iv a te P e n sio n P la n s by T yp e o f E m p lo y e r U n it,
M eth od of F in a n c in g , and C o lle c tiv e B a r g a in in g S ta tu s, W in te r 1962—63
(W o r k e r s in th o u s a n d s )
No
supplem ental
b e n e fi ts
A ll p la n s
Ite m
Num ber
W ork
ers1
Plans
W ork
ers1
A ll p la n s s t u d i e d -----------------------
1 5 ,8 1 8
1 5 ,6 2 1
1 ,4 8 5
1 ,5 6 1
S in g le e m p l o y e r -----------------------N o n c o n tr i b u to r y ----------------M e n tio n e d in a c o l l e c
t iv e b a r g a in in g
a g r e e m e n t -------------------N o t m e n t io n e d in a
c o l l e c t i v e b a r g a in in g
a g r e e m e n t -------------------C o n t r i b u t o r y -----------------------M e n tio n e d in a c o l l e c
tiv e b a r g a in in g
a g r e e m e n t -------------------N ot m e n t io n e d in a
c o l l e c t i v e b a r g a in in g
a g r e e m e n t --------------------
1 4 ,8 9 0
10, 657
1 1 ,7 4 2
8 ,454
1, 366
1, 051
259
232
M u l t ie m p lo y e r -------------------------N o n c o n t r i b u t o r y ------------------M e n tio n e d in a c o l l e c
tiv e b a r g a in in g
a g r e e m e n t _____________
N o t m e n t io n e d in a
c o l l e c t i v e b a r g a in in g
a g r e e m e n t -------------------C o n t r i b u t o r y -----------------------M e n tio n e d in a c o l l e c
tiv e b a r g a in in g
a g r e e m e n t -------------------N o t m e n t io n e d in a
c o l l e c t i v e b a r g a in in g
a g r e e m e n t --------------------
No
a d d itio n a l
b e n e fi ts
P l a n s We or rsk1
796
511
336 !
D i s a b i lit y r e t i r e m e n t and—
E a r ly
E a r ly
retirem en t
V e s ti n g
and
retirem en t
v e s t in g
W ork P lans W ork Plans W ork
Plans
ers 1
ers1
ers1
1 ,3 2 8
4 ,8 8 5
6, 104
348
312
4 ,7 8 5
3 ,439
5 , 8 34
3, 976
1, 3 9 0
1, 180
i
1 ,5 6 6
2 ,6 9 3
946
770
2, 175
2, 024
798
589
331
283
5, 668
487
138
189
193
2, 050
3, 154
358
1 ,4 1 9
46
155
, 724
4, 233
2 ,7 8 7
3, 288
564
315
94
147
175
118
36
1 ,3 8 9
1, 346
822
1 ,8 5 8
822
210
605
151
543
209
128
48
1, 034
1 ,4 9 5
32
9
315
903
93
68
12
14
1 ,0 3 1
955
117
83
197
34
270
250
176
175
518
512
148
137
43 9
398
175
512
137
398
1
5
11
40
1
5
-
3, 933
6
26
3, 199
1 ,7 9 3
315
26
143
27
869
3, 878
3, 212
119
110
1 ,3 0 2
914
285
283
981
823
100
84
810
3, 176
110
914
231
803
82
248
59
59
36
666
9
388
20
2
16
202
18
356
3
302
3
8
41
310
6
86
13
13
928
52
2
2
157
157
-
W ithout d is a b ili t y r e t i r e m e n t w ith —
A ll p la n s s t u d i e d -------------------------------------------------------------------------------------------------------------------
4 ,3 1 1
S in g le e m p l o y e r ------------------------------ --------------------------------------------------------------------------------N o n c o n t r i b u t o r y --------------------------------------------------------------------------------------------------------------M e n tio n e d in a c o l l e c t i v e b a r g a in in g a g r e e m e n t ___________ ________________ —
N o t m e n t io n e d in a c o l l e c t i v e b a r g a in in g a g r e e m e n t ______ ___________________
C o n t r ib u t o r y -------------------------------------------------------------------------------------------------------------------M e n tio n e d in a c o l l e c t i v e b a r g a in in g a g r e e m e n t -----------------------------------------N o t m e n t io n e d in a c o l l e c t i v e b a r g a in in g a g r e e m e n t --------- --------------------------
4 , 277
2, 827
M u l t ie m p lo y e r ----------------------------------------------------------------------------------- ------------------------------N o n c o n tr ib u to r y ------------------------------------------------- ---------------------------------------------------------M e n tio n e d in a c o l l e c t i v e b a r g a in in g a g r e e m e n t _______________________________
N o t m e n t io n e d in a c o l l e c t i v e b a r g a in in g a g r e e m e n t --------------------------------------C o n t r i b u t o r y -------------------------------------------------------------------------------------------------- --------------M e n tio n e d in a c o l l e c t i v e b a r g a in in g a g r e e m e n t ---------- -----------------------------------N o t m e n t io n e d in a c o l l e c t i v e b a r g a in in g a g r e e m e n t --------------------------------------
1
A c ti v e w o r k e r s in 1961.
N O T E : B e c a u s e o f ro u n d in g , s u m s of in d iv id u a l i t e m s m a y n ot e q u a l t o t a l s .
628
21 ,,4199
50
555
895
34
27
22
5
7
1
6
2, 257
1, 337
732
492
176
1 ,0 5 3
420
633
1 ,0 2 7
459
568
1 ,2 8 3
990
171
819
293
17
276
568
488
176
312
80
35
45
480
245
4
241
235
148
54
41
41
164
144
144
2, 080
177
141
127
14
36
6
29
-
13
13
-
19
-■
19
10
225
12
12
12
-
-
86
12
74
62
8
54
28
28
28
-
-
"
T a b le 28 .
P r o v is io n s for M a jo r S u p p lem en tal B e n e fits in P r iv a te P e n sio n P la n s ,
by N u m b er of A c tiv e W o r k e r s C o v e r e d , W in te r 1962—6 3
( W o r k e r s in th o u s a n d s )
A ll p la n s
M a jor s u p p l e m e n t a l
benefits provided
Num ber
Under
W o r k e r s 12
Plans
15, 621
1 3 ,8 4 5
2, 4 2 0
214
A ll p la n s s t u d i e d ------------------------------
1 5 ,8 1 8
N o s u p p l e m e n t a l b e n e f i t s --------------D i s a b i l i t y r e t i r e m e n t and—
No a d d itio n a l b e n e f i t s ---------------E a r ly r e t i r e m e n t and v e s t i n g —
E a r ly r e t i r e m e n t -----------------------V e s t i n g -----------------------------------------W ithout d is a b i l i t y r e t i r e m e n t
with—
E a r ly r e t i r e m e n t and v e s t i n g —
E a r l y r e t i r e m e n t -----------------------V e s t i n g ------------------------------------------
1 ,4 8 5
1, 561
1 ,3 9 3
796
4 , 885
1 ,5 6 6
946
1, 328
6 , 104
2 , 693
770
643
4 , 166
1 ,2 0 9
4 ,311
1, 337
492
2, 257
732
176
1
Num ber of w orkers covered
1 , 0 0 0 and
5, 000 and o v e r
u n d e r 5, 0 0 0
W orkers1
P lans
Plans
W orkers1
W o r k e rs 1
1,0 0 0
1 ,4 9 0
61
483
9 ,9 7 2
129
31
1 ,2 1 8
42
91
18
981
4 , 169
1 ,7 8 3
548
71
27
940
320
2
12
3, 229
868
737
295
119
518
266
60
227
1, 198
615
103
3 ,883
1 ,2 3 6
447
603
253
79
357
74
43
714
159
84
120
1 1 1
201
A c t i v e w o r k e r s in 1961.
N O T E : B e c a u s e of ro u n d in g , s u m s of in d iv id u a l i t e m s m a y not e q u a l to t a ls .
T a b le 29. P r o v i s i o n s fo r M a jo r S u p p le m e n ta l B e n e f i t s in P r i v a t e P e n s i o n P l a n s
by T y p e o f W o r k e r C o v e r e d , W in te r 1962—63
( W o r k e r s in t h o u s a n d s )
Num ber
A ll p la n s s t u d i e d -----------------------------N o s u p p l e m e n t a l b e n e f i t s --------------D i s a b i l i t y r e t i r e m e n t and—
No a d d itio n a l b e n e f i t s ---------------E a r ly r e t i r e m e n t and v e s t i n g —
E a r l y r e t i r e m e n t -----------------------V e s t i n g -----------------------------------------W ithout d i s a b ili t y r e t i r e m e n t
with—
E a r ly r e t i r e m e n t and v e s t i n g —
E a r l y r e t i r e m e n t -----------------------V e s t i n g -----------------------------------------1
2
T y p e of w o r k e r c o v e r e d
A ll p la n s
M a jor s u p p l e m e n t a l
benefits provided
2
W orkers1
S a la r i e d and
p r o d u c tio n
Plans
W orkers1
S a la r ie d o n ly
Plans
W orkers1
15, 621
6 ,0 3 8
, 263
4 ,9 2 5
7 , 039
3, 995
1, 584
1, 561
827
103
505
1 ,4 2 4
153
33
796
4 , 885
1 ,5 6 6
946
1, 328
6 , 104
2, 693
770
241
950
63 4
655
166
2 ,4 6 1
1 ,5 4 6
215
551
1 ,9 8 9
67 2
1, 105
2, 316
940
500
1 ,2 5 4
21
22
4 , 311
1 ,3 3 7
492
2, 257
732
176
1 ,8 4 1
561
329
1 ,3 8 5
320
791
183
1 ,6 5 1
593
66
22
446
271
37
402
141
60
2
6
B e c a u s e of rounding, s u m s of in divid u al it e m s m a y not eq u al t o ta ls .
W orkers1
1 ,4 8 5
1 5 ,8 1 8
A c ti v e w o r k e r s in 1961.
In c lu d e s w o r k e r s fo r w h ic h d a ta a r e n ot sh o w n s e p a r a t e l y .
NOTE:
P r o d u c t io n o n ly
Plans
2 12
2
200
12 1
5
794
127
97
T a b le 3 0 .
P r o v is io n s fo r M a jo r S u p p lem en tal B e n e fits in P r iv a te P e n sio n P la n s by In d u stry , W in te r 1962—63
th o u s a n d s)
In d ustry
A ll p la n s stu d ie d -------------------M i n i n g ----------------------------------------C o n tr a c t c o n s t r u c t i o n ------------M a n u f a c t u r i n g --------------------------T r a n s p o r t a t i o n -------------------------C o m m u n c i a t io n s and p u b lic
u t i l i t e s __________________________
W h o le s a l e and r e ta il
t r a d e ----------------------------------------W h o le s a l e tr a d e ----------------R e ta il t r a d e ------------------------F i n a n c e , i n s u r a n c e , and
r e a l e s t a t e ------------------------------S e r v i c e s --------------------------------------
A ll p la n s
s u p p l e m e n ta l
b e n e fi ts
N u m b e r We or rs k1
Plans
W ork
ers1
215,621
1 ,4 8 5
1 ,5 6 1
Z15, 818
316 :
327
449 j 1 ,0 7 2
9 ,2 5 7
9 ,6 7 8
673 !1 1 ,2 8 6 |
849 , 1, 27 0
No
ad d itio n a l
benefits
P l a n s We or rs k1
796
101
206
371
638
188
141
233
169
201
13
21
2
784
7
1, 328
D i s a b i lit y r e t i r e m e n t ;a nd—
E a r ly
E a r ly
retirem en t 1
V e s tin g
and
retirem en t |
v e s t in g
P l a n s We or rs k1 ! P l a n s We ro sr 1k P l a n s We ro sr k1
4 , 885 L 6 ,1 0 4 _
46
94
217
46
665
3 ,4 2 5 5, 080
213 :
182
253
101
1, 566 2, 693
946
770
4
2
118
284
242
50
72
967
96
1 ,3 1 3
255
168
|
42
558
1
2
47
143
143
50
748
1
5
281
38
28
20
62
24
22
61
150
130
86
220
139
75
64
479
225
304
39
164
86
11
27
A ll p la n s stu d ie d ________________________________
4 , 311
2, 257
1, 337
732
M i n i n g ______________________________________________
C o n tr a c t c o n s t r u c t i o n ___________________________
M a n u f a c t u r i n g -----------------------------------------------------T r a n s p o r t a t io n ----------------------------------------------------C o m m u n ic a t io n s and p u b lic u t i l i t i e s -------------W h o le s a l e and r e ta il t r a d e -------------------------------W h o le s a l e t r a d e ---------------------------------------------R e ta il tr a d e ----------------------------------------------------F i n a n c e , in s u r a n c e , and r e a l e s t a t e ------------S e r v i c e s ------------------------------------------------------------------
59
27
2, 345
46
63
1, 378
50
206
269
159
102
23
18
1
2
1 ,6 2 7 !
1, 147
480
47 9
440
1, 853
719
733
308
920
7
114
57
30
27
80
59
21
123
78
45
5
264
17
71
49
103
13
49
121
A c ti v e w o r k e r s in 1961.
I n c lu d e s in d u s t r i e s f o r w h ic h da ta a r e not sh o w n s e p a r a t e l y .
N O T E : B e c a u s e o f r o un d in g , s u m s of in d iv id u a l i t e m s m a y n ot e q u a l t o t a ls .
3
19
11
33
47
492
176
309
I
W ithout d is a b ili t y r e t i r e m e n t with—
120
313
702
644
58
580
99
110
185
46
11
672
98
94
138
81
57
216
6
2 10
87
86
196
41
155
85
28
10
9
273
22
-
110
-
26
21
133
3
130
51
"
13
6
7
10
98
T a b le 31. D e a th B e n e f it P r o v i s i o n s in P r i v a t e P e n s i o n P l a n s by Typ e of E m p l o y e r U n it,
M ethod of F i n a n c in g , and C o ll e c t iv e B a r g a in in g S ta tu s , W in te r 1962—63
(W o r k e r s in th o u s a n d s )
A ll p la n s
I
W ith d e a th b e n e fit
Ite m
Num ber
W o r k e r s 12 1
A ll p la n s s tu d ie d ----------------------------------------
15, 818
1 5 ,6 2 1
S in g le e m p l o y e r -----------------------------------------N o n c o n t r i b u t o r y ------------------------------------M e n tio n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t -------------------N o t m e n tio n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t ----------------C o n t r i b u t o r y -----------------------------------------M e n tio n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t ----------------N o t m e n t io n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t -----------------
1 4 ,8 9 0
10, 657
1 1 ,742
8 ,4 5 4
M u l t i e m p l o y e r -------------------------------------------N o n c o n tr ib u to r y ------------------------------------M e n tio n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t ----------------N o t m e n t io n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t ----------------C o n t r i b u t o r y -----------------------------------------M e n tio n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t ----------------N o t m e n tio n e d in a c o l l e c t i v e
b a r g a in in g a g r e e m e n t ----------------1
3, 933
5,
6
, 724
4 , 233
2, 787
3, 288
1, 034
,
,
W ithout d eath b e n e fit
Plans
1
W orkers1
Plans
W orkers1
5, 241
!
5 ,472
1 0 ,5 7 7
4 , 923
3, 329
1
I
3 ,934
2 ,5 2 0
9 ,9 6 7
7 ,3 2 8
7 ,8 0 8
5, 935
760
;
1 ,5 5 4
3, 173
4 , 114
1 ,8 2 1
1 ,8 7 3
875
668
10
, 149
, 569
1, 594
!
966
1 ,4 1 5
4 , 155
2 , 639
1 ,4 9 5
127
|
621
907
3, 199
1 ,7 9 3
1 ,4 6 7
794
1 ,7 3 2
999
928
3 ,8 7 8
3 ,2 1 2
;
318
290
1, 538
1 ,4 6 7
610
579
2, 340
1 ,7 4 5
3 ,1 7 6
i
290
1 ,4 6 7
520
1 ,7 1 0
-
-
59
31
36
595
869
810
,
2
36
59
59
666
18
356
11
17
7
339
41
310
17
55
24
256
28
71
A c ti v e w o r k e r s in 1961.
N O T E : B e c a u s e of ro un d in g , s u m s o f in d iv id u a l i t e m s m a y not e q u a l to t a ls .
T a b le 32. D e a th B e n e f it P r o v i s i o n s in P r i v a t e P e n s i o n P l a n s by I n d u str y , W in te r 1962—6 3
(W o r k e r s in th o u s a n d s)
A ll p la n s
With d eath b e n e fit
In d u stry
N um ber
A ll p la n s s t u d i e d -----------------------------------------
2 1 5 ,8 1 8
M i n i n g ----------------------------------------------------------C o n tr a c t c o n s t r u c t i o n -----------------------------M a n u f a c t u r i n g --------------------------------------------T r a n s p o r t a t i o n -------------------------------------------C o m m u n ic a t io n s and p u b lic u t i l i t i e s -----W h o le s a l e and r e t a il t r a d e ----------------------W h o le s a l e t r a d e ------------------------------------R e t a il t r a d e -------------------------------------------F i n a n c e , in s u r a n c e , and r e a l e s t a t e ____
S e r v i c e s --------------------------------------------------------
316
449
9, 257
673
849
1, 627
1, 147
480
1 ,8 5 3
719
1
2
W orkers1
2
1 5 ,6 2 1
327
1, 072
9, 678
1 , 286
1, 270
920
479
440
733
308
Plans
|
B e c a u se of rounding,
W ithout d e ath b e n e fi t
Plans
5 ,2 4 1
5 ,4 7 2
1 0 ,5 7 7
4
264
2, 534
194
301
551
441
35
313
2 , 811
676
873
284
103
181
345
118
312
185
6 , 723
479
548
1, 076
706
370
110
947
374
A c ti v e w o r k e r s in 1961.
In c lu d e s i n d u s t r ie s fo r w h ic h da ta a r e not sh o w n s e p a r a t e l y .
NOTE:
W orkers1
su m s of in divid u al ite m s m a y not equ al t o ta ls .
906
345
W orkers1
10
!
6
, 149
293
759
, 867
610
398
636
377
259
388
190
Appendix A . Scope and Method of Survey
The ch ief so u rc es of inform ation for th is study w ere rep orts and supporting docu
m en ts filed w ith the U. S. D epartm ent of L abor pursuant to the W elfare and P en sio n P lan s
D isc lo su r e A ct (P L 8 5 -8 3 6 , as am ended). The ad m in istra to rs of any em p loyee w e lfa re or
p en sion b en efit plan, as defined by the a ct, coverin g m ore than 25 w o rk ers w ere required
to file w ith the D epartm ent two co p ies of a d escrip tio n of the plan (D -l form ) w ithin 90 days
after the effectiv e date of the act (January 1, 1959) or plan (w h ich ever o ccu rs la te r ), and
two co p ies of the annual fin an cial report (D -2 form ) w ithin 120 days (now 150 days) after
the end of each ca len d ar, p o lic y , or other fisc a l y ea r. By the fall of I960, annual rep orts
had b een filed for over 25, 000 p en sion p lan s.
The p riv ate pen sion plan and w o rk er co vera ge e stim a te s in this report d iffer sub
sta n tia lly from sim ila r data for plans on file w ith the D ep artm en t's O ffice of L ab or-M an ag em ent and W elfa re-P en sio n P lan R eports for the sam e p eriod . About 30 p ercen t few er plans
and about 12 p ercen t few er w o rk ers are included in th is study. The fundam ental reaso n for
th is d ifferen ce is that m any plans reporting that they provided retirem en t b en efits w ere r e
jected from the study b eca u se they did not provide pen sion b en efits as defined in this study. 75
M ost rejected plans w ere d eferred p ro fit-sh a rin g plans; som e w ere stock bonus and savings
p la n s. 76
S im ila r ly , co v era g e estim a te s in th is report d iffer from estim a te s of p en sion b en e
fit co vera ge by the D epartm ent of H ealth, E ducation, and W elfare (HEW ). The HEW e s t i
m ates inclu de d eferred p ro fit-sh a rin g p lan s, th ose of nonprofit organ iza tio n s and plans w ith
few er than 26 w o rk er s, all of w hich w ere excluded from this study. H ow ever, as in this
study, they a lso do not include stock bonus and savin gs p lan s.
T ypes of D ocum ents Studied. The D - 1 d escrip tio n plan form req u ires that the fo l
low ing in form ation and docum ents be subm itted:
1. N am e and a d d ress of the plan.
2. A ccounting p eriod of the plan.
3. Type of plan ( i . e . , w e lfa re, p en sion , or com bination).
4. G roup(s) co v ered by the plan (hourly ra te, sa la r ie d , or a ll em p lo y ees).
5. Industry in w hich m ost p articip an ts are em ployed (8 industry d iv isio n s are liste d ).
6. W hether the plan is m entioned in a c o lle c tiv e bargaining ag reem en t.
7. P a rties m aking contributions (em p lo y er, p a rticip a n ts, union).
8. The nam e and a d d ress of the a d m in istrator (in m u ltiem p loy er p la n s, u su ally a
board of tr u stees) and the nam es and a d d r e sse s of p erso n (s) constituting the a d m in is
tra to r, th eir o fficia l p o sitio n s w ith re sp e ct to the plan, th eir relation sh ip to the e m
p loy er and em p loyee organ iza tio n , and any other o ffic e s , p o sitio n s, or em ploym ent held
by th em .
9. A d etailed d escrip tio n of the ad m in istration of the plan, including the nam es of
the party or p a r tie s p erform in g the follow ing functions: M aintaining reco rd s; d eter m in
ing elig ib ility ; p r o c e ssin g cla im s; m aking d eterm in ation on appeals; au thorizing paym ents;
m aking p aym ents; au thorizing ex p en ses; selec tin g the in su ran ce c a r r ie r , corp orate
tr u ste e , or se r v ic e organization; and d eterm ining in vestm en t p o licy .
10. The nam e and ad d ress of the party or organ ization through w hich b en efits are
p rovid ed .
11. N a m es, title s , and a d d r e sse s of any tr u stee(s) not m entioned under item s
8 or 10.
12. C opies of plan docum ents under w hich the plan is esta b lish ed and op erated ,
sch ed u le of plan b e n e fits, and a statem en t of the p ro ced u res to be follow ed under the
plan in p resen tin g cla im s for b en efits and for appealing the den ial of clairtis. *7
7 ^ For definition of a pension plan used in this study, see p. i .
76
In addition, since sec. 4(b)(4) of the act exempted plans with 25 or fewer employees (amended to "participants" by the 1962
amendments), they were omitted from the study even though reports were voluntarily filed for many of them.
99
100
The D -2 form , w hich in th is study w as u sed only to obtain the num ber of m em b ers
(active and retired ) co vered by each plan, a lso sh ow s, am ong other ite m s , the a s s e ts , lia b il
itie s , con trib u tion s, b en efits paid, and s a la r ie s and c o m m issio n s paid.
The standard docum ents u sed in this study are b rie fly d escr ib ed b elow . Although
th ese docum ents are u su ally n e c e s sa r y to p rovide a co m p lete d escrip tio n of the e s ta b lis h
m ent and op eration of a p en sion plan as req u ired by the act, other docum ents or d e s c r ip
tiv e m a te r ia ls m ay have b een and often w ere su b stitu ted .
1. C o llectiv e bargaining agreem en t betw een the union(s) and the em p lo yer(s) (or a s
so cia tio n of em p lo y ers) d escr ib in g , am ong other th in gs, the e m p lo y e r s’ obligation eith er
to m ake sp ecified contributions to a tru st fund or provid e sp ecified pen sion b en efits
or both.
2. P en sio n plan stating in full the p en sion plan adopted by the board of tr u ste e s or
n egotiated by the em p lo y ers and union, or u n ila tera lly esta b lish ed by the em p lo y er. Only
sim p lified b oo k lets issu e d to plan p articip a n ts, rather than the full text of the plan, w ere
ty p ica lly ava ila b le for in su red p lan s.
3. M aster group annuity contract settin g forth the full text of the in su red pen sion
plan and ob lig ation s of the p a r tie s.
4. Individual c e r tific a te s of p articip ation issu e d to p articip an ts under som e in
su red p lan s.
5. The D -l and D -2 fo rm s and attach m en ts w hich give an o v e ra ll d escrip tio n of
the plan and sum m ary fin an cial in form ation .
F or certain key c h a r a c te r is tic s, as exp lain ed b elow , the a n a ly sis w as b ased on sup
p ortin g docum ents filed by the a d m in istra to r s, rather than on the form its e lf, supplem ented
by other so u rc es of inform ation ava ilab le to the B ureau of L abor S ta tistic s.
P lan a d m in istra to rs in dicated on the D - l form (item 5) the industry d iv isio n in w hich
m o st of the p articip an ts w e re em ployed. E ight broad d iv isio n s w ere liste d : M anufacturing;
m ining; con stru ction ; transportation; com m u n ication s and u tilities; w h o lesa le and reta il trade;
fin an ce, in su ra n ce, and real estate; and s e r v ic e s . To p rovide a m ore in form a tiv e and m ean
ingful breakdow n of the plans studied and to co r r e c t e r r o r s in reporting (probably m o stly
due to the la ck of industry d efin ition s), each plan w as c la s s ifie d into the 2-d ig it industry
groups of the Standard Industrial C la ssifica tio n .? 7 G uidance for th is c la ssific a tio n w as ob
tain ed from the D -l form , and w as checked again st supporting plan d o cu m en ts. F or som e
plans it w as a lso n e c e s sa r y to check other so u rc es ava ilab le to the B ureau of L abor S ta tistic s.
T im e P e r io d s . Due to a lag in filin g and p r o c e ssin g re p o rts, the study involved s e v
er a l tim e p er io d s. The rep orts studied w ere se le c te d from a lis t of a ll I960 D -2 rep orts
filed w ith the U .S . D epartm ent of Labor— the la te st co m p lete lis t ava ilab le at the tim e of
the study. The w ork er co v era g e data, h ow ever, w e re obtained from the la te st annual f i
n an cial rep ort (D -2 form ) on file . T his u su ally show ed av era g e w ork er co vera ge during
calen d ar year 1961 or a fisc a l v ea r ending in 19-61. H ow ever, the m ajor c h a r a c te r istic s
and plan p ro v isio n s rela te to 1962—63, sin c e the plan p ro v isio n a n a ly sis w as based on the D -l
plan d escr ip tio n form w hich w as up to date at tim e of the a n a ly sis, the w in ter of 1962—6 3 .7778
Sam pling M ethod- The study w as b ased on a str a tifie d random sa m p le. The sa m
p le w as str a tifie d by two key c h a r a c te r istic s rep orted by plan a d m in istra to rs and tabulated
by the O ffice of L abor-M anagem ent and W e lfa re-P en sio n R eports: (1) The industry d ivision
in w h ich m o st p articip an ts are em p loyed , and (2) the num ber of a c tiv e and re tir ed w o rk er s.
A ll plans w ith 5, 000 p articip an ts or m ore w e r e inclu ded in the stu dy, r e g a r d le ss of in d u stry.
In m in in g, all w ith 3, 000 p articip an ts or m o re w ere in clu d ed . A random sam p le of rep o rts,
str a tifie d by in d u stry and w ork er co v era g e, w as s e le c te d for th ose w ith few er w o rk er s.
The la r g e p lan s se le c te d w ith certa in ty re p resen te d le s s than 3 p ercen t of the plans
and over 60 p ercen t o f the w o rk ers co v ere d by p en sion p lan s that filed rep orts w ith the
L abor D epartm ent for I960.
77 Bureau of the Budget, Standard Indistrial Classification Manual, 1957.
78 Sec. 6(b), as amended, requires the reporting of amendments within 60 days after they have been effectuated.
101
Data for each plan se le c te d in the sam p le w e re w eigh ted in accord an ce w ith the p rob
ab ility of se le c tin g its rep ort. F or ex am p le, w h ere 1 rep ort out of 5 w as sam p led in an
in d u s tr y -s iz e group, it w as co n sid ered as rep resen tin g it s e lf and four other p lan s and w as
given a w eigh t of 5. T h ere fo re, if the plan provided v e stin g , it w ould be counted a s 5 plans
providing v estin g in the total e s tim a te s .
B eca u se of le g a l, a d m in istra tiv e, and fin an cial arran gem en ts and p r e fe r e n c e s of ad
m in istr a to r s, the scop e of the su b m issio n s varied w id ely . F or ex am p le, a firm w ith se p a
rate plan s for production and sa la rie d w o rk ers and com m on fin an cial and ad m in istra tiv e te c h
niq u es m ight file only a sin g le rep ort. On the other hand, sep a ra te rep orts m ight be m ade
for the two plans b eca u se d ifferen t a d m in istra tiv e a rra n g em en ts w e re u sed . F or th is study,
com b ined rep orts of the fir s t type w ere exam in ed and an alyzed , and sep arate co v era g e fig
u res (rep orted or estim ated ) w ere a ssig n ed to each plan. On the other hand, if, a s in the
secon d c a se , sep a ra te rep o rts w ere m ade, both plans w ere an alyzed only if both w e re s e
le c te d for the sa m p le.
In addition, som e firm s or m ajor d iv isio n s o ffer su pplem ental plans to all or c e r
tain groups of w o rk ers co v ered by a b a sic plan. A gain, sep arate su b m issio n s for each plan
m ight be m ade, or they m ignt be com b ined. If the b a sic plan fe ll in the scop e of the sa m
ple (w hether by certa in ity or chance) the subordinate plan w as a lso analyzed even if it w as
d escrib ed in another rep ort. H ow ever, if the rep ort s e le c te d in sam pling w as that of a sub
ord in ate plan, it w as dropped from the sam p le and co n sid ered out of sco p e u n le ss the a s
so cia ted b a sic plan w as a lso se le c te d . By th is m ethod, the plans for w hich th ere w ere two
su b m issio n s w ere not given a b etter chance of bein g se le c te d than th o se w h ere the b a sic and
subord inate plan w ere in clu d ed in one su b m issio n (in w hich both c a se s w ere an alyzed ).
F or plans in w hich a b a sic and subordinate plan w ere an alyzed , it w as found that
certain b en efits w ere inclu ded in one plan but not the other and, in som e in sta n ces, re q u ire
m en ts for b en efits w e re d ifferen t, e . g . , the b a sic plan had v estin g w h ile the subordinate
plan did not. F or the tabulation s in th is stu dy, the req u irem en ts of the plan w hich applied
to and y ield ed the h ig h est b en efit for a w o rk er a ssu m ed to earn $500 a m onth w ere u sed .
A group of 286 plans w ith 4 7 5 ,0 0 0 w o rk ers had to be adjusted in th is m anner. In the r e
m aining c a se s the req u irem en ts for b en efits of the b a sic and subordinate plans w e re id en
tic a l so that no adjustm ent w as n eeded.
Appendix B. Tables
Table B - l . Reduction Factors for Early Retirement Between Ages 60 and 65, in Private Pension Plans
by Em ployer Unit, Collective Bargaining Status, and Method of Financing, Winter 1962—63*
(W orkers in thousands)
R e d u c tio n f a c t o r s
A ll p la n s w ith e a r l y r e t i r e m e n t ----N o r e d u c tio n 2 ------------------------------------A c t u a r i a l --------------------------------------------U n ifo r m p e r c e n t fo r e a c h m o n th
p r i o r to a g e 6 5 ------------------------------V4 of 1 p e r c e n t ----------------------------V3 of 1 p e r c e n t ___________________
Vi 0 o f 1 p e r c e n t --------------------------V2 of 1 p e r c e n t ----------------------------5/g of 1 p e r c e n t ---------------------------6/io ° f 1 p e r c e n t --------------------------5/ 8 o f 1 p e r c e n t ---------------------------3/ 4 of 1 p e r c e n t ---------------------------T a b le s o f r e d u c tio n f a c t o r s not
u n ifo r m 3 -------------------------------------------T a b le o f r e d u c e d b e n e f i t
a m o u n ts -----------------------------------------Othe r ---------------------------------------------------
A ll p la n s w ith e a r ly
retirem en t
S in g le e m p l o y e r
Number
W ork e rs
Plans
W orkers
Plans
, 099
1 1 ,7 8 6
1 1 ,7 3 5
10, 657
169
8 , 067
1
, 162
5 ,8 2 1
169
7, 968
, 162
5, 540
364
.
99
2, 837
32
52
62
934
179
1 ,0 0 6
520
52
4 , 192
108
545
193
1 ,2 4 5
710
1 ,2 9 4
71
31
2 ,6 3 5
32
50
60
821
166
937
517
52
3, 552
108
529
181
727
672
1 ,2 4 2
62
31
836
419
804
284
31
159
91
1
25
94
1 2
102
158
1
7, 588
4 , 106
N o r e d u c tio n 2 --------------------------------------A c t u a r i a l -----------------------------------------------_ _ ... .
U n ifo r m p e r c e n t fo r e a c h m o n th p r i o r to a g e 65
V4 of 1 p e r c e n t _____________________ ___________ _____________
V3 of 1 p e r c e n t ------------------------------4/io o f 1 p e r c e n t -----------------------------V2 of 1 p e r c e n t ------------------------------. ...................... .
% of 1 p e r c e n t ------------------------------6/io ° f 1 p e r c e n t -----------------------------5/s o f 1 p e r c e n t ------------------------------3/ 4 of 1 p e r c e n t ------------------------------T a b le o f r e d u c tio n f a c t o r s n o t u n i f o r m 3-------------T a b le o f r e d u c e d b e n e f i t a m o u n ts —
O t h e r -------------------------------------------------------
118
5 ,917
939
186
2 ,7 4 9
1 ,0 0 6
57
106
63
256
217
21
28
54
472
88
225
51
512
102
292
15
130
34
1, 129 !
4 ,511
.
7, 680
281
51
2, 150
977
3, 072
640
1 ,8 9 8
518
38
47
9 i
- •
46 2
91
781
520
1
3, 185
51
439
130
989
493
997
71
15
32
135
324
289
30
66
1
8
31
57
202
-
-
16
2
2
12
113
13
69
3
-
N o t m e n t io n e d in a
c o l l e c t i v e b a r g a in in g
agreem ent
A ll p la n s w ith e a r l y r e t i r e m e n t ------
M e n tio n e d in a
c o l l e c t i v e b a r g a in in g
agreem ent
W orkers | Plans
W orkers
M u l t ie m p lo y e r
Non c o n t r ib u to r y
8
, 763
132
5, 593
2, 575
20
41
61
736
162
983
520
52
374
31
58
8
, 589
3, 336
37
2, 474
262
1 , 1 1 2
71
31
289
91
71
1
91
67
C o n tr ib u to r y
1 ,0 4 2
3 ,8 6 9
3 ,2 2 8
46
152
180
1 ,0 4 4
59 2
8
|
'
!
11
24
12
11
1
198
17
23
-
462
10 1
3, 197
120
!
:
1 ,9 5 2
965
62
393
13
201
1 18
178
129
-
31
1 Based on a study of 15, 818 private pension plans covering 15. 6 m illion active workers in 1961.
2 Includes 57 plans covering 9 6 6 ,0 0 0 workers with norm al retirem ent at age 60 and early retirem ent at ages earlier than 60.
3 Not based on a uniform monthly reduction; often an approximate actuarial reduction.
N OTE:
Because of rounding, sums of individual item s m ay not equal totals.
103
104
T a b le B - 2 . R e d u c tio n F a c t o r s fo r E a r l y R e t i r e m e n t B e t w e e n A g e s 55 and 60, in P r i v a t e P e n s i o n P l a n s
b y E m p l o y e r Unit, C o ll e c t iv e B a r g a in in g S ta tu s, and M etho d of F in a n c in g , W in te r 1962—63 1
R e d u c tio n f a c t o r s
( W o r k e r s in th o u s a n d s)
A ll p la n s w ith e a r ly j
S in g le e m p l o y e r
retirem en t
|
Num ber
A ll p la n s w ith e a r l y r e t i r e m e n t —
N o p r o v i s i o n fo r e a r ly r e t i r e m e n t
b e tw e e n a g e s 55 and 6 0 ---------------A ll p la n s w ith e a r ly r e t i r e m e n t
at ag e 55 -----------------------------------------N o r e d u c t i o n -------------------------------------A c t u a r i a l --------------------------------------------U n ifo r m p e r c e n t fo r e a c h m o n th
p r io r to 6 0 ---------------------------------------V3 of 1 p e r c e n t ---------------------------2/ 5 of 1 p e r c e n t ---------------------------V2 of 1 p e r c e n t ----------------------------V1 2
1 p e r c e n t --------------------------- ;
3/s of 1 p e r c e n t ----------------------------- :
7 / i 2 ° f 1 p e r c e n t --------------------------T a b le of r e d u c tio n f a c t o r s not
u n ifo r m 2 ____________________________
O t h e r ----------------------------------------------------
W orkers
i
Plans
W ork e rs
Plans
M e n tio n e d in a
c o l l e c t i v e b a r g a in in g
agreem ent
W orkers ! Plans
W orkers
1 1 ,7 3 5
10, 657
364
1
1 2 ,0 9 9
1 1 ,7 8 6
3, 93 0
4 , 726
3 ,7 4 8
4 , 300
, 169
93
6 , 592
7, 060
878
4 , 149
7 ,987
93
6 , 532
, 357
878
4 , 012
60
137
801
43
71
322
170
175
1, 148
89
296
1
417 ,
9
20
1 ,5 6 5 j!
305 1
241 1
563 2 12
j
174
72
580
14
377 '!
91
549
8
890
44
73
406
173 1
175 ;
6
229
214
163
174
72
20
:
!
j
!
249 '
69 i!
12
A ll p la n s with e a r ly r e t i r e m e n t -----N o p r o v i s i o n fo r e a r l y r e t i r e m e n t b e t w e e n a g e s
55 and 6 0 --------------------------------------------A ll p la n s w ith e a r ly r e t i r e m e n t at a g e 5 5 ---------N o r e d u c t i o n ----------------------------------------A c t u a r i a l -----------------------------------------------U n ifo r m p e r c e n t fo r e a c h m o n th p r i o r to a g e 60 _______________________
___________________________
V 3 of 1 p e r c e n t -----------------------------_________________________
2/ s of 1 p e r c e n t ------------------------------__________________________
V 2 of 1 p e r c e n t ------------------------------__________________________
/ i 2 of 1 p e r c e n t -----------------------------% of 1 p e r c e n t ------------------------------- _________________________________________________________
7/ l2 of 1 p e r c e n t ------------ --------------.................
T a b le of r e d u c tio n f a c t o r s not u n i f o r m 2 ------------O th e r -----------------------------------------------------
7 ,5 8 8 j
-------------- — !
1 ,8 2 9
5 ,759
66
5, 052
- 374
26
64
77
130
60
17
261
6
i
182
426 |
2 ,1 0 1
3 ,6 4 1
182
703 i
2 ,4 1 0
27
1, 540
4 , 039
825
1 ,7 3 0
-
516
18
9
329
42
115
3
1, 135
143
161
513
144
149
25
128
319
276
73
2
84
2
31
101
19
-
12
347
49
22
2
N o n c o n tr i b u to r y
8 ,7 6 3
i
1 ,0 8 5 I 3, 198
3 , 0 2 2 1 5, 565
83
53
4, 387
2, 419
430
768
162
36
80
71
48
385
68
7 ,6 8 0
4 ,5 1 1
4 ,1 0 6
25
47
1, 129
j
-
N o t m e n t io n e d in a
c o l l e c t i v e b a r g a in in g '
agreem ent
5
I
M u l t ie m p lo y e r
111
154
11
318
9
21 NB oa ts ebda sone d aonstua duyn oifof r1m5 ,8m1 8o npthr ivl y a rt ee dpuecntios i no ;n po laftenn s anc o vaeprpi nr og x im15.a 6t emaicl ltiuoanr iaacl t irveed uwcotior kne. r s
8, 589
4 , 000
4 , 588
865
2, 255
1, 156
153
197
502
135
150
19
254
58
1
I1
8
C o n tr ib u to r y
3, 336
3, 197
732
2, 604
726
2 ,4 7 0
13
1 ,8 9 3
407
152
44
58
77
23
53
123
34
10
1228
2
21
61
21
2, 205
9
262
5
in 1961.
N O T E : B e c a u s e of r o u n d in g , s u m s of in d iv id u a l i t e m s m a y n ot eq ua l t o ta ls .
☆ U .S. GOVERNMENT PRINTING OFFICE : 1966 O - 2 27-801
BLS PUBLICATIONS ON EMPLOYEE BENEFIT PLANS
Bulletin
number
Price
Pensions
1326
Multiemployer Pension Plans Under Collective Bargaining, Spring 1960.
65 cents
1334
Pension Plans Under Collective Bargaining: Benefits for Survivors,
Winter 1960—61.
25 cents
1394
Unfunded Private Pension Plans.
30 cents
1407
Labor Mobility and Private Pension Plans.
45 cents
1435
Digest of One-Hundred Selected Pension Plans Under Collective Bargaining,
Late 1964.
50 cents
1477
Digest of 50 Selected Pension Plans for Salaried Employees, Summer 1965.
40 cents
Relationship of Employee Hiring Ages to the Cost of Pension Plans (July 1965).
Free
Changes in Negotiated Pension Plans, 1961—64, Monthly Labor Review,
September 1965. (Reprint 2479. )
Free
Health and Insurance
1293
Health and Insurance Plans Under Collective Bargaining: Major Medical
Benefits, Fall 1960.
20 cents
1296
Health and Insurance Plans Under Collective Bargaining: Life Insurance and
Accidental Death and Dismemberment Benefits, Early Summer 1960.
25 cents
1330
Digest of One Hundred Selected Health and Insurance Plans Under Collective
Bargaining, Winter 1961—62.
$1. 25
1377
Digest of 50 Selected Health and Insurance Plans for Salaried Employees,
$ 1 .0 0
Recent Changes in Negotiated Health and Insurance Plans, Monthly Labor
Review, September 1962. (Reprint 2402.)
Free
Spring 1963.
Other
1325
Digest of Profit-Sharing, Savings, and Stock Purchase Plans, Winter 1961—62.
(20 Selected Plans.)
30 cents
Health, Insurance, and Pension Plan Coverage in Union Contracts, Late 1960.
BLS Report 228.
Free
@FedFRASER