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Insurance plans, The incidence of service requirements
did not vary significantly by benefit area, but was low-
est among health and life insurance plan members and
highest for sickness and accident insurance. Except for
long-term disability insurance plans, service require-
ments were usually only 1, 2, or 3 months. Require-
ments found in LTD plans were more restrictive; two-
fifths of the participants had requirements of from 6
months to 3 years or more. Because of the long-term
nature of this benefit, employers have traditionally re-
stricted eligibility to employees who have demonstrated
some attachment to the company.

For health and life insurance benefits, the incidence
of requirements varied markedly among the employee
groups. While nearly three-fifths of professional-admin-
istrative employees could participate immediately, over
two-thirds of production workers had some waiting
period.

Private pension plans. Nearly two-fifths of employees
with pensions had immediate coverage under their plan.
Another one-fifth could participate regardless of age
but had a service requirement, seldom more than 1 year.
Most of the remaining employees could not enter their
employer’s pension plan until they reached age 25 and
completed 1 year of service, the most restrictive re-
quirement permitted by ERISA.

A slight majority of participants were in plans with
a maximum age, usually 59, beyond which newly hired
employees were not eligible. Maximum age conditions
are permitted under ERISA regulations as tong as the
specified age is within 5 years of a plan’s normal retire-
ment age.

Both minimum and maximum participation require-
ment provisions occurred less frequently in plans cov-
ering production workers.

Plan sponsors and collective bargaining

(tables 59-62)

The great majority of the insurance and pension plans
studied were single employer plans.” The small repre-
sentation of plans covering groups of employers re-
flected the survey’s scope. This study excluded several
service industries and small firms in other industries,
such as contract construction and trucking, where such
plans are more common than among the surveyed
establishments.

Insurance and pension plans for white-collar workers
usually resulted from management decisions, while pro-
duction workers’ plans were more likely to be collec-
tively bargained. Long-term disability insurance was an
exception; for just over half of the production workers,
this typically white-collar benefit was not negotiated.

Twelve percent of the participants in sickness and

This analysis excludes health insurance because available docu-
ments did not provide sufficient information.

accident insurance plans were covered by mandatory
temporary disability insurance plans in New Jersey and
New York. As noted earlier in the sickness and acci-
dent insurance section, both of these State-administered
plans are at least partially employer financed and pro-
vide benefits similar to privately sponsored sickness and
accident insurance. .

Other benefits

(table 63)

In addition to the major benefits previously discussed,
information was collected on a number of other bene-
fit plans, such as profit sharing, severance pay, and re-
location allowances. The data on these benefits show
the percent of workers in each employee group eligi-
ble for a specific benefit, but do not indicate the pro-
portion of employees actually taking advantage of such
benefits. Generally, benefits were provided to all or
none of the workers in an employee group within an
establishment; a small percent of employees were in es-
tablishments which offered a benefit to only some
workers in an employee group.

Funeral leave, military leave, parking (provided at
no cost or below commercial rates), and full or partial
payment of educational expenses were available to at
least three-fifths of the employees in each group. Em-
ployee discounts on purchases of the employer’s goods
or services and in-house infirmary care covered at least
two-fifths of the employees of each group. Among the
benefits surveyed, eligibility was lowest for stock bonus
plans, stock purchase plans, nonproduction bonuses, and
employee gifts. In addition, employee eligibility for use
of a company-owned or leased automobile for personal
business was seldom found, but was provided more
often to the professional-administrative employees than
to the other two groups.

Profit sharing, savings, and stock ownership
plans—capital accumulation instruments providing cur-
rent or deferred benefits—were available to a greater
number of workers in each occupational group in 1983
than in 1982. Beginning January 1, 1983, tax credits for
qualified stock ownership plans changed from a percent
of investment tax credit, which favored capital-inten-
sive corporations, to a percent of payroll, making tax
advantages available to a larger number of firms. In
addition, the “salary reduction” feature of recent tax
legislation, which allows the investment of employees’
pretax earnings in approved plans, has increased the
popularity of profit sharing and savings plans.” These
capital accumulation plans, available to a minority of
workers in each employee group, were offered most
often to white-collar workers.

2 For changes in tax credit computations for stack ownership plans,
see Public Law 97-34, Economic Recovery Tax Act of 1981. For
details on salary reduction arrangements, see the Revenue Act of
1978 and subsequent IRS regulations.



Table 26. Health insurance: Percent of full.

selected procedures, medium and large firms. "ts Participants in plans with denaitenefits by extent of coverage for
8

Sched. EE
uled |}FC°"-) Sup, Percent of reasonate id customary charge
Type of dental procedure | Total | cash sched. ject tof J Not
allow. |ScNed- copay, cov-
ance | Y' |ments| Total] so | 60 [et-r4) os w | es | 90 | 91-99} 100 | ered
;—_| mene |
All participants |
Examinations w) 3) sl et gy oleole ‘
Dental X-rays 1 3 e 2] 4 1 2| - 51 | ¢
Fillings roo | 29] 3 ela io) 2] eal s| 7} 2] | 6
Dental surgery wo | 2 | 3| G3 | s a] 2] 2] sie) 6] 7] 2 5 | 0
Periodontal car 100 | 26 3] 4 cas 4 2 2) 5] 38 6 7\| - 8] 0
, me iis apeld gaye ay ahsy a4
Orthodonti wo) 3) - | O | el a) 5} 2] a) H} 4] B] 2 2) 4
Ty) srt a) af tp alal tle] @ 41 28
Professional and .
administrative
jinations 20
Dental rays wo] 2) 3/8] 7)eale] el; 2} ria) - 142) e@
Fillings wo} a} 3] 8 | wl ala] 2) a8] 3, $} 2) 2/8
Dental surgery woo} 29] 3 8 ej 4] 1! 2] sll a] gs] 4| 6
Periodontal care .. 100 | 28 3| % ee 4 2 2) 8] 0 4 5 | - 7/06
1 -
Goan joo | sr |! 8) & al} s) 2] {8} 4) 8) 24 243
Orthodontia 100 18 - 1 fa g 3 2 3 8 2 3 4 2 os
Technical and clerical
nati 0 ,
Dental aye foo | 18 7/9] aleale 3) thal a} 2) - | wl @
Fillings wo | so] 4 8 a] @ | 3] ila) 2) 4 33 | O
Dental surgery 100 | 28 4} 9 é 4 2 3 5} ao 3 4 - 5 | @
Periodontal care .. woo 2 3 tay pa 4 2 3 5] 49 3 4 - 6! e@
13) - q
Crowns roo | 30 |} MY sl al] s| a) i}%) 3] 4) s| 4
Orthodont wo] iw) - | 0 | 6) aw} ss] 3] zi] s] $] 2 3) 4
® 52 | 43 4 ry oslo. +] - is) 1| 29
Production
nati 00
Dental aye io} is) 2) | o O)O)] +] tla} a} 2] - |] 3]
Fillings .. woo | a! 3/9 | sa] | @ 1} 2)! al | _ | 3] @
Dental surgery 100} 24 | 2 7) 3] 2! 1] slgj of] ww] - s| @
Periodontal care .. \ 0 24 2] 6 74 3 : ! 6| 35 a| to] - 91 eA
Inlays a7 | 4 4 6 os] iw] - aj ot
Growns 100 | 27) 4 1] 7} of} 5] a} a) 8) 2] 3]: 2| 4
Orthodont woo} q2| _ 1 70 | a7 5 1] aly 8 712 2 1
1) 8) a} sf rp oy Fig) ft 2) 29
' Reimbursement arrangement in which the
expenses paid by the plan increases if regular gern 29® of dentay > Less than 05 peent

are scheduled.
® Participant pays a specific amount per pro
all remaining expenses.

| appointments

Sedute and pian pays

NOTE: Because of rounding, sums of individual items may not
equal totals. Dashinézates no employees in this category.



Tabie 21. Health insurance: Percent of full-time participants in plans with basic hospital room and board coverage by
type of benefit payments and limits to coverage, medium and large firms, 1983

‘Subject to limit on days of coverage per hospitat confinement

Subject to
Type of payment Total 7 other | Unlimited
Ail veges 120 days | 14 ae 365 days $6 days limits!
All participants

100 cal 12 18 4 30 6 20 10

Daily dollar allowance 6 6 4 1 a) ° ) Q -
Less than $60 1 1 1 ) - - - - .
$50-$74 .. 1 1 1 roy - ) - (a) -
$75-$99 .. 1 1 1 io) a - - 0 :
$100-$126 .. 1 1 1 i] a) i) © = -
$125 or more 2 2 1 13) - 1) 6 19) =
Semiprivate rate .. 94 65 8 7) 4 30 6 19 10

Professional and administrative

Total ... 100 65 9 18 2 32 4 23 4
Daily doliar allowance 4 3 2 1 e 9) - a -
t) Q Q a) - - - - -

1 ) fa - = - - © -

1 1 ® Q ® - - 19) -

i) 1 @. 0 - 6 - - -

1 1 1 r9) - ie) - - -

‘Semiprivate rate .. 96 62 7 7 2 32 4 23 "4

Technical and clerical

Tota! 100 66 9 23 4 27 3 20 14
Daily dollar allowance 4 4 1 2 1 (a) 0 a) -
Less than $50 a] (9) iv) fo) - - - - -
$50-$7: 1) is) 0 - = - - Q -
$75-$99 .. 1 1 ro) a 8 - - 6 2
$100-$124 .. 1 1 Q is) 6 a is) - -
$125 or more 2 2 0. 1 - 0. - -
Semiprivate rate .. 96 62 7 21 3 27 3 20 14
100 5 15 16 4 3 8 18 7

8 8 6 1 - 1 ia) 1 -

2 2 2 (a) - - - - -

2 2 2 ® - ia) - 19] -

1 1 1 ® - - - 0 -

1 5) 1 10) - - ° - -

2 1 1 10) - 19) 0 9) -

92 68 10 15 4 30 8 7 7

* Includes workers in plans where the basic benefit is limited by a
maximum dollar amount per confinement or per year, and other plans
where the Jimit on the number of days of coverage applies within a

specified time period.

31

? Less than 0.5 percent

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

totals. ‘Dash indicates no employees in this category.



Table 35. Life Insurance: Percent of full-time participants |
by method of determining amount of basic life insurance
and frequency of related coverages, medium and large H

firms, 1983
| Profes-
i sional | Techni-
we and_| cal and | Produc-

tem tear, | aaminis-| clerical |tion par- i
ipants| ‘trative | partici | ticipants. i
partici- | pants |
Pants: !

: Total 100 | 100 | 100 | 100

Basic life insurance’

Based on eamings 65 a4 80 47
Multiple 48 68 67 28
Graduated schedule 7 16 13 19
Fiat amount 33 13 7 51
Based on service 2 3 2 2
i Other’. is) iv) iv) iv)

With extended coverage during total

‘and permanent disability 98 39 99 97 |
With accidental death and |

dismemberment coverage 7 87 65 78 |
With dependent coverage 18 7 18 19 :

' A few participants received only accidental death and dismemberment
iH a insurance.

| ii ? Includes participants in plans with insurance based on pension ac-
i crued at time of the employee's death.

ay ® Less than 0.5 percent.

NOTE:. Because of rounding, sums of individual items may not equal to-
tals.

40



incidence of alcohol and drug abuse provisions also was
up slightly (chart 3).

Employee contributions. Health insurance cost-sharing
measures taken by some employers were not limited to
elimination of basic coverage and inclusion of higher
major medical deductibles. The proportion of partici-
pants paying part of the premium for their own cover-
age increased to one-third from one-fourth a year ear-
lier. Also, the proportion of participants paying part of
the cost of their dependents’ coverage rose to 54 per-
cent from 51 percent in 1982.

Exact data on the amount of an employee’s contri-
butions sometimes were not available because payrol!
deductions applied to an insurance policy covering both
health insurance and one or more other benefits. How-
ever, among employees in contributory pians for which
the amount was reported, employee premiums for sin-
gle and family coverage averaged approximately $10
and $33 a month, respectively—up 13 and 19 percent
from 1982. Contribution rates were slightly higher for
technical-clerical participants than for the other two
employee groups.

Funding medium. Commercial insurance companies
remained the most common funding medium for each

of the health benefits studied, although their dominance
declined in 1983 in all areas except dental benefits. Blue
Cross-Blue Shield was an important funding medium
for basic benefits, but was less important in the major
medical area. As an alternative, medical expenses may
be paid by the employer, either directly out of general
revenues, through contributing to a trust fund, or by
subsidizing health care facilities. Such self-insurance has
gained importance in recent years, particularly for ma-
jor medical and dental benefits. (See labor/management
entry in table 34.) About 3 percent of the health insur-
ance participants covered by the survey were enrolled
in Health Maintenance Organizations.”

Life insurance

(tables 35-38)

Nearly all full-time employees within the scope of
the survey participated in life insurance plans in 1983;
four-fifths had the cost of a basic plan paid entirely by

” A Health Maintenance Organization (HMO) is a prepaid health °
care plan that delivers comprehensive medical services to enrolled
members for a fixed periodic fee. HMO plans and plans provided
through the more traditional health insurers were compared by Al-
Jan Blostin and William Marclay in, “HMOs and Other Health Plans:
Coverage and Employee Premiums,” Monthly Labor Review, June
1983, pp. 28-33.

Chart 3. Health insurance: Percent of full-time participants covered by selected
categories of medical care, medium and large firms, 1982-83

Dental care

Alcoholism
treatment

Drug abuse
treotment

Second surgical
opinion

Vision care

[2 Coverage Increase In 1983
MB Coverage In 1982

25
Percent of health insurance participants

°o4

T

r
50 75 100



Major medical benefits
Dental benefits

Administrative Details

Pre-existing condition

Minimum age of dependent children

Waiting period in case of infant illness

Maximum age of dependent children

Retiree eligibility

Eligibility of retirees eligible for Medicare

Coverage of dependents of retirees eligible
for Medicare

Medicare contribution for retiree

Medicare contribution for dependents of retirees
eligible for Medicare

Disabled or retired employees benefit coverage

Coverage of retirees’ dependents not eligible for
Medicare

Survivors’ benefit coverage

Section B
Hospital and Extended Care Coverage

Hospital room and board coverage
Hospital intensive care
Hospital miscellaneous coverage
Extended care coverage
Extended care in licensed extended care facility
Basis of extended care coverage
Extended care by home health care

Surgical and Medical Benefits
Surgical care coverage
Surgical schedule
Conversion factor for relative value schedule
Selected surgical procedure maximums
Maximum for multiple procedure
In-hospital medical coverage
Medical office coverage

Maternity Care Benefit
Who is covered
Obstetrical schedule
Voluntary abortion coverage
Miscarriages or therapeutic abortion coverage
Maximum for male sterilization
Maximum for female sterilization
Separate deductibles

Diagnostic X-Ray and Laboratory Testing (DXL)
Benefit
DXL coverage
Covered locations by DXL
DXL schedule
Selected DXL procedure maximums

Outpatient Care and Special Accident Benefit

Outpatient cate coverage

Comparison of inpatient and outpatient
coverage

Separate limitations

Outpatient charges covered under major medical

Accident bodily injury—special benefit

Prescription Drug and Private Duty Nursing
Coverage
Prescription drug
Private duty nursing

Mental Health Care Benefits
Mental health care coverage
Hospital confinements due to mental disorders
Hospital confinements due to mental disorders
covered the same as other illnesses
Selected coverages for mental health care
Coverage in special hospital

Dental Care Benefits
Dental care coverage
Coverage of employees
Coverage of spouses
Coverage of dependent children
Prophylaxis and routine exams
Fillings
Surgery - dental
Inlays
Crowns
Periodontal care
X-rays
Orthodontia
Incentive schedule
Deductible
Maximum coverage
Copayment

Vision Care Benefits
Vision care coverage
Eyeglasses
Schedule for eyeglasses
Eye exams
Contact lenses
Orthoptics

Other Medical Benefits
Second surgical opinion
Alcoholism treatment
Drug abuse treatment
Hearing care

Section C
Deductible, Coinsurance, and/or Maximum Benefit
Provisions

Covered expenses



|
i
!
Hl Table 46. Private pension plans:' Percent of full-time participants by minimum age and associated service requirements for |
early retirement,’ medium and large firms, 1983
Protes- Protes- |
i ‘ sional |Technical) bequc. sional Technical! pb aue. 1
fli je is » | All par- | and ad- |and cleri-| ¢ All par- | and ad- |and cleri- |
i Age and service requirements? | scipants | minista-| cal par- tion par] Age and service requirements? | ycspants | minisra-| cal par- | or Par i
f tive par- | ticipants | "P27 tive par- | ticipants | "Pant |
i ticipants ticipants
|
| Total 400 100 100 100 : i
| ‘Age 55—Continued j
| Participants in plans permitting 25 years’ service fe) il (a) O H
| early retirement 97 97 98 96
1 ‘Age 56-59 1 1 1 1
| No age requirement 6 10 7 3 10 or 45 yea ) 1 i) ro)
' Less than 30 years’ 20 of 30 years’ service 1 1 a) 1
i service oO 1 1 oO
: 90 years’ service 6 10 6 3 || Age co . it 6 6 16
No service requirement Oy 1 1 “)
Less than age 55 4 1" 5 years’ service .. 0 - - oy
No service requirement 19] “ iv) 10 years’ service .. 5 2 2 7
5 years’ service . ‘) 0 ro) 15 years’ service 5 4 a 7
i 10 years’ service 2 2 3 20-30 years’ service .. ) 0 0 1
45 years’ service 1 1 2
; 20 years’ service 9) i) i) QO 0 i)
We 25 years’ service 4 iv) 6 oO YO “ 1
We Age 55 . 6t 66 66 55 || Sum of age plus service 9 9 7 10
No service requirement 10 10 9 10 Equals 70 or less ... 1 2 2 “
1-4 years’ service .. ia) iy 0 fa) Equals 75 1 2 1 1
5 years’ service . 3 4 3 1 Equals 76-79 1 1 1 1
10 years’ service 35 38 39 30 Equals 80 1 1 1 1
11-14 years’ service .. 1 1 1 1 Equals 85 «... 5 3 2 7
15 years’ service 9 8 10 9
20 years’ service 3 3 4 3 [Participants in plans without early
retirement .. . a 3 2 4
+” Excludes supplemental pension plans. specify an age, it was the requirement tabulated.
* Early retirement is defined as the point at which a worker could re- “ Less than 0.5 percent.
tire and immediately receive accrued benefits based on service and
earnings but reduced for each year prior to normal retirement age. NOTE: Because of rounding, sums of individual items may not equal
? ff a plah had alternative age and service requirements, the earliest _ totals. ash indicates no emplayees in this category.
age and associated service were tabulated; if one alternative did not

wees de ocgie ne suciaie .

50



Table 44. Private pension plan
security benefit, medium and large firms, 1983

Percent of full-time participants by provi

In for integration of pension with social

Type of benefit formula

Provision Total’ lrerminall Career | Collar

earnings | earnings | amount

Type of benefit formula

Provision Total lTerminal| Career | Dollar

earnings |earings| amount

Alt participants

Total sss 100 } 100 | 100 | 100
With integrated formula ... 55 82 78 1
Offset by social security
ie 35 62 14 1
28 49 9 1
Not based on service® 7 13 5 ~
Dollar amount .. ) o 1 -
Percent of payment .... 7 12 4 -
Pure excess”... 1 1 - -
Step-rate excess* eee 18 64 -
Integrated with a social
security breakpoint 10 12 25 -
Integrated with a specific
dollar breakpoint 9 6 99 -
Without integrated formula 45 18 22 99

Professional and administrative

Total ... 100 | 100 | 100 100

With integrated formula ...... 78 89 69 9
Offset by social security
50 67 13 9
42 56 8 9
9 W 5 -
Dollar amount rv) - 1 -
Percent of payment 9 1 4 -
Pure excess’... 1 2 - -
Step-ate excess? ...... 27 20 57 -
Integrated with a social
security breakpoint .... 15 14 24 -
Integrated with a specific
dollar breakpoint 12 6 33 -
Without integrated formula ... 22 4 31 ot

Technical and clerical

Total 100 | 100 | 100 | too
With integrated formula .. 74 88 at 2
Offset by social security

payment” 62 69 19 2
Based on service® «Wn 42 58 9 2

Not based on service® 3 "W 9 -

Dollar amount iy) - 1 -

Percent of payment .. 9 4 8 -

Pure excess’ . oe 1 1 - -
Step-rate excess” 22 18 63 -
Integrated with a social
security breakpoint nn] 13 12 32 -
Integrated with a specific
dollar breakpoint ..

9 6 31 -

Without integrated formula ..

|With integrated formula

Offset by social security

payment? so 18 48 1
Based on service* . | 13 33 10
Not based on Semvice® enn 6 16 1
Collar amount ern] Y 1 6 -
Percent of payment .. 5 15 1 -
Pure excess’ .. 1 2 > -
Step-rate excess 13 16 | 74 -
Integrated with a social
security breakpoint 5 10 20 -
Integrated with a specific
dollar breakpoint. 8 6 54 -
Without integrated formula wren] 68 33 16 | 100

' Excludes supplemental pension plans.

* Includes money purchase plans and plans with benefit formulas
based on a percent of employee or employer contributions.

° Benefit as calculated by formula is reduced by portion of primary
social security payment.

“ Offset is equal to the product of a percent of primary social secu-
sity payments and the participant's years af service with the employer.
A maximum offset is frequently applied, for example, 50 percent.

* Benefit formula includes a reduction by a specified percent of pri-
‘mary social security payments or a specific doliar amount. Although
generally offsets of up to 83.33 percent are permitted by the internal

Revenue Service for plan qualification, offsets in excess of 50 percent
are uncommon.

© Less than 0.5 percent.

” Formula does not apply to earings subject to FICA (social secu-
rity) taxes or below a specific dollar breakpoint.

* Formula applies ower benefit rate to earings subject to FICA (so-
cial security) taxes or below a specific dollar breakpoint.

NOTE: Because of rounding, sums of individual items may not equal
totals. Dash indicates no employees in this category.

48



Table 50. Private pension plan:

Percent of full-time participants in plans granting ad hoc postretirement annuity
increases,” medium and large firms, 1983—-Continued

Characteristics

Professional and
administrative
participants

Technical and
clerical participants

Benefit formula for most recent
increase—Continued

Other type of formula

‘Combination of two or more benefit formulas

Type of formula not determinable ..

Provision for minimum increase in most recent
adjustment

Total

No minimum,
With minimum
Monthly dollar amount
Less than $5 ..

Varies by date of retirement
Percent of present benefit
Greater of a monthly dollar amount or a

percent of present benefit ..
Not determinable

Pravision for maximum increase in most
recent adjustment

Total

No maximum ...
With maximum
Monthly dollar ammount
$100 or less
$101-$150
$151-$200

More than $200
Percent of present benefit
Less than 10 .

10-14

15-19

20-24 ....

25-29

30 or more
Varies by date of retirement ..
Greater of a monthly dollar amount or a
percent of present benefit ..

Not determinabie ....

ne

Matas asartan

ne Posaae

Excludes supplemental pension plans.

? Unscheduled increases in pension payments for employees

retiring prior to 1983.
? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may
not equal totals. Dash indicates no employees in this category.

Production partici-

33



Table 58. Age and length of service requirements for
participation:' Percent of full-time participants in private
pension plans,’ medium and large firms, 1983

Protes-
sional | Techni-

; and | cal and | Produc-
‘Age and service requirement | All par- | asminis-| clerical |tion par-

provisions? ticipants | “trative | partici. | ticipants
partici- | pants
pants

Minimum requirement

Total 100 | 100 | 100 | 100
With minimum age and/or service

requirement .. 63 64 73 58

No age requirement 20 18 19 22

1 month of service 1 1 oO 1

2 months oO - o a

3 months 1 1 1 2

6 months: 2 2 2 a

1 year .. 14 12 "1 itd

2 years 1 1 1 1)

3 years 4 1 1 )

Over 3 years 1 1 1 1

Age 24 or fess . 4 3 4 4

No service requirement 1 iy) 0 1

4-11 months of service 1 1 1 1

1 year .. 2 2 3 2

Over 1 year o - o 0

Ago 25 ... 39 42 50 92

No service requiremen 2 4 3 1

1-5 months of service ) 0 0 -

6 months 1 1 2 1

Tyear? 35 37 45 29

Without minimum age and/or

service requirement 37 36 ar 42
‘Age and service requirement not

determinable o 0 Oo -

Maximum age requirement

Total 100 100 100 100
‘With maximum age requirement® 55 63 65 45
‘Without maximum age requirement... 45 37 35 55

* Excludes maximum 6-month administrative time lags allowed by
ERISA. Most plans with time lags adopt the beginning of designated 6-
month periods as participation dates.

? Excludes supplemental pension plans.

° If a plan had alternate participation requirements, one of which was
service only, the service only requirement was tabulated.

* Less than 0.5 percent.

5 ERISA legislation states that nearly all pension plans must allow par-
ticipation to full-time employees who have reached age 25 and who have
completed one year of service.

* ERISA legislation permits plan administrators to impose a maximum
age for participation. Maximum age must be within 5 years of the plan's
‘normal retirement date.

NOTE: Because of rounding, sums of individual items may not equal to-
tals, Dash indicates no employees in this category.



ce

Table 42. Private pension pians:' Percent of full-time participants in plans with percent of career earnings benefit formulas

by type and amount of formula and maximum benefit provisions,’ medium and large firms, 1983

Maximum benefit provision
2 Subject to Limit on years of credited service Not subject
Type and amount of formule’ At aimum® Other mato maximum
Tota | bese than | go 35 40 urn
All participants
Total 100 7 6 1 2 1 2 1 93
Flat percent per year of service 37 3 3 rv) 1 1 i) - 34
Less than 1.00 3 - - - - - 3
1,00-1.24 .. 4 1 1 - 1 ) - 2
1.25-1.49 6 1 1 - - 1 iv) - 5
1.50-1.74 . 20 - - - - - - 20
1.75-1.99 1 - - - - - - 1
2.00-2.24 . 2 0 iv) = - 0) - 2
2.25 of greater i) i) 0 0 - ~ - - -
Percent per year varies: . 63 4 3 1 1 - 2 1 59
By service 3 1 - - - - 1 2
By earnings 60 3 3 1 1 - 2 i) 56
By earnings and service 1 - - - - - - - 1
Professional and administrative
Total 100 6 5 1 1 1 2 ) 4
Flat percent per year of service a 2 2 () 1 1 () - 39
Less than 1.00 1 - - - - - - 1
1.00-1.24 .. 1 1 1 - 1 - - -
1.25-1.49 4 1 1 - > 1 ° - 3
1.50-1.74 .. 33 - 2 zt - ~ a” 33
4.751.998 .. 1 - - - - - - 1
2.00-2.24 .. 2 0 oO - - 6 : 2
2.25 or greater iv) ° 0 0 - - - -
Percent per year varies: .. 59 4 4 1 1 - 2 fa) 55
By service 3 ° - - - - - 0 2
By earnings .. 56 4 4 1 1 - 2 - 52
By eamings and service 0 - - - - - - 2 6

* Excludes supplemental pension plans.

? Maximum provisions in this table are independent of ERISA-imposed
ceilings on pensions payable from defined benefit plans.

® If a plan contained more than one career earnings formula, a primary
formula was selected and tabulated.

* The total is less than the sum of individual items because some
plans contain a limit on years of credited service and another maximum

provision.

* The benefit yielded under the formula

limited to a percent of tert

nai earnings coordinated with primary social security payments.

* Less than 0.5 percent.

NOTE: Data were insufficient to show technical-clerical and produc-
tion workers separately. Dash indicates no employees in this

category.



Table 5. Paid holidays: Percent of full-time employees by
number of paid holidays provided each year, medium and
large firms, 1983
Profes-
sional | Techni-
and cal and | Produc-
Number of days a €M- | adminis-| clerical | tion em-
Ployees | ‘tative | emptoy- | ployees
employ-| 9es
ees
Total 400 | 100 | 100 | 100
Provided paid holidays: 99 99 | 100 98
Under 6 days ..... 2 1 1 3
6 days ... 5 4 7 5
6 days plus 1 or 2 halt days 0) 0) 1 iV)
7 days ... 5 4 6 6
7 days plus 1 halt day 0) 0 10) re)
8 days ... 8 7 9 8
8 days plus 1 or 2 half days 1 1 1 rv)
9 days ... 2 15 7 8 |
9 days plus 1 or 2 half days ... 1 1 2 1 |
10 days 28 28 26 29
10 days plus 1 or more half days] 2 2 2 1
11 days 16 18 15 16
11 days plus 1 or 2 haif days 1 1 1 ()
12 days 1" 1 8 13
12 days plus 1 or 2 half days 10) () 0 (0)
13 days 5 6 4 5
14 days 1 1 a) 1
15 days 19) 10) i) Q
16 days oO 0) QO ) i
More than 16 days i) ) iv) 0)
Number of days not available 10) - - Yo
Not provided paid holidays 1 1 0 2

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

Table 6. Paid holidays: Percent of full-time participants by
policy on holidays that fall on a regularly scheduled day off,
medium and large firms, 1983

Protes-
i sional | Techni-
i and. | cal and | Produc-

; Holiday policy fe at, adminis-| clerical | fon’ par-
: P partici- | ticipants
I pants:
i Total 100 | 100 | 100 | 100
; Holiday is not observed 1 1 1 1
: Another day off granted as | so | e6 | 79
i Additional day's pay in lieu of
H f holiday usnennans senneee 3 2 2 5
i. Another day off or day's pay, :
t depending on when holiday falls .... 10 6 6 14
: Another day off or holiday not
I observed, depending on when
| holiday falls 2 2 3 1
i Other provision applies’ ie) io) ey ®

i Holiday policy not determinable ......| (9) 6 i)
i

* Includes plans where the policy differs by holiday.
? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

18



Table 27. Health insurance: Percent of full-time participants
in plans with dental benefits by deductible provision,’
medium and large firms, 1983

Table 28. Health insurance: Percent of full-time participants
in plans with orthodontic benefits by lifetime maximum
amount of coverage, medium and large firms, 1983

} Excludes separate deductibles for orthodontic procedures.

? Amount of deductible described is for each insured person. In some
plans, the individual and family deductibles are identical.

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals,

Table 28. Health insurance: Percent of full-time participants
in plans with dental benefits by yearly maximum amount of
insurance,’ medium and large firms, 1983

Hi Profes- Protes-
rf sional | Techni- sional | Techni-
Fe All and | cal and | Produc- Allpar. | and | cal and | Produc-
it Type of deductible? ticipants |20inis-| clerical |tion par- Doltar amount tie oats adminis-| clerical | tion par-
dE reipan's| ‘trative | partici- | ticipants Pi trative | partici- | ticipants
4 partici- | pants * | partici | pants
i pants pants
Total. 100 | 100 | 100 | 100 Total . 100 | 100 | 100 | 100
‘Subject to basic dental deductible ...) 61 65 | 67 | 55 Lifetime maximum specified .. 95 95 95 95
Less than $500 i 1 1/0
Yearly deductible 49 55 | 53 | 44 $500 . 20 | 22 20 | 20
i 1/1 a Q 1 $501-8749 9 6 5 13
i 23 | 27 | 24 at $750 ... 1% | 22 | 19 14
1 1 11 @ $751-$999 13 n 8 16
ze | 2 | 28 | 20 $1,000 wenn 30 | 29 | 95 | 28
2 2 2 2 $1,001-$1,499 . 2 1 1 2
$1,500 2 2 3 2
12 10 14 W Greater ,! 1 2 2 1
1 2 1 1
9 8 12 9 No lifetime maximum ... 5 5 5 8
1 1 1 1
1
: Subject to major m Less than 0.5 percent.
deductible 8 8 8 7 NOTE: Because of rounding, sums of individual items may not equal to-
No deductible 32 | 27 | 24 | 38 tals.

Table 30. Health insurance: Percent of full-time Participants
in plans with vision benefits by extent of benefits, medium
and large firms, 1983

] " Includes all: covered dental Procedures except orthodontia. Amount
of maximum specified is for each insured person.
® Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

36

Profes- Profes-
sional | Techni- sional } Techni-
‘All par. | a9. | eal and | Produc- ; Allpare | 2nd | cal and | Produc-
Dollar amount ticipants |20TMinis-| clerical |tion par- Benefit ticipants |2@TMinis-| clerical | tion par-
‘cipants | ‘trative | partici- | ticipants trative | partici- | ticipants
partici. | pants partici- | pants
pants pants
Total 100 100 100 100 Total .... 100 100 100 100
Yearly maximum specified 93 92 1 94 Eye examinations only 10 14 7 6
Less than $500 ia) ie) io) 1
$500 - 7 6 8 6 Examinations and eyeglasses .... 7 6 8 6
$501-$749 .. 1 1 1 1
$750 25 5 25 25 Examinations, eyeglasses, and
$751-$999 1 1 1 2 contact lenses... . 78 7 69 84
$1,000 . 47 44 43 50
$1,001-$1,499 4 4 4 3 ‘Orthoptics’ only ... 3 4 4 2
$1,500 , 4 6 5 3
Greater than $1,500 3 3 4 3 Other combinations 2 1 2 2
No yearly maximum 7 8 8 6 * Exercises to improve the function of the eye muscles.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.



Appendix B: Availability of
the Survey’s Data Base

The tables published in this bulletin present the ma-
jor findings of the employee benefits survey; results of
additional review of various benefit plan provisions ap-
pear in the Monthly Labor Review. However, these cover
only a portion of the employee benefits information
collected. Persons interested in all provisions of a par-
ticular benefit studied during the annual survey can
purchase a set of magnetic tapes containing the survey’s
data base through the Office of Wages and Industrial
Relations, Bureau of Labor Statistics, Washington, D.C.
20212. The charge for furnishing the data is limited to
the cost of producing the tapes and preparing support-
ing documentation.

For major benefit items, the BLS survey obtained
plan provisions and employee participation data for each
of three employee groups (professional-administrative,
technical-clerical, and production workers). Informa-
tion on employer costs was not collected. The magnetic
tapes, which consist of a control file and plan data files
for each benefit area, may be used to derive national
estimates, similar to those published in the bulletin, for
any item on the data base. The tapes cannot yield reli-
able estimates for individual industries, geographic re-
gions, or establishment size classes. Full documentation
accompanies the tapes, including examples of estimat-
ing formulas. Although Bureau staff will respond to
any questions concerning the content of the tapes, tech-
nical assistance in developing estimates cannot be pro-
vided to purchasers due to the heavy workload associ-
ated with the survey program.

Data users can purchase tapes with details of plans
for one benefit area or all, i.c., health, life, accident and
sickness, or long-term disability insurance; private re-
tirement pensions; and paid time-off provisions—lunch
time, rest periods, holidays, personal leave, vacations,
and sick leave. (Table 63 presents all of the information
that was collected on the other benefits surveyed.) The
plan data file contains provisions for each plan which
was reported and for which usable information was
available. However, plan identification numbers on the
tape are scrambled (and other identifying information
is removed) to protect the confidentiality of respond-
ing establishments.

Data users also can purchase the control file, which
contains establishment information required to produce
estimates from the plan: data. Control file records in-

67

clude establishment sample weights and size codes; Zeo=
graphic, industrial, and employee group classification
codes; and the number of workers in the employee
group. The control file also lists all benefit plans offered
in each establishment, with the number of plan partici-
pants in each employee group. A plan is listed on more
than one control file record if it covers employees in
more than one establishment. Although plan identifica-
tion numbers on the control file are scrambled, the same
scrambled numbers appear on the data file so they can
be matched to make estimates. Because establishment
schedule numbers on the control file are scrambled dif-
ferently for each employee group, it will not be possi-
ble to link together plans offered to different employee
groups within an establishment.

Benefit provisions obtained from plan documents are
recorded in coding manuals for insurance and pension
plans and then entered on the plan data file. A set of
coding manuals and instructions for completing them
are supplied to tape purchasers for interpretation of data
on the file. Paid time-off provisions are reported on
collection forms which are also provided to tape
purchasers.

The analysis of insurance and pension plans is ex-
tremely detailed. The following list of health insurance
plan provisions included in the data base gives an indi-
cation of the breadth and depth of the information avail-
able on the magnetic tapes. Other insurance and pen-
sion analysis is similarly detailed.

Health insurance data base
Plan Participation Requirements
When plan participation begins
Waiting period by type of benefit
Maximum age for participation

Employee Contribition for Employee and
Dependents’ Benefits
Percent paid or monthly contribution

Section A
Funding Media for Major Categories of Health
Care
Hospital benefits
Surgical benefits
Medical benefits



Contents—Continued

Page
Tables: |
Percent of full-time employees (or participants), medium and large firms, 1983: |
1. Summary: Participation in employee benefit programs . . 16 :
2. Work schedule: Number of hours scheduled per week . . . 16 |
3. Paid lunch time: Minutes per day . 17
4. Paid rest time: Minutes per day... 17 |
5. Paid holidays: Number of days provided each year . . 18
6. Paid holidays: Policy on holidays that fall on regularly scheduled day off 18
7. Paid vacations: Amount provided at selected periods of service 19
8. Paid holidays and vacations: Average number of days 20
9. Paid vacations: Length of service required to take vacation 20
10. Paid personal leave: Number of days provided per year ai
11. Short-term disability coverage: Participation in sickness and accident insurance plans
and paid sick leave plans 21 |
12. Paid sick leave: Type of provision 21
: 13 22
Eee 14. Paid sick leave: Average number of days at full pay by type of plan : 23
15. Paid annual sick leave: Average number of days by accumulation policy and sickness
and accident insurance coordination 24
16. Sickness and accident insurance: Type and duration of payments .. 25
17. Sickness and accident insurance: Percent of earnings formula by maximum
weekly benefit 27

18. Long-term disability insurance: Method of determining payment -- 28

19. Long-term disability insurance: Duration of benefits 28
Health insurance:

20. Coverage for selected categories of medical care 29

21. Basic hospital room and board coverage by type of benefit payments 31

22. Basic surgical benefits by maximum allowance for selected procedures . 32

23. Major medical coverage by amount of deductible and applicable benefit period . 33

24. Major medical coverage by coinsurance provisions 33

25. Major medical coverage by maximum benefit provisions 34

26. Dental benefits by extent of coverage for selected procedures . 35

27. Dental benefits by deductible provision ... 36 |
28. Dental benefits by yearly maximum amount of insurance .. 36

29, Orthodontic’ benefits by lifetime maximum amount of insurance . 36

30. Vision benefits by extent of benefits ......... . - 36

31. Mental health benefits by extent of benefits . 37
32. Coverage for selected special benefits 37
33. Contributory plans by type and amount of employee contribution . . 38
34. Funding medium for selected types of coverage 39

{ Life insurance:

I 35. Method of determining amount of basic life insurance and frequency of related

: coverages 40
36. Multiple-of-earnings formulas by amount of basic insurance and

maximum Coverage provisions .... 2.6... ene eee eee 4}

37. Flat dollar insurance by amount of basic insurance. . . 42
38. Effect of retirement on coverage ........ 42



H
t
i
4
3
3

egional Offices

ureau of Labor Statistics

ALASKA

oor

ON VIH

REGION VIE

°F we REGION VI
awn *>
Region | Region IV Regions VII and VIII
Suite 1603 1371 Peachtree Street, N.E. 911 Walnut Street

John F. Kennedy Federal Building
Government Center

Boston, Mass. 02203

Phone: (617) 223-6761

Region li
Suite 3400
1515 Broadway
New York, N.Y. 10036
Phone: (212) 944-3121

Region Hil
3535 Market Street
P.O. Box 13309
Philadelphia, Pa. 19101
Phone: (215) 596-1154

Atlanta, Ga. 30367
Phone: (404) 881-4418

Region V
9th Floor
Federal Office Building
230 S. Dearborn Street
Chicago, III. 60604
Phone: (312) 353-1880

Region VI
Second Floor
Griffin Square Building
Dallas, Tex. 75202
Phone: (214) 767-6971

Kansas City, Mo. 64106
Phone: (816) 374-2481

Regions IX and X
450 Golden Gate Avenue
Box 36017
San Francisco, Calif. 94102
Phone: (415) 556-4678



i

t

* Deductible expenses

Coinsurance by the amount of incurred expenses

Coinsurance by the number of days/visits

Maximum dollar per day/visit by number of
days/visits

Maximum number of days/visits for specified
expenses

Maximum dollar payable for specified covered
expenses

Section C questions are designed to identify and
describe the benefit provisions of covered expenses in

“section B that are subject to deductible, coinsurance,

and/or maximum benefit provisions. This section con-
sists of 15 sets of seven questions. One set of questions
is completed for each covered expense, or group of
covered expenses, with identical deductible, coin-
surance, and maximum benefit provisions. In the first
question of each set, a group of expenses with common
provisions is identified. The remaining six questions
give the benefit provisions for the group. Additional
sets of questions are completed until the benefit provi-
sions of all covered expenses have been described.



Table 20. Health insurance: Percent of full-time participants by coverage for selected categories of medical care, medium
and large firms, 1983

Provided care
7 Not provided
Category of medical care Total an By basic By major Reloos 4 ee
benefits only’ | medical only | maior medical |
All participants |
i
Hospital room and board ... 100 100 16 19 65 tv)
Hospitatization—miscellaneous services .. 400 100 5 20 65 ¢) !
Outpatient care* 100 100 12 20 68 0)
Extended care facility’ 100 58 22 24 2 42
Home health care* 100 37 18 "1 8 63
Surgical 100 100 34 28 37 °
Physician 100 99 ar 42 46
Physician visits—office .. 400 96 5 a4 7 4
Diagnostic X-ray and laborator 100 100 28 36 36 iv)
Prescription drugs—nonhospital 100 98 12 83 4 2
Private-duty nursing .. 400 96 5 90 1 4
Mental health care 100 99 9 19 n 1
Dental .. 100 74 68 6 - 26
Vision . . 100 28 26 2 - 72
Professional and administrative
Hospital room and board .. 100 100 15 20 64 )
Hospitalization—miscellaneous services 100 100 14 2t 64
Outpatient care* 100 100 8 at 70 a)
Extended care facility” 100 61 20 26 15 99
Home health care* 100 39 16 12 W 61
Surgical .. 100 100 37 31 32 }
Physician visits—in hospital 100 99 12 46 42 1
Physician visits—office 100 99 5 89 5 1
Diagnostic X-ray and laborator 100 400 28 4 3 e)
Prescription drugs—nonhospital 100 99 8 85 6 1
Private-duty nursing 100 99 6 92 1 1
Mental health care 100 99 6 20 74 1
Dental 100 79 73 6 - aq
Vision 100 25 22 3 - 75
Technical and clerical
Hospital room and board... 100 100 15 23 6
Hospitalization—miscellaneous services 100 100 12 24 63 0
Outpatient care* 100 100 9 24 67 e)
Extended care tacility’ 100 55 15 26 13
Home health care’ 100 36 15 12 9 64
Surgical 100 100 32 33 34 a)
Physician visits—in hospital 100 99 1 47 44 1
Physician visits—office . 300 99 6 86 7
Diagnostic X-ray and laboratory’ .. 100 100 2 AZ 31 a)
Prescription drugs—nonhospital 100 98 8 86 4 2
Private-duty nursing 400 98 6 a 1 2
Mental health care .. 100 99 7 23 63 1 i
Dental 100 72 65 7 - 28
Vision 100 24 a 3 - 76

See footnotes at end of table.

29


i
|
i
|
|

Incidence of several other benefits differed by em-
ployee group, with a larger proportion of profes-
sional-administrative employees usually covered. For
example, full or partial payment of relocation expenses
for transferred or newly hired employees was available
to nearly four-fifths of the professional-administrative
employees but to only two-fifths of the technical-cleri-
cal employees and less than one-fourth of the produc-
tion workers. Severance pay was offered to three-fifths
of the white-collar employees, almost twice the pro-
portion of production employees covered.

For six benefits, the data distinguish between full and
partial defrayment of the-cost of the benefit to the em-
ployee. Parking, for example, was nearly always free
to those employees eligible for the benefit. Conversely,
meals served in a cafeteria or other dining facility were
generally provided at reduced cost, rather than free, to
those eligible. Fully paid relocation allowances, more

common among eligible white-collar employees, in-

cluded payments for moving and interim living ex-
penses, and the cost of breaking a lease or selling a
house. Covered production workers were more often
eligible for only partial defrayment of relocation ex-
penses, generally limited to moving costs, or limited to
‘a maximum dollar amount.

For those employees provided recreational facilities,
which range from employer-sponsored sport teams to
sophisticated fitness facilities, nearly one-half of the
workers in each employee group were eligible to have
the full cost paid for while the remainder jointly fi-
nanced the cost of the benefit with the employer. Em-
ployees with partial reimbursement for education ex-
penses outnumbered those with full reimbursement by
2 to 1 for white-collar employees and 3 to 1 for pro-
duction workers. Full educational assistance included
total cost for books, tuition, and fees, but not necessar-
ily for worktime‘lost due to attending courses.



.
Table 10. Paid personal leave: Percent of full-time Table 11. Short-term disability coverage: Percent of

employees by number of paid personal leave days provided full-time employees by participation in sickness and accident |
per year, medium and large firms, 1983 insurance plans and paid sick leave plans, medium and large Hl
firms, 1983 i
Protes-
sional | Techni- . Profes-
‘Alem. | 290. | cal and | Produc- sional | Techni-
Number of days ployees |20inis-| clerical | tion em- ‘Alem. |. 20d | cal and | Produc-
trative | employ- | ployees Type of plan adminis-| clerical | tion em-
employ-| _ ees ployees "trative | employ-| ployees
ees employ-| ees

ees

; Total 300 | 100 | 100

Provided personal leave .. 25 31 35 17 Total 100 | 100 | 100
1 day 3 2 3 3
2 days 4 5 T 1 Sickness and accident insurance
3 days 3 3 4 3 only 4 5 49
i 4 days 5 6 8 4 Noncontributory’ 3 5 43
5 days 4 7 6 2
More than 5 days 2 3 2 1 Paid sick leave only 66 63 25
No maximum specified 3 5 3 1
Varies by length of service .. 1 1 2 1 Combined sickness and accident
insurance/paid sick leave... 23 26 23 18
H Not provided personal leave 75 69 65 83 Noncontributory’ sickness and
i accident insurance .. | 17 19 22 14
Workers were provided as much personal leave as they needed. No sickness and accident insurance
‘oF paid sick feave .. | 6 4 3 9

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

” Provided at no cost to employee.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

Table 12. Paid sick leave: Percent of full-time employees by
type of provision, medium and large firms, 1983

Protes-
sional | Techni-
i 7 ‘Alem |_ 80d | cal and | Produc
H Provision vyagg | @dminis-} clerical | tion em-
: Ployees | ‘trative | employ-| ployees
employ-| ees

t ees
: Total .. 100 100 100 100
i Provided sick leave 67 92 91 42
Sick leave provided on:
An annual basis only’ ..... 4B 59 65 33
A per disability basis only? 14 22 18 7
Both an annual and per :
disability basis 4 5 7 1
No specified maximum ‘number
‘of days* 2 5 1 iy]
Other basis® . i) o 19)
Not provided paid sick leave 33 8 9 58

* Employees eam a specified number of paid sick leave days per year.

This number may vary by length of service.
‘ ® Number of days of paid sick leave is renewed for each illness or dis-

ability. This number may vary by length of service.

3 Sick leave provided to employees as needed.

* Less than 0.5 percent.

* Includes formal plans with provisions that change from a specified
number of days per year to a specified number of days per absence after
a certain service period.

NOTE: Because of rounding, sums of individuat items may not equal to-
tals.

2


Table 3. Paid tunch time: Percent of full-time employees by
minutes of paid lunch time per day, medium and large firms, |

1983
+] Profes-
sional | Techni-
‘Alem. |_2n4_ | cal and | Produc-
Minutes per day oyees |20minis-| clerical | tion em- '
Ployees | ‘trative | employ- | ployees
employ-| ees.
ees
Total 100 | 100 | 100 | 100 |
Provided paid lunch time " 4 5 7
Under 20 minutes .. 1 1 1 2
20 minutes .. 4 Q () 7
‘Over 20 and under 30 minutes... (’) 0) iv) 1
30 minutes 4 2 2 6
‘Over 30 minutes 1 1 1 0)
Number of minutes not available..|_—(’) ° - i)
aa 96 95 83

Not provided paid lunch time

" Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

Table 4. Paid rest time: Percent of full-time employees by
minutes of paid rest time per day, medium and large firms,

1983
Profes-
sionat | Techni-
Ailem- |_ 2nd _| cal and | Produc-
Minutes per day Teyces |#2minis-| clerical | tion em-
Ploy trative | employ- | ployees
employ-} ees
ees
Total 100 100 100 100
Provided paid rest time 74 58 76 80
Under 15 minutes 2} 0 0) 3
15 minutes: | 4 4 6 2
Over 15 and under 20 minutes...) 1 1 1 1
20 minutes: 24 16 18 32
Over 20 and ui 3 2 1 5
30 minutes | 36 34 47 3t |
‘Over 30 and under 40 minutes... (’) 0) i) 1 i
40 minutes _ 1 1 1 q
‘Over 40 minutes .... . 2 iv) () 4 |
Number of minutes not avaitable..|_(') Qo 1) v)
26 42 24 20

Not provided paid rest time

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.



Table 20. Health insurance: Percent of full-time participants by coverage for selected categories of medical care, medium

and large firms, 1983—Continued

Provided care
Not provided
Category of medical care Total ak By basic By major . by basic | oe
benefits only’ medical only* major medical
Production

Hospital room and board...... 100 100 7 16 67 (0)

Hospitalization—miscellaneous services 100 100 16 7 66 e)

Outpatient caret ..... : 100 100 15 18 67 e)
Extended care facility’ 100 58 25 22 " 42
Home health care’... 100 37 aa 10 7 63
Surgical .. 400 100 34 24 42 a)
Physician Visits—in hospital . 100 100 13 36 50 e
Physician visits—office .. 100 94 4 80 9 6

Diagnostic X-ray and laboratory” 100 100 29 30 4a i)
Prescription drugs—nonhospital.. 100 98 16 80 2 2
Private-duty nursing 100 93 4 88 1 7
Mental health care . 100 99 ” 7 7 1
100 72 67 5 - 28

100 32 30 1 - 68

* A provision was classified as a basic benefit when it related to the
initial expenses incurred for a specific medical service. Under these pro-
visions, a plan paid covered expenses in one of several ways: (1) In
full with no limitation; (2) in full for a specified period of time, or untit a
dollar jimit was reached; or (3) a cash scheduled allowance benefit that
provided up to a dollar amount for a service performed by a hospital or
physician. For a specific category of care, a plan may require the par-
ticipant to pay a specific amount each disability or year (deductible) or a
nominal charge each visit or procedure (copayment) before reimburse-
ment begins or services are rendered.

? Major medical benefits cover many categories of expenses, some
‘of which are not covered under basic benefits, and others for which ba-
sic coverage limits have been exhausted. These benefits are character-
ized by deductible and coinsurance provisions that are applied across

30

categories of care.

2" Less than 0.5 percent.

* Coverage for any of the following services charged by the out-
patient department of the hospital: Treatment for accidental injury or
‘emergency sickness; surgical procedures; rehabilitative or physical
therapy; and treatment for chronic illness (radiation therapy, etc.).

* Some plans provide care only to a patient who was previously
hospitalized and Is recovering without need of the extensive care pro-
vided by a general hospital.

© Charges incurred in the outpatient department of a hospital and
‘outside of the hospital.

NOTE: Because of rounding, sums of individual items may not equa
totals.. Dash indicates no employees in this category.



i
i
b
ue
i
i

ment.” Furthermore, most deferred retirement benefits
were greater than immediate pensions, primarily be-
cause the time during which LTD benefits were paid
was typically added to an employee’s length of service
for computation of pension benefits.

Requirements for disability retirement were usually
based on specified years of service such as 10 years or
more. Fourteen percent of the participants, however,
had no age or service requirement for disability retire-
ment, and 21 percent had to meet the qualifications for
the LTD plan, which usually had a minimal service
requirement.

Postponed retirement. Employees who continue on the
job after age 65 rarely receive private pensions until
their actual retirement. Moreover, postponed retirement
is seldom fully reflected in the size of pension benefits
by both crediting the additional service and adjusting
pensions upward for the shorter retirement period.
However, for the first time since the survey began, a
majority (55 percent) of participants were in plans that
made some adjustment for postponed retirement, up
from 48 percent the 2 previous years.

Forty-seven percent of all participants were in plans
with benefit formulas that included credit for service
after age 65; 18 percent were subject to limits on the
number of credited years (frequently, only years up to
age 68 or 70). However, a number of plans with earn-

ings-based benefit formulas did recognize earnings levels
after age 65, even when service was not credited for
these years. Production workers were more likely than
white-collar employees to receive full credit for serv-
ice after age 65. Multiemployer plans, established by
collective bargaining agreements, frequently provide
for employer contributions to the pension fund for cov-
ered employees regardless of age.

In contrast to early retirees, who typically receive
reduced pensions over an extended time period, late re-
tirees seldom receive pensions that are increased to
compensate for the shorter time they will draw bene-
fits. Only 8 percent of the participants were in plans
that actuarially adjust the size of pensions or increase
the payment by a specified percentage for each addi-
tional year beyond the normal retirement age.

Postretirement pension increases. Inflation can severely
erode the purchasing power of a fixed pension through-
out a worker’s retirement years. Over half (54 percent)
of pension plan participants were in plans which in-
creased pensions for current retirees at least once dur-
ing the 1978-82 period. Most of these increases were
not automatic but discretionary, or ad hoc, adjustments.
The amounts of these ad hoc increases were not directly

"For a more complete discussion of disability retirement, see Donald
Bell and William Wiatrowski, “Disability Benefits for Employees in
Private Pension Plans,” Monthly Labor Review, August 1982, pp.
36-40.

linked to a cost-of-living index. Instead, retirees’ cur-
rent pensions were usually increased by either a per-
centage varying by the length of retirement, or a dol-
Jar amount per year of service. The latter type of in-
crease more often affected the pensions of production
workers, and frequently resulted from collective bar-
gaining agreement provisions.

Since the survey reports only the number of current
employees covered by pension plans and not the num-
ber of retirees, it cannot yield information on either the
proportion of annuitants actually receiving postretire-
ment pension increases or the average amount of their
benefit improvements. However, the magnitude of both
can be roughly indicated by weighting the information
collected on ad hoc increases by the number of active
workers participating in plans that granted such
increases.

This was the approach used to estimate average pen-
sion increases. For each plan granting an ad hoc in-
crease during the 1978-82 period, the amount of increase
was computed using three retirement periods (5, 10,
and 15 years) and two monthly pension amounts ($250
and $1,000) in effect on December 31, 1977. These in-
creases were then averaged using as weights the num-
ber of active workers participating to provide sur-
veywide estimates for each example. As shown in the
tabulation below, the length of retirement was a signifi-
cant factor in determining the size of pension adjust-
ments, with larger increases paid to persons retired
longest. Also, where maximum increases were speci-
fied, retirees with higher original pensions had lower
percentage increases. The BLS Consumer Price Index
for Urban Wage Earners and Clerical Workers (CPI-W)
rose 57 percent over the 5-year period studied. Retirees.
in plans with ad hoc adjustments, therefore, were com-
monly granted increases that were less than half of the
price rise.

Monthly pension on

December 31, 1977 Years of retirement

5 10 IS
$250:
Average pension on December 31, 1982..... $290 $313 $327
Percent change, December 31, 1977-82..... 16 25 31
$1,000:
Average pension on December 31, 1982..... $1,109 $1,189 $1,230
Percent change, December 31, 1977-82... . 1 19 23

Only about 3 percent of all participants were in plans
that provided for automatic increases in pension bene-
fits to offset cost-of-living increases."* In most in-
stances, the cost-of-living-adjustment formulas provid-
ed for benefit adjustment proporitonal to increases

"The CPI-W increased 5! percent between 1978 and 1981, the
highest 4-year rise in recent times. Postretirement increases during
this period are the subject of an upcoming Monthly Labor Review ar-
ticle by Donald G. Schmitt.



Table 53. Private pension plans:' Percent of full-time
participants by provision for preretirement survivor annuity,
medium and large firms, 1983

Profes-
sional | Techni-
Type of annuity for surviving | All par- onise| clerwal {ten po
spouse Sclpants partici | ticipants
pants
Total 100 too | 100
Preretirement survivor annuity
provides .. ne so | 99 | 98 | 99
Equivalent of joint and survivor
AMNUIRY? zo | 6 | 66 | 75
Based on early retirement! .... 61 87 55 66
50 percent of employee
PENSION rene 44 | 30 | 4 | 49
At extra employee
ssessanseees 14 13 12 16
51-99 percent of
employee pension 6 5 3 8
At extra employee
cost? .. oO - iv) 1
400 percent of employee
pension 3 4 4 3
At extra employee
cost’. an) 6 ) °
Alternative percentages
of pension at em-
ployee’s Option vemininnnl 7 8 8 6
At extra employee
cost® 3 4 3 3
Based on normal
retirement’ 9 9 W 9
At extra employee cost’... 1 1 o 1
Portion of accrued employee
benefit... 2a | 28 | 29 | 18
Reduced for early
retirement pacnanescasonsene 12 15 14 10
Unreduced for early
retirement sansonsecnes 1 9 10 13 7
Based on service projected
to normal retirement date ... 2 3 2 1
(Other annuity” 5 6 3 6
No preretirement survivor annuity
provided? ... 1 1 2 1

* Excludes supplemental pension plans.

? Many plans offer an elective preretirement spouse option. {f the elec-
tive provision was the only option, it was tabulated; if it was in combination
with an automatic preretirement spouse option, only the automatic provi-
sion was tabulated.

? The spouse annuity is computed as it the employee had retired with a
joint-and-survivor annuity. That is, the accrued pension is first reduced be-
cause of the longer length of time that payments were expected to be
made to both the retiree and the surviving spouse. The spouse's share is
then the specified percent of the reduced amount.

* Survivor annuity is based upon the benefit the employee would have
received if early retirement had occurred on the date of death.

5 Plan reduces the accrued employee pension benefit for each year
survivor protection is in force.

* Less than 0.5 percent.

? Survivor annuity is based on the benefit the employee would have re-
ceived if eligible for normal retirement on the date of death.

° Includes annuity based on a dollar amount formula or percent of eam-
ings.

* "A preretirement survivor annuity is required by ERISA only where
plans allow the payment of retiree benefits prior to the plan's normal re-
tirement age.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no empioyees in this category.

56

|



Personal leave

(table 10)

Formal personal leave, which allows employees to
be absent from work with pay for a variety of reasons
not covered by other specific. leave plans, was provided
to one-fourth of the employees. One-third of the
white-collar employees received personal leave, twice
the proportion of production employees with this bene-
i fit. Most commonly, employees provided personal leave
i were eligible for 1 to 5 days, averaging 3.7 days per
year. In cases where personal leave was part of an “an-
nual leave” plan (combined vacation and personal leave)
ij and could not be shown separately, it was reported as
vacation time. The survey did not cover the extent of
t informal personal leave.

Short-term disability benefits
ie (tables 11-17)

Workers may be protected against loss of income due
to a short-term disability through paid sick leave, usu-
ally providing 100 percent of their normal earnings, or
sickness and accident insurance, commonly providing
50 to 70 percent of earnings. Short-term disability pro-
i tection was available to 94 percent of all employees in
the survey, including 23 percent covered by both sick
L leave and sickness and accident insurance. Paid sick
k leave was most often provided to white-collar workers,
} while sickness and accident insurance was more often
t a benefit for production workers.

Sick leave plans. The number of days of paid sick leave
varies greatly, depending, in part, on whether a plan
i specifies the number of days available each year (an-
i nual plans) or for each absence due to illness or injury
(per-disability plans). Plan provisions that allow em-
ployees to accumulate unused annual sick Jeave days
and coordinate sick leave with sickness and accident
insurance also affect the amount of sick leave protection.

The majority of employees covered by paid sick leave
were under annual plans. These plans commonly in-
creased the number of available sick leave days sharply
over the first 5 years of service, and more moderately
thereafter. The average number of days, however, in-
creased appreciably through 15 years of service before
leveling out, due to schedules in a few plans covering
a large number of workers. Annual sick leave plans
made available an average of 17.3 days at full pay at 1
year of service, 39.9 days at 15 years, and 45.7 days at
30 years.

Annual plans that allow employees to carry over un-
used sick leave from one year to the next (cumulative
plans) generally make a smaller number of days avail-
able each year than noncumulative plans, relying on
accumulated sick leave to provide protection for a dis-
ability of several weeks. For example, at 20 years of
service, cumulative annual plans averaged 14.9 days

while similar noncumulative plans averaged 58.7 days.
Persons with cumulative plans who carry over a por-
tion of their available sick leave from year to year can
eventually accumulate substantial protection.

Sick leave plans that are coordinated with sickness
and accident insurance tend to provide fewer days than
those that stand alone, as the insurance payments begin
when the sick leave is exhausted. The difference is es-
pecially striking in noncumulative annual plans—those
that are coordinated with insurance averaged 42 days
less at 20 years’ service than similar plans without in-
surance.”

Seventeen percent of all employees had per-disability
sick leave plans. The number of days of paid leave
under these plans was generally larger than under an-
nual plans and increased sharply with length of service.
The average number of days at full pay increased from
46.2 at 1 year, to 110.8 at 15 years, and 152.1 days at 30
years.

Almost all paid sick leave plans provided the em-
ployee with full pay for at least a portion of the time
while on sick leave. In addition, about one-fourth of
the participants were in plans paying part of the em-
ployee’s regular salary after full-pay provisions were
exhausted. These partial-pay provisions were much
more common in per-disability plans (53 percent of par-
ticipants) than in annual plans (16 percent). Another 2
percent of the sick Jeave participants received partial
pay only.

At 1 year of service, 82 percent of the workers cov-
ered by sick leave plans received benefits beginning on
the first day of illness or disability. The remainder typi-
cally had to wait 1 to 5 workdays, with the waiting
period often decreasing to zero after 10 to 15 years of
service.

Sickness and accident insurance. Half of all employees
were protected against absences from work due to
short-term disabilities by sickness and accident insur-
ance plans. More than four-fifths of such employees had.
their benefits fully paid by their employer. Those who
were required to contribute toward the cost of cover-
age most often paid a fixed amount, usually between $1
and $1.99 a month. Most of the others paid a percent
of monthly earnings, or had the cost included in the
premium of an insurance package.

Payments under sickness and accident insurance plans
were either a percent of employee earnings or a sched-
uled dollar amount. The percent of earnings was usu-

5 Per-disability sick leave plans were excluded from this analysis be-
cause (1) only one-fifth of the employees with per-disability plans
were also covered under a sickness and accident insurance plan, and
(2) only annual sick leave plans allow the employees to carry over
and accumulate unused sick leave from one year to the next. Instead,
the number of days of paid leave under a per-disability plan is re-
newed for each illness or disability after the employee returns to
work for a specified period.



Table 17. Sickness and accident insurance: Percent of full-time participants with benefits based on percent of
earnings formula by maximum weekly benefit, medium and large firms, 1983

Maximum weekly benefit
No
‘Type of payment Total | Total | Less | $80 | $100 } $120 | $140 | $160 | $200 | $250 | $300 | maxi-
with than to to to to to to to or mum
maximum} $80 | $99 | $119 | $139 | $159 | $199 | $249,| $299 | more
All participants
Tota .... 100 7 1 2 4 4 10 4 W 3 13, 29
Fixed percent of earnings 1 70 1 af 4 4 10 4 "1 3 12 22
Less than 50 .... 1 1 ° - a) - - - - - - 0)
36 29 1 19 ra) «) 2 2 2 1 3 7
2 2 - - - iu) () 1 = (y ~ Yo
25 7 - 1 1 2 1 7 1 4 7
19 15 Q 0) 1 1 6 1 2 rv) 4 5
9 6 () QO 2 1 YO - ty 1 2 2
Percent of earings varies .. 9 1 - - - -|o -| 0 “ 1 7
Professional and administrative
Total 100 7 1 23 1 1 7 3 W 4 20 29
! Fixed percent of earnings 8s 70 1| 28 1 1 7 3} oo 4| 2] 15
t Less than 50 1 u) ~ (0) - ~ - _ _ ~ “
t 50-54 33 28 1 20 C) - 2 1 1 1 3 5
1 1 - - - - - 1 - - - -
bed 20 = 2, - 4) 0 - | 0 8 2 6 5
7 14 rv) 0) ~ oO 5 ty 1 0 7 2
i 9 6 0 e) 1 - “) - 0 1 4 2
: Percent of earnings varies 15 1 - - - - - -|1o0 -| 0 14
! Technical and clerical
| Total ... 100 70 14] 27 5 2 8 2 7 a] 15 | 30
Fixed percent of earnings 90 68 1) 27 5 2 8 2 6 3| mw] oat
} Less than 50 i) 0” - - (9) - - - - - - -
50-54 40 34 1 2) (’) ~- 2 1 1 Y 3 6
55-59 1 1 - - - 1 0 - | 0 - - - 1
if 60-64 23 13 - 1 1 1 Y 1 4 1 4 10
65-69 18 15 -} 0 2 1 6] 0) 1 1 5 3
70 or more 7 5 Y () 1 - oO 19) 1 2 2
Percent of earnings varies 10 2 - - - - () - ) () 1 9
Production
Total 100 a7] 2] 15 5 6| 13 5] 14 2 9] 28
Fixed percent of eamings .. 96 70 2] 15 5 12 5) 14 2 a) 2
Less than 50 1 1 1 -| 0 - - - - - -
50-54 36 27 1 15 () ia) 3 3 3 fu} 2 9
58-59 3 3 - - - v 1 1 - 0) -
60-64 25 18 - °) 2 3 2 {) 8 () 3 7
65-69 22 14 -| 0 1 1 6 3/0) 2 7 i
70 oF more ... 10 7 ’) 0) 2 1 t - 1 1 1 3
Percent of earnings varies 4 2 - - - - 1 -lo . 1 3
* Less than 0.5 percent, NOTE: Because of rounding, sums of individual items may not

equal totals. Dash indicates no employees in this category.

27


Table A-1. Estimated number of establishments and workers within scope of survey and number studied, medium and large

firms, United States,’ 1983

* Minimum Number of workers in establishments
employment in| Estimated
Industry division’ establishments | number of, Pofessiona)
within scope of |establishments| Totaf® and Technical and | production
survey administrative
Within scope of survey*

All industries. . 44,068 22,431,301 | 4,979,931 5,229,264 | 10,057,504
Manufacturing ...... 19,752 11,342,202 | 2,445,098 | 1,617,956 7,097,178
Nonmanufacturing 24,314 11,089,010 | 2,534,033 | 3,611,308 2,960,325

Mining ... 647 366,489 117,330 72,084 172,996
Construction 780 324,597 92,048 53,405 128,518
‘Transportation, communications, electric, gas, and

sanitary services "100-250 4,180 2,804,071 581,217 707,372 1,258,140
Wholesale trade 100 5,152 928,982 283,549 276,676 308,845
Retail trade .. 250 3,907 9,298,592 307,279 719,909 977,437
Finance, insurance, and real estate . 6,758 2,564,360 777,199 | 1,511,226 63,606
Selected services’ 2.892 801,919 375,411 270,635 50,843

Studied”

All industries .. 1,273 3,984,887 | 1,044,045 915,927 1,673,490
Manufacturing 645 2,297,110 642,561 960,054 1,276,020
Nonmanufacturing - 628 1,587,777 401,484 585,873 997,470

Mining ... 250 25 34,060 14,886 40,188 8,367
Construction — 250 26 33,885 14,665 91523 5,097
Transportation, communications, electric, gas, and

sanitary services nnn 162 743,249 178,925 230,508 283,996
Wholesale trade 62 20,871 7317 7,080 4,817
Retail trade .. 162 383,062 40,889 104,660 79,567
Finance, insurance, and real estate - 145, 282,060 93,529 167,216 5.980
Selected services’ 46 90,590 51.273 26,698 9,846

* Excludes Alaska and Hawaii.

? As defined in the 1972 edition of the Standard Industrial Classification
Manual, U.S. Office of Management and Budget.

® This figure includes out-of-scope workers. These workers —
executive management, part time, temporary, seasonal, and operating
personnel in constant travel status (e.g. airline pilots) - are excluded from
the counts of employment by occupational group.

“Number of establishments and workers shown within the scope of
the survey are estimates. These estimates differ from those developed in
the 1983 PATC survey, since each is based on the findings of its
respective survey.

* Minimum employment size was 100 for chemical and allied products;
petroleum refining and related industries; machinery except electri
electrical machinery, equipment, and supplies; transportation equipmer
and instruments and related products. Minimum size was 250 in all other
manufacturing industries.

available State Unemployment Insurance (UI) reports
for the 48 States covered by the survey and the Dis-
trict of Columbia. The reference date of the available
UI reports was generally March 1981. The refinement
procedures included’an effort to ensure that most sam-
pling frame units corresponded to the definition of an
establishment developed for this survey. (A small num-
ber of sampling frame units were not refined to corre-
spond to the definition of an establishment because of
limited company reporting ability.)

Sample design
The sample for this survey was a subsample of the
1983 PATC sample to reduce the costs and resources

© Minimurn employment size was 100 for railroad transportation; focal
and suburban transit, deep sea foreign and domestic transportation; air
transportation, communications, electric, gas, and sanitary services; and
pipelines; and 250 for all other transportation industries. U.S. Postal
Service is excluded from the survey.

” Limited to advertising; credit reporting and collection agencies;
computer and data processing services; research and development
laboratories; commercial testing laboratories; management and public
relations services, engineering and architectural services; noncommercial
research organizations; and . accounting, auditing, and bookkeeping
services.

® Minimum employment size was 50 for accounting, auditing, and
bookkeeping services; and 100 in all other selected services.

* These figures refer to all respondents to the survey, whether or not
they provided data for all items studied. See the section on survey
response.

required for data collection. The sample of 1,497 estab-
lishments’ was selected by first stratifying the sampling
frame by broad industry group and establishment size
group based on the total employment in the establish-
ment. The industry groups consisted of the eight major
industry divisions, as defined by the Office of Manage-
ment and Budget, which are covered by the survey and
shown in table A-1.

2The number of sample units selected in this survey is, at present,
largely determined by resources and operational constraints and may
be adjusted up or down in future surveys,

63



establishment reports in the survey. Therefore, the ac-
tual number of responses for the survey varies for each
of the 36 combinations.

The following summary is a composite picture of the
establishment responses to the survey:

Number of establishmen
In sample 1,497.
Out of business and out of s 56
Refusing to respond . 155
Nonresponse other t 13
Responding fully or partially . . 1,273

There were two procedures used to adjust for miss-
ing data from partial schedules and total refusals. First,
imputations for the number of plan participants were
made for cases where the number of participants was
not reported (about 2 percent of all plans). Each of
these participant values was imputed by randomly se-
lecting a similar plan from another establishment in a
similar industry and region. The participation rate from
this plan was then used to approximate the number of
participants for the plan which was missing a partici-
pation value but was otherwise usable.

For other forms of missing data (or nonresponse), an
adjustment was made using a weight adjustment tech-
nique based on sample unit employment. Under such a
technique, a model is assumed in which the mean value
of the nonrespondents is equal to the mean value of the
respondents at some detailed “cell” level. These cells
are defined in a manner that groups establishments to-
gether which are homogeneous with respect to the
characteristics of interest. In most cases, these cells are
the same as those used for sample selection. The spe-
cific weight adjustments used in this survey were cal-
culated in four stages for each occupational group and
benefit area combination. This allowed a maximum
amount of data from partially completed establishment
reports to be incorporated into survey estimates. For
example, data on the number of occupational group
employees in an establishment or participants in a plan,
or information on the existence of a plan, could be used
even if the plan provisions could not be obtained.

Survey estimation methods

The survey design used an unbiased estimator (the
Horvitz-Thompson) which assigns the inverse of each
sample unit’s probability of selection as a weight to the
unit’s data. The estimator was modified to account for
a weight adjustment factor developed during the ad-
justment for nonresponse. The general form of the es-
timator for a population total was:

65

‘ n Y,
Y= —
i=l P
i

where n = sample size

Y;= value for the characteristics of the i! unit
Pi= the probability of including the i'® unit in
the sample

The basic form of the estimator, after modification to
account for the weight adjustment factor, f,, developed
during the adjustment for nonresponse, was:

where ny = number of responding units

f,; = weight adjustment factor for the ith unit.

The estimation procedure was then the process of
estimating the appropriate employment or establishment
totals needed for each estimate and subsequently calcu-
lating the proportion, mean, or percentage which was
desired.

Reliability of estimates

The statistics in this bulletin are estimates derived
from a sample survey. There are two types of errors
possible in estimates based on a sample survey—sam-
pling and nonsampling. The “accuracy” of a survey re-
sult is determined by the joint effects of sampling and
nonsampling errors.

Sampling errors occur because observations are made
from only a sample, not the entire population. Since
this survey was based on a probability sample, estimates
of sampling error for the survey estimates can be pro-
duced directly from the survey data after appropriate
procedures have been implemented. Sampling errors
for a limited number of the estimates published in the
bulletin are available in the detailed description of sur-
vey methodology and reliability noted below.

Nonsampling errors can be attributed to many
sources: Inability to obtain information about all cases
in the sample; definitional difficulties; differences in the
interpretation of questions; inability or unwillingness to
provide correct information on the part of respondents;
mistakes in recording or coding the data obtained; and
other errors of collection, response, processing, cover-
age, and estimation for missing data. Through the use
of computer edits of the data and professional review
of both individual and summarized data, efforts were



made to reduce the nonsampling errors in recording,
coding, and processing the data. The nonresponse ad-
justment procedures are also a potential source of sur-
vey nonsampling error. To the extent that the charac-
teristics of the nonrespondents are not the same as those
of the respondents, nonsampling error is introduced in

the estimates. The magnitude of these and other non-
sampling errors is currently undetermined.

A more detailed description of survey methodology
and reliability may be obtained from the Office of Wages
and Industrial Relations, Bureau of Labor Statistics,
U.S. Department of Labor.



i
|
:

Table 15. Paid annual sick leave:' Average number of days at full pay for full-time participants by accumulation policy
and sickness and accident insurance coordination, medium and large firms, 1983

Profes- Profes-
sional | Techni- sional | Techni-
‘and | cal and | Produc- cal and | Produc-
item Mi pat | adminis-| clerical | tion par: item feats clerical | tion par-
Pp trative | partici- | ticipants| trative | partici- | ticipants
partici- | pants partici- | pants
pants pants
AU year of service:
Cumulative plan 92| 119| 9.2| — 7.2/lAt 10 years of service—Continued
With sickness ar Noncumulative plan | 456} 627) 432] 295
insurance .. 74a} 91| 87) 86 With sickness and acciden
Without sickness and insurance 26.4 42.3 29.3 WS
accident insurance 13! 193] 95| 87 Without sickness and
Noncumulative plan 21.9 33.2 17.0 14.4 accident insurance .. 57.5 724 51.2 45.0
With sickness and acci
insurance - 141! 2331 13.0} — 7.9]|At 20 years of service:
Without sickness and ‘Cumulative pian 19] 195] 151] 113
accident insurance 268} 380) 199] 204 With sickness and accident
insurance 10.7 14.5 12.6 76
At 6 years of service: Without sickness and
Cumulative plan | ou7] 185) 124} 85 accident insurance . 175| 220] 162] 150
With sickness and accident Noncumulative plan se7| 7a3| sea| 392
insurance .. a7| 15} 104) 62 ith sickness and accident
Without sickness and insurance | 327] 509] 372| 150
accident insurance 136] 175| 129] 110 Without sickness and
Noncumulative plan ‘| 354] 496) 316| 238 accident insurance .. 746| 919| 680] 60.1
With sickness and accident
insurance ... ve 204] 33.4| 21.1] 9.8 /jAt 25 years of service:
Without sickness and ‘Cumulative plan 1s0| 197] 152) 115
accident insurance 447| 573| 376] 364 With sickness and accident
insurance ita] 148] 129) a0
At 10 years of service: Without sickness and .
Cumulative plan | 138] 162] 140] 104 accident insurance .. 175| 222] 162] 150
With sickness and accident Noncumulative plan e19| 030] 593| 416
insurance oe| 132| 14] 67 With sickness and accident
Without sickness and IMSUTANCE oe | 349] 542] 301] 166
accident insurance 164| 207] 152, 142 Without sickness and
accident insurance . 7es| 967] 708] 631

* Paid sick leave plans with a specified number of days available
each year. Per disability plans were excluded from this table because
(1) only one-fitth of the employees with per disability plans were also
covered under a sickness and accident insurance plan and (2) only an-
nual sick leave plans allow the employee to carry over and accumulate
unused sick leave from one year to the next year. Instead, the number

of days of pai

leave under a per disability plan is renewed for each ill-

ness or disability after the employee retums to work for a specified pe-
riod. Data on per disability plans are presented in Table 14.

NOTE: Computation of average excluded days paid at partial pay and
workers with only partial pay days or zero days of sick leave.



Employee Benefits in Medium

and Large Firms, 1983

The 1983 benefits survey collected data on employee
work schedules and developed information on the in-
cidence and detailed characteristics of. 11 private sec-
tor employee benefits paid for at least in part by the
employer: Paid lunch and rest periods, holidays, vaca-
tions, and personal and sick leave; sickness and acci-
dent, long-term disability, health, and life insurance; and
private retirement pension plans. (See charts 1 and 2.)
In addition, data were collected on the incidence of 18
other employee benefits, including stock, savings and
thrift, and profit sharing plans; nonproduction bonuses;
employee discounts; educational assistance; relocation
allowances; and free or subsidized parking. The major
BLS findings are reported in this bulletin.

The survey covered full-time employees in medium
and large establishments (generally those with at least
100 or 250 employees, depending upon the industry).
Since data collection was limited to provisions of for-
mal plans, the extent of such benefits as rest periods
and personal leave may be understated. Furthermore,
the data show the coverage of benefit plans but not the
actual use of these benefits; for example, that part of
paid sick Jeave actually taken.

Data are presented separately for three occupational
groups—professional-administrative, technical-clerical,
and production workers. The text of this bulletin often
discusses the first two groups jointly, labeled white-col-
lar workers, in contrast with production or blue-collar
workers.

Respondents provided information on the number of
workers covered by specified benefit plans. Workers
generally were counted as covered by plans that re-
guired a minimum amount of service prior to réceiving
benefits, even if they had not met the minimum service
requirement at the time of the survey. Where
plans—such as health or life insurance—required an
employee to pay part of the cost (contributory plans),
workers were counted only if they elected the plan and
were paying their share of the cost. Data on insured
benefit plans and private retirement pension plans were
thus limited to “participants.” Plans for which only ad-
ministrative costs were paid by the employer were not
included in the survey.’

For the second consecutive year, survey results re-
flect a drop of about 600,000 in production worker em-
ployment within the scope of the survey. This decline

in employment—an ll-percent decrease over 2
years—did not occur evenly across industries, As a re-
sult, some shifts in survey findings regarding relative
incidence of types of benefit plan provisions stem, not
from changes in the plans, but from disproportionate
decreases in the number of employees covered by dif-
ferent types of plans.

Summary
The great majority of full-time workers within the
scope of the 1983 survey of employee benefits were

provided with health and life insurance and private re-.

tirement pension plans as well as paid holidays and va-
cations (table 1). Although the employer generally paid
the full cost of providing benefits, relatively more em-
ployees shared in the cost of health insurance in 1983
than in 1982. Provisions of many employee benefits dif-
fered markedly between white-collar and production.
workers.

On the average, employees received about 10 paid
holidays each year. The number of days of paid vaca-
tion, increasing with years of service, averaged nearly
16 days after 10 years and 21 days after 20 years.

Ninety-four percent of all employees had some pro-
tection against loss of income due to short-term disabil-
ity—either sick leave or sickness and accident insur-
ance, or both. Workers with 5 years’ service who were
covered by sick leave plans could take, on the average,
from slightly over 5 to nearly 15 weeks off with full
pay per year or per disability, depending on the type
of plan. Most of the workers covered by sickness and
accident insurance had benefits based on their weekly
earnings (commonly 50 to 70 percent) for a period from
13 to 52 weeks. Most employees also had some protec-
tion against extended income loss due to disability; 45
percent had long-term disability insurance, and 49 per-
cent were covered under private pension plans that pro-
vided immediate disability retirement benefits.

Virtually all of the participants in health insurance
plans were covered for most categories of expenses re-
lated to hospital and medical care. Life insurance was
provided for nearly all employees, most commonly for

‘An exception, however, was made in table 38, which tabulates
postretirement life insurance coverage. Plans under which retirees
pay the full cost were included since the guarantee of insurability at
retirement was, in itself, considered a benefit.



si

eee

Contents—Continued

Tables—Continued

Private pension plans:

39.
40.

41,
42.

43.

. Provision for integration with social security benefits. ......-.-00056

. Minimum age and associated service requirements for normal retirement .
. Minimum age and associated service requirements for early retirement ... .
. Early retirement by reduction factor for immediate start of payments. .

. Provisions for disability retirement ......--.+--+++-+-
. Provision for credit for service after age 65 . .
. Ad hoc postretirement annuity increases.
. Vesting provisions ....
. Provision for postretirement survivor annuity .
. Provision for preretirement survivor annuity. .

Method of determining retirement payments
Terminal earnings benefit formulas by amount and maximum benefit provisions .
Terminal earnings benefit formulas by definition of terminal earnings....---------++++
Career earnings benefit formulas by amount of formula and maximum benefit
provisions
Dollar amount benefit formulas by amount of formula and maximum benefit
provisions

Length of service requirement for participation:

. Sickness and accident insurance
. Long-term disability insurance. .
. Health insurance ...
. Life insurance... .
. Private pension plans.

Type of plan sponsor:

59.
60.
61.
62.

63.

Sickness and accident insurance. .......-.6 ese seer ee eesr eres tress tees tener ees
Long-term disability insurance. .
Life insurance.......
Private pension plans.

Other benefits: Percent of eligible employees

Appendixes:

A. Technical note
B. Availability of the survey’s data base . .

vi

Page



PE

in the BLS Consumer Price Index. Nevertheless, ceil-
ings on individual increases limited periodic adjustments
to 3 percent or less for one-half of the covered workers.
Most of the affected participants were in plans calling
for annual adjustments. Lifetime ceilings on increases
were rare.

Vesting. Even when an employee leaves an employer
without qualifying for either a normal, early, or disabil-
ity retirement benefit, a pension may ultimately be paid.
If certain conditions are satisfied at the time of separa-
tion, workers have a vested right in all or a significant
portion of their accrued pension benefits and may be-
gin receiving benefits years later. Although all pension
participants are entitled to vested benefits under the
Employee Retirement Income Security Act of 1974,
(ERISA), some variations exist as to when this occurs.
Most pension plans require 10 years of service before
benefits are fully guaranteed. While nearly two-thirds
of the participants were covered by the 10-year rule
regardless of age, slightly over one-fifth were affected
by the plan sponsor’s right to exclude years of service
before age 22 in determining vesting eligibility.

Unreduced vested pension payments begin at a plan’s
normal retirement age, based on the benefit formula in
effect when an employee left the plan. However, nearly
all terminated and vested participants could receive a
reduced pension at an earlier age (usually the plan’s
early retirement age). This option was available to 68
percent of the participants if they had just satisfied the
minimum vesting requirements when they left their
plans. Twenty-nine percent were not eligible for an
early start of payments unless they had completed more
years of service than were required for vesting.

Postretirement survivor benefits. ERISA also requires
that retirement plans allow employees to elect a form
of pension in which at least 50 percent of the retiree’s
payments continue to the spouse after the retiree’s death.
‘When this type of pension—called a joint-and-survivor
annuity—is elected, the employee will receive a lower
benefit during retirement since payments are likely to
be made over a Jonger period of time. When the retiree
dies, the spouse will receive part or all of the retiree’s
monthly pension benefits.”

Joint-and-survivor benefits are based on an actuarial
or arithmetic reduction of the employee’s pension which
is necessary to allow for continuation of benefits to the
employee’s survivor. One-fifth of the participants were
in plans offering only a joint-and-survivor option that
provides a surviving spouse 50 percent of the retiree’s
adjusted pension. Nearly two-thirds of participants had
a choice of two or more alternative percentages to be
continued to the spouse.

For a more complete discussion of survivor benefits, see Donald
Bell and Avy Graham, “Surviving Spouse's Benefits in Private Pen-
sion Plans,” Monthly Labor Review, April 1984, pp. 23-31.

Preretirement survivor benefits. Nearly all participants
were in plans providing for survivor payments in case
the employee diéd before retirement. Employees usu-
ally had to be eligible for early retirement before any
death benefits were payable. For seven-tenths of the
participants, a surviving spouse would receive an an-
nuity equivalent to the amount payable if the employee
had retired on the day prior to death and had elected
a joint-and-survivor form of payment. Most survivor
pensions of this nature were based on an early retire-
ment benefit and were provided at no cost to the em-
ployee. However, for 19 percent of those employees
having preretirement joint-and-survivor protection, it
was available only if elected, and its cost was paid by
the employee through a small deduction in the pension
ultimately payable to either employee or spouse.

Employee contributions. Only 8 percent of pension plan
participants had to pay part of the cost of their plan;
virtually all of those paid a percent of earnings. For 17
percent of these workers, the percentage was a flat
rate—most often from 1 to 4 percent of earnings (none
paid more than 6 percent). The majority of participants
in contributory plans paid one rate (usually 2 to 5 per-
cent) on earnings above a specified level, and a lower
rate (frequently zero) below that earrings level. The
annual earnings level at which this break occurred
ranged from $3,000 to $37,800, the social security tax-
able wage base in effect during 1983. Plans with vary-
ing employee contributions usually coordinate private
benefits with social security payments; as discussed ear-
lier, replacement rates in these plans are higher on earn-
ings above the social security taxable wage base.

Plan participation requirements

(tables 54-58)

The insurance and pension programs commonly
specify minimum length-of-service periods before em-
ployees may join a plan. These service requirements
often are nominal, coinciding with an employer’s pro-
bationary policy or the administrative time needed to
begin employer funding of benefits. Service require-
ments in some long-term disability insurance plans, how-
ever, are more restrictive, and are intended to limit the
number of covered workers and control employer costs.
Similarly, sponsors of pension plans frequently impose
age requirements which prevent younger or older
workers from participating.”

2 Age and service restrictions are not the only limitations on plan
participation. Benefits may be limited to persons with full-time and
permanent employment status; in other instances, a more liberal re-
quirement may apply, such as a workweek of 20 hours or more. Some
plans are available only to persons covered by another plan; for ex-
ample, life insurance plans that restrict eligibility to those who also
are’enrolled in the company’s health insurance program. In other
cases, participation in one plan blocks eligibility for others, as when
several alternative health insurance plans are offered by the employer.



an amount equal to annual earnings, rounded to the
next $1,000.

Eighty-two percent of the employees in the survey
were covered by private retirement pension plans. Bene-
fits were most frequently based on earnings during the
Jast 5 years of employment. Common eligibility require-
ments for normal retirement were: Age 65 with no
length-of-service requirement, age 62 with 10 years of
service, and 30 years of service with no age require-
ment. Virtually all covered employees could retire early
with a reduced pension, provided they fulfilled mini-
mum age and service requirements (most commonly,
age 55 with 10 or 15 years of service).

Funeral leave, military leave, subsidized parking, and
full or partial defrayment of educational expenses were
available to at least three-fifths of the employees. Al-
though a minority of the employees were eligible for
profit sharing, savings and thrift, and stock ownership
plans, the availability of these capital accumulation plans
grew between 1982 and 1983.

Work schedules

(table 2)

Forty-hour straight-time weekly work schedules ap-
plied to 84 percent of the employees covered by the
survey.’ Nineteen percent of the professional-adminis-
trative employees, 27 percent of the technical-clerical
employees, and 7 percent of the production workers
had shorter workweeks. Less than 2 percent of the work
force was scheduled to work other than a 5-day week.

Paid lunch and rest periods

(tables 3 and 4)

Eleven percent of the employees received formal paid
lunch periods, and 74 percent were provided formal
rest time, such as coffee breaks and clean-up time. Both
benefits were more common among production em-
ployees than among the two other occupational groups.

Paid rest time, averaging 25 minutes a day for each
occupational group, was provided most commonly as
two daily breaks of 10 or 15 minutes each. Production
employees who were covered by paid lunch plans usu-
ally received 20 or 30 minutes a day, averaging 24 min-
utes. The 4 percent of white-collar workers eligible av-
eraged 31 minutes of paid lunch time each day.

Paid holidays

(tables 5, 6, and 8)

Virtually all full-time employees in each occupational
group were provided paid holidays, averaging 9.8 days.
This represented a reduction of 0.2 of a day for the
second consecutive year following negotiated reduc-
tions, primarily in the auto industry.’ Extended holiday
plans, such as the Christmas-New Year’s Day period
2Work schedule data, limited to straight-time hours, included lunch

and rest periods only if they were paid. Regularly scheduled over-
time was exchided from work schedules in this survey.

provided in the auto industry, floating holidays, and
“personal holidays,” such as employee birthdays, were
included in the holiday plans reported.

When a holiday fell on a scheduled day off, such as
a Saturday or Sunday, another day off was regularly
granted to over four-fifths of the employees. Most of
the remaining workers received either another day off
or an additional day’s pay, depending upon the day on
which the holiday fell.

Paid vacations

(tables 7, 8, and 9)

After 15 years of service, full-time employees com-
monly received 20 days of paid vacation annually.
Length-of-vacation provisions averaged 8.7 days after
1 year; 15.7 days after 10 years; and 22.4 days after 25
years of service, virtually unchanged since 1980—the
first year such estimates were developed. Plans cover-
ing professional-administrative employees generally
provided more vacation days than those for other em-
ployees. Sixty percent of the professional-administra-
tive employees, for example, became eligible for at least
15 days of vacation after 5 years of service; this com-
pared with 33 percent of the production employees.

Virtually all white-collar employees received their regu-
lar salaries or earnings during vacation periods. About
seven-eighths of the production employees received
such vacation pay; 13 percent were provided vacation
payments based on a percentage of annual earnings; and
1 percent received lump-sum payments from vacation
funds.

Nearly all employees covered by vacation plans had
to work for a specified period before being able to take
a vacation. The most prevalent length-of-service re-
quirement was 6 months for white-collar employees and
1 year for production employees.

Seventeen percent of the plan participants were al-
lowed to cash in unused vacation time. This option was
offered to 10 percent of the white-collar participants
and 24 percent of the production participants.

Anniversary-year bonus vacation days were included
in the count of regular vacation time. Extended vaca-
tion plans, however, were excluded.’

3 Collective bargaining agreements reached in 1982 by major auto-
mobile mannfacturers and the United Auto Workers eliminated 9 an-
nual paid personal holidays plus 1 day of extra holiday pay each De-
cember. In a related move, } paid floating holiday in December and
6 to 9 supplemental vacation days were eliminated for the industry's
salaried workers.

“The 41-month contract negotiated in 1983 by the Steelworkers and
the major steel companies eliminated extended vacation plans after
1983. Under such plans, employers contributed a specified amount to
a fund that provided 13 weeks of vacation every 5 years to “Senior
Group” employees (the one-half of the employees with longest con-
tinuous service) and 3 weeks, in addition to regular vacation, every
5 years to “Junior Group” employees. New contracts negotiated in
1983 in the aluminum and can industries continued to provide for
extended vacations.



Table 7. Paid vacations: Percent of full-time employees by amount of paid vacation provided at selected periods of
service, medium and large firms, 1983

i
Profes- Profes-
: sional | Techni- sional | Techni-
S ‘Alem. |. 270_| cal and | Produc- ; Avem.|_ 2nd _ | cal and | Produc-
: Vacation policy Tosees |a0minis- | clerical | tion em, Vacation policy Gloyees |20minis-| clerical tion er-
Ploy trative | employ- | ployees| ees | trative | employ- | ployees.
employ-| ees employ- ees
ees ees |
Total .. 100 100 100 100 i
lat 15 years of service:
In plans providing paid vacations .....|_ 100 100 100 99 Under 10 days (o) ia) 0 1 |
10 days... 5 1 2 8 i
At 6 months of service:* Over 10 and under 15 days 0) a) (7) 14) :
Under 5 days 6 3 4 8 15 days .. 27 22 23 32
5 days . 39 4B 50 28 ‘Over 15 and under 20 days . 3 4 4 3
‘Over 5 and under 10 days 8 12 " 5 20 days 59 87 66 50
10 days 5 6 7 3 ‘Over 20 and under 25 days 2 2 1 2
‘Over 10 and under 15 days .. iv) 9) 9) 0) 25 days 1 2 2 1
1 2 is) 6 Over 25 days .. 1 1 1 1
ro) 1 i) i)
|At 20 years of service:
At 1 year of service: Under 10 days io) ie) fa) 1
Under 5 days i) a o } 10 days 3 1 2 5
5 days. 30 7 12 51 Over 10 and under 15 days i) ia) e ra)
‘Over 5 and un 1 ® 1 2 15 days of 14 7 8 15
10 days ... 62 79 83 43 Over 15 and under 20 days ... re) a 9) 1 i
Over 10 and under 15 days .. 1 2 2 1 20 days 55 69 65 48 i
15 days ... 3 8 1 1 Over 20 and under 3 4 3 3
Over 15 days 1 3 1 1 25 days 24 27 20 25
Over 25 and under 30 d 1 1 1 io)
At 3 years of service: 30 days 0 1 a) ro)
Under 5 days a) 7) 0 ie) Over 30 days 1 1 1 1
5 days 5 (3) 1 9
Over 5 and under 10 days 1 a 19) 2 ||At 25 years of service:
10 days ose 79 7 87 7 Under 10 days ® ie) fe} 1
‘Over 10 and under 15 days .. 7 6 5 9 3 1 2 5
15 days 6 13 5 2 ia) is) e ro) |
‘Over 15 and under 20 days is) (3) QO iv) 8 6 7 10 |
1 2 6 i) a to) a) )
1 1 1 iG) 34 32 34 29
2 3 2 2
At 5 years of service: 46 50 49 44
Under 5 days fe} e ) (ome 1 1 1 1
5 days: 7 2 ® 1 4 5 4 4 6
Over 5 and under 10 days e > iv) 9) 1 2 1 1
10 days . - 46 34 42 55
‘Over 10 and under 15 days .. 7 7 6 7 ||At 30 years of service?
15 days .. 4“ 54 48 30 Under 10 days ... (3) a) i) 1
Over 15 and u 1 rf o4 1 10 days 3 1 2 5 i
20 days 1 3 1 1 ver 10 and under 15 days .. a i) ® e
Over 20 days 1 2 1 1 15 days 8 6 7 10
Over 15 and under 20 days .. i) a i) a)
At 10 years of service: 20 days 30 a 33 27
Under 10 days (0) is) (a) 1 ‘Over 20 and under 25 days .. 1 2 1 1
10 days .. 8 3 4 13 (25 days . a 42 44 39
Over 10 and under 15 days 1 9) e 2 Over 25 and under 30 days - 1 1 1 1
15 days .. 66 65 72 63 30 days ... 1" 13 9 4
Over 15 and under 20 days 7 6 6 8 Over 30 days 3 3 2 4 {
15 23 16 10 1
2 3 1 2 |
|

* Excludes situations where employees are credited with vacation
days during the first 6 months of service but, as a matter of establish-
ment policy, must wait beyond 6 months before taking those days off.

? Less than 0.5 percent.

® Provisions were virtually the same after longer years of service.

NOTE: Data include anniversary year and bonus days and exclude
extended vacations. Dash indicates no employees in this category.



Employee Benefits in Medium Zs
and Large Firms, 1983 }

U.S. Department of Labor
Bureau of Labor Statistics
August 1984

Bulietin 2213



Table 37. Life insurance: Percent of full-time participants in
plans with flat dollar insurance by amount of basic
Insurance, medium and large firms, 1983

Table 38. Life insurance: Percent of full-time participants In
basic life insurance plans by effect of retirement on
coverage, medium and large firms, 1983

Profes- Profes-
sional | Techni- sional | Techni-
‘Alt par. |_ 290 | cal and | Produc- ; Aitpar.|__274_| eal and | Produc-
Amount of insurance teipoars|2dminis-| clerical jtion par- Effect of retirement tieipoats|24minis-| clerical | tion par-
icipants | “wative | partici- | ticipants ‘cipants | ‘trative | partici- | ticipants
partic- | pants partici- } pants
pants pants
Total .. 100 | 100 | 100 | 100 Total 100 {| 100 | 100 | 100
Less than $2,000 6 5 4 6 Insurance continues! .. 66 eo | 68 | 64
$2,000-$4,999 13 12 10 14 Continues for life .. 65 67 66 63
35,000-$9,089 32 | 36 | 40 30 Continues in full 3 4 5 2
$10,000-$14,999 a1 | 26 | 29 32 Reduced once 35 | 34 | 35 | 36
$15,000-$19,999 8 9 9 8 Reduced more than once
$20,000-$24,999 7 | 40 5 6 during retirement . | 26 | 30 | 2 | 24
$25,000-$20,999 2 3 4 2 Continues in torm of paid-up
$30,000 and over 1 2 ) Y insurance’ .. ie) 0 fo} 19)
Ceases during retirement 1 2 1 1
Less than 0.5 percent Insurance discontinued immediately. 34 | 31 se | 36

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

Table 39. Private pension plans:

* Includes pians in which coverage is fully retiree paid.

? Plan accumulates permanent amounts of insurance through the con-
tributions of active employees.

® Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

Percent of full-time

participants by method of determining retirement payments,

medium and large firms, 1983

Basis of payment®

Total

Terminal earnings formula
No alternative formula
Terminal earnings alternative
Career earnings alternative
Dollar amount aiternative®

Career eamings formula .
No alternative formuta
Career earnings alternative
Dollar amount alternative?

Dollar amount formula? ...
No altemative formula
Dollar amount alternative”
Percent of contributions

alternative.

Percent of contributions formula
No alternative formuta
Percent of contributions.

alternative ..

Money purchase

Profes-
sional | Techni-
All par- | and _| cal and } Produe-
Helpants | adminis-| clerical |tion par-
ipants | trative | partici- | ticipants
partici- | pants
pants
100 | 100 | 100 ; 100
54 n 70 36
24 33 40 1t
7 10 7 5
3 4 4 2
19 25 19 7
16 24 16 W
10 Ly W 6
oO iv) y iv .
6 8 5 5
28 4 W St
27 3 WwW 48
1 - iv) 3
“ ia) iv) ia)
1 “ iv 2
1 oO Oo 2
YO iv) “ is)
1 1 2 oO

‘Excludes supplementat pension plans.

* Alternative formulas are generally designed to provide a minimum
benefit for employees with short service or low earings.

° Includes formulas based on dollar amounts for each year of service
and schedules of benefits that vary by length of service.

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

42



ct

aeneenmenacte

Virtually all of the participants in health plans were
covered for most categories of hospital and medical ex-
penses. Among benefits less commonly provided were
dental care, care in an extended care facility or at home,
and vision care. Unlike most other employee benefits,
there were few differences in health insurance provi-
sions among employee groups.

The various categories of medical care are covered
under | of 3 benefit arrangements: Basic benefits only,
which generally have no deductible or coinsurance pro-
visions; major medical benefits only, which usually have
both deductible and coinsurance provisions,’ or basic
benefits plus major medical. In-hospital care was most
commonly covered by an arrangement that offered ba-
sic coverage plus supplemental coverage under major
medical benefits. Certain categories of medical care,
such as private-duty nursing, visits to a physician’s of-
fice, and prescription drugs, usually were covered only
under major medical benefits. Dental and vision care
were almost exclusively covered as basic benefits. Re-
gardless of the benefit arrangement used, most health
plans limited the size of payments.

Hospital coverage. The most costly component of
health care is that provided by a hospital: Nearly one-
half of all personal health care expenditures in the United
States are for hospital care.’ Virtually ail of the partici-
pants in health plans analyzed in this study received
coverage for hospital expenses. Eighty-one percent of
Participants had first-dollar coverage (basic benefits) for
hospital charges, down 12 percentage points since 1979.
Of those that received basic hospital coverage, 94 per-
cent were in plans that paid room and board expenses
up to the semiprivate rate, a provision that has grown
steadily in recent years, By paying the semiprivate rate,
rather than a specified dollar amount per day, the plan
automatically provided some protection against rising
hospital charges,

Nine-tenths of the participants in basic hospital plans
had limited duration of coverage. Slightly over
seven-tenths had plans which specified the maximum
number of days covered per confinement, most com-
monly 120 or 365 days. Most of the remaining plans
limited the duration of coverage by specifying a maxi-
mum dollar amount per confinement or per year.” Ad-
ditional coverage was usually available under a major
medical plan for cases that exceeded these limitations.

’The deductible is a specified amount of medical expense that an
insured person must incur before benefits will be paid by the plan.
Coinsurance is a provision where both the (insured) participant and
the insurer share, in a specified ratio, the health care expenses result-
ing from an illness or injury. The coinsurance percentage is the share
paid by the plan.

"Health Care Financing Review, Spring 1984 (U.S. Department of
Health and Human Services, Health Care Financing Administration),
Vol. 5, No. 3, table 5, p. 52.

Surgical coverage. Following the same pattern as hos-

Pital room and board, surgical benefits were most often
covered by basic benefits, but the percent covered only
under major medical plans has increased in recent years.
Seventy-one percent of participants received first-dollar
coverage for surgery in 1983, compared with 85 percent
in 1979.

Sixty-seven percent of the participants with basic sur-
gical benefits were in plans with payments based on the
“usual and customary” charge for the procedure per-
formed, up from 60 percent in 1979. Most of these plans
paid 100 percent of the charges. The remaining partici-
pants were covered by a schedule of payments for sur-
gical procedures, listing the maximum amount covered
for each operation.

Major medical coverage. Major medical benefits, pro-
vided to nine-tenths of the health insurance participants,
generally covered a wide range of medical services both
in and out of the hospital. There are two types of ma-
jor medical plans: One type supplements basic benefits
by covering expenses which exceed basic benefit limi-
tations or by covering expenses not paid by the basic
plan; the other type is comprehensive and stands alone
without basic plan coverage. Comprehensive major
medical policies have grown in popularity as employers
have sought to contain costs of providing health care
by eliminating first-dollar coverage. Participation in
comprehensive major medical. plans in 1983 nearly
equaled that in supplemental plans; a year earlier, two-
fifths of the major medical participants had the com-
prehensive coverage.”

With very few exceptions, major medical benefits
were not paid until the participants paid a certain amount
of the expenses. The purpose of this deductible portion
was to keep the premium cost down and discourage
unnecessary use of medical services. The deductible
amount was usually $100 or less per insured person,
payable each year. Participants with deductible amounts
greater than $100 increased from 7 percent in 1982 to
13 percent in 1983.

Once the worker had met the deductible requirement,
the plan paid a specified percentage (coinsurance) of
incurred expenses. Almost nine-tenths of the partici-
pants were in plans that paid 80 percent of expenses,

°This limitation was commonly found in “comprehensive major
medical plans.” These plans usually covered hospital expenses in full
up to a specified dollar amount per confinement (typically between
$2,000 and $5,000) and 80 percent thereafter. For this study, the full-
coverage portion was treated as a basic benefit and the 80-percent
portion as major medical.

‘Comprehensive major medical plans can be broken down into
strict and modified varieties. All expenses covered are subject to the
deductible and coinsurance provisions under the strict version whereas
the modified version might cover hospital, or hospital and surgical,
expenses in full up to a specified dollar amount without the applica.
tion of a deductible. (Also, see footnote 9.)



ally fixed—almost always between 50 and 70 per-
cent—although percents varying by service and length
of disability were also observed. Plans paying a percent
of earnings covered 81 percent of the white-collar par-
ticipants, compared with 36 percent of the blue-collar
participants. These plans often had a dollar limit on the
amount of the weekly benefit available; such limits have
risen steadily since they were first recorded in 1981.
Production workers were the most common recipients
of scheduled dollar benefits, which provided either a
fixed weekly amount (ranging widely from under $60
to over $140), or varying weekly benefits (usually based
on earnings).

The maximum weeks of coverage for each disability
were fixed for all but 13 percent of participants, for
whom duration of coverage varied by length of serv-
jce. Of those participants with benefits lasting for a fixed
period, most received 26 weeks of payments. Other
common periods were 13 and 52 weeks. The duration
of coverage showed little variation among employee
groups.

Waiting periods are nearly universal features of sick-
ness and accident insurance plans. The most common
provision requires an employee to be out of work due
to illness or injury some short period, usually 3107
days, before payments begin. Waiting periods may be
shortened or eliminated entirely for employees involved
in an accident or hospitalized. Some employers coor-
dinate sick leave plans with sickness and accident in-
surance to provide benefits during waiting periods.

Workers in two States, New Jersey and New York,
are covered by mandatory temporary disability insur-
ance plans that are at least partially employer financed.
Both of these State plans pay benefits based on a per-
centage of the worker’s earnings for up to 26 weeks
with a limit on the weekly benefit ($95 in New York
and $158 in New Jersey in 1983).°

Long-term disability insurance

(tables 18 and 19)

Long-term disability insurance (LTD) continues the
income of employees during extended periods of dis-
ability. Generally, LTD begins after sick leave and sick-
ness and accident insurance are exhausted and contin-
ues as long as the employee remains disabled, or until
retirement age. If disabled after age 60, however, LTD
benefits usually continue for 5 years or to age 70, which-
ever is earlier.

Forty-five percent of the employees covered by the
study had LTD insurance; one-fourth of the partici-
pants were required to contribute towards the cost of

® Both States permit an employer to substitute a private plan for the
State plan if the benefits provided are equivalent or more liberal. In
New York, many employers agree to pay the employee's share of
plan costs. California and Rhode Island also have mandated tempo-
rary disability insurance plans, but these plans require no employer
contribution and, thus, are not included in this survey.

the plans. The amount of LTD insurance usually var-
ied by earnings, as did the cost to the employee. When
a flat rate was charged, employees usually paid under
0.5 percent of earnings. In plans charging a monthly
amount per $100 of covered earnings, the rate was nor-
mally less than 60 cents.

The degree of participation varied widely among the
employee groups, with white-collar workers more than
twice as likely to have LTD insurance as production
workers. However, many employees not covered un-
der LTD insurance are eligible for an immediate dis-
ability pension through their retirement plan; 49 per-
cent of the employees (over three-fifths of the produc-
tion workers) were covered by immediate disability re-
tirement provisions.

Long-term disability benefits were usually a fixed
percent of monthly pay. Almost two-thirds of the par-
ticipants were guaranteed LTD benefits of 50 to 60
percent of predisability earnings, including payments
from social security and other government programs
such as workers’ compensation. The vast majority of
plans that pay a percent of earnings had maximum pay-
ment limitations, which commonly ranged from $1,500
to $5,000 a month.

Slightly over one-fourth of the participants were in
plans that provided a benefit which was not a fixed
percent of earnings, but was either a variable percent-
age of earnings or a scheduled dollar amount depend-
ent on earnings, length of service, or length of disabil-
ity. Production employees were more likely to be cov-
ered under these formulas than white-collar employees.

A ceiling on income during disability was a common
limitation to LTD payments, regardless of the type of
plan. These ceilings affected benefits only if the amount
payable from the LTD plan plus income from other
sources, such as rehabilitative employment and family
social security payments, exceeded a specified percent-
age of predisability earnings (frequently 70 to 75 per-
cent). Seven-tenths of the LTD participants were lim-
ited by these income ceilings, by the dollar maximums
in plans that pay a percent of earnings, or by a combi-
nation of both.

Health insurance

(tables 20-34)

Aimost all of the workers covered by the survey
were provided health insurance. Sixty-five percent had
health plans totally financed by their employers; this
was a 6-percentage-point decline from 1982. Forty-three
percent also received. noncontributory coverage for
their dependents, compared with 51 percent when first
tabulated in 1980. Sixty-three percent of the workers
were in plans which financed coverage to retirees, al-
though retiree contribution requirements and the level
of coverage maintained (including Medicare) sometimes
varied from those of active workers.



Table 51. Private pension plans:' Percent of full-time
participants by vesting provisions, medium and large firms,
1983

“Table 52. Private pension pians:' Percent of full-time

Participants by provision for postretirement survivor annuity,
medium and large firms, 1983

Profes-
sional | Techni-
and | cat and | Produc-
pene adminis-| clerical |tion par-

wative | partici- | ticipants
partci- | pants
pants

Provision

Profes-
sional | Techni-
cal and | Produc-
clerical | tion par-
Partici- | ticipants
pants

All par-

Type of annuity for surviving spouse | Finan

Type of vesting schedule

Total® 400 | 100 | 100 100

Cliff vesting? with full vesting after:

10 years of service at any age... 65 61 58 m1

10 years of service after
age 22 22 24 27 18
Other’... 2 2 3 2

Graduated vesting,’ with full vesting
after:

15 years of service® 4 4 5 3
ert 9 10 12 7

Provision for earliest receipt of
fully vested benefit

Total .. 100 | 100 | 100 | 100
Payable at normal retirement age
only a 3 2 4
Payable prior to normal retirement
age:
At specified age 68 70 70 66
At specified age, with additional
service requirement 29 27 27 30

' Excludes supplemental pension plans.

? Because plans may adopt alternative vesting schedules, sums of par-
ticipants covered by individual vesting schedules may exceed 100 percent.

3 Under a cliff vesting schedule, an emptoyee is not entitled to any
benefits accrued under a pension plan until satisfying the requirement for
100 percent vesting. The Employee Retirement Income Security Act
(ERISA) specifies 10 years as the maximum requirement for this form of
vesting.

* Includes both participants in plans containing vesting schedules more
liberal than ERISA standards and, for graduated vesting, in plans adopting
other ERISA standards.

* Graduated vesting schedules give an employee rights to a gradually
increasing share of accrued pension benefits, determined by years of serv-
ice and eventually reaching 100 percent vesting status.

* Participants in this group were in plans that adopted ERISA’s longest
time span for graduated vesting which calls for 25 percent vesting with 5
years of service, with the vested percentage increasing 5 percentage
points each year for 5 succeeding years, then 10 percentage points for
each of the next 5 years. Thus, 15 years is the maximum requirement for
this form of vesting.

55

Total... 100 | 100 ; 100 | 100

Postretirement survivor annuity

provided 100 {| 100 | 100 | 100

‘Spouse's share of joint-and-sur-

vivor annuity’ only 90 1 92 89
50 percent of retiree's
pension . 20 16 19 24
51-99 percent of retiree's
pension .. 6 4 3 8
100 percent of retiree’s
pension .. 1 1 te) 1
Altemative percentages at
retiree's option 63 70 70 86
‘Spouse's share of joint-and-sur-
vivor annuity plus portion of
retiree’s pension 5 4 2 6
Portion of retiree’s accrued
pension only 5 6 5 5
Postretirement survivor annuity not
provided" is) iv) co) -

+ Excludes supplemental pension plans.

? An annuity that provides income during the lifetime of both the retiree
and the surviving spouse. The accrued pension will usually be actuarially
reduced at retirement because of the longer length of time that payments
are expected to be made. ERISA requires that plans provide this annuity
as an automatic form of pension payment. Employees must waive the
spouse annuity in writing if they desire a pension during their lifetime only
or another option offered by the plan, such as guarantee of payments. for
a specified period.

*" Less than 0.5 percent,

* Includes participants in money purchase plans where the death bene-
fit is in the form of a lump sum payment equal to the present value of the
accrued benefit less payments already received.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.



Table 33, Health insurance: Percent of full-time participants In contributory plans by type and amount of employee

contribution, medium and large firms, 1983
. Professional and Technicat and clerical i
All participants administrative participants participants Production participants |
Type and amount of contribution |
Single Family Single Family Single Family Single Family i
coverage | coverage’ | coverage | coverage’ | coverage | coverage’ | coverage | coverage’ i
Total . 100 100 100 100 100 100 100 100 |
Flat monthly amount 96 a1 96 90 97 92 95 90 i
27 5 29 4 24 3 27 7 |
20 13 19 14 20 40 22 15 :
14 9 5 1 20 10 7 7
" 6 40 5 B 6 10 7
5 12 6 " 7 ” 3 14
i 2 13 2 13 2 13 2 12
$f 1 8 ro) 10 19) 10 1 6
) 6 1 5 1 8 ra) 6
| - 5 - 5 - 7 - 4
i - 2 - 2 2 - 1 |
- 2 - 2 - 3 - 2
- 1 - 1 - 2 - 1 |
- 2 - 2 - 2 - 2
Composite rate? .. 7 6 14 4 " 5 23 7
! ‘Amount varies by earings 1 1 2 1 2 1 1 1
Contribution not determinable 3 8 2 9 1 7 4 9
i * It the amount of contribution varied by either size or composition of fit area, for example, health insurance and sickness and accident insur-
{ family, the rate for an employee with a spouse and one child was used. ance. Cost data for individual plans cannot be determined,
For a small percentage of employees, the employee contributes the same
amount for single and family coverage. NOTE: Because of rounding, sums of individual items may not equal
? Less than 0.5 percent. totals. Dash indicates no employees in this category.
* A composite rate is a set contribution covering more than one bene-

38



Table 16. Sickness and accident insurance: Percent of full-time participants by type and duration of
Payments, medium and large firms, 1983—Continued

Maximum weeks of coverage
Type of payment Less Greater | Varies
Total | than | 13 | 1425 | 26 | 27-81 | 52 | than | by
13 52 service
‘Technical and clerical
All types .. 100 2 10 5 57 2 7 fu) 16
Fixed percent of earnings a 2 7 5 48 1 1 ) 10
Less than 50 0) - - ~ 0) ~ - -
32 1 1 1 27 () ¢) - 1
1 - - - oO iv) ~ = 1
19 1 4 3 8 iv) cv) iv) 2
a} 0) 2 - 8 - ° - 5
5 0 i) i) 3 1 - 1
8 - 1 - 2 “0 3 - 2
4 - {) - 2 ~ 2 - -
2 - “) ~ Oo 0 1 -
2 - - - 10) - - - 2
Fixed weekly dollar benefit W () 3 0) 7 oO 1 - 1)
Less than $60 .. 2 0 1 - 1 - - - 0)
$60-$79 .. 1 Y i) Cy iv) - - - -
$80-$99 2 - 1 ) 1 - - - -
$100-$1 3 - 1 0) 2 - - - -
$120-$139 2 - - ~ 1 - o} : 0
$140 or more 2 - 0) iv) 1 ) ) - i)
Weekly doliar benefit varies .. 10 - () ‘) 3 iV) 2 - 4
By earings ... 9 - iv) r0) 3 Y 2 - 4
By service or length of
disability 9) - rv) - 0) - 0) - -
Production
All types. 100 1 15 3 52 2 6] (Y 13
Fixed percent of earnings .. 35 () 5 2 24 fv) 1 () 2
Less than 50 ) - Cy - 0) ~ - ~ -
13 ie} 2 1 9 - - - 1
q ~ 0 - 1 0) - - -
s Oo 0) 1 6 19) iv) 0) 1
8 0) 2 - 6] 0 0) - C)
4 - 1 a) 2 - 0 - 0)
Percent of earnings varies... 0 - 1 (V) - - 1
t By service cy - i) - ) ~ - - -
E By Jength of disabili “| CD - - - - 0 - - )
By both service and length of
disability 1 - - - fa) - _ . °
Fixed weekly dollar benefit 35 Yo 9 1 at 1 2 - 1
: e| 0 4 - 3) 0) - - -
31 0 1 iV) 1 - - - -
3 - 1 0 2 - () - ~
6 - 1 0) 4 - ) - o)
6] 0 0) ~ 4 - 1 - ~
10 - () Qo 6 1 1 - 1
| Weekly dollar benefit varies 2a} 0 1 ) 7/1 0 12 9
By earnings........ : 27 0) 1 a) 6 ie) 12 8
By service or length of
disability ........ 1 - () - 1 ~ oO - ey
* Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may
not equal totals. Dash indicates no employees in this cate-
gory.

26



Private pension plans:' Percent of full-

ime participants in plans with percent of terminal earnings benefit formulas
nd amount of formula and maximum benefit provisions,’ medium and large firms, 1983

Maxirgum benefit provision

Sub- Not
ject to Limit on years of credited service sub-
ind amount of formula? an ee ject to
type ® nun More maxi-
umn’ | Total 25 |26-29| 30 | 31-34] 35 than mum
40
All participants
otal 53; 42 1 4) 0 | 2] 4] 13 ” 47.
S t per year of service .. 47 | 26) 2 | 1 4] | to} 4 6 - 22
xorg 1.00 ria@;o;-|o]-]-]-]-) - Pye Fe
7 1 1] - -1@]-]/ 0] - 1 QO} - 6
6 1 1 - - iv) - iv) iv) iv) “ - 5
17 | 10 | 10] - - 0 - 4. 3 1 - 7
4 2 2 - 1 - iv) - 1 1 - 2
10 | 10 9| 0 © 2) - 5 1 1 ~ - 1
1 1 1 - iv) iv) iv) - - - 0 - -
53 | 27 | 16 - iv - 210 7] - 6] o 26
24 14 5] ~ - - - 110 2 - 2) 0 10
23 12 10 1 - 7) - 2 ~ 4 - 3 ~ "1
3/0) 06 - - - = - - < - i] - 3
3 1 1 - - - - - - fu) - - 2
o}-]- -|-f-]}-])-)- - 0
too | 58 | 47 4 1] 4} oO | 5 0 45
a7 | a7 | a7 | © +] 4] a] sf o] 7 - 3a} 20
1 1 1] = 1] - - = - - - | 6
6} 2] 2] - - 1f-] 1 - 1 - 10 4
5} 2} 2|/-1-]/o@]}]-]o;la}]o -| sta
20] 12] 12] - - a) - 4} 4 - 2 8
4} 2] 2 - |] -] Oo] - 1 - | - 2
9} 8] 81M!) @ 2} - 410 1 - 1 1
2 2 2 - Oo 1 1 - ~ - - - -
53 | 28 | 20 1 - ra) - ° 8 - iv) 12 | 25
23 | 12| 7 -}-)-]0 70 a] - iv) 6) 4
25 | 15 | 12 +} - | OF] - 2| - a| - - 4|- 10
2 1 oO - - - - - - - - 1 2
3 1 1 - - - - - a] = - 0 2
o|-| - -|-}-]-]- - ©
100 54 49 1 1 5 et) 15 a 15 9 1 46
‘percent per year of service... 48 3 3 ° 1 5 iv} 12 1 8 3 - 17
Less than 1.00 oO; oO} O | - ° - - ~ - - - (a)
400-1.24 4 1 - - 1] - iv = 1 i) - 3
7 1 1 - - © - iv) © 0 rv) - 6
18] 14 W - - oO - 410 4 1 - 6
4 3 3 - 0 - iv) - 1 1 - 1
13] 12] 12) 0 iv) ay - 7 1 1 - - 1
2 2 2 - 1 1 oO - - - ra) - -
52 24 18 - 0 - ia) 7 - 6 1 8 29
22] 10] 8 -|- - 1} 0 3} - 3 1 5 | 12
21 1 10 - ca) - 2 - 4 - 3 - 2 9
si ala -|-]-)-]-]2.]-)]0 o| 5
3 1 1 - - - - - | O] - tT - | 6 2
oO] - - - - - - - - - i)



Table 16. Sickness and accident insurance: Percent of full-time participants by type and duration of
payments, medium and large firms, 1983

Maximum weeks of coverage

Type of payment Less Greater | Varies
Total | than | 13 | 14-25) 26 | 27-511 §2 | than | by
13 52 service
All participants.
All types .. + 100 1 13 4 55 2 13 ) 13
Fixed percent of earnings 47 1 5 3 32 ) 1 ) 4
cy = 9) - 0 = > - -
18 YO 1 1 14 iv) 0 - 1
1 = 9) - 1 C) = - 1)
12 0) 1 1 8 c) 0) 10) 1
10 () 2 ~ 7 cv) () - 1
4 () 1 0) 2 = Y - 1
Percent of eamings varies 4 - 0) - 1 ) 2 - 1
By service 2 - ty - 4 - 1 - -
By length of disability .. 1 - () - re) ’) 1 - iv)
By both service and length of
disability ... 1 - - - 0) - - - 1
Fixed weekly doliar benefit () 7 1 16 1 1 - 1
Less than $60 0) 3 - 3 0 - - cv)
$60-$79 vy) 1 0 1 - ~ - -
‘$80-$99 - 1 ) 1 - QO - -
$100-$119 ~ 1 iv) 3 - 0 - 0
$120-8139 0) 1) ~ 3 - 1 - 10)
$140 or more . - 1) Q 4 1 1 - 1
Weekly dollar benefit varies 22 0) 1 t) 6 0) 9 - 7
By earnings .. 21 iV) 0 10) 5 0 8 - 7
By service or
disability 1 - ”) - o - VW) - 1)
Professional and administrative
All types .. 100 3 8 5 65 2 | 0 9
Fixed percent of earnings 7 2 6 4 5t 1 1 () 7
Oo | - - - O | - - - -
2 v) 2 “y 23 - - - 2
1[ - - - 0) a] = ~ -
ra] 1 2 3 14 - Y 0 1
14 1 2 - 10 - “ - 2
7 0) ¢) 1 3 - 1 2
12 - - 3 - 8 - 1
By service ... 6 - - 1 5 - -
By length of disability 5 - - - 2 - 3 . -
By both service and length of
disability .. - 1 - - - 1) - - - 1
Fixed weekly dollar benefit. 9 c) 2 1 6 0) ) - -
Less than $60 2 t) a) - 2 - - - -
$60-87 1 - ¢) ) ) - - - -
$80-$99 2 - 0 - 1 - - - -
$100-$11 2 - 1 ) 1 - - - -
$120-$13 1 a) - ~ Y - - - -
$140 oF more 2 - - iV) 1 0 1) - -
Weekly dollar benefit v 8 - ) - 5 1 1 - 1
By earnings..... 8 - 0) - 5 1 1 - 1

See footnotes at end of table.

25



Appendix A: Technical Note

Scope of survey

This survey of the incidencé and characteristics of
employee benefit plans covered private sector estab-
lishments' in the United States, excluding Alaska and
Hawaii, employing at least 50, 100, or 250 workers, de-
pending on the industry. Industrial coverage included:
Mining; construction; manufacturing; transportation,
communications, electric, gas, and sanitary services;
wholesale trade; retail trade; finance, insurance, and real
estate; and selected services (table A-1).

Establishments which met the minimum size criteria
as of the reference date of the sampling frame were in-
cluded in the survey, even if they employed fewer
workers at the time of data collection. Establishments
found to be outside the industrial scope of the survey
at the time of data collection were excluded.

Table A-1 shows the estimated number of establish-
ments and employees within the scope of the survey
and the number within the sample actually studied for
each major industry division.

Occupational groups
Data were collected individually for the following
three broad occupational groups:

Professional-administrative:

Includes occupations that require a foundation
of knowledge in the theories, concepts, principles,
and practices of a broad field of science, learning,
administration, or management acquired through a
college-level education or the equivalent in pro-
gressively responsible experience. Above entry
levels, the exercise of a high degree of creativity,
originality, analytical ability, and independent judg-
ment to solve varied and complex problems in the
field of work is characteristic.

Technical-clerical:

Includes office and sales clerical, technical sup-
port, protective services, and other such occupa-
tions that do not require full knowledge of a pro-

"For this survey, an establishment was an economic unit(s) which
produced goods or services, a central administrative office, or an
auxiliary unit providing support services to a company. In manufac-
turing industries, the establishment was usually a single physical lo-
cation. In nonmanufacturing industries, all locations of an individual
company within a Standard Metropolitan Statistical Area (SMSA)
or within a nonmetropolitan county were usually considered an
establishment

fessional or administrative field of work or the ap-
plication of a high level of creativity, originality,
analytical ability; or independent judgment. Job
performance skills are typically acquired through
on-the-job experience and/or specific training
which is Jess than that usually represented by a
baccalaureate degree. These skills include the ap-
plication of a practical knowledge of established
procedures, practices, precedents, and guidelines.

Production:

Includes skilled, semiskilled, and unskilled trades;
craft and production occupations; manual labor oc-
cupations; custodial occupations; and operatives.

Excluded from the survey were executive employees
(defined as those whose decisions have direct and sub-
stantial effects on an organization’s policymaking), and
part-time, temporary, seasonal, and traveling operating
employees such as airline flight crews and long-distance
truckdrivers. :

Benefit areas

Sampled establishments were requested to provide
data on work schedules and details of plans in each of
the following benefit areas: Paid. lunch periods, paid
rest periods, paid holidays, paid vacations, personal
leave, sick leave, sickness and accident insurance, Jong-
term disability insurance, health insurance, private re-
tirement pensions, and life insurance.

BLS also collected data on the incidence of the fol-
lowing additional benefits: Funeral leave; military leave;
profit sharing plans; savings and thrift plans; stock bonus
plans; stock purchase plans; other stock plans; sever-
ance pay; employee discounts; noncash bonuses; non-
production bonuses; relocation allowances; recreation
facilities; subsidized meals; educational assistance; auto-
mobile parking; personal use of company-owned car;
and in-house infirmary.

Sampling frame

The scope of this survey was the same as that of the
Bureau’s 1983 National Survey of Professional, Admin-
istrative, Technical, and Clerical Pay (PATC). The list
of establishments from which the sample was selected
(called the sampling frame) was, therefore, the same as
that developed for the 1983 PATC. This sampling frame
was developed by refining data from the most recently



Chart 1. Paid time off: Percent of full-time employees covered, medium and
large firms, 1983

Vacations

Holidays

Rest time

Sick leave

Personal leave

Lunch period

T T TT. 1
(3) 25 50 75 100

Percent

Chart 2. Insurance and pension plans: Percent of full-time employees covered,
medium and large firms, 1983

Retirement pension

Life Insurance

Health Insurance,
employees

Health ineurance,
dependents

Zs

Long-term disability
insurance

2 Employer/employee pald

Sickness ond Ml Employer paid

accident insurance

t T —

25 50 75 100
Percent

bs
0



Table 1. Summary: Percent of full-time employees by
participation’ in employee benefit programs, medium and
large firms,’ 1983

Protes-
sional | Techni-
‘Allem-|_2%d_ | cal and | Produc
Employee benefit program Tovees |2dminis- | clerical |tion em-
Ploy trative | employ- | ployees
employ-| ees
ees
99 99 | 100 98
100 | 100 | 100 99
25 3t 35 7
Lunch period " 4 5 7
Rest time 74 58 76 80
Sick leave 67 | 92 91 42
Sickness and accident insurance 49 29 34 67
Noncontributory’ .. 4t 22 26 57
Long-term disability insurance .. 45 66 58 28
Noncontributory’ .. 34 47 42 23
Health insurance for employee .. 96 98 95 96
Noncontributory” 6s 62 54 n
Health insurance for 93 95 91 92
Noncontributary’ .. 43 42 35 47
Life insurance 96 97 95 95
Noncontributory? .. 80 79 78 81
Retirement pension 82 86 84 79
Noncontributory’ . 75 79 79 72

' Participation is defined as coverage by a time off, insurance, or pen-
sion plan. Employees subject to a minimum service requirement before
they are eligible for a benefit are counted as participants even if they have
not met the requirement at the time of the survey. if employees are re-
quired to pay part of the cost of a benefit, only those who elect the cover-
age and pay their share are counted as participants. Benefits for which
the employee must pay the full premium are outside the scope of the sur-
vey. Only current employees are counted as participants; retirees are ex-
cluded even if participating in a benefit program.

? See appendix A for scope of study and definitions of accupational
groups.

2 All coverage in the benefit program is provided at no cost to em-
ployee. Supplemental life insurance and pension plans, not tabulated in
this bulletin, may be contributory.

Table 2. Work schedule: Percent of full-time employees by
number of hours scheduled per week,’ medium and large
firms, 1983

Profes-
sional | Techni-
and | cal and | Produc-
ovens | adminis.) clerical | ton em-
loyees | ‘trative | employ- | ployees.
employ-| ees
ees

Work schedule

Total 100 | 100 100 100

Hours per week:

Under 35 .. 1 i) 1 2
35 .. _ 4 4 7 2
‘Over 35 and under 37.5 1 1 1 9)
375 7 9 13 3
Over 37.5 and under 40 3 4 5 1
84 80 72 92

iV) 1 eo ia)

Hours per week not avaitable ... i) iv) - i)

* Work schedule data, limited to straight-time hours, included lunch and
rest periods only if they were paid. Regularly scheduled overtime was ex-
cluded in this survey.

? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

16



* medium and large firms, 1983

Private pension plans:' Percent of full-time participants in plans granting ad hoc postretirement annuit¥

Professional and

Technical and

Production partici

‘See footnotes at end of table.

Characteristics Ail participants administrative ‘
participants clerical participants Pants
atledst one postretirement increase in
st Pe 51 54 49 50
Number of increases granted in
past five years
Total 100 100 100 100
39 42 47 32
36 38 38 34
9 9 8 10
5 5) iv) 10
1t Wt 7 14
Benefit formuta for most recent
“ Increase
Total 100 100 100 100
increase ... 32 33 35 29
‘Monthly dollar amount 5 2 2 8
‘Less than $10.00 (s) - = iv)
$10.00. 1 - °Q 5
$1001-$15.0 ...... 1 i] 0 1
$15.01-820.00 a) i) Q e
More than $20.00 1 ey i) 2
Varies by date of retirement 2 1 1 2
Percent of present benefit 27 92 33 22
2 2 5 1
1 e i) 1
2 2 1 2
1 1 1 1
2 2 3 1
1 1 1 e
iv) i) is] iv)
More than 15.0 1 1 iy) 1
Varies by date of retirement 19 23 21 15
Increase pet year of retirement 39 42 45 33
‘Monthly dollar amount ¢) 0) ¢) 1
Percent ol present benefit 38 42 45 32
‘Less than 2.0 3 3 2 3
6 7 6 5
1 1 1 1
1 1 1 ro)
5 7 6 3
2 3 4 2
2 2 2 2
iv) iy) 1 -
7 16 19 15
Vaies ty date of retirement ...... 2 2 3 1
Increase per year of Service 23 16 12 33
Monthly doiar amount 22 4 n 33
6 3 2 10
1 1 1 1
) e is) e)
9 6 4 13
1 a) 1 1
° ~ rv 1
2 3 2 1
a 2 1 5
Percent ol pesent benefit 1 1 1 6

53



Table 63. Other benefits: Percent of full-time employees in establishments providing specified benefits by percent of

eligible employees, medium and large firms, 1983

. 51 to 99 1 to 50
Al workers Data not
Benefit Total cligible percent percent None eligible | Va te
Professional and administrative employees
Paid leave:
Funeral leave 100 868 1 1 7 4
Military leave .. 100 81 a) 1 14 4
Profit sharing, savings, and stock plans:
Profit sharing 100 23 3 1 69 4
‘Savings and thrift 100 39 7 - 50 4
Stock bonus plans .. 100 6 1 3 86 4
Stock purchase plans 100 16 2 2 76 5
Stock ownership plans? 100 28 a is) 67 5
Income continuation plan:
Severance pay 100 60 3 1 32 5
Miscellaneous benefits:
Employee discounts 100 48 1 c) 47 4
Gifts ... 100 9 1 3 84 5
in-house infirmary ...... 100 50 2 1 42 5
Nonproduction bonuses .. 100 7 1 6 7 5
Relocation allowance:
Full defrayment of expenses 100 59 2 5 28 6
Partial defrayment of expenses. 400 16 1 2 75 6
Recreational facilities:
Full defrayment of cost 100 13 1 1 a 5
Partial defrayment of cost .. 100 16 Oy 1 73 5
Subsidized meals:
Full detrayment of cost .. 100 2 c) ) 94 4
Partial defrayment of cost .. 100 od 1 2 68 5
Educational assistance:
Full defrayment of expenses 100 26 iv) Y 68 5
Partial defrayment of expenses: 100 56 ia) 1 38 5
Parking:
Provided at no cost..... 100 66 a 7 20 4
Provided below commercial rates 400 3 1 2 90 4
Company automobile for personal busines:
‘Without reimbursing the company 100 1 () 15 79 4
Partially reimbursing the company .. 100 3 0) 10 82 4
Technical and clerical employees
Paid leave:
Funeral leave .. 100 89 1 Q 6 4
Military leave 100 79 () oO 16 4
Profit sharing, savings, and stack plans: .
Profit sharing ... 100 27 3 1 65 4
Savings and thrift 100 3 6 2 57 4
‘Stock bonus plans .. 100 8 1 () 90 4
‘Stock purchase plans 100 14 2 () 80 4
‘Stock ownership plans” 100 23 3 1 69 4
Income continuation plans:
Sevérance pay 100 57 3 1 35 4
Miscellaneous benefits:
Employee discounts ... 100 58 2 7 36 4
Gifts 100 10 0) 2 83 4
In-house infirmary 100 37 3 4 52 4
Nonproduction bonuses. 100 7 1 2 76 4
Relocation allowance:
Full defrayment of expenses 100 26 1 a 64 6
Partial defrayment of expenses ..... 100 12 {) 1 81 5
Recreational facilities:
Full defrayment of cost 100 "1 t) (a) 84 5
Partial defrayment of cost .. 100 14 - cy 81 5

See footnotes at end of table.



Table 23. Health insurance: Percent of full-time participants in plans with major medical coverage by amount of deductible

and applicable benefit period,’ medium and large firms, 1983

Sci Professional and Technical and clerical fei
All participants administrative participants Participants Production participants
Amount of deductible? Benefit period
t-year | Other t-year | Other tyear | Other tyear | Other
Total | period") period | TO! | period | period | T°! | period | period | "| period | period
| Total 100 96 3 100 97 2 100 97 2 100 35 4
Deductible specified 99 | 96 3 | o | 97 2 | 99 | 97 2 | 99 | 95 4
Based on earings? 6 6] - 6 6 | - 7 7] - 5 5 | -
Flat dollar amount 96 | 1 3 | 94 | 92 2 | 92 | 90 2 | 94 4
Less than $25 .. Oo 0“ - iv) ia) - “ iv) - “ “ -
2 1 1 2 1 1 1 a) 1 2 1 1
1 1 1 1 - 1 1 | - 1 1 -
21 20 ar 21 iv) 7 16 iv) 2 22 oO
iv) oO - - - - - - - iv) “ -
5 5 - 4 4 - 4 4 - 6 6 -
oO C) - 1 1 - iv) iv) - oO ) -
52 51 1 51 50 1 52 51 1 53 51 2
1 1} - 1 1 - 0 | 6 - 1 1 -
$150 7 7/0 8 a! 4 zi oul oO 4 3}
‘Over $180... 5 s| 0 5 5} 4 5 s | - 5 5 | 0
No deductible 1 - - 1 - - 1 - - 1 - -

* The deductible is the amount of covered expenses that an individual
must pay before any charges are paid by the insurance pian. The benefit
periad is the length of time within which a single deduotible requirement
applies. Some plans require that expenses equal to the deductible be in-
curred within a shorter period, such as 90 days.

? Amount of deductible described is for each insured person. However,
many plans contain a maximum family deductible. In some plans, the indi-
vidual and family deductibles are identical.

> These plans have deductibles which vary by the amount of the partici-
pants’ earnings. A typical provision is 1 percent of annual eamings with a

maximum deductible of $150.
“Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no emplayees in this category.

Table 24. Health insurance: Percent of full-time participants in plans with major medical coverage by coinsurance

provisions,’ medium and large, firms, 1983

Professional and
All participants administrative Technical and clerical | production participants
participants
Participants
Final coinsurance provision Initial coinsurance
80 | 85 | 90 80 | 85 | 90 80 | 85 | 90 80 | 85 | 90
T loth.| T he} Te loth -
tor [Per] Per |er-|Or"| tar [Per-| per- | per- or tal |Per- | per |per-| eo? G per- | per- | per-|
lcent|cent|cent cent|cent|cent cent|cent] cent cent|cent|cent
Total 86} 5! 3| 3| 100] a8} 5; 3) 3} 100) 91] 4) 2] 3/100) 87| 6 3] 4
Final coinsurance changes to 100
percent .. os zit 62} 5] 2} 2} 7e| 69] 5 2) 1) 80] 73] 4] 2} 4] 62] 52) 6) 2) 2
When covered expenses’ within a
year reach:
$1-$2,000 MALATE! 13) 12) A] O] A] 16) 15) A) 0) O 97 FOO) A
\ $2,001-$4,000 Hf HO] OO] O] 2) 197A) OF O | 2 20) FO; Os 12) WAT) eo
$4,001-$6,000 2a} 1, CYL OC] 29} 27) 1 2a] 26) 1) P) |} | 21] 19) 1) 1)
Fi $6,001-$8,000 al 3) 0) s] ef 3) 2lQ] tf 6 3) HO} 1 7 2 4A) ot
$8,004-$10,001 . 5 tt] Ve} a 4] af ate] 7] 6 eye] 7 Sf 1) a ey)
More than $10,000 4 4 ALA] - 5s. 4 AMA] -| 3) 3,070] - 5} 5G] A) =
Final coinsurance changes to other than
100 percent srsnntestnnce aoa -} -]@} ost at -) -h@ yo aol -p -p@ yo abo yep ep od
Coinsurance unchanged .... 26] 25] (| 1] 3] 24) 181] 2] 2} 19) 16] 2] 36) a4) ] 1) 1
_

* Coinsurance is the percent of covered expenses paid by the
plan. The balance is paid by the employee.

? Amount of covered expenses described is tor each insured per-
son, In rare cases, the limit for the individual and family are identical.

33

> Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not
equal totals. Dash indicates no employees in this category.



Table 25. Health insurance: Percent of full-time participants
in plans with major medical coverage by maximum benefit
provisions, medium and targe firms, 1983

Profes-
sional | Techni-
‘A par-| 294 _| eal and | Produc-
Type and dollar amount of maximum| :ci,brt, | adminis-| clerical | on par-
partici. | ticipants
pants.
Total 100 100 | 100
With maximum limits .. 84 83 78 88
Lifetime maximum only 74 73 n 8
Less than $25,000 2 1 2 3
$25,000 1 1 1 1
$25,001-$49,999 1 i) 1 1
$50,000 5 a 3 ?
$50,001-$99,999 1 i 0 2
‘$100,000 6 4 3 8
4 3 3 5
27 30 28 25
1 1 1 1
"1 18 " 1“
® 1 1 y)
14 7 7 ou
ra) ee e a
Annual or disability maximum
only 8 5 5 5
Both lifetime and annual or
disability maximums 6 5 3 9
Without maximum limits 16 7 22 12

' Most plans with a lifetime maximum have a reinstatement clause. By
furnishing satistactory medical evidence of insurability, an employee can
apply for restoration of the full lifetime maximum. Regardless of a mem-
ber's physical condition, however, a typical plan automatically restores up
to $1,000 of the major medical maximum each year.

? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-

tals.

34



: 5.
fairl rere, medium and large firms, 1983

Private pension plans:' Percent of full-time participants by minimum age and associated service requirements for

Profes- Profes-
sional [Technical sional Technical!
| Produc- Produc:
‘ All par- | and ad- |and cleri- , » | Allpar- | and ad- |and cleri-
e and service requirements? | scicanss | ministre: | cal par- ton bar] Age and service requirements? | sicipants | ministra- | cal par- toe
as tive par- | ticipants | "> tive par. | ticipants | "Pants
ticipants ticipants
100 100 100 100 jiAge 61 1) 0) 0
No service requirement ........ ) io) iv) oO
"7 9 12 24 20 years’ service 0 0 6 o
1 1 1 ro)
16 7 10 23 llAge 62 7 18 18 14
“ 1 rv) to) No service requirement .. 2 3 3 2
5 years’ service .. 1 2 2 1
° - i) 10 years’ service ..... 6 8 6 6
- oO 11-14 years’ service 1 1 “ 1
15 years’ service 1 2 1 1
5 8 4 4 20 years’ service 1 1 1 1
0) 0) - 25 years! service 1 ts) 1 1
2 6 3 i) 30 years’ service | 3 3 4 2
2 2 1 a More than 30 years’ service 0) O 7) o
“ “O Oo 1
lAge 63-66 ... 1 1 3 o
2 1 1 3 ‘No service requirement 1 3 0
0 ~ oO :
1 - “ 1 Age 65 36 31 38 38
e | - - iv) No service requirement 3t 28 34 30
ae ‘than 30 years’ service ... 1 1 1 1 1-4 years’ service ro) - - 0)
5 years’ service 1 1 1 1
13 18 14 9 10 years’ service 5 2 3 7
4 5 4 3
) O (0) ()__||Sum of age plus service. 9 12 40 7
2 2 2 2 Equals less than 80 2 3 2 2
ry) 1 1 ful Equals 80 .. 1 1 1 1
2 4 2 1 Equals 85. 4 6 3 3
1 1 1 iv) Equals 86-89 oO iv) 1 -
4 5 4 2 Equals 90 or more 2 2 2 2
1 1 1 0

judes supplemental pension plans.
Normal retirement is defined as the point at which the participant
ive and immediately receive all accrued benefits by virtue of
earnings, without reduction due to age.
‘a plan had alternative age and service requirements, the earliest
wand associated service were tabulated; it one alternative did not

specify an age, it was the requirement tabulated.
“ Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal
totals. Dash indicates no employees in this category.

49

|



bie 13. Paid sick leave: Percent of full-time employees by sick leave provision, medium and farge firms, 1983
Protes- Profes-
sional | Techni- sional | Techni-
Atl em: |_2n@_ | cal and | Produc: ‘allem. {_27d_ | cal and | Produc-
Sick leave policy’ 4 adminis-| clerical | tion em-| Sick leave policy’ adminis-} clerical |tion em-
ployees | ‘trative | employ- | ployees| Ployees |" trative | employ- | ployees
employ-| ees employ-| ees
ees ees
Total 400 | 100 | 100 | 100
Sick leave provided
Provided sick leave® . 67 92 ot 42 annually’—Continued
Sick leave provided Unused sick leave provisions:
annually’ .. 54 65 72 34 Carry-over only 16 18 24 4
Cash-in only ... 4 1 3 6
‘At 6 months of service: Cash-in and carry-over 2 1 3 2
Under 5 days 10 9 15 8 No provision .. 29 45 at 18
5 and under 10 days .. 16 20 27 9 Data not available i) 0 0 -
10 and under 30 days 10 19 16 3
30 and under 60 days...| (") 1 1 (9) Sick leave provided on a per
60 and under 120 days .. 1 2 1 0) disability basis® 7 28 24 8
120 days or more .. 2 5 1 1
At 6 months of service:
At 1 year of service: Under 5 days 1 1 1 Oy
Under 5 days 3 1 2 4 5 and under 10 days 4 8 5 1
5 and under 10 days .. 19 45 26 18 10 and under 30 days 3 6 5 1
10 and under 30 days 23 35 37 9 30 and under 60 days 1 1 1 0
30 and under 60 days 2 4 2 1) 60 and under 120 days 1 3 1 )
60 and under 120 days .. 1 4 1 1) 120 days or more 2 5 2 1
120 days or more .... 2 5 1 1
At 1 year of service:
Under 5 days 1 1 2 1
2 1 1 3 5 and under 10 days 2 5 a 1
15+] 14 18 16 10 and under 30 day 4 7 7 1
19 2) 32 8 30 and under 60 days 2 4 2 )
7 12 W 3 60 and under 120 days 1 3 1 Oo
5 9 6 2 120 days or more 3 6 2 1
120 days or more 3 7 2 1
At 5 years of service:
At 10 years of service: Under 30 days 2 3 3 1
Under 5 days 2 1 1 3 80 and under 60 days 3 5 5 1
5 and under 10 days .. 15 1" 18 16 60 and under 120 days 9 13 12 5
10 and under 30 days 16 22 28 7 120 days or more 3 7 3 1
30 and under 60 days 6 7 to 2
60 and under 120 days .. 7 13 9 3 At 10 years of service:
120 days or more ... 4 40 4 2 Under 30 days ... 1 2 2 i
30 and under 60 days 1 2 2 0
At 15 years of service: 60 and under 120 days 9 12 12 5
2 1 1 3 120 days or more 5 1" 6 1
15 " 18 15
16 22 28 8 At 15 years of service:
30 and under 60 days 3 3 6 1 Under 60 days 2 3 4 1
60 and under 120 days 8 14 "1 4 60 and under 120 days 3 6 5 1
120 days or more 6 14 7 2 120 days or more n 18 14 5
At 20 years ot service: At 20 years of service:
Under 5 days ... 2 1 1 3 Under 60 days 2 a 3 1
5 and under 10 days .. 18 1" 1B 15 60 and under 120 days 3 6 5 1
10 and under 30 days... 16 22 28 7 120 days OF MOFE ae ” 18 14 5
30 and under 60 days 3 3 5 1
60 and under 120 days 8 13 10 4 At 25 years of service:
120 days or more .. 7 16 9 2 Under 60 days 2 3 3 1
60 and under 3 5 5 1
At 25 years of service: 120 days or more W 19 16 6
Under 5 days ... 1 1 1 2
5 and under 10 days .. 16 10 18 7
10 and under 30 days 16 22 27 7 2 5 1 a)
30 and under 60 days 3 a 5 1 ) o) 0 0
60 and under 120 days 6 9 8 3
120 days or more .. 10 20 12 3. ||Not provided paid sick leave 33 8 9 58

"Some plans grant sick leave at partial pay, either in addition or as
an alternative to full-pay provisions. Employees receiving partial pay
only are included in the overall percentages of workers provided sick
leave; however, partial-pay days are disregarded in computing the distri-
butions by length of service.

? The total is less than the sum of the individual breakdowns be-
cause some employees were covered under both an annual and a per
disability plan.

> Employees earn a specified number of sick days per year. This

number may vary by length of service.
* Less than 0.5 percent.

5 Provisions were virtually the same after longer years of service.

® Sick leave is provided on a per illness or per disability basis. The
number of days may vary by length of service.

” Sick leave provided to employees as needed.

* Includes formal plans with provisions that change from a specified
number of days per year to a specified number of days per absence

after a certain service period.



Table 49. Private pension plans:’ Percent of full-time
participants by provision for credit for service after age 65,
medium and large firms, 1983

{ + Profes-
i sional_| Techni-
and | cal and | Produc-

Type of credit treats | adminis-| clerical | tion par-
ipants| ‘vative | partici- | ticipants
partici- | “pants
pants
Total 100 100 100
No credit for service sa | 57 | 63 | 45
Pension deterred
in amount ... | 45 50 54 38
Pension deferred, but increased
actuarially | 4 4 6 4
Pension deferred, but increased
by percent per additional year
of service? | 3 3 4 3
Pension begins at age 65 iv) - iv) 1

Credit for service, no actuarial

increase* 46 42 36 56

i All service credited .... 29 26 25 32
| Service credited to specified

| maximum age 18 16 " 22
j Service credited to specified

1 ‘maximum years of service (9) i) (9) )
Credit for service, with actuarial

i ~ 1 1 1 QO

All service credited .. 1 1 1 0
Service credited to specified

maximum age fe) ts) iv) 19)
Service.credited to specified

maximum years of service .. (a) - - e)

* Excludes supplemental pension plans,

* The pension amount computed at age 65 is increased by a specified
Percent (not part of the benefit formula) for each year the employee re-
mains active.

? Less than 0.8 percent.

* Additional service is included in the benefit formula, but the pension is
Not increased for later retirement date.

* Additional service is included in the benefit formula and the pension is
increased for later retirement date.

‘ NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

52



Table 63. Other benefits: Percent of full-time employees In establishments providing specitied benefits by percent of

eligible employees, medium and {arge firms, 1983—Continued
51 to 99 1 to 50
r All workers. 5 Data not
Benefit Total I percent percent | None eligible
eligible eligible eligible available
Technical and clerical employees
Miscellaneous benefits—Continued
Subsidized meals:
Full defrayment of cost 100 2 0) 1 92 4
Partial defrayment of cost .. 100 22 2 2 67 7
Educational assistance:
Full defrayment of expenses 100 22 0) 0) 72 4
Partial defrayment of expenses 100 53 1 2 40 4
Parking:
Provided at no cost . 100 59 4 7 25 4
Provided below commercial rates 100 4 1 a 88 4
Company automobile for personal business:
Without reimbursing the company 100 1 - 2 93 4
Partially reimbursing the company 100 1 - 1 94 4
Production employees
Paid leave:
Funeral leave 100 86 1 1 8 5
Miltary leave 100 65 1 1 29 6
Profit sharing, savings, and stock plans:
Profit sharing . 100 19 3 1 7 5
Savings and thrift 100 18 3 3 71 6
‘Stock bonus plans .. 400 3 QO CQ 91 5
Stock purchase plans 100 10 1 ° 84 6
Stock ownership plans* 100 19 2 2 72 6
Income continuation plans:
‘Severance pay 100 30 2 5 58 6
Miscellaneous benefits:
Employee discounts 100 47 1 ) 46 6
Gifts 100 8 1 2 84 6
In-house infirmary 100 83 1 1 40 6
‘Nonproduction bonuses 100 7 2 1 74 6
Relocation allowance:
Full defrayment of expenses 100 10 Q 5 7 7
Partial defrayment of expenses 100 12 cu) 2 78 6
Recreational facilities:
Full defrayment of cost 100 1 v) 0) 84 6
Partial defrayment of cost .. 100 12 - ru) a2 6
Subsidized meals: .
Full defrayment of cost 100 2 ) 1 92 5
Partial defrayment of cost .. 100 14 1 1 78 6
Educational assistance:
Full defrayment of expenses 100 16 °) 1 7 6
Partial defrayment of expenses 100 48 “) 2 44 6
Parking:
Provided at no cost 100 79 1 2 13 5
Provided below commercial rates 100 1 V) a) 93 5
Company automobife for personal business:
Without reimbursing the company 400 ¢) - 1 94 5
Partially reimbursing the company .. 100 0) - v) o4 5
* Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may not equal
? Include Employee Stock Ownership Plans and Payroll-based Stock totals. Dash indicates no employees in this category.

Ownership Plans.

61



Contents |

Page

Summary

Work schedules +

Paid lunch and rest periods .

Paid holidays .

Paid vacations

Personal leave .

Short-term disability benefits

Sick leave plans

i Sickness and accident insurance .
Long-term disability insurance
Health insurance
Hospital coverage ...
Surgical coverage
Major medical coverage
Dental coverage. .
Mental health coverage .
Other benefits .
Employee contributions
Funding medium
Life insurance
Retirement pension plans .
Benefit formulas

WCVMMAEIINIANAARHUVA HRA RWYKWWOH

Private benefits and social security payments 10
Normal retirement. . . 10
Early retirement. .... 11
Disability retirement . il
Postponed retirement 12
Postretirement pension increases. 12
Vesting B
Postretirement survivor benefits . 13
Preretirement survivor benefits . . 13
Employee contributions 3
Plan participation requirements . . 13
Insurance plans 14
Private pension plans ... 14
Plan sponsors and collective bargaining . 14
Other benefits . 14
Charts:
Percent of full-time employees (or participants) covered, medium and large firms, 1983:
1. Paid time off 2
2. Insurance and pension plans. : 2
3. Health insurance: Selected categories of medical c care .. 8
4. Average earnings used in private pension plans .. . 10
5. Earliest age for retirement in private pension plans M



Table 36. Life insurance: Percent of full-time participants in plans with multipte-of-earnings formulas by
amount of basic insurance and maximum coverage provisions, medium and large firms, 1983

1
In plans In plans with maximum coverage |
without i
Formula Total | maximum an Less than | $50,000- | $100,000- | $250,000 or I
coverage $50,000 | $99,999 | s249,999 | more i
All participants :
Total .. 100 56 44 2 7 20 16
Life insurance is equal to annual
earnings times:
Less than 1.0 3 2 1 cy) 1 iv) -
44 29 15 (0) 2 1 2
1 1 i) () - iv) ia)
9 3 (Uy 2 1 2
0) - oO Q - -
36 8 18 () 2 10
3 1 2 - ) 10) 1
iv) - iv) - ) - -
1 2 - 1 1 “
1 1 Y - - - 1)
Professional and administrative
Total ... 100 53 47 1 8 a 7
Life insurance is equal to annual
earnings times:
Less than 1.0 .. 3 2 1 0) 1 10) -
40 25 16 0) 2 YW 2
1 1 Yo - - ia) ()
9 3 6 0) 2 1
() = iv) Q = ~
39 0 19 tu) 2 10
3 2 2 - “) 1) 1
0 - i) - 0) -
3 1 2 - 1 1 1
1 1 13) - - - 0
Technical and clerical
Total 400 83 47 2 8 2 16
Lite insurance is equal to annual
earnings times:
Less than 1.0 .. 3 2 2 1 1 1 -
44 28 15 1 3 1 1
1 1 “ 0) - 0) ey
9 3 5 0) 2 2 2
y) - y) 0) - - :
3 15 20 () 6 12
3 2 1 - 0) “) 1
") - a - 0 7 - |
4 1 3 - 1 0 s i
1 oO - - - Yo
Total 100 62 38 2 6 16 14
Life insurance is equat to annual
earnings times:
Less than 1.0 3 2 1 iv) 1 1 -
48 34 14 1 1 10 2
2 1 0) - - i) -
8 4 5 1 1 1 2
34 20 8 0) 2 4 7
3 v) 3 - 0 - 2
1 - 1 - 1 - -
1 1 iv) ~ - iu) iv)
Y i) ‘) - ~ - )
* Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may

not equal totals. Dash indicates no employees in this category.

4)



Table 34. Health insurance: Percent of full-time participants by funding medium for selected types of coverage, medium

and targe firms, 1983

Basic | Basic | Basic | Major Basic | Basic | Basic | Major
Funding medium hospital’ | surgical’ | medical’ | medica? | °°! | hospital’ | surgical’ | medical’ | medica? | Pentel
All participants Technical and clerical
Total 100 100 100 joo 700 700 700 100 700 700
Coverage provided.. at 72 59 92 74 76 66 53 93 72
Blue Cross-Blue Shield 27 20 20 45 4 26 18 18 15 5
Commercial carrier 33 32 25 52 49 31 30 a1 84 47
Independent health plans 19 18 14 24 19 18 16 14 22 19
Labor/management... 16 14 10 24 17 13 "1 9 22 7
Health Maintenance
Organizations’ 3 4 fa) 2 5 5 5 e 1
Other® iv) 0 @ e 1 ia) a) e) a) 1
Combined .. 1 1 iv) 2 1 1 1 1 2 1
Coverage not provided .. 19 28 a 8 26 24 a4 47 7 28
Professional and administrative Production
Total... 160 700 100 700 700 100 100 100 700 100
Coverage provided... 80 69 55 95 79 aa 76 64 1 72
Blue Cross-Blue Shield 25 7 16 12 4 28 23 23 16 4
Commercial carrier 34 33 24 56 52 34 32 27 48 49
Independent health pians 19 7 13 23 22 20 20 15 25 18
Labor/management® 16 13 8 23 49 17 17 12 25 16
Health Maintenance
Organizations* 4 4 Q 2 2 2 2 el 2
Other iv) iv) «) e 0 iv) e ia) iy) 1
Combined 2 2 1 2 1 4 1 7) 1 1
Coverage not provided .. 20 at 45 5 21 16 24 26 9 28

"A plan provision was classified as a basic benefit when it covered
the initial expenses incurred for a specific medical service. Under these
provisions, a plan paid covered expenses in one of several ways: 1) (n
full with no limitation; 2) in full for a specified period of time, or until a
dollar limit was reached; and 3) a cash scheduled allowance benefit
that provided up to a dollar amount for a service performed by a hospi-
tal or physician. For a specific category of care, a plan may require the
participant to pay a lump sum amount each disability or year (deduct-
ible) or a nominal charge each-visit or procedure (copayment) before re-
imbursement begins or services are rendered.

? Major medical benefits cover many categories of expenses, some
of which are not covered under basic benefits, and others for which ba-
sic coverage limits have been exhausted. These benefits are character-
ized by deductible and coinsurance provisions that are applied across
categories of care.

? Includes plans that are financed by general revenues of a company
on a pay-as-you-go basis, plans financed through contributions to a

‘rust fund established to pay benefits, and plans operating their own fa-
cilities if at least partially financed by employer contributions. Includes
plans that are administered by a commercial carrier through Administra-
tive Services Only (ASO) contracts,

* Includes federally qualified (those meeting standards of the Health
Maintenance Organization Act of 1973, as amended) and other HMOs
delivering comprehensive health care on a prepayment rather than fee-
for-service basis. All HMOs are included here regardless of sponsor-
ship, e.9., Blue Cross-Blue Shield or a commercial insurance carrier.

* Less than 0.5 percent.

* Includes independent prepaid plans providing health benefits less
comprehensive than those of an HMO. Dental benefits plans spon-
sored by loca! dental societies are also in this category.

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

39

|
{



The establishment size groups are défined as follows:

Employment size Establishment
group employment

50-99
100-249
250-499
500-999

1,000-2,499
2,500-4,999
5,000-9,999

10,000 and over

The sample size was allocated to each stratum (de-
fined by industry and size) approximately proportional

to the total employment of all sampling frame estab-
lishments in the stratum. Thus, a stratum which con-
tained 1 percent of the total employment within the
scope of the survey received approximately 1 percent
of the total sample. The result of this allocation proce-
dure is that each stratum will have a sampling fraction
(the ratio of the number of units in the sample to the
number in the sampling frame) which is proportionate
to the average measure of size of the units in the stratum.

A random sample was selected within each stratum
using a probability technique to maximize the probabil-
ity of retaining establishments which were selected in
the 1982 survey.’ This method of selection reduced col-
lection costs by decreasing the number of new estab-
lishments in the sample.

Data collection

Data for the survey were collected by visits of Bu-
reau field representatives to the sampled establishments.
To reduce the reporting burden, respondents were asked
to provide documents describing their private pension
plans and plans covering the four insured benefit areas
within the scope of the survey. These were analyzed
by BLS staff in Washington to obtain the required data
on plan provisions. Data on paid leave and other paid
time off generally were obtained directly from the em-
ployers at the time of the visit.

Data were collected during the months of January
through July, reflecting an average reference period of
March 1983, Respondents were asked for information
as of the time of the data collection visit.

Data tabulation

The tables presented in this bulletin show the percent
of employees that were covered by paid leave plans,
participated in insurance or pension plans, or were eli-
gible for other benefits. Except in table 63, counts of
workers covered by benefit plans included those who
had not met possible minimum length-of-service require-

>This method modifies the method introduced by Nathan Keyfitz
in “Sampling with Probabilities Proportional to Size: Adjusting for
Changes in the Probabilities,” Journal of the American Statistical As-
sociation, 1951, No. 46, pp. 105-9.

ments at the time of the survey. Workers were counted
as participants in employee benefit plans that require
the employee to pay part of the cost only if they elected
the plan and paid their share. Plans for which the em-
ployee paid the full premium were outside the scope of
the survey, even if the employer paid administrative
costs. When tabulating the effect of retirement on life
insurance coverage, however, cases where the retiree
must pay the full cost of the insurance were counted
since the guarantee of insurability at retirement is con-
sidered a benefit.

Tables in this bulletin show the percent of workers
covered by individual benefit plans or plan provisions.
Percentages are calculated in three ways. One tech-
nique, followed in tables 1-5, 7, and 10-13, shows the
number of covered workers as a percent of all workers
within the scope of the survey. It is designed to show
the incidence of the individual employee benefit.

A second approach is followed in tables 6, 8-9, 14—
16, 18-20, 32, 34-35, 38-39, 44-46, 49, 51-62, which
show the number of workers covered by specific fea-
tures in a benefit area as a percent of all employees who
participate in that general benefit area. These tables an-
swer questions concerning the typical coverage pro-
vided to persons with a given insurance benefit or a
private pension plan; for example, what percent of all
employees with health insurance receive dental
coverage?

The third approach provides a close look at an im-
portant feature (tables 17, 21-31, 33, 36-37, 40-43, and
47); for example, what percent of all employees with
dental coverage in their health insurance are covered
for orthodontic work? Tables 48 and 50 combine the
second and third types above, indicating in the first row
of data the percent of persons in the benefit area who
have a particular coverage, while the remainder of the
table is based on all employees with that coverage.

This multilevel approach has the advantage of clearly
pointing out typical benefit plan characteristics after the
prevalence of the benefit has been established. Any of
the second or third types of tables, if desired, can be
converted to the first type by multiplying each data cell
by the appropriate factors. For example, to calculate
the percent of all employees with orthodontic cover-
age, multiply the percent of those with dental plans that
cover orthodontia by the percent of health insurance
participants with dental coverage, and multiply that
product by the percent of all employees who have
health insurance coverage.

Survey response

Each of the 36 combinations of occupational groups
and work schedule or benefit areas (e.g., health insu:
ance for production employees) was treated as an indi-
vidual survey and separate estimates developed for each.
This treatment facilitated the use of partially completed



ployer Life insurance coverage has improved
1979, either through an increase in specified
ae ts of insurance or through a liberalization of the
aan for determining benefits.
for amount of basic coverage for nearly two-thirds
aie jnsurance participants was based on their earn-
enabling the level of protection to automatically
cae with a rise in earnings. Earnings-based formulas
much more prevalent among white-collar workers
er cent) than among blue-collar workers (47 per-
1). The most common method of tying life insurance
protec tion to earnings was to multiply the employee's
snual earnings by 2 factor of 1 or 2 and round the
sduct to the next $1,000. Over two-fifths of all em-
ees in multiple-of-earnings plans had insurance
al earnings. Nearly as many, however, had
erage equal to twice annual earnings. Profes-
dministrative participants had the highest cov-
e, nearly half with this type of plan had insurance
i two or more times their earnings. Multiple-of-
gs formulas tended to be higher when employee
itibutions were required; over two-thirds of con-
ibutory plan participants were ligible for insurance
to two or more times earnings.
“There was no upper limit on insurance for a major-
\6f'participants in plans based on earnings. Where
existed, the proportion of employees with maxi-
ums under $100,000 has declined from one-half to
ae-fifth and the percent with maximums over $250,000

e

‘of the remaining life insurance plan participants
third of the total) received a flat amount of insur-
‘egardless of earnings. One-half of all produc-
tker participants were covered by a uniform
compared with about one-sixth of white-collar
kers; In 1983, there were increases in the flat
uunts paid. Participants in plans providing benefits
000 or more rose from 10 percent in 1982 to 18
‘with an equivalent decrease in coverage of less
$5,000.
the event’a participant became totally disabled,
lNstrance in virtually every plan was either contin-
for life, or was payable to the employee in lump-
Sum or fnstallment form. To qualify under disability
Provisions, the employee was usually required to be
under @ Specified age (commonly age 60) at the time of
disability

pa three-fourths of all life insurance participants
Additional insurance coverage if accidental death

fixed sate pO8C Contribution rate was commonly expressed as
from: 2 gc 0F €2ch $1,000 of insurance. Reported rates varied widely
“Data ween % 69 cents per $1,000; half were less than 30 cents.
ticipants, ,°2t Vailable for almost one-half of contributory plan par-

2m insaraga, "VC because payroll deductions sometimes applied to
benefit argue Policy covering life insurance and one or more other

or dismemberment occurred. The amount of insurance
was usually doubled in the case of accidental death.

In addition to basic coverage, some employers of-
fered their workers supplemental life insurance that was
at least partially employer financed. Only a small por-
tion of employees were participants in these plans,
which generally required employees to share in the
financing.

Another kind of coverage sometimes available to the
workers is life insurance on their spouses or unmarried
dependent children. Nearly one-fifth of life insurance
participants had dependent coverage in 1983; in most
cases, the employer paid all of the cost. The most com-
mon coverage for death of either a spouse or a child
was a flat amount of $1,000. Although coverage for a
child rarely exceeded $2,000, spouse coverage from
$2,000 to $10,000 applied to two-fifths of the partici-
pants with dependent life insurance. Instead of a flat
amount, the coverage for a child increased at specified
ages for over a fourth of the participants. For example,
a child could have no coverage until 14 days old, then
$250 until 6 months, followed by $500 up to a year,
and $1,000 after a year.

After retirement, basic life insurance coverage was
continued for life for nearly two-thirds of all partici-
pants; the preretirement amount of insurance, however,
was reduced for all but 3 percent. Other forms of life
insurance—accidental death and dismemberment, sup-
plemental, and dependent. coverage—were seldom
available after retirement.

Retirement pension plans

(tables 39-53)

Eighty-two percent of the employees in the survey
were covered by private retirement pension plans, with
the employer usually paying the entire cost. Coverage
varied by occupational group; the percent of employ-
ees provided pension plans was somewhat lower for
production workers than for the other two groups.

Benefit formulas. Seven-tenths of covered employees
were in plans with retirement payment formulas based
on their earnings. These formulas pay a percent of the
employee’s annual earnings per year of service, such as
2 percent for each year up to 30 years (yielding a maxi-
mum pension of 60 percent of earnings). Plans differ in
the calculation of annual earnings as well as in the rate
paid per year of service (chart 4). Twenty-three per-
cent of participants with these earnings-based formulas
had plans that used an average of career earnings; the
remainder were in plans which based pensions on earn-
ings in the final years of employment (terminal earnings
formula). Terminal earnings were the average earnings
over a 5-year period for 63 percent of participants with
earnings-based formulas, usually designating the 5 con-
secutive years with the highest earnings out of the last
10 before retirement.



Table 47. Private pension plans: Percent of full-time
participants in plans permitting early retirement by reduction
factor-for immediate start of payments, medium and large
firms, 1983

Profes-
sional | Techni-
All par- cal and | Produc-
Basis of reducing accrued benefit | i clerical | tion par-
ipants
partici- | ticipants
, pants
Totat .. too | 100 | 100 | 100
Actuarial? 16 13 14 20
Arithmetic reduction for each year
prior to normal retirement age 84 87 86 80
Uniform percentage .. 45 42 49 45
Less than 3.0 1 3 1 1
7 a 8 5
2 3 3 2
4 5 7 2
2 3 2 3
9 10 12 6
9) e) 0) iv)
16 8 14 ra]
6 (9) iW) iy)
1 1 3a
is) i) iv) is)
4 Qo Q 1
iy) e e) is)
Percentage varies by service 3 a 3 1
Percentage varies by age" 35 38 34 38
Data not available .... 7) - - (s)

* Excludes supplemental pension plans.

? Reduction schedule is related to actuarial assumptions
expectancy at age that pension payments begin.

* Less than 0.5 percent.

* The rate of reduction per year varies by age bracket, sometimes in
approximation of an actuarial table. For example, benefits may be re-
duced by 6.7 percent for each year between age 60 and the plan's normal
retirement age, and by 3.3 percent for each year retirement precedes age
60. Also includes some plans which reduce benefits arithmetically for
each year immediately below normal retirement age and actuarially below
a specified age, usually 85.

of the life

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

St

Table 48. Private pension plans:' Percent of full-time
participants by provisions for disability retirement, medium
and large firms, 1983

Profes-
sional | Techni-
‘Alt par |. 224 | cal and | Produc
Characteristic tieipents| 2dminis-| clerical |tion par-
cipants | trative | partici- | ticipants
partici- | pants
pants
Total with disability retirement
benefits seven oT cl 87 94
Minimum requirements for
disability retirement
Total . joo | 100 | 100 | 100
No age or service .. 14 18 19 10
Age only ia) - 0 iv)
Service only 87 45 45 70
Age and service . 8 6 7 1
Meets qualification for tong-t
disability benefits . 21 35 30 9
Benefit provisions
Total. 100 | 100 | 100 | 100
Immediate disabitty retirement? 66 48 48 84
Unreduced normal formula* so | 36 36 63
Reduced normal formula? 7 6 5 9
Other than normal formula® 9 6 7 12
Deferred disability retirement 34 | 62 52 16
With benefits based on:
Service when disabled 4 6 7 2
Service plus credit to early
retirement date or later 29 45 44 4
Service with some credi 4 1 1 1
Not based on service to) e 1 iG)

* Excludes supplemental pension plans.

?- Less than 0.5 percent.

3 Immediate disability pensions may be supplemented by additional al-
Jowances until an employee reaches a specified age or becomes eligible
for social security.

“ The disabled worker's pension is computed under the plan’s normal
benefit formula and is paid as if retirement had occurred on the plan's nor-
mal retirement date, based on years of service actually completed.

* The disabled worker's pension is computed under the plan's normal
benefit formula, based on years of service actually completed, and then
reduced for early receipt.

© The disabled worker's benefit is not computed by the plan's normal
benefit formula. The methods used include flat amount benefits, dollar
amount formulas, percent of unreduced normal benefits less social secu-
rity, and percent of earnings formulas both with and without social security
offsets.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.



Table 54. Length of service requirements for participation:'
Percent of full-time participants in sickness and accident
insurance, medium and large firms, 1983

Table 56. Length of service requirements for participation:
Percent of full-time participants in health Insurance, medium
and large firms, 1983

Protes- Profes-
sional | Techni- sional | Techni-
a All par- | 2nd | cal and | Produc: ; All par-|_ 74} cal and | Produc-
Length of service requirement | epg) adminis-| clerical | tion par- Length of service requirement | A! 8 | adminis-| clerical |tion par-
trative | partici- | ticipants ‘cipants partici- | ticipants
partici- | pants pants
pants
Total .. 100 | 100 | 100 | 100 Total 100 -| 100 | 100 | 100
With service requirement 68 74 78 With service requirement .. 57 42 51 68
1 month .. 29 34 26 1 month 21 19 19 23
2 months 4 6 10 2 months 8 4 6 12
3 months 22 22 23 3 months 16 " 16 19
4-5 months: 4 5 10 4-5 months .. 3 1 t 6
6 6 6 8 7 9 8
- - ® e 1 1 ie)
2 2 3
1 2 (9) Without service requirement ......... 43 58 49 32
Without service requirement hd 26 22 " Length of time employees must be on the job before they are cov-

* Length of time employees must be on the job before they are cov-
ered by a plan that is at least partially employer financed. There is tre-
quently an administrative time lag between completion of the requirement
and the actual start of participation. if the lag. was 1 month or more, it
was included in the service requirement. Minimum age requirements are
rare.

? ‘Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

Table 55. Length of service requirements for participatio

ered by a plan that is at (east partially employer financed. There is fre-
quently an administrative time lag between completion of the requirement
and the actual start of participation. If the tag was 1 month or more, it
was included in the service requirement. Minimum age requirements are
rare.

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

Table 57. Length of service requirements for participa- .

Percent of full-time participants in long-term disability tion:’ Percent-of full-thne participants in basic life
insurance, medium and large firms, 1983 insurance, medium and large firms, 1983
Profes- Protes-
sional | Techni- sional | Techni-
Allpar-|_2nd__| cal and | Produc- ‘ni pare 204 | cal and | Produc-
Length of service requirement | icignnts | adminis-| clerical |tion par- Length of service requirement | cians |adminis-| clerical
trative | partici- | ticipants trative | partici-
pantici- | pants partici- | pants
pants pants
Total 100 | 100 | 100 | 100 Total 100 | 100 | 100 | 100
With service requirement .. 70 66 73 70 With service requirement .. 58 42 87 67
1 month .. 10 1 10 10 1 month .. 2 18 18 24
2 months 3 2 2 5 2 months 8 2 6 Ww
3 months. 13 13 15 4 3 months 16 "1 18 18
4.5 months 1 1 1 2 4-5 months 2 1 3 2
6 months 7 4 18 21 6 months 10 8 n 10
1 year 18 16 7 14 7-11 months. ) - - ro)
2 years 2 2 3 2 1 year .. 1 1 1 2
3 years 2 1 3 1 Over 1 year i) 1 1 e
Over 3 years .. 4 4 5 4
Without service requirement 42 58 43 33
Without service requirement 30 34 27 30
Service requirement not
* Length of time employees must be on the job before they are cov- determinable . ® i) 0 i)

ered by a plan that is at least partially employer financed. There is fre-
quently an administrative time lag between completion of the requirement
and the actual start of participation. If the'lag was 1 month or more, it
was included in the service requirement.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

57

* Length of time employees must be on the job before they are cov-
ered by a plan that is at least partially employer financed. There is tre-
quently an administrative time lag between completion of the require-
ment and the actual start of participation. if the lag was 1 month or
more, it was included in the service requirement. Minimum age require-
ments are rare.

? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal
totals. Dash indicates no employees in this category.



_
—

ge for normal retirement
ns: Percent of full-time
and large firms, 1983

medium

Any age with
su! ficient

A service

2, 26%

‘within 5 years of the normal retire-
ay be denied pension coverage.)
réent of all participants were covered by
iting retirement at any age with 30 years of
“major concentration (23 percent) was
‘production workers, Plans which featured such
‘almost always offered other normal retire-
opportunities at specified ages with lower service
ments. (If a plan had alternative age and service
emenits,. the earliest age and associated service
2 tabulated; if one alternative did not specify an age,
as. the formula. tabulated.)

‘arly retirement, ixtually all of the employees par-
ipating in a-pension plan could retire early and re-
‘ceive an immediate, reduced pension. In some cases,
loyer approval is réquired for early retirement
‘benefits, é
"The amount of an early retirement pension is lower
F for three reasons: First, fewer years of service are ap-
plied to the benefit formula because an employee has
not worked until normal retirement age. Second, be-
cause benefits begin at an éarlier age, the retiree is ex-
pected to receive plam payments over a longer period
of time. Third, pension. funds are less, thereby lowering
earnings on investments.
The normal benefit ither adjusted on an actuarial
basis or reduced by 4 Péfcentage for each year between
the actual and normal: tetirement ages (arithmetic re-
duction). An actuarial reduction, based on the life expec-
tancy of employees at the age of their retirement, was

used in plans covering 16 percent of participants with
early retirement opportunities. Forty-five percent of the
covered employees could receive an early pension sub-
ject to a uniform arithmetic reduction, most commonly
6 percent a year. Most of the remaining participants
were in plans where the arithmetic decrease varied by
age bracket, often approximating an actuarial reduction.
A few plans applied reduction factors that vary by
length of service.

The majority of participants were covered by plans
providing early retirement at age 55; generally, 10 to
15 years of service were required. Nine-tenths of. the
white-collar workers could, with sufficient years of
service, retire by age 55, and nearly four-fifths of the
production workers had plans with similar provisions.

The early retirement pension in some plans was sup-
plemented by additional monthly payments if employ-
ees retire after meeting specific conditions. Plan spon-
sors include these special early retirement benefits ei-
ther to induce older workers to retire or as a reward

for long service. Generally, supplemental payments con-
tinue until the retiree becomes eligible for social secu-
rity benefits. The reduced pension is then payable for
life. In recent years, options outside of formal plan pro-
visions have offered similar incentives to employees
who retire within a specified limited time period."

Disability retirement. A career-ending disability may
entitle an employee to a pension at an earlier than nor-
mal retirement age. If the disability satisfies the plan’s
definition of total disability, pension benefits often be-
gin immediately, When an employer: provides other
sources of disability income, such as long-term disabil-
jty insurance, the disability retirement benefit might be
deferred until other forms of income have ceased.

Ninety-one percent of pension plan participants were ©

covered by disability retirement provisions in 1983-—up
4 percentage points since 1980. Employees in plans with
immediate disability retirement outnumbered by 2 to 1
those in plans with benefits deferred to normal or early
retirement age.

Eighty-four percent of the production workers with
disability retirement coverage were in plans with im-
mediate benefits. White-collar workers with disability
benefits in their pension plans, however, were nearly
equally divided between plans with immediate and de-
ferred benefits. Workers with deferred benefits were
usually provided with long-term disability benefits rang-
ing from 50 to 60 percent of earnings or more at the
time of disability; this was more than generally pro-
vided by pension plans with immediate disability retire-

‘Mary Popa, “Employers Made Early Retirement More Attrac-
tive: Fourth of Surveyed Companies Offer incentives,” Employee
Benefit Plan Review, February 1983, pp. 8-14.

i

|
|



Preface

This bulletin presents results of a 1983 Bureau of La-
bor Statistics survey of the incidence and provisions of
employee benefits in medium and large firms. This sur-
vey—the fifth in an annual series—provides representa-
tive data for 20 million full-time employees in a
cross-section of the Nation’s private industries. It was
designed to provide the Office of Personnel Manage-
ment with information on private sector practices for
use in comparisons with benefits of Federal workers.
The survey’s scope, therefore, is the same as that of an
annual Bureau survey of occupational salaries in the
private sector—National Survey of Professional, Ad-
ministrative, Technical, and Clerical Pay—which is cur-
rently used in the Federal pay comparability process
for white-collar workers. Appendix A provides a de-
tailed description of the scope and statistical procedures
used in the benefits survey.

iii

The reader is cautioned against analyzing trends since
the pilot survey in 1979. Due to the experimental na-
ture of the earlier surveys, differences in the results re-
flect not only changes in benefit practices in private in-
dustry, but also improvements in procedures and tech-
niques since the earlier studies. Nevertheless, several
changes have been identified in this bulletin that dem-
onstrate actual trends in benefit provisions.

This bulletin was prepared in the Office of Wages
and Industrial Relations by the staff of the Division of
Occupational Pay and Employee Benefit Levels. Field-
work for the survey was directed by the Bureau's As-
sistant Regional Commissioners for Operations.

Pictured on the cover of this bulletin is Home from
Vacation by Norman Rockwell, reprinted with permis-
sion from The Saturday Evening Post (c) 1930 by The
Curtis Publishing Company.



4
i
|

Table 22. Health insurance: Percent of full-time participants
in plans with basic surgical benefits by maximum allowance
for selected procedures, medium and large firms, 1983

Protes-
sional | Techni-
All par- |_2nd__| cal and | Produc-
Maximum allowance eipants| 2@minis-| clerical | on par-
trative | partici- | ticipants
partici- | pants
pants
Total 100 | 100 | 100 | 100
Usual and customary charge wvww---| 67 7 67 65
With overalt dollar limit on basic
surgical payments .. . 6 7 5 7
‘Without overall dollar limit on
basic surgical payments .. 61 65 63 59
Plan pays:
3 3 3 3
1 1 1 1
7 8 10 6
50 53 48 50
Maximum scheduled allowance 33 29 33 35
Most expensive surgical
1 r0) 1 2
2 1 1 2
2 1 1 4
4 4 3 5
6 3 5 7
2 2 4 2
$1251-$1500 . 4 3 3 4
'$1501-$2000 .. 6 7 9 5
$2001-$2500 .. 2 3 2 2
$2501-$3000 1 2 1 1
More than $3000 .. 2 3 2 1
Appendectomy:
$100 or less 0) iv) iv) (}
$101-$150 . 1 1 1 2
$151-$200 .. 5 3 2 7
$201-$300 .. 9 8 9 10
$301-$400 .. 7 7 8 6
$401-$500 .. 4 3 7 4
$501-$750 .. 5 6 5 5
More than $750 ) 1 o) 1
Not determinable® Y 10) 0 Y
Tonsillectomy:
$50 oF less 1 1 1 2
$51-$100 12 9 10 14
$101-$150 . 10 10 14 9
$151-$200 .. 4 a 4 5
$201-$300 .. 4 6 3 3
More than $30 Yo 0 i) 9)
Not determinable* 1 1 1 1
Hysterectomy:
$200 or les: 1 1 1 1
$201-$300 . 5 3 2 7
$301-$400 . 5 5 5 6
$401-$500 . 5 3 5 6
$501-$750 . 9 9 12 7
$751-$1000 4 3 3 4
$1001-$1250 .. 1 3 2 1
More than $12! ty 0) ” 0)
Not determinable’ 3 3 2 3

* Less than 0.5 percent.

? Information necessary to classify was not provided.

NOTE: Because of rounding, sums of individual items may not equal to-

tals.



Table 8. Paid holidays and vacations: Average number of
days for full-time participants, medium and large firms,
1983

Profes-
sional | Techni-
and | cal and | Produc-
es adminis-| clerical |tion par-

trative | partici | ticipants
partici- | pants
pants

Item

Paid holidays .. 98 | 10.0 96 98

Paid vacation by length of service:

At 6 months. 33 44 49 24
At‘ year. 87 | 104 96 74
At years 103 | 11.1 | 105 9.9
At years 125 | 135 | 128 | 118
At 10 years... 157 | 164 | 159 | 15.2
AL 16 years .. 182 | 190 | 187 | 176
At 20 years .. 205 | 21.2 | 206 | 202

22.4 | 229 | 225 | 221

At 25 years .
229 | 235 | 230 | 226

At 30 years'

' The average (mean) was essentially the same for longer lengths of
service.

NOTE: Computation of average included half days and excluded
workers with zero holidays or vacation days.

Table 9. Pald vacations: Percent of full-time participants by
length of service required to take vacation, medium and
large firms, 1983

Profes-
sional | Techni-
and | cal and | Produc-
adminis-| clerical | tion par-
trative | partici- | ticipants
partici- | pants
pants

All par-

Length of service requirement | soi Por

Total .

100 400 100 | 100
98

With service requirement

1 month 6 8 7 4

2 months 2 2 2 1

3 months 9 10 10 9

4-5 months 2 1 2 2°

6 months 40 49 st 30

7-11 months 1 1 3 1

1 year 37 25 24 50

Over 1 year “) - QO Y
Without service requirement 2 4 2 2

Service requirement not determin-
able

* Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

i
|



yployee Benefits in Medium
od Large Firms, 1983

—
Department of Labor
mond J. Donovan, Secretary

eau of Labor Statistics
et L. Norwood, Commissioner

gust 1984

Bulletin 2213

_For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C, 20402


Table 40. Private pension pians:' Percent of full-time Participants in plans with percent of terminal earnings benefit formulas

by type and amount of formula and maximum benefit Provisions,’ medium and large firms, 1983—-Continued

Maximum benefit provision

Sub- - , Not

lect to Limit on years of credited service sub-

Type and amount of formula? A T Other | ject to

. Less More | maxi- | maxi-

fmm’ | Total | than | 20 | 25 | 2629! 90 }a1-s4] 35 | 3620] 40 | than |mum® | mor

20 40
Productjon

48 29 3 1 3 o 10 1 8 1 2 - 22 52

Flat percent per year of service ... 47 19 19 1 1 3 iv) 9 1 2 1 1 - 1 28
Less than 1.00 1/0} - iv) = - - - - ~ - - 1
4.00-1.24 ., 13 1 1 - - iv) 1 wd - - - 1 12
1,25-1.49 .. 77/0106 - - = - iv) Da is) - ~ - - 7
1.50-1.74 , 13 6 6] - - iy) - 3) 0 2 1H - ® 7
1.75-1.98 .. 4 3 3 - - 1 - 1 ) ~ 1 - 2
2.00-2.24 .. 9 9 8 1 1 1 - 4 1 - = - 1 oO

2.25 or greater .. Oo] o;o - ao; o!1e - - - 0 - - -
Percent per year varies: .. s3 | 29] ww] 2] - - - 1} - e| - 1} - | 2] 2
By service 26 | 19 1 ~ - - - 9) - 1 - iy) - 18 7
By earnings . zz] 9] 9) 2| - - - 1}. 5] - 1] + 2) 13
By age .. 1/4 fv) - - - - - - - - iv) - iv] 1
By earings and service 3 1 1] - - - -.f = - a} - - - | 6 2
' Excludes supplemental pension plans. provision,

* Maximum provisions in this table are independent of ERISA-imposed
ceilings on pensions payable from defined benefit plans.

? If a plan contained more than ‘one terminal earnings formula, a pri-
mary formula was selected and tabulated,

* The total is less than the sum of individual items because some
Plans contain a limit on years of credited service and another maximum

* The benefit yielded under the formula is limited to a percent of termi-
nal earnings, often coordinated with primary social securty payments, or

to a fiat dollar amount.
* Less than 0.5 percent.

NOTE: Dash indicates no employees in this category.



Table 18. Long-term disability insurance: Percent of full-time participants by method of determining payment, medium and

large firms, 1983

i Protessional and Technical and clerical ,
All participants administrative participants participants Production participants
With} Without With | Without with | Without with | Without
Method maxi- | maxi- maxi | maxi max | maxi | maxi- | maxi-
mum | mum mum | mum mum | mum mum | mum
Total cover- | cover- Total cover- | cover- Total cover- | cover Total cover- | cover-
age pro-|age pro-| age pro-|age pro- age pro-|age pro- age pro-|age pro-
visions | visions visions | visions Visions | visions visions | visions
Ail methods .. 100 ca 20 | 100 4 72 28 | 100 75 25 |) 100 65 35
Fixed percent ot earings 74 58 7 79 58 24 7 60 17 66 55 4
Less than 50 percent .. 1 1 iu) 1 iv) 1 1 iv) 2 1 Y
50 percent 29 22 7 28 18 10 27 20 6 34 28 4
55 percent ¢) oY - - - - 0) 0) - 1 1 -
60 percent 27 7 39 31 8 37 29 8 a7 a
65 or 67 per 7 6 1 7 1 9 8 1 4 4 ¢
70 percent or more 2 1 1 2 1 3 1 1 1 0) +
Percent varies by eamings .. 12 8 3 12 9 3 7 13 5 4 3 1
Percent varies by service 1 1 v) 1 Oo 1 Y 1 1 1 -
Scheduled dollar amount varies by
earnings 9 2 6 2 - 2 1 VW) 25 5 20
Other 4 2 2 3 3 3 1 2 4 2 2

* Less than 0.5 percent.
? includes flat dollar amounts and scheduled percent of eamings vary-

ing by length of disability.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

Table 19. Long-term disability Insurance: Percent of

large.firms, 1983

full-time participants by duration of benefits, medium and

Protes-
sional | Techni-
‘All par.| 290 _ | cal and | Produc-
Duration ot benefits teeeats| adminis-| clerical | tion par-
icips ‘trative | partici- | ticipants
partici- | pants
pants:
Total .. 100 100 100 100
Until a specified age .. 32 31 33 32
1 1 1 oO
28 eT 29 28
3 3 3 4
uration of benefit varies 5B 57 59 87
By length of service 1 2 1 1
By age at time of disability” . 57 56 58 56
Single reduction 34 33 31 36
Gradual reduction 23 22 26 20
Other 19 12 J] 10

* Less than 0.5 percent.

® The 1978 amendments to the

‘Age Discrimination in. Employment Act

allow employers to reduce the duration ot long-term disability insurance
benefits to employees over age 65. The benefit, for example, may con-
tinue until age 65 if disabled before 60; however, if disabled after age 60,
the benefit may be continued only 5 years or until age 70, whichever is
earlier. In other cases, the duration of benefits reduces gradually, accord:

ing to an age schedule.

> Inchides benefits lasting for life, for a specified number of months, or
until some unspecified retirement age.

NOTE: Because of rounding, sums of individual items may not equal to-

tals.

28



Table 31. Health insurance: Percent of full-time participants in plans with mental health benefits by extent of benefits,

medium and large firms, 1983

Al z Professional and adminis-| Technical and clerical Production
trative participants Participants Participants
Coverage limitation
Hospital | Outpatient | Hospital | Outpatient | Hospital | Outpatient | Hospital | Outpatient
care care care care care care care care
Total .. 100 * 100 100 100 100 100 100 100
With coverage 100 95 100 96 100 95 100 94
Covered the same as other
illnesses enn 54 7 56 6 50 7 54 8
‘Subject to separate limitations’ 46 88 44 90 49 87 45 87
Limit on days or visits . 30 20 27 18 31 20 30 24
Limit on dollars 18 68 18 68 2a 67 7 69
Major medical coinsurance
jimited to 50 percent 3 54 2 57 3 56 3 52
Other limitations a 12 8 4 9 40 7 14
Not covered ® 5 ® 4 o 5 fa) 6

‘The total is less than the sum of the individual items because many
Plans had more than one type of limitation on mental health coverage.

? Less than 0.5 percent.

Table 32. Health insurance: Percent of full-time participants
by coverage for selected special benefits, medium and large

firms, 1983
Profes-
sional | Techni-
All pare}_28d_ | cal and | Produc-
Benefit item ticigants|@dminis-| clerical | tion par-
‘ciPANIS | trative | partici- | ticipants
partici- | pants
pants
Total 100 | 100 | 100 | 100
Covered by at least one of the .
listed special benefits’... 6 | 68 67 64
Second surgicat opinion 32 36 33 30
Aicoholism treatment .. 53 53 54 52
Drug abuse treatment 43 42 44 43
Hearing care 10 9 7 W
Not covered by any of listed special
benefits .. | 34 | 92 33 36

* The total is less than the sum of the individual items because many
Participants receive more than one benefit.

37



Table 14. Paid sick leave: Average number of days at full
pay for fulltime participants by type of plan, medium and
large firms, 1983 i
T

Protes-
sionat | Techni-
and | cal and | Produc-
adminis-| clerical |tion par-
trative | partici- | ticipants
partici | pants
pants

All par-
ticipants

Paid annual sick’leave' by length of

service:
At 6 months. 141| 21.8] 10.1) 10.0 j
At 1 year 173) 269] 140) 11.5
At years 214) 321] 188] 139
At 5 years 2681 394] 240) 178
At 10 years 342( 495] 91.9} 221
At 15 years 399| 566] 378) 263
At 20 years. 43,.0| 60.9] 406) 284
At 25 years 45.1] 643] 422] 299
At 30 years* 457| 654] , 426) 303

Paid per disability sick leave? by
ength of service:

At 6 months. 415| 489] 325) 97.6

AU year... 4621 545] 36.1) 44.4

At years 520| 625] 444, 44.4 |
At 5 years 730| 79.9] 664) 707 .

AU 10 years 8a.0| 97.5] 844) 765

At 15 years 110.8) 114.1] 1068} 111.1
At 20 years 131.8 | 1268] 127.0} 1448
At 25 years 151.9| 1424] 146.5) 177.6
At 30 years? 152.1) 1428] 146.8 1776

* Employees eam a specified number of days per year. This number
may vary by length of service.

? The average (mean) increased only slightly for longer periods of serv-
ice.

3 Employees eam a specified number of sick leave days for each ill-
ness of disability. This number may vary by length of service.

NOTE: Computation of average excluded days paid at partial pay and
workers with only partial pay days or zero days of sick leave.



with the remaining 20 percent to be paid by the worker.
For more than seven-tenths of the participants, how-
ever, the percentage paid by the plan increased to 100
percent after a specified level of expenses was incurred
during a year. For example, a plan might pay 80 per-
cent of the first $5,000 of covered expenses and 100
percent thereafter, thus limiting the employee's “out-
of-pocket” cost to $1,000 (in addition to the deductible).

By limiting payments on the initial covered expenses
during an illness or accident, insurers of major medical
policies are able to absorb the expenses of an infrequent
catastrophic illness without substantial increases in pre-
mium costs to the employer or worker. Growth of these
“stop-loss” provisions has increased rapidly since 1979,
when less than one-half of the major medical partici-
pants were covered.”

Benefits for 84 percent of major medical participants
were subject to a ceiling on the amount payable by the
plan, usually a lifetime maximum. The most common
limitation was $250,000. Since many plans specified
higher amounts, the average lifetime maximum for
white-collar workers was nearly $450,000, about
$100,000 higher than the blue-collar average.

Dental coverage. The dramatic increase in em-
ployer-provided dental care continued in 1983. Almost
three-fourths of the participants in health insurance
plans received coverage for dental expenses, compared
with approximately two-thirds in 1982 and one-half in
1979. This coverage was included most often in the
health benefit package for professional-administrative
workers.

Nearly all dental plans covered a wide range of serv-
ices including examinations, X-rays, and restorative pro-
cedures such as fillings, periodontal care, and inlays.
Participation in plans covering orthodontic expenses,
at least for dependent children, increased to 72 percent
of employees with dental benefits in 1983 from 62 per-
cent in 1980.

Dental payments were most commonly based on a
percentage of the reasonable and customary charge for
a procedure. The percentage covered by a plan gener-
ally depended on the type of procedure performed.
Lower cost procedures such as examinations and X-rays
were usually covered at 80 or 100 percent. Fillings,
surgery, and periodontal care were most likely to be
covered at 80 percent. More expensive procedures—in-
lays, crowns, and orthodontia—were often provided at
50 percent of the reasonable and customary charge.

About three-tenths of the dental plan participants
were offered reimbursement based on a schedule of cash

a __allowances._In_this_type_of arrangement, each proce-_

"Recent trends in major medical benefits were examined further
by Douglas Hedger and Donald Schmitt, “Trends in Major Medical
Coverage During a Period of Rising Costs," Monthly Labor Review,
July 1983, pp. 11-16

dure was subject to a specified maximum dollar amount
that could be paid to the participant. Preventive pro-
cedures were less likely to be subject to this type of
schedule than restorative procedures.

Three percent of dental plan participants had serv-
ices covered by an incentive schedule. Under this ar-
rangement, the percentage of dental expenses paid by
the plan increased each year if the participant was ex-
amined regularly by a dentist.

Unlike other basic health benefits, participants in den-
tal plans were typically required to pay a specified de-
ductiblé amount before the plan paid any benefits. The
most common requirement was a $25 or $50 deductible
to be met by the participant each year. However, some
plans required the participant to pay a deductible (usu-
ally $50) only once while a member of the plan rather
than every year. White-collar workers were more likely
than production workers to have plans with deductible
requirements.

Ninety-three percent of dental plan participants were
enrolled in plans that limited the amount of payment
each year by specifying a yearly maximum benefit.
Many plans have raised their limits in recent years—58
percent of employees with dental benefits had yearly
maximums of $1,000 or greater in 1983, up from 44 per-
cent in 1980. Orthodontic services usually were subject
to lifetime maximums, which have increased since first
tabulated in 1980. Lifetime maximums of $1,000 or more
for orthodontia applied to 35 percent of participants in
dental plans providing this benefit, double the percent
in 1980.

Mental health coverage. Nearly one-half of the partici-
pants in plans with mental health benefits had more re-
strictive hospital coverage for mental illnesses than for
physical ailments. This restriction was usually on the
duration of the hospital stay (often 30 days for mental
health care in basic hospital benefits, compared to 120
or 365 days for other illnesses). Even more restrictive
was coverage for mental health care outside the hospi-
tal (i.e, psychiatric office visits). Outpatient mental
health care was usually covered in the major medical
portion of a plan, where there were often ceilings on
the amounts payable for mental health care for each
visit and/or each year, and where the coinsurance for
nonhospital treatment of mental illnesses was often 50
percent, compared to 80 percent for physical illnesses.

Other benefits. Participation in vision care plans rose
from 22 percent in 1982 to 28 percent in 1983. Produc-
tion workers were the most likely to receive this bene-

—fit; and their plans typically were more comprehensive —-——~

than those for white-collar workers. Provisions for sec-
ond surgical opinions, reflecting employer efforts to
contain surgical costs, covered 32 percent of the par-
ticipants—up from 25 percent the previous year. The



Table 59. Type of pian sponsor: Percent of full-time
participants in sickness and accident insurance, medium and
large firms, 1983

Table 61. Type of plan sponsor: Percent of full-time
participants in life insurance, medium and large firms,
1983

Profes- Profes-
sional | Techni- sional | Techni-
‘alt par. |. 294 | eal and | Produc- ‘Alt par} 270 | cal and | Produc-
Plan sponsor ticipants |2dminis-| clerical | tion par- Plan sponsor eeeatg|adminis-) clerical jtion par-
Ps trative ticipants Ps trative | partici- | ticipants
partici- partici. | pants
pants pants
Total 100 100 100 100 Total ... 100 100 100 100
Single ‘employer—union-negotiated Single employer—union negotiated
- 3t 6 8 43 plan ... 29 16 15 42
srgle ‘employer—nonunion 40 63 54 3t Single employer—nonunion | 60 7 76 43
Single employer—bargaining status Single employer-~-bargaining status
not known | 13 10 n 15 ‘not known | 7 6 7 8
Multiemployer' .. 4 fo) 3 5 Multiempioyer’ 4 ie 2 7
State disability board? 12 an 25 7

* Individual employers in the same or in a related industry contributing a
negotiated amount to trust fund providing benefits for employees covered
under a collective bargaining agreement. The scope of the agreement
may be at local, district council, or national level.

® Less than 0.5 percent.

* Administrators of mandatory temporary disability insurance benefits in
New Jersey and New York. Required benefits can be provided through an
employer-sponsored plan as a substitute for the State fund.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

Table 60. Type of plan sponsor: Percent of full-time
participants in long-term disability insurance, medium and
large firms, 1983

Individual employers in the same or in a related industry contributing a
negotiated amount to trust fund providing benefits for employees covered
under a collective bargaining agreement. The scope of the agreement
may be at the local, district council, or national level.

? Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals.

Table 62. Type of plan sponsor: Percent of full-time
participants in private pension plans,’ medium and large
firms, 1983

Profes-
sional | Techni-
1 and | Produc-
All par- cal and | F
Plan sponsor ticipants clericat | tion par-

partici- | ticipants
pants

Profes-
sional | Techni-
and | cal and | Produc-
clerical | tion par-
partici- | ticipants
partici. | pants
pants

Atl par-

Plan sponsor ticipants

Total 100 100 | 100
Single employer—union-negotiated
plan .... 16 2 7 a
Single employer—nonunion . 79 94 87 52
‘Single employer—bargaining status
not known .. 5 4 5 7
Multiemployer" (a) a) - -
Employer association’ (a) ri) 1 eo

* Individual employers in the same or in a related industry contributing a
negotiated amount to trust fund providing benefits for employees covered
under a collective bargaining agreement. The scope of the agreement
may be at local, district counci, or national level.

? Less than 0.5 percent.

® Band of smail employers in a common trade or business, for example,
automobile dealers. The plan sponsored by the association is not negoti
ated with the employees.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

Total .. 100 | 100 100 100

Single employer—union-negotiated

JAN ne 31 9 15 52
Single employer—nnunion . 62 89 83 36
Single employer—bargaining status

not known 2 1 1 a
Multiemployer? 5 a) 1 9

+ Excludes supplemental pension plans.

? Individual employers within a related industry contributing a negotiated
amount to trust fund providing benefits for employees covered under a
collective bargaining agreement. The scope of the agreement may be at
the local, district council, or national level.

* Less than 0. percent.

NOTE: Gecause of rounding, sums of individual items may not equal to-
tals.



Table 41. Private pension plans: Percent of full-time
participants in plans with terminal earnings formulas by
definition of terminal earnings, medium and large firms,

1983
Profes-
sional | Techni- |
‘Alt pare | 2% | cal and | Produc-
Number of years in base ticipants |20minis-| clerical tion par-
: P trative | partici | ticipants
partici-.| pants
pants
Total too | 100 | 100 | 100 i
Three years 14 14 12 14 |
Last 3 e}ale -
High 3 2 2 2 2
Of last & 1 1 1 rs)
Of last 10 1 1 1 2
Of career iv) 1 rv) iv)
High consecutive 3 12 12 "1 13
Of last § 0 ra) 1 -
Of last 10 . 9 10 7. 9
Of career 3 2 3 4
83 83 86 79
5 6 5 4
8 7 6 10
5 5 4 5
1 a ro) 1
2 2 3 3
© iv) e 9)
High consecutive 5 70 70 74 65
Of fast 10 58 57 59 53
Of last 15 2 2 2 2
Of career " " 13 9
Other .. 0 ro) a 1
Other period ... 4 3 2 7

* Excludes supplemental pension plans,
2 Less than 0.5 percent.

NOTE: Because of rounding, sums of individual items may not equal to-
tals. Dash indicates no employees in this category.

45



Table 43. Private pension plans:' Percent of full-time participants in plans with dollar amount benefit formulas’ by type
and amount of formula and maximum benefit provisions,’ medium and targe firms, 1983

Maximum benefit provision N
lot
Subject subject
Type and amount of formula a | toy. Limit on years of credited service Other | to
. maxi- | maxi-
murn' Less More .
Total jnaesg) 25 | 90 | 31-04] 35 | 96-39} 40 Jynan gg] mum | mum
All participants
Total 100 28 at 2 5 6 1 4 oO 2 ) 8 72
Fiat monthly amount per year of
service ral 21 18 2 5 4 0 4 © 2 - 4 50
Less than $5.00 3 - - - - - - - - - - - 3
$5.00-$9.99 16 7 6 - 2 2 - 3 - 1 -10 9
$10.00-14.9: 16 6 5 - 1 210 1/0) 0 - 2) 10
$15.00-$19.99 27 3 2 - +! O - i) 1 - 1 24
$20.00-$24.99 4 2 21 0 11 0 - - -1 6 - - 3
$25.00-29.99 1 1 1 1 - 1 @ - | 6 - - - - 1
$30.00 or greater 3 2 2 2/0 - - - - - - - 1
Amount per year varies by service ...| 3 2 2 ul fu) 2 - iv) - - - oO 1
‘Amount per year varies by
earnings .. 26 5 1 - - - 1 2 - -16 4] at
Other 1 - - - - - - - - - - - 1
Production
Total .. 100 | 31 | 22 a 6 6 1 51 0 1 1] 0] 69
Flat monthly amount per year of
service .... 73 22 19 3 6 4 ra) 4 oO 1 - 4 50
Less than $5. 3 ~ - - - - - - - - - 3
$5.00-$9.99 18 7 7 - 2 2 3 - 1 - C) W
'$10.00-$14.99 18 7 5 - 1 2 1; 0 i) - 2 "
$15.00-$19,99 25 3 2 - 1/0 6 - - | 21
$20.00-$24.99 4 2 2| 6 1] 0 ~ - - - - 3
$25.00-$29.99 2 1 1 1 - | 6 6 - - - 1
$30.00 or greater 3 2 2 2| 6 - - - > - - 1
‘Amount per year varies by-service ..) 4 3 2), - 10 2 -1 0 - - - | 0 1
‘Amount per year varies by
earnings 23 6 1 - - - 1 - - - 4 5 17
Other .. 1 - - - - - - - - - - - 1

+ Excludes supplemental pension plans.

? Excludes plans with dollar amount formulas that serve as a mini-
mum benefit alternative to a percent of earnings formula.

3 Maximum provisions in this table are independent of ERISAim-
posed ceilings on pensions payable from defined benefit plans.

“The total is less than the sum of individual items because some
plans contain a limit on years of credited service and another maxi-

mum provision.

47

* The benefit yielded under the formula is limited to either a percent
of terminal earings, often coordinated with primary social security pay-
ments, of to a flat dollar amount.

© Less than 0.5 percent

NOTE: Data were insufficient to show professional-administrative
and technical-clerical workers separately. Dash indicates no
‘employees in this category.



recente eee et

|
|

Chart 4. Average earnings used in private
pension plans: Percent of full-time par-
ticipants under earnings-based formulas,
medium and large firms, 1983

average

The majority of earnings-based formulas—just over
half of terminal earnings and three-fifths of career earn-
ings formulas—applied rates that vary according to
service, earnings, or age. Career earnings formulas, for
example, typically applied one rate to each year’s earn-
ings below a specified amount, and a higher rate above
that amount. Nearly half of the terminal earnings for-
mulas and just under two-fifths of the career earnings
formulas applied a uniform rate to all years of service.
These uniform rates averaged 1.59 percent per year of
service in terminal earnings formulas and 1.42 percent
in career average earnings formulas. Thus, terminal
earnings formulas not only provide a higher earnings
base than career average formulas,” but the average
uniform rate is higher. However, terminal earnings for-
mulas do not necessarily yield a higher pension, for two
reasons. First, maximum benefit provisions, seldom
found in career earnings plans, appeared in plans. cov-
ering just over one-half of participants with terminal
earnings formulas. Second, benefits under a terminal
earnings formula were more likely to be offset by a re-
tiree’s social security payments. (See next section.)

Most plans that did not use a percent-of-earnings
benefit formula specified dollar-amount pensions for
each year of service. Dollar-amount formulas applied
to 28 percent of pension plan participants. While the

TM An employee who worked 30 years with a 5-percent pay increase
each year and who earned $25,000 in the last year of service would
have career average earnings of $13,451 a year, while the final S-year
average would be $22,730. The difference between the career and
final average lessens with shorter lengths of service.

10

dollar amount in these formulas frequently varied with
an employee’s earnings, the predominant method was
to multiply a uniform dollar amount by years of serv-
ice. Uniform amounts credited per year averaged $14.27
a month for production workers and $17.16 for
white-collar employees.

The basis of payment differed sharply by employee
group. While a large majority of white-collar workers
were provided earnings-based pensions, dollar-amount
formulas applied to over half of the production employ-
ees, Thirty-seven percent of all participants were in
pension plans providing benefits from either primary or
alternative formulas, whichever was greater. Alterna-
tive formulas were often included to provide at least a
minimum level of benefits for persons with short serv-
ice or low earnings.

Private benefits and social security payments. Employers
providing private pension plans share the cost of social
security coverage equally with their employees. Be-
cause many plan sponsors feel that private pension and
social security benefits should not be duplicative, for-
mulas for calculating private pensions often contain an
offset provision requiring part of the social security
pension to be subtracted from the annuity. Other plans
have “excess” formulas that replace less (or none) of
an employee’s earnings below a specified level (which
is either the social security taxable wage base or a dol-
Jar amount equal to a past taxable wage base).

Fifty-five percent of all participants were in plans
where benefit formulas were “integrated” with social
security." The method used was closely related to the
type of benefit formula: Terminal earnings formulas
tended to adopt the offset approach, while career earn-
ings formulas tended to incorporate the excess approach.
Dollar amount formulas were rarely coordinated with
social security; blue-collar employees, therefore, were
Jess likely to have integrated benefits.

Normal retirement. In 1983, fewer pension plan par-
ticipants were required to’ work until age 65 to receive
full benefits (normal retirement). Thirty-six percent
were covered by plans that specified age 65 as the ear-
liest age for normal retirement, down from 45 percent
in 1980 (chart 5). While these employees generally did
not have to satisfy a service requirement, plans permit-
ting normal retirement at earlier ages typically had
length-of-service requirements. (As stated below in the
discussion of participation requirements, employees

'SData in table 44 of this year’s bulletin are not directly compara-
ble with the information presented in previous bulletins. Prior to 1983,
step-rate excess formulas using a breakpoint other than the social se-
curity (FICA) taxable wage base were not interpreted as being inte-
grated. This interpretive change resulted from a comprehensive
analysis of formulas with social security integration characteristics
See Donald Bell and Diane Hill, “How Social Security Payments
Affect Private Pensions,” Monthly Labor Review, May 1984, pp. 55-60.